McDonough v. Mills Novelty Co.

• Decision Date: 03 October 1934
• Docket Number: No. 22220.,22220.
• Citation: 192 N.E. 236,357 Ill. 285
• Parties: PEOPLE ex rel. McDONOUGH, County Collector, v. MILLS NOVELTY CO.
• Court: Illinois Supreme Court

357 Ill. 285

192 N.E. 236

PEOPLE ex rel. McDONOUGH, County Collector,

v.MILLS NOVELTY CO.

No. 22220.

Supreme Court of Illinois.

June 15, 1934.

As Modified on Denial of Rehearing Oct. 3, 1934.

Error to Cook County Count; Edmund K. Jarecki, Judge.

Proceeding by the People, on the relation of Joseph B. McDonough, County Collector, for judgment and order of sale against the property of the Mills Novelty Company, for delinquent taxes, in which proceeding the company filed objections. The objections were overruled and judgment of sale was entered, and objector brings error.

Affirmed in part, reversed in part, and remanded with directions.Adelbert Brown, of Oak Park (Brundage, Landon & Holt, MacChesney, Whiteford & Wells, Altheimer, Mayer, Woods & Smith, McDonald, Pringle & Richmond, and Stearns & Jones, all of Chicago, of counsel), for plaintiff in error.

Thomas J. Courtney, State's Atty., of Chicago (Hayden N. Bell, Robert S. Cushman, Jacob Shamberg, William P. Kearney, and Leon Hornstein, all of Chicago, of counsel), for defendant in error.

HERRICK, Justice.

The county collector of Cook county applied for judgment and order of sale against the property of the Mills Novelty Company, the plaintiff in error (hereinafter called the objector), for certain delinquent taxes assessed for the year 1930 against its property. It filed objections to certain of such taxes levied for the benefit of the county of Cook, the city of Chicago, and the Cook County Forest Preserve District. All the objections were overruled and judgment of sale was entered. The record of the proceedings is brought here by the objector for review.

The objector attacks the validity of all additional and increased rates arising from the respective supplemental appropriation ordinances of the county of Cook and city of Chicago adopted pursuant to acts of the Legislature passed at the special session held in June, 1930. Laws of 1930, Special Sess. pp. 6, 8, 21, 29, 52 (Smith-Hurd Rev. St. 1931, c. 24, § 697b; c. 24, §§ 101, 102, 104, 117, 123; c. 24, §§ 542, 543; c. 34, §§ 25, 64, 66; and c. 81, § 1). The board of county commissioners adopted and passed on December 17, 1929, the regular annual appropriation ordinance for Cook county for the fiscal year 1930 and thereafter passed the levy ordinance and filed the same with the county clerk, which levy, when extended, required a rate for the corporate fund of .25. On July 22, 1930, the board passed an additional and supplemental appropriation ordinance for corporate purposes which increased the tax rate on the corporate fund from .25 to .32.

The city council of the city of Chicago adopted and passed on January 3, 1930, the regular annual appropriation ordinance for the fiscal year 1930 and passed the levy ordinance and filed the same with the county clerk, which, when extended, required rates as follows: $1.07 1/2 for the corporate fund, .05 for the library fund, and .06 for the tubercular sanitarium fund on each $100 of assessed valuation. The fiscal year for the city of Chicage began January 1, 1930, and ended December 31, 1930. Afterwards, on July 29, 1930, the city council passed an additional and supplemental appropriation ordinance for the corporate, library, and tubercular sanitarium purposes, and passed on ordinance levying a tax of $1.37, .06, and .075 for the corporate, library, and tubercular sanitarium fund purposes on each $100 of assessed valuation. Such extensions were made on such basis. The supplemental appropriations were not occasioned by fire, flood, or public calamity.

The power to authorize the levy of taxes by the state and the different political subdivisions thereof is inherent in the sovereign, except in so far as such authority is limited by the Constitution. The sovereign speaks through the Legislature, and while the Legislature may not directly levy a tax, it may grant to the different municipalities the power to levy such tax and at such rates as in its discretion are proper, restrained only by the inhibitions of the Constitution. The acts, supra, are not curative acts but are enabling acts, which the different municipalities may adopt or not, as by their several administrative bodies may be deemed appropriate to the municipal needs. There is no conflict between the present enabling taxing statutes and those in existence at the time of the passage of such several enabling acts. There is some difference in procedure, and the acts do grant the authority to increase the amount of the taxes theretofore levied by the several tax levies, thereby necessarily increasing the tax rates.

The right of municipalities to make additional tax levies where the necessity arose after the passage of the appropriation ordinance has been recognized by this court. People v. Day, 277 Ill. 543, 115 N. E. 732;People v. Daemicke, 278 Ill. 53, 115 N. E. 898. The increased tax rates were severally authorized by statute, and the provisions of the statute in making the additional appropriations and tax levy ordinance have been scrupulously observed. The enabling legislation here in a part of a program of that class of laws adopted by the Legislature at the special session of 1930 for the purpose of affording emergency relief from the serious financial situation which confronted the municipalities, generally, of the state. That phase of such emergency relief taxation plan by which the city of Chicago was authorized to issue bonds and to levy additional tax funds for the city and board of education after the passage of the annual appropriation ordinance has been held valid. People v. Chicago, Milwaukee, St. Paul & Pacific Railroad Co., 354 Ill. 630, 188 N. E. 821. The same legal principles which justified the conclusions reached in that case apply to the case at bar. The levy of the increased tax rates was legal.

The objector urges that the trial court was in error in holding that any levy in excess of .535 for Cook county was valid. The rate extended was .54. The rate was obtained from the following rates: County corporate fund, .32; county highway fund, .125; bond and interest fund, .089-making a total of .534. The objector claims that the rate is excessive by .005. It arrives at such amount by taking the tax rates as follows: County corporate fund, .32; county highway fund, .125; bond and interest fund, .09. It then argues that a .32 rate could not be exceeded for bond and interest requirements and the needs for the county fund under the authority of People v. Hoerr, 294 Ill. 338, 128 N. E. 572;People v. Cleveland, Cincinnati, Chicago & St. Louis Railway Co., 295 Ill. 214, 129 N. E. 164; and People v. Chicago, Burlington & Quincy Railroad Co., 295 Ill. 191, 129 N. E. 168. We do not differ from the rules of law stated in those cases but they are not applicable to the present record. We agree with the objector's contention that the rate of .12 1/2 on every $100 valuation, being fixed by statute for the county highway tax, could not be extended by the county clerk at .13 or in excess of .12 1/2. (Smith-Hurd Rev. St. 1933, c. 121, § 304.) People v. Missouri Pacific Railroad Co., 342 Ill. 226, 173 N. E. 816. The objector's error is in the method of his calculation. The rate for the bond and interest fund is .089 and not .09, as assumed by the objector. The total rate as determined by the addition of the different rates for the several county purposes was .534. The county clerk, assuming to act under the provisions of the statute, section 128 (Cahill's Rev. St. 1931, c. 120, par. 146; Smith-Hurd Rev. St. 1931, c. 120, § 116, p. 2396), extended the fraction of a cent as .01, thereby adopting the rate of .54. The county clerk did not undertake to advance the fraction of a cent to .01 as to any of the several items of the county tax, but the increase was made after the addition of the several rates for the county as a taxing body. Such action on the part of the county clerk was warranted by the statute. People v. Chicago, Lake Shore & Eastern Railway Co., 270 Ill. 477, 110 N. E. 720. The county court did not err in holding that the extension of the tax rate of .54 for county purposes was legal.

It is urged by the objector that the trial court erred in holding that a levy made for an appropriation of $7,035,927.61 to ‘liquidate liabilities' was legal. It was stipulated that the appropriation bills, to satisfy the needs of which tax levy ordinances were passed, included a series of items aggregating $7,035,927.61, containing the notation ‘to liquidate liabilities'; ‘for the payment of bills and invoices against Cook county outstanding and unpaid November 30, 1929, audited and allowed by the board of commissioners, corporate appropriations therefor having been exhausted, as follws,’ etc. The corporate fund balance sheet of Cook county as of November 30, 1929, showed various items in detail which it is not necessary to set forth here. It was stipulated that the total appropriated needs for the fiscal year 1930 were not reduced by reason of said assets. The objections to this item of tax are divided into two subdivisions: (1) The taxpayers for 1930 are not liable for the operating deficits of government for the year [357 Ill. 292]1929; and (2) these sums having been extended in excess of appropriations for the prior year are illegal and void.

The practice of reappropriating for accumulated deficits of previous years is not a sound practice and will not be encouraged by this court. Such practice might lead eventually to a budget composed principally of reappropriations for accumulated unliquidated obligations, with the result that little, if anything, would be left of the taxes raised for the meeting of current governmental operating expenses. However, in this case the record is barren of deficits occurring in the year 1929. The only showing made is that the deficits existed at the close of the prior fiscal year. For what length of time the several items which go to make up the total of the...