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05/18/87 Goldstein Oil Company Et v. the County of Cook Et Al.

May 18, 1987

GOLDSTEIN OIL COMPANY ET AL., PLAINTIFFS-APPELLANTS

v.

THE COUNTY OF COOK ET AL., DEFENDANTS-APPELLEES



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIRST DIVISION

509 N.E.2d 538, 156 Ill. App. 3d 180, 108 Ill. Dec. 842 1987.IL.636

Appeal from the Circuit Court of Cook County; the Hon. Earl Arkiss, Judge, presiding.

APPELLATE Judges:

JUSTICE O'CONNOR delivered the opinion of the court. CAMPBELL and MANNING, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE O'CONNOR

This is an appeal from an order dismissing a complaint for failure to plead an exception to the voluntary payment doctrine.

Plaintiffs Goldstein Oil Company and Novelly Oil Company are general partners of Apex Oil Company (Apex). Apex is in the business of buying, selling, and marketing gasoline and a variety of other petroleum products at wholesale to distributors and retailers. It maintains a key petroleum product storage facility at Forestview, Illinois.

In 1983, defendants Edward J. Rosewell (Rosewell), Cook County collector, and John J. Gallagher (Gallagher), Cook County auditor, made a demand upon Apex for payment of Cook County gasoline taxes on sales of gasoline by Apex to a retailer identified as Emanuel Torbati, doing business as Gas Center, between June 29, 1982, and June 9, 1983. At that time, there was in effect a Cook County ordinance entitled the Retail Sale of Gasoline Tax (gasoline tax), which provided as follows:

"A tax is hereby imposed on the retail sale in Cook County of gasoline at a rate of three cents per gallon or fraction thereof. Such taxes to be paid by the purchaser. Nothing in this ordinance shall be construed to impose a tax upon the occupation of distributors, suppliers or retail gasoline station operations." Cook County, Ill., Ordinances & Resolutions of the County of Cook sec. 13 -- 110 (1980).

The practice has been that when a gasoline retailer does not have a Cook County tax number, the county will look to the seller for collection of the gasoline tax. In this case, Torbati's registration had been rescinded, so the county demanded payment from Apex.

The complaint alleges that commencing in August 1983, defendant Gallagher, the Cook County auditor, in telephone conversations with Apex personnel, threatened to shut down the Forestview storage terminal if Apex failed to pay the tax. The complaint also alleges that in separate letters, Gallagher threatened the initiation of immediate legal action if the demanded tax payments were not made forthwith. On June 29, 1984, Apex remitted to defendant Rosewell the sum of $51,197.56.

Subsequently, Apex became involved in litigation with Torbati in a case pending before the United States District Court for the Northern District of Illinois, Eastern Division (Goldstein Oil Co. v. Emanuel Torbati, d/b/a Gas Center, No. 84 C6527). On December 20, 1984, Torbati's deposition was taken in that case. Torbati testified under oath that none of his purchases of gasoline from Apex were resold to customers in Cook County.

On the basis of Torbati's deposition testimony, Apex concluded that it was not liable for payments under the gasoline tax with respect to its sales to Torbati as Torbati did not sell product bought from Apex in Cook County. In its first amended complaint, Apex sought the refund of the $51,197.56 it had paid. The trial court dismissed the complaint as barred by the voluntary payment of taxes doctrine and plaintiff now brings this appeal. We affirm.

In Illinois it is the general rule that a taxpayer may not recover taxes which have been paid voluntarily. (Illinois Glass Co. v. Chicago Telephone Co. (1908), 234 Ill. 535, 85 N.E. 200; accord Burley v. Lindheimer (1937), 367 Ill. 425, 11 N.E.2d 926.) The plaintiff here does not dispute the general rule but argues that it falls within the exception to this doctrine which was enunciated in Illinois Glass and Getto v. City of Chicago (1981), 86 Ill. 2d 39, 426 N.E.2d 844, cert. denied sub nom. Illinois Bell Telephone Co. v. Getto (1982), 456 U.S. 946, 72 L. Ed. 2d 468, 102 S. Ct. 2012. Under the exception, the voluntary payment doctrine is not a bar to a taxpayer's suit for recovery of taxes where the payments were made under duress or compulsion or where the taxpayer had no knowledge of the facts upon which to frame a protest. Illinois Glass Co. v. Chicago Telephone Co. ...


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