Haynie v. Surplus Trading Co.
| Decision Date | 27 June 1927 |
| Docket Number | (No. 94.) |
| Citation | 297 S.W. 822 |
| Parties | HAYNIE, Collector, v. SURPLUS TRADING CO. |
| Court | Arkansas Supreme Court |
Appeal from Pulaski Chancery Court; J. E. Martineau, Chancellor.
Action by J. M. Haynie, collector, against the Surplus Trading Company. Judgment for defendant, and plaintiff appeals. Reversed and cause remanded, with directions.
This suit was brought by the sheriff and collector of Pulaski county, Ark., against the Surplus Trading Company to recover certain taxes for the years 1922 and 1923, which the complaint alleges were due by it upon personal property situated in Pulaski county, Ark., which it had failed to assess for the years 1922 and 1923 and which the assessor had assessed as property erroneously left off of the tax rolls and to which he had attached the statutory penalty.
The facts necessary to determine the issues raised by the appeal may be briefly stated as follows:
The Surplus Trading Company is a partnership composed of various firms, corporations, and individuals. It was organized for the purpose of dealing in military supplies of various kinds owned by the United States and left over after the World War. On April 21, 1922, the Surplus Trading Company paid the United States the sum of $138,492.65 for 87,143 blankets situated on the Camp Pike Military Reservation in Pulaski county, Ark. It subsequently sold these blankets for a profit to various firms in the state of Arkansas and in other states. It failed to assess its property for taxation for the years 1922 and 1923, and the assessor of Pulaski county duly assessed the property of said firm at an amount which he had been informed was the value of the property owned by said firm and situated in Pulaski county during the time for assessing said property in said years. The Governor of the state of Arkansas appointed an honorary commission to handle and sell property belonging to the United States situated in said Camp Pike Military Reservation. This property was sold at a reduced price by the United States to said honorary commission for the benefit of the Arkansas National Guard. The honorary commission employed the Surplus Trading Company to handle and sell said property for it. The Surplus Trading Company, as part of the consideration for its employment, agreed to advance the purchase price of said personal property upon the condition that it should be repaid from the sales of said property.
Such other facts will be stated or referred to in the opinion as may be necessary for a determination of the issues raised by the appeal.
The chancellor found the issues in favor of the defendant, and it was decreed that the complaint should be dismissed for want of equity. The case is here on appeal.
H. W. Applegate, Atty. Gen., and Sam T. & Tom Poe, of Little Rock, for appellant.
Rose, Hemingway, Cantrell & Loughborough, of Little Rock, for appellee.
HART, C. J. (after stating the facts as above).
The Camp Pike Military Reservation lies within the boundaries of Pulaski county, Ark., and the principal question presented for decision by this appeal relates to the power of the state and its subordinate taxing agencies to levy and collect taxes pursuant to the state laws upon personal property situated within said military reservation.
Counsel for appellee seek to uphold the decree of the chancellor denying the right of the state and its subordinate agencies to levy and collect such taxes upon the authority of Concessions Co. v. Morris, 109 Wash. 46, 186 P. 655. In that case, it was held that the Camp Lewis Military Reservation, which was donated by Pierce county to the United States by consent of the state Legislature, excepting only the right to serve criminal and civil process therein, from the exclusive control of Congress, is without the state in both a jurisdictional and territorial sense, and personal property located thereon is not taxable under the state laws.
We do not agree with the reasoning of the court in that case, and are of the opinion that it is contrary to the trend of the decision of the United States Supreme Court bearing on the question as well as to the weight of authority in the state courts. The true rule governing cases of this sort is stated by the Virginia Supreme Court of Appeals in Nikis v. Virginia, 145 Va. 618, 131 S. E. 236, 46 A. L. R. 219. In that case the court held to be subject to a state license tax a mercantile business carried on in a railroad station situated on land ceded to the federal government for an approach to an interstate bridge. It was there recognized that the state could not tax land or buildings situated thereon which had been ceded by the state to the United States; but it was expressly held that personal property situated in buildings upon said land owned by third parties was liable to be taxed by the state and county in which it should be found. In discussing the question, the court said:
"That the right of a state to tax the property of others located upon lands owned by the United States, although it cannot tax such lands, will not be held to be abandoned by the state, except for the most compelling reasons, is quite manifest from several decisions of the Supreme Court of the United States."
In that case, the General Assembly of Virginia ceded the land to the United States for abutments and approaches of a proposed bridge across the Potomac river. The state retained concurrent jurisdiction with the United States over such lands for the execution of legal process and the discharge of such other legal functions within the same as may not be incompatible with the consent given in the act. The act also provides that the land acquired and the abutments and approaches of the bridge should be exempt from taxation by the state and county in which they were situated.
The Camp Pike Military Reservation was acquired by the United States under the provisions of an act of the Legislature of 1903. Acts of 1903, p. 346. Section 1 of the act provides that the state of Arkansas consents to the purchase to be made by the United States of any site or ground for the erection of any armory or arsenal, etc., and that the jurisdiction of the state within and over all grounds thus purchased by the United States is ceded to the United States. The section provides that the grant of jurisdiction shall not prevent execution of any process of the state, civil, or criminal, upon any person who may be upon said premises. Section 2 provides that the state releases her right to tax any such site, grounds or real estate and all improvements which may be thereon and thereafter erected thereon, during the time the United States shall be and remain the owner thereof.
Thus it will be seen that by the terms of the act itself, it was not intended by the state to part with jurisdiction for the purpose of listing personal property of third persons in the reservation for assessment and taxation. The grant by the state expressly cedes its right to tax the land and buildings granted to the United States, and this of itself indicates an intention to reserve jurisdiction for taxation over the property of third persons located on such reservation. The United States accepted the grant upon the terms indicated, and, by its acceptance, acknowledged that there was no occasion for the state to cede exclusive jurisdiction to the United States or to exempt from state taxation the property of third persons situated upon the reservation, which was not used by the United States as a public agency or instrumentality for carrying out the purpose of the grant.
In Noble v. Amoretti, 11 Wyo. 230, 71 P. 879, it was held that state taxation of the stock of goods of a licensed Indian trader located upon an Indian reservation is not a tax upon an agency of the general government and is not a burden upon commerce with an Indian tribe. It was further held that personal property, including the stock of goods of a licensed Indian trader, located within the limits of the Shoshone Indian Reservation, and employed in the business of such trader, is subject to taxation under the laws of the state in the same manner and to the same extent as all other like...
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