People ex rel. Toman v. B. Mercil & Sons Plating Co.

• Citation: 37 N.E.2d 839,378 Ill. 142
• Decision Date: 18 November 1941
• Docket Number: No. 26091.,26091.
• Court: Supreme Court of Illinois
• Parties: PEOPLE ex rel. TOMAN, County Collector, v. B. MERCIL & SONS PLATING CO.

378 Ill. 142

37 N.E.2d 839

PEOPLE ex rel. TOMAN, County Collector,

v.B. MERCIL & SONS PLATING CO.

No. 26091.

Supreme Court of Illinois.

Nov. 18, 1941.

Proceeding by the People, on the relation of John Toman, County Collector, against the B. Mercil & Sons Plating Company involving objections to the annual tax levy of the city of Chicago for the year 1938. From a judgment sustaining the objections, relator appeals.

Reversed and remanded, with directions.Appeal from Cook County Court; Edmund K. Jarecki, Judge.

Thomas J. Courtney, State's Atty., and Barnet Hodes, Corp. Counsel, both of Chicago (Joseph F. Grossman, Otho S. Fasig, J. Herzl Segal, and Norman N. Eiger, all of Chicago, of counsel), for appellant.

Scott, MacLeish & Falk, of Chicago (Robert S. Cushman, John J. O'Brien, Jr., Dale Allen Letts, Robert E. Corcoran, and Pomeroy Sinnock, all of Chicago, of counsel), for appellee.

GUNN, Chief Justice.

The rulings of the county court upon thirteen items of the annual tax levy of the city of Chicago for the year 1938, objected to upon application for judgment, are presented in this appeal. Inasmuch as six of these items are controlled by recent decisions of this court we will first discuss the items of the levy not involved in such opinions. All objections involved in this appeal were sustained by the county court. The county collector of Cook county appeals directly to this court as the revenue is involved.

The first objection is that the annual appropriation ordinance for corporate purposes contained estimates of revenue which were excessive because the estimated source of revenue was illegal, or not otherwise justified. There are two items involved in this objection: One has to do with the estimate of accounts receivable contained in current assets as of January 1, 1938, $3,075,000; the other appears in the estimate of corporate revenue other than taxes, as pari mutual brokers' licenses $1,000,000. The second objection is that there was an under-estimate of corporate revenue other than from taxes, because of an item for ‘reserve for delinquencies and non-collections amounting to $1,184,000.’ The court sustained objections to $2,550,000 of the accounts receivable item, and to the pari mutual brokers' licenses item, specified in objection No. 1, and to the reserve item specified in objection No. 2. Objections Nos. 1 and 2 will be considered together because the record discloses that $1,000,000 of the reserve item of alleged underestimate was set up against the possibility of not collecting the $1,000,000 pari mutual brokers' licenses item.

The relevant part of the statute involved is the following part of paragraph 102 of chapter 24 of our Statutes, known as the Budget Law: ‘All such estimates shall be so segregated and classified as to funds and in such other manner as to give effect to the requirements of law relating to the respective purposes to which said assets and taxes and other current revenues are applicable to the end that no expenditure shall be authorized or made for any purpose in excess of funds lawfully available therefor. * * * If the appropriations from any fund as set forth in such ordinance as finally adopted shall exceed in the aggregate the maximum amount which such corporate authorities are herein authorized to appropriate therefrom, all appropriations made from such fund by such ordinance shall be void,’ etc. Ill.Rev.Stat.1939, chap. 24, par. 102.

Of the item designated current assets, $2,550,000 represented money owing by the county of Cook to the city of Chicago for fees due in State cases in the municipal court, which were required to be paid by the Municipal Court Act. Ill.Rev.Stat.1939, chap. 37, par. 417. On January 12, 1938, the city had obtained in the circuit court of Cook county, as judgment against Cook county for the sum of $1,758,005.25 for amounts due for said purpose up to the end of 1935; the amounts due and unpaid for the years 1936 and 1937 were estimated at $800,000, and were all included in the designation of current assets and estimated to produce $2,550,000. The balance of the item of $3,075,000 represents other accounts receivable not questioned.

Paragraph 102 of chapter 24, supra, requires the appropriation bill to set forth estimates by classes of all current assets and liabilities of each fund as of the beginning of the year. The claim is made by appellee that since the county was resisting payment of this amount, and was appealing the case to the Supreme Court, the act requiring payment might be declared invalid, and that it was apparent the sum would not be collected during the year 1938. It did appear on January 12, prior to the adoption of the annual appropriation bill, that the judgment against Cook county was some kind of an asset, as was also the claim for the two succeeding years, being based upon the same law, which might properly be considered an account receivable.

The statute is mandatory in requiring estimates to be made of current assets. Laws enacted by the General Assembly are presumed to be valid and constitutional, and before they can be declared void it must so appear beyond a reasonable doubt. Grand Trunk Western Railway Co. v. Industrial Comm., 291 Ill. 167, 125 N.E. 748. The corporate authorities of the city of Chicago had a right to assume that the law was valid, and it became their duty to include in the estimate of current assets an estimate of the amount of debt of Cook county to the city of Chicago. The fact it might not be collected during the current year 1938 would be no justification for not including it in the estimate, for even the current taxes levied for 1938 would not come into collection until the early part of 1939, but money could be realized from such taxes by issuance of tax anticipation warrants, and it is within the realm of conjecture, at least, that the city had some plan for obtaining money from the judgments and demands it held against Cook county. While it is not material to this decision it does appear the city sold the judgments in question for the full face value. We are of the opinion the court erred in sustaining objection No. 1 to the extent if applied to the item of $2,550,000 claimed due from Cook county.

The other part of the over-estimate claimed in objection No. 1 grows out of the ordinance of the city of Chicago dated December 21, 1937, which purported to license pari mutual brokers at semi-annual license fees ranging from $500 to $2,500 each, and which was estimated to produce $1,000,000. The position of the appellee, sustained by the county court, is that this ordinance was void as against public policy and as authorizing gambling transactions contrary to law, and that the city authorities had been advised by the Attorney General the ordinance was void, and, therefore, the inclusion in the estimate of current revenue from sources other than taxes consisted of an over-estimate, which rendered the appropriation void as exceeding the maximum which the city was authorized to appropriate under paragraph 102, supra.

The statute must be read and construed as a whole. One part cannot be singled out and considered without considering its relation to other parts of the same section. This is a familiar rule of construction. People v. Lieber, 357 Ill. 423, 192 N.E. 331. One part of this section requires a detailed estimate of all current revenue from sources other than the tax levy, and another part of the section requires that the appropriation shall not exceed, in the aggregate, the maximum amount that the city has authority to appropriate. The corporate authorities must estimate uncollected taxes of prior years, and the amount to be derived from the current taxes and from current revenue. The provision with respect to estimating the money that will be collected from current revenue is mandatory, as is, to the same extent, the provision that the appropriation shall not exceed the maximum amount that may be legally appropriated.

The legality of the methods of obtaining revenue is not the test of complying with the budget statute. If money is authorized by ordinance to be collected as a license fee it must be estimated in the appropriation bill, but the limit of the sums that may be appropriated is the maximum amounts estimated to be received. At the time the appropriation bill wa adopted there was an ordinance in effect authorizing fees to be collected from pari mutual brokers. The fact there was a public outcry over such a method of obtaining revenue nevertheless did not prevent the ordinance from being a source of current revenue, which had to be estimated. Even though the ordinance were of doubtful validity, that would not excuse failing to make an estimate of the revenue it might produce. Many ordinances properly adopted by cities are successfully attacked, but as long as they are in effect the city is not excused from including, in the budget, estimates of revenues that may be derived therefrom.

Counsel lose sight of the object of the annual appropriation bill. The requirement of the statute is to itemize revenue on hand and anticipated, and not to authorize the expenditure of more than is estimated will be received. Corporate authorities, in making their estimates, are not required to take the risk of having an appropriation held invalid by omitting estimated revenue because they fear the authority authorizing it may be voided, nor will they, On the other hand, invalidate their appropriation bill by including in their estimates moneys which they think will be derived from ordinances which are subsequently held illegal. The fact that a court vacated the pari mutual broker license ordinance is not material, because like attempts may be made to invalidate other sources of revenue, as they exist at the time of the adoption of the annual appropriation bill, that must be estimated, and the total estimate from the various sources enumerated in the statute is the measure of the amount which...