City of Eugene v. Keeney

• Decision Date: 09 December 1930
• Citation: 293 P. 924,134 Or. 393
• Parties: CITY OF EUGENE v. KEENEY, COUNTY ASSESSOR, ET AL.
• Court: Oregon Supreme Court

293 P. 924

134 Or. 393

CITY OF EUGENE v. KEENEY, COUNTY ASSESSOR, ET AL.

Supreme Court of Oregon

December 9, 1930

In Banc.

Appeal from Circuit Court, Lane County; G. F. Skipworth, Judge.

Suit by the City of Eugene, a municipal corporation, against B. F Keeney, Assessor of Lane County, and others. From a decree dismissing suit, plaintiff appeals.

Affirmed.

S. M. Calkins, of Eugene, for appellant.

H. E Slattery, of Eugene (Alta King, of Eugene, on the brief), for respondents.

BELT J.

The city of Eugene instituted this suit for the purpose of determining whether certain real property owned by it is exempt from taxation. The facts out of which this controversy arose are interesting. In 1925, and for some years prior thereto, the Oregon & California Railroad Company owned a tract of land, part of which was within the corporate limits of the town of Springfield. It was generally expected by the citizens of that community that the railroad company would use such site for its terminal yards and car shops. However the city of Eugene desired the benefits to be derived from such industrial development, and immediately took steps to obtain title to land which it considered would be a more suitable railroad terminal. Pursuant, no doubt, to such plan, the charter of the city of Eugene was amended in August, 1925, to authorize such municipality "to purchase * * * real property * * * within and without the territorial limits of the city for the municipal railway terminals, municipal belt line railway municipal parks and for any other municipal purposes," and to issue bonds not in excess of $175,000 to accomplish such purposes. A corporation called the Eugene Terminal Company was organized for the purpose of acquiring title to land for and on behalf of the city, such land to be offered as a site for terminals and car shops of the Southern Pacific Company. The Eugene Terminal Company, having obtained for the city the necessary amount of land, exchanged it for the tract owned by the Oregon & California Railroad Company and originally intended to be used for its terminal yards. Bonds having been issued and sold, the city of Eugene, on September 10, 1925, entered into a contract with the Eugene Terminal Company to purchase for $175,000 the land which had been exchanged by the railroad company. $170,000 was paid upon execution of the contract, and the balance of the purchase price was paid upon delivery of the deed, which was on June 20, 1926. The deed was not filed for record, however, until September 29, 1926. Prior to the execution of this deed, the city, on November 25, 1920, entered into a contract with the town of Springfield whereby it leased to the latter municipal corporation for a period of 49 years, at a nominal rental of $1 per annum, the property it had purchased with the proceeds of this bond issue, reciting in the instrument that the property was "to be used and devoted to any purposes desired by the said lessee consistent with the rights and powers granted by the charter amendment above set forth." In this lease the city reserved a five-acre tract of land to be devoted to a municipal park, "for the use of the general public, particularly the town of Springfield and the city of Eugene." It was also recited in the contract of lease that the city of Eugene entered into such agreement "in order that the tract be maintained and kept intact for future uses and purposes and in the meantime be applied to such uses and purposes as shall further the interests and promote the economic and esthetic progress of the general community composed of the town of Springfield and the city of Eugene." Thus was oil poured upon the troubled waters.

After Springfield acquired interest in this 247 acres of land, 56.3 acres of which were within the corporate limits of the city, its common council purported to authorize the execution of a lease, on December 22, 1926, to S. J. James, for a 10-acre tract of the land, upon which he agreed to erect a tannery. On March 11, 1929, this lease was cancelled by the city for breach of contract.

In 1927 an agreement was also made by the city of Springfield with C. I. Gorrie, Jr., granting him the right to use a part of the land for crops or grazing purposes in consideration of a stipulated rental. It is noteworthy that it is expressly provided in this agreement that "The Industrial Park Committee" which was appointed by the common council had the right of "showing this land to prospective industrial investors."

On April 16, 1929, the city of Springfield entered into an agreement with the Eckerson Flying Service, Inc., whereby this company was granted, for a period of five years, an exclusive right to use a portion of the land for the purpose of conducting an aviation school. The land was also to be used as a municipal airport.

The county assessor, being of the opinion that the property, with the exception of the 5-acre tract reserved for a municipal park, was not exempt from taxation, assessed it, in March, 1926, to the Oregon & California Railroad Company, since its deed to the Eugene Terminal Company was not filed for record until July 24, 1926. In each of the following years the property has been assessed to the city of Eugene. Hence this suit for injunctive relief.

It is a well-established general rule that the property of a municipal corporation used for public or corporate purposes is exempt from taxation by the state or county in which it is situated, whether the property is within or without the municipality by which it is owned. See cases collated in exhaustive note 3 A. L. R. 1439. Where such public...