Court Opinion

ID: 9725525
Source: CourtListenerOpinion
Date Created: 2023-08-26 11:51:31.998819+00
Date Added: 2024-06-11T18:25:16.211529
License: Public Domain

Mr. Justice Schaefer, dissenting: I am unable to agree that the decision of this court in Owens-Illinois Glass Co. v. McKibbin, 385 Ill. 245, disposes of the case now before us. The complaint in Owens-Illinois alleged: “Breweries which sell beer and charge deposits for bottles, transfer the ownership and title, as well as the possession of the bottles, to their customers and the sale of new bottles by the plaintiff to such breweries is not a sale for use and consumption under the said Act but falls within said Rule No. 51 of the Department and is a sale for resale and not within the terms of said Retailers’ Occupation Tax, and no liability to pay taxes under such Act accrues to plaintiff on account of such sales.” The regulation there involved (Rule 51) provided: “Sellers of containers to purchasers who are engaged in the business of selling tangible personal property contained in such containers to other persons are deemed to make sales of such containers for resale if the purchasers of such containers are engaged in the business of selling tangible personal property contained in such containers and transfer the ownership of the containers to their customers together with the ownership of the tangible personal property contained therein.” In that case the defendant McKibbin, then Director of the Department, contended that his motion to dismiss the complaint did not admit the legal conclusions which it contained. But this court rejected that contention, saying: “We are of the view that if appellant was of the opinion the cause of action was defectively stated the point should have been raised in the trial court.” 385 Ill. at 251. In this case we are called upon to determine the legal effect of stipulated facts which show a pattern that differs sharply from the ordinary sale for resale. There are a series of transfers of possession of the bottles, the consideration for each transfer being an amount substantially less than half of the original costs of the bottles, with each bottle coming back to the plaintiffs for reuse an average of 18 to 24 times. In my opinion there is enough difference between these transactions and ordinary sales for resale to warrant examination of the new portion of Rule 51 which provides : “Effective February 1, 1965, sellers of containers which are reusable, and which in the ordinary course of business are returned to the purchaser to be used again as containers for tangible personal property, are making sales for use or consumption, and their receipts from such sales are subject to the retailers’ occupation tax. This is true regardless of the fact that the purchaser may charge a deposit at the time of transferring the container to his customer.” The majority see no significant difference between Owens-Illinois and the present case because in this case it was stipulated that when the plaintiffs deliver bottles to the retailers, (1) they “surrender the possession of such containers” and (2) they surrender “all right to reclaim the possession thereof.” It is these two stipulated facts which, in the opinion of the majority, make this case indistinguishable from Owens. As I read the present regulation it establishes a factual test to determine whether the bottler is the ultimate consumer of the bottle: if he transfers possession of reusable bottles by a method which “in the ordinary course of business’ results in their return to him because no one else wants them or has a use for them, then the bottler, and not someone else, is the ultimate consumer of the bottle. It seems to me that the two stipulated facts are irrelevant to the test established by the regulation. That test is whether the bottles return to the bottler because no one else wants them. The fact that he surrenders possession and the right to reclaim the bottles does not prevent them from returning to him again and again for reuse. The stipulated facts do not, in my opinion, establish that under the present regulation the bottler is not the ultimate consumer of the bottle. And it seems to me that the court should consider the validity of that regulation under the stipulated facts, free from predetermined legal conclusions as to transfers of ownership and title. As to that question I express no opinion.