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People Ex Rel. Hamer v. Jones

OPINION FILED MARCH 28, 1968.

THE PEOPLE EX REL. PAUL E. HAMER ET AL., APPELLANTS,

v.

THEODORE JONES, DIRECTOR OF REVENUE, ET AL., APPELLEES.



APPEAL from the Circuit Court of Lake County; the Hon. GLENN K. SEIDENFELD, Judge, presiding.

MR. JUSTICE KLUCZYNSKI DELIVERED THE OPINION OF THE COURT:

Plaintiffs brought action in the circuit court of Lake County to compel the county board of review and the Director of the Department of Revenue of the State of Illinois to assess and equalize all property, real and personal, at its full, fair cash value.

Their complaint filed on April 27, 1966, alleged that they are residents and taxpayers of West Deerfield Township in the county of Lake, owning taxable personal and real property; that all residential taxable real property in the township and the county is assessed at approximately 55% of the fair cash value; that taxable personal property therein is assessed at 3% of the valuation of the improvement on the parcel of real property as a basis for determining the valuation of taxable personal property; that taxable motor vehicles within the township and county are assessed at 30% of the wholesale price as shown in the red book price list and that other taxable personal property therein is otherwise ignored and that it is and has been the practice of the assessor of the township as well as other assessors in the county to establish an assessed value of all taxable property at less than full, fair cash value.

They further alleged that section 1 of article IX of the Illinois constitution provides that each person or corporation shall pay a tax in proportion to the value of his or its property; that sections 20 and 21 of the Revenue Act (Ill. Rev. Stat. 1963, chap. 120, pars. 501 and 502) provide that all personal and real property is to be assessed at 100% of its full, fair cash value; that section 108a of the Revenue Act (Ill. Rev. Stat. 1965, chap. 120, par. 589.1) provides that each local board of review or board of appeals, as the case may be, is required to act as the equalizing authority within each county; that where it finds that both taxable real and personal property is being assessed at less than the full fair cash value, it must increase the aggregate assessment on all taxable property subject to local assessment by 25% in order to eventually produce a ratio of assessed value to full, fair cash value equivalent to 100% and that said board must then report these findings to the Department of Revenue which, upon receipt of the report, is required under section 146 of the Revenue Act (Ill. Rev. Stat. 1965, chap. 120, par. 627) to determine the amount to be added to or deducted from the aggregate reviewed assessment on property subject to local assessment jurisdiction in order to produce a ratio of assessed to full, fair cash value equivalent to 100%.

They charged that the Lake County board of review ascertained for the tax year 1965 that all taxable property within said county, including that of the petitioners, was assessed as described; that the Department of Revenue, based upon the report of the Lake County board of review, ascertained for the tax year 1965 that all taxable real property within Lake County was assessed at approximately 50% of full, fair cash value; that the county of Lake was assigned an equalization factor of 100% and a multiplier of one; that for the tax year 1965 the Department found that the average assessment level in the county was at the approximate assessment level in effect throughout the State of Illinois and that the assessment level throughout the State of Illinois is approximately 50% of the full, fair cash value.

They further contended that the failure to perform the valuation of taxable personal and real property at 100% of its full, fair cash value, as described, violates the equality and uniformity of the taxation provisions of the Illinois constitution; that the constitutional requirement of equality and uniformity prohibits taxation of taxable real property at grossly higher value than the same kind of property belonging to others in the same tax district; that such an intentional violation of the rule of uniformity is discriminatory and fraudulent; that the constitutional provisions and applicable provisions of the Revenue Act exhibit a very specific purpose and practical plan (equalization) by which all property in the State, not exempt, shall be assessed at 100% of its full, fair cash value; that the assessment of various classes of taxable real and personal property at different percentages than full, fair cash value means that the taxable personal property does not share equally in the cost of government; that the assessment of taxable real and personal property in the manner alleged violates the Illinois constitutional provision (Ill. Const., art. IV, sec. 22) prohibiting the granting of special or exclusive privilege, immunity or franchise, and that the assessment of taxable real and personal property, as alleged, contravenes the fourteenth amendment of the Federal constitution providing for equal protection of the laws.

In count I of their complaint, they prayed that a writ of mandamus issue commanding the Director of the Department of Revenue forthwith to modify the aggregate assessment on all taxable property both real and personal for the year 1965 in the State of Illinois in order to produce a ratio of assessed value to full, fair cash value equivalent to 100%.

In count II thereof they prayed for a declaratory judgment that both the State and Federal constitutions as well as the statutes of the State of Illinois require that all taxable property within the State be assessed at its full, fair cash value; that the provisions of the aforesaid declaration should be subsisting, valid and binding upon all public officials performing or otherwise dealing with assessment of taxable property within the State; that the Department of Revenue be directed to advise and instruct all of the supervisors, the township assessors, the board of review or boards of appeals, as the case may be, of their assessment duties under the constitution and statutes; that the Department of Revenue be directed to take appropriate steps to comply with the applicable statutes prior to the 1966 tax year, and that the court retain jurisdiction to enter any and all orders, etc., necessary to enforce its declaration.

In the third count of the complaint they prayed that, upon a full hearing and determination, those defendants responsible for the assessment of taxable real and personal property within the State of Illinois be enjoined from assessing taxable real estate and personal property at less than its full, fair cash value; that a mandatory injunction issue directing said defendants to assess all taxable real estate and personal property at 100% of its full, fair market value and that during the pendency of the action a temporary injunction issue to enjoin and restrain these defendants from acts and conduct complained of.

On July 22, 1966, the court heard the Director's motion to dismiss filed June 27, 1966, and found that counts I, II and III were insufficient in law to state a cause of action against the Director. It therefore sustained the motion to dismiss as to him on all counts but granted plaintiffs leave to amend counts II and III as to the county board. Following this amendment, plaintiffs made a motion for summary judgment and the board moved to dismiss the amended complaint. The court determined that plaintiffs' factual allegations regarding the tax assessment procedures used in Lake County were true but declared that it could "in the exercise of its judicial discretion deny the request for the writ of mandamus, the request for a declaratory judgment and the request for a writ of injunction, where to issue the writs and declarations prayed for would cause chaos and confusion and that to order the Lake County Board of Review and the Department of Revenue to assess all property in Lake County at its full, fair cash value, as required by statute, would cause chaos and confusion." Accordingly, it ordered that plaintiffs' motion for summary judgment be denied, and the county board's motion for dismissal be granted.

On appeal, plaintiffs contend: "The main issue is whether the trial court ruled correctly in involuntarily dismissing the action. Another issue is whether the trial court abused its discretion in denying the Taxpayer leave to amend the pleadings involving the Director. Other issues are whether the lower court was correct in permitting the Board to file their motion without the prerequisite certificate of counsel and whether the granting of the motion extending the time within which the Director could answer the complaint without notice or the knowledge of the Taxpayers denied the Taxpayers due process of law."

An appreciation of the nature of plaintiffs' action and the issues arising from the dismissal thereof, requires a review, even though briefly, of the history of property taxation in Illinois. The authority to tax property is derived from section 1 of article IX of the Illinois constitution which contains the pronouncement that "The General Assembly shall provide such revenue as may be needful by levying a tax, by valuation, so that every person and corporation shall pay a tax in proportion to the value of his, her or its property — such value to be ascertained by some person or persons, to be elected or appointed in such manner as the General Assembly shall direct, and not otherwise."

The constitution recognizes no difference between real and personal property nor does it make any distinction between tangible and intangible personal property. It allows the legislature wide latitude but requires uniformity. The Revenue Act enacted under this constitutional grant provides that all real and personal property in the State shall be assessed and taxed (Ill. Rev. Stat. 1965, chap. 120, par. 499), except so much thereof as may be exempt by the Act, and that all such property subject to assessment shall be assessed at its fair cash value. Ill. Rev. Stat. 1965, chap. 120, pars. 500, 501.

This assessment and valuation of taxable property thereunder has created vexatious problems and serious difficulties. Although the law has directed full value assessment, de facto debasement has occurred. In 1940, it was noted in Mobile and Ohio Railroad Co. v. State Tax Commission, 374 Ill. 75 when, on page 76 thereof, the court said: "By virtue of a recognized custom, property, generally, throughout the State of Illinois is now, and for many years last past has been, assessed for taxation at a figure less than its full cash value and this custom has long been recognized by the State Tax Commission." It was conceded that the enforcement of the uniformity requirements of the constitution was an old and continuing problem in the court and with the legislature, and that it could not be truthfully said that either branch of government had ever yet arrived at a satisfactory solution. The court reasoned that the ideal might be beyond attainment through available human agencies, but that the quest could not be abandoned either by the legislature or the judicial branch ...


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