Standard Oil Co. v. Bollinger

• Decision Date: 08 April 1932
• Docket Number: No. 21047.,21047.
• Citation: 348 Ill. 82,180 N.E. 396
• Parties: STANDARD OIL CO. v. BOLLINGER, Director of Finance, et al.
• Court: Illinois Supreme Court

348 Ill. 82

180 N.E. 396

STANDARD OIL CO.

v.BOLLINGER, Director of Finance, et al.

No. 21047.

Supreme Court of Illinois.

Feb. 19, 1932.

Rehearing Denied April 8, 1932.

Suit by the Standard Oil Company against Albert C. Bollinger, Director of Finance, and others. From a decree dismissing bill for want of equity, plaintiff appeals.

Affirmed.

See also 337 Ill. 353, 169 N. E. 236.

Appeal from Circuit Court, Sangamon County;Charles G. Briggle, judge.

Louis L. Stephens and Hicks & Folonie, all of Chicago, for appellant.

Oscar E. Carlstrom, Atty. Gen., and Montgomery S. Winning and A. N. Tolliver, both of Springfield, for appellees.

STONE, C. J.

This is an appeal from the decree of the circuit court of Sangamon county dismissing the bill of appellant by which it seeks an injunction against appellees, Albert C. Bollinger, individually and as director of finance of the state of Illinois, Garrett Kinney, his successor, and other officials of the finance department. The bill seeks to restrain the payment into the road fund in the state treasury or other disposition of the proceeds of the 2-cent motor fuel tax paid by appellant for the month of January, 1928, under the provisions of the Motor Fuel Tax Act of 1927 (Laws 1927, p. 758), amounting to $224,873.16, and seeks return of such sum to appellant. The basis of the action is the invalidity of the act of 1927, which was held to be unconstitutional in Chicago Motor Club v. Kinney, 329 Ill. 120, 160 N. E. 163.

On February 11, 1929, after the decision in the Chicago Motor Club Case, appellant filed its first amended and supplementalbill of complaint. Appellee Kinney had in the meantime been appointed director of finance as successor to appellee Bollinger, and was made party defendant both individually and in his official capacity as director of finance. Appellees filed an answer both individually and officially, and also filed a cross-bill seeking discovery, to which cross-bill a demurrer was filed and sustained, appellees excepting to such order of the chancellor. Appellant filed exceptions to the answer, which were sustained, and appellees excepted, and, abiding their answer, the chancellor, on hearing on the amended and supplemental bill and the averments of the answer not excepted to, entered a decree dismissing the bill of complaint as to all defendants as individuals, but directing Bollinger, as director of finance, to pay the said sum of $224,873.16 to appellant, and enjoining Kinney, as successor of Bollinger, from receiving any of said moneys. Appellees Bollinger and Kinney, as former director and as director of finance, appealed from this part of the decree to this court. Appellant filed cross-errors, by which it sought to have reversed the portion of the decree of the circuit court dismissing the bill as to the defendants therein in their individual capacity. This court reversed the decree of the circuit court and remanded the cause, with directions to overrule the exceptions to the answer and the demurrer to the cross-bill. Standard Oil Co. v. Bollinger, 337 Ill. 353, 169 N. E. 236. In that case this court held that on the bill of complaint there filed, the answer thereto, and the exceptions of appellant admitting the facts set up in the answer, appellant acted merely as an intermediary between its customers and the department of finance; that it collected the tax, as a tax, from its customers and paid it as a tax, not out of its own funds but as collections from its customers for that particular purpose; that it had refunded none of the money so collected to its customers, and though it had filed written protests at the times of payment of the tax to the department of finance, it did not come into equity with clean hands and was not entitled to equitable consideration. This court also held that on the record there made appellant had paid the tax voluntarily, and its protests made at the times of such payment were of no avail. On remandment appellant filed its second amended and supplemental bill, and later filed an amendment thereto. This bill contained the averments of the first amended and supplemental bill. As they are in substance set out in the opinion of this court on former consideration of the case, they need not be again detailed here.

The second amended and supplemental bill also contained the additional averments that $2,370.94 of said tax paid represented 2 cents per gallon after deducting 3 per cent. of the total, as allowed by the Motor Fuel Tax Act of 1927 on motor fuel used by appellant in its own trucks and vehicles. This bill also avers as new matter that divers of its customers protested ‘against the increase of the exaction from them upon purchase of such motor fuel over what such exaction would have been but for the existence of such tax claims,’ and that appellant did as to such customers agree to attempt to recover the ‘tax so delivered to Bollinger,’ and that if it succeeded in so doing it would make ratable restitution of the proceeds of such collection, if any. It is also averred that appellant at no time disclaimed obligation to purchasers who had, in fact, made such purchases, and that it proposes to, and will, pay to such bona fide claimants the amounts ‘equivalent to pro rata of tax payments paid by your orator and recovered herein.’ The bill also avers that appellant has agreed to repay the amount of such tax ‘pro rata of net recovery’ to such customers according to their purchases. By the amendment to the second amended and supplemental bill appellant alleges that the tax payments were made by it through fear that Bollinger, as director of finance, would enforce the penalties of the act against it, resulting in irreparable damage to its business, and that such payments were made involuntarilyand under duress. This amendment also avers that the purpose of the act having failed with the act, the taxes so paid cannot be lawfully expended and so are held in trust for appellant. It is also there averred that the exaction of the tax was contrary to the Illinois Constitution and the Constitution of the United States.

To the second amended and supplemental bill defendants jointly and severally, in their individual capacity, filed a plea of former adjudication, averring that the decree of the circuit court dismissing the bill as to them in their individual capacity was not appealed from and became and remains a final decree. Appellees Bollinger and Kinney, in their official capacity, also filed an answer in substance the same as that filed to the first amended and supplemental bill, which answer was excepted to on the former hearing and held sufficient by this court on review. They also further answered the second amended and supplemental bill, denying that the fund sought is in the hands of Bollinger or Kinney individually but as officials, and denying that complainant has any right to the fund or part thereof or that the fund is held in trust. The answer avers that no threat was made requiring the making of application for report blanks or requiring the payment of the tax; that appellant sold the motor fuel and collected the tax not as an addition to the purchase price but as a tax, and has not returned to any of its purchasers any part of the tax collected and in consequence has suffered no injury. The answer further avers that complainant, while protesting to the department by a written protest that the law was invalid, represented to its customers and to the public that the law was in force and effective, and that it was collecting on sales of motor fuel under the act, 2 cents per gallon as a tax thereon in addition to the purchase price, and that it did so collect the tax and by its conduct became guilty of the wrongdoing which it alleges appellees to be guilty of and does not come into court with clean hands. The answer further avers that for the several months, from August, 1927, to December, 1927, appellant paid to the finance department the sum of $2,121,101.98 tax on motor fuel under written protest of the same kind and character as was used on payment of the tax involved here but brought no suit to restrain payment into the state treasury, though it knew and believed, as shown by the allegations of its bill, that it could not recover such payments after their payment into the state treasury; that it and other fuel distributors sat complacently by and filed no suit until the act was declared unconstitutional in a suit filed by the Chicago Motor Club, which is not a distributor but a consumer of motor fuel; that complainant knew the tax would fall on the consumer and that the use of such tax for the construction of hard-surfaced roads would be beneficial to complainant; and that therefore complainant made these payments voluntarily and not under duress or compulsion. They also answered the amendment to the second amended and supplemental bill, denying that Bollinger, as director of finance, made any demand on complainant for compliance with the act, and averred that complainant fully, willingly and voluntarily complied with the said act. This answer...