APPEAL from the Court Court of Sangamon County, the Hon.
WILLIAM D. CONWAY, Judge, presiding.
MR. JUSTICE HOUSE DELIVERED THE OPINION OF THE COURT:
Rehearing denied May 17, 1961.
The county collector of Sangamon County filed application for judgment in the county court against the objector railroads for 1957 taxes paid under protest. The railroads filed substantially similar objections and requested a refund of a portion of the taxes so paid. They appeal from orders overruling their respective objections and the two causes are consolidated here. The collector cross-appeals from an order overruling his motion to set aside an order denying a motion to strike the objections for want of jurisdiction and an order overruling his objections to certain evidence offered by objectors. We have jurisdiction because the revenue is involved and constitutional questions are presented.
The objections are based upon the contention that the property of the Gulf, Mobile and Ohio Railroad Company and the property of the Chicago and North Western Railway Company in Illinois, as distributed to Sangamon County and its taxing districts by the Department of Revenue, was assessed and equalized at full, fair cash value, while the locally assessed property in the county and its taxing districts was assessed and equalized at levels of not to exceed 50% and 38.50%, respectively, of such value. They assert that the officials charged with assessment and equalization functions wilfully and deliberately assessed local property at the lower levels, and that the officials' conduct in that regard resulted in gross discrimination against the railroads and was constructively fraudulent. The measure of recovery sought is the difference between what they were taxed and what they should have been taxed had locally assessed property been assessed and equalized at its full, fair cash value.
The collector questions the jurisdiction of the county court to entertain the objections on the theory that the order of the Department fixing the multiplier was a decision reviewable only under the Administrative Review Act, and that the remedy, if any, was by proceedings to have the valuation of locally assessed property raised. We address ourselves to the jurisdictional problem before considering the substantive issues.
Counsel for the collector categorizes as "pure dictum" two recent opinions of this court, People ex rel. Callahan v. Gulf, Mobile and Ohio Railroad Co. 8 Ill.2d 66, and Chicago, Burlington & Quincy Railroad Co. v. Department of Revenue, 17 Ill.2d 376, and thereafter ignores them.
The Burlington case was a suit against the Department contending that the valuation of the railroad's Illinois property was excessive and was essentially aimed at relief through reduction of its valuation and not with the Department's duty to equalize locally assessed property to full value. It was there held that the Department was not authorized to reduce the railroad's valuation to less than full value, and it was stated (p. 391): "But appropriate remedies are available if the plaintiff's property is in fact bearing a disproportionate share of the tax burden in some taxing districts. Plaintiff may petition the Department for a reconsideration of the equalization multiplier * * *. And such an objection may also be raised to a county collector's application for judgment and order of sale of its real estate." It was also pointed out that the time sequence made it unlikely that county equalization factors would have been determined at the time railroad valuation was being established. Thus while the availability of tax objections was dictum in that case, it was calculated, not inadvertent, and was indicative of the court's view that there must be a means for taxpayers to resolve their dilemma by finding a proper tribunal before whom and a proper method by which they can present evidence to establish their charge that there has been discrimination against them.
The Gulf, Mobile and Ohio case (8 Ill.2d 66) arose by tax objections filed to the application for judgment and sale of real estate, as here, and the objections were based on the contention that the railroad's property had been assessed at full, fair cash value but it had been excessively taxed because locally assessed property was fraudulently and intentionally undervalued. The availability of tax objections was held to be a proper remedy, but they were stricken on the sole ground that the objections did not allege sufficient facts to establish constructive fraud.
The collector asserts that the remedy of objectors is not by objections but by administrative proceedings.
The question of the exclusiveness of administrative review under the Administrative Review Act, (Ill. Rev. Stat. 1957, chap. 110, pars. 264 et seq.) and section 138 of the Revenue Act, (Ill. Rev. Stat. 1957, chap. 120, par. 619,) in tax cases such as this, has not heretofore been considered by us. However, this question is decided in People ex rel. Hillison v. Chicago, Burlington and Quincy Railroad Co. ante, p. 88, in an opinion handed down today. That case differs from the case at bar only in that section 148a of the Revenue Act (par. 629a) is not relied upon here. That case holds that it is not an exclusive remedy and is decisive of the issue.
The question of inapplicability of the administrative review remedy in discrimination cases such as this has been suggested but a determination of that issue is unnecessary in this case. The real question here is whether the tax-objection remedy is available.
Section 146 of the Revenue Act (par. 627) empowers the Department to ascertain and determine the percentage relationship between the valuation placed on locally assessed property and its full, fair cash value, and then add to or deduct from the assessment in order to produce a ratio equivalent to 100%. Section 151 (par. 632) provides that after completion of equalization of the percentage finally determined, the Department shall certify it to the county clerks.
The procedure of tax objection has been available since the 1845 Revenue Act and has evolved with little change through five successive acts culminating in sections 194 and 235 of the Revenue Act of 1939. (Ill. Rev. Stat. 1957, chap. 120, pars. 675 and 716.) There seems to be no doubt but that constructive fraud was available as a defense in such a proceeding at all times until 1947. In that year section 138 (par. 619) was amended to make the provisions of the Administrative Review Act (previously enacted in 1945) applicable to all proceedings for judicial review of final administrative decisions of the Department of Revenue. These sections have remained in force in the same form since 1947, except for an amendment added in 1957 which was primarily for the purpose of requiring payment of 100% of the amount of taxes protested rather than 75% as theretofore provided. This amendment tends to indicate a legislative intent that the issue of excessive taxation resulting from constructive fraud may continue to be used as a defense in objections to application for judgment, since the General Assembly must have been aware of our holding in the Gulf, Mobile and Ohio case. As the statutes now read, administrative review procedure is more appropriately applicable to original assessments, such as railroads and capital stock, than the equalization of assessments of local officials by the application of multipliers.
We are fully aware that relief by way of tax objection is a cumbersome and ponderous process. Nevertheless, it is a legal remedy available to objectors and they have seen fit to pursue it. We now turn to the question of whether they have sustained the ...