Cooper v. Corbin

• Decision Date: 31 January 1883
• Citation: 1882 WL 14342,105 Ill. 224
• Parties: THOMAS COOPER et al.v.AUSTIN CORBIN et al.
• Court: Illinois Supreme Court

105 Ill. 224

1882 WL 14342 (Ill.)

THOMAS COOPER et al.

v.AUSTIN CORBIN et al.

Supreme Court of Illinois.

Filed at Springfield Sept. 28, 1882.Rehearing denied January Term, 1883.

OPINION TEXT STARTS HERE

APPEAL from the Circuit Court of Champaign county; the Hon. C. B. SMITH, Judge, presiding.

Messrs. B. S. PRETTYMAN & SONS, for the appellants:

Under the facts, this cause is res judicata. The former decree is conclusive upon the parties to that suit, and privies. Cromwell v. County of Sack, 94 U. S. 351; Cole v. Favorite, 69 Ill. 457; Hicks v. Chapin, 67 Id. 375; Harvey v. Ward, 49 Cal. 124; Ogden v. Larrabee, 70 Ill. 510; Rising v. Carr, 70 Id. 596; Tuttle v. Garrett, 74 Id. 444; Stout v. Lye, 103 U. S. 67.

The tax was a lien on all the personal property in question, and a purchaser at a mortgage sale took it subject to all liens of record, and is chargeable with notice thereof. Strong v. Allen, 44 Ill. 428.

This is chattel property, and a chattel mortgage not executed as required by law, where possession is left with the mortgagor, is void. Const. of 1870, art. 11, sec. 10; Davis v. Ransom, 18 Ill. 396; Porter v. Dement, 35 Id. 478; Sage v. Browning, 51 Id. 217.

The sale of the property under a decree of the United States Court did not divest the State of its lien for taxes, although no levy had been made prior to such sale. The lien for a personal property tax extends to all the personal property of the tax debtor. 1 Am. & Eng. Railway Cases, 402; Atlantic and Richmond A. L. W. Co. v. State, 63 Ga. 483; Binkert v. Wabash Ry. Co. 98 Ill. 205; Rev. Stat. chap. 120, secs. 161, 254; Dennis v. Maynard, 15 Ill. 481.

The lien of the collector's warrant continues against all the personal property of the tax debtor from the date of its reception by the collector until the tax is paid, and purchasers of such property must see that the tax has been paid. Rev. Stat. “Revenue,” sec. 254; Hill v. Figley, 23 Ill. 421; Binkert v. Wabash Ry. Co. 98 Id. 205.

Mr. JAMES MCCARTNEY, Attorney General, and Mr. E. S. SMITH, also for the appellants:

The fact of property being incumbered at or before the time of levying a tax, does not give a mortgagee a lien superior and prior to the lien for taxes. Dunlap v. Gallatin County, 15 Ill. 7; Dennis v. Maynard, Id. 477; Almy v. Hunt, 48 Id. 45; Binkert v. Wabash Ry. Co. 98 Id. 205. The taxes, and not the warrant, make the lien. In that view the warrant is wholly immaterial. Almy v. Hunt, 48 Ill. 45; Union Trust Co. v. Weber, 96 Id. 346.

Mr. JOHN M. HAMILTON, Mr. C. W. FAIRBANKS, Mr. J. H. ROWELL, and Mr. GEORGE W. GERE, for the appellees:

The decree in the suit by the receiver of the railroad company is no bar to this suit, there being no identity of parties or of the issues in the two cases. Town of Lyons v. Cooledge, 89 Ill. 529; Yeates v. Briggs, 95 Id. 79; Gaar, Scott & Co. v. Hurd, 92 Id. 315; Garrick v. Chamberlain et al. 97 Id. 623.

Equity will assume jurisdiction to enjoin the collection of a tax in all cases where the tax has been levied without authority of law, or where the property is not subject to taxation. Kimball v. Merchants' S. L. & T. Co. 89 Ill. 611; Binkert v. Wabash Ry. Co. 98 Id. 205; Dickey v. Reed, 78 Id. 261; McConkey v. Smith, 73 Id. 313; Deming v. James, 72 Id. 78; Chicago, Burlington and Quincy R. R. Co. v. Cole, 75 Id. 591.

The Chattel Mortgage act is not applicable to mortgages given by railroad companies. Palmer v. Forbes, 23 Ill. 301; Titus v. Mabee, 25 Id. 257; Titus v. Ginheimer, 27 Id. 462.

When the tax warrant came to the hands of the collector of Tazewell county, we were in possession of the property by the receiver, and whether the property was properly mortgaged or not, our possession gave us the prior lien. The possession of a receiver is that of the trustee for persons entitled under final decree. High on Receivers, secs. 134, 162.

A tax warrant is not a specific lien against the particular property on which personal taxes are assessed, but a lien in general upon property owned by the tax debtor. Gaar, Scott & Co. v. Hurd, 92 Ill. 330; Burroughs on Taxation, 269.

Capital stock of a corporation, for taxation, taking the place of shares of capital stock, like it is personal property. D. B. & T. Co. v. Parks, 88 Ill. 170; Ottawa Glass Co. v. McCaleb, 81 Id. 556; Belleville Nail Co. v. People ex rel. 98 id. 399; Maur v. L. P. and B. R. R. Co. 27 Id. 77; Binkert v. Wabash Ry. Co. 98 Id. 208.

The assessment of a tax against one for a chattel he owns at the time, creates a debt against him, but no lien against the chattel; and if, after such assessment, and before the tax warrant comes into the collector's hands, the tax debtor, in good faith, sells or mortgages the same, the purchaser or mortgagee will be protected from the tax. Gaar, Scott & Co. v. Hurd, supra.

The tax sought to be collected is not a lien on the real estate purchased by us under the decree of foreclosure. Schæffer v. People, 60 Ill. 182; Belleville Nail Co. v. People ex rel. 98 Id. 401. See, also, Burroughs on Taxation, 270, 258, 271; Cooley on Taxation, 303; Atlantic and Pacific R. R. Co. v. Cleino, 2 Dillon, 181; Price v. Powell, 44 Mo. 436; Hime v. Commissioners, 19 Wall. 655; Kirkwood v. Magill, 6 Kan. 510; Anderson v. State, 23 Miss. 459; Harrington v. Hilliard, 2 Mich. 271; 38 Pa. St. 339.

Mr. JUSTICE CRAIG delivered the opinion of the Court:

This was a bill to enjoin the collection of taxes assessed on the capital stock of the Indianapolis, Bloomington and Western Railway Company, for the years 1873, 1874 and 1875. On the hearing, a decree was rendered in favor of the complainants, as prayed for in the bill, and the collectors of Tazewell and De Witt counties appealed.

It appears that George B. Wright, receiver of the Indianapolis, Bloomington and Western Railway Company, in 1877 filed a bill in the circuit court of Peoria county to enjoin the collection of taxes involved in this proceeding. The circuit court, on the hearing, dissolved the injunction and dismissed the bill, and the decree, on appeal to this court, was affirmed. Appellants contend that the decree so rendered is a bar to this action,--that the doctrine of res judicata applies. One great object of the law is, to settle questions and put an end to disputes between parties; and hence, where a matter has once been litigated, and a judgment rendered, in a court of competent jurisdiction, the judgment must be regarded as final between the parties to the litigation, and those who claim under them after the rendition of the judgment. But this rule of law can not be invoked here, because the appellees, who brought this bill, were not parties to the former action, nor do they claim under the receiver, who was a party. Wright, who brought the former bill, was acting under the direction of the United States Court, which had appointed him receiver. He had no right or title whatever to the property. He was a mere custodian under the order of a court. Appellees acquired title to the property, as purchasers under a deed of trust, long after Wright had filed the bill, and they claim that by the purchase they obtained title to the property free and clear of the taxes which appellants are now attempting to enforce against it. This question was not litigated in the former suit. It had not arisen when the former judgment was rendered. We are therefore of opinion that the former judgment can not be relied upon as a bar to this action, for two reasons: First, the parties were not the same; second, the subject matter of the litigation was not the same.

The questions here involved are not free from difficulty, and in order to determine the rights of the parties it will be necessary to consider, first, the nature and extent of appellants' claim; and second, the nature, character and scope of the mortgages under which appellees predicate a right to a priority of lien.

As stated heretofore, the taxes involved were assessed for the years 1873, 1874 and 1875, on the capital stock of the Indianapolis, Bloomington and Western Railway Company, and it is stipulated in the record that all taxes other than taxes upon the capital stock had been fully paid previous to the commencement of this suit. In August, 1878, the collector of taxes in and for the county of Tazewell levied upon the rolling stock of the Indianapolis, Bloomington and Western Railway Company, which was then in the hands of a receiver, for the purpose of collecting the taxes above specified. There is no ground for the position that the tax in question became a lien upon the real estate of the company from and after the first day of May of each year that it was levied, for the reason that the tax levied was a personal property tax, and not a tax on real estate. Capital stock has never, so far as we know, been treated as real property. It is in its very nature changeable, transitory, and has no element whatever which likens it to real property. In taxation, under the statute, it stands in the place of shares of capital stock, and when the latter is taxed the former is exempt; and shares of capital stock have always been regarded as personal property, in the same manner as promissory notes or bonds. Belleville Nail Co. v. The People, 98 Ill. 399, is a case in point. In that case the question arose whether a tax of this character was a real estate tax, and it was said: “It is sufficient to say that the capital stock and franchise of a corporation are recognized by the statute as to be listed, valued and taxed as personal property. Rev. Stat. 1874, chap. 120, secs. 3, 4, 7, 34.” Again, section 34 of the Revenue law, cited supra, in express terms declares, that “every person owning or using a franchise granted by any law of this State, shall, in addition to his other property, list the same as personal property, giving the total value thereof.”

If, then, the tax in question was a personal property tax, when did such tax become a lien on the property of the Indianapolis, Bloomington and ...