In re Assessment of Aurora Gaslight
| Decision Date | 24 October 1916 |
| Docket Number | No. 9124.,9124. |
| Citation | 113 N.E. 1012,64 Ind.App. 690 |
| Court | Indiana Appellate Court |
| Parties | In re ASSESSMENT OF AURORA GASLIGHT, COKE & COAL CO. |
OPINION TEXT STARTS HERE
Appeal from Circuit Court, Dearborn County; Warren N. Hauck, Judge.
Appeal by the Aurora Gaslight, Coke & Coal Company from a judgment of the circuit court adjudging the company liable for certain taxes. Judgment affirmed.Addison C. Harris, of Indianapolis, and McMullen & McMullens, of Aurora, for appellant. Givan & Givan, of Lawrenceburg, for appellee.
On July 22, 1912, the auditor of Dearborn county, Ind., placed on the tax duplicate of that county assessments of omitted personal property of the Aurora Gaslight, Coke & Coal Company as follows: For the year 1908, $10,500; for the year 1909, $9,800; for the year 1910, $8,400.
From the assessments the company appealed to the Dearborn circuit court, where upon trial the court found and duly adjudged that said company was liable for taxes on amounts as follows: For the year 1908, $11,200; for the year 1909, $10,500; for the year 1910, $9,800.
The property so assessed is the amount alleged to be due the gas company in each of the respective years aforesaid, from the Indiana Public Service Company, as a part of the purchase money for the sale of its plant and property to that company.
The only error assigned is the overruling of appellant's motion for a new trial.
The grounds to the motion for a new trial are that the decision of the court is not sustained by sufficient evidence; that the decision is contrary to law.
The facts are not controverted, and the correctness of the decision and judgment of the lower court depends upon the meaning and legal effect of the instruments executed by appellant and the service company.
On April 27, 1907, appellant executed to the service company a written instrument denominated a lease, the substance of which is as follows: For and in consideration of the covenants and agreements herein contained and payment of $21,000, and other payments and considerations, the first party, the gas company, hereby demises, lets and leases to the second party, the following real estate and personal property: Here follows description of certain real estate in Aurora, Ind., “together with all the buildings, structures, fixtures, machinery, boilers, engines, reservoirs, tanks, wells, benches, retorts, purifiers, gas mains, conduits, connections, scales and meters, connected with or appertaining to the gas plant of the first party in the city of Aurora, *** to have and to hold for the term of nine (9) years from the first day of May, 1907, or sooner determination of this lease, yielding and paying therefor the consideration and rent following, to wit:” $5,000, cash May 1, 1907. $1,000, cash May 1, 1908. $1,000, cash May 1, 1909. $2,000 on May 1st each of the years, viz. 1910, 1911, 1912, 1913, 1915, and 1916, and 5 per cent. per annum “on all of the unpaid part of said consideration and rent” payable semiannually in equal installments on the 1st day of May and November of each year. The second party covenants as follows: (1) To pay all taxes, charges, or assessments at any time levied upon or charged against said property, provided the first party shall pay all such charges, taxes, and assessments due and payable on 1907. (2) To keep the plant, system, and property in as good condition and repair as it was at the time of the transaction. Second party is given the right to make such alterations, changes, and improvements as it may deem beneficial, provided the value of the property shall not be lessened thereby. Also, granted the privilege of paying “all or any part of the money payments herein provided for in advance.” It is further agreed and understood:
“That a certain agreement of even date herewith relating to the hereby demised property and premises is hereby made a part of this lease, and that the two instruments shall be construed and considered together.”
Upon full payment of the amounts stipulated herein and performances of all covenants to be performed by the second party, the first party will by good and sufficient assignment and deed convey to the second party the aforesaid real estate, gas plant, and appurtenances thereunto belonging. It is further agreed that if the payments aforesaid, or any part thereof shall remain due and unpaid for 90 days, or if any taxes, charges, or assessments against said property shall become due and delinquent for 90 days, or if default is made in any of the covenants herein contained or in the aforesaid agreement of even date herewith, then this lease shall become null and void, and it shall be lawful for the first party to re-enter the said premises and remove all persons thereform and repossess said premises, the second party waiving all notice to quit. The second party covenants to pay the first party the amounts above specified, and first party covenants that on payment of the money and performance of the aforesaid agreements second party may hold and enjoy said premises for the time and term aforesaid.
On the same date the same parties executed another instrument, which appellant denominates an “option,” in substance as follows: In consideration of the mutual agreements, covenants, and conditions herein contained, and in further consideration of $21,000, and a further sum equal to the reasonable price of all personal property to be scheduled and prices fixed to the mutual satisfaction of the parties hereto, the first party hereby covenants and agrees to sell, transfer, assign, set over, and convey to second party the identical real estate, property, and appurtenances described in the alleged lease in this writing. “And in consideration aforesaid the second party covenants and agrees to pay and render to said first party, the consideration abovesaid, as follows:” Here follows stipulation of amounts, dates of payment, rate of interest, and other conditions identical with those in the alleged lease, including provisions relating to payment of taxes, charges and assessments, insurance, prepayment of the consideration, and the making of alterations, repairs, or improvements. It is also provided that the “certain lease of even date herewith” is hereby made “a part of this agreement as fully and completely as it would or could be if copied herein,” and said two instruments shall be considered and construed together as parts of the same transaction. Provided that the title to said property shall be and continue in first party until such time as the second party shall have fulfilled all its part of the agreement. Then follow stipulations for assignment and conveyance of property same as in “the lease” and the provisions as to default in payments for 90 days, to the effect that on such default “first party at its option shall have the power and right to declare and make this agreement void and of no continuing force or effect, and upon such declaration *** second party shall forfeit and release by way of liquidated damages, all right, title, claim or demand on or to said premises or any part thereof, and to any and all money theretofore paid by the second party to the first party.”
At the trial it was agreed that the service company entered into possession of the property in pursuance of said writings and has since continued in such possession; that all payments due have been made in accordance with the terms of the writings.
Appellant contends that the instruments and the transactions between the parties thereto do not show a sale of the property to the service company and a debt due it from such purchaser for a balance of purchase money which is liable to assessment for taxation. It further contends that the writings show that the service company only held an option for the purchase of the property described therein, that it had possession and control thereof by virtue of the lease, and that the stipulated money obligations represent rent, and not a balance of purchase money.
The parties have agreed that the two instruments shall be construed together, and the rules of construction, independent of such agreement, would necessitate such consideration.
[1] Considering the writings in their entiretyand the character of the transaction, we must seek to find the intention of the parties. The form and names of the instrument are not of controlling effect, for the law looks through form to substance and will give effect to the real and dominant intention of the parties when definitely ascertained. Beardsley v. Beardsley, 138 U. S. 262, 11 Sup. Ct. 318, 34 L. Ed. 928;Mendenhall v. First New Church, 177 Ind. 336-342, 98 N. E. 57;Heryford v. Davis, 102 U. S. 235, 26 L. Ed. 160;White v. Redenbaugh, 41 Ind. App. 580-583, 82 N. E. 110. In the case at bar we are only concerned with the question of intention as it bears upon the right to subject the money obligations to taxation.
[2] If the real transaction was a sale of property and such amounts in truth and in fact represent a balance of purchase money, the character of...
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