Court Opinion

ID: 6969056
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:59:05.826603+00
Date Added: 2024-06-11T16:08:43.694881
License: Public Domain

Mr. Justice Carter, dissenting: The contract set out in the opinion of the court is not a contract of sale but a contract for a sale. It is a mere executory agreement to convey on certain conditions, and I do not agree that the unpaid purchase money therein mentioned is a credit, within the meaning of the Revenue law. No title passed to the obligee, but it remained in the obligor, and the lands described in the agreement were assessable to the obligor as his property, and were in fact assessed to him. The mere fact that the obligee covenanted to pay the taxes on the land assessed subsequently to 1895 did not make him the owner of either the legal or the equitable title to the property. The land still belonged to Griffin. He had agreed to convey it in fee simple by a sufficient warranty deed on certain conditions, but had not sold it. The question then is presented whether the owner of property who has made a mere executory agreement to convey it for and upon the payment of a stipulated price, to one who, by such agreement, promises to pay that price at the time fixed upon, no promissory note or obligation other than such agreement having been given, can be assessed both upon the property and the price or amount agreed to be paid for it. I am of the opinion that in such cases the property to be assessed is the land or other property so agreed to be sold and transferred, and not the agreement for such future sale or transfer. To tax both is to levy and assess double taxes on what in reality is the same thing. We have held that where the owner sold tracts of land taking the purchaser’s notes therefor, secured by mortgagee on such of the tracts as he conveyed, and as to other tracts gave his bond for a deed, and the lands having been assessed to the purchaser, the notes were taxable in the hands of the vendor. (People v. Rhodes, 15 Ill. 304; People v. Worthington, 21 id. 170.) But in these' cases there was a sale whether the legal title passed or not, and a credit was created by the notes in the hands of the holder of them. The notes were property. There is a vital distinction between a sale and a mere executory agreement for a sale. Thus it is said in 21 American and English Encyclopedia of Law, 478, note: “In the one case A sells to B; in the other he only promises to sell. In the one case B becomes the owner of the goods themselves as soon as the contract is completed, by mutual consent. If they are lost or destroyed he is the sufferer.” Barrow v. Window, 71 Ill. 214. If two parties, by sale, have out of one kind of property created two kinds, both are taxable; but if they have only agreed to do so, such agreement is not taxable as a credit or as property, in the sense those terms are used in our revenue laws. To hold otherwise is to hold that the framers of such laws intended to tax contracts as such, and according to the value of the property involved, or the amount of damages which might be recovered for a breach of them, in addition to the property itself. ' In People v. Rhodes, supra, it was said the notes received by the vendor for the land were credits, and that “he had converted land into this kind of property. It is true, the land had not been conveyed, but he held the naked legal title merely to secure the payment of the purchase money, -x- -x- * There is no force in the objection that the same property was twice subjected to taxation. The land was the property of Walker, (the vendee,) and was by him listed for taxation. The notes were the property of Rhodes and were assessed to him.” And in People v. Worthington it was said that a new property was created by the transaction, which, as before said, was a sale, and promissory notes were given for the purchase money. In the case at bar such was not the case, and I do not think that by mere construction of doubtful accuracy we should place a burden upon the right to contract. I do not deny the validity of the act for the taxation of credits, but I insist that the statute so providing, and defining the term “credits” as “every claim or demand for money, labor, interest or other valuable things due or to become due, not including money on deposit,” should receive a reasonable construction so as to avoid double taxation. The money promised to be paid by this contract could not be recovered without compliance with his contract by Griffin. There was no absolute or unconditional indebtedness. If A and B should enter into a contract providing that B should work or labor for A for one year and that A should pay B $200 for such work and labor, would it be contended that at the outset B had a demand against A for $200 in money which would be taxable in his hands as a credit, and that A had a demand against B for labor which would be taxable to him as a credit? As a credit is defined to be a demand for any “valuable thing,” why, under the opinion of the court, would not Riehl’s right, by the contract, to have Griffin convey the land to him upon payment of the contract price be a demand for a valuable thing—for land—and taxable as a credit in his hands? Riehl was no more bound to pay than Griffin was to convey. The title remained in Griffin and was assessed to him. By such a construction for purposes of taxation three kinds of property would be created: First, the real and only property—the land; and the other two, fictitious credits—one a demand for money and the other a demand for land. So, also, if A and B agree to exchange horses at a future designated day, in a certain sense each would have a demand against the other for the horse contracted for; but no one would contend that, in addition to the two horses, there would be two credits of similar value created for purposes of taxation. Such executory agreements are not credits. The fact that they are enforcible proves nothing. True, it has been held that promissory notes given for lands purchased, where the vendor retains the legal title as security for payment, executing a bond for a deed, the land being assessed to the purchaser, are taxable as credits; but I know of no previous case in which this court has held that a mere agreement for a future sale and payment is a credit, within the meaning of the Revenue law.