People ex rel. Wenzel v. Chicago & N. W. Ry. Co.

• Decision Date: 27 May 1963
• Docket Number: Nos. 37584-37587,s. 37584-37587
• Parties: The PEOPLE ex rel. Mike WENZEL, County Collector, Appellee, v. CHICAGO AND NORTH WESTERN RAILWAY COMPANY, Appellant.
• Court: Illinois Supreme Court

Page 780

190 N.E.2d 780

28 Ill.2d 205

The PEOPLE ex rel. Mike WENZEL, County Collector, Appellee, v. CHICAGO AND NORTH WESTERN RAILWAY COMPANY, Appellant.

Nos. 37584-37587.

Supreme Court of Illinois.

May 27, 1963.

Hugh J. Dobbs and Louis F. Gillespie, Springfield, and George M. Hollander, Chicago (Carl McGowan, Chicago, and Gillespie, Burke & Gillespie, Springfield, of counsel), for appellant.

Paul C. Verticchio, State's Atty., Carlinville, for appellee.

DAILY, Justice.

These appeals, consolidated for purposes of review, are prosecuted by defendant, the Chicago and North Western Railway Company, from orders of the county court of Macoupin County overruling defendant's objections to property taxes for the years 1956, 1957, 1958 and 1959. We have jurisdiction because the revenue is involved.

The pleadings in each case consisted of the application of the county collector for judgment for the taxes paid by defendant under protest in each particular year, and the objections of defendant to allegedly excessive taxes levied against its property. With respect to each year the objections alleged that defendant's property in Macoupin County had been assessed at its full, fair cash value by the Department of Revenue (a fact here conceded by the plaintiff-collector to be true), but that locally assessed property, even after giving effect to the multiplier or equalization factor certified by the Department for each year, had been assessed at no more than 42.70% of full, fair cash value for the years 1956, 1957 and 1958, and at no more than 55% for the year 1959. Continuing, the objections alleged that the under-assessment of the locally assessed property was deliberate on the part of the State and local officials concerned, that it was constructively fraudulent, and that the undervaluation of locally assessed property resulted in excessive, illegal and discriminatory taxes on defendant's property, the recovery of which was prayed. We note in passing that the issues raised by these objections were the same as those first considered by this court in People ex rel. Hillison v. Chicago, Burlington and Quincy Railroad Co., 22 Ill.2d 88, 174 N.E.2d 175, and People ex rel. Kohorst v. Gulf, Mobile and Ohio Railroad Co., 22 Ill.2d 104, 174 N.E.2d 182, and that the county court had the benefit of those decisions when it entered the orders from which appeal has been taken. Here, however, evidentiary problems are presented which did not arise in the Hillison and Kohorst cases.

At the hearing on the objections, defendant, to overcome the presumption that the taxes were just and that the officials who had administered local assessment and equalization had honestly and properly performed their duties (People ex rel. Reinhardt v. McRoberts, 22 Ill.2d 282, 174 N.E.2d 841), followed the course of the taxpayers in Hillison and Kohorst and sought to introduce into evidence studies of the Department of Revenue relating to the assessment level of Illinois property in general, and to the ratio between full value and assessed value in particular. These ratio studies, we need state only generally in view of the issues raised in these appeals, disclosed that both the county assessment and the equalized county assessment were considerably less than full, fair cash value for each of the years in question. As was true in Kohorst, defendant also introduced testimony explaining the ratio studies and expressing opinions as to their reliability, and, in addition, introduced testimony of the county supervisor of assessments, to the effect that he and the county board of review sought to maintain assessments of personal property in the county at 55% of full value. The collector, in turn, introduced testimony reflecting upon the reliability of the ratio studies, and evidence designed to show that the studies had not been based upon a truly representative sampling of real-estate transactions in the county.

The trial court, in most instances, reserved the rulings on major objections to the evidence offered by both sides and, at the conclusion of the hearing, incorporated its rulings into the orders overruling defendant's objections. In substance, the court held that the studies relating to assessments for the years 1956 and 1957 were not admissible in evidence and overruled defendant's objections to the taxes for those years, presumably on the ground that defendant, without the studies in evidence, had failed in its burden of overcoming the presumption that the taxes for those years had been proper and just. As to the 1958 and 1959 taxes, however, the court ruled that the ratio study evidence was admissible, but nonetheless overruled the tax objections with an express finding that defendant's evidence did not establish that local real property was assessed at a figure less than 100% of fair cash value. Although not stated and somewhat obscured by the blanket rulings on evidence, an examination of the record leads us to believe the county court accepted the theory of plaintiff's proof that the sales-assessment method upon which the departmental studies were based, was not a reliable method for determining the ratio between the assessed value of real estate and its full, fair cash value. On appeal defendant contends that the ratio studies for 1956 and 1957 were properly admissible into evidence, and that the studies for each of the years involved, together with the supporting papers and the testimonial evidence concerning them, were competent to establish the ratio between full and assessed value in Macoupin County.

A better understanding of the trial court's orders and the issues they raise requires, we believe, a brief description of the sales-assessment method by which the Department determines the ratio between the full and assessed values of real estate. The ratio studies involved here are the end product arrived at by such method. Assessed value is obtained from abstracts of the assessment books furnished by each county clerk after the books have been certified by the board of review. Full value is obtained from samples of actual sales in each county. Insofar as samplings of real-estate transactions are concerned, it appears that a field man goes into each county in each year and procures data on current transactions from the records in the recorder's office. The procedure followed is as prescribed in a manual issued by the Department and, generally speaking, the samplings sought are arm's length transactions between willing sellers and willing buyers. Conveyances omitted from the sampling include those between members of families or corporate affiliates, and those in which the grantor is an administrator, guardian, receiver, trustee, master in chancery or the like.

The field man records the data for each transaction selected on a regular card form. These cards reflect, among other things, the date of the transfer; a description of the property; the recited consideration; the revenue stamps on the deed and the value indicated thereby; the location of the property and whether it is urban or rural; and where possible a description of the improvements on the property and of encumbrances. There are also spaces for reporting the assessed value for two years, although normally only the assessed valuation for the current year is shown, and a space for the initials of the field man who abstracted the data. In some instances the field man also inserts the ratio between assessed valuation and the consideration reflected by the deed, and where he does not it is either filled in by those editing the cards, or determined from the computation made by punch card machines. In the latter regard, the data on the field man's card is normally transferred to a punch card, and much of the subsequent tabulation and calculation is done by business machines.

Upon being received by the Department the cards are screened, or edited, to eliminate transactions which are not sufficiently reliable to be included and, from what is left, the ratio determinations and studies are made. As has been described in the Kohorst case (22 Ill.2d at 110, 174 N.E.2d at 186), the ratio of assessed to full value is first determined in each transaction included in the sampling. To arrive at the county-wide ratio, the ratios for all eligible single transactions are first tabulated to determine median ratios. In Macoupin County separate medians are determined for urban and rural property, and such medians are weighted to represent the proportion which each class of property is of all the property in the county for which the ratio is being determined, and finally the weighted ratios are then averaged to determine the average weighted sales-assessment ratio for the county. Having thus determined the ratio between full and assessed value in a particular county, the Department next determines the multiplier, or equalization factor, and in order to avoid undue accentuation of the sales transactions occurring in any single year, takes into consideration not only the ratio study of the current tax year, but also the studies relating to the two years preceding.

In the instant case defendant offered into evidence the official sales-assessment ratio studies of the Department for the years 1951 to 1958 inclusive, and the edited cards on which the basic data for the 1959 ratio study was reported to the Department. These 1959 cards were...