People ex rel. No. 3 J. & E. Discount, Inc. v. Whitler

• Decision Date: 15 September 1980
• Docket Number: No. 52761,52761
• Parties: , 43 Ill.Dec. 721 The PEOPLE ex rel. NO. 3 J. & E. DISCOUNT, INC., et al., Appellants, v. Robert M. WHITLER, Director of Revenue, et al., Appellees.
• Court: Illinois Supreme Court

Page 854

410 N.E.2d 854

81 Ill.2d 473, 43 Ill.Dec. 721

The PEOPLE ex rel. NO. 3 J. & E. DISCOUNT, INC., et al., Appellants, v. Robert M. WHITLER, Director of Revenue, et al., Appellees.

No. 52761.

Supreme Court of Illinois.

Sept. 15, 1980.

Richard B. Caifano and Martin E. Litwin, Chicago, for appellants.

William J. Scott, Atty. Gen., Chicago (Robert G. Epsteen, Asst. Atty. Gen., Chicago, of counsel), for appellees.

UNDERWOOD, Justice:

On the petition of plaintiffs, No. 3 J. & E. Discount, Inc., and Victor Brown, the circuit court of Cook County issued a writ of prohibition against defendants, Robert M. Whitler, acting director of the Illinois Department of Revenue, and Norman L. Marcus, a departmental hearings referee. The writ prohibited them from holding a departmental hearing pursuant to section 18a of the Cigarette Tax Act (Ill.Rev.Stat.1977, ch. 120, par. 453.18a) regarding the confiscation of certain packs of cigarettes seized from the plaintiffs. The court, however, refused to prohibit the department from assessing a penalty under section 18b of the Cigarette Tax Act (Ill.Rev.Stat.1977, ch. 120, par. 453.18b). The appellate court held the writ should not have issued, and affirmed the refusal to prohibit the assessment of a penalty. (77 Ill.App.3d 439, 32 Ill.Dec. 770, 395 N.E.2d 115.) We granted plaintiffs' leave to appeal.

The statutes pertinent to this dispute provide in relevant part as follows:

"Sec. 18. Any duly, authorized employee of the Department may arrest without warrant any person committing in his presence a violation of any of the provisions of this Act, and may without a search warrant seize any original packages not tax stamped or tax imprinted underneath the sealed transparent wrapper of such original packages in accordance with the provisions of this Act and any vending device in which such packages may be found, and such original packages or vending devices so seized shall be subject to confiscation and forfeiture as hereinafter provided." (Ill.Rev.Stat.1977, ch. 120, par. 453.18.)

"Sec. 18a. After seizing any original packages of cigarettes, or cigarette vending devices, as provided in Section 18 of this Act, the Department shall hold a hearing and shall determine whether such original packages of cigarettes, at the time of their seizure by the Department, were not tax stamped or tax imprinted underneath the sealed transparent wrapper of such original packages in accordance with this Act, or whether such cigarette vending devices, at the time of their seizure by the Department, contained original packages of cigarettes not tax stamped or tax imprinted underneath the sealed transparent wrapper of such original packages as required by this Act. * * *

If, as the result of such hearing, the Department shall determine that the original packages of cigarettes seized were at the time of seizure not tax stamped or tax imprinted underneath the sealed transparent wrapper of such original packages as required by this Act, or that any cigarette vending device at the time of its seizure contained original packages of cigarettes not tax stamped or tax imprinted underneath the sealed transparent wrapper of such original packages as required by this Act, the Department shall enter an order declaring such original packages of cigarettes or such cigarette vending devices confiscated and forfeited to the State, and to be held by the Department for disposal by it as provided in Section 21 of this Act. " (Ill.Rev.Stat.1977, ch. 120, par. 453.18a.)

"Sec. 18b. With the exception of licensed distributors, anyone possessing cigarettes contained in original packages which are not tax stamped as required by this Act, or which are improperly tax stamped, shall be liable to pay, to the Department for deposit in the State Treasury, a penalty of $10 for each such package of cigarettes in excess of 100 packages. Such penalty may be recovered by the Department in a civil action." (Ill.Rev.Stat.1977, ch. 120, par. 453.18b.)

"Sec. 20. Whenever any peace officer of the State or any duly authorized officer or employee of the Department shall have reason to believe that any violation of this Act has occurred and that the person so violating the Act has in his, her or its possession any original package of cigarettes, not tax stamped or tax imprinted underneath the sealed transparent wrapper of such original package as required by this Act, or any vending device containing such original packages to which stamps have not been affixed, or on which an authorized substitute for stamps has not been imprinted underneath the sealed transparent wrapper of such original packages, as required by this Act, he may file or cause to be filed his complaint in writing, verified by affidavit, with any court within whose jurisdiction the premises to be searched are situated, stating the facts upon which such belief is founded, the premises to be searched, and the property to be seized, and procure a search warrant and execute the same. Upon the execution of such search warrant, the peace officer, or officer or employee of the Department, executing such search warrant shall make due return thereof to the court issuing the same, together with an inventory of the property taken thereunder. * * * Upon the return of the process duly served or upon the posting or publishing of notice made, as hereinabove provided, the court or jury, if a jury shall be demanded, shall proceed to determine whether or not such property so seized was held or possessed in violation of this Act, or whether, if a vending device has been so seized, it contained at the time of its seizure original packages not tax stamped or tax imprinted underneath the sealed transparent wrapper of such original packages as required by this Act. In case of a finding that the original packages seized were not tax stamped or tax imprinted underneath the sealed transparent wrapper of such original packages in accordance with the provisions of this Act, or that any vending device so seized contained at the time of its seizure original packages not tax stamped or tax imprinted underneath the sealed transparent wrapper of such original packages in accordance with the provisions of this Act, judgment shall be entered confiscating and forfeiting the property to the State and ordering its delivery to the Department, and in addition thereto, the court shall have power to tax and assess the costs of the proceedings." (Emphasis added.) Ill.Rev.Stat.1977, ch. 120, par. 453.20.

This appeal presents two questions: whether in light of the above-quoted statute and the facts of this case the writ of prohibition was properly issued and whether it was properly limited to the section 18a hearing. The facts involved are not disputed. On December 22, 1976, two agents of the Department of Revenue (Department) filed a complaint for a search warrant against plaintiffs' premises in La Grange. The complaint alleged that packs of cigarettes with counterfeit tax stamps were being sold on the premises and that plaintiffs held unstamped packs or packs with counterfeit stamps with the intent to sell them in violation of the penal provisions of the Cigarette Tax Act (Ill.Rev.Stat.1977, ch. 120, pars. 453.23, 453.24). A warrant issued the same day, and in the subsequent search the 42,000 packages of cigarettes which are the subject of this litigation were seized. Criminal charges were filed the next day against Victor Brown, apparently the proprietor of the store in La Grange and subsequently coplaintiff in the petition for a writ of prohibition.

Thereafter the Department notified plaintiffs that it intended to hold a hearing to confiscate the seized packages under section 18a and to impose a penalty under section 18b. Plaintiffs then filed this action seeking a writ of prohibition ordering the defendants to "desist and refrain from any further proceedings in the matter," and arguing that section 20 limited the Department to in-court proceedings because the cigarettes were seized pursuant to a search warrant. The court allowed plaintiffs' motion for a temporary writ, thereafter denying defendant's motion to quash and issuing a permanent writ of prohibition ordering the defendants to refrain from any further departmental proceedings to confiscate the cigarettes. Defendants then filed a notice of appeal but subsequently moved to dismiss the appeal and remand the cause because a nolle prosequi had been entered in the criminal case before the writ of prohibition had issued and the judge who issued the writ had not known of this development. The appeal was accordingly dismissed without prejudice and the cause remanded to the circuit court, which again issued a writ prohibiting the Department from holding a hearing to confiscate the seized cigarettes but expressly providing in the order that the Department could hold any other hearing.

In holding the writ should not have issued, the appellate court acknowledged that section 20 of the Cigarette Tax Act says that the circuit court "shall" hold the confiscation hearing when the cigarettes have been seized pursuant to a search warrant but reasoned that a literal interpretation of the statute would unnecessarily frustrate the ability of the Department to enforce the Cigarette Tax Act as the legislature intended. The court thus construed section 20 to require a confiscation hearing in the circuit court only when a criminal prosecution is pending. In its absence the court concluded that section 20 should not be construed to preclude departmental proceedings. Since the criminal action had been nol-prossed, the Department was free to hold both confiscation hearings under section 18a and penalty hearings under section 18b. That court reasoned that the language of the section does not in any way limit the ability of the Department to assess penalties and that, since such action was, in its judgment, ministerial rather than judicial or quasi-judicial, it was...