Atkinson v. State Tax Commission

• Decision Date: 05 November 1936
• Parties: ATKINSON et al. v. STATE TAX COMMISSION et al. [*]
• Court: Oregon Supreme Court

62 P.2d 13

156 Or. 461

ATKINSON et al. v. STATE TAX COMMISSION et al. ^[*]

Supreme Court of Oregon

November 5, 1936

In Banc.

Appeal from Circuit Court, Multnomah County; Robert Tucker, Judge.

Action by Guy F. Atkinson and Geo. H. Atkinson, copartners doing business as the Guy F. Atkinson Company, against the State Tax Commission and others. From the judgment, the plaintiffs appeal.

Reversed and remanded, with directions.

BEAN and KELLY, JJ., dissenting.

Howard P. Arnest, of Portland, for appellants.

Carl E Davidson, Asst. Atty. Gen. (I. H. Van Winkle, Atty. Gen., on the brief), for respondents.

RAND, Justice.

The facts in this case are very similar to those in Winston Bros. Company et al. v. State Tax Commission of Oregon, et al. (Or.) 62 P.2d 7, on this day decided, and the law of that case is decisive of this.

In this case, as in the former one, the state seeks to impose a tax upon the profits realized by the plaintiffs in the performance of a contract entered into by them with the War Department. In the other case, the work was done in the reconstruction of a jetty, while in this case the work was done in the construction of a dam, locks, and ship canal in the Columbia river at Bonneville, Or.

The plaintiffs here, as in the former case, are nonresidents of the state.

The evidence shows that the dam, locks, and ship canal are being constructed as an aid to navigation and it is undisputed that all the operations of the plaintiffs here, under their contract, were entirely performed on land the title to which had been acquired either by condemnation, by grant of the state, or by purchase from private individuals, except a small portion thereof which was done on the south channel of the river lying between Bradford Island and the mainland which channel, before the work was done, was navigable for small craft.

There are two statutes not referred to in the other case, both of which are applicable to show that the fee in these lands was acquired by consent of the state. These are sections 60-1301 and 60-1303, Oregon Code 1930, which read as follows:

"Whenever it shall become necessary for the United States to acquire the title to any real property in this state belonging to any individual or corporation, for the purpose of constructing any canal or locks, or any other public improvement authorized to be made by any act of congress, and such property cannot be purchased from the owner for the purpose, it shall be lawful for any authorized agent of the United States to enter upon examine, and select a quantity of land, fully sufficient in length and breadth for such canal and locks, or other public improvements, and such authorized agent may proceed in the mode prescribed in chapter IV of Title XXXVII to have such property appropriated, and the compensation therefor determined and paid."

"Consent is hereby given to the United States to purchase or otherwise acquire any lands within the state of Oregon for the purpose of erecting thereon any needful public buildings, under authority of any act of congress; and the United States may enter upon and occupy any such lands which may be purchased or otherwise acquired, and shall have the right of exclusive jurisdiction over the same provided, that all process, civil or criminal, issuing under authority of the laws of the state of Oregon, may be executed by the proper officers thereof upon any person or persons amenable to the same within the limits of the land so acquired, in like manner and to the same effect as if this act had not been passed."

It will thus be seen that the title, whether acquired by purchase or condemnation, was acquired with the consent of the state and, since all work and operations by the plaintiffs were performed on lands the fee to which had been acquired by the federal government, the state, under the rulings in the Winston Bros. Company Case, has no jurisdiction over such lands other than merely the right to serve process and has no legislative authority to tax any of the operations thereon or any income arising from any work done thereon.

Defendants argue that the federal government may acquire exclusive jurisdiction over territory within a state only in one of two ways: First, by purchase with consent of the state; or, second, by cession of jurisdiction by the state. We think that both of these elements are present in this case and that the purchase was made with the consent of the state and that jurisdiction was ceded to the federal government by the state.

The rule applicable to the concurrent jurisdiction over a bridge constructed over navigable waters under the authority of the War Department has no application here. In such case, the government may construct a bridge over navigable waters with or without the consent of the state under the power conferred upon Congress by article 1, section 8, clause 3, which gives to Congress the power to regulate commerce with foreign nations, and among the several states and with the Indian tribes. The construction of a bridge over a navigable stream, whether done with or without the consent of the state, is an exercise of power under said constitutional provision and, if the bed of the river on which the piers are laid is occupied by the federal government in the construction of the bridge without the consent of the state, its occupancy is authorized, but in that case both the state and the federal government retain concurrent jurisdiction thereover. This is clearly pointed out in Stockton v. Baltimore & N.Y. R. Co. (C.C.) 32 F. 9, 18, where the court said:

"It is argued that this is the only constitutional method by which the United States government...