
    *Andrews, Ordway & Green v. The Auditor, &c. The Auditor v. Andrews, Ordway & Green.
    January Term, 1877,
    Richmond.
    By agreement between the United States government and the owner of land, the government erects buildings on the land, intended to be and actually used by operatives employed by the government in dressing stone to be employed in the erection of public buildings at Washington; and under the agreement the government has the right to remove the buildings — Held:
    1. The buildings are personal property.
    2. Constitutional Law — Taxing* Government Property. — The buildings being the property of the United States, the state cannot tax them either as personal property or as parcel of the land on which they are built.
    3. Taxation — Exemptions.—When buildings put up on the land of another are exempted by law from taxation, they should not be valued with the land, and the owner of it is not to be charged with their value as part of his land subject to taxation. But where such buildings are not exempt from taxation, they should be valued and the tax charged to the owner of the “land.
    One of these cases was an appeal by the auditor of public accounts of the commonwealth of Virginia from a judgment of the circuit court of Chesterfield county, reversing a judgment of the county court, upon the application of Andrews, Ordway & Green, to have repaid to them taxes which had been assessed upon the buildings located upon lands owned by them, which buildings were the property of the United States government, and to have the same exempted from taxation. The other case was an application to the court of appeals for a writ of man-damns to the *auditor to require him to repay the said taxes. The case is stated by Judge Christian in his opinion.
    
      P. W. Christian, for the petitioners.
    
      The Attorney General, for the auditor.
   Christian, J.

This case is before us upon a writ of error to a judgment of the ciixuit court of Chesterfield county. The controversy arose out of a motion made by Andrews, Ordway & Green before the county court of Chesterfield for redress against an alleged erroneous assessment of taxes.' The county court held the assessment against them lawful; but on appeal to the circuit court the judgment of the county court was reversed, and the appellants were relieved from the erroneous assessment complained of; and it was to this judgment, reversing the judgment of the county court, that a writ of error was awarded by one of the judges of this court.

The question we have to determine arises upon the certificate of facts made by the ci urt below, which certificate is as follows: in the matters of the motion of Andrews, Ordway & Green for redress against an erroneous assessment, the court doth certify that the following facts were proven: ¡

That R. S. Andrews, Albert Ordway and S. S. Green owned a tract of land lying opposite Rocketts, Richmond, in Manchester Township, Chesterfield county, Virginia, containing twenty-one and three hundred and seventy-nine thousandths acres; that the said land anil buildings thereon are assessed on the land book for 1873 at $29.000, and the whole thereof -‘charged to Andrews, Ordway & Green; that the sum included in said assessment on account of buildings is $27,500; that of the said buildings only one-sixth in value belongs to Andrews, Ordway & Green; that the rest of the buildings, amounting in value to five-sixths of the whole, were erected by the United States with tile consent of Andrews, Ordway & Green, with the understanding that the said buildings were removable by the United States. The said buildings were paid for entirely by the United States, and are the property of the United States; they are used by the operatives and employees of the United States in dressing the granite to be used in the erection of certain public buildings in Washington, District of Columbia, for the use and accommodation of the state, war and navy departments of the United Slates government. That the said Andrews, Ordway & Green have not received and do not receive any compensation in any form for the use of Iheir land in the erection of the said buildings by the United States; that for the superintendence of the work done in said ' buildings the said Andrews, Ordway & Green j receive a certain percentage uiider contract; | that the taxes assessed on the said land and all the buildings, which land and buildings are valued at $29.650, are as follows:

State tax .........:..........$148 25
School tax ................... 44 48
County levy ................. 44 48
Township levy ............... 59 30
Expenses of collection ........ 11 86
Making a total ..............$308 37

While the amount involved in this case is insignificant, the question we have to determine is of the -‘gravest importance, because it involves the respective rights and powers of the. state and the Federal government, with respect to the highest prerogative of sovereignty — the power of taxation.

First, I have to remark that it must be taken upon the certificate of facts in the record as a concessum in the case that five-sixths of the buildings erected on the lands of Andrews, Ordway & Green were the property of the United States, erected by that government for a legitimate purpose, and under a contract to be removed at the pleasure of the government.

Under that contract they (the buildings) were not the property of the owner of the soil, and were no part of the real estate.

It is a principle firmly settled by numerous decisions, that where a building is erected by one man, upon the land of another, by his permission, upon an agreement or understanding that it may be removed at _ the pleasure of the builder, it does not become a part of the real estate, but continues to be a personal chattel and the property of the person who erected it. 1 Wash, on Real Prop, p. 3, § 4; Osgood v. Howard, 6 Greenl. 452; Smith &c. v. Benson &c., 1 Hill’s R. 176; Wills v. Bannister, 4 Mass. R. 514; Doty v. Gorham, 5 Pick. R. 487; Marcy v. Darling, 8 Pick. R. 282; Rogers v. Woodbury, 15 Pick. R. 156; Wall v. Hinds, 4 Gray R. 256; Barnes v. Barnes, 6 Vermont R. 388; Dulois v. Kelly, 10 Barb. R. 496, and Dame v. Dame, 38 New H. R. 429, and cases there cited, where the whole subject is elaborately discussed and numerous decisions of many states in the Union are collated.

From these decisions it is clear that the mere fact that these buildings were erected upon the lands of the defendants in error by their permission did not constitute them a part of the realty, but they were the *personal property of the United Slates government, to be removed at its pleasure under its contract with the defendants in error.

Being, then, the property of the United States, is it liable to be taxed by the state? This is the question we have to determine. It has been argued here on both sides with signal ability and learning. In my view of the case, however, much of the learned and eloquent argument of the attorney general was directed to a question that does not arise in this case. He treated the property taxed as real estate, and protested against the right of the United States to acquire or control in any manner any real property within the jurisdiction of the state, except in the mode pointed out in the constitution. Undoubtedly, the jurisdiction of the state is supreme over every inch of her territory, except that which is voluntarily relinquished to another sovereignly. Beyond all question, the right of eminent domain is in the state, and not in the United States. The United States can acquire ownership of the soil within the territory of the stale only with the consent of the state.

But in this case the property taxed is not land but personal property; and questions as to eminent domain and exclusive jurisdiction need not be considered.

The single question is whether this personal propertjr acquired by the United States for the purposes set forth in the certificate of facts, is a proper subject of taxation by the state. It is certified as part of the facts proved in the court below, that “the said buildings were paid for entirely by the United States and are the property of the United States, and are used by the operatives and employees of the United States in dressing granite to be used in the erection of certain public buildings in Washington for the use and accommodation *of the state, war and navy departments of the United States government.” Can such property used for such purposes be a legitimate subject of state taxation.

■ Taxation is an incident of sovereignty, and is co-extensive with that to which it is incident. All subjects over which, the sovereign power of the state extends are objects of taxation; but those over which it does not extend are upon the soundest principles, exempt from taxation. This proposition may almost be pronounced self-evident.

In our complex system of government the power of taxation is concurrent in the state and federal governments. These two governments .operate on the same people and over the' same territory. The powers of sovereignty are divided between the government of the Union and those of the states; and although both exist within the same territorial limits they are separate and distinct sovereignties, acting sejiarately and independent of each other within their respective spheres. Each within its appropriate sphere is supreme. They are each sovereign with respect to the objects' committed to it, but neither sovereign with respect to the objects committed to the other. It is true the government of the United States is one of limited and carefully guarded powers. It must be now taken as an established rule of construction of the constitution of the United States, that the sovereign powers vested in the state governments by their respective constitutions remained unaltered and unimpaired except so far as they were granted to the government of the United States. That the intention of the framers of the constitution in this respect might not be misunderste od, this rule of interpretation was expressly 'declared in the tenth article of the ^amendments: "The powers not delegated to the United States are reserved t© the states respectively or to the people.”

The government of the United States therefore can claim no powers which are not granted to it by the constitution, and the powers actually granted must be sucli as are expressly given, or given by necessary implication. But while a government of limited powers, yet within the sphere of its granted powers, and in the exercise of all these means, and the employment of all those agencies and instrumentalities “necessary and proper for carrying into execution” its granted powers, the government of the United States is as supreme and independent as the states which created it. McCulloch v. State of Maryland, 4 Wheat. R. 316; Osborn v. U. S. Bank, 9 Wheat. R. 738: Western v. City of Charleston, 2 Pet. R. 449; Bank of Commerce v. NeW York City, 2 Black U. S. R. 620; Bank Tax Case, 2 Wall. U. S. R. 200; Kent’s Com. 445-431, (marg.).

Let us now apply these principles t® the case before us. The property proposed to be taxed is owned by the United States government, and used by that government in preparing granite for- the erection of a grand-public building in the city of Washington for the accommodation of the navy, war and state departments. The property thus owned and used is not the property of a contractor of that government, but of the government itself, and is used by its employees and agents.

Now the power to “erect needful public buildings” is one of the powers expressly granted in the constitution, and even if it had not been expressly granted, it would have been conferred by necessary implication; for the very establishment of the government carried with it the necessity of the power to erect ^public buildings in which to carry on its great and varied affairs in its different departments.

The power to “erect needful buildings” necessarily carries with it the power to use the proper means to erect such buildings. This cannot be done without materials, without tools, without machinery, without engineering often. Expensive and elaborate buildings cannot be spoken into existence or raised by magic. Property in varied forms must be employed in providing material, in dressing it into shape and form, in transporting if and placing it in its appropriate place. And all this must be done often, and generally within the territorial limits of the states.

Suppose the necessary materials cannot be obtained within the ten square miles comprising the district of Columbia, or from any other real estate over which the United States holds exclusive jurisdiction and ownership. What then? May not the government acquire by purchase the necessary materials in one of the states; and if so acquired, may it not, must it not, have the right without hindrance or restriction to prepare those materials by the use of all the machinery and all the appliances necessary to that end? If temporary buildings are necessary, may it not put up such buildings under contract with the owner of the soil? If engines and machinery and teams and wagons and other appliances and property are necessary, can this property be taxed when used for this legitimate purpose? I think not. The power to tax carries with it the power to destroy. If the right to impose_ the tax exists at all, it is a right which in its nature acknowledges no limits. It may be carried to any extent within the jurisdiction of the state or corporation which imposes it, which the mere will of such state or corporation may prescribe. The consequence *would be, that the states might deprive the general government of the exercise of powers essential to its very existence.

Can any thing be more dangerous or more injurious than the admission of a principle which authorizes every state and every corporation in the Union which possesses the right of taxation, to burthen at their discretion the exercise of the granted powers of the general government, or those which are necessary and proper to carry such granted powers into execution. Within this domain the supremacy of that government cannot be questioned; and in the exercise of its legitimate powers, it must be left free and unembarrassed by any conflicting authority. The power of a state cannot rightfully be so exercised as to impede or obstruct the free course of those measures which the government of the United Stales may rightfully adopt.

In McCulloch v. The State of Maryland (supra), this question was discussed in all its relations by the most distinguished counsel of that day of great men; Daniel Webster, William 'Pinckney, Wm. Wirt, Uuther Martin and Walter Jones being among the counsel who argued the case. Chief Justice Marshall delivered the opinion of the court. That opinion stands to-day, as it will stand for all time, as a monument to his wisdom and learning, and among the great emanations of that luminous intellect which made clear and certain every question which it took in its grasp. The principles established by that opinion have been recognized and followed ever since. I give his own interpretation of that opinion, given ten years after-wards, to show its application to the case before us. In Weston v. The City Council of Charleston, 2 Pet. R. 149, 467, he says, referring to the case of McCulloch v. State of Maryland, “It was discussed at the bar in *all its relations, and examined by the court with its utmost attention. We will not repeat the reasoning that conducted us to the conclusion thus formed; but that conclusion was, that all subjects over which the sovereign power of the state extends are objects of taxation; but those over which it does not extend are, upon the soundest principles, exempt from taxation. The sovereignty oí a state extends to everything which exists by its own authority or is introduced by its permission; but not to those means which are employed to carry into execution powers conferred by the people of the United States. The attempt to use the power of taxation on the means employed by the government of the Union in pursuance of the constitution is itself an abuse, because it is the usurpation of a power which the people of a single state cannot give. The states have no power, by taxation or otherwise, to retard, impede, burthen, or in any manner control the operation of constitutional laws to carry into execution the powers vested in the general government.”

The case before us seems to me to come within the letter and spirit of the principles here announced.

Property is certainly one of the means, or agencies, or instrumentalities, or whatever you may call it, “necessary to carry into execution” the powers expressly granted in the constitution, to erect “all needful buildings.” The government of the United States must of necessity hold property within the states as a means of exercising its high and important functions. And if this property can be taxed by the state, it may be taxed out of existence; and thus the general government may be “retarded, impeded and burthened” in its operations to such an extent that its most important functions may be impaired and its very existence threatened.

*[ have already said that the principles settled in McCullough v. State of Maryland have never been departed from, but. acted upon by the supreme court of the United 'States for more than half a century, from 1819 down to the present day. Tn several recent decisions the same doctrines have been re-affirmed. See Bank of Commerce v. New York City, 2 Black’s R. 620; Bank Tax Case, 2 Wall. U. S. R. 209.

In these cases it was held that that portion of its capital which a bank has invested in the stocks, bonds or other securities of the United States, is not liable to taxation by a state. This is upon the principle that these stocks and bonds and other securities are the property of the United States, used as a “means of carrying into execution its granted powers” — necessary and proper to carry into effect the great fiscal operations of the general government. My mind can comprehend no distinction between an exemption of such property as this, and an exemption of the property proposed to be taxed in this case. If the power to establish National Banks is within the granted powers enumerated in the constitution, certainly the power “to erect all needful buildings” is be yond all question among the granted powers in express terms; and if the property used ill the one case is exempt from taxation, that used in the other must be also.

The establishment and enforcement of the principles declared by Chief Justice Marshall in the cases above referred to, are absolutely necessary to the harmonious and efficient operations of both the national and state governments. They apply to both and must govern both with equal force. If the state government may tax the property, the means, the appliances, the agencies and instrumentalities used in carrying on its manifold and varied operations within that sphere in which Hi is supreme, why may not the national government tax the property, the agencies and instrumentalities used by the state government in carrying on its operations within that sphere within which it is supreme.

If such usurpation of authority can be exercised by one, why may it not be exercised by the other? In both it would be a usurpation and abuse of authority.

In The Collector v. Day, 11 Wall. U. S. R. 113, 127, Mr. Justice Nelson delivering the opinion of the court, uses the following forcible and apt words, which very fitly apply to the point we are now considering. It was a case where a United States collector sought to impose a tax upon the salary of a judicial officer of a state. In discussing the question as to the power of the Federal government to impose such a tax, he says: “And if the means and instrumentalities employed by that government (the U. S. gov’t) to carry into operation the powers granted to it. are necessarily exempt from taxation by the states, why are not those of the states depending upon their reserved powers for like reasons equally exempt from Federal taxation. Their unimpaired existence in the one case is as essential as in the other. It is admitted that there is no express provision in the constitution that prohibits the general government from taxing the means and instrumentalities of the states; nor is there any prohibiting the states from taxing the means and instrumentalities of 'that government. In both cases the exemption' rests upon 'necessary implication, and is upheld by the great law of self-preservation; as any gov- , ernment^ whose means employed in conducting its operations, if subject to the control óf another and distinct government, ,can exist only at the mercy of that govern'ment. Of what avail are these means, if another power may *tax them at discretion?” See also Dobbins v. Commissioners of Erie, 16 Pet. R. 435.

I think the 'true principle sustained by the highest authority, by the constitution itself and by its most eminent expounders, is that hereinbefore declared, to wit, that each government is. within its appropriate sphere, supreme. Each is sovereign with respect to the objects committed to it. Neither is sovereign with respect to the objects ■ committed to the other.

_ If this cardinal principle of the constitution be kept constantly in view and steadily upheld, the two governments, state and federal, will move, each in its own orbit of governmental operations, without collision and without conflict of authority. Each being separate and independent, neither interfering with the other within the domain of its exclusive sovereignty, the operations of each left free and unembarrassed from restrictions imposed by the other, the whole complex system will move in harmony and peaceful conjunction, dispensing to all the blessings' of free government and constitutional liberty.

There is but one other point I deem necessary to notice. It was insisted by the learned attorney general, that under otir system for the assessments and collection of taxes prescribed by the statute, the assessor is directed to value “the land with the improvements thereon;” and that ihe state will look to the value of the land only for taxes upon the value of both land and improvements. That in providing for the public revenues, the state cannot take notice of the private contracts of parties which fixes the title of the land in one person and the buildings erected thereon in another, but that the owner of the land must, for the purposes of taxation, be regarded as the owner of the buildings also. This view, in its general application *is certainly correct. Undoubtedly where the buildings erected on the land are themselves the subject of taxation, the state will take no notice of private contracts which sever the ownership of the land from that of the buildings; and will hold the owner of the land responsible for the taxes on both. But suppose the buildings are exempt from taxation, — how then? Suppose a church or parsonage, or other building used for charitable purposes, is erected on land with the permission of the owner, he retaining the title to the soil on which it stands; can the owner of the land be taxed for the value of such buildings? Certainly not. If authority is wanting for so self-evident a proposition,- I refer to the cases cited by the learned counsel for the defendants in error. Parker v. Redfield, 10 Conn. R. 490; Lefevre v. Mayor &c. of Detroit, 2 Mich. R. 586; which are express authorities on this point. But it is said that churches and like buildings are exempt from taxation by express statute. So they are. And the buildings erected by the United States, owned by that government, and used for the lawful purpose of carrying into execution its granted .powers, are also exempt from taxation — not by express statute it is true, but by laws as potent and obligatory as if they were written on the statute books of every state in the Union.

But it is said it is inconvenient to the state government to make separate assessments of the lands from the improvements, and that the assessor cannot b.e expected to determine complicated questions arising between such separate ownership.

If the argument a-b inconvenienti can be used in a case affecting such great rights it has no force here. Separate assessments are often made, and required to be made, by thq statute. When one party owns the ^surface, and another party the minerals beneath the surface, the assessment is made separately. So in some cases where machinery is used for certain kinds of manufactures, the machinery and buildings are assessed to one owner, and the land on which it is erected to another. Code, ch. 33, § 30, 43. Complicated questions of title, or rights arising under contracts of the parties, are not left to the determination of the assessor. Any party may apply in any case to the county court to correct an erroneous assessment. That is the tribunal, and not the assessor, which is to determine all such questions.

Upon the whole, I am of opinion that the buildings upon which the tax is imposed in this case, being the property of the United States employed and used to carry into execution granted powers under the constitution of the United States, is not subject to taxation by the state. I am therefore for confirming the judgment of the circuit court of Chesterfield, and for awarding a peremptory mandamus, requiring the auditor of public accounts to refund to the plaintiffs the amount of taxes erroneously assessed and paid by them.

Staples and Burks, Js., concurred in the opinion of Christian, J.

MoncurE, P., and Anderson, J., dissented.

Judgment of the circuit court affirmed AND PEREMPTORY MANDAMUS ISSUED. 
      Erecting Buildings on Another's Band— Effect of Agreement. — See Shelton v. Ficklin, 32 Gratt. 727-743 and note, affirming the decision of the principal case that where a building is erected by one man upon the land of another, by his permission, with -the right to remove it retained, it does not become a part of the realty but continues to be a personal chattel and the property of the person who erected it.
     