APPEAL from the Circuit Court of Du Page County; the Hon. WIN
G. KNOCH, Judge, presiding.
MR. JUSTICE GUNN DELIVERED THE OPINION OF THE COURT:
A suit at law was filed by the village of Lombard, a municipal corporation, in the circuit court of Du Page County to recover a penalty of $200 per day from the Illinois Bell Telephone Company, a corporation, because of its failure or refusal to file a quarterly statement of its gross receipts, as required by ordinance 506 of said village. The defendant, hereafter referred to as the telephone company, appeared and made a motion to dismiss on several grounds, claiming the ordinance was illegal, null and void. The circuit court sustained the motion and ordered the complaint dismissed. The court certified that the validity of an ordinance was involved, and that public interest required that an appeal be taken directly to the Supreme Court. The village appeals.
The complaint discloses that in 1922 an ordinance was enacted granting the telephone company the right until 1946, and thereafter until terminated upon sixty days' notice, to construct, erect, renew, maintain and operate the usual facilities of a telephone communication system over, under and across the streets, alleys and public places within the village. No charge or license was ever exacted by this ordinance. In December, 1946, the board of trustees of said village terminated the rights of the telephone company under the 1922 ordinance by a sixty-day notice as of February 13, 1947, and on February 2, 1948, enacted ordinance 506 involved in this suit.
The provisions of the ordinance involved in this proceeding are sections 1, 3 and 6. Section I in substance provides that it shall be unlawful to maintain and install any pipes, conduits, wires, or other equipment for the transmission of gas, electric current, impulses, sounds, voices or communications, in, on, under or over any street, alley, sidewalk, parkway or other public place in the village, or to maintain or install any pole or mast to support or hold such wires, without complying with the terms of the ordinance.
Section 3, out of which the principal controversy arises, is as follows: "Unless otherwise provided by specific grant of authority from the village to a person, firm or corporation authorized to maintain poles and wires in, under or over any such public place, or to maintain mains for for the transmission or transportation of gas in or under any such place, each person, firm or corporation maintaining any pipes, conduits, cables, poles or wires in or under any public place shall pay to the village for the privilege of so maintaining such equipment a sum equivalent to 3 per cent of the gross receipts to such person, firm or corporation for the services, current, or gas rendered to premises within the village. Any such person, firm or corporation shall render to the village treasurer a verified statement of such gross receipts at least quarterly, and the payments provided for herein shall be made within thirty days following the end of each quarter of the calendar year. In the event of a telephone company being subject to the provisions of this ordinance, the charge for services shall include the charges for toll calls made from premises in Lombard and charged to the station in Lombard from which such call is made."
Section 6 of the ordinance provides that any person violating the ordinance "shall be fined not less than Ten Dollars nor more than Two Hundred Dollars for each offense, and a separate offense shall be deemed committed on each day during or on which a violation occurs or continues."
The complaint further alleges that the telephone company has refused, and continues to refuse, to render a statement of its gross receipts in violation of ordinance 506, and prays for the penalty incurred by each day of such refusal, claimed in the complaint to amount to $24,000, and for a writ of mandamus to compel the said telephone company to file such a statement of gross receipts with the village clerk from February 13, 1948, to July 23, 1948, the date of the filing of the complaint.
The motion to dismiss specifies several grounds, the main reason of which is the invalidity of the ordinance in attempting to exact 3 per cent gross receipts for a right to continue the privilege of maintaining its equipment in, over, or under the public streets and places of the village. No question of ouster is presented or prayed for in the complaint, nor is there presented the question of any illegal act upon the part of the telephone company other than such as is claimed to be required by said ordinance.
It will at once be seen that the validity of the levy of 3 per cent of gross receipts, required by section 3 of the ordinance, will determine whether the suit for penalties has any legal foundation, since, of course, if the imposition of 3 per cent is unauthorized by law a penalty could not be exacted for failure to comply with the illegal exaction.
The parties to the suit cannot agree upon the nature of the charge or exaction contained in this ordinance. Appellant admits it is not a police or regulatory measure, but claims it is in the nature of a rental for the use of its streets. On the other hand, the appellee contends there is no grant of authority by the General Assembly, either direct or implied, authorizing a municipality to make such a charge, and that it is a privilege or occupation tax, for which no authority has been granted by the legislature; and that conceding, but not admitting, that the charge is intended to be considered as rental for the use of the public streets, the same is illegal because of want of authority upon the part of the village to make such a charge.
It is therefore advisable in the first instance to determine whether the provisions of section 3 of the ordinance are in the nature of a tax, or whether it is a rental for the use of city property. In approaching this proposition we should examine the general limitations of taxation. Section 1 of article IX of the constitution, after making provisions for the general property tax to be levied according to valuation, gives the General Assembly power to tax certain types of business, owning or using franchises or privileges, in such manner as it shall from time to time direct by general law, uniform as to the class upon which it operates.
Taxes are generally defined as coming within two classes, property taxes and excise taxes, (Cooley on Taxation, 4th ed., vol. 1, sec. 46,) and excise taxes are variously denominated, such as occupational, licenses, privilege, franchise, and other types which are distinguished from property taxes by one being a tax directly upon the property itself, and the other as a charge for a privilege arising from the use of the property itself, generally intangible in nature. (Reif v. Barrett, 355 Ill. 104.) In Bachrach v. Nelson, 349 Ill. 579, we held that the limitation of section 1 of article IX of the constitution confined taxation to property taxes, occupation taxes and franchise taxes or privilege taxes, although broadly speaking the last two mentioned come within the term "excise taxes." The above are limitations upon the power to tax, since the general power to tax, inherent in the sovereignty, vests in the General Assembly. Porter v. Rockford, Rock Island and St. Louis Railroad Co., 76 Ill. 561; Reif v. Barrett, 355 Ill. 104; Elmhurst State Bank v. Stone, 346 Ill. 157.
A municipal corporation has no inherent powers of its own. Such powers are acquired wholly by a grant from the General Assembly. (City of Chicago v. Chicago Beverage Co. 372 Ill. 33; Littell v. City of Peoria, 374 Ill. 344; City of Chicago v. Ingersoll Steel and Disc Division of Borg-Warner Corp., 371 Ill. 183.) And neither is a municipal corporation endowed with inherent power to license or exact payment for a privilege. The express enumeration of powers granted a city by statute is an exclusion of powers not granted. (City of Chicago v. Chicago Beverage Co., 372 Ill. 33; Village of Kincaid v. Vecchi, 332 Ill. 586.) Thus, if the exaction made by section 3 of the ordinance in question is considered in the nature of a tax permitted by the constitution to be exercised by the General Assembly, or which may be delegated to a city or municipal corporation, it becomes necessary for the latter to establish the grant of authority by which it exercises such right.
In recent years a number of statutes have been enacted which are not greatly different in nature from that of the ordinance under consideration. The Retailers' Occupation Tax Act provides for a tax upon persons engaged in the business of selling personal tangible property at retail, at the rate of 2 per cent on the gross receipts from such sales of tangible personal property. (Ill. Rev. Stat, 1947, chap. 120, par. 441.) This has been construed by the court not as a property tax but as an occupation tax. (Reif v. Barrett, 355 Ill. 104.) The General Assembly has also, by the statute known as the Messages Tax Act, (Ill. Rev. Stat. 1947, chap. 120, par. 467.1 et seq,) imposed a tax upon persons engaged in the business of transmitting messages in this State at the rate of 3 per cent of the gross receipts from such business; and a like statute, with substantially identical language, levies 3 per cent upon the gross sales from distributing, supplying or selling gas; (chap 120, par. 467.16 et seq.) and for electricity; (chap. 120, par, 468 et seq.) These several taxes are similar in nature and are occupation taxes ...