Appeal from the Appellate Court for the First District; heard
in that court on appeal from the Circuit Court of Cook County;
the Hon. Donald J. O'Brien, Judge, presiding.
MR. JUSTICE UNDERWOOD DELIVERED THE OPINION OF THE COURT:
Rehearing denied November 12, 1976.
This is a direct appeal pursuant to Supreme Court Rule 302(b) by defendants, Robert H. Allphin, Director of the Illinois Department of Revenue, and Philip Mitchell, manager of the Department's investigation division, from an order of the circuit court of Cook County which found them guilty of contempt and imposed fines and jail sentences for violation of a permanent injunction order. The order in question had restrained them from enforcing sections 9c and 18 of the Cigarette Tax Act (Ill. Rev. Stat. 1973, ch. 120, pars. 453.9c and 453.18) against individuals transporting cigarettes from any other State into Illinois for their own use and not for sale.
The sequence of events leading to this appeal is as follows. On September 2, 1973, Thomas G. O'Leary was arrested by agents of the Illinois Department of Revenue and charged with illegal transportation into Illinois of more than 2,000 non-tax-stamped cigarettes in violation of section 9c of the Cigarette Tax Act (Ill. Rev. Stat. 1973, ch. 120, par. 453.9c). That section prohibits, inter alia, the transportation into Illinois, without prior authorization, of a single lot or shipment of original packages containing more than 2,000 cigarettes which have not been Illinois tax-stamped.
The section further provides that, in the event cigarettes are transported on the highways of this State in violation of that section, the vehicle containing the cigarettes and the cigarettes themselves are subject to seizure and confiscation as provided in section 18a of the Act (Ill. Rev. Stat. 1973, ch. 120, par. 453.18a). Section 18 provides that authorized employees of the Department may arrest without warrant any person committing a violation of the Act in their presence and may without a search warrant seize packages of cigarettes which have not been tax-stamped as required by the Act. Ill. Rev. Stat. 1973, ch. 120, par. 453.18.
On March 12, 1974, O'Leary filed a class action in the circuit court of Cook County against defendants Allphin, Mitchell and two agents of the Department alleging that his arrest, the search of his car and the seizure of his property violated various provisions of the State and Federal constitutions. The complaint also sought to enjoin further enforcement of the Cigarette Tax Act against any persons who transport cigarettes without Illinois tax stamps into Illinois for their personal use and not for resale, irrespective of the quantity involved. Following a hearing, the trial court entered an injunction order on April 25, 1974, and an amended injunction order on May 9, 1974, restraining defendants "permanently from directly or indirectly enforcing Section 453.9c and Section 453.18, Chapter 120 Illinois Revised Statutes, against individuals transporting cigarettes into Illinois for their own use and not for sale from any State in the United States." The order further stated "it is this Court's opinion that Section 453.9c does not apply to individuals carrying into Illinois from another State, cigarettes in excess of 2,000 in number for their own use and not for resale", and also provided: "It is not necessary, nor does this Court say Section 453.9c or 453.18 is unconstitutional. This Court says only that Section 453.9c and 453.18 does [sic] not apply to individuals carrying into Illinois cigarettes purchased outside of Illinois for their own use and not engaged in the business of selling them."
On June 24, 1974, a petition for instructions was filed in the circuit court by the Attorney General on behalf of the Department of Revenue and its director stating that subsequent to the issuance of the injunction order investigators from the Department of Revenue had observed a substantial increase in the number of people driving automobiles bearing Illinois licenses purchasing cigarettes from Indiana cigarette stands near the Illinois-Indiana border; that signs had been posted in Indiana stating that due to the injunction order there was no longer any limit to Illinois buyers; that the Department of Revenue had observed and intended to continue to scrupulously observe the letter and spirit of the court's order; that the order had resulted in unexpected effects which made it apparent that "clarifications of the Order are essential so that the Department of Revenue will be enabled to execute the duties imposed upon it by the State Legislature and at the same time to avoid being guilty directly or indirectly of violating this Court's Order"; and that the Department requested the court clarify its order so that the Department would be enabled to determine: (1) possession of what number of cartons of cigarettes would constitute a presumption that the possessor had not purchased the same for his own use; (2) in the event it was ascertained that the possessor of the cigarettes had bought more than one brand of cigarettes would this be prima facie evidence that the cigarettes were not purchased for his own use; and (3) would it be permissible for authorized officers of the Department or for the State Police at the Department's request to stop automobiles bearing Illinois license numbers, the drivers of which had been observed purchasing cigarettes in Indiana, and subject them to specified provisions of the Cigarette Use Tax Act providing for arrests, searches and seizures, confiscation and penalties. The trial court denied the petition for instructions and stated: "The only thing I am going to say is obviously I am not going to prejudge any case. I am not going to tell you what is proper or improper, unless I have some full facts in the case before me, in the petition before me, on a contempt or some other actual controversy that may arise." The court stated, however, that "under my judgment, they [Department of Revenue agents] have the right to stop a car to find out how many packages of cigarettes they have, even if it is only one package of cigarettes" and to tell them "that they are going to have to pay a use tax on them."
On November 6, 1975, the Appellate Court for the First Judicial District announced its decision affirming the permanent injunction order entered by the trial court. In its written opinion, the appellate court construed various provisions of the Cigarette Tax Act and the Cigarette Use Tax Act and held that section 9c of the Cigarette Tax Act was applicable only to persons engaged in the business of selling cigarettes in Illinois who transport into or within the State original packages of cigarettes which are not stamped as required by the Cigarette Tax Act. The court held that "an individual who imports tax-unstamped cigarettes for his own use, regardless of quantity, is not subject to the provisions of the Cigarette Tax Act, but instead is subject to the provisions of the Cigarette Use Tax Act and the tax thereunder." (35 Ill. App.3d at 229.) Review of the appellate court's decision on leave to appeal granted is presently pending before this court in cause No. 48329, which has been taken under advisement following oral argument at this term of court.
On November 13, 1975, one week after the appellate court's decision was announced, a petition was filed in the circuit court by Thomas G. O'Leary, individually and as representative of a class of persons similarly situated, requesting the court to issue a rule to show cause why the defendants should not be held in contempt of court for willful failure to comply with the trial court's injunction order. Although the petition contained various general allegations that the injunction order had been violated, the only specific violations alleged were: that Alphonse Dobrovolskis, who was not engaged in the business of selling cigarettes, "was accosted on the public highways of Indiana on or about September 2, 1973," and wrongfully arrested and imprisoned; that Daniel Kelly, who purchased no cigarettes of any kind "was subjected to similar abuses as O'Leary and other members of the class"; that Martin Kelly, the father of Daniel Kelly, who had purchased cigarettes for his own use but was not arrested, had been subject to a wrongful search and seizure and had later been served with a complaint alleging possession of unstamped cigarettes; and that in March of 1975 "the defendant caused CBS to travel on the highways with them and with their mini-camera photographs were taken of the defendants deliberately violating the order of this court."
The defendants filed a response to the petition for rule to show cause which denied all material allegations of the petition and contained supporting affidavits by revenue agents with respect to the cases of Martin Kelly and Daniel Kelly. The affidavit cited the details of the Kellys' arrest for transportation of 727 packages of tax-unstamped cigarettes into Illinois from Indiana and stated that Martin Kelly had admitted he had purchased the cigarettes for fellow employees who paid him 25 cents a carton above his cost.
On December 3, 1975, the trial court issued the rule to show cause, returnable instanter, why the defendants "should not be held in contempt of the court for the alleged failure to comply with the injunction rendered herein." The trial commenced that day. Plaintiff's evidence consisted primarily of testimony concerning matters not specifically alleged in the petition for rule to show cause. However, there was testimony by Daniel Kelly that he was the son of Martin Kelly and was driving his father's car on March 1, 1975, when he was stopped and arrested by Department of Revenue agents while returning from Indiana where his father had purchased 76 cartons of cigarettes. He testified that neither he nor his father had ever been engaged in the business of selling cigarettes and that the purchase had been made by Martin Kelly for his use and that of his family. He also stated that his father had gone to Indiana to buy cigarettes on previous occasions, but he could not remember how many times. Martin Kelly did not testify at the trial.
Alphonse Dobrovolskis, who was named in the petition for rule to show cause and who had verified the petition, was not called by plaintiff as a witness in support of the petition. However, he was called by the defendants pursuant to section 60 of the Civil Practice Act (Ill. Rev. Stat. 1973, ch. 110, par. 60) and testified after having been granted immunity from prosecution. He stated that he was arrested on August 18, 1974, in Illinois after returning from Indiana in possession of between 50 and 54 cartons of cigarettes, of which approximately 10 were different brands. Five cartons were for his own use and the balance were for friends, relatives and neighbors who had given him money to buy cigarettes for them. He testified that he had gone to Indiana to purchase a like quantity of cigarettes at three or four week intervals on about three other occasions. He further testified that he was a retail grocer and had obtained a license to sell cigarettes the day after he was arrested.
There was testimony by three other witnesses who had purchased cigarettes in Indiana, although none of the incidents they related had been alleged in the petition for rule to show cause. Boysie Queen testified that he and his wife, neither of whom smoked, had each purchased five cartons of cigarettes in Indiana and were stopped by revenue agents on their return to Illinois. They were not arrested, but the agents told them they would have to pay a tax on the cigarettes. Upon being so advised, they returned the cigarettes to Indiana and received a refund. James Bingham, a truck driver who made several trips to Indiana every night on his route, testified that he had been stopped on several occasions by revenue agents, although there was no testimony that he had ever been arrested. He stated that on one occasion he had nine cartons of cigarettes in his truck and was given a tax slip indicating he owed a $10.80 tax which was to be mailed in to the Department of Revenue. He further testified that he purchased cigarettes about twice a week but never bought more than 10 cartons per week. Some of his purchases were made for fellow employees with funds they had given him for that purpose. He stated that over a period of approximately nine months he was observed on as many as 20 occasions by revenue agents. Frances J. Wieczorek testified that on October 15, 1975, she was arrested and her car was confiscated by revenue agents as she was driving back from Indiana where she had purchased 73 cartons of cigarettes consisting of 19 different brands. She stated that she had purchased the cigarettes to ...