People Ex Rel. McDonough v. Chicago Union Lime Works Co.

My objection to the conclusion reached in this opinion is that it may found a dangerous precedent in valuing property forad valorem taxation. The valuation is based solely on an estimate of the property's income capacity over a twenty-year period. Of these, only two are past years, while the others are years in the future and therefore entirely speculative. The opinion confirms a valuation based *Page 310 upon the projection of the present income into the distant future, and to that extent it goes too far. By such a rule many inconsistencies would necessarily arise in the valuation of similar property, contrary to the equality and uniformity requirements of the State and Federal constitutions. For instance, if an adjacent stone quarry of the same general character were filled with water and used as a swimming pool, the income would, perhaps, not permit the same kind of valuation. And it would also be easily possible that a similar property might be used for the same dumping business but operated by a tenant, so that the rental income, rather than the business profits, would be the determining factor.

The opinion also erroneously assumes that "the value of the property does not depend on the business astuteness of the owner." It would be difficult to find any property which has earning capacity which would neither shrink nor enlarge according to the initiative and business capacity of its owner. Nicholas, in his work on Eminent Domain, (2d ed.) sec. 446, says: "Furthermore, care must be taken to distinguish between income from the property and income from the business conducted on the property;" and (sec. 229) that business income "is not considered in determining the value of such land" — it only illustrates uses: also (sec. 219) that "profits, that might be derived from devoting the land to a particular use, depend so much upon contingencies that cannot be foreseen that they have no real bearing upon present value." It is recognized that future profits depend to a large degree upon proper management and many other contingencies which may or may not happen.Illinois Light and Power Co. v. Bedard, 343 Ill. 618. *Page 311