Mobile & O.R. Co. v. State Tax Comm'n

CourtSupreme Court of Illinois
Citation374 Ill. 75,28 N.E.2d 100
Decision Date14 June 1940
Docket NumberNo. 25617.,25617.
PartiesMOBILE & O. R. CO. et al. v. STATE TAX COMMISSION.

OPINION TEXT STARTS HERE

Proceeding by the Mobile & Ohio Railroad Company and others against the State Tax Commission on appeal from an assessment made by the Commission on the property of the Mobile & Ohio Railroad Company for the year 1938. From an adverse judgment, the State Tax Commission appeals.

Affirmed.Appeal from Circuit Court, St. Clair County; Maurice V. Joyce, judge.

John E. Cassidy, Atty. Gen. (Montgomery S. Winning, of Springfield, of counsel), for appellant.

David S. Lansden, of Cairo, and Rufus Creekmore, of St. Louis, Mo., for appellees.

SHAW, Justice.

This is an appeal by the State Tax Commission from a judgment entered by the circuit court of St. Clair county on a statutory appeal from the commission to that court under the provisions of section 10 of the Tax Commission act of 1919, Ill.Rev.Stat.1937, chap. 120, par. 347, now section 138 of the Revenue act of 1939, Ill.Rev.Stat.1939, c. 120, § 619, in the matter of the assessment by the State Tax Commission of the property of the Mobile and Ohio Railroad Company for the year 1938. The record consists of an agreed statement of facts and presents for determination by this court the question of whether the State Tax Commission has used lawful methods and rules in equalizing the valuations of railroad properties in the various counties hereinafter mentioned.

By virtue of a recognized custom, property, generally, throughout the State of Illinois is now, and for many years last past has been, assessed for taxation at a figure less than its full fair cash value and this custom has long been recognized by the State Tax Commission. Prior to 1938, the commission, in assessing property coming under its jurisdiction, determined, first, the full value of such property, and then equalized such full value at that percentage of fair cash value which, in its opinion, represented a State-wide average of the percentages of fair cash value used by local assessing officers in assessing property, and, for the years 1933, 1934, 1935, 1936, and 1937, the commission determined that the average equalized value of property throughout the State was thirty-seven per cent of the fair cash value thereof. In assessing the property of a railroad company the commission equalized the valuation thereof and divided such equalized value among the several counties and other taxing districts therein through which the lines of the railroad company operated. However, during the years 1936, 1937, and 1938, the State Tax Commission made an investigation of the assessment ratio used in each county of the State and concluded that there was a wide variation among the counties in the percentages of fair cash value at which property was assessed by the local assessing officers. Such percentages were found to range from twenty-four per cent in DuPage county to seventy-eight per cent in Massac county, while the average for all of the counties was thirty-four and one-half per cent.

In view of its conclusions in this behalf the commission decided that the constitutional requirement of uniformity could not be satisfied for the several taxing districts of the State by equalizing railroad valuations for the entire State at one identical percentage, but that the railroad valuations for each county should be equalized at the same percentage of fair cash value as other property is equalized in that county. Consequently, in 1938, the commission adopted the following method of assessing railroad property. It valued the property of each railroad company subject to assessment by it, including the property of the Mobile and Ohio Railroad Company, divided such valuation among the several counties and other taxing districts through which the lines of such railroad company operated, and then equalized the valuation in each county at the percentage of fair cash value used by local assessing officers in equalizing other property in that county.

The appellees contend, and the trial court held, that this method of equalizing the valuation of railroad property violates the Railroad Assessment act of 1937, Ill.Rev.Stat.1937, chap. 120, pars. 56.1-56.15, the uniformity provisions of the State constitution, and the due process and equal protection clauses of the fourteenth amendment to the Federal constitution, and that, regardless of the facts developed by the investigation herein referred to, the method used by the State Tax Commission prior to 1938 is the only legal method of equalizing railroad valuations.

In assessing the property of the Mobile and Ohio Railroad Company, the State Tex Commission, after a hearing, fixed the full value of said property subject to assessment by it for the year 1938, at $3,747,820, concerning which valuation no question is raised. This full value was then divided by the commission among the respective counties and other taxing districts through which the line of railroad operated, and thereupon the full value, as thus divided, was equalized by the State Tax Commission for each county at the average ratio found by the commission to be used by the local assessment officials in such county in assessing other property. The full value of the properties in question, as divided among the several counties, the final assessed value in each county, and the equalization factor or assessment ratio employed for each county are as follows:

+--------------------------------------------+
                ¦         ¦          ¦          ¦Equalization¦
                +---------+----------+----------+------------¦
                ¦         ¦          ¦          ¦Factor or   ¦
                +---------+----------+----------+------------¦
                ¦         ¦Full      ¦Assessed  ¦Assessment  ¦
                +---------+----------+----------+------------¦
                ¦County   ¦Value     ¦Value     ¦Ratio       ¦
                +---------+----------+----------+------------¦
                ¦         ¦          ¦          ¦            ¦
                +---------+----------+----------+------------¦
                ¦Alexander¦$ 785,629 ¦$ 518,515 ¦66%         ¦
                +---------+----------+----------+------------¦
                ¦Jackson  ¦705,508   ¦282,203   ¦40%         ¦
                +---------+----------+----------+------------¦
                ¦Monroe   ¦490,755   ¦318,991   ¦65%         ¦
                +---------+----------+----------+------------¦
                ¦Perry    ¦55,526    ¦42,200    ¦76%         ¦
                +---------+----------+----------+------------¦
                ¦Randolph ¦624,947   ¦331,222   ¦53%         ¦
                +---------+----------+----------+------------¦
                ¦St. Clair¦684,843   ¦205,453   ¦30%         ¦
                +---------+----------+----------+------------¦
                ¦Union    ¦400,612   ¦272,416   ¦68%         ¦
                +---------+----------+----------+------------¦
                ¦         ¦          ¦          ¦            ¦
                +---------+----------+----------+------------¦
                ¦Total    ¦$3,747,820¦$1,971,000¦            ¦
                +--------------------------------------------+
                

The line of the Mobile and Ohio Railroad Company in the State of Illinois extends from Cairo, in Alexander county, to East St. Louis, in St. Clair county, and is located in and passes through the counties of Alexander, Union, Jackson, Perry, Randolph, Monroe and St. Clair. In these counties the line of said railroad company operates through 166 of the 809 taxing districts located therein.

The investigation conducted by the State Tax Commission tended to show that in most counties of the State rural property was equalized at a higher percentage of its fair cash value than urban property. The respective percentages in the counties through which the line of the Mobile and Ohio Railroad Company operates, and the weighted average assessment ratio for said counties, are as follows:

+------------------------------------------+
                ¦         ¦Assessment¦Assessment¦Weighted  ¦
                +---------+----------+----------+----------¦
                ¦         ¦Ratio     ¦Ratio     ¦Average   ¦
                +---------+----------+----------+----------¦
                ¦         ¦for Rural ¦for Urban ¦Assessment¦
                +---------+----------+----------+----------¦
                ¦Counties ¦Property  ¦Property  ¦Ratio     ¦
                +---------+----------+----------+----------¦
                ¦         ¦          ¦          ¦          ¦
                +---------+----------+----------+----------¦
                ¦Alexander¦81%       ¦60%       ¦66%       ¦
                +---------+----------+----------+----------¦
                ¦Jackson  ¦51        ¦33        ¦40        ¦
                +---------+----------+----------+----------¦
                ¦Monroe   ¦70        ¦51        ¦65        ¦
                +---------+----------+----------+----------¦
                ¦Perry    ¦91        ¦57        ¦76        ¦
                +---------+----------+----------+----------¦
                ¦Randolph ¦56        ¦48        ¦53        ¦
                +---------+----------+----------+----------¦
                ¦St. Clair¦41        ¦36        ¦38        ¦
                +---------+----------+----------+----------¦
                ¦Union    ¦80        ¦49        ¦68        ¦
                +------------------------------------------+
                

In 1933, and in each subsequent year to and including 1938, the Governor, the State Auditor, and the State Treasurer, acting pursuant to the laws relating to the levy and extension of State property taxes, met and determined tht no rate for State purposes need be levied or extended for that year upon the assessed valuation of property throughout the State, and in each of these years the State Tax Commission, for that reason, did not equalize the assessments of property between the different counties of the State.

The total full value of the properties of all railroads in Illinois subject to assessment by the State Tax Commission for the year 1938, was found by the commission to be $948,615,953, and the total assessments of all such...

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