APPEAL from the Circuit Court of Cook County; the Hon. WILLIAM
V. BROTHERS, Judge, presiding.
MR. JUSTICE BRISTOW DELIVERED THE OPINION OF THE COURT:
The State of Illinois appeals directly to this court from a judgment order of the circuit court of Cook County sustaining the objections of defendant Chas. Levy Circulating Company to a personal property assessment of its capital stock for tax purposes by the Department of Revenue for 1954.
Since this case relates to revenue, this appeal is properly a direct appeal to this court under section 75 of the Civil Practice Act. Ill. Rev. Stat. 1957, chap. 110, par. 75(1)(b).
The defendant corporation was incorporated under the laws of the State of Illinois on January 29, 1924, for the following stated purposes: "to conduct and carry on the business of wholesale newspaper and magazine distributor; to buy, sell and generally deal in newspapers, magazines, books and other publications; to own, equip, maintain and operate vehicles, wagons, carriages, cabs, trucks and automobiles, by which to transfer, transport, convey, haul and distribute newspapers, magazines, books and other publications, baggage, boxes, parcels and goods, wares and merchandise of every description; to conduct and carry on a general transfer business; to own, operate and conduct garages and stables; to buy, sell and generally deal in goods, wares and merchandise of every kind and description." No change in the originally stated purpose has ever been made.
For the year 1954 the Department of Revenue assessed defendant's capital stock in the amount of $375,000. Plaintiff filed its complaint seeking recovery of taxes in the amount of $14,310 with interest and penalties, including $1,076.43 tax on tangible property assessed by the Cook County assessor. At the hearing defendant objected to assessment of its capital stock on the ground that it is organized for a purely mercantile purpose. The trial court sustained such objection and entered judgment for tax on the tangible property only in the amount of $1,076.43.
Plaintiff contends on this appeal that defendant is not organized for a purely mercantile purpose and that the capital stock assessment by the Department of Revenue is valid. Defendant contends that it is organized for purely mercantile purposes within the meaning of the statute and that plaintiff is estopped by prior verdict from contending otherwise. Plaintiff in its reply brief asserts that the record does not warrant such defense of estoppel and that, if applicable, such defense doctrine should be re-examined and modified so as not to apply to matters involving the public revenue.
An examination of the record in this case discloses no written, formal objections by defendant to the assessment to have been filed in court, but the matter was heard on defendant's oral objections to the assessment in open court. The trial court hearing was held before the same trial judge who had heard similar proceedings by the same parties in prior years. The sole witness for defendant was an attorney who, after being sworn, stated the objection to assessment by the Department of Revenue, and testified that the same objection had been made and sustained by the court in several previous cases, being cases Nos. 54-C-8311, 53-C-6704, and 46-C-10215 in the circuit court of Cook County, and three others in the superior court of Cook County. The court then specifically inquired if the defendant had anything it wished to offer in evidence. Certain copies of income tax returns and corporate records were offered but no records of the prior cases referred to were offered in evidence.
Section 130(6) of the Revenue Act of 1939, as amended June 30, 1943, (Ill. Rev. Stat. 1957, chap. 120, par. 611(6), so far as pertinent, provides: "The Department shall: * * * (6) Assess, and value, in the manner provided by law, the capital stock, including the franchise of all companies or associations incorporated under the laws of this State, except companies and associations organized for purely manufacturing and mercantile purposes, or for either of such purposes."
The defendant relies, not upon the general statutory provision, but upon the exception therein. It is a rule of general acceptance as to the construction of statutes, that exceptions or provisos found in a statute are to be strictly construed. People ex rel. Bowen v. Hughes, 370 Ill. 255, 258.
The term "mercantile" means the buying and selling of commodities for profit. (Kohlsaat & Co. v. O'Connell, 255 Ill. 271; People ex rel. Mercer v. Wyanet Electric Light Co. 306 Ill. 377.) Prior decisions of this court hold that a corporation must be organized exclusively for a manufacturing or a mercantile purpose in order that its capital stock be excepted from assessment by the Department of Revenue. The presence of any other purpose, separate and distinct therefrom, withdraws the corporation from the excepted class. The determination of this question is governed by the terms of the corporate charter. Distilling and Cattle Feeding Co. v. People ex rel. Barnewolt, 161 Ill. 101; Evanston Electric Illuminating Co. v. Kochersperger, 175 Ill. 26; People ex rel. Mercer v. Wyanet Electric Light Co. 306 Ill. 377; Central Union Telephone Co. v. Onken, 271 Ill. 638.
A reading of defendant's corporate charter discloses authority in the broadest language to operate a general transfer business as well as a garage and stable service, which are clearly service businesses unrelated to the newspaper and magazine business. This is authority to engage in other than "purely manufacturing and mercantile purposes." Unless the State is estopped by prior verdict, defendant is subject to assessment for capital stock purposes by the Department of Revenue.
The defendant asserts that the issues raised in the prior cases and there decided by the trial court were identical with the issues in the case at bar, that there have been no changes in the factual situation since then, and that plaintiff is estopped by the verdicts in the prior cases to claim that defendant is assessable by the Department of Revenue as a corporation organized for other than exclusively mercantile purposes. In support of such position, defendant relies on the decision of this court in People ex rel. Carr v. Psi Upsilon Fraternity, 324 Ill. 540.
Plaintiff argues that the record does not warrant such defense of estoppel, but its main contention is that such defense doctrine should be re-examined and modified on the theory that the defense of estoppel by verdict is not available in cases involving public revenue as a matter contrary to public policy.
In the Psi Upsilon case this court stated that the issues and facts therein presented a clear case for applying the rule of estoppel by verdict and that it was unnecessary to quote from the many cases, citing a few of them. We then stated in that case, without qualification, that a judgment sustaining objections to the collection of taxes is conclusive in an action to collect taxes for subsequent years where the property was adjudicated exempt on the same grounds and there has been no change, citing People ex rel. Smith v. Locklin, 273 Ill. 106, and cases from other jurisdictions. The only authority cited and relied on by the county collector in such case was Chicago Theological Seminary v. People ex rel. Raymond, 189 Ill. 439. An examination of all the Illinois authorities cited in the Psi Upsilon case discloses no consideration by the court in any of such cases of the argument here presented, but merely a consideration of the general principles of estoppel by verdict. Therefore, it is incumbent on us to examine the validity of the plaintiff's argument in ...