Court Opinion

ID: 3413521
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:41:15.399945+00
Date Added: 2024-06-11T13:39:40.398075
License: Public Domain

I concur in the reversal of the judgment in this case but not for the reasons stated in the foregoing. Upon that branch of the case I am in accord with the views expressed in the dissenting opinion of Mr. Justice Farthing. I am of the view that better and safer grounds for reversal are apparent upon the face of the petition.
The relator alleged himself to be a citizen and tax-payer of Waukegan, in Lake county, and that the then present members of the board of review were David VanPatten, James King and Frank Worack; that Russ Alford was assessor for the town of Waukegan in 1933; that the Waukegan Generating Company was a resident of and had its main place of business in said township and was a subsidiary of the Public Service Company of Northern Illinois; that it possessed a large amount of personal property in the township, including boilers, steam turbines, electric generators, pumps of different kinds, machinery and equipment for handling fuel, switch-boards, transformer sets, condensers, coal and other personal property, all of which were joined together so as to form a continuous unit or property for the production and distribution of electric energy; that because of this inter-relation of the various parts of said plant and because much of the machinery was especially designed for that company, the property as a whole and as a going concern had a value greatly in excess of the aggregate of the values of the separate items *Page 119 
composing it; that the plant furnished power to a territory 150 miles south of the Wisconsin-Illinois line and east and west a distance of 25 to 125 miles, serving 321 communities having a population of more than a million inhabitants, including 29,000 residential consumers and many large corporations; that the plant is of modern design, installed between 1923 and 1933, more than one-fourth of it less than two years old and approximately one-half of it less than three years old; that the total original cost of said plant, "including land improvements," was $28,496,142, and that of this sum the personal property represented an investment of $21,894,639. There are also allegations as to the funded debt of the company and its net earnings.
The amended petition further alleges that the company filed a schedule with the assessor for April 1, 1933, showing a full cash value of its personal property, including steam engines, boilers, etc., material and manufactured articles, tools, implements, machinery and office furniture in the sum of $803,240. It is further alleged that the assessor increased this valuation to $3,116,800; that the supervisor of assessments made no changes in the assessor's figures and that the company applied to the board of review for a reduction; that at a session held on November 1, 1933, the board of review reduced the total assessment to $1,200,000. It is further alleged that the value established by the board of review was so inadequate "as to show a gross abuse of discretion on the part of the said board of review and failure to exercise sound judgment and for that reason was fraudulently made and does not constitute a lawful assessment." It is further alleged that the board fraudulently adopted a wrong and illegal method and rule of ascertaining the value of the property "by considering said personal property as dismantled and offered for sale to a possible purchaser item by item, second-hand and as junk; that the first step in said method was to take the original historical cost of what was called the usable items of said property *Page 120 
as thus dismantled and deduct therefrom a value for depreciation based on a so-called ten-year life theory of said items of personal property, ten per cent being deducted from the original cost of each item each year from date of purchase, installation and construction up to ten years, after which said personal property was given no value; that the next step in said method was a further deduction for a supposed cost of removal from service of said item of personal property and placing same in condition for delivery to a possible purchaser f.o.b. cars at said plant; that under said method and rule no value was given to any so-called usable parts such as steam pipes, fittings, valves, pipe covers, machinery foundations, parts of boilers, fire-brick, water walls and other parts and items; that no value was given to items which under said methods of valuation it was supposed would cost more to remove than the same would sell for second-hand or as junk; that no value was given to said personal property not in use; that no value was given to said personal property for enhancement in value by installation and engineering cost; that said board of review willfully and arbitrarily disregarded the assessment and testimony of Russ Alford as to the fair cash value of said property; that said board arbitrarily refused to consider the fair cash market value as a unit formed and constituting a single continuous property operating for the purpose for which designed to a possible purchaser, or to the owner; that said board refused to take into consideration * * * what a prudent man would give for said property as a unit for a permanent investment, with a view to present and future income." It was alleged that neither the earnings of the company, its funded indebtedness nor its reports to the Commerce Commission were considered, and that by a gross abuse of discretion the value was fixed far below its fair cash value. The amended petition further alleged that all other personal property in Waukegan was assessed for taxation on a basis of twenty-five per cent *Page 121 
of its fair cash value while that of the generating company was fixed at nine and sixty-four hundredths per cent, and that by said reduction the company would pay sixty-one and one-half per-cent less taxes on its personal property in proportion to other property in the town. It is further alleged that the method followed by the board was one testified to by experts and witnesses of the Waukegan Generating Company at the hearing before the board, and that the value fixed was approximately that testified to by said witnesses and experts; that the hearing was had on October 9, 1933, and that the revision of the assessment was not made of record until November 1, 1933, the day before the board adjourned sine die. Finally, it is alleged that as a result of the decrease in assessment other taxpayers will suffer loss and increased burdens in proportion to tables set forth in the petition. It is prayed that mandamus
may issue requiring the board to re-assemble and assess the property of the company at its fair cash value as of April 1, 1933, and to correct its books accordingly.
To the amended petition the respondents demurred generally and specially, but inasmuch as that portion of the demurrer which is special is more in the nature of an argument than a pleading it should be considered as general, only. The trial court overruled the demurrer, which appellants elected to stand by, overruled a motion in arrest of judgment, and ordered the peremptory writ of mandamus to be issued as prayed in the amended petition.
There are certain well established rules of law which have a bearing on these facts. In People v. Henry, 236 Ill. 124, it was sought by mandamus to compel certain drainage commissioners to change a system of drainage which they had adopted, as it was alleged, from selfish motives on the part of the commissioners and in fraud of the rights of the petitioner. In that case it was decided that a petitioner for mandamus must show a clear legal right to the writ, and that although the writ will lie to compel the performance *Page 122 
of a duty it cannot control discretion. We also said: "The general charge that a party acted fraudulently or was guilty of fraud is a statement of a conclusion but is not a good pleading. The facts should be averred upon which the charge of fraud is based."
In Sterling Gas Co. v. Higby, 134 Ill. 557, on page 568, it was said: "The statement that the action of the board was fraudulent is the mere statement of the conclusion or opinion of the pleader. It devolves upon the party claiming fraud to state the facts relied upon as constituting it; and where the facts alleged do not necessarily amount to fraud, a demurrer to the bill does not admit fraud. The facts averred in the bill which it is claimed show fraud on the part of the board of equalization are to be taken most strongly against the pleader." In that case we also quoted from Connecting RailwayCo. v. People, 119 Ill. 182, as follows: "Obviously, the fraud which may be urged against the assessment must, in general terms, have either consisted in a willful disregard, by the members of the board, of a known duty, for the purpose of producing a result which could not otherwise have been produced, or in their denying or preventing the tax-payer from doing something that he might lawfully do, and, but for being denied and prevented by them, would have done, which would or might have had the effect to have caused a lower valuation of the property to be made."
The property being assessed by the board of review in the case at bar was only the tangible property of the Waukegan Generating Company within the town of Waukegan. (NationalReserve Ins. Co. v. Shipton, 314 Ill. 472.) Intangibles are subject to assessment by the State Tax Commission and not by the local authorities. (Illinois Central Railroad Co. v. Carr,302 Ill. 172; National Reserve Ins. Co. v. Shipton, supra.) It was early held in this State that in a tax case the cost of machinery was no evidence of its value even though it had been constantly repaired, and in *Page 123 
the same case it was held that the bonded indebtedness of the company and advancing income through freight rates could not be considered. (Chicago and Northwestern Railway Co. v. BooneCounty, 44 Ill. 240.) In the absence of facts amounting to fraud the valuation fixed upon property for purposes of taxation is not subject to the supervision of the judicial department of government. Burton Stock Car Co. v. Traeger,187 Ill. 9; People v. Norton, 358 id. 272.
Application of the foregoing principles materially limits the field of inquiry in the present case. Many, if not all, of the derogatory adverbs may be disregarded as conclusions and many of the allegations require no consideration by reason of their immateriality. Thus, the allegation that the board of review "willfully, knowingly, arbitrarily and fraudulently adopted and followed a wrong, improper and illegal method and rule," is reduced to a simple allegation that the board followed an improper method, thereby erring. The allegations as to the cost of the equipment, the funded debt of the company and its income are to be disregarded as immaterial. The allegation that the board refused to consider the enhancement in value of said property by reason of its being connected into an operating plant — a going concern and a part of a distribution system — is to be disregarded, as this alleged enhancement of value, if it existed, would be an intangible, probably under the jurisdiction of the State Tax Commission but certainly not subject to assessment by the local assessor or board of review. The allegation that no value was given to certain items, such as steam pipes, fittings, valves, pipe covers, machinery foundations, parts of boilers, fire-brick, etc., is of no avail to the petitioner for mandamus for two reasons: First, because it is not alleged they had any value; and second, because no facts are alleged showing these items to be personal property rather than fixtures. *Page 124 
Eliminating the improper allegations of conclusions and the immaterial averments, we arrive at a point where it would be necessary for us to hold that the judiciary can control the discretion reposed in administrative officers in order to grant the writ prayed for. The petition shows on its face that the review of assessment came on regularly to be heard before the board of review, and although it is alleged in the tenth paragraph thereof that the board failed to exercise sound judgment, and in other paragraphs that it adopted wrong methods of valuation, yet it nowhere appears that it acted arbitrarily or without consideration of evidence. On the other hand, it affirmatively appears that the board did hear the evidence of the assessor and that it heard the testimony of expert witnesses produced by the generating company and it is not alleged that it heard no other evidence. There is no allegation of fact from which bribery or corruption can be inferred, and under such circumstances the action of the board is not subject to the supervision of the judicial department of government. (Burton Stock Car Co. v. Traeger, supra.) In County of Cook v.Columbia Ins. Co. 329 Ill. 189, we said: "If the officers whose duty it is to assess property for taxation fail or refuse to perform that duty they may be compelled by mandamus to act, but no court can decide for them what their judgment is or ought to be. Assessors exercise a quasi-judicial authority, and when property is to be taxed by value, the value must be determined by their judgment and not by the judgment of some other public officer or tribunal. — 4 Cooley on Taxation, (4th ed.) sec. 1601; Loewenthal v. People, 192 Ill. 222; People v. Webb, 256 id. 364."
For the foregoing reasons, rather than those expressed in the opinion adopted, I concur in the reversal of the judgment. *Page 125