{ "id": 5351393, "name": "International Business Machines Corporation et al., Appellees, vs. The Department of Revenue, Appellant", "name_abbreviation": "International Business Machines Corp. v. Department of Revenue", "decision_date": "1962-09-28", "docket_number": "No. 37140", "first_page": "503", "last_page": "511", "citations": [ { "type": "official", "cite": "25 Ill. 2d 503" } ], "court": { "name_abbreviation": "Ill.", "id": 8772, "name": "Illinois Supreme Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "228 Ill. 522", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5629257 ], "weight": 2, "pin_cites": [ { "page": "534" } ], "opinion_index": 0, "case_paths": [ "/ill/228/0522-01" ] }, { "cite": "3 Ill.2d 570", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2694335 ], "opinion_index": 0, "case_paths": [ "/ill-2d/3/0570-01" ] }, { "cite": "414 Ill. 600", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5314494 ], "opinion_index": 0, "case_paths": [ "/ill/414/0600-01" ] }, { "cite": "188 Ill. 255", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 3234597 ], "opinion_index": 0, "case_paths": [ "/ill/188/0255-01" ] }, { "cite": "9 Ill.2d 69", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5319741 ], "opinion_index": 0, "case_paths": [ "/ill-2d/9/0069-01" ] }, { "cite": "203 Ill. 26", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 3274481 ], "opinion_index": 0, "case_paths": [ "/ill/203/0026-01" ] }, { "cite": "413 Ill. 581", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5314012 ], "opinion_index": 0, "case_paths": [ "/ill/413/0581-01" ] }, { "cite": "413 Ill. 257", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5313998 ], "opinion_index": 0, "case_paths": [ "/ill/413/0257-01" ] }, { "cite": "408 Ill. 41", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2643333 ], "opinion_index": 0, "case_paths": [ "/ill/408/0041-01" ] }, { "cite": "403 Ill. 338", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2620558 ], "opinion_index": 0, "case_paths": [ "/ill/403/0338-01" ] } ], "analysis": { "cardinality": 673, "char_count": 14539, "ocr_confidence": 0.782, "pagerank": { "raw": 3.661618230004062e-07, "percentile": 0.890550761839783 }, "sha256": "f4e50cba9283e63a8e63b36f1c3f79d138fa98d92b9db83d34d0421da08cd13b", "simhash": "1:3bb81e6ba2f46b51", "word_count": 2395 }, "last_updated": "2023-07-14T20:58:32.986200+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "International Business Machines Corporation et al., Appellees, vs. The Department of Revenue, Appellant." ], "opinions": [ { "text": "Mr. Justice Hershey\ndelivered the opinion of the court:\nThis is an appeal from a decree of the circuit court of Cook County entered in a proceeding under the Administrative Review Act reversing an administrative decision of the Department of Revenue which had denied plaintiff\u2019s claims for credit and refund under the Retailers\u2019 Occupation Tax Act. We have jurisdiction on direct appeal since the trial court expressly held unconstitutional a certain 1961 amendment to the Retailers\u2019 Occupation Tax Act, and since the public revenue is involved. Ill. Rev. Stat. 1961, chap, no, par. 75.\n. In 1961, the General Assembly amended the Retailers\u2019 Occupation Tax Act to expand the definition of \u201csale at retail\u201d to include any transfer of \u201cpossession of, or the right to the possession of\u201d tangible personal propert). (H.B. No. 1136, 72nd General Assembly; Ill. Rev. Stat. 1961, chap. 120, par. 440, p. 1630.) The Use Tax Act was similarly amended. (H.B. No. 1135, 72nd General Assembly; Ill. Rev. Stat. 1961, chap. 120, par. 439.2, p.\u2018 1608.) The apparent purpose of this amendatory legislation was to make a lease of personal property the equivalent of a sale insofar as the incidence of the two taxes is concerned.\nInternational Business Machines Corporation, hereinafter sometimes referred to as IBM, is engaged in the business of manufacturing, selling, servicing and leasing business machines, and, except for manufacturing, carries on all of these activities in Illinois. IBM paid the Department of Revenue, under protest, for the months of September and October, 1961, the sum of $20,000 on account of Illinois retailers\u2019 occupation, use, and municipal retailers\u2019 occupation taxes on its machine rental transactions in Illinois, and secured- a temporary injunction preventing such moneys from being paid into the State treasury. The Service Bureau Corporation, a machine rental customer of IBM, intervened as a plaintiff in the injunction suit.\nIBM then filed claims for credit on account of such taxes with the Department of Revenue and duly protested the Department\u2019s tentative denial of such claims. A hearing was then had on such claims by the Department of Revenue, after which the Department made a final administrative decision disallowing all such claims in their entirety. Plaintiff then brought this proceeding under the Administrative Review Act to review the final administrative decision of the Department.\nThe transactions involved in the claims are rental receipts derived on and after September 1, 1961, from lease and rental transactions with IBM customers. It is undisputed that all the transactions involved are bona fide leases. The Department denied the claims in their entirety.\nIn reversing the decision of the Department of Revenue the trial court held, among other things, that the amendment to the Retailers\u2019 Occupation Tax Act is unconstitutional in that it embraces a subject not expressed in its title in violation of section 13 of article IV of the constitution of Illinois, and also involves an improper classification in violation of section 1 of article IX of the constitution of Illinois, and the due-process clauses of the State and Federal constitutions, and that the use tax is inapplicable to the lease transactions. The trial court also found that the claims for credit were presented by and on behalf of the persons who actually bore the burden of the taxes, and that no unjust enrichment would result from allowing the claims.\nThe principal question presented by this appeal is whether or not the amendment to the Retailers\u2019 Occupation Tax Act by House Bill No. 1136 of the 72nd General Assembly violates section 13 of article IV of the constitution of 1870 by embracing a subject not included within its title. The title of the Retailers\u2019 Occupation Tax Act, which was not amended by House Bill No:\u2019 1136, is \u201cAn Act in relation to a tax upon persons engaged in the business of selling tangible personal property to purchasers for use or consumption.\u201d\nThe pertinent constitutional provision is as follows : \u201cNo act hereafter passed shall embrace more than one subject, and that shall be expressed in the title. But if any subject shall be embraced in an act which shall not be expressed in the title, such act shall be void only as to so much thereof as shall not be so expressed; * * Const, of 1870, art. IV, sec. 13.\nHouse Bill No. 1136 made several changes in the definitions section of the act, apparently designed to include rental transactions as sales. (Ill. Rev. Stat. 1961, chap. 120, par. 440.) The definition of \u201csale at retail\u201d was expanded (the italics indicating new matter added by the amendment) as follows: \u201c \u2018Sale at retail\u2019 means any transfer (conditional or otherwise) of the ownership of, or title to, or possession of, or the right to possession of, tangible personal property to a purchaser, for use or consumption and not for resale in any form as tangible personal property, for a valuable consideration.\u201d\nThe definition of \u201cpurchaser\u201d was expanded to include \u201cany one who, through a sale at retail, acquires the ownership of, or title to, or possession of, or the right to the possession of, tangible personal property for a valuable consideration.\u201d\nFinally, the definition of \u201cselling price\u201d was amended by a proviso to the effect that that term may, at the election of a lessor, mean the retail selling price \u201cwhich the lessee-purchaser would normally have been required to pay for the property at that time if the lessee-purchaser had bought the property in the ordinary sense of a purchase instead of leasing it.\u201d\nIt has been observed that objections to the validity of legislation based upon constitutional requirements as to titles are often made but seldom sustained. This does not mean, however, that the constitutional provision is without effect nor that it will not be applied in the proper case. Indeed this court has in the past not hesitated to strike down as unconstitutional legislative enactments or parts thereof which have run afoul of the constitutional provision. (Johnson v. Daley, 403 Ill. 338.) The general principles governing the sufficiency of the title of an act are easily stated, although the application of these principles to specific cases is not without difficulty. Thus, a title need not be an index, table of contents or summary of the provisions of the act, but is sufficient if it directs attention to the general scope, purview or ambit of the law. (Department of Public Works and Buildings v. Chicago Title and Trust Co. 408 Ill. 41; Johnson v. Halpin, 413 Ill. 257; Department of Public Works and Buildings v. Lanter, 413 Ill. 581.) Generally speaking, where the title of the original act is repeated in the title of an amendatory act, anything may be included in the amendatory act that is embraced within the title of the original act. (Gage v. City of Chicago, 203 Ill. 26; People ex rel. Bentson v. Bowen, 9 Ill.2d 69.) However, it has been stated that \u201cAmendatory provisions that are not germane to the subject expressed in the title of the original act are unconstitutional, unless the title of the act can be and is amended without violating the rule against dual subject matter.\u201d (1 Sutherland Statutory Construction, 3rd ed. Horack, par. 1908, pp. 346-7; Kennedy v. LeMoyne, 188 Ill. 255.) This court has recognized the possibility and propriety of amending an act to include matter not embraced in the original title provided the title is also amended to embrace the new matter. (People ex rel. Gutknecht v. City of Chicago, 414 Ill. 600; Zisook v. Maryland-Drexel Neighborhood Redevelopment Corp. 3 Ill.2d 570.) That procedure was not followed, however, in the enactment of this amendatory legislation. The question, therefore, is not whether the legisla- \u25a0 ture might properly have defined the word \u201csale\u201d to include leases had the title of the act been amended. It is, rather, whether the business of leasing personal property may be taxed under an act the title of which refers only to \u201ca tax upon persons engaged in the business of selling tangible personal property to purchasers for use or consumption.\u201d In our opinion it cannot if either the constitution or the English language is to retain any semblance of integrity.\nWe believe that the appropriate considerations governing the disposition of this case are illustrated by a hypothetical example set forth in the opinion in Rouse v. Thompson, 228 Ill. 522, 533-4: \u201cIf the title of an act should be \u2018An Act to define and punish the crime of larceny,\u2019 it is clear that provisions defining perjury, arson or felonious homicide, and fixing the punishment of those offenses, would be subjects wholly foreign to the title of the act. But if the title should be, as is the case with our present Criminal Code, \u2018An Act to revise the law in relation to criminal jurisprudence,\u2019 the subject thus expressed would clearly'be broad enough to include provisions defining and fixing the punishment, not only of these, but of all other imaginable offenses against the public law, and also all proper provisions for the prevention of crimes, for the indictment, trial, conviction and punishment of all classes of offenders, and for fixing the jurisdiction, both original and appellate, of the various courts in criminal cases, and prescribing the mode of procedure and the rules of evidence applicable to criminal trials. These subjects, multiplied as they are in detail, are all included in the general subject of criminal jurisprudence, * * In the Rouse case the court held that an act which referred in its title only to \u201cprimary elections of delegates \u2022 to nominating conventions\u201d could not include provisions relating to the holding of primaries for the nomination of party candidates. The court, however, indicated that had the title been \u201cAn act to provide for the holding of primary elections by political parties or organizations,\u201d it would have been broad enough to include the selection of both party candidates and delegates to a party convention at a primary election. 228 Ill. 522, 534.\nDefendant argues that the legislature may and frequently does use words in a statute in other than their usual sense. This is undeniably true, but that is not the point. The question here is not the power of the legislature to define terms for the purpose of a statute, but whether the content of the act goes beyond the subject expressed in its title. A somewhat ludicrous example may serve to illustrate the distinction. One of the horrible examples of legislative definitions is the English statute which is said to have provided: \u201cWhenever the word \u2018cows\u2019 occurs in this Act it shall be construed to include horses, mules, asses, sheep and goats.\u201d (Cited in Cooper, Effective Legal Writing, 3; see Dickerson, Legislative Drafting, 90.) Such a technique might well be constitutionally permissible if the title of the act were \u201cAn Act relating to domestic animals,\u201d but it is unquestionably bad under a title referring only to cows.\nIn our opinion a title referring only to a tax upon \u201cpersons engaged in the business of selling tangible personal property to purchasers for use or consumption\u201d is not, without amendment, sufficiently broad to include provisions extending the tax to persons engaged in leasing personal property in bona fide rental transactions. We hold, therefore, that the amendatory act, to the extent that it purports to embrace such leases within the terms of the Retailers\u2019 Occupation Tax Act, is in violation of section 13 of article IV of the constitution of 1870 and is void.\nSince the title of the Use Tax Act is \u201cAn Act in relation to a tax upon the privilege of using tangible personal property in this State,\u201d the companion amendment to that act by House Bill No. 1135 is not subject to the same constitutional objection. The use tax is, however, complementary to the retailers\u2019 occupation tax, and the Use Tax Act provides: \u201cIf the seller of tangible personal property for use would not be taxable under the Retailers\u2019 Occupation Tax Act despite all elements of the sale occurring in Illinois, then the tax imposed by this Act shall not apply to the use of such tangible personal property in this State.\u201d (Ill. Rev. Stat. 1961, chap. 120, par. 439.3.) Since, because of the invalidity of the amendment to the Retailers\u2019 Occupation Tax Act, IBM is not subject to retailers\u2019 occupation tax with respect to its lease transactions, it follows that its lessees are not subject to use tax. The trial court was correct in reversing the decision of the Department of Revenue and in allowing the claim for credit in its entirety.\nAlthough the foregoing considerations dispose of the case, it should be noted, in the interest of preventing possible misunderstanding in the future, that there is still another ground for holding that the use tax is not applicable to the use by a bona fide lessee. The tax is imposed \u201cupon the privilege of using in this State tangible personal property purchased at retail * * *.\u201d (Ill. Rev. Stat. 1961, chap. 120, par. 439.3.) \u201cUse\u201d is defined (with certain exceptions not here pertinent) as \u201cthe exercise by any person of any right or power over tangible personal property incident to the ownership of that property.\u201d (Ill. Rev. Stat. 1961, chap. 120, par. 439.2.) This definition was not changed by the 1961 legislation. Even though the 1961 legislation attempted to obliterate the distinction between a sale and a lease and a lessee and a purchaser, it did not eliminate the distinction between ownership and possession. Indeed, the inclusion of both terms in the amended definitions of \u201cpurchase at retail,\u201d \u201cpurchaser,\u201d and \u201csale at retail\u201d involves a recognition that \u201cownership\u201d and \u201cpossession\u201d are not synonymous. A mere lessee does not exercise over the property any rights or powers incident to the ownership of the property. Thus, in the absence of a change in the statutory definition of \u201cuse,\u201d the lessee does not use the property in the statutory sense and is not subject to use tax.\nThe decree of the circuit court of Cook County is af\u00edn med.\nDecree affirmed.", "type": "majority", "author": "Mr. Justice Hershey" } ], "attorneys": [ "William G. Clark, Attorney General, of Springfield, (William C. Wines, Aubrey Kaplan, Raymond S. Sarnow and A. Zola Groves, Assistant Attorneys General; of counsel,) for appellant.", "Adams, Williamson & Turney, of Chicago, (Jack A. Williamson and Russell J. Turney, of counsel,) for appellees." ], "corrections": "", "head_matter": "(No. 37140\nInternational Business Machines Corporation et al., Appellees, vs. The Department of Revenue, Appellant.\nOpinion filed September 28, 1962.\nWilliam G. Clark, Attorney General, of Springfield, (William C. Wines, Aubrey Kaplan, Raymond S. Sarnow and A. Zola Groves, Assistant Attorneys General; of counsel,) for appellant.\nAdams, Williamson & Turney, of Chicago, (Jack A. Williamson and Russell J. Turney, of counsel,) for appellees." }, "file_name": "0503-01", "first_page_order": 513, "last_page_order": 521 }