People ex rel. Henry Marble Co. v. Nudelman

• Decision Date: 09 October 1940
• Docket Number: No. 25577.,25577.
• Citation: 374 Ill. 280,29 N.E.2d 264
• Parties: PEOPLE ex rel. HENRY MARBLE CO. v. NUDELMAN et al.
• Court: Illinois Supreme Court

374 Ill. 280

29 N.E.2d 264

PEOPLE ex rel. HENRY MARBLE CO.

v.NUDELMAN et al.

No. 25577.

Supreme Court of Illinois.

June 14, 1940.

Rehearing Denied Oct. 9, 1940.

Mandamus proceeding by the People, on the relation of the Henry Marble Company, against S. L. Nudelman and others to compel the Director of Finance and others to issue a credit memorandum to relator for retailers' occupation taxes which relator had erroneously paid. From a judgment ordering that a peremptory writ of mandamus issue, defendants appeal directly to the Supreme Court.

Affirmed.Appeal from Circuit Court, Cook County; Harry W. Fisher, judge.

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

Campbell, Clithero & Fischer, of Chicago, for appellee.

FARTHING, Justice.

The Henry Marble Company, appellee, is a construction contractor engaged in the business of incorporating marble into buildings so that it becomes a part of the building. It also sells small amounts of marble to others. It erroneously paid a retailers' occupation tax on receipts from both construction work and the sales to others, and continued to pay such taxes up to and including December, 1937. The taxes were paid under rule No. 6 of the Department of Finance of the State of Illinois. That rule was changed December 31, 1937, to conform to the decision of this court in Herlihy Mid-Continent Co. v. Nudelman, 367 Ill. 600, 12 N.E.2d 638, 115 A.L.R. 485. As changed, the rule recognized that construction contractors were not liable for the tax. The total amount of the taxes in question paid by the appellee was $1,079.63.

This suit was filed June 1, 1939, and on September 30, 1939, appellee filed its amended petition in the circuit court of Cook county for the issuance of a writ of mandamus to compel the Director of Finance, the Auditor of Public Accounts, and the Treasurer of the State of Illinois to issue a credit memorandum to the relator for the sum of $1,079.63, and that defendants be compelled to pay the said sum to the appellee. The amount claimed was arrived at by computing the tax paid, $1,643.30, deducting the amount admitted by appellee to be due under the act for sales of marble to others, $334.02, and deducting, again, the amount of credits taken by appellee on subsequent tax liability, $229.65. The petition also alleged the enactment of a statute by the Sixtieth General Assembly of Illinois, 1937, Laws 1937, p. 95, appropriating to the Division of Retailers' Occupation Tax of the Department of Finance of the State the following: ‘For contingencies, $50,000;’ ‘For refunding erroneous tax payments as provided in section 6 of the Retailers' Occupation Tax act, $100,000,’ and to the department, in general, ‘For contingencies, $50,000.’ The petition further alleged that the Sixty-First General Assembly, 1939, Laws 1939, p. 166, enacted a statute appropriating to the Division of Retailers' Occupation Tax of the Department of Finance the following: ‘For Refunding amounts of Retailers' Occupational Tax erroneously paid according to the rules and regulations of the Department of Finance in effect at the time of such payment .....$100,000,’ and for the Department of Finance, in general: ‘For Contingencies .....$15,000.’

The appellants answered admitting the payments as alleged by appellee, but stated they had no knowledge as to what part of the sales came under the Retailers' Occupation Tax Act and demanded strict proof as to this. The answer further admitted the appropriations enacted by the Sixtieth General Assembly but averred: (1) That the item ‘For contingencies, $50,000,’ was vetoed by the Governor; (2) that the item ‘For refunding erroneous tax payments * * * $100,000,’ was completely exhausted, and (3) that the item ‘For contingencies, $50,000,’ was not available for payment of appellee's claim, due to the restriction of section 4 of the Appropriation Act (Senate Bill No. 446, Sixtieth General Assembly, Laws 1937, p. 105) as follows: ‘No contract shall be entered into or obligation incurred for any expenditure from the appropriation herein made for contingencies and for reserves until after the purpose and amount of such expenditure had been approved in writing by the Governor.’ The answer further admitted the two appropriation items of the Sixty-First General Assembly, but averred: (1) That the $100,000 appropriation had been exhausted by two previous mandamus judgments and an order directing appellants to hold $22,648.38 pending the outcome of an appeal in a third mandamus suit, all entered in the circuit court of Cook county; (2) that the appropriation item: ‘For contingencies, $15,000’ was not available by reason of the restrictive force of section 4 above set forth. The answer set out that defendants had no knowledge as to what portion of appellee's business consisted of sale of fixtures, and no knowledge of the amount of credit taken on subsequent tax liability. The answer also denied that under the rules of the department, then existing, the payments had been made erroneously.

The appellee replied admitting that section 4 of the Appropriation Act contained the provision set out in the answer, but as to that appellee stated: (a) That the obligation to refund the amounts claimed in this cause arose from the provision of the Retailers' Occupation Tax Act providing for refund in event of erroneous payment, and that the Governor had approved the provision when he approved the act; (6) that if section 4 of the Appropriation Act be interpreted as delegating to the Governor the right to select some items for payment and reject other items properly within the scope of the...