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Schlessinger v. Olsen

OPINION FILED JUNE 8, 1982.

SHIRLEY SCHLESSINGER ET AL., PLAINTIFFS-APPELLANTS,

v.

SIDNEY R. OLSEN, COOK COUNTY RECORDER OF DEEDS AND REGISTRAR OF TITLES, ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Cook County; the Hon. RAYMOND K. BERG, Judge, presiding.

PRESIDING JUSTICE STAMOS DELIVERED THE OPINION OF THE COURT:

This cause is before the court on remand from the Illinois Supreme Court. In our earlier decision in this case (89 Ill. App.3d 583, 411 N.E.2d 1239), we reversed the trial court's dismissal of plaintiffs' action and remanded the case for determination of the class certification issue prior to any judgment on the merits. The circuit court had originally granted plaintiffs' motion for a preliminary injunction but subsequently granted defendants' motion for reconsideration, vacated the preliminary injunction order, and dismissed the complaint. We believed that a judgment on the merits rendered prior to a decision as to certification of the class precluded appellate review on the merits. The basis for this belief was the uncertainty which would result regarding the scope of the decision, i.e., who would benefit from such a judgment on the merits. (See 89 Ill. App.3d 583, 590.) The Illinois Supreme Court reversed, holding that in the interests of time and efficiency, a trial court may decide a motion to dismiss prior to resolution of the class certification issue. (86 Ill.2d 314, 320, 427 N.E.2d 122.) The case was remanded to this court for consideration of the substantive issues presented by the appeal.

In 1978, plaintiffs Shirley Schlessinger and Portia Kern filed a six count complaint in the circuit court of Cook County challenging the constitutionality of the real estate transfer tax statute then in effect (Statute II). (Ill. Rev. Stat., 1978 Supp., ch. 120, par. 1003.) This statute permitted county recorders of deeds and registrars of titles to retain 50% of the tax collected by them as a "distribution of the tax." Statute II was enacted in response to a similar, eventually successful, attack on the prior existing statute (Statute I). See Saltiel v. Olsen (1979), 77 Ill.2d 23, 394 N.E.2d 1197; Ill. Rev. Stat. 1975, ch. 120, par. 1003.

The instant complaint was brought against Sidney R. Olsen, as the recorder of deeds and registrar of titles for Cook County, Edward J. Rosewell, as the Cook County treasurer, and the County of Cook, as a body politic. The two plaintiffs were acting both individually and as potential class representatives. Plaintiff Schlessinger resides in Cook County and during the short period of time when Statute II was in effect, paid real estate transfer taxes of $45.50. She paid these taxes under protest. Plaintiff Kern seeks standing as a class representative of all Illinois taxpayers. Kern did not allege she paid the tax under Statute II.

Counts I, III, and V of the complaint were brought by Schlessinger and asked that the action be certified as a class action on behalf of those parties who paid the real estate transfer tax imposed by Statute II. These counts requested that the monies collected under that statute be returned to the individual taxpayers. Counts II, IV, and VI of the complaint were brought by Schlessinger and Kern and sought certification as a class action on behalf of all Illinois taxpayers. These counts prayed that the appropriate county funds be disgorged to the State.

Count I alleged that the amendment to the original statute (Statute I) which produced Statute II violated the 1970 Illinois Constitution, article VIII, section 2. Statute II and this constitutional provision are set out below:

"A tax is imposed on the privilege of transferring title to real estate, as represented by the deed that is filed for recordation, at the rate of 50 cents for each $500 of value or fraction thereof stated in the declaration provided for in this Section. If, however, the real estate is transferred subject to a mortgage the amount of the mortgage remaining outstanding at the time of transfer shall not be included in the basis of computing the tax.

Such tax shall be collected by the recorder of deeds or registrar of titles of the several counties through the sale of revenue stamps whose design, denominations and form shall be prescribed by the Department. The revenue stamps shall be sold by the Department to such recorder of deeds or registrar of titles who shall cause them to be sold for the purposes prescribed. The Department shall charge at a rate of 25 cents per $500 of value in units of not less than $500. The proceeds from such sale by the Department shall be deposited in the General Revenue Fund of the State Treasury. The recorder of deeds or registrar of titles of the several counties shall sell the revenue stamps at a rate of 50 cents per $500 of value or fraction thereof. The net proceeds from such sale by the recorder of deeds or registrar of titles shall be treated as the distribution of the tax which is herein authorized to be charged and collected. The recorder of deeds or registrar of titles may use such proceeds for the purchase of revenue stamps from the Department. The county board shall appropriate a sufficient amount of money for the purchase of revenue stamps from the Department until such time as the fees of the recorder of deeds or registrar of titles under this Section are sufficient for such purpose. Payment of the tax shall be evidenced by revenue stamps in the amount required to show full payment of the tax imposed by this Section. Except as provided in Section 4 of this Act, no deed shall be accepted for filing by any Recorder of Deeds or Registrar of Titles unless revenue stamps in the required amount have been purchased from the Recorder of Deeds or Registrar of Titles of the county where the deed is being filed for recordation. Such revenue stamps shall be affixed to the deed by the Recorder of Deeds or the Registrar of Titles either before or after recording as requested by the grantee. A person using or affixing a revenue stamp shall cancel it and so deface it as to render it unfit for reuse by marking it with his initials and the day, month and year when the affixing occurs. Such marking shall be made by writing or stamping in indelible ink or by perforating with a machine or punch. However, the revenue stamp shall not be so defaced as to prevent ready determination of its denomination and genuineness." (Emphasis added to reflect challenged portion.) (Ill. Rev. Stat., 1978 Supp., ch. 120, par. 1003.)

"SECTION 2. STATE FINANCE

(a) The Governor shall prepare and submit to the General Assembly, at a time prescribed by law, a State budget for the ensuing fiscal year. The budget shall set forth the estimated balance of funds available for appropriation at the beginning of the fiscal year, the estimated receipts, and a plan for expenditures and obligations during the fiscal year of every department, authority, public corporation and quasi-public corporation of the State, every State college and university, and every other public agency created by the State, but not of units of local government or school districts. The budget shall also set forth the indebtedness and contingent liabilities of the State and such other information as may be required by law. Proposed expenditures shall not exceed funds estimated to be available for the fiscal year as shown in the budget.

(b) The General Assembly by law shall make appropriations for all expenditures of public funds by the State. Appropriations for a fiscal year shall not exceed funds estimated by the General Assembly to be available during that year. [This Section 2 of Article VIII shall become effective on January 1, 1972. See Transition Schedule Section 1(c).]" (Emphasis added.) Ill. Const. 1970, art. VIII, sec. 2.

Count I alleged that the portion of Statute II which allowed the county to retain $.25 from every $.50 collected constituted a State expenditure of public funds without appropriation by the General Assembly. An expenditure without an appropriation is prohibited by the constitutional provision quoted above. Count II echoed count I except, as explained previously, it was brought by both Schlessinger and Kern, sought to have a broader class certified, and requested that the county funds be repaid to the State of Illinois.

Count III alleged that even if Statute II was a proper appropriation by the General Assembly, it was nevertheless constitutionally defective as violative of ...


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