State ex rel. Ferguson v. Donnell

• Decision Date: 07 July 1941
• Docket Number: 37905
• Parties: State of Missouri at the relation of Abner H. Ferguson, Federal Housing Administrator, serving as Federal Housing Commissioner Under Executive Order No. 9070, Relator, v. Forrest C. Donnell, Dwight H. Brown, Roy McKittrick, Forrest Smith, Wilson Bell, and Byron Schubel, as members of the State Board of Equalization of Missouri; Jesse A. Mitchell, Lawrence Boogher, Clarence Evans, and Byron Schubel, as members of the State Tax Commission of Missouri; Clifford Corneli, Henry L. Mueller, Henry W. J. Rott, Walter E. Miller, Roy D. Jablonsky and Phillip G. Deuser, as members of the County Board of Equalization of St. Louis County, Missouri; Walter E. Miller, as County Clerk of St. Louis County, Missouri; Phillip G. Deuser, as Assessor of St. Louis County, Missouri; and Willis W. Benson, as Collector of Revenue of St. Louis County, Missouri
• Court: Missouri Supreme Court

163 S.W.2d 940

349 Mo. 975

State of Missouri at the relation of Abner H. Ferguson, Federal Housing Administrator, serving as Federal Housing Commissioner Under Executive Order No. 9070, Relator, v. Forrest C. Donnell, Dwight H. Brown, Roy McKittrick, Forrest Smith, Wilson Bell, and Byron Schubel, as members of the State Board of Equalization of Missouri; Jesse A. Mitchell, Lawrence Boogher, Clarence Evans, and Byron Schubel, as members of the State Tax Commission of Missouri; Clifford Corneli, Henry L. Mueller, Henry W. J. Rott, Walter E. Miller, Roy D. Jablonsky and Phillip G. Deuser, as members of the County Board of Equalization of St. Louis County, Missouri; Walter E. Miller, as County Clerk of St. Louis County, Missouri; Phillip G. Deuser, as Assessor of St. Louis County, Missouri; and Willis W. Benson, as Collector of Revenue of St. Louis County, Missouri

No. 37905

Supreme Court of Missouri

July 7, 1941

Rehearing Denied July 28, 1942.

Writ quashed.

Harry C. Blanton and Russell Vandivort for relator.

(1) The personal property involved is immune from State taxation by reason of the sovereign immunity of the United States. The property is immune from taxation because it is used in carrying on a governmental function. Clallam County v United States, 263 U.S. 341; Mullen Benevolent Corp v. United States, 290 U.S. 89; City of New Brunswick v. United States, 276 U.S. 547; Van Brocklin v Tennessee, 117 U.S. 151; United States v. Buffalo, 54 F.2d 471; Federal Land Bank v. Priddy, 295 U.S. 229; United States v. Summerlin, 310 U.S. 414; Korman v. Federal Housing Administrator, 113 F.2d 743; Sec. 3466, R. S. of the U.S.; Graves v. New York ex rel. O'Keefe, 306 U.S. 466; Inland Waterways Corp. v. Young, 309 U.S. 517; Pittman v. Home Owners' Loan Corp., 308 U.S. 21; Alabama v. King & Boozer, 314 U.S. 1; State ex rel. Baumann v. Bowles, 342 Mo. 357, 115 S.W.2d 805; Federal Land Bank v. Bismarck Co., 314 U.S. 95. The tax immunity has not been waived. Sec. 208, National Housing Act, Title 12, U. S. C., sec. 1714; Sec. 207, National Housing Act, Title 12, U. S. C., sec. 1713; Austin v. The Aldermen, 74 U.S. 694. (2) The personal property herein is exempt from the application of the State tax laws by Section 10937 of the Revised Statutes of Missouri of 1939. Sec. 10937, R. S. 1939; Title Guaranty & Trust Co. v. Crane Co., 219 U.S. 24; Maiatico Construction Co. v. United States, 79 F.2d 418, certiorari denied, 296 U.S. 649; Laret Investment Co. v. Dickmann, 345 Mo. 449, 134 S.W.2d 65.

Roy McKittrick, Attorney General, Robert L. Hyder and Tyre W. Burton, Assistant Attorneys General, for respondents; Edwin F. Vetter of counsel.

(1) The personal property of the Federal Housing Administration is not immune from State taxation by reason of the sovereign immunity of the United States. State ex rel. Baumann v. Bowles, 115 S.W.2d 805, 342 Mo. 357; South Carolina v. United States, 199 U.S. 437, 50 L.Ed. 261. (2) The personal property herein is not exempt from taxation by Section 10937, R. S. 1939. Lewis v. Commonwealth, 247 S.W. 749. (3) Since Congress has not passed legislation immunizing from State taxation the personal property herein taxed, then the State has authority to tax same. State of Alabama v. King and Boozer, 62 S.Ct. 43.

Tipton, J. All concur except Gantt, J., absent.

OPINION

TIPTON

This is an original certiorari proceeding to review the records of the respondents in reference to the validity of a tax assessment upon certain personal property owned by the relator and used by him in connection with the operation of a group of apartment buildings in St. Louis County, Missouri, which he acquired pursuant to Title II of the National Housing Act. To the repondents' return, the relator has filed a motion for judgment on the pleadings.

Respondents have adopted the relator's statement of facts, and we will do likewise. These facts are as follows:

"This is an original certiorari proceeding in which the State Board of Equalization, the State Tax Commission, the Board of Equalization of St. Louis County and certain St. Louis County officers have been required to certify their records to this Court to enable it to adjudicate the validity of a purported tax assessment. The assessment was made upon certain personal property owned by the Federal Housing Administrator and used by him in connection with the operation of a group of apartment buildings in St. Louis County, Missouri, which he had acquired pursuant to Title II of the National Housing Act.

"The facts in the case are not in dispute. The State Board of Equalization, the State Tax Commission, and the County Board of Equalization each made extensive findings of fact, by which the facts were found to be as hereafter stated. The parties by their stipulation agreed that such were the facts.

"The personal property which was the subject of the disputed tax assessment was acquired by the Federal Housing Administrator under the following circumstances:

"In 1938, the Manhassett Village Corporation, a Missouri corporation, desired to build a group of apartment buildings in St. Louis County, Missouri, and made arrangements to borrow the necessary funds from the New York Life Insurance Company. The plan contemplated that the payment of the debt was to be insured by the Federal Housing Administrator pursuant to the National Housing Act.

"On March 16, 1938, Manhassett Village Corporation borrowed the sum of One Million Six Hundred Thousand Dollars ($ 1,600,000.00) from the New York Life Insurance Company, for the purpose of constructing the group of apartment buildings hereinafter called 'Manhassett Village.' The debt was secured by a deed of trust on Manhassett Village.

"On March 21, 1938, Stewart McDonald, as Federal Housing Administrator, executed a contract of mortgage insurance, pursuant to Section 207 of Title II of the National Housing Act, by which the New York Life Insurance Company was insured against loss by reason of non-payment of the deed of trust.

"Thereafter, the development called Manhassett Village was constructed, it being an apartment community of seven (7) buildings containing three hundred and fifty-four (354) three and four room apartments, designed to be let to tenants for living quarters. It covered approximately twenty-one acres.

"Payments under the deed of trust were defaulted and Manhassett Village was purchased by the New York Life Insurance Company at a sale under the deed of trust on February 26, 1940, for the amount of One Million Five Hundred Two Thousand Two Hundred Ninety-Five Dollars ($ 1,502,295.00).

"Thereafter, on March 6, 1940, the New York Life Insurance Company called upon the Federal Housing Administrator to fulfill his obligations under the mortgage insurance contract and conveyed Manhassett Village to him. The Company also assigned to him a deficiency claim which it had against Manhassett Village Corporation in the amount of One Hundred Thirty Thousand Nine Hundred Ninety-Three Dollars and Eleven Cents ($ 130,993.11).

"The deed and assignment both conveyed the property described therein to 'Stewart McDonald, of Washington, D. C., as Federal Housing Administrator, under the provisions of the National Housing Act, as amended, his successors and assigns.'

"During the time in which Manhassett Village Corporation operated Manhassett Village, the Corporation acquired certain tools, fixtures, machinery, office furniture and equipment which were necessary for use in connection with Manhassett Village in order to operate the apartments efficiently and make available to the tenants such services as tenants of apartment buildings ordinarily receive in the vicinity of the City of St. Louis and St. Louis County. The property is described in detail in the findings of fact made by the various tax agencies.

"The original deed of trust on Manhassett Village, the trustee's deed to the New York Life Insurance Company thereunder, and the deed to the Federal Housing Administrator all purported by their terms to include said personal property used in connection with Manhassett Village, so that title to it passed to the Administrator at the same time he acquired Manhassett Village. As a precaution, however, the Administrator also procured a conveyance of said personal property directly from Manhassett Village Corporation on May 6, 1940.

"On March 19, 1940, the Barngrove Realty Company of St. Louis became the agent of the Federal Housing Administrator for the purpose of operating and managing Manhassett Village. Between that date and June 1, 1940, it became necessary to acquire, and the Administrator did acquire, a small amount of additional personal property for use in connection with Manhassett Village. That property is also described in the findings of fact.

"Thereafter, the Assessor of St. Louis County, Martin L. Neaf, caused a list to be compiled of all the above mentioned personal property and found that on June 1, 1940, its value was Three Thousand Three Hundred and Sixty Dollars ($ 3,360.00). He further found that the above property acquired between March 19, 1940, and June 1, 1940, had a value of One Hundred and Four Dollars ($ 104.00), which was, however, included in the valuation of Three Thousand Three Hundred and Sixty Dollars ($ 3,360.00).

"Thereafter Martin L. Neaf made and entered a tax assessment against 'McDonald, Stewart, as Federal Housing Administrator, 201 N. 4th St.' in the amount of Six Thousand Seven Hundred and Twenty Dollars ($ 6,720.00). The assessment was based upon the above-mentioned personal property and was entered as of June 1, 1940. It was double the value originally determined by the Assessor, because no tax return had been made by the Federal Housing Administrator or his agents with reference to the personal...