Judicial
Rulings

Illinois Supreme Court

Personal property tax exemptions

Hartley v. Kusper et al. and Continental Illinois National Bank and Trust Company v. Stanley T. Kusper, consolidated cases, decided September 26, 1975

THE ILLINOIS Supreme Court has modified its earlier position concerning the partial personal property tax exemption which originated in Article IX-A of the former (1870) Constitution and in effect carried over into the 1970 Constitution. Whereas previously the court had held that the exemption extended only to property owned by natural persons but not to property held by a trustee or fiduciary, the court in this decision by Justice Schaefer gives a break to certain widows, orphans, and others whose property, by law, is controlled by trustees.

The court said it "again rejected the claim that all personal property held in trust for natural persons is exempt from taxation," but then asserted that "there are some situations in which property held by fiduciaries can fairly be said to have been intended to be exempted from taxation. Such situations are those in which the natural person who owns the property is prevented by law from dealing with it as a natural person.

"When, for example, the ownership of a natural person is terminated by death, the law imposes an involuntary fiduciary relationship during the period of administration. Similarly, the legal inability of an incompetent to manage and dispose of his property requires the appointment of a conservator. A minor's legal disability presents a closer case, for property may be held by a minor in his own name. Nevertheless, the inability of a minor to deal fully and freely with property held in his own name often compels the establishment of a guardianship or custodianship for the minor's property .... In each of these situations the fiduciary relationship comes into being because the law prevents a particular class of natural persons (heirs or legatees of decedents, incompetents or minors) from exercising property rights that are available generally to other natural persons." The court then distinguished these situations from others involving "voluntary fiduciary relationships created to accomplish results that could not be achieved so long as the property is owned by a natural person."

The court overruled, in part, Lake Shore Auto Parts Co. v. Korzen, in which Article IX-A was first interpreted in 1971 and 1973.Initially, the Illinois court had held Article IX-A unconstitutional on federal grounds in that it gave an exemption to natural persons but not to trustees and corporations; however, the U.S. Supreme Court overruled the Illinois court, saying that it was not unconstitutional to treat individuals and corporations differently with respect to taxation./ C.P.R.�

Judicial discipline

DuPAGE County Circuit Court Judge Philip F. Locke was suspended for six months on October 22 after he was adjudged guilty of misconduct by the Illinois Courts Commission. Judge Locke, the commission said, should have disqualified himself from hearing a land use case involving a long-time friend and business associate.

Robert A. Sweeney, an associate judge of the Cook County Circuit Court, was reprimanded by the commission on October 30 for improper conduct following his arrest in March 1974 on a drunk driving charge after an auto accident. �

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