APPEAL from the Circuit Court of Cook County; the Hon. THOMAS
C. DONOVAN, Judge, presiding.
MR. PRESIDING JUSTICE STAMOS DELIVERED THE OPINION OF THE COURT:
Mr. PRESIDING JUSTICE STAMOS delivered the opinion of the court:
Plaintiff filed this suit as a class action alleging that defendant wrongfully charged a tax pursuant to the Retailers' Occupation Tax Act *fn1 when the tax should have been charged in accordance with the Service Occupation Tax Act. *fn2 The trial court entered judgment in favor of plaintiff individually, but ordered the class action allegations of the complaint stricken. Plaintiff appeals contending that it was error to strike the class action allegations of her complaint.
Defendant General Motors Corporation (hereinafter defendant) cross-appeals contending that: (1) the trial court should have declined equity jurisdiction; (2) it was improper to enter judgment on the pleadings; and (3) it was improper for the trial court to enter an injunction requiring defendant to pay under protest one-half of any taxes it collects pursuant to the Retailers' Occupation Tax Act.
On February 13, 1967, defendant performed work on plaintiff's automobile. The vehicle was lubricated, a quart of oil was added, and new spark plugs, oil filter, and condenser were installed. Plaintiff paid $30.05 for labor, $16.26 for materials and $.65 for a separately listed "sales tax."
Plaintiff thereafter filed this suit. Defendant filed an answer admitting that it had performed services on plaintiff's automobile and had sold tangible personal property to her, but denying that it was a serviceman subject to the Service Occupation Tax Act. Plaintiff filed a motion for a temporary injunction based upon the allegations of her complaint. On motion of the court the Director of the Department of Revenue and the State Treasurer were made parties defendant. Defendant then filed a motion to strike the class action allegations of the complaint and to dismiss the action. Briefs were filed and argument was heard by the court on the motion. Judgment was thereafter entered which ordered, among other things, that plaintiff recover $.33, the amount of tax she was allegedly overcharged; that the class action allegations of the complaint be stricken; and that plaintiff's request for an accounting be denied. Defendant was ordered to pay under protest one-half of any taxes it collects pursuant to the Retailers' Occupation Tax Act, if the Service Occupation Tax Act is applicable to the transaction on which the tax is collected.
The taxing statutes here involved have been explained in Pierce v. Pacini, 127 Ill. App.2d 1, 261 N.E.2d 515. It is unnecessary to reiterate all that was said there, but we will briefly summarize the pertinent points to facilitate understanding of the issues involved in this litigation.
• 1 A retailers' occupation tax is imposed upon persons selling tangible personal property at retail and is computed as a percentage of the gross receipts of such sale. A sale at retail is any transfer of the ownership or title to tangible personal property for a valuable consideration to a purchaser for use or consumption.
• 2 A service occupation tax is imposed upon persons making sales of service and is computed as a percentage of the cost price to the serviceman of the tangible personal property transferred as an incident to such sale. A sale of service is a transaction which is not a retail sale of tangible personal property under the Retailers' Occupation Tax Act or Use Tax Act.
• 3-5 Whether any particular sale constitutes a sale at retail or a sale of service depends upon the circumstances of the transaction. When a customer contracts for the restoration of an automobile's function and relies upon the skill of the serviceman in the performance of this task, the serviceman is engaged in the sale of a service. If in the course of repair the serviceman chooses and installs a part necessary to such repair, the transfer of the part is incidental to the service and the serviceman is liable for the service occupation tax. However, if the customer selects an article for purchase and the sale does not obligate the seller to install it, the transaction is a sale at retail subject to the retail occupation tax. Thus, a single businessman can be subject to both taxes, although not for the same transfer of tangible personal property, dependent upon the circumstances surrounding the contract of sale.
• 6 Defendant initially contends that the trial court should have declined equity jurisdiction because plaintiff has an adequate remedy at law. Plaintiff replies that this contention would perhaps be valid if she had sued only in her own behalf, but urges that, since she is prosecuting this litigation as the representative of a class, the trial court properly invoked its equity jurisdiction to prevent a multiplicity of suits. A court of chancery may exercise jurisdiction to prevent a multiplicity of suits where a number of persons have separate causes of action against the same person and the claims are governed by the same legal rule and involve similar facts. (I.L.P. Chancery, § 52.) Therefore, if this litigation could properly be prosecuted as a class action, it was not error for the court to exercise its equity jurisdiction.
• 7 Plaintiff contends that it was error to strike the class action allegations of her complaint. The basic criterion of a class action is a community of interest in the subject matter of the suit and the remedy sought. (Harrison Sheet Steel Co. v. Lyons, 15 Ill.2d 532, 155 N.E.2d 595; Smyth v. Kaspar American State Bank, 9 Ill.2d 27, 136 N.E.2d 796.) The subject matter of this suit is the money allegedly improperly collected as tax by defendant. The remedies sought are an injunction to prohibit further improper collection of tax by defendant, an accounting to determine the amount of money allegedly wrongfully collected from the class, imposition of a constructive trust on that money, and restitution thereof. There is a common interest among members of the class in the subject matter of the suit and the remedies sought.
• 8 Defendant urges that a class action is inappropriate under the circumstances of this litigation because each member of the proposed class suffered an overcharge, if any, in a separate transaction unrelated to the transactions of other class members with defendant. As hereinabove stated the tax to be collected depends on the circumstances surrounding the contract of sale. However, we can perceive no cogent reason why the separateness of the transactions should bar a class action in this case. Plaintiff purports to represent those customers of defendant who paid a tax computed pursuant to the Retailers' Occupation Tax Act when the tax should have been computed in accordance with the Service Occupation Tax Act. The sole issue to be litigated on behalf of the class is whether class members are entitled to restitution of the overcharge. If plaintiff is a proper representative, she can pursue this litigation on behalf of the class to a determination of that issue without presenting evidence of the individual factual situations of other class members. Such evidence will be required only if it is necessary for persons to prove their membership in the class and the amount of recovery due them.
Defendant also contends that there is no common fund from which the class members can obtain reimbursement for any overcharge they may have suffered. However, plaintiff has requested that a constructive trust be imposed upon the allegedly excess taxes collected by defendant. If a constructive trust is proper under the circumstances, the money so ...