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People v. Valley Steel Products Co.

OPINION FILED APRIL 3, 1978.

THE PEOPLE OF THE STATE OF ILLINOIS, APPELLANT,

v.

VALLEY STEEL PRODUCTS COMPANY ET AL., APPELLEES. — THE PEOPLE OF THE STATE OF ILLINOIS, APPELLANT,

v.

J.D. BARTER CONSTRUCTION COMPANY ET AL., APPELLEES. — THE PEOPLE OF THE STATE OF ILLINOIS, APPELLANT,

v.

J.D. BARTER CONSTRUCTION COMPANY, APPELLEE.



No. 49612. — Appeal from the Circuit Court of Sangamon County, the Hon. George P. Coutrakon, Judge, presiding.

No. 49629. — Appeal from the Circuit Court of Sangamon County, the Hon. George P. Coutrakon, Judge, presiding.

No. 49630. — Appeal from the Circuit Court of Sangamon County, the Hon. Harvey Beam, Judge, presiding.

MR. CHIEF JUSTICE WARD DELIVERED THE OPINION OF THE COURT:

William J. Scott, Attorney General, of Springfield, and C. Joseph Cavanagh, State's Attorney, of Springfield (Donald B. Mackay, Philip Weber, and Gerri Papushkewych, Assistant Attorneys General, of counsel), for the People.

Jenner & Block, of Chicago, and Hendricks & Watt, of Murphysboro (David W. Watt, Jr., of counsel), for appellees J.D. Barter Construction Company, James Guard, and Robert W. Henley.

William J. Scott, Attorney General, of Springfield (Donald B. Mackay and Philip Weber, Assistant Attorneys General, of counsel), for the People.

Thomas P. Sullivan, Donald R. Harris, Jeffrey D. Colman, Eugene R. Wedoff and Kathleen J. Purcell, of Chicago (Jenner & Block, of counsel), for appellee J.D. Barter Construction Company.

In each of these appeals, cause No. 49612, People v. Valley Steel Products Co., and causes No. 49629 and 49630, People v. J.D. Barter Construction Co., the circuit court for Sangamon County dismissed indictments returned by the grand jury on August 27, 1975, which charged the corporate defendants and various individuals with violations of sections of the Motor Fuel Tax Law (Ill. Rev. Stat. 1975, ch. 120, pars. 417 et seq.) (the Act).

In causes No. 49612 and 49629 the circuit court dismissed the indictment for the reason, among others, that the Act violated the equal protection clause of article I, section 2, of the Illinois Constitution. The State took a direct appeal under Rule 302(a)(1) (58 Ill.2d R. 302(a)(1)). In cause No. 49630, the circuit court upheld the Act on the equal protection issue, but dismissed the indictment on non-constitutional grounds. The State took an appeal to the appellate court, the appeal was transferred here under Rule 302(b) (58 Ill.2d R. 302(b)), and the three causes were consolidated for argument and decision.

In cause No. 49612, People v. Valley Steel Products Co., the indictment named both Valley Steel Products Company (Valley Steel) and Howard Neuman, alleged in the indictment to be Valley Steel's comptroller and secretary-treasurer. Various counts of the indictment alleged that Valley Steel was doing business in Illinois as a licensed bulk user of special fuel, and that, over the period from April 1973 through January 1975, the defendants failed to comply with section 5b of the Act (Ill. Rev. Stat. 1975, ch. 120, par. 421b), which requires a monthly return showing the amount of special fuel received or purchased during the preceding month, in that the returns understated these amounts. Other counts charged that Valley Steel was doing business in Illinois, that it was not licensed as either a supplier or a distributor of motor fuel, and that, over the period from July 1972 to January 1975, the defendants had made purchases of motor fuel, but had failed to pay the motor fuel tax to the State, as required by section 7 of the Act (Ill. Rev. Stat. 1975, ch. 120, par. 423).

It was charged in other counts of the indictment that the defendants had distributed motor fuel without a license, in violation of section 3 (Ill. Rev. Stat. 1975, ch. 120, par. 419) of the Act, by transporting motor fuel into Illinois and distributing it to points located in three named Illinois municipalities.

Valley Steel filed a motion to dismiss all counts of the indictment on the grounds that a corporation is not subject to criminal prosecution for violations of the Act and that the Act violated the equal protection clause of article I, section 2, of the Illinois Constitution, in that the Act designated violations as Class 3 and Class 4 felonies, whereas comparable violations of other statutes imposing use and occupation taxes were punishable only as misdemeanors or business or petty offenses. Valley Steel also moved to dismiss the charges of distributing motor fuel without a license on the ground that the communities in which distribution was allegedly made were located in counties other than the County of Sangamon, so that venue was improper under section 1-6 of the Criminal Code of 1961 (Ill. Rev. Stat. 1975, ch. 38, par. 1-6).

The defendant Neuman also filed a motion to dismiss. It paralleled that of Valley Steel on the equal protection and venue issues. Neuman's motion also asserted that the indictment was defective since it did not allege that he was the person responsible for filing tax returns or making payment of any taxes due. In a memorandum opinion accompanying its order of dismissal, the trial court found in favor of the defendants on each of their contentions.

In cause No. 49629, the indictment named as defendants J.D. Barter Construction Company (Barter), James Guard, and Robert W. Henley. Guard was alleged to be the general manager of Barter, and Henley was alleged to be a commission agent for Mobil Oil Corporation. The indictment charged Barter and Guard with violation of sections 5b and 7 of the Act. In addition the indictment charged that the defendant Henley was responsible for reporting to Mobil Oil Corporation the amount of motor fuel tax from the sale of special fuel made to Barter, but that he failed to do so, thereby causing Mobil to fail to collect and pay over said tax, as required by section 6 (Ill. Rev. Stat. 1975, ch. 120, par. 422).

The trial court's dismissal of the indictment rested on its acceptance of the defendants' contentions as to violation of the equal protection clause and of corporate immunity from prosecution. Certain counts were also dismissed because they failed to allege a mental state or a specific intent as defined by section 4-9 of the Criminal Code of 1961 (Ill. Rev. Stat. 1975, ch. 38, par. 4-9).

In cause No. 49630, the indictment, which named Barter alone, charged it with violations of section 13 of the Act (Ill. Rev. Stat. 1975, ch. 120, par. 429) in filing claims for refunds of motor fuel tax payments which falsely stated that the fuel purchased on which the refund was claimed was used for a nontaxable purpose. In this case, which was heard by a different judge, the circuit court rejected the defendant's claim as to ...


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