W. C. Reynolds v. State of Illinois — 8 Ill. Ct. Cl. 61

W. C. REYNOLDS, DOING BUSINESS UNDER THE NAME AND STYLE OF REYNOLDS OIL COMPANY, Claimant, v. STATE OF ILLINOIS, Respondent.

Case summary

Claimant sought refund of gas tax paid on gasoline allegedly lost through a leaky tank. The court denied the claim because the tax was voluntarily paid and no statute authorized recovery of voluntarily paid taxes.

Claim type: Tax Refund

Cases cited: Oppenheimer & Co. vs. State, 6 Ct. Cl. 465; Board of Education vs. Toennigs, 297 Ill. 469; Ill. Glass Co. vs. Chicago Tel. Co. 234 Ill. 535; School of Domestic Arts vs. Harding, 331 Ill. 330; Western Electric Co. vs. State, 6 Ct. Cl. 414; Wm. Wrigley Jr. Co. vs. State, 7 C. C. R. 153

AI-generated summary from the opinion text — may contain errors. The opinion text and PDF above are the official record.

Headnotes

GAS TAX-voluntarily paid cannot be recovered. Where gas tax is voluntarily paid it cannot be recovered.
SAME-paying on demand of State official or to avoid penalties not duress or compulsion. Payment of tax on demand of proper State official or to avoid penalties is not compulsion or duress.

HARRY TYPER, for claimant. OTTO KERNER, Attorney General; JOHN KASSERMAN, Assistant Attorney General, for respondent.

MR. JUSTICE YANTIS delivered the opinion of the court:

Claimant herein seeks to recover a refund of One Hundred Twenty-seven and 50/100 Dollars ($127.50) gas tax paid on 4,250 gallons, reported over a period of nine months as sold, but which it is now claimed was lost by a leaky tank.

Respondent, by the Attorney General, files its motion to dismiss the claim as being supported by no legal rights.

The tax was apparently voluntarily paid. A discount and deduction for a certain loss of 1,942 gallons by leakage, was made during the period now complained of.

It is well settled in this State that a tax voluntarily paid cannot be recovered back in the absence of a statute providing for such a recovery. It is also well settled that the fact that the statute under which the tax was levied and collected was unconstitutional will not authorize an action for its recovery by the party paying it. (Oppenheimer & Co. vs. State, 6 Ct.

Cl. 465; Board of Education vs. Toennigs, 297 Ill. 469.) The fact that the State had no legal right to demand the tax and claimant was under no legal obligation to pay it is of no consequence unless the payment was compulsory in the sense of depriving claimant of its free will. (Ill. Glass Co. vs. Chicago Tel. Co. 234 Ill. 535; School of Domestic Arts vs.

Harding, 331 Ill. 330; Western Electric Co. vs. State, 6 Ct.

Cl. 414.)

Wm. Wrigley Jr. Co. vs. State, 7 C. C. R. 153. [*62]

NUMBERS 65-96

MISSING AT TIME

OF FILMING

[*63] (The scanned page is almost entirely blank, with only a small number of scattered, unreadable random speckle dots, no legible text, page numbers, or running heads that can be transcribed.) [*7]

WARNER CONSTRUCTION COMPANY, A CORPORATION v. 97 STATE OF ILLINOIS.

the instrument. The paragraph in question is not clearly worded, but upon a careful consideration thereof, we are of the opinion that the construction placed upon said Paragraph Two (2) by the claimant and by the Attorney General is correct, and that such paragraph will not bear the interpretation placed thereon by the department. We conclude, therefore, that the State did not have the right to forfeit the deposit check upon the ground that the claimant failed to give notice within twenty (20) days after the opening of the bids, of its desire to withdraw. Whether the State was justified in forfeiting the check on any other grounds, still remains to be considered.

Paragraph Two (2) provides that the proceeds of the check shall become the property of the State, in either of two contingencies, to-wit: 1. If, for any reason, the bidder, after the opening of the bids, withdraws. 2. If on notification within twenty (20) days from the date of the opening, the bidder refuses to execute the contract and bond.

There is nothing in the record to indicate that the claimant at any time withdrew its bid, and consequently it is unnecessary to further consider the first contingency above stated. Furthermore, there is no question but what the claimant refused to execute the contract and bond. Claimant justifies its refusal upon the fact that it was not notified of the award within twenty (20) days after the opening of the bids.

The Attorney General contends that the claimant received a "notification" within twenty (20) days after the opening of the bids, and therefore impliedly admits that if claimant was not notified of the award within twenty (20) days after the opening of the bids, it was justified in refusing to execute the contract and bond.

We now come to the consideration of the question as to whether the letter of the Department of November 17, 1931 constituted a "notification" within the meaning of said Paragraph Two (2), as contended by the Attorney General.

If such letter constituted a "notification" within the meaning of Paragraph Two (2), then the State was justified in retaining the deposit check. If, on the other hand, the letter -7 [*98] of November 17th did not constitute such "notification", then the claimant was within its rights in refusing to execute the contract and bond, and is entitled to the return of its deposit check.

It will be noted that the letter of November 17th merely advises the claimant that it was "the apparent low bidder", and further, that "preliminary to award of contract is now required that a bond properly executed be on file in this office". There is nothing in such letter which would justify the claimant in proceeding with the work under the contract.

On December 3, 1931, to-wit, thirty (30) days after the opening of the bids, claimant notified the department that it had received no notice of the contract having been awarded and asked for the return of the check. The department made reply to such letter on December 9th. If the department took the position that the letter of November 17th constituted a "notification", such letter of December 9th should have so stated. However, the department in its said letter of December 9th said nothing whatsoever about its letter of November 17th, but on the contrary, then notified claimant "of the acceptance of your following proposals, opened on Tuesday, November 3, 1931", etc.; and notified claimant that a formal contract would follow and that pending receipt of such contract, said letter of December 9th be taken as authority to proceed with the work. This letter of December 9th constituted the first authority given to claimant to proceed with the work. The letter of the Division of Architecture and Engineering of December 14th stated that December 2nd was the date the Division received authorization to enter into this contract.

From a careful consideration of all of the correspondence in the matter, the court feels that the letter of the department dated December 9, 1931 was the first notification which was given to claimant in accordance with the provisions of Paragraph Two (2), and that the letter of the department dated November 17, 1931 was not intended to be and was not in fact the notification required by said Paragraph Two (2). The department was not in position to award a contract until a bond had been filed by the successful bidder, and no request to file such bond was made prior to said letter of November 17th. Inasmuch as no contract could be [*66] WANSER CONSTRUCTION COMPANY, A CORPORATION v. 99 STATE OF ILLINOIS.

awarded until a bond was filed, surely no notification could be given prior to the award.

There can be no question as to the right of the State in a proper case to forfeit a deposit if the bidder neglects or refuses to enter into a contract within the time required by the proposal. However, forfeitures are not favored in the law, and before the State can justify a forfeiture, it must bring itself within the terms of the contract authorizing the same. In this case, under the terms of the proposal which was prepared by the State itself, the State was entitled to declare a forfeiture for failure to execute the contract, provided "notification" was given to the bidder within twenty (20) days after the opening of the bids. The word "notification" as used in said Paragraph Two (2) can mean nothing other than a "notification" of the fact that the contract was awarded to the bidder. The letter of November 17, 1931 was not such a notification.

The first notification given to claimant of the award of the contract to it was the letter of the department dated December 9th, which was more than twenty (20) days after the opening of the bids. In this connection it is also to be noted that the claimant on December 3rd, to-wit, thirty (30) days after the opening of the bids, requested the return of its deposit check.

It is also to be noted that the department on December 23rd, referring to the request made by claimant that it be privileged to decline the award of the contract, advised the claimant as follows: "Kindly refer to your letters of December 10th and December 15th wherein you request that you be privileged to decline the award of above contract, and be advised that the same is hereby granted and the award is being made to the next lowest bidder."

Nothing whatsoever was said regarding the forfeiture of the deposit check, and there is nothing in the evidence to show that the State lost anything on account of the acceptance of the next lowest bid. On the record before us, we feel that the State was not justified in forfeiting the deposit bid and that the claimant is therefore entitled to a return of the amount of its deposit check.

Award is therefore entered in favor of the claimant for the sum of Three Thousand Dollars ($3,000.00).