# Petition — Smith v. Snow > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_2441%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1977 - **Citation:** 434 U.S. 939 ## Text Sup eme Court, U.S; - lpi ashi AUG 25 1977 | Supreme Court of the United tates a Octoser TERM, 1977 ——9'7-310 ee -_—— - — eS ee DONALD R. SMITH, Treasurer of Illinois, MICHAEL J. BAKALIS, Comptroller of Illinois, ROBERT M. WHITLER, Department of Revenue of Illinois, JOHN W. CASTLE, Director, Department of Local Govern- ment Affairs of Illinois, Petitioners, vs. ROBERT H. SNOW, individually and on behalf of all other taxpayers similarly situated, MARVIN E. SCHATZMAN, individually and on behalf of all other taxpayers of Cook County, Illinois, EDWARD J. ROSE- WELL, as Treasurer and Ex-Officio Collector of Cook County, Illinois, STANLEY T. KUSPER, JR., Clerk of Cook County, Illinois, THE COUNTY OF COOK, a body politic and corporate, ILLINOIS CENTRAL GULF RAILROAD CO., a Delaware Corporation, Respondents. PETITION FOR WRIT OF CERTIORARI TO THE SUPREME COURT OF ILLINOIS WILLIAM J. SCOTT, Attorney General of the State of Illinois, 160 North LaSalle Street, Chicago, Illinois 60601, Attorney for Petitioners. Hersert Lee Capian, Assistant Attorney General, (312) 793-3813, Mary ©. Usarusa, Assistant Attorney General, (312) 793-2877, Of Counsel. Keenan Printine Company (312) 372-0066-qy> 365 INDEX I hud Cs CaN bain bidet od caVeceveves 2 I Ts Bhai boas co cee ncccebeccdccoeses 2 QUESTIONS PRESENTED ...........cccccceeess 2 oe GE 4 STATEMENT OF THE CASE.................... 5 A. The Special Illinois Charter and the Charter Property Gross Receipts Tax................. 5 I Cc dh ecb cudcnseccacdeeevoes 6 C.F en Or Goa oc csn cu cwcccescecess 6 D. How the Federal Question Is Presented....... 8 REASONS FOR GRANTING THE WRIT......... 10 I. THE DECISION OF THE ILLINOIS SU- PREME COURT ERRONEOUSLY CON- STRUES AND APPLIES THE PERMIS- SIVE ACTION TAKEN BY THE INTER- STATE COMMERCE COMMISSION AND ERRONEOUSLY PRESUMES THAT THE COMMISSION INTENDED AND EFFEC- TIVELY ORDERED THE STATE CHAR. TER PROPERTY GROSS RECEIPTS TAX AND RELATED STATE STATUTES TO Se EE wb apie we dhasete sees 10 A. Interstate Commerce Commission Approv- al of a Section 5(2) Voluntary Reorgani- zation Will Not Be Conclusively Presumed to Render State Statutes Invalid When the State Law Was Not In Issue Before the Commission and No Findings Were Made to Evidence or Support Such an In- EE BOS codon ics KiccdedsKeidoseescioss ii. Pace B. The Commission’s Approval of a Volun- untary Reorganization Should Not Be Con- strued so as to Compel All Necessary Par- ties to Consent, Nor Should It Be Con- strued so as to Impliedly Override State Contract and Corporation Law to Elimi- nate Questions of Proper Legal Title.... C. The Rights and Obligations Created in the Charter Between the Railroad and the State and the State’s Tenth Amendment Powers May Not Be Abrogated Merely By Commission Approval of the Plan of ESE ST AR ae aie I ie a Fads sass ius neuwubaniad wuss Appendix A - Opinion of the Illinois Supreme Court Appendix B ~ Judgment Order of the Circuit Court CPt GON i eis hated Appendix C - Order and Relevant Parts of the Deci- sion of the Interstate Commerce Com- BS pace ly endip es a ARS Sate Appendix D - Statutes Tenth Amendment to the United States RR en eh ae ae Interstate Commerce Act, Section 5(a) gL AR cena aaa talc ea a Interstate Commerce Act, Section 5(11) gs RNID ROSES 14 Cl D1 - Pace An Act to Incorporate the Illinois Cen- tral Railroad Co., Section 18, 19; Il. Rev. Stats. 1975, chap. 120, sec. 373, a EIEN een ee eer eee D6 The Business Corporation Act of 1933, Section 160; Ill. Rev. Stats. 1975, chap. CED ba ngcloderrin hoe seedy D8 An Act to Increase the Powers of Rail- road Corporations, Section 2; Ill. Rev. Stats. 1975, chap. 114, sec. 166........ D9 TABLE OF AUTHORITIES Tenth Amendment of the United States Constitution 20 Interstate Commerce Act, Section 5(2); 49 U.S.C. ie ee ida dia pdse puduetcbateedsne 11 Interstate Commerce Act, Section 5(11); 49 U.S.C. DA kc Ve Cheese Snbad dds bacbteebaes bonvecs ave 11 CasEs: Arkansas Railroad Com. v. Chicago, RI. & P.R. Co., ss halk, oka a's pues So0c) 00 soes'e 13 Branch v. Jesup, 106 U.S. 458 (1883)................ 19 Central Freight Lines, Inc. - Contro] - Alamo Exp., 8 ey eer 15 Central Transportation Co. v. Pullman’s Palace Car ER a er ae oe oy Pe a 19 Florida v. United States, 282 U.S. 194 (1930)......... 12 Illinois Central R. Co. v. Emmerson, 299 Til. 325, 132 ne wees 18 iv. Illinois Central R. Co. v. Howlett, 525 F. 2d 178 (7th Cir. 1975), cert. den. 424 U.S. 976 (1976).......... Illinois Central R. Co. v. Public Utilities Com., 245 ih 8 Pe gr oe nee meee ap eee oa Lawrence v. St. Louis—San Francisco Ry. Co., 274 U.S. OOD CII iv ds hb ca dn heed R barn det bs Cee tis McGary Transportation Co., Inc. —- Purchase — DeMelle, OO WE ZUAS DD CRs oa Seer. een a ie veo cb bee Neustadt, et al. v. Illinois Central R. Co., 31 Ill. 484 North Carolina v. United States, 325 U.S. 507 (1944).. Palmer v. Massachusetts, 308 U.S. 79 (1939)......... Pennsylvania R. Co. v. St. Louis A. € T.H.R. Co., 118 Ey SD & os 5 web de> daehescadeseyetentothess People ex rel. Chicago v. Illinois Central R. Co., 235 Ss BOR WN 3 sib eo Sec devcbcwaswls bnccceunraceen Seaboard Air Line R. Co. v. Daniel, 333 U.S. 118 Snow v. Dixon, et al., 66 Tl. 2d 443 (1977)............ Texas & N.O.R. Co. v. Brotherhood of Railroad Train- men, 307 F. 2d 151 (6th Cir. 1962), cert. den. 371 U.S. 952 (1963), reh. den. 375 U.S. 871 (1963)...... Thomas v. West Jersey R. Co., 101 U.S. 71 (1879)..... United States v. Interstate Commerce Commission, 396 Ui GEE. COR i onc hawks coc cnd evi ae York & M.C.R. Co. v. Winans, 58 U.S. 30 (1854) 17 t - Supreme Court of the United States Ocroser Term, 1977 No.——— DONALD R. SMITH, Treasurer of Illinois, MICHAEL J. BAKALIS, Comptroller of Illinois, ROBERT M. WHITLER, Department of Revenue of Illinois, JOHN W. CASTLE, Director, Department of Local Govern- ment Affairs of Illinois, Petitionezs, _ vs. .* ROBERT H. SNOW, individually and on behalf of all other taxpayers similarly situated, MARVIN E. SCHATZMAN, individually and on behalf of all other taxpayers of Cook County, Illinois, EDWARD J. ROSE- WELL, as Treasurer and Ex-Officio Collector of Cook County, Illinois, STANLEY T. KUSPER, JR., Clerk of Cook County, Illinois, THE COUNTY OF COOK, a body politic and corporate, ILLINOIS CENTRAL GULF RAILROAD CO., a Delaware Corporation, Respondents. PETITION FOR WRIT OF CERTIORARI TO THE SUPREME COURT OF ILLINOIS 2 Petitioners, Donald R. Smith, State Treasurer of Ili- nois, Michael J. Bakalis, Comptroller of the State of [I- linois, Robert W. Whitler, Director of the Department of Revenue of Illinois, and John W. Castle, Director of the Department of Local Government Affairs of Illinois, re- spectfully pray that a writ of certiorari issue to review the judgment and opinion of the Supreme Court of IIli- nois, entered in this proceeding on April 5, 1977. OPINION BELOW The opinion of the Supreme Court of Illinois is reported at 66 Ill. 2d 443 (1977) and appended hereto as Appendix A. The judgment order of the Circuit Court of Cook Coun- ty, Illinois, not reported, is appended hereto as Appendix B. The order and relevant parts of the decision of the Inter- state Commerce Commission, 338 I.C.C. 805, 879-880, 940-1 (1971) are appended hereto as Appendix C. JURISDICTION The judgment of the Supreme Court of Illinois was en- tered on April 5, 1977. The order denying rehearing was entered May 27, 1977. This Court’s jurisdiction is con- ferred by 28 U.S.C. 1257(3) and 2106. QUESTIONS PRESENTED Whether the 125-year-old Illinois Central Charter Prop- erty Gross Receipts Tax and related State statutes have been repealed by action of the Interstate Commerce Com- mission, 3 Whether the plenary power of the Interstate Commerce Commission to enforce its .rders must be conclusively pre- sumed to’render State statutes invalid in a Section 5(2) voluntary reorganization when the State law was not in issue before the Commission and findings were not made to evidence or support such an intention nor an appropri- ate order entered to mandate such a result. Whether Interstate Commerce Commission permission for a carrier to voluntarily reorganize pursuant to Section 5(2) of the Interstate Commerce Act operates to compel all parties necessary to the transaction to consent and by implication overrides State contract and corporation law to eliminate questions of proper legal title necessary to effectuate the reorganization. Whether sound principles of federalism and comity re- quire that an exercise of federal regulatory power in con- travention of the Tenth Amendment to the United States Constitution not be presumed in the absence of a clear statement of intent to so act and an unavoidable situation for interposing federal preemption. STATUTES INVOLVED Tenth Amendment to the United States Consti- tution. Interstate Commerce Act, Section 5(2), (11), 49 U.S.C. Section 5(2), (11). An Act to Incorporate the Illinois Central Rail- ruad Co., Section 18, 19, Ill. Rev. Stats. 1975, chap. 120, See. 373, 374. The Business Corporation Act of 1933, Section 160, Ill. Rev. Stats. 1975, chap. 32, Sec. 157.160. An Act to Increase the Powers of Railroad Cor- porations, Section 2, Ill. Rev. Stats. 1975, chap. 114, Sec. 166. Pertinent text is set forth in Appendix D. STATEMENT OF THE CASE ai: The Special Illinois Charter and the Charter Property Gross Receipts Tax. The Illinois Central Railroad Company was created by special legislative act on February 10, 1851. Under this legislative charter, the Illinois Central Railroad Company received a grant in trust of a two-hundred-foot right-of- way, together with such other lands necessary for ancil- lary uses, and approximately 2,595,000 acres of public lands adjacent to the right-of-way (R. C604, 757, 763), as well as other valuable assets, rights and privileges, for “the only and sole purpose of surveying, locating, con- structing, completing, altering, maintaining and operating a railroad’’ and branches, pursuant to the covenants and conditions of the grant, as a ‘‘solemn and binding con- tract.’’ An Illinois Charter Property Gross Receipt Tax was simultaneously imposed upon the Illinois Central Rail- road Company ‘‘in consideration of the grants, privileges and franchises . . . conferred upon said company.’’ (Ill. Rev. Stat. 1975, ch. 120, sec. 373.) The annual tax now exceeds $5.6 million and since August 10, 1972, the date Illinois Central Railroad Company purportedly dissolved itself, collections have aggregated over $18 million (R. C399-400). To further secure payment of of the tax, the Illinois Railroad Corporation Act, enacted in 1885 (Ill. Rev. Stats. 1975, ch. 114, sec. 166), provides in part: 6 ‘‘ |. nothing herein contained shall be so construed as to authorize or permit the Illinois Central Railroad Company to sell the railway constructed under its charter, approved February 10, 1851, or to mortgage the same, except subject to the rights of the state under its contract with said company, contained in its charter, or to dissolve its corporate existence, or to relieve itself or its corporate property from its obli- gations to this state, under the provisions of said charter.”’ The Illinois Business Corporation Act, first adopted in 1919 (Ill. Rev. Stats. 1975, ch. 32, sec. 157.160) also con- tains the above provision. B. The Reorganization On or about May 16, 1968, Illinois Central Industries, Inc., a Delaware Corporation, of which Illinois Central Railroad Company is a wholly owned subsidiary, and Gulf, Mobile and Ohio Railroad Company, a Mississippi Corpo- ration, filed with the Interstate Commerce Commission a voluntary petition for approval and authorization to con- solidate and merge pursuant to 49 U.S.C. Sec. 5(2)(a). The plan was approved by the Commission in its deci- sion rendered December 20, 1971. (338 I.C.C. 805). The State of Illinois was not a party to the proceedings before the Commission. The Commission did not decide any ques- tion concerning the power of the Illinois Central to unilat- erally dissolve its Illinois corporate existence and trans- fer away its charter properties, so as to relieve it from its obligation to pay the Charter Property Receipts Tax and other duties and obligations existing under Illinois law. C. The Origin of the Case This action originated on November 20, 1973, when the plaintiff, Robert H. Snow, filed his petition for leave to 7 file a complaint in the Circuit Court of Cook County, Illi- nois (R. C79-104). Plaintiff, as a citizen and taxpayer of the State of Illinois, sought to enjoin the State defend- ants from expending public funds to continue to collect the Charter Property Gross Receipts Tax from [Illinois Central Railroad Company, and to enjoin Illinois Central from paying the tax to the state (R. C133-150). Over ob- jection of all defendants, leave to file was granted (R. C132). The amended complaint alleges that ‘‘effective August 10, 1972, Illinois Central [Railroad Company] effectively ceased to exist because it merged into [Illinois Central] Gulf {Railroad Co.] and conveyed all of its assets to Gulf’’ and the Charter Property Gross Receipts Tax **ceased to be of legal effect and became null and void.’’ (R. C138). Motions of defendants to strike and dismiss the amended complaint (R. C154; 157; 166; 184; 200) were overruled. (R. C215). Thereafter, motions of defendants for sum- mary judgment (R. C382-414; 448-459; 482-499) were de- nied, and plaintiff’s motion for summary judgment (R. C600-65) was allowed. (R. C936-946). The judgment order of May 17, 1976, inter alia, finds: ‘5. That a plan of reorganization was approved by the Interstate Commerce Commission whereby the Illinois Cen- tral Gulf Railroad Company (‘‘Gulf’’) acquired the assets of Illinois Central Railroad Company (‘‘I.0.’’) and Illi- nois Central Railroad Company was to be dissolved. This plan became effective on August 10, 1972 and under said plan 1.C. sold and conveyed all of its assets, including the Charter Property, to Gulf... . 10. That under the Plan of Reorganization, the Charter Property Tax did not be- 8 come an obligation of Gulf, and Gulf did not acquire LC.’s exemption from all other taxation as described in Section 22 of the 1851 Charter.’’ (R. C939-941). The State defendants perfected a direct appeal to the Illinois Supreme Court. On April 5, 1977, the Court ren- deréd its opinion which affirmed the judgment of the circuit court as modified, and remanded the cause for further pre- ceedings. The State defendants’ petition for rehearing was denied on May 27, 1977. D. How the Federal Question Is Presented The effect of the Interstate Commerce Commission’s approval of the reorganization upon State law was first raised in the Answer of Illinois Central Gulf Railroad Company to the Amended Compiaint (R. C219-23), and again in the Reply of Plaintiff Snow to Answer of Illinois Central Gulf Railroad (R. C301-2), and the Memorandum in Support of Certain Defendants’ Motions for Summary Judgment. (R. C450, 455). A suit had been filed by Illinois Central Railroad Com- pany in the District Court to litigate the question whether the Illinois Central Special Charter had been ‘‘duly dis- solved’’ over state objections, but the district court action was involuntarily dismissed on procedural grounds without ever reaching the substantive issue. (Jllinois Central Rail- road Company v. Howlett, 525 F. 2d 178 (7th Cir. 1975), cert. denied, 424 U.S. 976 (1976)). In the case a bar, plaintiff expressly argued that: ‘‘There is no issue before this Court as to whether or not the I.C. is ‘empowered to dissolve its corporate existence’; that issue is being litigated between the 9 I.C. and the Illinois “Secretary of State in Federal Court, and is not an issue which has been raised by any pleading in this case.’’ (R. C625; 691; 920) Intervening defendant Schatzman adopted the same po- sition: that the matter had not been asserted in the Com- plaint, was not a direct issue in the case, had not been fully briefed and should not be a part of the final judg- ment or decree. (R. C920) Intervening defendants, Rosewell, Kusper and Carey adopted this identical position. (R. C912) Nevertheless, in its judgment order, the Court found that by virtue of the Commission’s approval of the re- organization, the Illinois Central Gulf Railroad acquired the assets of the Illinois Central Railroad Company, in- cluding the charter property, and the Ilinois Central was then dissolved. In their brief filed with the Illinois. Seatitiits Court, the State defendants again raised the issue whether the Special Illinois Charter of the Illinois Central Railroad, the Charter Property Gross Receipts Tax, and State laws prohibiting I.C.’s corporate dissolution and transfer of charter assets have been effectively repealed by the or- der of the Interstate Commerce Commission. In its opinion, the Illinois Supreme Court, by relying solely on ‘‘federal grounds,’’ rejected the State defend- ants’ contention that the Illinois Central Railroad Com- pany had no power under State law to dissolve its char- ter and transfer its charter property. Specifically, the Court found that any charter which would prevent the sale of the Illinois Central and all of its assets, including the charter property, would be overriden under 49 U.S.C. Sec. 5(11) in order to effect the transaction approved by the Interstate Commerce Commission. (66 Tl]. 2d at 457- 462). 10 REASONS FOR GRANTING THE WRIT I. | THE DECISION OF THE ILLINOIS SUPREME COURT ERRONEOUSLY CONSTRUES AND APPLIES THE PERMISSIVE ACTION TAKEN BY THE INTER- STATE COMMERCE COMMISSION AND ERRONE- OUSLY PRESUMES THAT THE COMMISSION IN- TENDED AND EFFECTIVELY ORDERED THE STATE CHARTER PROPERTY GROSS RECEIPTS TAX AND RELATED STATE STATUTES TO BE OVERRIDDEN. The Special Illinois Central Railroad Company Charter and statutes subsequently adopted prohibit the Railroad from unilaterally dissolving its corporate existence or re- lieving itself or its corporate property from its obliga- tions to the State under the provisions of the Charter. One of the primary obligations of the Railroad under the Charter is the payment of the Charter Property Gross Receipts Tax to the State. Over the past 124 years, every change or amendment to the charter operations of Illinois Central Railroad Com- pany has been by mutual consent of the railroad and the State of Illinois, effected by appropriate legislative en- actments and acceptance of the enactments by the corpo- rate officers of the railroad. This has even occurred subse- quent to the purported reorganization which triggered the instant action. (R. C454-5, 670-1) - The issue of whether the Illinois Central Railroad Com- pany has the right to unilaterally dissolve its special char- ter existence, transfer away its charter property and thus relieve itself of its duty to pay the Charter Property 11 - Gross Receipts Tax in contravention of Illinois law was not decided by the Interstate Commerce Commission, nor has the issue ever been adjudicated in a court of competent jurisdiction. Nevertheless, the Illinois Supreme Court assumed that because the voluntary reorganization was approved by the Interstate Commerce Commission, any inhibiting State law was automatically nullified under 49 U.S.C. 5(11). This erroneous view of the meaning of an order of the Interstate Commerce Commission cannot stand. It is prem- ised upon a basic misunderstanding of the effect of Com- mission approval of a voluntary reorganization, is con- trary to the Commission’s own interpretation of its au- taority, and constitutes an nnwarranted extension of fed- eral jurisdiction into a matter of state concern. A. Interstate Commerce Commission Approval of a Sec- tion 5(2) Voluntary Reorganization Will Not Be Conclu- sively Presumed To Render State Statutes Invalid When The State Law Was Not In Issue Before The Commission and No Findings Were Made To Evidence or Support Such An Intention. There is no dispute that under 49 U.S.C. 5(11), the Interstate Commerce Commission may exercise power to suspend inhibiting State laws to the extent necessary to effect a voluntary reorganization. The issue is not, how- ever, what the Commission may have power to effectuate in an appropriate case, but rather what in fact the Com- mission did decide in reviewing the Illinois Central reor- ganization petition. 12 The decision of the Commission in the reorganization reveals no express intention to override the provisions of the Special Illinois Charter and related statutes. It did not find that Illinois law should be superseded, nor did it mandate such a result in its order. Nevertheless, the Illi- nois Supreme Court has supplied such an intention purely by implication and has thus invalidated the aforementioned Illinois laws. This Court has never held that a decision of the Inter- state Commerce Commission will automatically supersede State laws and powers where the Commission made no finding that such a result was intended. Rather, the deci- sions of this Court show that where State law is to be invalidated by an order of the Commission, the intention to override must be expressly set out the order. As Chief Justice Hughes stated in this Court’s opinion in Florida v. United States, 282 U.S. 194, 211-212 (1930): ‘‘The question in the present cases then, is not one of authority but of its appropriate exercise. The pro- priety of the exertion of the authority must be tested by its relation to the purpose of the grant and with suitable regard to the principle that whenever federal power is exerted within what would otherwise be the domain of state power, the justification of the exercise of the federal power must clearly appear.’’ (Empha- sis added) In Seaboard Air Line R. Co. v. Daniel, 333 U.S. 118, 124 (1948), relied upon by the Illinois Supreme Court in rendering its decision, this Court held that the appellant railroad company was relieved of the necessity of com- plying with certain South Carolina constitutional and stat- utory provisions because the Interstate Commerce Commis- sion had expressly stated in its order that this was its intention. 13 ; In the absence of such specific findings, this Court has declined to presume that state laws and powers are auto- matically overriden by decisions of the Commission. North Carolina v. United States, 325 U.S. 507, 520 (1944). In Arkansas Railroad Com. v. Chicago, R. I. & P. R. Co., 274 U.S. 597 (1926), the issue was whether an order of the Interstate Commerce Commission had extended to in- trastate rates. At page 603 of the opinion, Justice Brandeis wrote: ‘‘The intention to interfere with the state function of regulating intrastate rates is not to be presumed. Where there is serious doubt whether an order of the Interstate Commerce Commission extends to intrastate rates, the doubt should be resolved in favor of the state power.”’ " The Court further noted that if the railroad believed that the Commission had intended to include the intra- state rates within its order, the railroad should have taken action to secure an express statement from the Commis- sion that such was its intention. Similarly, if the Illinois Central felt that the Illinois Charter Property Law should be overridden, it had a duty to request a specific ruling on the issue by the Commission. It did not. The Commission made no specific findings that the Illi- nois charter law should be overriden. The Illinois Supreme Court nevertheless assumed that such an intention was implied in the Commission’s finding that the reorganiza- tion was in the public interest. State laws, however, should not be so lightly set aside. As this Court held in Illinois Central Railroad Co. v. Public Utilities Commission, 245 U.S. 493, 510 (1918) : ‘*In construing federal statutes enacted under the power conferred by the Commerce Clause of the Con- 14 stitution, the rule is that it should never be held that Congress intends to supersede or suspend the exer- cise of the reserved powers of a State, even where that may be done, unless, and except so far as, its purpose to do so is clearly manifested. Reid v. Colo- rado, 187 U.S. 137, 148; Cummings v. Chicago, 188 U.S. 410, 430; Savage v. Jones, 225 U.S. 501; Missouri, Kansas ¢ Texas Ry. Co. v. Harris, 234 U.S. 412, 419. This being true of an act of Congress, it is obvious that an order of a subordinate agency, such as the Commission, should not be given precedence over a State rate statute otherwise valid, unless, and except so far as, it conforms to a high standard of certainty.’’ If the Commission had intended to override the provi- sions of the special Illinois charter and related statutes, it would have said so. No such intention was stated or implied, and the Illinois Supreme Court was clearly in error when it supplied such an intent by pure implication and effectively repealed several Illinois statutes. The Commission’s Approval Of A Voluntary Reorgani- zation Should Not Be Construed So As To Compel All Nec- essary Parties To Consent, Nor Should It Be Construed So As To Imliedly Override State Contract And Corporation Law To Eliminate Questions Of Proper Legal Title. The Illinois Supreme Court apparently believed that Commission approval of the reorganization meant that the transaction was of necessity to be accomplished, regardless of any questions remaining to be resolved under Illinois law. This is contrary to the Commission’s own view of its powers. Commission review and approval in any proposed reor- ganization is a federal statutory precondition to the com- 15 pletion of such transaction. But, its approval of a reor- ganization is permissive only, and not mandatory. The Commission has described its authority as follows: ‘*As to vendor’s desire to withdraw from the trans- action, we have repeatedly found that authority granted under former section 213 and present sec- tion 5 is permissive only, and may, or may not, be exercised by the parties, and that all matters involv- ing the interpretation and enforcement of the terms of contracts must be left for settlement between the parties themselves or by the courts.’’ McGary Trans- portation Co., Inc. — Purchase — DeMelle, 50 MCC 608, 611 (1948). In Central Freight Lines, Inc. - Control — Alamo Exp., 90 MCC 96, 100-101 (1962), the Commission further stated: ‘‘Our function under the statute is to determine whether the transaction proposed will be consistent with the public interest, and whether the terms and conditions proposed, subject to such conditions or mod- ifications as we may require, are just and reasonable. ... Whether the transaction will be consummated, or consummation could be legally compelled by appli- cants, is not for us to decide. Our authority is per- missive only. We cannot force consummation of any transaction approved by us under section 5. In our view, the fact that the transaction conceivably may not be consummated under the modified terms does not inhibit our authority to approve the transaction on the revised terms proposed by applicants.’’ Clearly, where such a reorganization is voluntary and by request of the carriers, an I.0.C. order does not man- date that the action be taken nor compel any dissenting party to conform. In Texas d N. O. R. Co. v. Brotherhood of Railroad Trainmen, 307 F. 2d 151, 159-60 (6th Cir. 1962), cert. den. 371 U.S. 952, 83 S. Ct. 508 (1963), Reh. den. 375 U.S. 871, 84 8. Ct. 28 (1963), the Court said: 16 ‘‘Now, are we to read into the authority of the ICC to ‘approve’ a transaction, the right of the carrier to unilaterally create one of the contracts which may be necessary to the completion of that transaction and thereupon bind a third party to it? Clearly, that does not follow as a matter of course from the normal meaning of the terms used in section 5(2) (a). ‘Nor has the ICC, in its interpretation of section 5(2), found any such hidden authority. It looks upon its duties as purely permissive, approving with appropri- ate conditions contracts, agreements, and consolida- tions which are negotiated by the parties under the normally applicable law governing such transactions in other fields. As the Commission has often held, it has no power to compel a carrier to undertake 4 section 5(2 )transaction. ... ‘‘F'rom these cases, we believe the Commission is of the opinion that the carriers must rely upon applicable contract and corporate law to carry their section 5(2) transaction into effect, and may not rely upon the Commission’s ‘approval’ to coerce a recalcitrant party into line.’’ (Emphasis added) Even if the proposed partners to a reorganization agree, a voluntary reorganization still cannot be legally consum- mated unless under state law all the necessary parties to such a merger or consolidation have proper title to the rights and property which they wish to bring into the reorganization and are able to execute the necessary con- tracts to accomplish the transaction. The law is most clearly stated by the United States Supreme Court in the recent Northern Lines merger cases, United States v. Interstate Commerce Commission, 396 U.S. 491, 526 (1970). Chief Justice Burger said: ‘‘The premise of Livingston’s position is that under this statute before the Commission can assume juris- diction over a merger application it must determine 17 that the applicants have proper legal title to. the rights and property which they seek to bring into the merger. This is an erroneous assumption. The Com- mission is not required to deal with the subtleties of **good title’ before assuming jurisdiction over a sec- tion 5 matter. Cf. 0. C. Wiley & Sons v. United States, 85 F. Supp. 542, 543-545 (D. C. W. Va.), aff’d per cu- riam, 338 U.S. 902 (1949); Walker v. United States, 208 F’. Supp. 388, 396 (D. C. W. D. Tex. (1962) ; Inter- state Investors, Inc. v. United States, 287 F. Supp. 374, 392 n. 32 (D. C. S. D. N. Y. 1968), aff’d per cu- riam, 393 U.S. 479 (1969). And because a Commission order under section 5(2) ‘is permissive, not manda- tory,’ New York Central Securities Corp. v. United States, 287 U.S. 12, 26-27 (1932), the approval of a merger proposal does not amount to an adjudication of any such questions. These are matters for the courts, not for an agency that has responsibility in the realm of regulating transportation systems.’’ (Empha- sis added) The 1.C.C. order entered December 20, 1971, did not consider or decide any issues existing between the State of Illinois and Illinois Central Railroad Co. concerning good title. These were left to the courts to resolve, and were the subject matter of Illinois Central Railroad v. Howlett, 525 F. 2d 178 (7th Cir. 1975), cert. den. 424 U.S. 976 (1976), which was dismissed on procedural grounds without reaching the merits of the case. They are the is- sues remaining to be adjudicated in a court of competent jurisdiction on proper pleadings where the parties are correctly aligned. 18 C The Rights And Obligations Created In The Charter Be- tween The Railroad And The State And The State’s Tenth Amendment Powers May Not Be Abrogated Merely By Commission Approval Of The Plan Of Reorganization. The Charter of the Illinois Central Railroad is a solemn contract between the State and the Railroad which cannot be altered or abandoned without the consent of both con- tracting parties. Illinois Central R. Co. v. Emmerson, 299 Tl. 325, 132 N.E. 471 (1921); People ex rel. Chicago v. Ilh- nois Central R. Co., 235 Ill. 374, 85 N.E. 606 (1908); Neu- stadt, et al. v. Illinois Central R. Co., 31 Ill. 484 (1863). Central to the Charter is the obligation of Illinois Central to pay the 7% Charter Gross Receipts Tax to the State. The annual tax now exceeds $5.6 million and since August 10, 1972, the date Illinois Central purportedly dissolved itself, collections have aggregated over $18 million. (R. C399-400) Decisions of this Court have consis ently held that rail- road corporations cannot unilaterally absolve themselves from the performance of their obligations under their charters without the consent of the State legislature. In Thomas v. West Jersey R. Co., 101 U.S. 71, 83 (1879), this Court said; ‘¢* * * [Where a corporation, like a railroad com- pany, has granted to it by charter franchise intended in large measure to be exercised for the public good, the due performance of those functions being the con- sideration of the public grant, any contract which dis- ables the corporation from performing those func- tions, which undertakes, without the consent of the State, to transfer to others the rights and powers con- ferred by the charter, and to relieve the grantees of 19 - the burden which it imposed is a violation of the con- tract with the State, and is void as against public policy.’’ See also York & M. L. R. Co. v. Winans, 58 U.S. 30, 39 (1854); Branch v. Jesup, 106 U.S. 458, 463 (1883); Penn- sylvania R. Co. v. St. Louis A. & T. H. R. Co., 118 US. 290, 313 (1886); Central Transportation Co. v. Pullman’s Palace Car Co., 139 U.S. 24, 41 (1891). The Illinois Supreme Court in its opinion recognized the fact that a contract exists between the State and the Railroad when it stated: ‘‘The contractual nature of the charter and the 7% charter tax imposed on IC therein are firmly established.’’ (66 Ill. 2d at 455). Nevertheless, the court’s decision effectively denied the State the opportu- nity to assert its rights under the contract by regarding Commission approval of the plan as conclusive on all issues. As the authorities set out in Part B of this Petition clearly show, the Commission refrains from adjudicating the contractual disputes that may arise between the parties. Furthermore, where federal jurisdiction impinges upon an area traditionally reserved to the States under the Tenth Amendment (taxation in the instant case), this Court has always required a clear intent to supersede State laws and an actual conflict between State and federal au- thority. As stated in Palmer v. Massachusetts, 308 U.S. 79, 84 (1939): ‘‘Therefore, in construing legislation this court has disfavored inroads by implication on state authority and resolutely confined restrictions upon the tradi- tional power of states to regulate their local transpor- tation to the plain mandate of Congress,’’ i i, 20 In d*scussing the resolution of a controversy concern- ing the respective powers of the federal government and the states over railroads engaged in interstate commerce, Justice Brandeis wrote in Lawrence v. St. Louis—San Fran- cisco Ry. Co., 274 U.S. 588, 595 (1926) : ‘‘The delimitation of the respective powers of the two governments requires often nice adjustments. The fed- eral power is paramount. But public interest demands that whenever possible conflict between the two au- thorities and irritation be avoided. To this end it is important that the federal power be not exerted un- necessarily, hastily, or harshly. It is important also that the demands of comity and courtesy, as well as of the law, be deferred to.’’ In its decision, the Illinois Supreme Court assumed that the Interstate Commerce Commission intended to repeal the Illinois State Charter Law and related statutes, and effectively denied the State its right to collect the 7% Char- ter Property Gross Receipts Tax. Sound principles of comity and federalism require that an exercise of fed- eral regulatory power in contravention of the Tenth Amendment not be presumed in the absence of a clear statement of intent to so act and an unavoidable situa- tion for interposing federal preemption. Since the Com- mission expressed no intention to override Illinois law in its order approving the reorganization, the Illinois Su- preme Court was clearly in error. CONCLUSION For 125 years since its creation, the State of [linois has imposed a Charter Property Gross Receipts Tax upon the Illinois Central Railroad Company ‘‘in consideration of the vast and valuable grants, privileges and franchises ... conferred upon -said company.’’ 21 To secure payment of the tax, maintenance of the char- ter lines, and faithful performance of the other duties and obligations imposed by law upon Illinois Central Rail- road Co., the railroad is prohibited from dissolving its Illinois Corporate existence or transferring away its prop- erty so as to relieve itself from its obligations to this State under the provisions of its special charter. Over the past 124 years, every change or amendment in the charter of the Illinois Central Railroad Company has been by mutual consent of the railroad and the State of Illinois, effected by appropriate legislative enactments and acceptance of the enactment by the corporate officers of the railroad. The Illinois Central Railroad Company petitioned the Interstate Commerce Commission for federal permission to voluntarily reorganize its corporate structure pursuant to section 5(2) of the Interstate Commerce Act. The Interstate Commerce Commission was not peti- tioned to override the Illinois Central Charter Property Gross Receipts Tax or the related Illinois statutes which secure the tax. The Commission made no findings and entered no order to mandate the repeal of the Illinois laws. The Illinois Supreme Court erroneously concluded that the Interstate Commerce Commission had ruled that the reorganization must be effected and, consequently, the Charter Property Gross Receipts Tax and related stat- utes were nullified. The decision of the Illinois Supreme Court is premised upon an uncorrect view of the meaning of the Commission’s order and the impact of federal law, and is nothing less than ‘‘petitio principlii.’’” Where a State’s Tenth Amend- 22 ment powers are at stake, the principles of comity and federalism require a definite statement of intent to over- ride State law, and such an intent may not be supplied by implication, as the Illinois Supreme Court has done here. WHEREFORE, for these reasons, Petitioners pray that a writ of certiorari issue to review the judgment and opinion of the Illinois Supreme Court entered April 5, 1977. Respectfuly submitted, Wun J. Scort, Attorney General of the State of Illinois, 160 North LaSalle Street, Chicago, Illinois 60601, Attorney for Petitioners. Respondents. Hersert Lee Capian, Assistant Attorney General, (312) 793-3813, Mary C. Usatusa, Assistant Attorney General, (312) 793-2877, Of Counsel. Al APPENDIX A OPINION OF THE ILLINOIS SUPREME COURT (66 Ill. 2d 443) MR. JUSTICE MORAN delivered the opinion of the court: In 1851, by ‘‘An Act to incorporate the Illinois Central Railroad company’’ (1851 Private Laws of Illinois 61, hereinafter, the charter), the Illinois General Assembly authorized construction of a railroad line between Chi- cago and Cairo with a branch to the Mississippi River via Galena, and granted for that purpose a 200-foot right-of- way and approximately 2.6 million additional acres along that right-of-way. Most of this land derived from Fed- eral land grants of the prior year. The line constructed pursuant to this charter (the charter line) includes 705.5 miles of main line. This, in addition to 1,820 miles of non-charter-line track, was operated by the Illinois Central (IC) until August 10, 1972, when, pursuant to a plan of reorganization (Plan) approved by the Interstate Com- merce Commission (Commission), the IC sold and con- veyed all of its assets to the defendant, Illinois Central Gulf Railroad Company (Gulf), a newly formed Delaware corporation, in exchange for stock. The IC distributed this stock to its shareholders and purportedly dissolved. Gulf has since owned and operated the IC's former charter line and the noncharter lines, as well as the former Gulf, Mobile & Ohio Railroad lines. In the same manner as the IC before it, Gulf has paid the 7% gross revenue tax imposed on IC’s charter line. This tax, under sections 18 and 22 of the charter (which may be found, as modified, in Ill. Rev. Stat. 1975, ch. 120, pars. 373, 374), was imposed on IC in lien of ordinary taxes. Gulf, likewise, has paid it in lieu of other taxes, and it has been thus accepted for the years 1972 through 1975 without challenge by the defendant State of Illinois officials (State). A2 The instant dispute arises from the claim of Robert H. Snow, an Illinois taxpayer, that State funds are being disbursed to effect the collection from Gulf of the illegal 7% tax on charter properties. He brings this action under ‘‘An Act in relation to suits to restrain and enjoin the disbursement of public moneys by officers of the state’’ (Ill. Rev. Stat. 1975, ch. 102, par. 11 et seq.) (the Public Monies Act). The essence of the action is that this 7% tax was an exemption personal to IC, not applicable to Gulf, and is being illegally collected in lieu of other taxes which would ordinarily be due from the charter line. Marvin E. Schatzman (as a Cook County taxpayer), Edward J. Rosewell (as Cook County treasurer), and Stanley T. Kusper, Jr. (as Cook County clerk), intervened. On cross motions, the circuit court rendered summary judgment for the plaintiff on May 17, 1976, finding that under the plan of reorganization the tax on the charter line did not become an obligation of Gulf, and Gulf did not acquire IC’s special tax exemption. The chancellor decreed IC dissolved, enjoined the State from continuing to collect the charter tax from Gulf and from expending public funds in connection therewith, and ordered the Director of the Department of Local Government Affairs, effective August 10, 1972, to ‘‘assess the Charter Property in the same manner as he assesses the property of other railroads in the State’’ and to ‘‘transmit the lists and information to the various proper taxing authority of the Illinois counties in which Charter Property is located.’’ On appeal, Gulf urges that the charter property tax obligation and corresponding immunity from other tax were contract rights passed to Gulf by virtue of the Commission’s approval of its plan of reorganization. Gulf furtbcr urges that, should this court disagree with this A3 proposition, the trial court’s order requiring Gulf’s char- ter line to be assessed in the same manner as other Illinois railroads should be applied prospectively only. The State agrees with Gulf that the 7% charter tax is due and owing, but contends it is due from IC; that the contract rights created in the charter between IC and the State may not be unilaterally abrogated by the IC or by the powers of the Commission to approve the Plan. Additionally, the State asserts that Snow lacks standing to attack the voluntary payments of a tax by another, and that administrative review, rather than suit under the Pub- lie Monies Act, is the proper vehicle for this action. With reference to the question of standing and appro- priateness of this action under the Public Monies Act, the State asserts that the amounts collected by the 7% tax total over $5.6 million per year, whereas the $41,400 éx- pended in auditor’s salary for its collection are de mini- mis, and that therefore Snow and the other taxpayers he represents have no interest in preventing the token ex- penditure. The State ignores the fact evidenced by the record that the time of literally hundreds of State em- ployees is devoted in some part to the assessment and collection of this tax. Furthermore, there is no require- ment that a taxpayer’s individual interest in a suit under the Public Monies Act be substantial. In the case of Krebs v. Thompson (1944), 387 Ill. 471, 475-76, the court acknowl- edged that, ‘‘{u]nder the settled rule in this State, ev- ery taxpayer is injured by the misapplication of public funds, whether the amount be great or small. Such injury is not prevented by the fact that the State may thereafter receive fees under an unconstitutional statute in excess of the cost of its administration.’’ Long before the enactinent of the Public Monies Act, the citizens and taxpayers of this A4 State have been permitted to sue to enjoin the misuse of public funds. (See Barco Manufacturing Co. v. Wright (1956), 10 Ill. 2d 157, 160, and Fergus v. Russel (1915), 270 Ill. 304, 314, and cases cited therein. See also Cusack v. Howlett (1969), 44 Ill. 2d 233, 236.) Furthermore, a taxpayer may bring suit to enjoin the misuse of public funds in administering an illegal legislative act even though the taxpayer is not subject to the provisions of that act. (Mansfield v. Carpentier (1955), 6 Ill. 2d 455, 460-61; Bode v. Barrett (1952), 412 Ill. 204, 233-34; Krebs v. Thompson (1944), 387 Ill. 471, 474.) The case of Droste v. Kerner (1966), 34 Ill. 2d 495, cited by the State for the proposition that the taxpayers have no standing to sue because the public funds allegedly disbursed illegally were de minimis, was a consolidated appeal from two actions: one attacking a legislative enactment conveying State lands brought under the Public Monies Act; another attacking the same enactment on a theory of public trust. The court found that the Public Monies Act did not give the plain- tiffs standing to maintain the first action, for conveyance of public lands was not the improper ‘‘disbursement”’ of public ‘‘funds’’ contemplated by the Act. In the second action, under the public trust doctrine, the plaintiff alleged that certain State funds would be expended for land surveys, title reports and the like to carry out the pro- tested act. The court viewed these allegations as ‘‘no more than speculative conclusions’? and then determined that ‘tin any event, the expenditures which plaintiff alleges are de minimis for purposes of standing to sue as a taxpayer.’’ (Droste v. Kerner (1966), 34 Ill. 2d 495, 505.) The court’s statement regarding de minimis expenditures specifically referred to standing to sue under the public trust doctrine rather than under the Public Monies Act. Furthermore, A5 this aspect of Droste was overruled in Paepcke v. Public Building Com. (1970), 46 Tll. 2d 330, 341. Droste is clearly irrelevant to the issue of standing in the case at hand. Other cases which the State cites to demonstrate that the Public Monies Act is an inappropriate vehicle for this suit are not on point. Daly v. County of Madison (1941), 378 Ill. 357, 361, brought by taxpayers to en- join an election, was characterized by the court as an action involving a political question which the courts of equity have no power to resolve. The case of People ex rel. Morse v. Chambliss (1948), 399 Ill. 151, was not brought under the Public Monies Act. The plaintiff taxpayer there sued the property owner to enforce a tax lien of about $13,500 against defendant’s property, which lien he claimed to have arisen as a result of taxing officials’ unauthorized acceptance of $14,500 as full satisfaction for back taxes of $28,000. The court in Cham liss observed that ‘‘[t]here can be no question but that the suit is for the collection of taxes alleged to be due and owing’’ (399 Till. 151, 153), that the taxing body must direct the bringing of such suit, and that an individual taxpayer has no right to bring suit for the collection of taxes. The case sub judice is clearly distinguishable. It is designed to prevent the continued acceptance of an allegedly unlawful tax in lieu of all other taxes, when the appropriate taxing authorities have declined, and still decline, to follow ap- plicable statutory procedures requiring them to assess all of Gulf’s property in the same manner as other railroad properties assessed. The State asserts that administrative review is the appropriate method for determining the correctness of a vehicle because it was not intended to enlarge the rights of citizens or extend the established jurisdiction of a court of A6 equity. (Daly v. County of Madison (1941), 378 Ill. 357, 376.) Owens-Illinois Glass Co. v. McKibbin (1943), 385 Ill. 245, 256-57, reviewed the decisions of this court regarding injunctive relief in tax matters and acknowledged the firmly established principle that ‘‘equity has jurisdiction to enjoin the collection of an unauthorized tax, although there exists a coneurrent remedy at law.’’ This principle continues to be viable (see Sta-Ru Corp. v. Mahin (1976), 64 Ill. 2d 330, 334; Illinois Bell Telephone Co. v. Allphin (1975), 60 Ill. 2d 350, 359-61) despite a modification to that rule created in Illinois Bell. In Illinois Bell (60 Ill. 2d 350, 359), this court held that the above proposition from Owens was no longer applicable where an administrative remedy was available under the Administrative Review Act. The State, for the first time on appeal, asserts that prior to bringing this suit the plaintiffs failed to invoke correct administrative remedies (presumably administra- tive review of defendant Kirk’s assessment, or lack thereof, on the charter property). Since this argument was pre- sented for the first time on appeal, it is deemed waived, and the rule of Illinois Bell is thus inapplicable. We conclude that this action is one traditionally entertained by courts of equity. We do not, therefore, address the applicability of the Owens rule in an action seeking an iniunction under the Public Monies Act where administrative remedies are allegedly available. For the reasons above, we hold that plaintiff had standing and may properly maintain this action under the Public Monies Act. _ It is the position of both Gulf and the State that the imposition of the charter tax in the years 1972 to 1975 was lawful, but their rationales differ. Gulf claims that all of IC’s rights and obligations, including the charter tax and exemption from other taxes, were transferred to Gulf AT under the ‘‘plenary power’’ of the Commission to effec- tuate such transfer. The State argues that the charter constitutes a contract between IC and the State; that it was beyond the power of the Commission, by approving the plan of reorganization, to transfer the charter proper- ties, rights, and obligations to Gulf in abrogation of the charter contract; and that, therefore, IC has not been dis- solved and the charter tax is still due and owing from it. Plaintiff Snow maintains that the tax rights and obligations derived under the charter were personal to IC and were nontransferable without the consent of the Illinois General Assembly ; that the language of the charter itself anticipates and authorizes the sale of the IC charter property; that the charter itself expressly cuts off the right to IC’s tax exemptions when the charter property is sold to third persons; that the Commission’s approval of the Plan did not purport to transfer IC’s charter tax rights and immunities to Gulf; that the Commission’s power ex- tends to all acts necessary to effectuate the Plan (including the sale of all IC assets to Gulf) but its power does not extend to matters of taxation exclusively reserved to the States; and that the effect of the approved sale of all IC . property to Gulf was the dissolution of IC by operation of law. The history of IC’s organization is well recorded in the judicial opinions of this State. Most of the land was provided to the IC by land grant from the Federal govern- ment through the State. ‘The Congress of the United States * * * in 1850 passed an act granting to the State of Illinois a right of way through the public lands and the ownership of every alternate section of land for more than six miles in width on each side thereof, to aid the A8 State in constructing the railroad finally built by [IC].’’ (People v. Illinois Central R.R. Co. (1916), 273 Ill. 220, 234.) ‘‘The act provided that the lands granted should be subject to the disposal of the legislature of Illinois and be applied to the construction of the said road and branches, and to no other purpose. * * * By sec- tion 15 of the charter appellee was granted all the lands ceded to the State by the act of Congress of 1850; also depot grounds in the city of Cairo, the right of way and all the improvements made thereon by the Internal Improvement Commission and the Great Western Railway Company under the acts of 1837. This latter property was in addition to that ceded to the State by the act of Congress of 1850.’’ (State v. Illinois Central R.R. Co. (1910), 246 Ill. 188, 197-98.) ‘*When this charter was granted, the privilege or franchise to build this railroad was not considered of any special value. In the fifteen years, more or less, previous to the granting of this charter the public authorities had made several attempts to build a rail- road similar to the one that was finally constructed by appellant company, and in one act the State had appropriated three and a half million dollars for that purpose. * * * The year this charter was granted, Gov. French, then chief executive of the State, said: ‘The constitution having wisely debarred the State from again involving its credit in wild and visionary schemes of internal improvement, their chance of suc- cess rests upon individual skill, capital and enter- prise.’ ’’ People v. Illinois Central R.R. Co. (1916), 273 Ill. 220, 234-35. _ The land then granted to IC by the charter was largely ‘‘undeveloped and its ultimate value entirely problemati- cal.’’ People v. Illimois Central R.R. Co. (1916), 273 Ill. 220, 235. ‘*TIn passing the Land Grant Act, granting to the State the alternate sections of land afterward received by A9 appellant company from the State, Senator Stephen A. Douglas in the United States senate said: ‘* * * These lands have been in the market from fifteen to thirty years. The average time is about twenty-three years. But they will not sell at the usual price of $1.25 per acre because they are distant from any navigable stream or a market for produce. * * *’ ’’ People v. Ill- nois Central R.R. Co. (1916), 273 Ill. 220, 234. Likewise, the contractual nature of the charter and the 7% charter tax imposed on IC therein are firmly estab- lished. (State v. Illinois Central R.R. Co. (1910), 246 Ill. 188, 205-07, and cases cited therein.) Sections 18 and 22 of the charter, authorizing the charter tax, are set out in full in People v. Illinois Central R.R. Co. (1916), 273 Til. 220, 224-25. Section 22 provided: ‘*Sec. 22. The lands selected under said act of con- gress, and hereby authorized to be conveyed, shall be exempt from all taxation under the laws of this state, until sold and conveyed by said corporation or trus- tees, and the other stock, property and effects of said company shall be in like manner exempt from taxation for the term of six years from the passage of this act.’’ (Emphasis added.) 1851 Private Laws of L[llinois 72. Plaintiff Snow asserts that the above section of the charter contemplates the sale of the charter line and that the tax exemptions indicated therein are effective only until the property is sold and conveyed. He also asserts the transaction between IC and Gulf constituted such sale and conveyance of IC properties, which sale to Gulf cut off the tax exemption and did not effect a transfer to Gulf of the right and obligation to pay the charter tax in lieu of other taxes. The State, on the other hand, asserts that the above charter section contemplated only the sale of non-right- of-way properties to raise funds from time to time. Such A10 properties would lose their tax-exempt status upon trans- fer to a third party. This section does not, it is asserted, speak to the sale of the railroad as an entity and, consequently, does not speak to the question of charter rights and obligations in the hands of a purchaser of the railroad as an entity. Both the State and Gulf urge, in this regard, that the intent of the charter may be gleaned by referring to the subsequent actions of the legislature in 1885 (Ill. Rev. Stat. 1975, ch. 114, par. 165), and in 1933 (Ill. Rev. Stat. 1975, ch. 32, par. 157.160). The former act provides, in terms virtually identical to those used in the latter, that nothing in the act ‘‘shall be so construed as to authorize or permit the Illinois Central Railroad Company to sell the railway constructed under its charter, * * * except subject to the rights of the state under its con- trac with said company, * * * under the provisions of said charter.’’ The State urges that the intent to disallow uni- lateral abrogation of the charter terms is evident in these enactments. Gulf, on the other hand, argues that these enactments support its proposition that the charter per- mitted the sale of the IC charter property, subject only to the buyers assuming the IC’s obligations to the State under the charter. The circuit court concluded (as was suggested by Snow) that section 22 of the charter contemplated a sale or con- veyance of the railroad as an entity. This interpretation is erroneous. The cited portion of section 22 refers to two broad classes of properties: those ‘‘lands * * * hereby authorized: to be conveyed,’’ and the ‘‘other stock, property, and effects of said company.’’ (Emphasis added.) We believe the phrase ‘‘lands * * * hereby authorized to be conveyed’’ necessarily refers to the land adjacent to and along the railroad right-of-way, the sale of which was All specifically provided for by section 16 of the charter. (1851 Private Laws of Illinois 70.) That the sale of less than all of the railroad property was authorized by the charter terms is implicit in the use in section 22 of the specific term ‘‘lands’’ rather than the more general term ‘‘properties.’’ Furthermore, immediately after the refer- ence to ‘“‘lands * * * authorized to be conveyed,’’ the charter deals with ‘‘other stock, property, and: effects * © *” (Emphasis added.) Although we are unable to conclude that these provisions authorize the sale of the railroad as an entity, we are likewise unable to infer from these and other charter terms that the IC was forbidden to make such a sale. No language in the charter may be fairly interpreted to prohibit such sale, and we decline the State’s invitation to construe the acts of the legislature, 34 years or more after the charter’s acceptance by IC and enactment by the General Assembly, to imply such a term in the contract between IC and the State. The State nevertheless asserts that, where a corpora- tion such as a railroad has been granted a charter franchise intended to be exercised ‘‘for the public good, the due performance of those functions being the consideration of the public grant, any contract which disables the corpora- tion from performing those functions which undertakes, without the consent of the State, to transfer to others the rights and powers conferred by the charter, and to relieve the grantees of the burden which it imposes, is a violation of the contract with the State, and is void as against public policy.’’ (Thomas v. West Jersey R.R. Co. (1879), 101 U.S. 71, 83, 25 L. Ed. 950, 952.) By this and like citations, the State asserts that the unilateral acts of the IC, purporting to transfer all its assets, rights and obligations to Gulf without State consent, constitutes a forfeiture and rever- 2 Al2 sion of the railroad. It is also suggested, inferentially, that the State has a contractual interest, implied by law and because of public policy, in the continued existence of the charter, maintenance of the charter line by IC, and the right to collect the 7% charter tax from IC. We take no issue with the holding in Thomas, but we believe its effect is overriden to the extent necessary to effect a transaction approved by the Commission under 49 U.S.C. see. 5 (1970). Section 5(11) provides: ‘‘[A]ny carrier * * * participating in * * * any trans- action approved by the Commission [under section 5] * * * shall have full power * * * to carry such transac- tion into effect and to own and operate any properties and exercise any control or franchises acquired through said transaction without invoking any ap- proval under State authority; and any carriers * * * participating in a transaction approved or authorized under the provisions of this section shall be and they are relieved from the operation of * * * prohibitions of law, Federal, State or municipal, insofar as may be necessary to enable them to carry into effect the trans- action so approved or provided for * * *, and to hold, maintain, and operate any properties and exercise any control or franchises acquired through such transac- tion. *.* * 9?) The power of the Commission to approve transactions under section 5 in derogation of State law, of course, ultimately derives from the powers of Congress under the supremacy clause of the United States Constitution (U.S. Const., art. VI), which provides that a constitutional act of Congress shall be the supreme law of the land, the laws _of any State to the contrary notwithstanding, and from the interstate commerce clause (U.S. Const., art. I, sec. 8), which empowers Congress to regulate commerce among the several States. It has been long recognized, however, Al3 that congressional power to occupy a field of law is not necessarily coextensive with its exercise of that power. Willson v. Black Bird Creek Marsh Co. (1829), 27 U.S. (2 Pet.) 245, 7 L. Ed. 412; Cooley v. Board of Wardens (1851), 53 U.S. (12 How.) 299, 13 L. Ed. 996. It is, of course, clear that an agency of Congress has authority to act only within the scope of powers delegated to it by statute. Relevant to an understanding of the scope of the authority given the Commission under 49 U.S.C. see. 5 is the brief history provided by the Supreme Court of the development and regulation of our nationwide system of railroads: ‘‘The basic railroad facilities of the United States were constructed under state authorization and re- strictions by corporations whose powers and limita- tions were prescribed by state legislatures, or resulted from limitations on the states themselves. Construction in reference primarily to local or regional transporta- tion needs created duplicating and competing falilities in some areas and provided inadequate ones in others. Expansion neressary to serve advancing national fron- tiers was stimulated by extensive subsidies from the Federal Government, largely in the form of land grants. But the stress and strain of World War I brought home to us that the railroads of the country did not function as a really national system of trans- portaion. Tha crisis also made plain the confusions, in- efficiencies, inadequacies and dangers to our national defense and economy flowing from the patchwork railroad pattern that local interests under local law had created. The demand for an integrated, efficient and coordi- nated system of rai) transport, equal to the needs of Al4 our national economy and defense, resulted in the Transportation Act of 1920. In a series of decisions on particular problems, this Court defined the general purposes of that Act ***. The tenor of all of these was to confirm the power and duty of the Interstate Com- merce Commission, regardless of state law, to control rate and capital structures, physical make-up’ and relations between carriers, in the light of the public interest in an efficient national transportation system. [Citations.] As a means to this end, the 1920 Act required the Commission to prepare and adopt a plan for nationwide consolidations of the railway properties of the Coun- try. eee The Transportation Act of 1940 relieved the Com- mission of formulating a nationwide plan of consoli- dations. Instead, it authorized approval by the Com- mission of carrier-initiated, voluntary plans of merger or consolidation if, subject to such terms, conditions and modifications as the Commission might prescribe, the proposed transactions met with certain tests of pub- lie interest, justice and reasonableness, in which case they should become effective regardless of state au- thority. *** This Court has recently and unanimously said in reference to this Act, ‘Congress has long made the maintenance and development of an economical and efficient railroad system a matter of primary na- tional concern. Its legislation must be read with this purpose in mind.’ Seaboard Air Line R. Co. v. Daniel, 333 U.S. 118.’’ Schwabacher v. Unite dStates (1948), 334 U.S. 182, 191-93, 92 L. Ed, 1305, 68 S. Ct. 958, 963- 64. - NN ea - Ald ' The Commission’s approval of a section 5 transaction is dependent upon, among other considerations, a finding that such transaction will be ‘‘consistent with the public interest.” (Schwabacher v. United States (1948), 334 U.S. 182, 194, 92 L. Ed. 1305, 1313, 68 S. Ct. 958, 965.) In its opinion approving the subject transaction, the Commission pointed out at page 841: ‘‘The phrase ‘consistent with the public interest,’ as judicially construed, means compatible with, or not contradictory or hostile to the public interest. See Pa- cific Power and Light Co. v. Federal Power Comm., 111 F. (2d) 1014, 1016. As was stated by the Supreme Court in New York Central Securities Corp. v. United States, 287 U.S. 12, 25: ‘The term ‘‘ public interest’’ *** has a direct relation to the adequacy of our transportation system, to its essential conditions of economy and efficiency and to appropriate provision and best use of transporta- tion facilities.’’’ (Illinois Central Gulf R.R. Co.— Acquisition—Gulf, Mobile & Ohio R.R. Co., [llinois Central R.R. Co. et al. (1971), 338 I.C.C. 805, 841.) The Commission, further, made a specific finding that the transaction was in the best interest of the public. (338 L.C.C. 805, 834.) We therefore believe that public policy was adequately served by the Commission’s necessary finding that the transaction was in the public interest. In- sofar as necessary to effect a section 5 transaction, sec- tion 5(11) suspends any charter term, express or implied, which would otherwise prevent the sale of IC. As the sale of all IC assets, including the substantial charter line prop- erties, was the very foundation of the transaction approved by the Commission, such sale was clearly encompassed A16 within the section 5(11) protection from inhibiting State laws. Seaboard Air Line R.R. Co. v. Daniel (1948), 333 U.S. 118, 92 L. Ed. 580, 68 8. Ct. 426. It has been observed that ‘‘[t]he law does not expressly dissolve the selling corporation, but it leaves it without stock, officers, property, or franchises. A corporation with- out shareholders, without officers to manage its business, without property with which to do business, and without the right lawfully to do business, is idssolved by the opera- tion of the law which brings this condition into existence.” (Rochester R. Co. v. Rochester (1907), 205 U.S. 236, 256, 51 L. Ed. 784, 792, 27 S. Ct. 469.) The State, nevertheless, fur- ther objects that the chancellor incorrectly ruled on the issue of IC’s dissolution because that issue has never been presented to the court on proper pleadings where the par- ties are correctly aligned. (We point out in this regard that the State, though given notice and invitation to attend the Commission hearings on the subject plan of reorganization, declined to attend.) The circuit court afforded the State the opportunity to plead this issue and provided a 30-day con- tinuance expressly for that purpose. The State did not so plead. We therefore hold that, under all these circum- stances, the circuit court correctly ruled that the IC was dissolved. | Snow urges that, although approval of the Plan was sufficient to effect a sale of the IC properties to Gulf, such approval did not confer upon Gulf the IC’s charter tax status. He maintains that these tax exemptions and ob- ligations did not survive the sale and conveyance of the charter line properties to Gulf. Snow’s argument is three- pronged. First, section 22 provides that the tax-exempt status of the charter property existed only until the charter property was sold and conveyed. Second, he argues that the Al7 so-called Charter Immunity Cases (cited later) establish that tax exemptions created as to one corporation are per- sonal to that corporation and are not part of the general franchises which may be transferred upon sale to another corporation. Instead, the new corporation becomes subject to the general tax laws existing at the time of its formation. Third, Snow poses that the Commission’s approval did not have the effect of overriding the nontransferability of tax exemptions under State law because such override was not necessary to effect the section 5 transaction, and because the Commission did not purport to address the State taxa- tion issue. Snow’s first argument fails because section 22 of the charter, as discussed above, cuts off the tax exemption of charter properties ‘‘hereby authorized to be conveyed.” Section 22 does not deal with the sale of the charter line as an entity, or with the transfer or loss of the special tax status incident thereto. No other charter provision deals with the tax status of the charter properties in the hands of a third party. However, in the absence of a specific charter provision or a valid act of the General Assembly expressly providing therefor, we hold that the tax ex- emption and charter tax granted IC were personal to IC and could not pass on sale to Gulf. The body of law evolved in the 10 so-called Charter Immunity Cases amply sup- ports this conclusion. Yazoo & Mississippi Valley R.R. Co. v. City of Vicksburg (1908), 209 U.S. 358, 52 L. Ed. 833, 28 S. Ct. 510; Rochester Ry. Co. v. City of Rochester (1907), 205 U.S. 236, 51 L. Ed. 784, 27 S. Ct. 469; Yazoo &€Missis- sippi Valley R.R. Co. v. Adams (1901), 180 U.S. 1, 45 L. Ed. 395, 21 S. Ct. 240; Chesapeake & Ohio Ry. Co. v. Miller (1885), 114 U.S. 176, 29 L. Ed. 121, 5 8. Ct. 813; St. Louis, Iron Mountain @ Southern Ry. Co. v. Berry (1885), 113 Al8 U.S. 465, 28 L. Ed, 1055, 5 S. Ct. 529; Memphis ¢ Little Rock R.R. Co. v. Berry (1884), 112 U.S. 609, 28 L. Ed. 837, 5 S. Ct. 299; Louisville @ Nashville R.R. Co. v. Palmes (1883), 109 U.S. 244, 27 L. Ed. 922, 3 S. Ct. 193; Wilson v. Gaines (1881), 103 U.S. 417, 26 L. Ed. 401; Atlantic d Gulf R.R. Co. v. Georgia (1879), 98 U.S. 359, 25 L. Ed. 185; Morgan v. Louisiana (1876), 93 U.S. 217, 23 L. Ed. 860, See Cincinnati, Indianapolis & Western R.R. Co. v. Barrett (1950), 406 Til. 499, 504-05. Did the Commission’s approval of the sale of the IC’s property to Gulf effect a transfer to Gulf of IC’s charter tax status which otherwise ended under the Charter Im- munity Cases? It is Gulf’s thesis that the Commission’s approval of a plan of reorganization operates, under section 5(11), to suspend the effect of State tax law. Gulf’s reading of section 5(11) emphasizes reference to the ‘‘plenary powers’’ of the Commission, but Gulf ignores the effect of the express limitation of that section to suspensions of State law only ‘‘insofar as may be necessary to enable them to carry into effect the transaction so approved ***.”’ 49 U.S.C. see. 5(11) (1970). As discussed above, Congress’ power to fully occupy a field of law is not necessarily coextensive with the exercise of that power. On the other hand, matters of State taxation are reserved to the States under the tenth amendment to the Constitution. (See Thomson v. Union Pacific R.R. Co. (1870), 76 (9 Wall.) U.S. 579, 591, 19 L. Ed. 792.) The power of the State legislature to levy and collect taxes is unrestricted where such tax is not otherwise unconstitution- al. (People ex rel. Schuler v. Chapman (1939), 370 Ill. 430, 437; see also State v. Illinois Central R.R. Co. (1910), 246 Til. 188, 206). When the United States Constitution has granted the Federal government plenary jurisdiction in a certain field, and an act of Congress within that field im- Al9 pinges upon an area traditionally reserved to the States (taxation, in this instance), a rule of constrution has grown up to shelter this delicate area of State’s rights. This rule affirms that ‘‘Congress may circumscribe its regulation and occupy a limited field” and prescribes that ‘‘the in- tention to supersede the exercise by the state of its au- thority as to matters not covered by the Federal legislation is not to be implied unless the act of CUngress fairly inter- preted is in conflict with the law of the state.” Atchison, Topeka & Santa Fe Ry. Co. v. Railroad Com. (1930), 283 U.S. 380, 392-93, 75 L. Ed. 1128, 1137, 51 S. Ct. 553, 556. Section 5(11) of the Act reveals congressional intention to abrogate State law in section 5 transactions no further than necessary to effect than transaction. It is our opinion that a fair reading of that act does not reveal a congres- sional intent to supersede State law in the matter of State taxation, where the otherwise applicable State tax imposes no unconstitutional burden upon interstate commerce. As the authority of an agency of Congress extends no further than the act conferring that authority, it is our opinion that the Commission’s approval of the Plan did not operate to extend the otherwise invalid charter tax and concurrent exemptions to Gulf. This conclusion is further based on the fact that the Com- mission did not address, much less attempt to adjudicate, the question of such charter tax exemptions in its detailed, 76-page opinion approving the transfer. The Plan itself no- where makes any explicit reference to the charter tax obli- gations of IC or of their transfer to Gulf. Only in exhibit C to the Plan, entitled ‘‘Indenture Sale, Assignment and Transfer,’’ is any reference whatsoever made to IC’s char- ter tax obligations. Paragraph 3(e) thereto provides that Gulf ‘“‘assumes all contracts, obligations or liabilities *** A20 and agrees that any lien of the State *** upon, or right to tax, the charter line property *** in accordance with the provisions of the charter ***, approved February 10, 1851, shall not be released, suspended, modified, altered, remitted or in any manner diminished or impaired as against [Gulf] but the same, as applicable to the charter line property *** shall be and remain *** binding upon [Gulf].’’ This provision appears to reffect IC’s desire and Gulf’s assent that [C be held harmless by Gulf for any charter taxes thereafter imposed upon IC by the State. Further, no ex- press reference to the charter tax exemptions is made any- where in the Plan, the exhibits, or the opinion of the Com- mission. Fairly considered, the Commission’s approval of the plan of reorganization, which plan contained no reference to IC’s special tax exemption and referred to IC’s tax status only obliquely in an exhibit thereto, cannot be deemed to authorize the transfer to Gulf of IC’s charter tax obliga- tions or immunities, in the absence of some express refer- ence to the contrary in the Commission’s opinion. No such reference here exists. We hold that IC’s special tax obliga- tion and immunities did not pass to Gulf under the terms of IC’s charter, or by enabling legislation, or by virtue of the Commission’s approval of the reorganization. It fol- lows that the taxes generally applicable to railroads in this State were applicable to Gulf commencing August 10, 1972. It remains for this court to determine whether these gen- erally applicable State taxes can and should be applied retroactively upon Gulf. Gulf maintains that the taxes may be assessed and collected only pursuant to statute, and that there is no statutory scheme which permits such retroactive application; that reassessment may be accom- plished only by way of administrative review prior to finalization of the assessments, and once these have been A21 certified to the county clerk by the Department of Local Government Affairs there can be no reassessment. The tax action which the chancellor ordered the Department of Local Government Affairs to take herein is erroneously characterized by Gulf as a ‘‘ reassessment.’’ Such characteri- zation is based upon the following: section 80 of the Revenue Act of 1939 (Ill. Rev. Stat. 1975, ch. 120, par. 561) provides that all real estate property be assessed as a unitfi Gulf’s charter line property must necessarily be included in any such unit; there is no statutory authority for assessing the charter line separately ; and, therefore, the Gulf property was fully assessed for the years in question (albeit, Gulf concedes, ‘‘ perhaps erroneously’’). As applied to the charter line property, historically treated as a separate tax entity, this argument clearly elevates form over substance. Sections 79 through 90 of the Revenue Act of 1939 (Tll. Rev. Stat. 1975, ch. 120, pars. 560-571) provide ample direction, and section 220 (Ill. Rev. Stat. 1975, ch. 120, par. 701) provides the Department ample authority to access the charter property for years past. We note, parenthetically, that defendant Kirk, who is charged with the duties of this assessment, does not deny the assessment can be carried out under his statutory author- ity, nor that such duty would be unduly burdensome. The cireuit court’s judgment order provided that, effective August 10, 1972, ‘‘the Director of the Depart- ment of Local Government Affairs shall assess the Charter Property in the same manner as he assesses the property of other railroads in the State and he shall transmit the lists and information to the various proper taxing authorities of the Illinois counties in which Charter Property is located.’’ (Emphasis added.) Section 86 of the Revenue Act of 1939 (Ill. Rev. Stat. 1971, ch. 120, par. 567) contemplates (with minor variations) that the equalized assessed value of the ar. A22 railroad properties subject to assessment shal] be listed and taxed in the several taxing districts in the proportion that the length of track within the taxing district bears to the total length of track owned or used in the State. Thus, the circuit court was in error in its concluding phrase, ‘‘in which Charter Property is located,’’ for this phrase has the effect of directing the transmission of such assessment lists only to the taxing districts in which the charter line is located. By the order of the circuit court, Guli was responsible for property taxes as of August 10, 1972. One of the attorneys for the plaintiffs pointed out at oral argument that section 81 of the Revenue Act of 1939 (Tll. Rev. Stat. 1971, ch. 120, par. 562) requires new railroad companies to file their schedules ‘‘pertaining to real property in January, and pertaining to personal property on April 1 next after the location of their road.’’ We interpret this to mean that filling was required by January and April 1973, respectively, and therefore conclude that the trial court erred in requiring Gulf, a new corporation, to be respon- sible for the period from August 10, 1972, through December 31, 1972. As stated above, there is adequate statutory authority to hold Gulf legally subject to retrospective taxation for the years 1973 to 1975. Separate considerations govern whether, for equitable reasons, Gulf should be required to make such payments in addition to the 7% gross receipt tax concededly paid for 1973, 1974 and 1975. Because there was no express charter authorization for the transfer of IC’s charter tax status to Gulf, and because the law of the Charter Immunity Cases holds such attempted trans- fers invalid in the absence of express legislation, Snow argues that Gulf knew or should have known that such tax A23 status could not be transferred to it by IC. He further urges that the judgment makes no change in existing law, unlike cases where this court has provided only prospective application. Gulf, to the contrary, asks not to be subjected to ‘‘double taxation’’ by the retrospective application of this judgment. We believe the circumstances of this case require us to fashion a judgment which does not impose an inequitable tax burden upon Gulf. The limited effect of the Commission’s approval upon IC’s charter tax status was not clearly foreshadowed in view of the constitutional powers of Congress to regulate commerce between the States and the powers to suspend State law bestowed upon the Commission in section 5(11). Moreover, Gulf could reasonably have taken various acts of the State legislature, subsequent to the charter, to indicate that the State would attempt to hold Gulf responsible for he payment of the charter tax. Gulf could likewise reasonably have expected the State to view the charter tax as the fair equivalent of other taxes, and could reasonably have expected the State to take the posture that the State did ultimately take—to accept the charter taxes in lieu of all other taxes. Based on the foregoing, we determine that partial retrospective application is appropriate. The trial court’s judgment order is modified to provide that if any additional tax is found to be due and owing from Gulf for any one of the years 1973, 1974, and 1975, such tax shall be limited to an amount that exceeds the charter tax. already paid to the State for that year. The judgment of the circuit court is hereby affirmed as modified, and the cause is remanded for further proceedings consistent with the views expressed herein. Affirmed as modified; cause remanded. CLARK and DOOLEY, JJ., took no part in the consideration or decision of this case. eee ents eee Bl APPENDIX B JUDGMENT ORDER OF THE CIRCUIT COURT OF COOK COUNTY IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS COUNTY DEPARTMENT — CHANCERY DIVISION ROBERT H. SNOW, individually and» on behalf of all other taxpayers similarly situated, Plaintiff, vs. ALAN J. DIXON, State Treasurer of Illinois, GEORGE W. LINDBERG, Comptroller of State of Lllinois, ROBERT H. ALLPHIN, Director } No. 73 CH 2723 of the Department of Revenue of Illinois, and FRANK A. KIRK, Director of the Department of Local Government Affairs of Illinois, and ILLINOIS CENTRAL GULF RAILROAD CO., a Delaware cor- poration, Defendants. J JUDGMENT This cause coming on to be heard upon motion for sum- mary judgment of plaintiff ROBERT H. SNOW (‘‘Snow’’), the motion for summary judgment of defendant Lllinois Central Gulf Railroad Co. (‘‘Gulf’’), and the motion for summary judgment of Alan J. Dixon (‘‘Dixon’’), State Treasurer of Illinois, George W. Lindberg (‘‘Lindberg’’), Comptroller of the State of Illinois, Robert H. Allphin (‘‘Allphin’’), Director of the Department of Revenue of —_— * .» —-= B2 Illinois, and Frank A. Kirk (‘‘Kirk’’), Director of the Department of Local Government Affairs of [Illinois (Dixon, Lindberg, Allphin and Kirk being hereinafter some- times referred to collectively as the ‘‘State Defendants’’), and certain stipulations of fact submitted by the parties herein; and the Court having examined the pleadings, cer- tain stipulations of fact, certain interrogatories and their answers, certain stipulated depositions, and the memoranda of law filed herein, having heard the arguments and repre- sentations of counsel, and being otherwise fully advised in the premises: THE COURT DOES HEREBY FIND: 1. Snow has been, and now is, a citizen of the State of Illinois, a resident of the City of Chicago, County of Cook, State of Illinois, and is a taxpayer, both in and to the County of Cook and the State of Illinois; that this lawsuit is properly brought as a taxpayer’s suit under ‘‘an Act in relation to suits to restrain and enjoin the disbursement of public monies by officers of the State’’, (Ill. Rev. Stats. ; 1973 Ch. 102, § 11 et seq.) that Snow’s claims are typical of the claims of said taxpayers; and that Snow and his coun- sel will fairly and adequately protect the interests of the taxpayers of the State of Illinois. 2. That by private law in force February 10, 1851, the Illinois General Assembly enacted ‘‘An Act to Incorporate the Illinois Central Railroad Company”’ (the ‘‘ Private Law’’), certain portions of which Private Law provide as follows: (a) Section 1 of said Private Law provides as follows: ‘*Whereas, in the judgment of this general assembly, the object of incorporating the Central Railroad Com- pany cannot be attained under general laws; therefore, Section 1, Be it enacted by the people of the State of B3 [llinois, represented in the General Assembly, That Robert Schuyler, George Griswold, Gouverneur Morris, Franklin Haven, David A. Neal, Robert Rantoul, junior, Jonathan Sturgis, George W. Ludlow, John F. A. Sanford, Henry Grinnell, William H. Aspinwall, Leroy Wiley, and Joseph W. Alsop, and all such per- sons as shall hereafter become stockholders in the company hereby incorporated, shall be a body politic and corporate, by the name and style of the ‘‘Illinois Central Railroad company,’’ and under that name and style shall be capable of suing and being sued, im- pleading and being impleaded, defending and being defended against, in law and equity, in all courts and places whatsoever, in like manner and as fully as natural persons; may make and use a common seal, and alter or renew the same at pleasure; and by their said corporate name and style, shall be capable, in law, of contracting and being contracted with, shall be and are hereby invested with the powers, privileges, im- munities and franchises, and of acquiring, by purchase or otherwise, and of holding and conveying, real and personal estate which may be needful to carry into effect, fully the purposes and objects of this act.’’ 3. That certain sections, as amended, of the aforesaid Private Law appear in Illinois Revised Statutes, 1973 Ch. 120, as follows: “TLLINOIS CENTRAL RAILROAD’’ Act of Feb. 10, 1851, R. S.-1847, p. 909 373. Five percent of income.] §18. In considera- tion of the grants, privileges and franchises herein conferred upon said company for the purposes afore- said, the said company shall, on the first Mondays of December and June in each year, pay to the De- partment of Revenue of the State of Illinois five per centum on the gross or total proceeds, receipts or in- come deprived from said road and branches, for the six months then next preceding. The first payment of such percentage on the main trunk of said road to B4 commence four years from the date of said deed of trust, and on the branches, six years from the date aforesaid, unless said road and branches are sooner completed, then from the date of completion. And for the purpose of ascertaining the proceeds, receipts or income aforesaid, an accurate account shall be kept by said company, a copy whereof shall be furnished to the Governor of the State of Illinois and to the Depart- ment of Revenue; the truth of which account shall be verified bv the affidavits of the treasurer and secretary of such company. And for the purpose of verifying and ascertaining the accuracy of such account, full power is hereby vested in the Governor of the State of Illi- nois, the Director of the Department of Revenue, or any other person by law appointed, to examine the books and papers of said corporation, and to examine, under oath, the officers, agents, and employees of said company, and other persons. And if any person so ex- amined by the Governor or other authority, shall knowingly and wilfully swear falsely, or if the other officers making such affidavits shall knowingly and wil- fully swear falsely, every such person shall be subject to the pains and penalties of perjury. 374. Land taxable when conveyed—Application of tax, etc.] § 22. The lands selected under the act of congress entitled ‘‘An Act granting the right of way, and making a grant of land to the states of Illinois, Mississippi and Alabama, in aid of the construction of a railroad from Chicago to Mobile’’, passed September 20, 1850, and authorized by this Act to be conveyed shall be exempt from all taxation under the laws of this state, until sold and conveyed by the Illinois Cen- tral Railroad Company or the trustees designated in this Act. The stock, property and assets belonging to the company shall be listed by the president, secretary or other officer, with the Department of Revenue and an annual tax for state purposes shall be assessed, upon all the property and assets of every name, kind and description belonging to that company. Whenever the taxes levied for state purposes shall exceed %4 of Bd 1% per year, such excess shall be deducted from the gross proceeds or income required to be paid by the company to the state, and the company is hereby ex- empted from all taxation of every kind, except as here- in provided for. The revenue arising from such taxa- tion, and the 5% of gross or total proceeds, receipts or income aforesaid, shall be paid to the Department of Revenue and covered into the general revenue fund in the state treasury and applied to the payment of in- terest-paying state indebtedness until the extinction thereof. In case the 5% provided to be paid into the state treasury and the state taxes to be paid by the corporation do not amount to 7% of the gross or total proceeds, receipts or income, however, then the com- pany shall pay the difference, so as to make the whole amount paid equal, at least to 7% of the gross receipts of the company.”’ 4. That certain lands were thereafter conveyed to the Illinois Central Railroad Company (‘‘IC’’) pursuant to the Private Law, and other ancillary lands having been ac- quired by IC, all of which lands are hereinafter referred to as the Charter Property, and pursuant to the Private Law, IC began to pay, with respect to the Charter Property the special tax described in §§ 18 and 22 of the Private Law, such special tax being hereinafter referred to as the Charter Property Tax, and also pursuant to the Private Law, IC with respect to the Charter Property only, became and was exempt from all state and local taxation other than the Charter Property Tax. 5. That a Plan of Reorganization was approved by the Interstate Commerce Commission whereby Illinois Cen- tral Gulf Railroad Company (‘‘Gulf’’) acquired the assets of Illinois Central Railroad Company (‘‘IC’’) and Gulf, Mobile & Ohio Railroad Company (‘‘GM&O’’) and Illinois Central Railroad Company was to be dissolved. This Plan ae B6 became effective on August 10, 1972 and under said Plan IC sold and conveyed all of its assets, including the Charter Property, to Gulf. 6. That the parties have stipulated that the discovery deposition of Harold J. Weldrake (‘‘Weldrake’’), an em- ployee of Allphin’s, heretofore taken in this cause, as cor- rected by said deponent, may be used in lieu of calling Wel- drake as a witness and that at pp. 6, 17-18, 23 of his deposi- tion Weldrake (whose testimony is not contradicted by any other evidence) stated that at the time of the taking of his deposition the Illinois Department of Revenue employed three full-time auditors (one permanently assigned and two in training), whose aggregate annual salary was $41,- 400.00, to verify and ascertain the accuracy of the accounts and returns submitted in connection with the Charter Prop- erty and the Charter Property Tax. 7. That Snow submitted certain interrogatories to the State Defendants and that in their answer to Interrogatory 11, the State Defendants state that in relation to the assess- ment and collection of the Charter Property Tax, for the period between 1968 and May 1, 1975, there are literally hundreds of employees of the State of Iilinois who had as some portion of their responsibilities, duties relating to any or all of the following: (a) Verification of the accuracy of the list of stock, property and assets submitted; (b) Recording of the list of stock, proper*y and assets submitted ; (c) Establishing the valuation of the items contained on the list of stock, property and assets; (d) Establishing the tax rate to be applied; (e) Establishing the tax to be assessed against each such item on the list of stock, property and assets; B7 (f) Receiving or processing in any way tex payments; (g) Verifying or ascertainir, whether the total tax paid amounts to seven percent of the gross or total pro- ceeds, receipts or income, or issuing deficiency notices, where applicable ; or (h) Secretarial or clerical duties in connection with the duties or responsibilities above described or in relation or in connection with any duty or responsibility relating in any way to the procedures set forth in Section 374 of the Illinois Revised Stats., 1973, Chapter 120. 8. That unless enjoined and restrained, the State De- fendants, or some of them, as to Gulf, will continue to col- lect and to enforce the collection of the Charter Property Tax, and will continue to spend public funds of the State of Illinois in connection with the enforcement and collection of the Charter Property Tax. 9. That since August 10, 1972, Gulf, and not IC, has been filing Charter Property Tax accounts and returns, and has been paying the Charter Property Tax on the Charter Property. 10. That under the Plan of Reorganization, the Charter Property Tax did not become an objection of Gulf, and Gulf did not acquire IC’s exemption from all other taxation as described in said Section 22 of the 1851 Charter. 11. That effective as of August 10, 1972, the Director of the Department of Local Governmental Affairs should assess the Charter Property in the same manner as he assessed the property of other railroads in the State and transmit the lists and information to the various proper taxing authorities of the Illinois counties in which Charter Property is located. 12. That trusts should be declared by this Court for all tax moneys heretofore paid by Gulf on the Charter B8 Property which have not been paid into the general state treasury and for all future sums of money paid by Gulf, subsequent to the date of this judgment, on account of taxes of any nature on or pertaining to the Charter Prop- erty, which moneys should be placed into segregated funds, at interest, pending the further order of this Court, and said funds not to be disbursed or commingled pending further order of this Court. 13. That Snow is without adequate remedy at law and is entitled to the injunctive relief described herein and that Snow’s motion for summary judgment should be granted, and the motions for summary judgment of Gulf and of the State Defendants should be denied. 14, That the relief prayed for in paragraphs A and B of the prayer in the amended complaint is proper and should be granted to the extent hereinafter provided, that pursuant to Section 45(4) of the Civil Practice Act of Illinois, this judgment will terminate the litigation except for the matters reserved herein, and that there is no just reason for delay- ing the enforcement of this judgment or an appeal there- from. 15. That the charter granted to IC was a binding con- tract between the State of Mlinois and IC. IT IS THEREFORE ORDERED, DECLARED, AD- JUDGED AND DECREED AS FOLLOWS: A. The motions for summary judgment of Gulf and the State Departments are denied, the motion for summary judgment of Snow is granted, and judgment is entered in favor of Snow and against the defendants. B. The Charter Property Tax did not become an obli- gation of Gulf and the exemptions from state and local taxation granted to IC and the Charter Property under the B9 1851 law were not as a matter of law conveyed to or ac- quired by Gulf pursuant to the Plan of Reorganization; and IC’s sale and conveyance of the Charter Property to Gulf, pursuant to said Plan, was a sale and conveyance of the Charter Property within the meaning of Section 22 of the 1851 law, so that effective August 10, 1972, the Charter Property lost its exemption from all applicable state and local taxation from which it previously was exempt. C. Effective as of August 10, 1972, the Director of the Department of Local Government Affairs shall assess the Charter Property in the same manner as he assesses the property of other railroads in the State and he shall trans- mit the lists and information to the various proper taxing authorities of the Illinois counties in which Charter Prop- erty is located. D. Pursuant to said Plan of Reorganization and ap- proval thereof by the Interstate Commerce Commission, IC has been duly dissolved. E. The State Defendants are permanently enjoined and restrained from continuing to collect or from expending public funds of the State of Illinois in connection with the enforcement and collection of the Charter Property Tax from Gulf, and such a permanent writ of injunction is or- dered to be issued forthwith, by the Clerk and under the Seal of this Court. F. Trusts are hereby declared for all tax moneys here- tofore paid by Gulf on account of the Charter Property Tax which have not been paid into the general revenue fund of the State Treasury and for all future sums of money paid by Gulf, subsequent to the date of this judgment, on account of taxes of any nature on or pertaining to the Charter Property and the Court retains jurisdiction thereof. Cs ae 7 B10 G. With respect to all moneys heretofore paid by Gulf on account of the Charter Property Tax which have not been paid into the general State Treasury and for all future moneys which Gulf may pay on account of the Charter Prop- erty Tax subsequent to this judgment, pending the further order of this Court, Allphin, or his successor, and Dixon, or his successor, are ordered to place all such sums of money into a segregated protest fund, at interest, said fund not to be disbursed or commingled, pending the further order of this Court, and a permanent writ of injunction is ordered to be issued forthwith, by the Clerk and under the Seal of this Court. H. With respect to all moneys paid by Gulf, subsequent to this judgment, on account of state taxes of any nature (other than the Charter Property Tax) on or pertaining to the Charter Property, pending the further order of this Court, the State Defendants are ordered to place all such sums of money into one or more segregated funds, at inter- est, said funds or funds not to be disbursed or commingled, pending the further order of this Court, and a permanent writ of injunction is ordered to be issued forthwith, by the Clerk and under the Seal of this Court. I. With respect to all sums of money hereinafter paid by Gulf to the Cook County Collector on behalf of Cook County taxing bodies, subsequent to the date of this judgment, on account of all back taxes (if any) resulting from assess- ments (if any) for the period between August 10, 1972 and the date of this judgment (including but not limited to per- sonal property taxes and real estate taxes), on or pertain- ing to the Charter Property, such tax moneys shall be held by defendant Edward J. Rosewell, Cook County Collector (‘‘Rosewell’’), or his successors, in one or more segregated interest bearing accounts, until the further order of this Court. : Bil J. With respect to all sums of money when paid by Gulf on account of all future taxes due for assessments made for the first full taxable year after the date of this judgment (including but not limited to personal property taxes and real estate taxes) on or pertaining to the Charter Property, payable to the Cook County Collector on behalf of Cook County taxing bodies, such moneys shall be deemed to have been paid under protest in accordance with the statutes per- taining to the payment of taxes under protest, and one third of such tax moneys when paid shall be held by Rosewell, or his successors, in one or more segregated interest bearing accounts until the further order of this Court. The remain- ing two thirds shall be distributed to the taxing bodies so entitled. K. Without limiting the finality of this judgment, the Court retains jurisdiction of this cause for the purpose of entering appropriate orders with respect to the award of plaintiff’s costs and counsel fees, and the enforcement of this judgment. L. This cause is continued generally, to be called for hearing upon five days’ notice from any party in the event that defendants do not perfect an appeal within the time permitted by law or following a final determination of any appeal. Dated this 17th day of May, 1976. ENTER: DONALD JJ. O’BRIEN, Judge. NEISTEIN, RICHMAN, HAUSLINGER & YOUNG, Ltd. Attorneys for Plaintiff 33 N. La Salle Street Chicago, Llinois 60602 782-2555 Cl APPENDIX C DECISION OF THE INTERSTATE COMMERCE COMMISSION, 338 I.C.C. 805, 879-880 (1971). STATUTORY FINDINGS Subject to the terms, conditions, and modifications here- inbefore discussed, which we find to be just and reasonable, we find that (1) the acquisition by Illinois Central Gulf Railroad Company of the properties, franchises, and oper- ating authorities of Gulf, Mobile ead Ohio Railroad Com- pany, including motor carrier operating rights held by Illinois Central Railroad Company; (2) the acquisition by Illinois Central Gulf Railroad Company of sole or joint control of carriers subject to the Interstate Commerce Act subsidiary to, or affiliated with Gulf, Mobile and Ohio Rail- road Company and/or Illinois Central Railroad Company through ownership of stock or lease, including trackage rights over, or joint use of, railroad lines of certain car- riers; (3) the amendment to the lease of the properties of the New Orleans Great Northern Railway Company dated July 1, 1933, as supplemented as of September 4, 1940, un- der which the Illinois Central Gulf Railroad Company will operate the properties of the New Orleans Great Northern Railway Company; (4) the acquisition by Illinois Central Industries, Inc., of sole control of Illinois Central Gulf Railroad Company by way of (a) sale, assignment, and transfer of the properties of Gulf, Mobile and Ohio Rail- road Company to Illinois Central Gulf Railroad Company, (b) the merger of Gulf, Mobile and Ohio Railroad Company into Illinois Central Industries, Inc., (c) the sale, assign- ment, and transfer of the properties of [Illinois Central Railroad Company to Illinois Central Gulf Railroad Com- pany, and the liquidation and dissolution of Illinois Central Railroad Company, are all transactions within the scope C2 of subparagraph (a) of section 5(2) of the act and will be consistent with the public interest; (5) the inclusion of Bonhomie & Hattiesburg Southern Railroad Company, the Fernwood, Columbia and Gulf Railroad Company, and the Columbus and Greenville Railway Company into the IIli- nois Central Gulf Railroad Company, as a prerequisite to our approval of the principal transactions herein, is upon equitable terms and is consistent with the public interest; (6) the issuance by Illinois Central Gulf Railroad Company of 1,000 shares of common stock, par value $1 per share, and the assumption by [linois Central Gulf Railroad Com- pany of the certain obligations of Central, Gulf, and Co- lumbus and Greenville Railway Company are (a) for a law- ful object within the corporate purposes of Illinois Central Gulf Railroad Company, and are compatible with the pub- lic interest, which is necessary or appropriate for or con- sistent with the proper performance by the merged com- pany of service to the public as a common carrier, and which will not impair the ability of the merged company to perform that service, and (b) are reasonably necessary and appropriate for such purposes; (7) Industries should he considered as a carrier under section 5(3) for the pur- pose of compliance with sections 20(5) and 20a to the ex- tent previously indicated; that Industries motion to dis- miss its application under section 20a in Finance Docket No. 25106 should be, and it is hereby, denied in view of our action herein, and that the proposed issuance of se- curities by Industries in connection with our authorization in Finance Docket Nos. 25103, 25104, and 25105, is con- sistent with the proper performance of its service to the publie by each carrier which is under the control of such corporation ; that it will not impair the ability of any such carrier to perform such service, and that it is otherwise consistent with the public interest ; and that Industries will C3 continue to be considered a carrier under section 5(3) and subject to the provisions of sections 20(1) and (2) as afore- said; and (8) that the increase in total fixed charges re- sulting from the merger and inclusion transactions will not be contrary to the public interest. An appropriate order will be entered. VICE CHAIRMAN HARDIN and COMMISSIONER BREWER did not participate. ORDER OF THE INTERSTATE COMMERCE COMMISSION, 338 1.C.C. 805, 940-1 (1971). Investigation of the matters and things involved in these proceedings having been made, a hearing having been held, oral argument having been heard, and the Commission, on the date hereof, having made and filed a report containing its findings of fact and conclusions thereon, which report and the report of the hearing examiner are referred to and made a part hereof: It is ordered, That subject to the terms, conditions, and modifications referred to in our report, (1) the acquisition by Illinois Central Gulf Railroad Company of the proper- ties, franchises and operating authorities of the Gulf, Mo- bile and Ohio Railroad Company and of the Illinois Central Railroad Company; (2) the acquisition by Illinois Central Gulf Railroad Company of sole or joint control of carriers subject to the Interstate Commerce Act subsidiary to, or affiliated with the Gulf, Mobile and Ohio Railroad Company C4 and/or the Illinois Central Railroad Company through ownership of stock or lease, including trackage rights over, or joint use of, railroad lines of certain carriers; (3) the amendment to lease of the properties of the New Orleans Great Northern Railway Company dated July 1, 1933, as supplemented as of September, 1940; (4) the acquisition by Illinois Central Industries, Inc., of sole control of Tli- nois Central Gulf Railroad Company by way of (a) the sale, assignment, and transfer of the properties of Gulf, Mobile and Ohio Railroad Company to Illinois Centtal Gulf Railroad Company, (b) the merger of the Gulf, Mobile and Ohio Railroad Company into Illinois Central Industries, Inc., and (c) the sale, assignment, and transfer of proper- ties of the Illinois Central Railroad Company to the Illinois Central Gulf Railroad Company and the liquidation and dissolution of the Illinois Central Railroad Company; and (5) the inclusion of the Bonhomie & Hattiesburg Southern Railroad Company, the Fernwood, Columbia and Gulf Rail- road Company, and the Columbus and Greenville Railway Company be, and they are hereby, approved and author- ized. It is further ordered, That the issuance by the Illinois Central Gulf Railroad Company of 1,000 shares of com- mon stock, par value $1 per share, and the assumption by Illinois Central Gulf Railroad Company of the outstanding obligations of the Gulf, Mobile and Ohio Railroad Com- pany, the Illinois Central Railroad Company and the Co- lumbus and Greenville Railway Company and the issuance of certain securities by Illinois Central Industries, Inc., in connection with authorization herein and as proposed in F.D. No. 25106, be, and they are hereby, authorized. It is further ordered, That except as herein authorized, the aforesaid stock shall not be sold, pledged, repledged, C5 or otherwise disposed of by the Illinois Central Gulf Rail- road Company unless or until so ordered or approved by this Commission. It is further ordered, That nothing herein shall be con- strued to imply any guaranty or obligation as to said se- eurities or dividends thereon on the part of the United States. It is further ordered, That Illinois Central Industries, Inc., shall be considered as a carrier under section 5(3) and made subject to sections 20(1), (2), and (5), and to section 20a as aforesaid. It is further ordered, That motions for discovery, peti- tions for an order overruling the examiner on matters re- lating to the admission or exclusion of evidence, and all motions or petitions to dismiss the proceedings, or to re- mand the proceedings to the examiner be, and they are hereby, denied. It is further ordered, That the request of the Kansas City Southern Lines for further hearing with respect to its re- quested conditions be, and it is hereby, denied. It is further ordered, That the Illinois Central Gulf Rail- road Company when establishing changes in traffic rates and charges as may be required in effectuating the transac- tions herein approved may do so upon notice to this Com- mission and to the general public by not less than 10 days’ filing and posting in the manner prescribed in section 6 of the Interstate Commerce Act and shall in schedules mak- ing such changes refer to this order by date and docket number. It is further ordered, That if the authority herein grant- ed is exercised, the Illinois Central Gulf Railroad Company shall submit for the consideration and approval of the Commission three copies of the journal entries required to record the transactions authorized herein, C6 It is further ordered, That this order shall become effec- tive from and after 35 days from date of service. It is further ordered, That if the authority granted here- in is not exercised within 1 year from the effective date of this order, it shall be of no further force and effect. And it is further ordered, That jurisdiction be, and it is hereby retained, over these proceedings, for the purpose of considering all matters which may be submitted pur- suant to our requirements regarding ownership interests in the applicants and other railroads being granted relief herein or our conditions prescribed in the matter of em- ployee protection, and for issuing such further orders as may be appropriate. By the Commission. ROBERT L. OSWALD, Secretary. (SEAL) D1 APPENDIX D TENTH AMENDMENT TO THE UNITED STATES CONSTITUTION The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are re- served to the States respectively, or to the people. INTERSTATE COMMERCE ACT, SECTION 5(2). (49 U.S.C. 5(2)) § 5, par. (2). Unifications, mergers, and acquisitions of control. (a) It shall be unlawful, with the approval and authorization of the Commission, as provided in subdivi- sion (b) of this paragraph— (i) for two or more carriers to consolidate or merge their properties or franchises, or any part thereof, into one corporation for the ownership, management, and opera- tion of the properties theretofore in separate ownership; or for any carrier, or two or more carriers jointly, to pur- chase, lease, or contract to operate the properties, or any part thereof, of another; or for any carrier, or two or more carriers jointly, to acquire control of another through own- ership of its stock or otherwise; or for a person which is not a carrier to acquire control of two or more carriers through ownership of their stock or otherwise; or for a person which is not a carrier and which has control of one or more carriers to acquire control of another carrier through ownership of its stock or otherwise; or (ii) for a carrier by railroad to acquire trackage rights over, or joint ownership in or joint use of, any railroad line or lines owned or operated by any other such carrier, and terminals incidental thereto. D2 (b) Whenever a transaction is proposed under subdi- vision (a) of this paragraph, the carrier or carriers or person seeking authority therefor shall present an appli- cation to the Commission, and thereupon the Commission shall notify the Governor of each State in which any part of the properties of the carriers involved in the proposed transaction is situated, and also such carriers and the ap- plicant or applicants (and, in case carriers by motor ve- hicle are involved, the persons specified in section 305(e) of this title), and shall afford reasonable opportunity for interested parties to be heard. If the Commission shall con- sider it necessary in order to determine whether the find- ings specified below may properly be made, it shall set said application for public hearing; and a public hearing shall be held in all cases where carriers by railroad are involved unless the Commission determines that a public hearing is not necessary in the public interest. If the Commission finds that, subject to such terms and conditions and such modifi- cations as it shall find to be just and reasonable, the pro- posed transaction is within the scope of subdivision (a) of this paragraph and will be consistent with the public in- terest, it shall enter an order approving and authorizing such transaction, upon the terms and conditions, and with the modifications, so found to be just and reasonable: Pro- vided, That if a carrier by railroad subject to this chapter, or any person which is controlled by such a carrier, or affiliated therewith within the meaning of paragraph (6) of this section, is an applicant in the case of any such pro- posed transaction involving a motor carrier, the Commis- sion shall not enter such an order unless it finds that the transaction proposed will be consistent with the public in- terest and will enable such carrier to use service by motor vehicle to public advantage in its operation and will not unduly restrain competition. D3 (c) In passing upon any proposed transaction under the provisions of this paragraph, the Commission shall give weight to the following considerations, among others: (1) The effect of the proposed transaction upon adequate trans- portation service to the public; (2) the effect upon the public interest of the inclusion, or failure to include, other railroads in the territory involved in the proposed trans- action; (3) the total fixed charges resulting from the pro- posed transaction; and (4) the interest of the carrier em- ployees affected. (d) The Commission shall have authority in the case of a proposed transaction under this paragraph involving a railroad or railroads, as a prerequisite to its approval of the proposed transaction, to require, upon equitable terms, the inclusion of another railroad or other railroads in the territory involved, upon petition by such railroad or railroads requesting such inclusion, and upon a finding that such inclusion is consistent with the public interest. (e) No transaction which contemplates a guaranty or assumption of payment of dividends or of fixed charges, shall be approved by the Commission under this paragraph except upon a specific finding by the Commission that such guaranty or assumption is not inconsistent with the public interest. No transaction shall be approved under this paragraph which will result in an increase of total fixed charges, except upon a specific finding by the Commission that such increase would not be contrary to public interest. (f) As a condition of its approval, under this para- graph, of any transaction involving a carrier or carriers by railroad subject to the provisions of this chapter, the Commission shall require a fair and equitable arrangement to protect the interests of the railroad employees affected. In its order of approval the Commission shall include terms D4 and conditions providing that during the period of four years from the effective date of such order such trans- action will not result in employees of the carrier or car- riers by railroad affected by such order being in a worse position with respect to their employment, except that the protection afforded to any employee pursuant to this sen- tence shall not be required to continue for a longer period, following the effective date of such order, than the period during which such employee was in the employ of such carrier or carriers prior to the effective date of such order. Notwithstanding any other provisions of this chap- ter and chapters 8 and 12 of this title, an agreement per- taining to the protection of the interests of said employees may hereafter be entered into by any carrier or carriers by railroad and the duly authorized representative or repre- sentatives of its or their employees. Feb. 4, 1887, c. 104, Pt. I, § 5, 24 Stat. 380; Feb. 28, 1920, ¢. 91, § 407, 41 Stat. 580; June 16, 1933, ¢. 91, Title II, §§ 201, 202, 48 Stat. 217; Aug. 9, 1935, ¢. 498, § 1, 49 Stat. 543; Sept. 18, 1940, c. 722, Title I, § 7, 54 Stat. 905; Aug. 2, 1949, c. 379, § 3, 63 Stat. 485. INTERSTATE COMMERCE ACT, SECTION 5(11). (49 U.S.C. 5(11)) § 5, par. (11). Plenary nature of authority under sec- tion. The authority conferred by this section shall be ex- clusive and plenary, and any carrier or corporation par- ticipating in or resulting from any transaction approved by the Commission thereunder, shall have full power (with the assent, in the case of a purchase and sale, a lease, a corporate consolidation, or a corporate merger, of a ma- jority, unless a different vote is required under applicable State law, in which case the number so required shall as- D5 sent, of the votes of the holders of the shares entitled to vote of the capital stock of such corporation at a regular meeting of such stockholders, the notice of such meeting to include such purpose, or at a special meeting thereof called for such purpose) to carry such transaction into ef- fect and to own and operate any properties and exercise any control or franchises acquired through said transac- tion without invoking any approval under State authority; and any carriers or other corporations, and their officers and employees and any other persons, participating in a transaction approved or authorized under the provisions of this section shall be and they are relieved from the operation of the antitrust laws and of all other restraints, limitations, and prohibitions of law, Federal, State, or mu- nicipal, insofar as may be necessary to enable them to carry into effect the transaction so approved or provided for in accordance with the terms and conditions, if any, imposed by the Commission, and to hold, maintain, and operate any properties and exercise any control or fran- chises acquired through such transaction. Nothing in this section shall be construed to create or provide for the crea- tion, directly or indirectly, of a Federal corporation, but any power granted by this section to any carrier or other corporation shall be deemed to be in addition to and in modification of its powers under its corporate charter or under the laws of any State. Feb. 4, 1887, c. 104, Pt. I, § 5, 24 Stat. 380; Feb. 28, 1920, c. 91, § 407, 41 Stat. 480; June 16, 1933, ec. 91, Title II, $ 202, 48 Stat. 217; Sept. 18, 1940, ce. 722, Title I, § 7, 54 Stat. 905. D6 | D7 AN ACT TO INCORPORATE THE ILLINOIS CEN- TRAL RAILROAD COMPANY, SECTION 18, 19 (Ill. Rev. Stat., 1975, Chap. 120, § 373) : “373. Five per cent of income.) §18. In consid- officers making such affidavits shall knowingly and wilfully swear falsely, every such person shall be sub- ject to the pains and penalties of perjury.’’ (Ill. Rev. Stats. 1975, Chap. 120, § 374): eration of the grants, privileges and franchises here- in conferred upon said company for the purposes aforesaid, the said company shall, on the first Mon- days of December and June in each year, pay to the Department of Revenue of the State of Illinois five per centum on the gross or total proceeds, receipts or income derived from said road and branches, for the six months then next preceding. The first payment of such percentage on the main trunk of said road to commence four ;cais from the date of said deed of trust, and on the branches, six years from the date aforesaid, unless said road and branches are sooner completed, then from the date of completion. And for the purpose of ascertaining the proceeds, receipts or income aforesaid, an accurate account shall be kept by said company, a copy whereof shall be furnishtd to the Governor of the State of Ilinois and to the De- partment of Revenue; the truth of which account shall be verified by the affidavits of the treasurer and secre- tary of such company. And for the purpose of v [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_2441%3A1. Public record. Not legal advice.