The Pac. Hotel Co. v. Lieb

• Decision Date: 30 September 1876
• Citation: The Pac. Hotel Co. v. Lieb, 83 Ill. 602, 1876 WL 10411 (Ill. 1876)
• Parties: THE PACIFIC HOTEL COMPANYv.HERMAN LIEB et al.
• Court: Illinois Supreme Court

83 Ill. 602

1876 WL 10411 (Ill.)

THE PACIFIC HOTEL COMPANY

v.HERMAN LIEB et al.

Supreme Court of Illinois.

September Term, 1876.

OPINION TEXT STARTS HERE

APPEAL from the Circuit Court of Cook county; the Hon. E. S. WILLIAMS, Judge, presiding.

Mr. THOMAS F. WITHEROW, for the appellant.

Mr. JAMES K. EDSALL, Attorney General, for the appellees.

Mr. JUSTICE SCHOLFIELDdelivered the opinion of the Court:

The bill, in the present case, prays that the collection of all taxes levied upon the capital stock of The Pacific Hotel Company, as assessed by the board of equalization, be enjoined.The court below sustained a demurrer to the bill, and the questions to be determined arise upon that ruling.

By § 32 of the Revenue act, in force July 1, 1872, it is required that “companies and associations incorporated under the laws of this State, (other than banks organized under the general banking laws of this State,) shall, in addition to the other property required by this act to be listed, make out and deliver to the assessor a sworn statement of the amount of its capital stock, setting forth, particularly--

1st.The name and location of the company or association.

2d.The amount of capital stock authorized, and the number of shares into which such capital stock is divided.

3d.The amount of capital stock paid up.

4th.The market value, or if no market value, then the actual value of the shares of stock.

5th.The total amount of all indebtedness, except the indebtedness for current expenses, excluding from such expenses the amount paid for the purchase or improvement of property.

6th.The assessed valuation of all its tangible property.

Such schedule shall be made in conformity to such instructions and forms as may be prescribed by the Auditor of Public Accounts.In all cases of failure or refusal of any person, officer, company or association to make such return or statement, it shall be the duty of the assessor to make such return or statement from the best information which he can obtain.

It is required by § 33, that “such statements shall be scheduled by the assessor, and such schedule, with the statements so scheduled, shall be returned by the assessor to the county clerk.Said clerk shall, at the time he makes his report of assessment, forward to the auditor all such schedules and statements so returned to him.The auditor shall, annually, on the meeting of the State Board of Equalization, lay before said board the schedules and statements herein required to be returned to him; and said board shall value and assess the capital stock of such companies or associations in the manner provided in this act.”That is to say, as prescribed by § 3, “to ascertain and determine, respectively, the fair cash value of such capital stock, including the franchise, over and above the assessed value of the tangible property of such company or association.”

It is alleged that the valuation or assessment of appellant's capital stock is grossly unequal, unfair and oppressive, and was made in fraud of its rights, and that, in listing its property, appellant omitted to list its capital stock, or indebtedness, in addition to its tangible property, for the reason that neither the Auditor of Public Accounts, nor the duly authorized assessor, furnished it with the instructions or forms, in conformity with which such return is required to be made, or made demand for such return.

The point is made, and pressed with much ability and ingenuity, by the counsel for appellant, that this renders the tax levied upon the capital stock absolutely void.Among the cases cited, in support thereof, are Graves v. Bowen et al.11 Ill. 439;Tibbits v. Job et al.Id. 460;Schuyler et al. v. Hull,Id. 463;Marsh v. Chestnut,14 Id. 223;Billings v. Dutton,15 Id. 218.

In our opinion, there is a material difference between the returns required by the statutes in those cases, and that required by the section under consideration, and, therefore, the principle controlling in them has no necessary application here.

In the cases in 11 Illinois, the listing included the valuation of the property upon which the rate per cent of taxation levied had to be computed and extended for collection, and so, without the return, there was nothing by which to ascertain the amount the tax-payer should pay, there being no authority to determine it otherwise than upon computation based upon such valuation.In the last two cited cases, the listing also included the valuation, and it was, in addition, essential that the return should be made within the time prescribed by the statute, to allow the tax-payer an opportunity to inspect the return and prepare for the hearing of his objections to the assessment.Here, however, there is no necessity of listing, for the purpose of indicating with certainty the particular property to be assessed, for this is indicated by the law with such certainty, that there can be no possible misapprehension.It is the capital stock, including the franchise, over and above the assessed value of the tangible property.Where such a company is created by the laws of this State, it possesses this property, of some value, although it may be only nominal, and it can possess no other property with which it may be in danger of being confounded, unless it shall be separately and specifically mentioned.The officers of the corporation can but, and must, know that it possesses this property which is to be taxed, since it is an inseparable incident to corporate existence.

The State Board of Equalization, in assessing this class of property, does not act as a board of review, as it does with respect to other kinds of property, but as an original assessor.The law makes it its duty, not to assess the capital stock of corporations whereof returns shall be laid before it by the auditor, but its language is: “The capital stock of all companies and associations now or hereafter created under the laws of this State, shall be so valued by the State Board of Equalization as to ascertain and determine, respectively, the fair cash value of such capital stock, including the franchise, over and above the assessed value of the tangible property of such company or association.”And to that end it is empowered to “adopt such rules and principles for ascertaining the fair cash value of such capital stock, as to it may seem equitable and just.”§ 3, clause 4.

Jurisdiction to make the valuation, therefore, is conferred, in allcases where the company or association is created under the laws of this State, and, in making it, the board is to be governed by “such rules and principles as to it may seem to be equitable and just,” instead of being restricted to valuations returned by the local assessors, and laid before it by the auditor.The local assessor is not required to fix any valuation, and the matters to be returned by him are merely such as the law presumes to be important in enabling the board of equalization to discharge its duty intelligibly.Manifestly, such returns might, if deemed fraudulent or untrustworthy, be entirely disregarded, and the valuations be made from other sources of information supposed to be more accurate and reliable, for,...