People ex rel. Schlaeger v. Bunge Bros. Coal Co.
| Decision Date | 16 January 1946 |
| Docket Number | No. 28450.,28450. |
| Citation | 64 N.E.2d 365,392 Ill. 153 |
| Parties | PEOPLE ex rel. SCHLAEGER, County Collector, v. BUNGE BROS. COAL CO. et al. |
| Court | Illinois Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Cook County Court; Edmund K. Jarecki, Judge.
Proceeding by the People on the relation of Victor L. Schlaeger, County Collector of Cook County, against Bunge Bros. Coal Company and others for judgment and an order of sale for 1941 delinquent taxes. The respondents paid the taxes under protest and filed objections asking a refund of a portion of the tax alleged to have been illegally exacted. From a judgment sustaining certain objections to relator's application for judgment and order, relator appeals.
Affirmed in part and reversed in part and remanded with directions.
William J. Tuohy, State's Atty., and Barnet Hodes, Corp. Counsel, both of Chicago (Joseph F. Grossman, Otho S. Fasig, Emmett Harrington, and J. Herzl Segal, all of Chicago, of counsel), for appellant.
Robert N. Holt and Scott, MacLeish & Falk, all of Chicago, for appellees.
The county collector has appealed from a judgment of the county court of Cook county sustaining certain objections to the collector's application for judgment and order of sale for 1941 delinquent taxes. Appellees paid the taxes under protest, and, in accordance with section 194 of the Revenue Act of 1939, Ill.Rev.Stat.1939, chap. 120, par. 675, filed objections asking a refund of the portions of the tax alleged to have been illegally exacted.
The first item involved is the appropriation and levy of the city of Chicago for the city relief fund, to reimburse loans made to that fund from other idle city funds during a portion of the fiscal year prior to the collection of 1940 taxes in the amount of $578,577.27. This item represents the difference between the sum of $2,810,000, borrowed from idle funds, and the amount estimated by the city to be available from cash on hand and from collections of the 1940 tax to repay such borrowed funds. The appropriation for the city relief fund, as set out in the 1941 appropriation and levy ordinances, is as follows:
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¦For relief of poor and indigent persons, as provided by law ¦$4,821,422.73¦
+---------------------------------------------------------------+-------------¦
¦Loss and cost in collection of taxes ¦600,000.00 ¦
+---------------------------------------------------------------+-------------¦
¦Liability for reimbursement of advances made by other City ¦578,577.27 ¦
¦funds for relief purposes ¦ ¦
+---------------------------------------------------------------+-------------¦
¦Total for City Relief Fund ¦6,000,000.00 ¦
+-----------------------------------------------------------------------------+
Appellant insists that under section 1 of article 8 of the Cities and Villages Act, in force at the time of the passage of the appropriation and levy ordinances of 1941, Ill.Rev.Stat.1939, chap. 24, par. 123, the city was empowered to levy taxes for the relief and support of all poor and indigent persons lawfully resident therein, to the extent of $6,000,000, and that under section 2 of the Illinois Emergency Relief Commission Act, as then in force, Ill.Rev.Stat.1939, chap. 23, par. 394, in order to participate in State contributions to that purpose, the city was required to levy at least a 3-mill tax, which approximates $6,000,000; and so it was necessary to levy a tax of $6,000,000 for the years 1940 and 1941.
Counsel for appellant say that not enough was collected from the 1940 levy for relief to repay the balance of $578,577.27 so borrowed, and since the city owed the duty to repay the loans procured from idle funds, the appropriation and levy were valid. Appellees, on the other hand, insist that it was incumbent on the city and its officers to so limit its expenditures during the year 1940 that enough would be collected from the levy made to meet the demands on the fund and at the same time pay off the loans from idle funds, and that the city is powerless to repay this loan except from the 1940 levy when collected.
Municipal officers charged with the duty of protecting the credit of the municipality are presumed to do their duty. It is settled in this State that liabilities arising during the year for which the levy is made may be met out of monies borrowed temporarily from other idle funds. Of course, where this is done, a legal duty rests upon the municipality to restore such funds, and it has been held, where the loan was made to pay bonds and interest, that a tax may be levied to repay such loan, where, through inability to collect, the levy for that year does not yield sufficient funds to complete such repayment. Gates v. Sweitzer, 347 Ill. 353, 179 N.E. 837, 79 A.L.R. 1151;People v. New York Central Railroad Co., 355 Ill. 80, 188 N.E. 807.
Appellees argue that the city has no authority to levy a tax in the year 1941 to reimburse other city funds for advances made to the poor-relief fund in the year 1940; that since the city appropriated $6,000,000 for poor relief in each of the years 1940 and 1941, and section 2a of article 7 of the Cities and Villages Act, Ill.Rev.Stat.1939, chap. 24, par. 102, forbids the making of further appropriations in any year after the passage of the annual appropriation ordinance, the transfer of idle funds to the poor-relief fund could be legally only an advancement of idle monies in anticipation of the collection of the resources of the poor-relief fund levied for 1940 and could be paid only out of 1940 poor-relief taxes when collected. They argue that such advances or transfers operate very much the same as money raised by a sale of tax anticipation warrants and can be paid only from 1940 taxes levied for poor relief when collected.
Appellant relies upon the case of Gates v. Sweitzer, 347 Ill. 353, 179 N.E. 837,7 A.L.R. 1151. In that case money was borrowed from idle funds to pay certain bonds and interest as they accrued. This loan was made against the 1927 levy for the bond and interest fund. In 1929 a levy was made to repay an unpaid balanceof that loan. It appeared that the park commissioners were unable to collect sufficient of the tax levied to complete the repayment of this loan. It was there argued that as the park commissioners had, in their original levy, levied all taxes necessary to meet that expense, they had no power to levy a second tax for that purpose, and, further, that the repayment of funds borrowed to pay bond and interest accruals should be paid out of taxes already levied for bond and interest purposes as such tax was collected. It was there pointed out, however, that taxing authorities are required to use sound business judgment to prevent default, and that there is no prohibition against levying a subsequent tax to reimburse a fund so used, where, in the case of bonds and interest, the taxing authorities are unable to collect sufficient funds from the levy against which the loan is made to complete repayment thereof. Liability for reimbursement in such a case is general and not limited, as in case of tax warrants. The obligation in such a case is a debt against the taxing district. Gates v. Sweitzer, 347 Ill. 353, 179 N.E. 837, 79 A.L.R. 1151. This is not such a case.
Counsel for appellant say that it is not disputed that on January 1, 1941, there remained unpaid that part of the loan represented by the amount here objected to. The city's estimate required to be filed at the beginning of the fiscal year 1941, as shown in the additional abstract filed by appellees, contained the items:
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¦Cash ¦$ 364,335.25¦
+--------------------+------------¦
¦Net taxes receivable¦1,867,087.48¦
+---------------------------------+
thus making total assets of $2,231,422.73. The loan from idle funds consisted of two items. The first, made on July 31, 1940, was of.$1,910,000. This was on November 26, 1940, raised to $2,810,000. It is seen that by deducting total current assets of $2,231,422.73 from the $2,810,000 borrowed, there remains the sum of $578,577.27, which is the amount sought to be levied here to pay the balance of the loan. In other words, the estimate indicates that the relief fund for 1940 lacks that much of assets to repay the loan. This estimate was made approximately sixty days before the 1940 tax was put in collection. The additional abstract of record shows that in the 1940 appropriation and levy there was appropriated and levied $6,000,000, of which $600,000 was for loss and cost, leaving $5,400,000 for relief. It does not appear why the estimate of net taxes receivable from the 1940 levy should be no more than $1,867,087.48, when the appropriation and levy for relief was in the sum of $5,400,000. Nor does it appear how it could be determined, on January 1, 1941, what the net taxes receivable in that appropriation would be. This was approximately sixty days before the 1940 levy went into collection.
If ‘net taxes receivable’ means net after accounting for outstanding obligations unpaid and contracted for against the 1940 appropriation, one of two things seems apparent, either such obligations were for other than repayment of the loan and were in excess of the amount appropriated for relief, or there was an anticipated failure of collection amounting to $3,532,912.52 of the 1940 levy. There is nothing in the record explaining such anticipated failure of collection, and it seems unreasonable to suppose such would occur. While taxes are presumed to be legally levied and the burden is on the objector to show otherwise, in this case the estimate made by the appellant indicates that no reason existed why there would not be sufficient collection in the 1940 levy to meet this alleged deficit, in which case the...
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