Krebs v. Thompson

• Decision Date: 19 September 1944
• Docket Number: No. 27961.,27961.
• Citation: Krebs v. Thompson, 387 Ill. 471, 56 N.E.2d 761 (Ill. 1944)
• Parties: KREBS v. THOMPSON, Director of Reglstration and Education, et al.
• Court: Illinois Supreme Court

387 Ill. 471

56 N.E.2d 761

KREBS

v.THOMPSON, Director of Reglstration and Education, et al.

No. 27961.

Supreme Court of Illinois.

Sept. 19, 1944.

Action by Arthur H. Krebs, as taxpayer, against Frank G. Thompson, Director of Registraction and Education, and others to enjoin expending of any funds of the state for the administration of an act to regulate the practice of professional engineering. From a decree for plaintiff, the defendants appeal.

Affirmed.Appeal from Circuit Court, Sangamon County; Victor Hemphill, judge.

George F. Barrett, Atty. Gen., and George E. Drach and Brown, Hay & Stephens, all of Springfield (William C. Wines, of Chicago, and Paul W. Gordon, of Springfield, of counsel), for appellants.

Griffin, Winning Lindner & Jones, of Springfield (Montgomery S. Winning, of Springfield, of counsel), for appellee.

SMITH, Justice.

This is a direct appeal from a decree of the circuit court of Sangamon county. The suit was brought by appellee as a taxpayer, under Illinois Revised Statutes 1943, chap. 102, par. 11. Its purpose was to enjoin the Director of Registration and Education, the Director of Finance, the Auditor of Public Accounts and the State Treasurer from expending any funds of the State for the administration of an act entitled, ‘An Act to regulate the practice of professional engineering.’ Ill.Rev.Stat.1943, chap. 48 1/2. By the complaint the validity of the act was challenged on several grounds. The trial court overruled a motion of appellants to dismiss the suit. Appellants stood by this motion. The court entered a decree granting a permanent injunction, as prayed. The appeal has been perfected to this court by the above-named State officials and an intervening appellant.

It will be necessary to first dispose of appellants' contention that appellee, as a taxpayer, cannot maintain the suit. Appellee bases his right to prosecute the suit on the sole ground of his status as a taxpayer. He does not claim that he will be subject to the provisions of the act, or affected by its provisions, except as a taxpayer.

To appellants' motion to dismiss, certain affidavits were attached. Those affidavits tended to show that, in the opinion of the appellants, the act, from a financial stand point, will be self-sustaining. That is, that the fees paid in by registrants under the act will exceed the cost of administering the act. In one of the these affidavits, made by the Superintendent of Registration in the Department of Registration and Education, it was estimated that the number of registrants under the act would be approximately five thousand; that the cost of administering the act would not exceed $11,000. Presumably this estimate refers to the annual cost. No counter affidavits were filed. Hence the affidavits, in so far as material, must be accepted as true. By section 27 of the act each applicant for registration is required to pay a fee of $20.

It has long been the settled rule in Illinois that the expenditure of public funds by an officer of the State, for the purposeof administering an unconstitutional act, constitutes a misapplication of such funds. It is equally well settled that a taxpayer may maintain an action to enjoin the expenditure of public funds for such purpose. Reid v. Smith, 375 Ill. 147, 30 N.E.2d 908, 132 A.L.R. 1286;Fergus v. Russel, 270 Ill. 304, 110 N.E. 130, Ann.Cas.1916 B, 1120;Burke v. Snively, 208 Ill. 328, 70 N.E. 327.

Appellants do not challenge this rule. They deny its application to this case. The basis on which this rule is founded is that the taxpayers are the equitable owners of State funds; that such taxpayers are injured by the misapplication of such funds; that an expenditure of public funds in pursuance of an unconstitutional statute is a misapplication of the funds, which may be restrained at the suit of a taxpayer. Fergus v. Russel, 270 Ill. 304, 110 N.E. 130, Ann.Cas.1916B, 1120;Jones v. O'Connell, 266 Ill. 443, 107 N.E. 731;Dudick v. Baumann, 349 Ill. 46, 181 N.E. 690.

The challenge of appellants to the right of appellee to maintain this suit as a taxpayer is based upon a novel and ingenious argument. The argument is that the fees paid by applicants for registration under the act will exceed the cost of administering the act and will result in an net profit to the State. From this premise it is argued that a taxpayer cannot be injured because he has no interest in the fees paid under the act; that such fees are not tax money and hence the taxpayer has no interest in the funds. The argument presupposes that in the administration of the act the fees paid by the applicants for registration do not belong to the State until the administration expenses have been deducted and that the ownership of the State attaches only to the net balance, after the payment of operating costs. We do not think this argument is sound. The source from which the funds expended in the administration of the act are derived is not material. All of the funds, regardless of their source, belong to the State. Section 27 of the act, Ill.Rev.Stat.1943, chap. 48 1/2, par. 27, fixes the fees to be paid by applicants for registration. These fees belong to the State. The administration of the act is committed to the Department of Registration and Education. By section 2 of an act in relation to the payment of public money of the State into the State Treasury, Ill.Rev.Stat.1943, chap. 127, par. 171, every department or agency of the State is required to pay to the State Treasury the gross amount of all money received, not later than the day following its receipt. All moneys so paid into the State Treasury, unless the statute requires such money to be paid into a special fund, or such funds are paid under protest in accordance with section 2a of that act, Ill.Rev.Stat.1943, chap. 127, par. 172, immediately become a part of the general revenue funds of the State. In view of this statute it would be the duty of the Director of the Department of Registration and Education to pay into the State Treasury all funds received from applicants for registration. Under this statute, such funds constitute a part of the general revenue funds of the State. People ex rel. Barrett v. Bradford, 372 Ill. 63, 22 N.E.2d 691;Board of Trade of City of Chicago v. Cowen, 252 Ill. 554, 96 N.E. 1084;Whittemore v. People, 227 Ill. 453, 81 N.E. 427,10 Ann.Cas. 44.

The departments of the State Government are not operated on a net profit basis. All the funds received by them must be covered into the State Treasury. The cost of administering the act will not be paid, in any event, out of the revenues derived therefrom. Such costs can only be paid out of the general funds in the State Treasury, in accordance with appropriations made for that purpose. Const. art. IV, sec. 17, Smith-Hurd Stats. All funds expended for the administration of the act belong to the State and constitute a part of the general revenues of the State.

The argument that a taxpayer has no interest in the funds for the reason that the revenues produced by the act will exceed the cost of administering its provisions must necessarily fall of its own weight. The showing of appellants by the affidavits attached to their motion to dismiss is that there will be an estimated administration expense of $11,000. This can be paid only out of the general funds of the State. The expenditure of this or any other amount from the general funds of the State for the purpose of administering an unconstitutional statute is such an injury to every taxpayer that he may bring a suit to enjoin such unlawful expenditure and misapplication of the funds of the State. The fact that an equal or greater amount than the amount expended for the administration of the act will be ultimately produced from fees paid under the act, and paid into the State Treasury, has nothing whatever to do with the right of a taxpayer to enjoin the misapplication of public funds for the administration of the act, if it is not a valid statute. Under the settled rule in this State, every taxpayer is injured by the misapplication of public funds, whether the amount be great or small. Such injury is not prevented by the fact that the State may thereafter receive fees under an unconstitutional statute in excess of the cost of its administration.

Under the averments of the complaint, which was sworn to, and which averments were admitted by the motion to dismiss, appellee clearly had the right to maintain the action to prevent what was alleged would constitute a misapplication of State funds.

The cases relied upon by appellants, such as Daly v. County of Madison, 378 Ill. 357, 38 N.E.2d 160, and Price v. City of Mattoon, 364 Ill. 512, 4 N.E.2d 850, involved no expenditure of public funds. Those cases are wholly inapplicable to the question here involved.

Appellee's attack on the validity of the act is based chiefly upon his contention that the act is so vague and indefinite in its terms that it cannot be determined what activities are included within the act and what activities are excepted from its provisions. Section 1 provides that, ‘any person practicing or offering to practice professional engineering is required to submit evidence that he is qualified so to practice and to be registered as hereinafter provided.’ Ill.Rev.Stat.1943, chap. 48 1/2, par. 1. That section further provides that ‘it is unlawful for any person not so registered, to practice or offer to practice professional engineering in this State.’

Section 2 is a glossary. In that section, ‘professional engineering’ is defined as follows: “Professional engineering' means any professional service such as consultation, investigation, evaluation, planning, design or supervision of construction, in connection with any public or private utilities, structures, buildings, machines, equipment, processes, works, or projects, wherein the public welfare or the safeguarding of life, health or property is concerned or involved, when such...