Court Opinion

ID: 9738466
Source: CourtListenerOpinion
Date Created: 2023-08-26 19:53:48.010232+00
Date Added: 2024-06-11T07:24:06.254366
License: Public Domain

MR. JUSTICE RYAN, dissenting: In my opinion, the legislative history of the Act indicates that its present provisions were designed to hold individuals, not corporations, criminally liable for violations. As the majority notes, in 1935, “person” under the Act was defined as “any natural individual, firm, trust, estate, partnership, association, joint stock company, joint adventure, corporation, or a receiver, trustee, conservator, or other representative appointed by order of any court, or any city, town, county or other political subdivision of this State.” (Smith-Hurd Rev. Stat. 1935, ch. 120, par. 417; 1935 Ill. Laws 1184, 1185.) After this court refused to hold officers and directors liable as accessories for motor fuel tax violations, in People v. Strong (1936), 363 Ill. 602, and People v. Duncan (1936), 363 Ill. 495, the legislature, in 1937, amended section 1 of the Act to specifically include within the definition of “person” the officers, agents and employees of a corporation. The amendment was made by adding another sentence to the 1935 definition of “person” set out above. The added sentence read: “Whenever used in any section of this act prescribing and imposing a fine or imprisonment or both, *** as applied to corporations the term ‘person’ shall mean and include the officers, agents, or employees thereof who are responsible for any violation of this act.” (Emphasis added.) Ill. Rev. Stat. 1937, ch. 120, par. 417; 1937 Ill. Laws 1047, 1048. The italicized language above implies that the corporation, as well as individuals, could be criminally liable for violations. However, as the majority opinion notes, the legislature, in 1937, also amended section 15 of the Act (the penalty section). The addition provided that in the event the distributor violating the Act is a corporation, “then the officer or officers, agent or agents, employee or employees, of such corporation responsible for any act of such corporation, or failure of such corporation to act, which act or failure to act constitutes a violation of any of the provisions of this Act ***, shall be punished ***.” (Emphasis added.) (Ill. Rev. Stat. 1937, ch. 120, par. 431; 1937 Ill. Laws 1047, 1049.) These two amendments appear to be somewhat inconsistent; one indicates the corporation and individuals are liable, whereas the other only imposes penalties on individuals at fault when the distributor is a corporation. In 1961, the legislature changed the definition of person in section 1.11 to its present form. In relevant part, it now states: “ [A] s applied to corporations the term ‘person’ shall mean the officers, agents, or employees thereof who are responsible for any violation of this Act.” (Emphasis added.) (Ill. Rev. Stat. 1975, ch. 120, par. 417.11.) In my opinion, the words “and include,” which followed the words “shall mean” in the 1937 amendment, were specifically deleted by the legislature in order to resolve the apparent inconsistency of the 1937 amendments. This deletion harmonizes section 1.11 with section 15 by excluding corporations from penalties and penalizing only the individuals responsible for the violations. I believe that a proper reading of the Act indicates that criminal penalties should only be imposed on the individuals responsible for the defalcation, not on the corporation. I hasten to point out that under this construction a corporation would not be completely absolved from liability. In the event that an erroneous return was filed or the proper tax was not paid, the corporation would still be liable for the tax plus substantial civil penalties under sections 4 and 5 of the Retailers’ Occupation Tax Act (Ill. Rev. Stat. 1975, ch. 120, pars. 443, 444), as made applicable to the Motor Fuel Tax Law by section 21 thereof (Ill. Rev. Stat. 1975, ch. 120, par. 434a). The fact that a dishonest, careless or incompetent officer or employee fails or refuses to pay the tax is certainly no reason to penalize the shareholders by imposing heavy criminal sanctions on the corporation, when it has derived no benefit from the violation. Thus, it appears logical to impose criminal sanctions only against the individual who is directly responsible for the violation.