Illinois Cent. R. Co. v. Carr

• Court: Illinois Supreme Court
• Writing for the Court: CARTWRIGHT
• Citation: Illinois Cent. R. Co. v. Carr, 302 Ill. 172, 134 N.E. 138 (Ill. 1922)
• Decision Date: 22 February 1922
• Docket Number: No. 14409.,14409.
• Parties: ILLINOIS CENT. R. CO. v. CARR, County Collector.

302 Ill. 172

134 N.E. 138

ILLINOIS CENT. R. CO.

v.CARR, County Collector.

No. 14409.

Supreme Court of Illinois.

Feb. 22, 1922.

Suit for injunction by the Illinois Central Railroad Company against Patrick J. Carr, County Collector. From an order enjoining the collection of a tax on certain bonds and sustaining a demurrer to residue of the bill, plaintiff appeals.

Affirmed as to the injunction, reversed and remanded, with directions as to the residue.

Appeal from Superior Court, Cook County; Charles M. Foell, judge.

Walter S. Horton, George A. Dupuy, and John G. Drennan, all of Chicago, for appellant.

Edward J. Brundage, Atty. Gen., and Robert E. Crowe, State's Atty., William H. Duval, Baldwin, Church, Shepard & Lynde, and Homer K. Galpin, all of Chicago (Frank L. Shepard, of Chicago, of counsel), for appellee.

CARTWRIGHT, J.

In the year 1919 the board of assessors of Cook county assessed to the appellant, the Illinois Central Railroad Company, shares of stock, bonds, moneys, and credits at full values amounting to $10,308,000 and fixed the value for assessment at one-half that amount, or $5,154,000. The board of review, upon complain by the appellant, refused to annul the assessment, and a tax at the rate of 5.14 per cent., amounting to $264,915.60, was extended against the property, and a warrant was issued to the appellee, Patrick J. Carr, county collector, for its collection. The appellant filed in the superior court of Cook county its bill of complaint challenging the power of the board of assessors to make any assessment against the property, and further alleging as to the stocks and bonds that they were not held for investment but were in the nature of title deeds to lines of railroad in other states operated by the appellant as a part of its system. The bill prayed for an injunction againt the collection of the tax. One item assessed was 174,867 joint first refunding 5 per cent. bonds of the Chicago, St. Louis & New Orleans Railroad Company of the par value of $100, and the full value was fixed at $3,000,000, the assessed value at one-half that amount, and the tax was $77,100. The bill alleged that these bonds were an indebtedness of the appellant and not a taxable asset. The appellee answered the bill as to those bonds and filed a general demurrer to the residue. The chancellor found that the bonds were the joint obligations of the appellant and the other railroad company, which had been prepared and were held pending their favorable negotiation to the public, when they would become a liability of the appellant as one of the joint makers. As it appeared that the bonds were in the nature of a promissory note still in the maker's possession and if ever sold would create an indebtedness, the tax as to them was enjoined. The demurrer to the residue of the bill was sustained, and appellant having elected to stand by the bill as amended, a decree was entered accordingly and an appeal was prosecuted to this court.

Several divisions of the brief and argument for the appellee are devoted to general well-settled principles and are supported by numerous decisions of this court. They are: (1) That all property is subject to assessment for taxation unless specifically exempted therefrom by statute within the limits of the Constitution; (2) that all property of the appellant not included in or properly a part of its charter lines is subject to assessment under the General Revenue Law (Hurd's Rev. St. 1919, c. 120) for purposes of general taxation; and (3) the jurisdiction of the board of assessors and board of review includes all property not specifically placed elsewhere for assessment nor exempt from taxation. To these propositions the appellant replies that it does not claim any exemption from taxation and admits that its property is taxable either under section 22 of its charter of the Revenue Act; that all its property not included in nor properly a part of its charter lines is subject to assessment under the General Revenue Law for purposes of general taxation, and that jurisdiction of the board of assessors and board of review includes all property not specifically placed elsewhere for assessment nor exempt from taxation. The position of the appellant in argument and the basis of the bill of complaint is that the property assessed has by its charter or the Revenue Act been placed elsewhere than the local assessing authorities for the purpose of assessment; that if the property is a part of the charter lines the assessment is to be by the Auditor of Public Accounts, and if not a part of such lines, by the State Tax Commission. It was alleged in the bill that the property was acquired as a part of the operation of the original charter lines and was a part of the assets of those lines, but in the argument here it is suggested no further than to sustain the claim that the assessment was covered by the provisions of the charter and therefore not within the jurisdiction of the board of assessors. The bill also raised a question whether the property, if not within the charter, was a part of ‘capital stock’ assessable by the State Tax Commission; but that also is only material on the question of the authority of the board of assessors. Manifestly, if the board of assessors and board of review were without jurisdiction, the questions whether the items assessed were property which could be assessed at all or by what authority are not involved, and it would not be proper to consider them until an assessment should be made by some authority competent to make an assessment.

It is undeniable that the items included in the assessment are held and owned by the appellant as a railroad corporation and can be assessed for taxation only under appellant's charter or the provisions of the Revenue Law relating to taxation of such corporations. The claim of the appellee is that they were lawfully assessed by the board of assessors of Cook county upon two grounds: First, the general rule that intangible personal property follows that situs of the owner, and the principal office of the appellant being in Cook county, the property assessed had its location there for the purpose of assessment; and, second, that sections 46 and 47 of the Revenue Act subjected the property to assessment by the local authority.

As a general rule, incorporeal personal property has no locality, but accompanies the person of the owner wherever he goes. But that is merely a rule of the common law adopted for convenience, only, and it may be changed by the Legislature in the exercise of its judgment. The actual situs of personal property having a visible and tangible existence will determine the town or district in which it may be taxed without reference to the domicile of the owner, but intangible property for the purpose of taxation, in the absence of a statute, is generally held to be situated at such domicile. Scripps v. Board of Review, 183 Ill. 278, 55 N. E. 700. If the Legislature has changed the rule with respect to this property, it had power to do so (First Nat. Bank of Mendota v. Smith, 65 Ill. 44), and in State Railroad Tax Cases, 92 U. S. 575, 23 L. Ed. 663, where the Revenue Act of this state was under consideration, it was regarded that the Legislature had made such a change except as to real estate not a part of the track and right of way and personal property having a permanent location, and it was said that in doing so the Legislature simply exercised and ordinary function of legislation.

In the Hub v. Hanberg, 211 Ill. 43, 71 N. E. 826, it was held that the statute giving authority to a local assessor was broad enough to include every species of property not therein expressly removed from such jurisdiction, and the language of the schedule was broad enough to comprehend the capital stock of a corporation, including the franchise. That decision, and sections 46 and 47 of the Revenue Act before mentioned, furnish ground for argument that the board of assessors had power to make this assessment. In the Revenue Act the assessment of the property of...