89 N.E.2d 361 | Ill. | 1949
These cases brought in the circuit court of Cook County by various owners of night clubs in the city of Chicago against the Director of the Department of Revenue of the State of Illinois, the State Treasurer and the Attorney General of Illinois, seek to enjoin these officials from taxing them under the Retailers' Occupation Tax Act, upon the theory that plaintiffs are primarily theater restaurants and night clubs for the entertainment of their patrons and that their sale of meals, refreshments and beverages is only incidental to the business of a night club or theater and, therefore, such sales are not subject to the tax.
In the Byron Massell case, cause No. 31063, the complaint was filed on November 13, 1945, and on November 14, 1945, a temporary injunction was issued impounding in a protest fund all of the taxes paid within 30 days prior to the filing of the complaint and thereafter to be paid by *481 the plaintiffs. From time to time various other night clubs on petition were by order of court granted leave to become additional parties plaintiff and the temporary injunction extended to include such plaintiffs. No answer or appearance was filed by the State officials until November 23, 1948, at which time George F. Barrett, as Attorney General, filed the appearance of the State officials and a motion to strike the complaint. On December 1, 1948, the trial court overruled the motion to strike, and the defendants elected to stand by their plea. The trial court entered a decree against the defendants on that date, holding that the plaintiffs were not subject to the taxes imposed by the act. Thereafter on December 20, 1948, a supplemental decree was entered ordering the defendants to make certain specific refunds to these plaintiffs from the protest fund which had been accumulated under the temporary injunction. At that time the assistant Attorney General consented to the entry of this supplemental decree by writing thereon, "Checked and found correct by Oliver Bovik, Ass't. Atty. Gen'l." Subsequently, on December 29, 1948, the Treasurer of the State of Illinois, with knowledge and consent of the Department of Revenue, paid the amounts pursuant to the decree unto the plaintiffs and a satisfaction of judgment was thereafter filed by the plaintiffs. The total refund paid was $239,880.85. The judgment for these amounts was entered only upon the affidavits of the respective plaintiffs and it appears that no testimony was presented in court as to the amount of the alleged refunds. Thereafter, on January 21, 1949, notice of appeal was filed by the present Attorney General.
In the case of Roth, Inc. v. Richard J. Daley et al., the original complaint was filed on May 9, 1941. It asserted that the plaintiffs, all of whom operated night clubs, were primarily in the business of entertainment and that the serving of foods and beverages was incidental to that business and, therefore, they were immune from the Retailers' *482 Occupation Tax Act both as to cover charge and as to moneys charged for food and refreshments. Likewise, in that case a temporary injunction was issued on May 12, 1941, and moneys were paid into a protest fund pursuant thereto. On May 27, 1941, George F. Barrett, as Attorney General, filed an answer on behalf of the State officials and, aside from the filing of many intervening petitions adding various other night clubs as parties plaintiff, the cause continued to remain pending disposition or dismissal for want of prosecution until December 16, 1948. On that date the trial court entered its decree adjudging that the plaintiffs were primarily in the theater or entertainment business and that their sale of foods and drinks were incidental to that business and that, therefore, none of them were subject to the provisions of the Retailers' Occupation Tax Act and they were entitled to refunds of all taxes paid into the protest fund and subsequently would be required to pay no taxes under the act. This decree was based upon an amended complaint and motion to dismiss the same, which were filed on the same date of the decree by leave of court. On December 21, 1948, the trial court, after considering the affidavits of the plaintiffs, found that they were all entitled to refunds in varying amounts aggregating $91,912.97 and entered an order directing that those amounts be paid. In the decree of December 16, 1948, it appears that the trial judge or the assistant Attorney General present at that time wrote on the bottom of the decree the following: "No objection basis Pl. engaged primarily in entertainment business." On the decree of December 21, 1948, the assistant Attorney General wrote the following. "Checked and found correct by O. Bovik Ass't. Atty. General." Subsequently, on December 29, 1948, with the knowledge and consent of the Department of Revenue and of the Attorney General, the State Treasurer, pursuant to the decree, paid the full amount of the refunds to the plaintiffs. *483
On April 19, 1949, Ivan A. Elliott, the present Attorney General, filed a petition for leave to appeal from the decree of December 16, 1948, and the supplemental order or judgment on December 21, 1948, entered in the case of Roth, Inc. v.Daley. In that petition he claimed that he had no knowledge of the pendency of this case and its disposition until after the period for filing notice of appeal had expired. An answer to that petition was filed and subsequently this court granted leave to appeal and this case is now before us on the merits.
Because both of these cases involved similar questions of law and similar facts they have been consolidated by this court for consideration and opinion.
At the outset the plaintiffs contend that this court cannot consider this appeal for the reason that the appeal is perfected from a decree entered by consent of the defendants and also for the reason that the questions involved have become moot because of the voluntary payment of the judgments by the State officials. Normally, where a decree is entered by consent of the parties no appeal can be perfected therefrom because the decree is not a judicial determination of the rights of the parties but merely is a recital of the agreement of the parties. (Bergman v.Rhodes,
We have carefully examined the records presented in this appeal and we believe that it affirmatively appears that the decrees appealed from were, in fact, entered by consent *484 and did not constitute a judicial determination of the rights of the parties.
Section 23 of article IV of the constitution provides: "The General Assembly shall have no power to release or extinguish, in whole or in part, the indebtedness, liability, or obligation of any corporation or individual to this state, or to any municipal corporation therein." We held in People ex rel. Ames v. Marx,
The question has not become moot merely by the payment of the amounts ordered by the judgments, because the decrees purported to perpetually restrain the State officials from collecting taxes under the Retailers' Occupation Tax Act from these plaintiffs, therefore, affecting future tax collections.
This court held in Brevoort Hotel Co. v. Ames,
In Continental Can Co. v. Nudelman,
It would, therefore, appear that from this court's prior rulings with reference to the interpretation of the Retailers' Occupation Tax Act, at least the portion of the plaintiffs' businesses which consists of selling food and beverages and other personal property is taxable, even though in *486
certain instances the sale of food, beverages and other personal property is incidental to the main business conducted by the plaintiffs of providing entertainment. In Ahern v. Nudelman,
It is, therefore, the opinion of this court that the decrees appealed from in the cases at bar had the effect of exempting and forgiving these plaintiffs from liability for taxes and, therefore, that the decrees are invalid and should be reversed. The question of the right to recover the amounts provided in said decrees is not before the court and we express no opinion thereon.
For the reasons stated in this opinion, the decrees of the circuit court of Cook County are reversed.
Decrees reversed. *487