People ex rel. City of Highland Park v. McKibbin

• Citation: 44 N.E.2d 449,380 Ill. 447
• Decision Date: 10 November 1942
• Docket Number: No. 26104.,26104.
• Parties: PEOPLE ex rel. CITY OF HIGHLAND PARK v. McKIBBIN, Director of Finance.
• Court: Supreme Court of Illinois

380 Ill. 447

44 N.E.2d 449

PEOPLE ex rel. CITY OF HIGHLAND PARK

v.McKIBBIN, Director of Finance.

No. 26104.

Supreme Court of Illinois.

Sept. 21, 1942.

As Modified on Denial of Rehearing Nov. 10, 1942.

Mandamus proceeding by the People on the relation of the City of Highland Park, against George B. McKibbon, (successor to A. M. Carter) Director of Finance, to compel him to furnish the relator with a credit memorandum under the Public Utility Tax Act of 1935. From an adverse judgment, the relator appeals.

Judgment affirmed.Appeal from Circuit Court, Cook County; Harry M. Fisher, judge.

Benj. F. O'Dell and Robert Thorsen, both of Chicago, for appellant.

George F. Barrett, Atty. Gen. (Albert E. Hallett, of Chicago, of counsel), for appellee.

STONE, Chief Justice.

Appellant, city of Highland Park, filed in the circuit court of Cook county its petition for mandamus directed against A. M. Carter, then Director of Finance of the State, seeking to compel the Director to furnish appellant with a credit memorandum under section 6 of the Public Utility Tax act of 1935 (Law of 1935, p. 1197.) The tax paid under that act prior to the date the act was declared invalid, amounted to $4,796.97. Appellant alleges in its petition that this tax was paid through a mistake of fact or error of law. The circuit court sustained appellee's motion to strike and, appellant standing on its petition, the same was dismissed. The cause comes to this court on direct appeal since the revenue and the validity of a statute are involved.

Appellant was engaged in the business of furnishing and selling water for domestic and commercial consumption within the meaning of the Public Utility Tax act of 1935, section 2 of which imposed a three per cent tax on sales of water, gas or electricity. That act was declared invalid by this court in City of Chicago v. Ames, 365 Ill. 529, 7 N.E.2d 294, 109 A.L.R. 1509. Thereafter appellant made demand on the Department of Finance for a cash refund or credit memorandum pursuant to section 6 of that act, which demand was refused. By its petition here it seeks a credit memorandumunder that section of the 1935 act. It is also alleged here that the tax under that act was paid under protest.

Its principal contentions are that section 6, known as the refund section of the act of 1935, was not held to be invalid and did not fall with the rest of the act by the decision of this court holding that the taxing clause of the act is unconstitutional, and that since this is so and section 6 was re-enacted in substantially the same language in the Public Utility Tax act of 1937, Ill.Rev.Stat.1939, c. 120, § 473, appellant is entitled to receive the credit memorandum sought.

Section 6 of the Public Utility Tax act of 1935 provided: ‘If it shall appear that an amount of tax, penalty or interest has been paid which was not due under the provisions of this Act, whether as the result of a mistake of fact or an error of law, then such amount shall be credited against any tax due, or to become due, under this Act from the public utility which made the erroneous payment, or such amount shall be refunded to such public utility by the department.’ In the Ames case the act of 1935 was invalid on the ground that there existed no reasonable basis for the classification exempting the payment of tax on sales of water furnished for industrial uses while imposing it upon other sales of water. In that case the tax was paid under protest and an injunction was sought to prevent turning the taxes over to the State Treasurer.

In this case appellant argues that it paid, under protest, the taxes for which it now seeks a credit memorandum. No allegations of fact appear in the petition to support this contention. Its petition, after setting out the provisions of the act of 1935 applicable to it, alleges that the Department of Finance, pursuant to authority contained in the act, ordered appellant to pay, and that it did pay, the tax each month from July, 1935, until January 31, 1937, when, by reason of the decision of this court in the Ames case, it discontinued paying the tax. Section 7 of article IX of the constitution of 1870, Smith-Hurd Stats., provides that all taxes levied for State purposes shall be paid into the State treasury. The State Government statute ( Ill.Rev.Stat.1939, chap. 127, par. 171,) requires that each department collecting money on behalf of the State, pay the same into the State treasury not later than the day next after its collection, disregarding holidays and Sundays. Paragraph 172 of that statute provides the means whereby a taxpayer may, by notice to the State Treasurer, make payments under protest, in which event the money shall be kept in the protest fund for thirty days, during which interim an injunction or restraining order may be sought, and the validity of the tax tested, in which event the fund is to be held until the final order of the court. It does not appear from appellant's petition that this method was followed or that an injunction was sought. So far as shown by the record the taxes were paid voluntarily and turned into the State treasury. Appellant's contention that it is entitled to this credit memorandum because the tax was paid under protest cannot be sustained, and unless appellant's petition points to a valid statute authorizing the repayment of the tax or the issuance of a credit memorandum in lieu thereof, appellant cannot recover, no matter how meritorious its claim. Peoples Store of Roseland v. McKibbin, 379 Ill. 148, 39 N.E.2d 995;People ex rel. Sweitzer v. Orrington Co., 360 Ill. 289, 195 N.E. 642;LeFevre v. Lee County, 353 Ill. 30, 186 N.E. 536.

Appellant contends that section 6 of the 1935 act was not repealed by the 1937 act but the latter act preserved the right to a credit memorandum provided in the 1935 act. Its counsel argue that section 6 of that act was not declared invalid in the Ames case or any other case, but on the...