United States v. City of Philadelphia

• Citation: 50 F. Supp. 170
• Decision Date: 11 May 1943
• Docket Number: Civil Action No. 2392.
• Parties: UNITED STATES v. CITY OF PHILADELPHIA et al.
• Court: U.S. District Court — Western District of Pennsylvania

50 F. Supp. 170

UNITED STATES v. CITY OF PHILADELPHIA et al.

Civil Action No. 2392.

District Court, E. D. Pennsylvania.

May 11, 1943.

Gerald A. Gleeson, U. S. Atty., and Walter A. Gay, Asst. U. S. Atty., both of Philadelphia, Pa., for plaintiff.

Robert McCay Green, City Sol., and Edwin S. Ward and Michael D. Hayes, Asst. City Sols., all of Philadelphia, Pa., for City of Philadelphia.

Robert T. McCracken, C. Brewster Rhoads, and Samuel Fessenden, all of Philadelphia, Pa., for School Dist. of Philadelphia.

BARD, District Judge.

This action was brought by the United States of America against the City of Philadelphia, the School District of Philadelphia, the Receiver of Taxes of Philadelphia County, and the members of the Board of Revision of Taxes of Philadelphia County to recover city and school taxes paid to the City and School District to vacate any city and school tax assessments and liens on the properties in question, and to restrain the defendants from assessing future taxes against these properties and collecting such taxes.

The properties in question were part of the estate of Joseph Pennell, who by will left them to his wife for life and upon her death to the United States of America for the Division of Prints of the Library of Congress, the income from the properties to be used by the Library of Congress to maintain a collection of etchings and other works of the decedent. The widow of the testator died in 1936 and the Orphans' Court of Philadelphia County awarded the estate to the Library of Congress. The award was accepted by the Congress in that year. On August 3, 1937, the properties in question, being real estate in the City of Philadelphia, were conveyed by the Librarian of Congress to the Provident Trust Company of Philadelphia under a deed of trust which was revoked on July 27, 1940, when the title to the properties was vested in the Library of Congress Trust Fund Board. This trust deed provided, inter alia, as follows:

"Third: Trustee shall first pay out of all principal and income moneys so collected all expenses and costs in connection with the management and administration of the said Trust and in connection with the carrying and maintenance of said real estate, including all taxes, water rents, insurance premiums, costs of repairs and any and all other charges in connection with the maintenance of said real estate.

"Fourth: Trustee after the payment of all necessary costs, charges and expenses in connection with the management and administration of this Trust and the carrying and maintenance of said real estate shall pay all moneys, both principal and income, to the person who may be occupying the position of Librarian of Congress at the time such payments are made."

The Provident Trust Company as trustee paid the city and school taxes on a number of the properties from 1936 to 1940. By stipulation it has been agreed that the taxes on all the properties for the year 1936 and on one property for the year 1940 were legally assessed and properly paid. It has also been stipulated that taxes for the year 1941 were erroneously assessed on all the properties and that no attempt has been made to collect them. Although the stipulation does not so provide, defendants have conceded that since 1940 all the properties are exempt from local taxation, and they do not oppose an injunction against the assessment and collection of future taxes while the properties are owned by the Library of Congress Trust Fund Board. This narrows the matters at issue to the question whether the plaintiff is entitled to recover for the taxes paid on the properties for the years 1937, 1938, 1939, and, in two instances, 1940. The amount of the taxes in dispute has been stipulated as $1,669.45 as to the defendant City of Philadelphia and $937.78 as to the defendant School District of Philadelphia.

Defendants do not challenge the familiar principle of law that property of the United States, whether owned directly or by an instrumentality or agency, is exempt from local taxation. Clallam County v. United States, 263 U.S. 341, 44 S.Ct. 121, 68 L.Ed. 328. Their first and principal contention is that these taxes were voluntarily paid by the Provident Trust Company under the express authority of the trust deed by which it held legal title to the properties. This contention cannot be sustained. Assuming that the trust deed was intended to authorize the payment of taxes which could not lawfully be assessed against these properties, the United States would not be bound by the act of its agent, the Librarian of Congress, in granting such authority. See Utah Power & Light Co. v. United States, 243 U.S. 389, 409, 37 S.Ct. 387, 61 L.Ed. 791, 818. The right of the United States to recover payments wrongfully made by one of its agents has recently been set forth in an opinion of the Supreme Court, speaking through Mr. Justice Black, in United States v. Wurts, 303 U.S. 414, at page 415, 58 S.Ct. 637, 638, 82 L.Ed. 932, at page 934, as follows: "The...