160 N.E. 755 | Ill. | 1928
James A. Meade, a citizen and tax-payer of Cook county, filed a petition against the board of review in the circuit court of that county for a writ of mandamus commanding it to assess the fair cash value of the capital stock of many corporations named in the petition, including the franchise and debt over and above the assessed value of the tangible property of such companies for the year 1926. An answer was filed, to which the petitioner demurred, the demurrer was overruled, and the petitioner electing to stand by his demurrer the petition was ordered dismissed at his costs, and he has appealed.
The petition alleged, among other things, that the board of assessors had neglected and refused to assess the capital stock of said corporations except as to certain of them, as to which that board had made an arbitrary assessment of so small an amount as to represent a small proportion of the true value of the capital stock, and such assessments were not the result of the honest judgment or discretion of the board but were deliberately and intentionally made with intent to give an unlawful preference to such corporations, *390 and are unlawful; that the books of the board of assessors were turned over to the board of review about September 1, 1926, and it thereupon became the duty of the board of review to assess the capital stock of each of the companies that was not assessed on its true capital stock according to law; that the board of review failed to assess any of said corporations according to law for the year 1926, but, on the contrary, confirmed the improper and inadequate assessments made against such corporations, and unless ordered by the court will not make any assessment of capital stock value as to such corporations; that on December 1, 1926, there was delivered to the board of review, and each member thereof, a demand in writing setting forth the facts in regard to the failure to assess or the inadequate assessment of the capital stock of said corporations, but the board of review has taken no steps to comply with the petition or demands, and the members thereof have stated to the petitioner that they would not comply with his demands and would refuse to make any changes in the values so made by the board of assessors and confirmed by the board of review. A supplemental and amended petition was filed on February 1, 1927, showing that since the filing of the original petition the board of review had completed its assessments as to the capital stock valuation of the corporations named in the petition and made what it claimed to be the net assessment of capital stock, including the franchise, being the excess of the equalized value of the capital stock and debt over that of the tangible property as found by the local assessors and the board of review. The amount of the net capital stock assessment as to each of the corporations named was set forth in the petition, and it was alleged that the assessment made against each of said corporations was made by the board at so low a figure as to amount in law to no assessment, and it was therefore alleged that the assessments were fraudulent. It was further alleged that the board of review did not follow rule II of the State Tax *391 Commission in making its assessment of capital stock and followed no rule, but made a purely arbitrary assessment at a small amount as to some of the corporations and at no amount as to others, and that the capital stock valuations were not the result of any honest judgment or discretion on the part of the board and resulted in almost entirely omitting from taxation the capital stock valuations of the corporations.
The answer denied specifically the allegations of the petition that the assessments of the capital stock of the corporations were below the true value or below the proportion of true value borne by other classes of property in Cook county, or were made arbitrarily or without the exercise of the honest judgment and discretion of the members of the board, or that they were made with intent to give an unlawful preference to the corporations or any property owner. It denied that the board followed no rule in making the assessments, and denied specifically and in detail every allegation tending to show fraud or partiality, dishonesty or neglect of duty. It was alleged that the assessment was made in conformity to rule II, and the facts in regard to making the assessment are set out, as follows: For many years it has been the well known, established and uniform custom of the different officers and bodies engaged in the assessment of property for taxation in Illinois not to fix the value of property at its full cash value but at a percentage of that value as its value for purposes of taxation, which was fixed at about sixty per cent, the percentage so adopted sometimes differing in different years, according to the valuation which was fair in the judgment of the different boards, commissions and taxing officers, in order to assess all property uniformly, as required by law. This custom was followed by the local assessors in the assessment for 1926, and their action resulted in valuing the property to which it was applied at an average throughout the State of eighty per cent, or less, of its fair cash value. As the *392 valuations of similar property and the percentages used for purposes of taxation of the same or different kinds of property by the various local officials have not been absolutely uniform, it has always been, and is, necessary to have those values equalized by some State board, and now by the tax commission, in order to comply with the law by making taxation uniform throughout the State. The answer further alleged that this custom has been so well known and well established for many years prior to 1926 that it had been recognized and approved as proper by the legislature and the courts as a valid method of securing uniformity in taxation throughout the State, and that the board of review found it necessary to proceed in substantially the manner stated in rule II of the tax commission, and after it had determined from all proper sources of information the fair cash value of the capital stock, including the franchises of the corporations subject to assessment by it, and added to the amount so ascertained by it the amount of indebtedness, (except for current expenses, excluding from such current expenses the amount paid for the purchase or improvement of property,) that the board of review should equalize the amount so obtained in order that corporations should be assessed, as near as practicable, upon a uniform basis with other property throughout the State, and all of the methods provided for in rule II were in good faith followed by the defendants in making such assessments. In computing the net assessed value of the capital stock of each of the corporations the board ascertained the fair cash value of the capital stock from quotations of such shares in the market over a reasonable period of time and from such information as the board of review had or could obtain by diligent inquiry and by adding thereto the amount of indebtedness of each of such corporations (except indebtedness for current expenses, excluding from such expenses the amount paid for the purchase or improvement of property). It then equalized the amount so obtained by taking sixty per cent thereof, *393 which was the same percentage of value which all local assessors during the years 1925 and 1926, and for many years prior thereto, had taken in order to ascertain and fix the value of tangible property assessed by them. One-half the difference between the equalized value of the capital stock of such corporation so determined and the aggregate equalized value of its tangible property was then taken by the board of review as the actual assessed value of the capital stock of such corporation upon which the tax rate was figured, and the defendants alleged that this method of assessment was adopted and employed by the board of review in good faith, in accordance with rule II of the tax commission.
Rule II of the tax commission provides that for the purpose of ascertaining the fair cash value of the capital stock, including the franchise of corporations, the fair cash value of the shares of capital stock (consideration being given, among other things, to the value of the shares of stock and the quotation of such shares in the market over such a period of time as may be reasonable, also the books of said corporations and the returns heretofore made to the Auditor of Public Accounts or to the tax commission, and such information as the tax commission has or may be able to obtain,) and the amount of indebtedness (except indebtedness for current expenses, excluding from such expenses the amount paid for the purchase or improvement of property,) shall be combined or added together. The tax commission shall then equalize the amount so obtained so that said companies or associations shall be assessed, as near as practicable, upon a uniform basis with other property throughout the State. From the aggregate amount so determined and equalized as aforesaid there shall be deducted the aggregate equalized valuation of all tangible property of such corporations or associations, respectively, and one-half of the remainder, if any, shall be taken and held to be the assessed value of the capital stock of such corporations *394 or associations, including the franchises over and above the tangible property thereof.
The appellant argues that the answer was obnoxious to the demurrer because it complied with no rule of common law pleading. A proceeding for the writ of mandamus is an action at law, and the pleadings are governed by the same rules as apply to other actions at law. The petition is in the nature of a declaration. (People v. Lueders,
The answer shows, and the demurrer admits, that tangible property, instead of being assessed at its fair cash market value as required by the statute, has been for many years uniformly assessed in this State at sixty per cent of its fair cash market value. Clearly, if the capital stock of a corporation is assessed at its full value and its tangible property is deducted only at sixty per cent of its value, the result would be to produce an excessive valuation of the capital stock of the corporation in comparison with other property throughout the State and to compel the corporation to pay a greater proportion of taxes according to the value of its property than the owners of other property, and would thus destroy the uniformity of taxation required by the constitution.
The demurrer to the answer was properly overruled, and the judgment will be affirmed.
Judgment affirmed. *398