The opinion of the court was delivered by: WILLSON
In this case the government seeks a judgment of this court declaring null and void certain tax assessments made by the defendants on property situate in the City of New Castle, Lawrence County, Pennsylvania, together with an order directing defendants to remove the properties from the tax rolls of such city and to refrain from levying taxes upon said property and for such further relief as this court may find the plaintiff to be entitled.
This case appeared on my non-jury trial list. The facts were presented to the court upon an agreed written statement. Thereafter counsel for all parties were heard at oral argument. The property may be briefly described as a government surplus industrial facility known as Plancor 765, constructed in 1942 by the Defense Plant Corporation at a cost of $ 23,000,000. During the war it was operated by United Engineering and Foundry Company as a government contractor. The property was declared surplus to War Assets Administration by Reconstruction Finance Corporation, successor to Defense Plant Corporation, March 1, 1956; and accountability therefor was accepted by War Assets Administration effective as of May 1, 1946. United Engineering and Foundry Company was in continuous possession of the property from the time of the declaration of surplus until December 31, 1953 under a series of leases, all of which required payment by it of local taxes. A new one-year lease was entered into effective January 1, 1954, which omitted the requirement for payment of local taxes by United. It appears that for the years 1943 to 1953, inclusive, United paid to the City of New Castle and the County of Lawrence, all taxes assessed against the property, amounting to $ 1,222,824.20.
It appears that the obligation on the part of United as lessee to pay local taxes was deleted from the new lease of January 1, 1954 in recognition of the rule announced in the case of Board of Commissioners of Sedgwick County, State of Kansas v. United States, 105 F.Supp. 995, 123 Ct.Cl. 304, a decision of the United States Court of Claims decided July 15, 1952, to the effect that liability of property to taxation under circumstances similar to those in this case is dependent upon the government corporation both holding legal title to and having full control and dominion over the property sought to be taxed. The Administrator of the General Services Administration has acknowledged that in order to insure the tax exempt status of the property he caused to be recorded on December 15, 1953 in Lawrence County a quitclaim deed by which legal title was conveyed from the Reconstruction Finance Corporation, successor to Defense Plant Corporation, to the United States of America. It is noticed at this point that the deed had been executed June 13, 1950, but not recorded until three and one-half years later, in Deed Book Volume 376, page 596, Lawrence County records, and entered of record in the New Castle City Registry Department on December 21, 1953. The deed conveys land described as containing approximately 50.171 acres of land, together with buildings, improvements, appurtenances, etc.
Paragraph 10 of the agreed statement of facts is a letter under date of October 11, 1954 from the Administrator of the General Services Administration to the Acting Comptroller General, in which the Administrator summarizes the government's then position and says in part:
'Notwithstanding the decision in the Sedgwick County case and the vesting of legal title in the United States, the City of New Castle has made demand for payment of the 1954 taxes.'
However, subsequently, and on July 19, 1956, the government sold the property which is the subject of this suit to the Mesta Machine Company, a Pennsylvania corporation. In its deed to Mesta there is no warranty of title, the language of the deed being:
'This Deed is executed and delivered to the Grantee, herein, its successors and assigns, without warranty, express or implied, anything herein contained to the contrary notwithstanding.'
The foregoing brief review of the factual situation is necessary in order for this court to clearly indicate why it has come to the conclusion that the pleadings and the facts agreed upon present no justiciable issue or controversy for this court to decide.
Defendants in their amended answer seeking dismissal, paragraphs 12, 13 and 14, aver that by the sale and transfer of the Plancor No. 765, the tax liability attached to the land and hence passed to the present owner, the Mesta Machine Company, and that by reason thereof the sovereign immunity from local taxation claimed by the plaintiff cannot now be asserted on behalf of Mesta Machine Company. Defendants say also in their answer that plaintiff, being no longer the owner of the land and hence with no property interest in it, has no liability for the payment of property taxes and plaintiff is not a proper party to this suit.
It becomes necessary, therefore, to examine the complaint as amended. The complaint was filed July 29, 1955. In it the government avers ownership, the assessment of taxes and seeks a judgment of the court for relief, specifically to declare the taxes and assessments null and void and to restrain the local authorities from further assessing taxes or levying upon the property. The complaint mentions the 1954 and 1955 taxes. The amended complaint filed October 18, 1955 recites the chain of title to the property in more detail than the original complaint and makes reference to defendants' acting through their officers, agents and employees. The meat of the amendment, however, is the recital of the title and recording of the deed as heretofore mentioned. On July 13, 1956, the plaintiff presented a petition to again amend the complaint. The amendment was granted and this added to the complaint the 1956 taxes which by that time had been assessed and levied by the local authorities.
A final petition to amend was filed on August 16, 1956, and on the same date was allowed by a judge of this court, the order reading as follows:
'And now, this 16 day of August, 1956, upon consideration of the within Petition, and it appearing to the Court that justice requires the amending of the Complaint, it is hereby ordered that the same be amended by adding a new paragraph to be known as paragraph number VII, as follows:
'VII. The United States of America on July 19, 1956, sold the property which is the subject of this suit to the Mesta Machine Company, a Pennsylvania corporation.'
This court recognizes the principle that the Federal government is constitutionally immune from taxation or regulation by the several states. Van Brocklin v. State of Tennessee, 117 U.S. 151, 6 S. Ct. 670, 29 L. Ed. 845, expressly held that the constitutional immunity applied to taxation by the state of lands owned by the United States. In Clallam County v. United States, 263 U.S. 341, 44 S. Ct. 121, 68 L. Ed. 328, the Supreme Court ...