Court Opinion

ID: 6962218
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:47:30.510915+00
Date Added: 2024-06-11T16:08:28.821573
License: Public Domain

Mr. Chief Justice Sheldon delivered the opinion of the Court: This was a bill in chancery to restrain the-collectors of taxes of certain counties from taking any steps for the purpose of charging the capital stock tax for the year 1873, assessed against the Cairo and Yineennes Bailroad Company upon the road-bed, right of way, railroad track and real estate of said railroad company, and to enjoin the receivers of said company from paying such tax. The defendants failing to make answer to the bill, a decyee pro confesso was entered against them, in accordance with the prayer of the bill. The collectors of taxes sued out this writ of error. The first error assigned is as to supposed defects in the service of process. The return of service upon the defendant Burnett is: “I have duly served the within by reading the same, and delivering a true copy thereof to the within named George E. Burnett, as I am therein commanded. “April 18, 1878. James H. Pease, Coroner.” It is objected that the return does not show a copy of what was delivered, or the time of service,—that the date appearing is that of the return, not of the service. The return being indorsed on the summons, stating that the within was delivered, is a statement that the summons was delivered. The date which appears refers with sufficient certainty to the time of service, and is to be taken as that, and not the time of the return. Chic, and St. Louis R. R. Co. v. Holbrook, 92 Ill. 299. It is objected that the defendant Carter is commanded to" appear “before the circuit court of said Alexander,”—not Alexander county. This is a mere clerical omission, of no consequence. The caption of the writ is, “State of Illinois, Alexander county, ss.,” and the words which follow, commanding the defendant “to appear before the circuit court of said Alexander, at the next term thereof, to be holden in the cit/of Cairo, in said Alexander county, on,” etc., inform the defendant of what the omission was, and that it was the circuit court of Alexander county before which he was to appear. In a suit in the United States Circuit Court for the Southern . District of Illinois, there had been appointed two persons receivers of the railroad, and it is alleged to be error that the State court took jurisdiction of the receivers, and decreed a perpetual injunction against them,—that the United States court alone had cognizance of the matter. The receivers are. not parties to the writ of error, and as they are not complaining of the decree, the court is not called upon to review it as against them. But if it were, we should find no error. The object of the bill was to enjoin the collection of taxes assessed by the authorities of the State, and the fact that the property sought to be made liable for the taxes was in the possession of the United States court, by the receivers, could not affect the jurisdiction of the State court as to the subject matter. The receivers might have objected to being sued in the State court, but did not. The receivers might be sued in the State court, with the permission of the court appointing them, and no objection having been made, such permission may well be presumed. It is objected that the court had no jurisdiction over any bondholder except the complainant Bodewald, and yet that the decree-is in his favor and in favor of all other bondholders— that the other bondholders should have been made defendants, as unknown bondholders. The only ground for this objection is that the complainant Bodewald states-, in his bill, that he brings the suit on his own behalf, as a bondholder, and on behalf of all other bondholders of mortgage bonds of the railroad company, which the property in question had been mortgaged to secure. The decree is not in terms in favor of all the bondholders. The relief prayed and granted was such as would have been granted, if at all, in behalf of complainant suing alone. His interest extending to the entire property threatened, entitled him to the protection of the -court in that regard, and to ail the relief granted, independent of the other bondholders; and the interest of all the bondholders was so identical and inseparable, that he was entitled to sue in behalf of all, as well as in his own behalf. It is- a common form of suit in such cases. Another assignment of error is, that on May 20, 1878, a rule was entered upon the defendants to answer the bill by the following Wednesday morning, and that on the same day the rule was entered the defendants were defaulted. It is true that the transcript of the proceedings does so show, but the decree itself finds that “the defendants having each failed to answer complainants’ bill, as by the rule of the court they were required to do, and each of said defendants being three times solemnly called, came not, but made default. ” As every presumption is in favor of the regularity of the proceedings of the court, we may take the fact to be as asserted by the decree, that the defendants had failed to answer, as required by the rule, and regard the inconsistency in the dates as a clerical error. As respects the merits of the ease, the mortgage or deed of trust of the railroad property, to secure the payment of the bonds of the company, was made in 1871. All the bonds had been sold on the market prior to January 1, 1873. The capital stock tax in question was assessed in the year 1873. This capital stock tax is a personal property tax, and although, by section 255 of the Revenue act, real property is made liable for taxes on personal property, it is provided that the tax on personal property shall not be charged against real property, except in case of removals, or where the tax can not be made out of the personal property. Section 183 of the act provides how the tax on personal property shall be charged against real property; that the collector of taxes shall select for that purpose some particular tract or lots of real property owned by the person from whom the personal property tax is due, and in his advertisement for judgment against and sale of lands delinquent for taxes, shall designate the particular tract or lots of real property against which such personal property tax is charged, and in'the list filed for such judgment the same shall be shown, and that the court shall give judgment against such tract or lots of real property for such personal property tax. A tax on personal property does not become a lien on real estate until the collector of taxes shall select for that purpose some particular tract or lots of real property, and charge the tax against the same, as above named. Belleville Nail Co. v. The People, 98 Ill. 399; Ream et al. v. Stone et al. 102 id. 359; Parsons v. East St. Louis Gas Light Co., post, p. 380. And see Binkert v. Wabash Ry. Co. 98 id. 206; Cooper v. Corbin, 105 id. 225. The corporation against whom the personal property tax was assessed had parted with all interest in this real estate in which the bondholders were interested. The decree finds that the equity of redemption was of no value whatever, and that the property was no longer in the possession of the corporation, but was in the hands of the court by its receivers. There was nothing against which this tax could be charged, except property belonging exclusively to the bondholders, or held for their benefit. Their interest having been acquired long before the tax was assessed, the bondholders, we think, were entitled to the relief granted, to prevent making the threatened charge against the property of this personal property tax, and thereby clouding the title and impairing the security. As to the suggestion that the remedy was at law, and not in chancery, this court has frequently held that one who obtains a lien on personal property prior in time to a tax assessed against the former owner, is entitled to have enjoined the seizure of such property for the tax. Ream v. Stone, 102 Ill. 359; Binkert v. Wabash Ry. Co. 98 id. 205; Cooper v. Corbin, 105 id. 225. As to the decreeing of costs against the defendants, that being a matter resting in the discretion of the circuit court, under the statute, we do not see proper to interfere with the exercise of such discretion. • The decree will be affirmed. Decree affirmed.