People v. Wilson Car Lines, Inc.

• Decision Date: 05 October 1938
• Docket Number: No. 24526.,24526.
• Parties: PEOPLE v. WILSON CAR LINES, Inc.
• Court: Illinois Supreme Court

369 Ill. 294

16 N.E.2d 752

PEOPLE

v.WILSON CAR LINES, Inc.

No. 24526.

Supreme Court of Illinois.

June 15, 1938.

As Modified on Denial of Rehearing Oct. 5, 1938.

Action of debt by the People of the State of Illinois against the Wilson Car Lines, Inc., to recover personal property taxes. Judgemtn for defendant, and plaintiff appeals.

Affirmed in part, reversed in part and remanded, with directions.Appeal from Circuit Court, Cook County; Thomas J. Lynch, judge.

Thomas J. Courtney, State's Atty., and Philip H. Treacy, both of Chicago (Marshall V. Kearney, of Chicago, of counsel), for appellant.

W. R. Brown, of Chicago, for appellee.

ORR, Justice.

The People brought an action of debt in the circuit court of Cook county for the 1932, 1933, and 1934 personal property taxes against the Wilson Car Lines, Inc., a Maine corporation with its principal place of business in Cook county, Illinois. Propositions of law were submitted by defendant and judgment was rendered by the court in its favor. The case is here on direct appeal.

The principal facts were stipulated by the parties. On April 1, 1932, defendant company owned 1,742 railroad cars valued at a fair cash value of $968,853; on the same date in 1933, it owned 1,697 cars valued at $1021,238; in 1934, it owned 1,627 cars valued at $1,055,689. These cars were rented to railroad companies for the interstate and intrastate transportation of merchandise to and from certain meatpacking plants located in Cook county. Defendant also owned office furniture and fixtures located in the same county. In 1932, defendant filed a personal property tax schedule listing its office furniture at $500. The local assessor increased this valuation to $755 and inserted an additional assessment on line 16 of the printed schedule labeled ‘Manufacturers' Tools and Machinery,’ with a valuation of $168,983. The two items were totaled and equalized at thirty-seven per cent, making an equalized assessment of $62,803. Defendant filed a complaint before the board of appeals which revised the assessment and reduced the equalized value to $53,145. A tax was thereupon assessed against defendant in the amount of $4,107.51, only $14.30 of which was paid-that part of the tax attributable to the office furniture.

In 1933, defendant again scheduled only its office furriture. An additional assessment of $145,440 was entered by the assessor on line 10 of the schedule labeled ‘Machinery and Equipment,’ and another item of $25,000 was entered on line 16, labeled ‘all other personal property.’ These items were equalized at thirty-seven per cent to give a total assessed value of $63,137. Defendant again complained to the board of appeals which struck off all the items except the office furniture. Subsequently, after notice to defendant, the assessor made an additional assessment for omitted property for the year 1933 in column 10 labeled ‘Machinery and Equipment,’ with an equalized value of $48,138. Substantially the same events occurred in 1934. On line 10, labeled ‘Machinery and Equipment,’ an additional assessment of $117,094 was entered by the assessor; the board of appeals, upon the recommendation of the assessor, reduced that valuation to $70,456 which was equalized to $26,069, and defendant paid only $4 the tax on its office furniture-out of a total tax of $1,856.12.

It was successfully contended by defendant in the circuit court that the assessment entered on line 16 of the 1932 schedule labeled ‘Manufacturers' Tools and Machinery,’ and those entered on line 10 of the 1933 and 1934 schedules labeled ‘Machinery and Equipment,’ could not be sustained by proof that defendant owned railroad cars-assuming that these cars were subject to taxation. A motion was filed by the People to correct the record to show that the assessment made in each case was upon cars owned by defendant but this motion as denied. Section 191 of the Revenue act (Ill.Rev.Stat.1937, chap. 120, § 179) provides: ‘In all judicial proceedings of any kind, for the collection of taxes, * * * no error or informality in the proceedings of any of the officers connected with the assessment, levying or collecting of the taxes, not affecting the substantial justice of the tax itself, shall vitiate or in any manner affect the tax or the assessment thereof; and any irregularity or informality in * * * any of the proceedings connected with the assessment or levy of such taxes, or any omission or defective act of any other officer * * * connected with the assessment or levying of such taxes, may be, in the discretion of the court, corrected, supplied and made to conform to law by the court,’ etc. While the right to order the record amended under this section is in the discretion of the trial court, such discretion must be reasonably exercised and is subject to review upon appeal. People ex rel. v. Payne, 296 Ill. 236, 129 N.E. 759.

The schedules upon which the challenged assessments were entered were issued by the State Tax Commission in conformity with the provisions of section 25 of the Revenue act (Ill.Rev.Stat.1937, chap. 120, § 25). The one used in 1932 contains forty-one separate classifications of personal property; those used in 1933 and 1934 contain sixteen classifications. An assessment of railroad cars cannot accurately be placed under any of the specific groups and hence should have been inserted under the last item on each of the schedules which covers all taxable personal property not otherwise specified. The existence of this error, alone, however, does not vitiate the assessment if it can be said that it does not affect ‘the substantial justice of the tax.’ This court described the purpose served by requiring the itemization of assessed property in People v. Commonwealth Edison Co., 367 Ill. 260, 11 N.E.2d 408. We said there (page 411): ‘(1) It would inform those of the public generally as to the nature and amount of personal property which the taxpayer had submitted for assessment and tend to influence, on his part, a full rendition of his property; (2) a taxpayer would know the kind and amount of property on which he was assessed and the aggregate assessment as to each class, and could plead such assessment in bar if an effort was later made to re-assess the same property as omitted property; and (3) bodies created for the purpose of discovering property not returned for taxation, and causing it to be assessed, would have a schedule of the property disclosed by the taxpayer. The investigating body would thereby be able more readily to determine whether the owner had made a complete return, and omitted property, liable to taxation, could be ascertained more easily.’ While railroad cars might, in one sense, be considered ‘machinery’ or ‘equipment,’ their inclusion under classifications so labeled cannot be said to satisfy the three requirements just quoted. If the cars had been itemized under the general provision covering personal property not otherwise mentioned in the schedule, defendant would have had even less information as to the nature of the property assessed, yet it could not have complained. Hence, we cannot see how defendant was injured. Had the property been assessed under the general classification, the same doubt as to its nature would have existed-a doubt which, in any event, could not have been very great, since defendant admitted that it owned no property other than the railroad cars, except the office furniture which was properly itemized. The trial court should have permitted the record to be amended.

The circuit court further found that the cars in question here were assessable by the State Tax Commission as rolling stock belonging to the railroad companies upon whose lines they were operated. In support of this ruling, defendant cites the early decision of Kennedy v. St. Louis, Vandalia & Terre Haute Railroad Co., 62 Ill. 395, where this court held that railroad cars were properly assessed to a railroad company even though that company merely leased them. In that case we were called upon to construe the effect of an amendment to the Revenue act enacted in 1869. The act, prior to amendment, provided that the schedule of personal property filed by a railroad should include ‘an inventory of the rolling stock belonging to said company, with the value thereof,’ etc., and this court had construed it in Cook County v. Chicago, Burlington & Quincy Railroad Co. 35 Ill. 460, 461, to mean that rolling stock merely leased by a company need not be scheduled by it. The amendment in 1869 provided that a railroad company should list ‘the rolling stock and personal property which may be used upon such road in the counties, towns, and cities through which such road may run, whether such rolling stock belongs to such road, or to the company, corporation, person or persons using or operating such road.’ After reviewing the history of these sections of the act, we decided in the Kennedy Case, supra, that the words ‘belonging to,’ in the provision first quoted, were intended to include rolling stock merely used or operated by a railroad. The Revenue act, as it existed from 1932 to 1934, contained no provision similar to the amendment of 1869. Section 44 of that act (Smith-Hurd Stats. c. 120, § 48; Cahill's Stat. 1931, chap. 120, par. 49; Cahill's Stat. 1933, chap. 120, par. 49) provided that: ‘The movable property belonging to a railroad company shall be held to be personal property’ and that the schedule to be filed shall contain a ‘correct detailed inventory of all the rolling stock belonging to such company,’ etc. In the absence of a provision similar to the amendment of 1869, we believe that the construction of the words ‘belonging to’ adopted in the Kennedy Case, supra, is not in point. It seems clear that the legislature intended that those words as they were used in the statutes from 1932 to 1934 should have their generally accepted meaning and that only cars owned by a railroad company should be assessed to...