United States Spruce Production Corp. v. Lincoln County

• Decision Date: 18 December 1922
• Docket Number: 8600.,8585
• Parties: UNITED STATES SPRUCE PRODUCTION CORPORATION v. LINCOLN COUNTY et al. (two cases).
• Court: U.S. District Court — District of Oregon

285 F. 388

UNITED STATES SPRUCE PRODUCTION CORPORATION v. LINCOLN COUNTY et al. (two cases).

Nos. 8585, 8600.

United States District Court, D. Oregon.

December 18, 1922

Carey &amp Kerr and Omar C. Spencer, all of Portland, Or., for plaintiff.

G. B McCluskey, Dist. Atty., and C. E. Hawkins, both of Toledo Or., and McFadden & Clarke, of Corvallis, Or., for defendants.

WOLVERTON District Judge.

These are suits, two in number, by the United States Spruce Production Corporation against Lincoln County, Or., and the sheriff and county assessor, to enjoin the attempted collection of taxes assessed against property standing in the name of plaintiff. The first suit involves taxes for the years 1919 and 1920, and the second for 1921. The plaintiff is a corporation created under the laws of Washington, by the Director of Aircraft Production, pursuant to the Act of Congress of July 9, 1918, amending the Act of April 11, 1918 (U.S. Comp. Stat. 1918, Compact Edition, Appendix, p. 1771 (Comp. St. Ann. Supp. 1919, Secs. 3115 1/32g-3115 1/32k, 6911a)), for purposes hereinafter indicated. This corporation was duly authorized to transact business in the state of Oregon.

Without reference to particular acts of Congress, it is sufficient to say that the President was authorized, within the limits of funds specifically appropriated, to requisition for the government war materials, including plants, etc., and the Secretary of War was authorized to condemn lands and interests therein for military purposes, including standing and fallen timber, sawmills, camps, logging roads, rights of way, etc., suitable for the effectual production of lumber and timber supplies, or to purchase the same, or enter into contracts for the use thereof, for like purposes; all such power of the President and Secretary of War being referable to war emergencies. Accordingly, the United States, under the direction of the President and Secretary of War, undertook the construction of certain logging roads in Washington and Oregon, which was begun by the Signal Corps, Aviation Section, of the United States Army, and later continued by the Bureau of Aircraft Production, Spruce Production Division, of the United States War Department; these being agencies through which the powers vested in the President and the Secretary of War were exercised, in pursuance of acts of Congress.

For the purposes indicated, the United States, acting through the Signal Corps, entered into a contract with Warren Spruce Company for the construction of the railroads described, and the acquisition of the rights of way. Likewise the Signal Corps entered into arrangements with the port of Toledo, and with other persons and corporations, for the acquisition of mills, terminals, and other property for war purposes. All these properties were afterwards transferred to the plaintiff by the Warren Spruce Company or the original owners thereof. Additional rights of way and property were acquired by plaintiff, and additional work was done upon said railroad lines by it. The properties concerned are particularly described in the complaint.

It has been determined that the Shipping Board Emergency Fleet Corporation is not a government organization or agency, possessing the attributes of sovereignty in the sense that it is entitled to immunity from suit in the courts, and that suitors have their ordinary remedies against it without being relegated to the Court of Claims. Sloan Shipyards Corporation et al. v. United States Shipping Board Emergency Fleet Corporation, and allied cases (Nos. 308, 376, 526, October term, 1921) 258 U.S. 549, 42 Sup.Ct. 386, 66 L.Ed. . . . . It may be assumed that the United States Spruce Production Corporation occupies like relation to the general government.

Counsel for defendants have filed a very exhaustive and able brief in support of the proposition that the property of the Spruce Production Corporation is not immune from state taxes. Such is the question involved here; not whether it is immune from suit or action as is the general government. The cardinal principle upon which the proposition is...