Appeal from the Circuit Court of Cook County; the Hon. RAYMOND
S. SARNOW, Judge, presiding. Judgment reversed and cause remanded
MR. JUSTICE SCHWARTZ DELIVERED THE OPINION OF THE COURT.
This action was brought by the State to recover a privilege tax imposed by the Motor Vehicle Act of 1951. The trial court held that the State had failed to exercise reasonable diligence in obtaining service of process and dismissed the suit. On appeal, the State contends that neither the requirement of reasonable diligence nor the doctrine of estoppel are applicable. The facts follow.
In 1951 the General Assembly amended section 9 of the Motor Vehicle Act (Ill Rev Stats, c 95 1/2, § 9) which then provided that the operator of a registered second division vehicle (truck, bus, trailer, etc.) pay either an annual flat license tax or an optional mileage weight license tax. The amendment, effective January 1, 1952, deleted the mileage weight tax option and substantially increased the flat annual tax. On November 20, 1951, the Circuit Court of Sangamon County declared the amendment unconstitutional and enjoined the Secretary of State from collecting the tax it imposed. Defendant applied for registration of his vehicle and for the privilege of operating it on public highways in the State during 1952. At that time he was given notice that additional taxes based on the amendment might be due. The registration application stated:
"Notice: the rate schedule on this form does not include the 1952 tax increase held invalid by the Sangamon County Circuit Court. Additional tax will be due if the validity of such increase is sustained by the Supreme Court."
The amendment was held constitutional by the Illinois Supreme Court and the United States Supreme Court. Bode v. Barrett, 412 Ill. 204, 106 N.E.2d 521 (1952), affd 344 U.S. 583, 97 L Ed 567, 73 S Ct 468 (1953).
The State commenced this action against the defendant on June 21, 1955, and a summons issued the same day was returned unserved. Alias summonses were issued and returned unserved in October 1959 and May 1962. Finally, an alias summons was issued and served on November 9, 1967. Defendant moved to dismiss the complaint on the ground that the State had not exercised reasonable diligence in obtaining service as then required by Supreme Court Rule 4 (now Ill Rev Stats, c 110A, § 103(b) (1969)) which reads as follows:
"If the plaintiff fails to show reasonable diligence to obtain service, the action as a whole or as to any unserved defendant may be dismissed with or without prejudice on the application of any defendant or on the court's own motion."
The motion was sustained and judgment entered for the defendant.
The State contends that the standard of reasonable diligence should not be applied to it when it is acting in its sovereign capacity to collect public revenue. Defendant argues that the State is bound by rules of procedure as is any other litigant and that lack of reasonable diligence in obtaining service of process is therefore a proper ground for dismissal even against the State.
Numerous cases have held that neither estoppel nor laches are bars to a State action where public revenue is involved. Department of Revenue v. Barding, 33 Ill.2d 235, 210 N.E.2d 475; Todd v. Annunzio, 410 Ill. 343, 102 N.E.2d 297; Clare v. Bell, 378 Ill. 128, 37 N.E.2d 812; People v. Illinois Women's Athletic Club, 360 Ill. 577, 196 N.E. 881; People ex rel. City of Chicago v. Commercial Union Fire Ins. Co., 322 Ill. 326, 153 N.E. 488. It has been held that even the doctrine of estoppel by verdict does not apply where public revenue is involved. People v. Chas. Levy Circulating Co., 17 Ill.2d 168, 161 N.E.2d 112. The rationale underlying these decisions was ably expressed in the early case of People v. Brown, 67 Ill. 435. There the court said, p 438:
"Its [the State's] rights, revenues and property would be at a fearful hazard, should this doctrine [of estoppel] be applicable to a State. A great and overshadowing public policy of preserving these rights, revenues and property from injury and loss by the negligence of public officers, forbids the application of the doctrine."
While decisions have acknowledged by way of dictum that cases may arise where justice would require application of the doctrine of estoppel against the State acting in its governmental capacity (State v. Illinois Central R. Co., 246 Ill. 188, 92 N.E. 814; People by Barrett v. Bradford, 372 Ill. 63, 22 N.E.2d 691) or against a municipality (City of Quincy v. Sturhahn, 18 Ill.2d 604, 165 N.E.2d 271; County of Piatt v. Goodell, 97 Ill. 84), the only case we find where the State was estopped from acting in its governmental capacity is Hickey v. Illinois Central R. Co., 35 Ill.2d 427, 220 N.E.2d 415. In Hickey governmental bodies had disclaimed any interest in certain land for fifty years and had dealt with the land as if it belonged to the Illinois Central Railroad. As a result, the railroad had executed many leases, conveyances and other agreements involving the property. The court held that justice precluded the State from asserting a belated claim to the land.
The instant case is clearly distinguishable. At the time that defendant applied for the privilege of using the highways he was given notice that an additional tax might be due. There is no evidence that he was led by State officials into believing the State was abandoning its right to such taxes. In fact the State continued its efforts to collect from others who failed to pay the 1952 tax. People ex rel. Carpentier v. Central & Southern Truck Lines, Inc., 17 Ill.2d 120, 160 N.E.2d 777; People ex rel. Carpentier v. Treloar Trucking Co., 13 Ill.2d 596, 150 N.E.2d 624. The collection of taxes is basic to the very existence of the State and the doctrine of estoppel should be applied against the State only where the equities are strongly in favor of the party invoking the doctrine. The record in the case before us is devoid of facts upon which this court could base a finding that the equities strongly support defendant's position. Indeed, while it is the duty of the State to collect taxes, it is likewise the duty of citizens to pay them.
Defendant contends that the State, as any other litigant, is bound by the procedural requirement of reasonable diligence. In People ex rel. Carpentier v. Windy City Motor Service, Inc., 22 Ill.2d 209, 174 N.E.2d 839, which defendant cites in support of his contention, the issue was whether a suit for motor vehicle license fees and taxes was commenced within two years after the dissolution of the defendant corporation. After holding that the two ...