Atkinson v. State Tax Commission

*463 RAND, J. The facts in this ..case are very similar to those in Winston Bros. Company et al. v. State Tax Commission of Oregon et al. on this day decided, and the law of that case is decisive of this." In this case, as in the former one, the state seeks to impose a tax upon the profits realized by the plaintiffs in the performance .of a contract entered into by them with the War Department. In the other case, the work was done in the reconstruction of a jetty, while in this case the work was done in the construction of a dam, locks and ship canal in the Columbia river at Bonneville, Oregon. The plaintiffs here, as in the former case, are nonresidents of the state. ' The evidence shows that the dam, locks and ship canal are being constructed as an aid to navigation and it is undisputed that all the operations of the plaintiffs here, under their contract, were entirely performed on land the title to which had been acquired-either by condemnation, by grant of the state, or by purchase from private individuals, except a small portion thereof which was done on the south channel of the river lying between Bradford island and the mainland, which channel, before the work was done, was navigable for small craft. There are two statutes not referred to in the other case, both of which are applicable to show that the fee in these, lands was acquired by consent of the state. These are sections 60-1301 and 60-1303, Oregon Code 1930, which read as follows: . ‘ ‘ Whenever it shall become necessary for the United States'to acquire the title to any real property in this state belonging to any individual or corporation, for the purpose of constructing any canal or locks,- or any *464 other public improvement authorized to be made by any act of congress, and such property cannot be purchased from the owner for that purpose, it shall be lawful for any authorized agent of the United States to enter upon, examine, and select a quantity of land, fully sufficient in length and breadth for such canal and locks, or other public improvements, and such authorized agent may proceed in the mode prescribed in chapter IV of Title XXXVII to have such property appropriated, and the compensation therefor determined and paid.” “Consent is hereby given to the United States to purchase or otherwise acquire any lands within the state of Oregon for the purpose of erecting thereon any needful public buildings, under authority of any act of congress; and the United States may enter upon and occupy any such lands which may be purchased or otherwise acquired, and shall have the right of exclusive jurisdiction over the same; provided, that all process, civil or criminal, issuing under authority of the laws of the state of Oregon, may be executed by the proper officers thereof upon any person or persons amenable to the same within the limits of the land so acquired, in like manner and to the same effect as if this act had not been passed. ” It will thus be seen that the title, whether acquired by purchase or condemnation, was acquired with the consent of the state and, since all work and operations by the plaintiffs were performed on lands the fee to which had been acquired by the federal government, the state, under the rulings in the Winston Bros. Company case, has no' jurisdiction over such lands other than merely the right to serve process and has no legislative authority to tax any of the operations thereon or any income arising from any work done thereon. Defendants argue that the federal government may acquire exclusive jurisdiction over territory within a state only in one of two ways: First, by purchase with *465 consent of the state, or second, by cession of jurisdiction by the state. We think that both of these elements are present in this case and that the purchase was made with the consent of the state and that jurisdiction was ceded to the federal government by the state. The rule applicable to the concurrent jurisdiction over a bridge constructed over navigable waters under the authority of the War Department has no application here. In such case, the government may construct a bridge over navigable waters with or without the consent of the state under the power conferred upon Congress by Article I, section 8, subdivision 3, which gives to Congress the power to regulate commerce with foreign nations, and among the several states and with the Indian tribes. The construction of a bridge over a navigable stream, whether done with or without the consent of the state, is an exercise of power under said constitutional provision and, if the bed of the river on which the piers are laid is occupied by the federal government in the construction of the bridge without the consent of the state, its occupancy is authorized, but in that case both the state and the federal government retain concurrent jurisdiction thereover. This is clearly pointed out in Stockton v. Baltimore & N. Y. R. Co., 32 Fed. 9, where the court said: “* * * It is argued that this is the only constitutional method by which the United States government can obtain the possession and use of lands within a state, especially of lands belonging to the state. “The argument, however, is directed to the acquisition of territory, with exclusive jurisdiction over the same, and is entirely sound in that regard. But it does not touch the question as to the power of the United States to acquire the mere use of land without exclusive jurisdiction therein. Nearly all the powers of govern *466 ment are exercised over territory in which the United States and the several states have concurrent jurisdiction. It is only in exceptional cases that the United States desires to have exclusive jurisdiction, and a consequent cession of territory. It is very true that the consent of the state legislature is required in order to give the United States this exclusive jurisdiction. But that is all. It is not required when exclusive jurisdiction is not sought. On the contrary, the government, if it sees fit, may condemn land for its purposes without the consent of the state. Thus it was decided in the supreme court in the case of Kohl v. U. S., 91 U. S. 367, that the government of the United States may exercise the right of eminent domain within a state, for the purpose of condemning land for the use of a post-office building, and may, for this purpose, resort to its own courts. In such a case, there cannot be a doubt that the post-office building could be erected and used by the government without asking the consent of the state legislature. Such consent would, indeed, be necessary to vest in the United States exclusive jurisdiction over the post-office building and grounds; but it would not be necessary to enable the government to use the property for the purposes for which it was acquired. And so of any other property wanted for a public purpose; the consent of the legislature is not necessary to its acquisition, or to its use; but only to the exclusion of state jurisdiction over the place. That jurisdiction, if allowed to remain, will extend to the punishment of crimes committed against state laws therein, and to the service of state process, but, of course, cannot interfere with the execution of the United States laws, nor with the performance, by United States officers and agents, of the duties devolved upon them. “In short, cession by a state is only necessary to extinguish its jurisdiction, in whole or in part, and is not necessary to .the use of land by the United States for public purposes, — subject, like all lands within the limits of the Union, to the concurrent jurisdiction of both governments; that of the United States being supreme, The laws of the latter are supreme everywhere, *467 in the states as well as in the territories of the United States; but-have exclusive force, within the states, only in such places as have been ceded by them. “The argument based upon the doctrine that the states have the eminent domain or highest dominion in the lands comprised within their limits, and that the United States have no dominion in such lands, cannot avail to frustrate the supremacy given by the constitution to the government of the United States in all matters within the scope of its sovereignty. This is not a matter of words, but of things. If it is necessary that the United States government should have an eminent domain still higher than that of the state, in order that it may fully carry out the objects and purposes of the constitution, then it has it. Whatever may be the necessities or conclusions of theoretical law as to eminent domain or anything else, it must be received as a postulate of the constitution that the government of the United Statés is invested with full and complete power to execute and carry out its purposes. And as one of these purposes is the regulation of commerce among the several states, and as that involves the needs and ways of intercommunication, it follows that congress may provide for these necessities whether the states co-operate and concur therein or not.” The defendants also cite Fort Leavenworth Railroad Co. v. Lowe, 114 U. S. 525 (29 L. Ed. 264, 5 S. Ct. 995); as a decision sustaining the right of the state to levy the tax in question. We do not so read that opinion. Fort Leavenworth was established on lands the title to which was in the United States at the time of its establishment, and, in the act of admitting Kansas as a state, there was no reservation of federal jurisdiction over the Fort Leavenworth Military Reservation. Later, the state of Kansas ceded to the United States jurisdiction over the reservation but reserved to itself the right to tax private property therein and, because of those facts which are entirely dissimilar from those involved here, *468 it was held that the property and franchises on the reservation of the railroad company plaintiff were subject to tax by the state. It was also held that: “When the United States acquire lands within the limits of a State by purchase, with the consent of the Legislature of the State, for the erection of forts, magazines, arsenals, dock-yards, and other needful buildings, the Constitution confers upon them exclusive jurisdiction of the tract so acquired; but when they acquire such lands in any other way than by purchase with the consent of the Legislature, their exclusive jurisdiction is confined to the erections, buildings and land used for. the public purposes of the Federal Government.” (Paragraph one of the syllabus.) In the body of the opinion, the court said : “These authorities are sufficient to support the proposition which follows naturally from the language of the Constitution, that no other legislative power than that of Congress can be exercised over lands within a State purchased by the United States with her consent for one of the purposes designated; and that such consent under the Constitution operates to exclude all other legislative authority.” . This principle, we think, is controlling here. From this it follows that the state of Oregon had no right to impose the tax in question here. The judgment of the lower court will, therefore, be reversed and the cause is remanded to the court below to enter a judgment in favor of the plaintiffs. Campbell, C. J., not sitting. Belt, Rossman and Bailey, JJ., concur. Kelly and Bean, JJ., dissent. *469 (67 P. (2d) 161) Howard P. Arnest, of Portland, for appellants. Carl E. Davidson, Assistant Attorney General, of Portland (I. H. Van Winkle, Attorney General, of Salem, on brief), for respondents. James B. Bain, District Attorney of Multnomah county, and Frank S. Sever, Deputy District Attorney, on brief amici curiae. Argued on rehearing February 18; former opinion reversed and lower court affirmed April 6, 1937