People ex rel. Prindable v. New York Cent. R. Co.

• Decision Date: 19 May 1947
• Docket Number: No. 29982.,29982.
• Parties: PEOPLE ex rel. PRINDABLE v. NEW YORK CENT. R. CO.
• Court: Illinois Supreme Court

397 Ill. 50

72 N.E.2d 821

PEOPLE ex rel. PRINDABLE

v.NEW YORK CENT. R. CO.

No. 29982.

Supreme Court of Illinois.

March 19, 1947.

Rehearing Denied May 19, 1947.

Appeal from St. Clair County Court; Joseph E. Fleming, Judge.

Proceeding by the People on the relation of D. A. Prindable, county collector, against the New York Central Railroad Company. From portion of judgment overruling its objections to county collector's application for judgment and order for sale of its property for nonpayment of taxes, defendant appeals.

Judgment affirmed in part and reversed in part and cause remanded with directions.

Farthing, Farthing & Feickert, of Belleville, for appellant.

L. P. Zerweck, State's Atty., Kevin Kane and Fred E. Merrills, all of Belleville, and Arthur R. Felsen and Frank M. Summers, both of East St. Louis, for appellee.

WILSON, Justice.

The defendant, the New York Central Railroad Company, having previously paid its taxes in full, under protest, filed objections in the county court of St. Clair county to an application of the county collector for judgment against, and an order for the sale of its property for, the nonpayment of certain taxes for the year 1944 levied by the towns of Stites and East St. Louis, School District No. 188, and the village of Brooklyn. From the portion of the judgment overruling its objections, defendant appeals.

The town tax for corporate purposes of the town of Stites was levied at a rate of 6.3 cents on each $100 assessed valuation. Defendant's first objection charges that the budget and appropriation ordinance adopted in 1944 covered the fiscal year commencing March 28, 1944, and ending March 26, 1945; that the ordinance disclosed no part of the 1944 town tax would be received during the fiscal year described;that no anticipation warrants were to be issued against the 1944 town tax, and that the town budget and appropriation ordinance appropriated no part of the proceeds of the 1944 town tax. Accordingly, defendant alleged that the town tax was levied prior to the fiscal year for which it was levied and in which it was to be expended. The same objection was leveled against the town tax of 4 cents for the town of East St. Louis. The facts are identical with respect to these first two objections. The towns of Stites and East St. Louis each operated on a cash basis in 1944. This means that current expenses for a calendar year are paid from the proceeds of taxes of former years or other available funds, without reliance upon the taxes to be levied for such calendar year. ‘The taxes for such year, when collected, provide the cash fund for operating on a cash basis the expenses of the following year.’ People ex rel. Manifold v. Wabash R. Co. 389 Ill. 403, 59 N.E.2d 795, 796. Apparently, the towns of Stites and East St. Louis were operating on a cash basis and able to pay all expenses for the fiscal year commencing March 28, 1944, without using any part of the levy of taxes for the year 1944.

The gist of these objections is that since no part of the taxes levied for the year 1944 was to be expended during the fiscal year 1944 they were levied before they had been appropriated. From this, the argument is advanced that the only tax receipts appropriated were those from the levy of 1943 and the levies of prior years. To sustain the contention and supporting argument, section 3 of the Municipal Budget Act, as amended in 1939, is invoked. (Ill.Rev.Stat.1943, chap. 120, par 365.3.) So far as relevant, the statute requires the governing body of municipalities such as the towns of Stites and East St. Louis, within or before the first quarter of each fiscal year, to adopt a combined annual budget and appropriation ordinance. Section 3 declares that nothing in the act shall be construed as requiring any municipality to change, or preventing any municipality from changing, from a cash basis of financing to a surplus or deficit basis of financing. The third section also ordanins, ‘The governing body of each municipality shall fix a fiscal year therefor. If the beginning of the fiscal year of a municipality is subsequent to the time that the tax levy for such fiscal year shall be made, then such annual budget and appropriation ordinance shall be adopted prior to the time such tax levy shall be made.’ There is, however, no condition precedent in the statute, as amended in 1939, that the budget shall be adopted prior to the tax levy, except in the one instance where the beginning of the fiscal year is subsequent to the time of the tax levy for that year. People ex rel. Manifold v. Chicago, Burlington & Quincy R. Co., 386 Ill. 56, 54 N.E.2d 389.

Although the statute reflects the legislative intent to accomplish conformity in the manner of budgeting expenses throughout the State, there is no indication that the budget is a preliminary requirement to the levying of a tax. People ex rel. Ammann v. Wabash R. Co., 391 Ill. 200, 62 N.E.2d 819;People v. Wabash R. Co., 389 Ill. 403, 59 N.E.2d 795;People v. Chicago, Burlington & Quincy R. Co., 386 Ill. 56, 54 N.E.2d 389;People ex rel. Larson v. Thompson, 377 Ill. 104, 35 N.E.2d 355, 140 A.L.R. 948. As pertinently observed in People v. Chicago, Burlington & Quincy R. Co. (386 Ill. 56, 54 N.E.2d 390), ‘The law is general in its application to those bodies included, and is intended to bring about unform specification and classification of revenue and expenditure by providing the forms used in the budget be furnished by the Tax Commission. If there was any doubt that this is the correct construction it would be removed by the provision of section 4.’ The fourth section, as amended by an act approved July 23, 1943, ordains, ‘The failure by any governing body of any municipality to adopt an annual budget and appropriation ordinance, or to comply in any respect with the provisions of this Act, shall not affect the validity of any tax levy of any such municipality, otherwise in conformity with the law.’ Ill.Rev.Stat.1943, chap. 120, par. 365.4; see, also, par. 676a.

In People ex rel. Manifold v. Wabash R. Co., 389 Ill. 403, 59 N.E.2d 795, 797, the question presented for decision was whether the so-called budget and appropriationordinance was in fact an appropriation of the taxes to be collected for the calendar year 1942, when the only moneys estimated and to be expended were those derived from the tax levy of 1941, or from sources other than the taxes of 1942. We held that a budget and appropriation ordinance providing only for expending cash or cash items on hand of a previous year could not be considered as a budget of the revenue to be derived from a subsequent levy, and was, in effect, no budgeting, under the law, of the funds to be derived from the levy of 1942, adding, ‘This does not invalidate the levy under section 4 of the act.’ A contrary rule would render impossible cash operation of their affairs by municipalities. The challenged ordinance only budgeted the money on hand or available, and appropriated it without reference to the 1944 tax levy. People ex rel. McWard v. Wabash R. Co., 395 Ill. 243, 70 N.E.2d 36;People ex rel. Prindable v. Illinois Central R. Co., 389 Ill. 474, 59 N.E.2d 798.

Defendant answers in its reply brief that section 4, when construed as excusing the two townships from adopting budget and appropriation ordinances prior to the passage of their tax levies, is void. To support this contention, the argument is advanced that section 4 is not in harmony with the intent of the statute, repugnant to the other provisions of the act, and void because it cannot be given any meaning consistent with the purpose of the statute. Defendant invokes the rule of statutory construction that where the first clause of a section conforms to the obvious policy and intent of the legislature, it is not rendered inoperative by a later inconsistent clause which does not conform to this policy and intent. People ex rel. Griffith v. Mohr, 252 Ill. 160, 96 N.E. 893;Cummings v. People, 211 Ill. 392, 71 N.E. 1031. Section 4 is in the nature of a proviso. The office of a proviso generally is to qualify or restrain the preceding section or paragraph. A proviso is generally enacted with the intent of excepting something from the enacting provisions, to restrain or qualify its generality or to exclude some possible ground of misinterpretation or of the act being extended to a state of facts or class of cases which were not intended to be brought within its purview. Wells Bros. Co. v. Industrial Com., 285 Ill. 647, 121 N.E. 256;In re Day, 181 Ill. 73, 54 N.E. 646,50 L.R.A. 519. The manifest objective of the statute People v. Chicago, Burlington & Quincy R. Co., 386 Ill. 56, 54 N.E.2d 389;People v. Wabash R. Co., 391 Ill. 200, 62 N.E.2d 819;People v. Wabash R. Co., 389 Ill. 403, 59 N.E.2d 795;People v. Thompson, 377 Ill. 104, 35 N.E.2d 355, 140 A.L.R. 948, impels the conclusion that section 4 is not void for repugnancy.

As an alternative objection to the taxes levied by the township of East St. Louis, defendant contends that the portion of the town collector's commissions payable to the town fund is sufficient to meet the town's legitimate expenses without the necessity of any tax levy, and that the levy of $16,835 for town purposes is, therefore, void. The city treasurer is also the town collector and his annual commissions for collecting taxes, according to the stipulation of the parties, are approximately $35,000. The collector paid the excess of $1,500 of his commissions into the city treasury of East St. Louis. Section 36 of the Fees and Salaries Act (Ill.Rev.Stat.1943, chap. 53, par. 55,) provides, in part, that in counties containing a population not exceeding 300,000 inhabitants, ‘all excess of commissions and fees over fifteen hundred dollars shall be paid into the town or district treasury,’ and that in counties containing more than 300,000 inhabitants the commission of two per cent shall be allowed to and deducted by the town or district...