Illinois State Toll Highway Commission v. Korzen
| Decision Date | 18 March 1965 |
| Docket Number | No. 38782,38782 |
| Citation | 205 N.E.2d 433,32 Ill.2d 338 |
| Parties | The ILLINOIS STATE TOLL HIGHWAY COMMISSION, Appellee, v. Bernard J. KORZEN, County Treasurer, et al., Appellants. |
| Court | Illinois Supreme Court |
Daniel P. Ward, State's Atty., Chicago (Edward J. Hladis, Chief of Civil Division, Ronald Butler, Theodore M. Swain, Asst. State's Attys., of Counsel), for appellants.
William G. Clark, Atty. Gen., James J. Mejda, Asst. Atty. Gen., Eugene Kart, Sp. Asst. Atty. Gen., Chicago (Eugene Kart, and Alexander J. Isaacs, Chicago, of counsel), for appellee.
The county treasurer and other tax officials of Cook County appeal from a decree of the circuit court enjoining them from assessing certain real estate owned by the State Toll Highway Commission. The property consists of so-called 'oases' along the toll road at which service stations and restaurants are located. The act grants authority to lease such areas to private parties for these purposes (Ill.Rev.Stat. 1963, chap. 121, par. 314a34), and pursuant thereto they were leased to Standard Oil Company for a 25-year period. The lease contained a provision that the annual rental would be reduced by an amount equal to and ad valorem taxes assessed against the leaseholds and improvements.
The circuit court held the leaseholds exempt from taxation by reason of section 18 of the Toll Highway Act, which declares that 'all property belonging to the Commission, and the said toll highways, shall be exempt from taxation.' (Ill.Rev.Stat. 1963, chap. 121, par. 314a43.) The defendant tax officials rely on section 26 of the Revenue Act of 1939, which provides as follows: 'When real estate which is exempt from taxation is leased to another whose property is not exempt, and the leasing of which does not make the real estate taxable, the leasehold estate and the appurtenances shall be listed as the property of the lessee thereof, or his assignee, as real estate.' (Ill.Rev.Stat.1963, chap. 120, par. 507.) A number of decisions are cited holding or declaring leaseholds taxable where the land was owned by the State, school district or other entity enjoining tax exemption. (See La Salle County Mfg. Co. v. City of Ottawa, 16 Ill. 418; People v. International Salt Co. of Illinois, 233 Ill. 223, 84 N.E. 278; City of Chicago v. University of Chicago, 302 Ill. 455, 134 N.E. 723, 23 A.L.R. 244; People ex rel. Paschen v. Hendrickson-Pontiac, Inc., 9 Ill.2d 250, 137 N.E.2d 381.) It is then argued that the legislature's failure to amend section 26 in the light of these decisions, and its failure to specifically exempt leaseholds in the Toll Highway Act, shows an intention to have them assessed under the former.
We are satisfied, however, that the circuit court was correct in reaching a contrary conclusion. In Illinois State Toll Highway Comm. v. Eden Cemetery Ass'n, 16 Ill.2d 539, 158 N.E.2d 766, this court held that the Commission could condemn for the use of service area facilities even though they were operated by a private corporation for profit. We pointed out that the use was not a private one, for which the power of eminent domain may not be exercised, because the proximity of facilities for gasoline, food and other necessities of travel promoted the objectives of limited access and safety of travel, that 'service stations and restaurants are an integral part of the toll road system, whether they be operated by the Toll Highway Commission or leased to a private corporation who may be better able to carry on the business, thus bringing about the desired result. We think the General Assembly, in providing that 'all property belonging to the Commission' without regard to its use, shall be exempt from taxation, meant to include the property here in question.
Such is the conclusion reached by the Supreme Court of New Jersey in Walter Reade, Inc. v. Township of...
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...subjecting the fee to taxation." 239 U.S. 126, 132, 181, 36 S.Ct. 28, 30, 60 L.Ed. 177. Plaintiffs also rely on State Toll Highway Com. v. Korzen, 32 Ill.2d 338, 205 N.E.2d 433, wherein it was held that Standard Oil Company was exempt from the leasehold tax on property leased from the Commi......
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