Archer v. the Terre Haute

• Decision Date: 31 May 1882
• Citation: 102 Ill. 493,1882 WL 10256
• Parties: BURNS ARCHER et al.v.THE TERRE HAUTE AND INDIANAPOLIS RAILROAD COMPANY.
• Court: Illinois Supreme Court

102 Ill. 493

1882 WL 10256 (Ill.)

BURNS ARCHER et al.

v.THE TERRE HAUTE AND INDIANAPOLIS RAILROAD COMPANY.

Supreme Court of Illinois.

Filed at Mt. Vernon Jan. 18, 1882.Rehearing denied May Term, 1882.

OPINION TEXT STARTS HERE

APPEAL from the Circuit Court of Effingham county; the Hon. WILLIAM C. JONES, Judge, presiding.

Messrs. WISE & DAVIS, for the appellants:

The pretended lease from the St. Louis, Vandalia and Terre Haute Railroad Company to the Terre Haute and Indianapolis Railroad Company is null and void. Sess. Laws of 1865, p. 102. The lease being null and void, appellee can only be regarded as the servant of the St. Louis, Vandalia and Terre Haute Railroad Company, or as the custodian of its property. Thomas v. Railroad Co. 11 Otto, 71; Ottawa, Oswego and Fox River Valley R. R. Co. v. Black, 79 Ill. 262; Hays v. Ottawa, Oswego and Fox River Valley R. R. Co. 61 Id. 422.

The State has the common law right to sue for taxes. Ryan v. Gallatin County, 14 Ill. 78; Dunlap v. Gallatin County, 15 Id. 7; Town of Geneva v. Cole, 61 Id. 398.

If the lease be valid, the appellee, having therein agreed to advance for the lessor company sufficient funds to pay the taxes assessed against the latter company, is liable to a suit in behalf of the State and said counties for said taxes under said agreement, the same being for the benefit of the authorities entitled to the taxes. Hartford Fire Ins. Co. v. Olcott, 97 Ill. 439, and cases therein referred to on page 454; Illinois Fire Ins. Co. v. Stanton, 57 Id. 354; Gantzert v. Hoge, 73 Id. 32; Rogers et al. v. Herron et al. 92 Id. 583.

Messrs. DECIUS & EVERHART, for the appellant John W. Goodwin, in addition to the foregoing points, made the following among others:

As a general rule a court of equity will not interfere to restrain a tax on the ground alone that the tax is illegal. 3 Wait's Actions and Defences, 719, 721.

This same tax has been held by this court to be legal. St. Louis, Vandalia and Terre Haute R. R. Co. v. Surrell, 88 Ill. 535; Hopkins, Receiver, v. Taylor, 87 Id. 436.

The legality of taxing capital stock has repeatedly been sustained by this court. Porter v. Rockford, Rock Island and St. Louis R. R. Co. 76 Ill. 565; Huck et al. v. Chicago and Alton R. R. Co. 86 Id. 352; Chicago, Burlington and Quincy R. R. Co. v. Siders, 88 Id. 320.

It makes no difference to the public in which name the assessment of taxes is made. A general or special property is sufficient. Kennedy v. St. Louis, Vandalia and Terre Haute R. R. Co. 62 Ill. 396.

A foreign corporation has not the right to take control of the rights, property and franchises of a domestic corporation, and place itself, by lease or otherwise, between the taxing power and its property.

It is well settled that a court of equity will never entertain a bill to restrain the collection of a tax, or an officer from collecting the same, except in cases where the tax is unauthorized by law, or when it is assessed upon property not subject to taxation. Cook County v. Chicago, Burlington and Quincy R. R. Co. 35 Ill. 460; Village of Nunda v. Village of Chrystal Lake, 79 Id. 311.

Mr. S. S. WHITEHEAD, for the appellant Burns Archer:

If appellee's claim is based upon the hypothesis of title to the property, either real or personal, it is fully estopped by its acts and conduct in inducing the assessment to be made against the lessor company. Baker v. Pratt, 15 Ill. 571, citing Welland Canal Co. v. Hathaway, 8 Wend. 483; Degell v. Odell, 3 Hill, 218; Leeper v. Hersman, 58 Ill. 218; Chicago and Alton R. R. Co. v. Shea, 64 Id. 471.

The trustees of a railroad company, if they do business in the name of the company, are liable to be sued in that name, and their property, i. e. the property of the trustees, is responsible for the liabilities incurred by the railroad company while its trustees are transacting business under that name. Wilkinson et al. v. Fleming, 30 Ill. 353.

Lessees of railroads have always been held responsible for the obligations of the lessors, when those obligations affect the public. Illinois Central R. R. Co. v. Kanouse, 39 Ill. 278; Toledo, Peoria and Warsaw Ry. Co. v. Rumbold, 40 Id. 143; 1 Redfield on Railways, (5th ed.) 618-620; Chicago and Rock Island R. R. Co. v. Whipple, 22 Ill. 105; Ohio and Mississippi R. R. Co. v. Dunbar et al. 20 Id. 623; Peoria and Rock Island Ry. Co. v. Coal Valley Mining Co. 68 Id. 489.

The Terre Haute and Indianapolis Railway Company is, while lessee, the St. Louis, Vandalia and Terre Haute Railroad Company. West v. St. Louis, Vandalia and Terre Haute R. R. Co. 63 Ill. 545.

Messrs. GILMORE & WHITE, Mr. T. J. GOLDEN, and Mr. JNO. G. WILLIAMS, for the appellee:

The contract of February 10, 1868, between the St. Louis, Vandalia and Terre Haute Railroad Company and the Terre Haute and Indianapolis Railroad Company is valid. Both parties thereto had full authority under the law to execute it. Private Laws of 1867, sec. 13, p. 678.

That contract vested in appellee the absolute ownership of the rolling stock or equipment received by it under the contract.

The Terre Haute and Indianapolis Railroad Company acquired its title to the possession of the property embraced in this contract, free from the lien of taxes assessed against the capital stock of the St. Louis, Vandalia and Terre Haute Railroad Company in 1873, 1874 and 1875. Gaar, Scott & Co. et al. v. Hurd, 92 Ill. 315; Binkert v. Wabash Ry. Co. 98 Id. 203.

Equity will interfere to prevent a sale of property which will create a cloud upon the real owner's title thereto. Christie et al. v. Hale, 46 Ill. 117; Groves et al. v. Webber, 72 Id. 606.

Equity will also interfere to prevent a multiplicity of suits, or to prevent a simple trespass, if there be danger of irreparable injury. Deming et al. v. James, 72 Ill. 78; Ryan v. Brown et al. 18 Mich. 197; Osborn v. Bank, 9 Wheat. 738; McCreary v. Sutherland, 23 Md. 471; Binkert v. Wabash Ry. Co. 98 Ill. 203; High on Injunctions, sec. 796.

Mr. JOHN T. DYE, also for the appellee. Mr. JUSTICE SCOTT delivered the opinion of the Court:

The bill in this case was exhibited by the Terre Haute and Indianapolis Railroad Company, a corporation existing under the laws of the State of Indiana, in the circuit court of Effingham county, and as amended was against the collectors of taxes in several counties named, and was to enjoin taxes levied for State, county, and other purposes, on the capital stock of the St. Louis, Vandalia and Terre Haute Railroad Company, for the years 1873 to 1875, both years inclusive. At the same time the taxes were levied on the capital stock of the company, taxes for the same purposes, for the same years, and by the same authorities, were also levied on the tangible property of the company. The bill contains an allegation the taxes assessed on the tangible property of the company have been paid by complainant; but whether they have or not, no relief is asked against such taxes. On the hearing in the circuit court, on the issues formed by the pleadings, and on consideration of the evidence submitted by the respective parties, the court decreed substantially the relief asked by the bill. As the litigation concerns the public revenue, the collectors of the several counties named as defendants have brought the case directly to this court on appeal.

The bill contains an allegation the taxes levied and assessed on the capital stock of the St. Louis, Vandalia and Terre Haute Railroad Company, for the years 1873, 1874 and 1875, have been added to the amounts assessed in the several counties for the year 1878 on the property of the same corporation. A willingness is expressed by the bill to pay the taxes for the year 1878, but the several officers charged with the collection of taxes insist on collecting, with the taxes of 1878, the taxes remaining unpaid for the former years, as previously stated. The litigation, therefore, has respect only to the taxes assessed on the capital stock of the St. Louis, Vandalia and Terre Haute Railroad Company for the years 1873, 1874 and 1875. By the bill, the validity of the taxes for those years is challenged, on account of some irregularity on the part of the Board of Equalization; but as the objection is not pressed upon the attention of the court in the argument, it will not be necessary to remark on this branch of the case, further than to say that similar objections taken to assessments on the capital stock of railroad corporations have been held in former decisions of this court to be unavailing, and the taxes decided to be valid. As the discussion proceeds, the taxes assessed on the capital stock of the St. Louis, Vandalia and Terre Haute Railroad Company will be treated as valid assessments, and as valid and subsisting liens on the property of that corporation.

It is a proposition so plain it will not be controverted, that a foreign corporation may not interfere, by bill, to enjoin taxes, legally or illegally assessed under the laws of this State, against a domestic corporation, unless the corporation complaining will itself be injuriously affected by the collection of such taxes, as to its property or otherwise. Two causes are assigned as grounds for relief,--first, the several collectors claim the right to collect the taxes assessed on the capital stock of the St. Louis, Vandalia and Terre Haute Railroad Company, for the years before mentioned, by distraint and sale of property, of which complainant obtained possession under a contract entered into with that company on the 10th day of February, 1868, and under which it still holds the property, and unless restrained, defendants will enforce their demands; and second, it is said defendants unlawfully set up a pretended right to advertise for judgment and sale to pay such taxes, property acquired by complainant of the St. Louis, Vandalia and Terre Haute Railroad Company, known and designated as right of way, and that unless restrained defendants will take judgment against such right of way...