Novick v. Dep't of Finance

• Decision Date: 03 April 1940
• Docket Number: No. 25429.,25429.
• Citation: 373 Ill. 342,26 N.E.2d 130
• Parties: NOVICK v. DEPARTMENT OF FINANCE.
• Court: Illinois Supreme Court

373 Ill. 342

26 N.E.2d 130

NOVICK

v.DEPARTMENT OF FINANCE.

No. 25429.

Supreme Court of Illinois.

Feb. 21, 1940.

Rehearing Denied April 3, 1940.

Certiorari proceeding by Victor Novicki, doing business as Vic's Tavern, to review the Department of Finance's assessment of a deficiency tax under the Retailers' Occupation Tax Act. The superior court quashed the writ of certiorari, and Victor Novicki appeals.

Reversed and remanded, with directions.Appeal from Superior Court, Cook County; Francis B. Allegretti, judge.

Hermann P. Haase, of Chicago, for appellant.

John E. Cassidy, Atty. Gen. (Montgomery S. Winning, of Springfield, and Mortimer Porges and Philip J. Simon, both of Chicago, of counsel), for appellee.

JONES, Justice.

Appellant conducted a tavern in the village of Melrose Park. He filed monthly returns with payments of what he claims to be the correct amount of taxes due under the Retailers' Occupation Tax Act, Ill.Rev.Stat.1939, c. 120, § 440 et seq. Upon a reassessment in the sum of $1,382.19, with penalty of $69.11, notice thereof, protest by the taxpayer, and a hearing, the Department of Finance assessed appellant $959.51 as a deficiency tax due from July 1, 1933, to August 31, 1937, with penalty of $47.98. The superior court of Cook county quashed a writ of certiorari to review the proceedings, and the cause is here by an appeal of the taxpayer.

At the hearing appellant introduced in evidence a book showing daily receipts and disbursements from July 1, 1933, to December 31, 1935, and another book with a like showing for the remainder of the period. He testified the entries were made by him daily, that they were true and correct, and that he kept no other books. On cross-examination, he testified the book for the first period was copied from another book of original entry, which he later produced. Appellee introduced in evidence the reassessment. Over the objection of appellant, appellee introduced in evidence statements of Novicki's purchases of beer from the Western Beverage Company, from John Pauga, and from the Charles A. Zahn Company. An investigator for the Department of Finance testified he examined the records of the vendors and that the statements produced were correct, but that he could not testify as to the correctness of the records from which they were taken. These statements were objected to on the ground they were hearsay evidence, and it is not denied this is true.

The first question presented is whether these statements, although hearsay evidence, were properly admitted. Section 8 of the Retailers' Occupation Tax Act (Ill.Rev.Stat.1939, chap. 120, § 447) in part, provides: ‘In the conduct of any investigation or hearing, neither the department nor any officer or employee thereof shall be bound by the technical rules of evidence and no informality in any proceeding, or in the manner of taking testimony, shall invalidate any order, decision, rule or regulation made or approved or confirmed by the department.’ Counsel for appellant suggests, and we think rightly so, that this provision may permit the asking of leading questions and other informalities in the introduction of evidence, but that the legislature did not intend by section 8 to abrogate the fundamental rules of evidence. The rule against hearsay evidence, that a witness may testify only as to facts within his personal knowledge and not as to what somebody else told him, is founded on the necessity of an opportunity for cross-examination, and is a basic and not a technical rule. Chicago & Alton Railroad Co. v. Johnson, 116 Ill. 206, 4 N.E. 381;Snydacker v. Brosse, 51 Ill. 357, 99 Am.Dec. 551;Barnes v. Simmons, 27 Ill. 512, 81 Am.Dec. 248. Such evidence is not admissible under section 8.

Appellee has cited a number of cases to the effect that an officer who is empowered to review tax assessments is not bound by the evidence introduced by the taxpayer, but has a right to act upon his own knowledge and judgment and to use any available means of information; and that he may hear affidavits or unsworn testimony without giving an opportunity for cross-examination. People v. Millard, 307 Ill. 556, 139 N.E. 113;People v. St. Louis Bridge Co. 291 Ill. 95, 125 N.E. 752;In re Maplewood Coal Co. 213 Ill. 283, 72 N.E. 786;Pratt v. Raymond, 188 Ill. 469, 59 N.E. 16;Earl & Wilson v. Raymond, 188 Ill. 15, 59 N.E. 19;Sterling Gas Co. v. Higby, 134 Ill. 557, 25 N.E. 660. An examination of those cases discloses that they involved taxes on real or personal property, and the question at issue was the value of the property sought to be taxed. Those cases are clearly not in point. The question, here, is not the value of property, a...