Richardson Lubricating Co. v. Kinney

• Decision Date: 10 December 1929
• Docket Number: Nos. 19549,19551.,s. 19549
• Citation: 168 N.E. 886,337 Ill. 122
• Parties: RICHARDSON LUBRICATING CO. v. KINNEY, State Treasurer, et al. INDIAN REFINING CO. v. BOLLINGER, State Director of Finance.
• Court: Illinois Supreme Court

337 Ill. 122

168 N.E. 886

RICHARDSON LUBRICATING CO.

v.KINNEY, State Treasurer, et al.

INDIAN REFINING CO.

v.BOLLINGER, State Director of Finance.

Nos. 19549, 19551.

Supreme Court of Illinois.

Oct. 19, 1929.

Rehearing Denied Dec. 10, 1929.

Separate suits by the Richardson Lubricating Company against Garrett DeF. Kinney, State Treasurer, and another, and by the Indian Refining Company against Albert C. Bollinger, State Director of Finance. From adverse decrees, defendants appeal.

Reversed and remanded, with directions.Appeal from Circuit Court, Sangamon County; Charles G. Briggle, judge.

Oscar E. Carlstrom, Atty. Gen., and S. S. Du Hamel, State's Atty., and Montgomery S. Winning, both of Springfield, for appellants.

Doyle, Sampson & Giffin, Terry Lindner, and A. F. Newkirk, all of Springfield, for appellee Richardson Lubricating Co.

Oscar John Dorwin, of Lawrenceville, and Brown, Hay & Stevens, of Springfield, for appellee Indian Refining Co.

George F. Barrett, Charles V. Barrett, Clifford R. Edmister, Dent, Dobyns & Freeman, and William R. T. Ewen, all of Chicago, A. M. Fitzgerald, Harry Moore, and Gillespie, Burke & Gillespie, all of Springfield, Good, Childs, Bobb & Wescott, and Hicks & Folonie, all of Chicago, Roy Geibe Hill, of Springfield, Huff & Cook, Newby & Murphy, Owen & Campbell, and Warren Pease, all of Chicago, S. D. Scholes, L. E. Stone, T. J. Sullivan, and Frank L. Trutter, all of Springfield, Winston, Strawn & Shaw and Walter A. Wade, all of Chicago, Robert R. Humphrey, of Lincoln, Cobbs, Logan & Alexander, of St. Louis, Mo., James T. Montgomery, of Sedalia, Mo., P. C. Otwell, of Belleville, Van Sant & Besse, of Sterling, Mighell, Gunsul & Allen, of Aurora, and William R. Friedrich, of Naperville, of counsel, for both appellees.

DIETZ, J.

This is an appeal by the director of finance and the state treasurer from a decree of the circuit court of Sangamon county enjoining the director from paying to the treasurer and the treasurer from receiving, and requiring the director to refund to the Richardson Lubricating Company certain moneys paid by it to the department of finance as taxes on the sale and distribution of motor fuel under the Motor Fuel Tax Act of 1927 (Laws 1927, p. 758), which was held unconstitutional in Chicago Motor Club v. Kinney, 329 Ill. 120, 160 N. E. 163, on February 24, 1928. The director of finance has also appealed from a similar decree entered in the same court against him and in favor of the Indian Refining Company. The two appeals have been consolidated in this court for hearing and decision. The pleadings and facts in both cases are substantially identical.

The bill of complaint of the Richardson Lubricating Company avers that the complainant has been a distributor of motor fuel in the state of Illinois licensed under the act since July 31, 1927; that it has invested and employs in its business large sums of money and a great amount of valuable property and equipment; that since so licensed the complainant has made the returns and payments to the department of finance provided for in the act; that on February 20, 1928, the complainant filed its return and paid to said department $3,674 as taxes on motor fuel sold and distributed by it during the month of January, 1928, and that such return was made on a form furnished to the complainant by said department which contained a printed synopsis of certain provisions of the act, including the following: ‘Secs. 12 and 13.-Criminal penalties, revocation of the distributor's license and injunction proceedings are provided for violation of the provisions of the act.’ It further charges that said payment was made because of the fear and belief of the complainant that unless the tax was paid it would be subjected to the penalties provided in the act, and therefore such payment was made under duress. The charges of duress are: ‘That at the time of making said return and payment to said Department of Finance as above set forth, the complainant, having knowledge of the penalties provided for in said purported act, feared and believed that unless such returns were made and such tax was paid the license of the complainant to act as a distributor of motor fuel within this State would be forthwith revoked by said Department of Finance through such of the defendants as are officers therein, as aforesaid; that the complainant would be subjected to suits to recover said tax imposed by said purported act; that the complainant and its officers, agents and employees would be subjected to criminal prosecution and fine; that they, and each of them, would, in fact, be so prosecuted and fined, and that its said officers, agents and employees would further be subjected to imprisonment and would be imprisoned, all as provided in said purported act; and further, at the time of making such return and payment as aforesaid the complainant also feared and believed that the revocation of its said license and the institution and prosecution of said suits and criminal prosecutions, and the imposition and infliction of said fines, penalties and forfeitures as aforesaid, would greatly hinder and perhaps wholly ruin the complainant's said business, and that thereby the complainant would suffer great financial loss and would be greatly, permanently and irreparably damaged and injured thereby; and the complainant says that it was caused to and did make the return and payment aforesaid wholly be reason and on account of the said belief and fear so entertained by it as above set forth.’ The bill also alleges that on March 19, 1928, the complainant filed with the department of finance a written protest, declaring that the sum so paid by the complainant was illegally exacted of it on the ground that said act had been declared unconstitutional, and demanding that said sum be returned.

The appellants, who were made defendants to the bill, filed an answer thereto, admitting all of the foregoing allegations thereof, but denying that such payment was made involuntarily, and averring that the defendants at all times regarded the act as valid; that such payment was made by the complainant willingly, freely, and without complaint or protest, knowing and believing that the burden of the tax did not fall upon the complainant but upon the consumers of motor fuel, and that such tax would be used in the construction of additional hard roads, which would result in an increased use of motor fuel, to the benefit of the complainant in the prosecution and successful operation of its business; that no threat to enforce the penalties prescribed by the act had been made against the complainant, its business, agents, or employees; that the complainant sold the motor fuel upon which the tax was paid, and at the time of such sale collected from the purchasers thereof the sum of 2 cents for each gallon sold as such tax thereon and as a part of the purchase price, and then and there represented and advertised to the public and to its customers purchasing and about to purchase motor fuel, that said act was in force and effect and that it was charging and collecting from those who purchased motor fuel from it the sum of 2 cents per gallon as and for the purpose of paying such tax; that the complainant has not returned or offered to return to such purchasers any portion of such tax so paid by them, but has kept and intends to keep the same; and that the complainant has not suffered and will not suffer any injury, or loss because of such payment, in consequence whereof the complainant does not come into court with clean hands and is estopped from asserting the claims set forth in its bill. Exceptions of the complainant to the foregoing averments of the answer were sustained. To support certain of these averments the defendants filed a cross-bill for discovery, to which a demurrer of the cross-defendants was also sustained. The defendants elected to stand by their answer and cross-bill, and a hearing was had on the bill and answer, which resulted in the decree appealed from.

The first question to be determined is whether the payment was made voluntarily or under duress. This is a question of law, to be determined from the allegations of fact contained in the bill and answer, assuming all of them to be true. The only charge of duress alleged in the bill is that the payment was made because of the fear and belief of the complainant that, unless the tax was paid, the complainant, its officers, and agents, would be subjected to the penalties provided in the act. The answer avers that the payment was made by the complainant willingly, freely, and without complaint or protest. These allegations of the bill and answer are not inconsistent. One who makes payment of a legal demand cannot be said to have made such payment involuntarily merely because he does so in the fear and belief and unless such payment is made he will be subjected to the penalties of a valid act, otherwise all taxes could be said to be paid involuntarily. Likewise, one is not under duress who pays a demand he believes to be just or the legality of which he does not question, for the law will presume ‘that every citizen freely and voluntarily discharges every duty which he...