Baltimore & O.S.W.R. Co. v. People ex rel. Gaston

• Decision Date: 16 December 1902
• Citation: 200 Ill. 541,66 N.E. 148
• Court: Illinois Supreme Court
• Parties: BALTIMORE & O. S. W. R. CO. v. PEOPLE ex rel. GASTON, Treasurer.

200 Ill. 541

66 N.E. 148

BALTIMORE & O. S. W. R. CO.

v.PEOPLE ex rel. GASTON, Treasurer.

Supreme Court of Illinois.

Dec. 16, 1902.

Appeal from Clay county court; Jno. R. Bonney, Judge.

Proceedings by the people, on the relation of Oscar C. Gaston, treasurer and ex officio collector of taxes of Clay county, for judgment for delinquent taxes on land of the Baltimore & Ohio Southwestern Railroad Company. From a judgment overruling the objections to the tax, the company appeals. Modified.Edward Barton, A. M. Rose, W. T. Bonham, and Creighton, Kramer & Kramer, for appellant.

John W. Thomason, State's Atty., and R. S. C. Reaugh, for appellee.

This is an appeal from a judgment of the county court of Clay county against the appellant, the Baltimore & Ohio Southwestern Railroad Company, for the balance of the unpaid city tax levied by the city of Flora on the property of appellant. The city of Flora, in August, 1901, passed an ordinance levying the city taxes for the year 1901. One item of this tax levy was: ‘For the partial payment of the purchase price of the city electric light plant, the sum of $2,600.’ The total amount levied by the ordinance was $4,450. The total assessed valuation of the taxable property in the city of Flora for the year 1901 was $254,061. On this amount the county clerk extended the city tax levy at the rate of 2 per cent. The total city tax thus extended amounted to $5,082.40, or $632.40 more than the ordinance called for. The assessed value of the appellant's property within the city of Flora for the year 1901 was $44,611. The tax levied thereon, at 2 per cent. amounted to $892.22. Of this amount the appellant refused to pay the sum of $392.48. When the county treasurer and ex officio collector applied to the county court for a judgment against appellant's lands for this delinquent tax, appellant objected to that portion of the taxes levied for the partial payment of the purchase price of the city electric light plant on the following grounds: First, because the city was authorized to levy only three mills on the dollar for lighting purposes, or $133.83 on appellant's property; second, because the amount sought to be collected was intended to be used in the payment for a plant operated by the city to furnish street lights, and also to private individuals for hire; third, because the amount extended on the tax books was in excess of the amount asked for by the appropriation ordinance, amounting to $110.42 on the property of appellant; and fourth, because the aforesaid item was intended to pay an unconstitutional indebtedness, the city being at the time indebted, including this indebtedness, in excess of [200 Ill. 543]5 per cent. of the assessed value of the property in the city. The objections were overruled by the county court, and judgment entered for the delinquent tax and costs. A contract between the Southern Illinois Electric Light Company, of St. Elmo, Ill., and the city of Flora, executed November 18, 1899, was introduced in evidence, by which, after reciting in the preamble that the light company had made a proposition to the city to lease its electric light plant to the city, and that the city had accepted this proposition by an ordinance duly passed, and that the light company was indebted on its plant in the sum of $13,000, payable in yearly installments of $1,000 each, the first one due November 18, 1900, and bearing 6 per cent. interest, payable semiannually, the light company leased to the city its electric light plant, together with all its appurtenances, etc., for the term of 13 years, in consideration of the payment by the city of a yearly rental of $1,000, and the annual interest due on the indebtedness on the plant at the time the rent fell due. The city also covenanted to pay all taxes, assessments, etc., levied on the plant; to operate said plant at its own cost and expense, and keep it in good repair and insured for the benefit of the light company; and to deliver up possession at the end of the term. In case of default in any of the covenants, the city agreed to surrender the premises on 30 days' notice, in writing. The contract then contains the following covenants: ‘It is further covenanted and agreed, by and between the parties hereto, that the party of the second part shall have the right and option, at any time during the term of this lease, to purchase the said electric light plant for the price and sum $13,000, or by paying off the said first mortgage coupon notes hereinbefore described, as they severally become due and payable, together with accrued interest thereon; and if said party of the second part exercise its option, hereby given, to purchase said electric light plant upon the terms and conditions herein above set forth, the party of the second part shall, at any time thereafter, have the right to pay the said first mortgage coupon notes, or any part thereof, in multiples of $1,000, by issuing and delivering to the party of the first part, or the holders of said notes, its bond or bonds, issued in due form of law, bearing five per cent. semiannual interest, in lieu of any of said first mortgage coupon notes above described. And it is further covenanted and agreed that, if the party of the second part, at any time during this lease, exercise its option to purchase said electric light plant, the sum of $1,000 paid per annum as a part of the yearly rental herein provided shall be applied in payment of the purchase money of said plant, and be held to form a part of such purchase price, it being distinctly understood and agreed that the party of the second part shall only pay $13,000 for said plant in case of the purchase thereof under this agreement, in addition to the interest that may accrue thereon, until said sum of $13,000 is fully paid, as herein provided.’ The light company further covenanted, in case of a purchase by the city and the payment of the purchase price as above provided, to execute a good and sufficient deed for the plant, and to assign all its capital stock to the city, and surrender its right, privilege, and franchise acquired by a certain ordinance of the city. The city is in possession and operating the light plant under this lease. Other matters necessary to an understanding of the controverted questions in the case are stated in the opinion.

CARTER, J. (after stating the facts).

The first objection we consider is that the county clerk extended the city tax of the city of Flora for the year 1901 at the rate of 2 per cent., the amount thus extended being $632.40 more than was required by the appropriation ordinance, or an excess of about 14 per cent. The power of the county clerk to extend the tax at a rate greater than is necessary to produce the exact amount required was fully considered in Railroad Co. v. Baldridge, 177 Ill. 229, 52 N. E. 263, and we there held that the statute was sufficiently broad to allow the clerk ‘to so compute the rate per cent. of the levy as that the amount produced would be sufficient to meet the sums required by the appropriation ordinance and the commissions which the statute provides may be retained by the collector out of the amounts by him collected.’ In Edwards v. People, 88 Ill. 340 (approved in Trust Co. v. Weber, 96 Ill. 346), we held that a rate per cent. which would produce the net amount required to be raised, exclusive of the costs of collection and the amount of losses and deductions which would probably occur, was a proper one to be adopted by the officer extending the tax. In Village of Hyde Park v. Ingalls, 87 Ill. 11, the village trustees included the following item in their appropriation ordinance: ‘For amount necessary to pay the expense of collection and deficiencies arising in the collection of the last four foregoing items, $22,672.68.’ The court said (page 13): ‘It is hardly probable that in any instance was the entire levy of a state, county, city, or village tax collected when it was due and should have been in the treasury. * * * If courts may, as we think they should, recognize the probability of deficiencies in collection (from whatever causes they may occur), then it would seem plain they must recognize the power and duty in the legislative department of the municipality to anticipate and provide against the probable deficiency. * * * A surplus may undoubtedly be brought into the treasury by this mode of levying, but it will not be lost. It will belong to the corporation, and may be used in extinguishing other debts or in the payment of current expenses, and thereby lighten future taxation. * * * And, in the absence of evidence showing that the trustees have clearly abused their discretion in the amount levied to supply the anticipated deficiency, we know of no reason why even a court of equity, much less a court of law, should interfere with and nullify their determination.’ The statute authorizes the clerk to fix and extend a rate sufficient to produce the net amount required. No showing was made as to the actual amount realized from the taxes collected, and no abuse of the discretion of the clerk in fixing the rate per cent. was shown, except that it would produce 14 per cent. more than was required if entirely and fully collected. We are not prepared to hold this an abuse of the discretion vested in the officer by law,...