City of Mattoon v. Graham

• Decision Date: 21 March 1944
• Docket Number: No. 27735.,27735.
• Citation: 386 Ill. 180,53 N.E.2d 955
• Parties: CITY OF MATTOON v. GRAHAM, County Collector, et al.
• Court: Illinois Supreme Court

386 Ill. 180

53 N.E.2d 955

CITY OF MATTOON

v.GRAHAM, County Collector, et al.

No. 27735.

Supreme Court of Illinois.

March 21, 1944.

Suit by the City of Mattoon against W. C. Graham, County Collector, and others, to enjoin defendants from collecting or attempting to enforce payment of general taxes for 1942 levied against certain land owned by plaintiff outside its corporate limits and to permanently restrain defendants from levying any general taxes upon the property while owned by plaintiff and used exclusively for municipal purposes. From a decree dismissing the complaint for want of equity except as to general taxes for 1943 and subsequent years with respect to which defendants were permanently enjoined from levying any general taxes against 3 per cent. in area of the land or any works, machinery, or fixtures located thereon and used exclusively for coveying water to plaintiff city, plaintiff appeals.

Decree affirmed.Appeal from Circuit Court, Coles County; Casper Platt, Judge.

O. F. Schoch, of Mattoon, for appellant.

Craig & Craig, W. K. Kidwell, and Kenneth Green, all of Mattoon, for appellees.

WILSON, Justice.

The plaintiff, the city of Mattoon, filed its complaint in the circuit court of Coles county to enjoin W. C. Graham, the county treasurer and collector, Humboldt township, School District No. 76, and the supervisor and town assessor, from collecting and attempting, in any manner, to enforce the payment of the whole or any part of the general taxes for the year 1942, levied against 75.50 acres owned by plaintiff, charging that the property is exempt from taxation, being located beyond the corporate limits of the city and used exclusively for a municipal purpose, namely, a water-supply system. Plaintiff also sought to restrain defendants, by a permanent injunction, from levying any general taxes upon the property while owned by plaintiff and used exclusively for municipal purposes. Injunction is a proper remedy where the property owner alleges that the tax is levied upon property not subject to taxation. Illinois Central Railroad Co. v. Hodges, 113 Ill. 323. Defendants answered, averring that the greater percentage of the surface of the land is used to produce farm products and that these products are raised either by plaintiff or its tenant. The cause was heard upon the pleadings, two stipulations of fact and the testimony of the superintendent of the water department of the city. A decree was entered adjudging that the complaint be dismissed for the want of equity as to the taxes for 1942 and that, with respect to the general taxes for 1943 and subsequent years, defendants be permanently enjoined from levying any general taxes against three per cent in area of the land, or against any works, machinery or fixtures located upon this portion of the property used exclusively for conveying water to the city of Mattoon and, as to the remaining ninety-seven per cent in area of the land, that the complaint be dismissed for the want of equity. From this decree, plaintiff prosecutes a direct appeal, the revenue being involved.

Pertinent facts appear from the pleadings and the stipulations. Plaintiff made no objection to the tax levy for 1942 and did not file a claim for a reduced valuation. Nor, prior to instituting this action, did plaintiff file any statement disclosing the portion of the property in question used for water-producing functions and the part employed for agricultural purposes. Plaintiff owns and operates a waterworks or water-supply system, both within and without its corporate limits, pursuant to statutory authorization. Ill.Rev.Stat.1943, chap. 24, article 78. Plaintiff is the sole owner of the real estate, consisting of 75.50 acres, involved in this litigation. Located on the property are nine water wells, booster or pump station, fixtures, machinery, equipment, pipe lines and power lines, all belonging exclusively to plaintiff and used solely for the carrying of water to the city. From the real estate, there is furnished approximately fifty per cent of the domestic water and approximately twenty per cent of all the water used in Mattoon. The wells are one of the sources of water for the fire department, sewer department, streets, parks, and for other municipal, public and domestic purposes in the municipality-water which has been treated and sold to all users at fixed rates and, for the last several years, at a profit to the city. Admittedly, the operation of the real estate as a source of water for plaintiff's waterworks system does not interfere with the production of farm products on the property. From 1936 to May 21, 1943, the day plaintiff filed its complaint, ninety-seven per cent of the surface of the real estate has been leased for agricultural purposes on a crop-share basis, and plaintiff receives the usual and customary rental in the community where the land is located. A tenant is in possession, conformably to an oral agreement for the planting, cultivation and harvesting of the crops.

An examination of the testimony of the superintendent of the water department of the city discloses that he did not claim that the part of the land used for agricultural purposes is presently needed for producing water. Although he did testify that this land covers a basin or lake of water, and plaintiff now asserts that water is pumped from the basin lying beneath the surface of the land which it owns and conveys inside the corporate limits of the city, the testimony of its sole witness fails to show that all of any particular stratum beneath the surface is used. Indeed, plaintiff's witness admitted his lack of personal knowledge of the structures underlying the south 2000 feet of the property. Competent evidence is thus wanting that the wells presently producing water pump water from an area 2000 feet distant from the wells and, specifically, that the city drains water from the ninety-seven per cent in area of the tract involved in this litigation.

Seeking a reversal of the decree, plaintiff contends that its entire tract of 75.50 acres is used exclusively for a municipal purpose and, hence, exempt from taxation. Furnishing domestic water to its citizens is, without question, a municipal affair or purpose of a chartered city. City of South Pasadena v. Pasadena Land & Water Co., 152 Cal. 579, 93 P. 490;Smith v. City of Glendale, 1 Cal.App.2d 463, 36 P.2d 1083. To sustain the decree, defendants maintain that ninety-seven per cent in area of the real estate is used for farming, a non-municipal purpose, and subject to taxation. Defendants concede that three per cent in area of the property is exempt from taxation.

Section 3 of article IX of our Constitution, Smith-Hurd Stats. provides: ‘The property of the state, counties, and other municipal corporations, both real and personal, * * * may be exempted from taxation; but such exemption shall be only by general law.’ The quoted constitutional provision is not self-executing and exemptions exist only when granted by general law enacted by the General Assembly. People ex rel. Olmsted v. University of Illinois, 328 Ill. 377, 159 N.E. 811. The applicable statute, so far as relevant, declares ‘All property described in this section to the extent herein limited, shall be exempt from taxation, that is to say: * * * (6) * * * and all property owned by any city or village outside of the corporate limits of the same if used exclusively for municipal purposes.’ In addition, paragraph 9 of the same section exempts from...