{
  "id": 5492773,
  "name": "Board of Education of Paris Union School District, No. 95, Edgar County, Illinois, Appellee, v. Board of Education of Non-High School District of Edgar County, Illinois, Appellant",
  "name_abbreviation": "Board of Education of Paris Union School District v. Board of Education of Non-High School District",
  "decision_date": "1923-07-10",
  "docket_number": "Gen. No. 7,555",
  "first_page": "415",
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  "last_updated": "2023-07-14T20:11:21.824833+00:00",
  "provenance": {
    "date_added": "2019-08-29",
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    "judges": [],
    "parties": [
      "Board of Education of Paris Union School District, No. 95, Edgar County, Illinois, Appellee, v. Board of Education of Non-High School District of Edgar County, Illinois, Appellant."
    ],
    "opinions": [
      {
        "text": "Mr. Justice Shurtlepp\ndelivered the opinion of the court.\nThis action is in assumpsit, with declaration consisting of the common counts, for tuition of pupils from nonhigh school territory of Edgar county, Illinois, who attend high school in Paris Union School District during the year 1920-1921. Towards the end of the school year in question, appellee presented to appellant a statement of the number of pupils who had attended the high school from nonhigh school territory, together with an itemized statement of the cost of maintaining the school, in which was included a charge for use and depreciation of school plant. Appellant accepted the statement of the number of pupils and the cost of maintaining the school, except as to the items for use and depreciation, and paid to the treasurer the sum of $15,151.65, and refused to pay the remainder claimed to be due appellee on the items for use and depreciation.\nAfter this action was commenced, the stipulation set out in appellant\u2019s statement was entered into from which it will be seen that appellant now admits that it owes appellee $1,524.42, but denies the remainder of the amount, $3,200.30, found by the trial court to be due appellee.\nThe only questions submitted to the trial court for decision were: (1) Should the depreciation of two per cent be based on the original cost of the building and equipment, stipulated at $90,000, or upon the market value of such building and equipment upon the day stipulated within the year for which tuition is claimed; and (2) should the five per cent for use of the building, ground and equipment be based on the original cost when same were acquired by the district, or upon the stipulated value of the same upon the day agreed upon, within the year for which tuition is claimed? \u25a0\nSection 96 of chapter 122 provides: \u201cThe tuition paid shall in no ease exceed the per capita cost of maintaining the high school attended, \u00abexcluding therefrom interest paid on bonded indebtedness, which shall be computed by dividing the total cost of conducting and maintaining said high school by the average number of pupils enrolled, including tuition pupils.\u201d [Cahill\u2019s Ill. St. ch. 122, ff 104.]\nIn People v. Chicago & N. W. Ry. Co., 286 Ill. 384, it was held (p. 395): \u201cThe \u2018total cost\u2019 of maintaining such high school should include all expenses incurred by the high-school district in maintaining such high school, the rental of any buildings therefor not owned by the high-school district, and a reasonable charge for the use and depreciation of buildings owned by the high-school district.\u201d\nSome question is raised by appellant as to the right of appellee to recover for the use of lands or grounds, inasmuch as the court in People v. Chicago & N. W. Ry. Co., supra, in construing the act under which this suit is brought, and defining the term \u201ctotal cost,\u201d confines the term \u201creasonable charge for the use\u201d to the subject of \u201cbuildings\u201d and appellant contends that appellee should not be permitted to recover for the use of \u201cland\u201d or \u201cground.\u201d However, the stipulation signed and submitted by both parties was in part as follows:\n\u201cThat the questions in this case to be tried by the court are:\n\u201c(1) Shall the depreciation of two per cent be based upon $90,000, the original cost of building and equipment, or upon $153,000, the fair cash market value of the building and equipment as of May 31, 1921.\n\u201c (2) Shall the five per cent for use be based upon $100,000, the original cost of grounds, building and equipment, or upon $173,000, the fair cash market value of the grounds, building and equipment as of May 31, 1921, \u2019 \u2019 so that we do not deem that that question is in this case, whatever the correct rule may be.\nAppellant contends that under the United States War Revenue Act, as it relates to an income tax and war profits and excess profit, that \u201cinvested capital\u201d is not based upon the present net worth of the assets as shown by appraisal, but upon actual cost, and that \u201cappreciation of assets\u201d cannot be included in \u201cinvested capital,\u201d quoting La Belle Iron Works v. United States, 256 U. S. 377, 41 Sup. Ct. 528, and appellant contends that the proper allowance for depreciation is that amount which should be set aside each year in accordance with a consistent plan by which the aggregate of such amounts for the useful life of the property will suffice, with the salvage value at the end of such useful life to provide in place of the property its cost. Article 161, U. S. Revenue Act.\nDepreciation does not apply to land apart from the improvement. Article 162, U. S. Revenue Act.\nIt is true, that in the stipulation as to the figures of the cost of land, buildings and equipment purchased, erected and procured by appellee in 1904, the parties have made use of the term \u201cinvested capital\u201d as of that time, but the question is still raised as to whether the statute in question is to be construed the same and operates in a like manner as the federal acts of 1918. The stipulation also covers the \u201cfair cash market value\u201d of the property as of the time used. Appellant relies substantially upon the foregoing authorities and contends that the rate of depreciation and stipulated percentage value of use and occupation should be applied to the original cost to appellee, of the property.\nAs to the term \u201cinvested capital,\u201d as used in the U. S. Revenue Acts, appellee insists that \u201cby referring to the federal statute and the case of La Belle Iron Works v. United States, cited by appellant, wherein such statute was interpreted, it will be seen that such statute was passed as a war measure \u2018on the eve of our entry into war, and in order to provide \u201ca special preparedness fund\u201d for army, navy and fortification purposes,\u2019 and for the purpose of determining what the statute defined as \u2018Excess Profits\u2019 on which such tax should be computed, the said statute provided for an excess profits tax on corporations and partnerships equal to eight per cent of the amount by which their net income exceeded $5,000 plus eight per cent of the actual \u2018invested capital.\u2019 In another section of the statute for the purpose of determining the amount of such excess tax, \u2018invested capital\u2019 was defined as \u2018actual cash paid in.\u2019 It appears perfectly clear that department regulations and rules cited, were for the sole purpose of administering the particular statute wherein Congress has specifically defined \u2018invested capital\u2019 as \u2018actual cash paid in\u2019 and had specifically fixed the same as the amount on which the eight per cent deduction should be computed, in determining how much should be called \u2018excess profits\u2019 and taxed accordingly. The act of Congress plainly named $5,000 plus eight per cent of the \u2018actual cash paid in\u2019 as the amount of the profits of corporations and partnerships which would not be taxed, and provided that profits in excess of such amounts would be \u2018excess profits\u2019 and be subject to such tax,\u201d and appellee also submits \u201cthat in this case there is no question of profit to appellee; but the questions are, shall appellee be allowed, as a reasonable charge for the use of the property used by appellant, five per cent of the admitted market value of the property for the year in which it is used; and shall appellee be allowed two per cent on the fair market value of the buildings and equipment for depreciation which it is admitted will occur.\u201d\nAs to the income tax to determine profit, appreciation and benefit, caused by war conditions or otherwise, a certain fixed and stable period was taken as a basis to work from when no extraordinary conditions existed (1913), and differences were measured as from a later date to the conditions of that year, arbitrarily, as a fair rule for all to arrive at the changes in valuation and the fluctuations in that abnormal period. The term \u201cinvested capital\u201d was defined arbitrarily for a specific purpose in extraordinary times and in regard to an entirely different subject-matter.\nIn all cases of the taking of private property for public use, the damages are the fair cash market value of the property taken and measured at the time of taking the property.\nProperty devoted to one public use and so taken under the law of eminent domain may be subjected to another public use (Chicago, R. I. & P. R. Co. v. Town of Lake, 71 Ill. 333; Lake Shore & M. S. Ry. Co. v. Chicago & W. I. R. Co., 97 Ill. 506; Pittsburgh, Ft. W. & C. Ry. Co. v. Sanitary District, 218 Ill. 286; Davis v. Nichols, 39 Ill. App. 610), and in all such cases of taking property, impressed with one public use, the damages for property taken is the fair cash market value of the property taken at the time of taking the same.\nAll of these matters are within legislative control the same as the statute in question, the validity of which is not attacked, and in none of the cases cited is it suggested that one corporation having acquired property by purchase or eminent domain should yield it to another corporation, at its cost price, in case it had increased in value.\nSection 1 of chapter 80, Rev. St. [Cahill\u2019s Ill. St. ch. 80, ff 1], provides where the owner, etc., may sue for and recover rent, \u201cor a fair and reasonable satisfaction for the use and occupation,\u201d of premises by debt or assumpsit, and section 96 of chapter 122 [Cahill\u2019s Ill. St. ch. 122, j[ 104] seems to provide a case where a suit may be brought to recover a demand, in the nature of rent or for use and occupation.\nIt is held in Cyc., vol. 39, p. 870: \u201cThat the landlord can recover a reasonable consideration for the use and occupation of the premises, taking into consideration the purpose for which they are best adapted, although they are actually used for another purpose,\u201d and counsel have quoted cases (National Bank of Illinois v. Baker, 27 Ill. App. 356; 128 Ill. 533), holding that depreciation, as defined, means a loss in value of some destructible property, over and above current repairs, and in the contract in question it was held to refer to a future time, with reference to the time the contract was entered into. No definition we have been able to find makes any reference to \u201cfirst cost\u201d or to \u201ccost\u201d at any particular time, as a basis for computing depreciation.\nIt is suggested that school districts, in many cases, are donees in charitable donations, and receive gifts of money, sites, buildings and equipment, and that under the rule contended for by the appellant, these would operate to the benefit of the nonhigh school district the same as to the donee intended. If the rule should be established, as contended for by appellant, it could be equally as cogently contended that the serving district had misappropriated its funds, entered into improvident contracts, paid exorbitant prices for its site, building and equipment and that the \u201ccost price\u201d of such property was grossly unfair and unjust.\nIt would seem beyond question that the depreciation value of the property should be based upon its varying value from year to year, in order to arrive at a result that would replace the properties, and we are unable to arrive at any fair and just method of computing the value of rent for use and occupation, when it is to be computed upon a percentage of value basis, except to make the computation upon the value at the time of the use.\nThere being no error in the judgment of the court below, the same is affirmed.\nAffirmed.",
        "type": "majority",
        "author": "Mr. Justice Shurtlepp"
      }
    ],
    "attorneys": [
      "Shepherd, Trogdon & Dole, for appellant.",
      "Burnie McClain and Stewart W. Kincaid, for appellee."
    ],
    "corrections": "",
    "head_matter": "Board of Education of Paris Union School District, No. 95, Edgar County, Illinois, Appellee, v. Board of Education of Non-High School District of Edgar County, Illinois, Appellant.\nGen. No. 7,555.\n1. Stipulations \u2014 exclusion of issue by stipulation. In an action of assumpsit by a board of education for tuition of high school pupils from a nonhigh school district, plaintiff\u2019s right to recover for the use of lands and grounds is not in issue, under a stipulation conceding the right by limiting the question to be tried by the court to whether the charge for use should be based upon the original cost of \u201cgrounds, building and equipment\u201d or the fair cash market value thereof as of a certain date.\n2. Statutes \u2014 construction of federal emergency tax legislation not conclusive in construction of State school law. In an action in assumpsit for tuition for high school pupils attending from a non-high school district, under Cahill\u2019s Ill. St. ch. 122, | 104, relative thereto, the construction placed upon the U. S. War Revenue Act limiting \u201cinvested capital\u201d to actual cost, exclusive of any appreciation, is not controlling, especially in view of the emergency character of that act, in determining whether the charge for depreciation of buildings and school equipment and for use of grounds, buildings and equipment should be based on actual cost or the fair cash market value as of the date of use thereof by such students from defendant district, notwithstanding the parties, in stipulating as to the actual cost, have used the term \u201cinvested capital,\u201d the \u201cfair cash market value\u201d as of the date of use having also been stipulated.\n3. Schools and education \u2014 use and depreciation of school property by outside pupils.determinable on market value and not on cost. In an action by a board of education in assumpsit for tuition from pupils from a nonhigh school district, plaintiff is entitled to recover for depreciation and use of school grounds, buildings and equipment based on the fair cash market value thereof as of the date of actual use by such pupils and is not limited to pro rata recovery based upon the actual cost of the grounds, buildings and equipment.\nAppeal by defendant from the Circuit Court of Edgar county; the Hon. Augustus A. Pabtlow, Judge, presiding. Heard in this court at the October term, 1922.\nAffirmed.\nOpinion filed July 10, 1923.\nShepherd, Trogdon & Dole, for appellant.\nBurnie McClain and Stewart W. Kincaid, for appellee."
  },
  "file_name": "0415-01",
  "first_page_order": 469,
  "last_page_order": 476
}
