Farrand Coal Co. v. Halpin

Citation10 Ill.2d 507,140 N.E.2d 698
Decision Date24 January 1957
Docket NumberNo. 34183,34183
PartiesFARRAND COAL COMPANY, Appellant, v. Clifford E. HALPIN, Director of Revenue, et al., Appellees.
CourtSupreme Court of Illinois

Hoffmann & Hoffmann, Springfield, for appellant.

Latham Castle, Atty. Gen. (Willard Ice, Mark O. Roberts, and M. Brooks Byus, Springfield, of counsel), for appellees.

BRISTOW, Justice.

Plaintiff coal company appeals directly to this court from a decree of the circuit court of Sangamon County dismissing for want of equity its complaint to enjoin the transfer from the protest fund of payments of retailers' occupation tax made under protest and for a determination that the Retailers' Occupation Tax Act (Ill.Rev.Stat.1955, chap. 120, par. 440 et seq.) does not apply to persons engaged in the business of selling the energy in coal to a utility which energy is transferred by the utility into electrical energy for sale at retail to its customers.

The public revenue being in issue, the appeal properly comes directly to this court.

The plaintiff coal company paid under protest $311.96 with the filing of its retailers' occupation tax return for December, 1952, which sum represented a tax purportedly due from it on the business of being engaged in the sale of coal to the city of Springfield which operates an electric utility. The plaintiff's complaint alleges that the tax in question pertains only to that part of its business constituting sales of energy purchased by the utility; that the utility purchases the energy from plaintiff coal company for the purpose of processing and transferring such energy into electrical energy for resale for ultimate consumption by purchasers of the energy; that the energy sold by the utility is the same energy it purchased, though changed in form into electrical energy; that the energy in the coal constitutes an ingredient or constituent or material of the electrical energy; that the energy purchased by the utility and also the electrical energy sold by the utility are both tangible personal property; that since the energy purchased by the utility is tangible personal property and the same energy is resold by the utility to its customers, the energy is not used or consumed by the utility; that the retail sale of tangible personal property purchased by the utility from plaintiff coal company cannot be consummated until the energy is sold by the utility; that there is not, therefore, a sale at retail by plaintiff coal company to the utility and there cannot be a sale upon which a tax can be measured or imposed under the title or subject matter of the Retailers' Occupation Tax Act; that plaintiff, in the sale of energy in coal to the utility, which energy the utility resells, is not engaged in the business of selling tangible personal property to a purchaser for use or consumption, nor engaged in the business of making retail sales.

The answer of defendants denies that the tax is due from plaintiff on the business of being engaged in the sale of energy in coal to the city of Springfield but alleges that the tax is due from plaintiff on the sale of coal, and in substance denies all other allegations of the complaint.

The testimony offered was almost entirely expert testimony, consuming the better part of two full days. Plaintiff offered testimony by an associate professor of physics from Purdue University, by a doctor of philosophy in physics in the institute for nuclear studies of the University of chicago, by another physics professor from the University of Chicago, and by the general superintendent of the utility, who was a graduate engineer from Purdue University. Defendants offered testimony by a professor of physics from the University of Illinois and by a professor of mining and metallurgical engineering from Washington University. The experts for the respective parties disagree with each other as to whether or not energy is tangible as a matter of scientific fact. Plaintiff's witnesses in substance testify that electrical energy and the energy in coal is tangible personal property and the same; defendants' witnesses testify that electrical energy is not tangible personal property nor merely energy from coal in a changed form.

The basic issue to be resolved in determining this case is whether, under the act in question, coal is sold as tangible personal property to the utility for use or consumption and not for resale and is therefore the measure of a taxable retail sale, or whether energy, as tangible personal property, is bought in the form of coal, extracted therefrom, processed and resold as tangible personal property in the form of electrical energy.

The Retailers' Occupation Tax Act is, by its title, an act 'in relation to a tax upon persons engaged in the business of selling tangible personal property to purchasers for use or consumption.' Section I of the act defines 'sale at retail' as meaning 'any transfer of the ownership of, or title to, tangible personal property to a purchaser, for use or consumption and not for resale in any form as tangible personal property, for a valuable consideration.' Section I of the same act further provides that 'Sales of tangible personal property, which property as an ingredient or constituent goes into and forms a part of tangible personal property subsequently the subject of a 'sale at retail', are not sales at retail as defined in this Act.' However, nowhere in the act did the Illinois legislature define the meaning with which it used 'tangible personal property' within the act.

It is apparent that the key to all the problems presented lies in the matter of...

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36 cases
  • People v. La Pointe
    • United States
    • Illinois Supreme Court
    • 13 Noviembre 1981
    ...popularly understood meanings. (People v. Schwartz (1976), 64 Ill.2d 275, 280, 1 Ill.Dec. 8, 356 N.E.2d 8; Farrand Coal Co. v. Halpin (1957), 10 Ill.2d 507, 510, 140 N.E.2d 698.) In addition to the language used, consideration is also given to the legislative objective and the evil the stat......
  • People v. Haron
    • United States
    • Illinois Supreme Court
    • 4 Junio 1981
    ...legislative intent, that the words of the statute have their ordinary and popularly understood meanings. (Farrand Coal Co. v. Halpin (1957), 10 Ill.2d 507, 510 (140 N.E.2d 698).) In addition to the language used, consideration is given to the legislative objective and the evil the statute s......
  • Exelon Corp. v. Department of Revenue
    • United States
    • Illinois Supreme Court
    • 20 Febrero 2009
    ...arguments, which did not include any rebuttal of Dr. Fajans' expert opinion. Relying on this court's decision in Farrand Coal Co. v. Halpin, 10 Ill.2d 507, 140 N.E.2d 698 (1957), the ALJ concluded that the General Assembly did not intend to include electricity within the meaning of "tangibl......
  • People v. Neither, 4-87-0551
    • United States
    • United States Appellate Court of Illinois
    • 9 Marzo 1988
    ...64 Ill.2d 275, 1 Ill.Dec. 8, 356 N.E.2d 8, cert. denied (1977), 429 U.S. 1098, 97 S.Ct. 1116, 51 L.Ed.2d 545; Farrand Coal Co. v. Halpin (1957), 10 Ill.2d 507, 140 N.E.2d 698.) In addition to the language used, consideration is also given to the legislative objective and the evil the statut......
  • Request a trial to view additional results

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