
    Common Pleas Court of Montgomery County.
    John F. Ohmer v. The Miami Conservancy District.
    Decided, January 30, 1928.
    
      H. W. Baker, for plaintiff.
    
      Brown & Frank, for defendant.
   Snediker, J.

This is an action for equitable relief. The plaintiff, who is a purchaser from the Government of the United States of the ten lots located in the city of Dayton, upon which heretofore assessments had been levied to be collected over a period of years, asks to be relieved of the payment of penalties arising from the non-payment of some of these assessments, under the following conditions: Prior to the World War these properties upon which is built a manufacturing establishment, were owned by the Dayton Body Company. The Government desired to secure this property for use in the manufacture of naval supplies, and became its purchaser on the 5th day of February, 1918, and in the general warranty deed delivered to it was found the following exception: “except as to any assessments under the Conservancy Act of Ohio.” This property was used for the purpose intended until the close of the war,. when it was offered for sale by the Government, and with competition, at a public auction of the premises, on September 4, 1920, this plaintiff bought the real estate from the Government, making a deposit which was required, and receiving from the United States by and through the Secretary of the Navy an acknowledgment that the United States had this day accepted his offer and agreed to sell the real estate to him, and that upon the full payment of the balance of the purchase price the United States would execute and deliver instruments of conveyance, but that the title, to the property was to remain in the United States until the full purchase price has been paid. At different times additional partial payments were made by the plaintiff to be applied on the purchase price of this property, and his final payment was transmitted to the Secretary of the Navy on June 29th, 1926. This having been done, plaintiff demanded from the Government a deed in conformity with what he understood to be the agreement, which was that the Government should take care of the assessments and penalties of the Miami Conservancy District. This the Secretary of the Navy declined to do on the advice of the Department of Justice, on the ground that any assessments or penalties on account of the non-payment of assessments falling due during the period the property was owned by the Government were void as against the United States; and the Government declined to pay any of them.

Under those conditions the plaintiff has not accepted, nor has there been delivered to him a deed for the premises so purchased, and he asks that the controversy as to the conservancy assessihents and penalties, and as to the liability of the Government or of himself therefor, be determined by the court in this case. However, he has deposited with the clerk of this court the sum of $1,570.34, which covers the principal amount of the assessments due and payable including those due in 1927, and asks that this having been done, the penalties be ordered cancelled and that the money paid by him into the court be ordered transmitted to the proper authorities in full of the delinquent assessments, and for such other relief in equity as he may be entitled to.

In his petition the plaintiff says “ that he is wiling to pay the delinquent assessments without penalty in order that he may obtain a deed from the Government and be relieved of the lien.” We regard this plaintiff as the real party in interest in this case and entitled to bring this action for the reasons hereinafter given.

After the enactment of what was known as the Conservancy Act of the state of Ohio, a proceeding was commenced in this court of No. 36847, and entitled “In the Matter of the Miami Conservancy District.” Such proceedings were had that the District was established, and it thereupon became a body corporate and a political subdivision of the state. Thereafter upon hearings certain assessments were levied upon the property within the district for the payment of the expense of its establishment, organization, works and maintenance. Upon the properties in question in this case there was levied at the time of the making of these assessments such amount for benenfits as was determined to be appropriate. These were a lien upon the corpus of the estate and became due and payable from the then owners thereof, or from their successors in title, whether by grant, gift, devise or descent.

At the time the property was acquired by the Dayton Body Company these assessments were still due and becoming due and were being paid. When it was purchased by the United States Government and thereafter during the time it was in possession of the Government, these assessments became due and the Government refused payment on the ground that the general Government could not be taxed by a state or by a subdivision thereof. As a result of this position taken by the Government there was an accumulation of unpaid assessments. and of penalties at the rate of two per cent a month on all assessments unpaid. This was the condition when this plaintiff became the purchaser of this property at the public sale had by the Government in 1920, and the Government not then delivering any deed, but continuing to be the record and legal owner of the property, the assessments were still unpaid and the penalties on account thereof were and have been accruing up to this time.

It cannot be questioned that the framers of the Conservancy Act intended that this District should be organized for the protection of the owners of the property within it, and that the assessments and penalties, if any, should be paid by them. This is manifested in a number of sections of the Act which relate to the establishment of the District, to the appraisals for benefits, to the hearing on appraisals, and to the collection of assessments and the imposition of penalties. It is unnecessary for us to refer to these sections by number as they are found in the General Code. There is not in that part of the Code which defines the terms used therein any definition of the word “owner. That being true, we are relegated to the ordinary use of that term for an ascer tainment of its meaning, or, as we ordinarily say, to the common law definition thereof. This may be found in the decisions of the courts of this state. “The state has provided by statute for following the legal title and as a rule, especially in cases like this, assesses the taxes against the one holding the legal title. By this arrangement the state regards the one holding such title the owner, the one to whom it belongs.” This being • true by whom were the assessments and penalties payable, which accrued and were unpaid, during the time the Government was holding the legal title to this property?

At Section 579 of Page and Jones on Taxation by Assessment, these authors say:

“The power of the Legislature to levy assessments on land depends in part on the ownership thereof, and on the use to which it is devoted. The United States is a government distinct from that of each state, beyond the control of individual states, in no way amenable to their authority, and possessing the right to own land for governmental purposes. The United States cannot be sued without its own consent, and no personal liability can therefore be enforced against it. Its lands cannot be taken away from it by process issued by states courts, and therefore no lien for local assessments can be enforced against it. The action of United States officials cannot be controlled by the state courts by the writ of mandamus. For these reasons, property owned by the United States is not subject to local assessments. This principle applies not only to land owned and used by the United States for governmental purposes, but also to its public lands, which it has not yet conveyed to individuals.”

Supporting this general statement are numerous authorities of which are the following:

In the case of Nevada National Bank, of San Francisco, Respondent, v. Poso Irrigation District, Respondent, and Augustine v. Russell, Intervener, Appellant, 140 Calif., p. 244-247, the syllabus is:
“Public lands of the United States cannot be included in an irrigation district, and can form no part thereof. Neither the state nor its agencies can impose an assessment, tax, or liabilty thereupon; and a sale and patent therefor after the issuance of bonds of the irrigation district, cannot operate to charge the land in the hands of a holder under the patent with any pre-existing liability on such bonds, not assented to by the government or its grantee.”

In the body of the opinion the court say:

“The further question then arises, Did the sale and conveyance by the United States to the intervener or her grantor, operate to charge it with a pre-existing liability not created or assented to either by the government or its grantee? This question must also be answered in the negative, for if the grantee of. the United States must take the land burdened with the liability of an irrigation district made to include it without the assent of the government or the purchaser, it attaches a condition to the disposal of the property of the government without its sanction or consent, and which must, in such cases, interfere with its disposal.”

In the case of Edgerton v Huntington School Township, 126 Ind., 261, Judge Goffey, in discussing an attempt to subject the congressional township lands in the state to assessment in aid of the construction of public ditches or drains, says:

“The state has no power to tax such lands, for if it were permitted to do so, it could tax them out of existence, and divert them to the use of the state in the payment of ordinary expenses. So, if they could be assessed for local improvements and exposed to sale at public auction, and sold to the highest bidder, they might be totally absorbed and diverted from the common school fund to a purpose never contemplated when they were reserved.”

This same question has been before the United States Supreme Court. In the case of the Wisconsin Central Railroad Company v. Price County, 133 U. S., p. 496, the first syllabus reads:

“No state has power to tax the property of the United States within its limits.”

In passing on the case, Justice Field said:

“It is familiar law thaiT a state has no power to tax the property of the United States within its limits. This exemption of their property from any taxation by authority of the state, whether it be strictly for state purposes or for mere local and special objects — is founded upon that principle which inheres in every independent government, that it must be free from any such interference of another government as may tend to destroy its powers or impair their efficiency. If the property of the United States could be subjected to taxation by the state, the object and extent of the taxation would be subject to the state’s discretion. It might extend to buildings and other property essential to the discharge of the ordinary business of the national government, and in the enforcement of the tax those buildings might be taken from the possession and use of the United States. The Constitution vests in Congress the power to ‘dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States.’ And this implies an exclusion of all other authority over the property which could interfere with this right or obstruct its exercise.”

This position has been taken by the Government under the Constitution ever since its adoption, and has been supported by the decisons of the Supreme Court of the United States and by other federal courts in numerous opinions, some of which are cited by counsel for plaintiff in the very able brief which he has filed with this court. Among these are Ward v. Maryland, 12 Wal., 427; McCullough v. State of Maryland, 4 Wheat., 316; Van Brocklin v. State of Tennessee, 117 U. S., 153; Northern Pacific R. R. Co. v. Trail County, 115 U. S., 610.

So that we are constrained to hold that from the time the Government of the United States became the owner of the property in the petition referred to, the State, and the Conservancy District as a sub-division thereof, were without power or authority to collect from the Government that portion of the assessments which had been theretofore imposed which fell due during that period or to collect any penalties which incidentally accrued from a nonpayment of such assessments by the Government, the exceptions as to such assessments found in the deed of the Body Company to the Government to the contrary notwithstanding. Whether there is a contract right in such exception which may be availed of by the successors in title of the United States Government we are not deciding.

The status of this plaintiff is this: He has paid his money for the full purchase price of the property, the Government holds the title to that property and refuses to make a deed to him until such a situation is made as recognizes its freedom from liability for such assessments and penalties. In order to create that situation he has deposited with this clerk the whole amount of the assessments and asks an order of the court relieving him from all payment of penalties, whch, under the foregoing authorities could not be imposed upon the property during the time the Government owned it, nor collected by the ordinary proceedings for that purpose, nor at any time could be said to be subsisting in such a way as to be available to the state or its subdivision ' against the Government.

Under these extraordinary conditions, it is our opinion that this plaintiff is entitled to an order of this court enjoining the Conservancy District of the state of Ohio, from collecting such penalties and to a mandatory order directing that they be cancelled on its books. This opinion has no reference to any assessments or penalties thereon which may accrue subsequent to the time when the United States Government executes and delivers to this plaintiff its deed, nor to the collection by the Conservancy District of the entire amount of the assessment imposed upon said property, in the case, In Re Conservancy District of Ohio, which has been taken care of for the years during the time it is owned by the Government, by the check deposited by this plaintiff with the clerk of ths court.

Let an entry be drawn in conformity to the foregoing opinion.  