United States v. City of Buffalo

• Decision Date: 07 December 1931
• Docket Number: No. 68.,68.
• Citation: 54 F.2d 471
• Parties: UNITED STATES v. CITY OF BUFFALO.
• Court: U.S. Court of Appeals — Second Circuit

54 F.2d 471 (1931)

UNITED STATES v. CITY OF BUFFALO.

No. 68.

Circuit Court of Appeals, Second Circuit.

December 7, 1931.

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Richard H. Templeton, U. S. Atty., of Buffalo, N. Y. (Joseph J. Doran, Asst. U. S. Atty., of Rochester, N. Y., and Harold B. Ehrlich, Asst. U. S. Atty., of Buffalo, N. Y., of counsel), for plaintiff-appellant.

Charles L. Feldman, of Buffalo, N. Y. (Herbert A. Hickman, of Buffalo, N. Y., of counsel), for defendant-appellee.

Before L. HAND, SWAN, and CHASE, Circuit Judges.

CHASE, Circuit Judge (after stating the facts as above).

No time need be spent to show that property purchased by the United States with the consent of the state in which it is located is beyond the reach of state or municipal taxation unless the United States consents. U. S. Const. art. 1, § 8. No claim is made that it is. Moreover, property of the United States is expressly made exempt in New York by section 4 of the Tax Law of that state (Consol. Laws N. Y. c. 60).

On December 1, 1919, the property was, however, owned by a private corporation and was then taxable. It is equally clear that under the charter of the city of Buffalo its status as taxable property as of that date was fixed by the acts of the officials of the defendant. But the establishment of its taxable status according to law and the creation of a lien upon the property for any taxes assessed upon it are not the same or equivalent things and do not put into being the same rights and liabilities.

For the purposes of this case, we may assume arguendo that the owner of the property on December 1, 1919, was, when its taxable status became fixed, personally liable for taxes assessed upon it either before or after April 20, 1920, which were for the fiscal year of such taxable status and were due and payable the following July 1st. But that does not necessarily mean that the property itself was liable for such taxes after it had ceased to be the property of that owner. This would depend upon whether the taxing power had any lien or claim for taxes upon the property itself apart from that to which it could be subjected in the event of its ownership by one subject to taxation and liable for the tax at the time payment of the tax could be enforced. When it became the property of another its only liability for unpaid taxes would, of course, be due to some lien against the property itself as of the time the new ownership came into being.

Regardless of what had been done before the government took title April 20, 1920, there was yet to be taken certain vital steps to create such a lien. Section 106 of the defendant's charter, above quoted in part, provides for the publication of a notice by the assessor on the 1st day of June or as soon thereafter as practicable and further provides that all taxes and assessments, together with interest thereon, shall be liens upon the lands upon which they are assessed from the time of the publication of such notice until they are paid. By the defendant's charter, therefore, the publication of this notice was made a condition precedent to the creation of a lien on the property for these taxes. As the notice could not be published until June 1st, there could have been no valid lien on April 20th when the government took title. Furthermore, the assessment of December 1, 1919, was but a valuation of the property for purposes of taxation. In re Donner-Hanna Coke Corporation, 212 App. Div. 338, 340, 209 N. Y. S. 62. The assessment for taxation is another distinct step, Matter of Freund, 143 App. Div. 335, 337, 128 N. Y. S. 48; and no lien is created on the property by the act of assessment for valuation, Barlow et al v. St. Nicholas National Bank, 63 N. Y. 399, 401, 20 Am. Rep. 547; Lathers v. Keogh, 109 N. Y. 583, 17 N. E. 131. See, also, Buckhout v. City of New York, 176 N. Y. 363, 68 N. E. 659. Accordingly, we entertain no doubt that when the United States took title, the property was unincumbered by any lien for taxes.

After that date the same immunity from new taxation which made it thereafter exempt protected it from being subjected to any new lien for prior taxes. See United States v. Pierce County (D. C.) 193 F. 529; Bannon v. Burnes et al. (C. C.) 39 F. 892. Some confusion seems to have resulted from the failure to distinguish the difference between the status of property which is exempt from state or municipal taxation solely by reason of the voluntary surrender by state law of the right to tax, and property which is immune from state or municipal taxation because it is owned by the United States. See Ft. Leavenworth Railroad Co. v. Lowe, 114 U. S. 525, 5 S. Ct. 995, 29 L. Ed. 264. The important reason no such lien could come into being without the consent of the federal government after it took title lies in the fact that taxation of the property of the United States depends wholly upon the will of its owner. Van Brocklin v. Tennessee, 117 U. S. 151, 155, 6 S. Ct. 670, 29 L. Ed. 845. As the whole is inclusive of all its parts, so immunity from taxation which rests upon the sovereign right of the federal government to hold property tax free includes freedom from all taxation not fixed and final as a charge against the property itself when the government acquires it. Since the right here invoked...