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O'leary v. Allphin

OPINION FILED NOVEMBER 6, 1975.

THOMAS G. O'LEARY, PLAINTIFF-APPELLEE,

v.

ROBERT H. ALLPHIN, DIRECTOR OF THE DEPARTMENT OF REVENUE, ET AL., DEFENDANTS-APPELLANTS.



APPEAL from the Circuit Court of Cook County; the Hon. DONALD J. O'BRIEN, Judge, presiding.

MR. JUSTICE MEJDA DELIVERED THE OPINION OF THE COURT:

Mr. PRESIDING JUSTICE MEJDA delivered the opinion of the court:

Plaintiff, Thomas O'Leary, brought a class action against defendants Robert H. Allphin, Director of the Illinois Department of Revenue, Philip Mitchell, Chief Investigator of the Department of Revenue, and Burner Kellough and Jeffrey Kueltzo, agents. The trial court entered an injunction order restraining defendants from enforcing sections 453.9c and 453.18 *fn1 of the Illinois Cigarette Tax Act (Ill. Rev. Stat. 1973, ch. 120, pars. 453.9c and 453.18) against individuals transporting cigarettes into Illinois for their own use and not for sale from any State in the United States. Section 9c inter alia prohibits the unauthorized transport into Illinois of tax-unstamped original packages containing more than 2,000 cigarettes in any single lot or shipment. Section 18 provides that agents of the Department of Revenue may make arrests and seizures as to violation of the Act committed in their presence. Defendants appeal.

Defendants contend that section 9c applies to any person transporting such cigarettes into Illinois, irrespective of whether they are for personal use or resale; and, in the alternative, if not applicable to persons transporting cigarettes for their own use, a presumption is created under the section that the transporting of more than 2,000 such cigarettes into Illinois is not for personal use but for resale.

On September 2, 1973, plaintiff was arrested by defendants Kellough and Kueltzo, agents of the Illinois Department of Revenue, and charged with the illegal transport into Illinois of more than 2,000 non-tax-stamped cigarettes in violation of section 9c of the Cigarette Tax Act. The agents were in street clothing and driving an unmarked car. They testified that they saw plaintiff make the purchase of cigarettes at the DeLux Cigarette Stand in Indiana, place them in the trunk of his car, then drive into Illinois, where his car was stopped and searched without a warrant by agents Kellough and Kueltzo. The trunk contained 27 cartons of tax-unstamped cigarettes. Plaintiff was arrested and directed to the Calumet City, Illinois, police station where his car and the cigarettes were seized, subject to confiscation and forfeiture under section 18 of the Act.

On March 12, 1974, plaintiff filed the instant class action complaint alleging that his arrest the search of his car and the confiscation of his property were in violation of various provisions of the United States and Illinois Constitutions. It sought to enjoin defendants from prosecuting any person under the Cigarette Tax Act, being any member of the plaintiff class, who transported into Illinois unstamped cigarettes for their own personal use and not for resale, regardless of the quantity involved. Defendants filed an answer and plaintiff replied. Following a hearing, the trial court entered an injunction order on April 25, 1974, and an amended injunction order on May 9, 1974, nunc pro tunc, permanently restraining defendants and their agents from enforcing directly or indirectly paragraph 453.9c and paragraph 453.18, chapter 120 of Illinois Revised Statutes (sections 9c and 18 of the Cigarette Tax Act), against individuals transporting cigarettes into Illinois for their own use and not for sale from any State in the United States. The order included findings that the foregoing sections of the Cigarette Tax Act were constitutional, but unapplicable to persons transporting tax-unstamped cigarettes into Illinois for their own use and not for resale; that paragraph 453.9c was never intended by the legislature to apply to the transport of unstamped cigarettes for an individual's own use and not for resale, regardless of the quantity involved; that the Cigarette Tax Act was a revenue measure imposed only upon those engaged in the business of selling cigarettes in Illinois; and that the Department of Revenue itself had placed persons in the plaintiff's status outside the scope of the Act by issuing authorization permits under paragraph 453.9c only to persons engaged in the business of selling cigarettes in Illinois. Oral arguments were consolidated for hearing with People v. Richman, 35 Ill. App.3d 231, ___ N.E.2d ___.

The central question presented is the applicability of the Cigarette Tax Act in general, and in particular, whether the prohibition against the unauthorized transport into this State of unstamped cigarettes applies to individuals importing such cigarettes into Illinois for their own use and not for sale.

Paragraph 453.9c of chapter 120 of the 1973 Illinois Revised Statutes, being section 9c of the Act, provides in pertinent part:

"`Transporter' means any person transporting into or within this State original packages of cigarettes which are not tax stamped as required by this Act, except:

(a) A person transporting into this State unstamped original packages containing a total of not more than 2000 cigarettes in any single lot or shipment;

(b) a licensed cigarette distributor under this Act;

(c) a common carrier;

(d) a person transporting cigarettes under Federal internal bond or custom control that are non-tax paid under Chapter 52 of the Internal Revenue Code of 1954, as amended;

(e) a person engaged in transporting cigarettes to a cigarette dealer who is properly licensed as a distributor under the Illinois Cigarette Tax Act or the Illinois Cigarette Use Tax Act, or under the laws of any other state, and who has in his possession during the course of transporting such cigarettes a bill of lading, waybill, or other similar commercial document which was issued by or for a manufacturer of cigarettes who holds a valid permit as a cigarette manufacturer under Chapter 52, Internal Revenue Code of 1954, as subsequently ...


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