State Ex Rel. Board of County Commissioners v. Bruce

This is an original proceeding brought by the relator, the Board of County Commissioners of Valley County, as such, seeking a writ of mandate against the county assessor and the county treasurer, commanding them to levy and collect taxes in accordance with the statutes of this state upon personal property owned by persons and private corporations located within the townsite of Fort Peck, and other lands belonging to the United States acquired for the Fort Peck Dam. The sheriff of Valley county is made a party defendant, and a like writ is sought commanding him to enforce the license laws of this state against persons, firms and businesses located in the same area.

A similar proceeding was before this court, brought by the same relator, against the assessor and treasurer, seeking the same relief, which was denied, in the case of State ex rel.Board of Commrs. v. Bruce, 104 Mont. 500, 69 P.2d 97. Since the decision in that case some three cases have been decided by the Supreme Court of the United States, which, it is argued, are controlling here and lead to a different conclusion from that announced in the former case.

The respondents have filed answer to the application for the writ. Certain persons, whose property or businesses would be subject to taxation or the payment of licenses, have by leave of court filed complaints in intervention. Other interested parties have, through counsel by leave of court first had, appeared asamici curiae, and were heard by the court. There is no dispute as to the essential facts on the face of the various pleadings. The facts in this case are in most respects identical with those appearing in the former proceeding, although some additional facts are found in the proceeding here.

In the former case, after the denial of a petition for rehearing, a petition to reopen the case under the provisions of section 9187, Revised Codes, was filed. That petition sought to bring to the attention of the court the same additional facts which are found in the pleadings in this case. By that petition, the briefs filed in support of it, and by the briefs and arguments here, it is sought to secure a re-examination of certain propositions which were settled in the former opinion, and could in nowise be affected by the recent decisions of the Supreme Court of the United States.

It is here argued that the former decision is res judicata; also, that under the rule of stare decisis, the former opinion is controlling. These contentions present serious questions, but in view of our conclusions we shall assume for the purpose of this opinion, but without so deciding, that neither the plea ofres judicata nor the rule of stare decisis is of binding force in the consideration of this case. However, since some of the questions decided in the former opinion have not been here reargued, let it be understood that we are adhering to what was said in the former opinion, unless expressly modified herein.

The statement of the case appearing in the former opinion states the facts disclosed here, except certain additional facts which we shall presently notice. Hence we will not restate what was there said with reference to the facts.

We decided in the former opinion that section 25, Revised Codes, was the controlling Act of cession until the approval of section 25.1 on January 17, 1934. Since section 25 contains no reservation of the right in the state to tax, whereas section 25.1 contains such a reservation, much of the controversy involves the question as to which of these Acts of cession prevails.

We determined the facts to be in the former case that the lands in the townsite of Fort Peck were acquired by the United States securing options to purchase in the fall of 1933 from the owners of these lands; that while these options were in force possession was taken with the consent of the owners, and improvements were made on the lands by the United States; and that later, and after the enactment of section 25.1, title was conveyed and the purchase price paid in accordance with these options. The facts now presented are much more in detail covering this same subject. The property which is sought to be taxed, and the businesses which are sought to be licensed, are in or on the townsite of Fort Peck. This townsite is located on lands purchased from Chester T. Taylor, Peter Maxness, and the state of Montana. Ninety-four per cent. of the townsite lies on lands acquired from Taylor.

On November 11, 1933, Taylor executed, for a recited consideration, an option to purchase his lands to the United States for $23,500. It provided: "This option to be exercised by giving me notice of acceptance within thirty days, * * * possession to be given immediately upon notice of acceptance." On December 1, 1933, and thereafter, the United States took exclusive possession of these lands with the consent of Taylor, and continued in possession of them thereafter. During the month of December, 1933, improvements were made on the lands by the United States. On November 29, 1933, authority to purchase and take possession of these lands was requested of the Secretary of War, which was granted on December 28, 1933. The acts in taking possession were ratified at that time by the Secretary of War. Later, on February 10, 1934, a contract for the sale of the same lands for the same price was executed by Taylor to the United States. Deeds for the lands were executed and delivered on April 11, 1934, June 16, 1934, and January 5, 1935. The title to an 80-acre tract of the Taylor lands was based on a tax title, which the Department of Justice failed to approve. A friendly condemnation suit was brought as to this tract, the award being the contract price. The decree was recorded November 2, 1935. The other tract, owned by an individual, was acquired by the United States in a similar manner, except that no condemnation proceeding was involved. The dates of the options, taking of possession, erection of improvements, consent to the purchase, and ratification of the taking of possession in both instances were substantially the same. All conveyances of title were made after the effective date of section 25.1.

The state lands were acquired in the following manner: On November 7, 1933, the State Land Board was notified of the necessity of the United States obtaining title to those lands. This board passed a resolution on November 17, 1933, authorizing the United States and its agents to enter upon the lands and conduct any work, operation or activity relating to the construction of the Fort Peck project, subject to the rights of a lessee who gave his consent to the occupation of these lands by the United States. On December 1, 1933, exclusive possession was taken of these lands and improvements were begun thereon. On February 6, 1934, a definite price for them was offered by the United States, which was accepted February 16 of the same year, and patent was issued therefor on June 8 following.

It is argued that the options were not binding contracts in themselves and expired before acceptance, and in any event the lands were not purchased until the conveyances of title were executed, and that therefore the lands were purchased after the effective date of section 25.1.

An option contract, when accepted within the time and in the[1, 2] manner provided, becomes a valid contract upon which specific performance may be had. (Torelle v. Templeman,94 Mont. 149, 21 P.2d 60.) Acceptance of an option may be implied from the acts and conduct of the parties, as by taking possession, or the making of improvements on the property. (66 C.J. 501; Curran v. Rogers, 35 Mich. 221; Clark v.Harmer, 5 App. D.C. 114; Harless v. Petty, 98 Ind. 53; James on Option Contracts, sec. 827.) The record contains no proof of notice in accordance with the option, but possession was to be surrendered upon notice of acceptance. Possession was surrendered while the option was in force. Accordingly, the notice must either have been given or waived. The option did not specify that the notice must be in writing; it could be given verbally as well as by formal writing.

When the United States went into possession under these options and made improvements upon the premises, it accepted the options, and thereby a binding contract to purchase resulted. A suit could be maintained on this binding obligation the terms of which were found in the option, against the United States under the Tucker Act, 24 Stat. 505, 28 U.S.C.A., sec. 41, subd. 20. (See Hurley v. Kincaid, 285 U.S. 95, 52 Sup. Ct. 267,76 L. Ed. 637.)

It is contended that these lands were not purchased within the[3] meaning of Article I, section 8, clause 17, of the federal Constitution; that, in order for a purchase to be made within the meaning of the Constitution, a full and complete title must be conveyed to and vested in the United States. The word "purchase" as used in the statute (43 U.S.C.A., sec. 11), prohibiting certain governmental employees from becoming interested in the purchase of public lands, was construed as meaning "inclusive of the various modes of securing title to or rights in public lands." (Waskey v. Hammer, 223 U.S. 85, 32 Sup. Ct. 187, 189,56 L. Ed. 359.) The word "purchase" used as a verb is defined "to obtain or secure as one's own by paying or promising to pay a price." (New Standard Dictionary; First Nat. Bank v. UnitedStates, 38 F.2d 925; 51 C.J. 95.)

We pointed out in our former opinion that the work on the Fort Peck project was authorized by the laws of the United States. The Missouri River is a navigable stream. The Secretary of War was authorized to purchase lands needed to enable him to maintain, operate or prosecute works for the improvement of rivers for which provision had been made by law, at a price fixed by the owner of the land which, in the opinion of the Secretary of War, is reasonable, without further delay. (25 Stat. 94, 33 U.S.C.A., sec. 591.) Hence, before the enactment of section 25.1 there was a valid, enforceable contract to pay for the lands of the individuals at an agreed price, giving the right to the United States to occupy and use these lands exclusively for its own purposes. The United States had thereby purchased these lands.

The United States had acquired the right to possess, enjoy, and occupy the state lands, and was exercising these rights. True, the method of arriving at a price was not fully determined, nor the manner of completing the conveyance. Notwithstanding these deficiencies the United States had purchased these lands within the meaning of the word "purchase" as used in the federal Constitution.

It is argued that the Act of cession found in section 25 never[4] became operative in that no map or plat was filed with the proper local authority. It is said the requirement in that respect is in effect a condition precedent to the Act of cession becoming operative. The same argument was made on the hearing in the former case, but we declined to accept or follow it. Now our attention is invited for the first time to certain decisions under somewhat similar statutes, where a conclusion in variance with our former holding was announced.

In the case of Six Companies v. De Vinney, 2 F. Supp. 693, an Act of cession of the state of Nevada was under consideration, containing a like provision with reference to the filing of a map or plat. The Act was held inoperative on two grounds. First, the lands were not purchased or acquired by condemnation, and, hence, were without the provisions of the Act. Second, that the map or plat was not filed, and, therefore, the Act was inoperative as an Act of cession. The first ground disposed of the case; however, the court in deciding the second point, based its opinion upon the rule that statutes relinquishing jurisdiction are strictly construed, in conformity with the decision in the case of Larson v. South Dakota,278 U.S. 429, 49 Sup. Ct. 196, 73 L. Ed. 441.

However sound this latter rule may be, our course must be otherwise. Section 25 is a part of our Codes. It has been so ever since their first adoption. Section 4, adopted as a part and parcel of the same Codes, declares: "The codes establish the law of this state respecting the subjects to which they relate and their provisions and all proceedings under them are to be liberally construed with a view to effect their objects and to promote justice." Giving heed to this legislative command, we may not strictly construe section 25.

In the case of State v. Mendez, (Nev.) 61 P.2d 300, it was held that the filing of the map under the Nevada Act of cession was a condition precedent to its effective operation. The rule of strict construction of the statute in the case of SixCompanies v. De Vinney, supra, was followed.

The case of Pothier v. Rodman, (1 Cir.) 291 Fed. 311. 319, involved an Act of cession by the state of Washington over lands to be donated by Pierce county to the United States. The Act provided the precise method of conveyance to be followed. Exclusive legislation over the lands "so conveyed" to the United States "provided, upon such conveyance being concluded * * * an accurate plat or map * * * be filed in the auditor's office of Pierce county, together with copies of the orders, deeds, patents or other evidences in writing of the title of the United States." (Laws Washington 1917, p. 14, sec. 20.) The court concluded that exclusive jurisdiction did not vest until the filing of the map. The Act required the concurrent filing of the map with the conveyance, and no exclusive jurisdiction could vest until the conveyance had been made under the terms of the Act.

In section 25 no time is expressly mentioned when the map shall be filed, nor by whom. If the legislature desired to make the filing of the map a condition precedent to the vesting of exclusive jurisdiction, it could have done so by apt language. In a like Act of cession of the Glacier National Park (sec. 22), jurisdiction did not vest until the United States, through the proper officers, notified the Governor that it assumed police or military jurisdiction over the park. The same provision is found in the Act of cession over Yellowstone National Park (sec. 23).

Construing this statute liberally, with the view of effecting its object, namely, to cede exclusive jurisdiction to the United States over all lands acquired by the United States for any of the purposes mentioned in Article I, sec. 8, clause 17, of the federal Constitution, we may not declare that the provision with reference to the filing of a map or plat was a condition precedent to the Act becoming operative. However, a strict construction would doubtless lead to a different result. We, in our former opinion, considered at length what, if any effect, the use of the word "provided" had in creating a condition precedent, and now adhere to what we there said on the subject.

It is said that section 25 was never intended by the[5, 6] legislature as an Act of cession, so far as the property in question is concerned. This contention has for its basis the title of the Act when the section was first enacted. (Laws 1893, p. 51.) The language of the statute is plain and unambiguous with reference to the purpose of the use of the property to be acquired. The ambiguity, if any, is in the federal Constitution. We concede the rule to be that, if the language of the statute needs construction, resort may be had to its title as an aid. If the legislative intention can be determined from the plain meaning of the words of the statute, the court may not apply other means of interpretation. (Murray Hospital v.Angrove, 92 Mont. 101, 10 P.2d 577; State ex rel. DuFresne v. Leslie, 100 Mont. 449, 50 P.2d 959, 101 A.L.R. 1329.) Nor may the fact that the title of the Act was deficient, in that it was more narrow than the body of the Act, now be asserted against its validity, since it has been adopted as a part and parcel of our Codes four different times. (State exrel. Board of County Commrs. v. Bruce, supra.)

In the former opinion we determined that the Fort Peck[7] project, and in particular the buildings on the Fort Peck townsite, were needful buildings within the meaning of the federal Constitution. Our position has since been fortified by the decision of the Supreme Court of the United States in the case of James v. Dravo Contracting Co., 302 U.S. 134,58 Sup. Ct. 208, 213, 82 L. Ed. 125, decided December 6, 1937, where it was said: "Locks and dams for the improvement of navigation, which are as clearly within the federal authority as post offices, have been regarded as ``needful buildings.' (UnitedStates v. Tucker, (D.C.) 122 Fed. 518, 522.) We take that view. We construe the phrase ``other needful buildings' as embracing whatever structures are found to be necessary in the performance of the functions of the federal government."

In our former opinion we followed the decision of this court[8] in the case of State v. Tully, 31 Mont. 365,78 P. 760, 3 Ann. Cas. 824, to the effect that, where the state has given its consent to the purchase of lands by the federal government, the lands so purchased, if used for any of the purposes mentioned in the federal Constitution, ipso facto fall within the exclusive jurisdiction of the federal government, and the state's jurisdiction is thereupon ousted. This view was in accord with expressions found in certain opinions of the Supreme Court of the United States, although these statements when so made were, perhaps, dicta. That court, speaking as the source of ultimate authority as to the effect of the purchase of property with the consent of the state, declared in the case ofSilas Mason Co., Inc., v. Tax Com. of Washington,302 U.S. 186, 58 Sup. Ct. 233, 244, 82 L. Ed. 154: "As such a transfer rests upon a grant by the State, through consent or cession, it follows, in accordance with familiar principles applicable to grants, that the grant may be accepted or declined. Acceptance may be presumed in the absence of evidence of a contrary intent, but we know of no constitutional principle which compels acceptance by the United States of an exclusive jurisdiction contrary to its own conception of its interests. The mere fact that the Government needs title to property within the boundaries of a state, which may be acquired irrespective of the consent of the State (Kohl v. United States, 91 U.S. 367, 371, 372,23 L. Ed. 449, 451), does not necessitate the assumption by the Government of the burdens incident to an exclusive jurisdiction." This language was approved and followed by that court in the case of Atkinson v. State Tax Com., 302 U.S. 641, 58 Sup. Ct. 419,82 L. Ed. 440, decided January 31, 1938. We now adopt the rule of decision as announced by the Supreme Court of the United States, and expressly modify our former decision in this respect.

We indicated the view in our former opinion that reservations or exceptions, such as are found in section 25.1, that is, any reservation in an Act of cession not incompatible with the use for which the lands were acquired, does not operate to destroy the Act as an effective grant of exclusive jurisdiction. While we then found some statements in former opinions of the Supreme Court of the United States to the contrary, which we then regarded as dicta, that court has now said of such statements, in the case of James v. Dravo Contracting Co., supra, as follows: "There are other obiter dicta in other cases, but the point now raised does not appear to have been definitely determined. It is not questioned that the state may refuse its consent and retain jurisdiction consistent with the governmental purpose for which the property was acquired." And the same court further said in the same opinion of the right of the state to qualify its cession by reservations, as follows: "In that event, as in cases of acquisition by purchase without consent of the state, jurisdiction is dependent upon cession by the state, and the state may qualify its cession by reservations not inconsistent with the governmental uses. * * * There appears to be no reason why the United States should be compelled to accept exclusive jurisdiction or the state be compelled to grant it in giving its consent to purchasers."

It is now argued that, in the light of the three recent decisions, relator is entitled to the relief demanded. The court in the Dravo Case states the reservation contained in the West Virginia statute as follows: "By a further provision in section 4 the state reserves the right to execute process within the limits of the land acquired, ``and such other jurisdiction and authority over the same as is not inconsistent with the jurisdiction ceded to the United States by virtue of such acquisition.'" And in disposing of the validity of the reservation it said: "In the present case, the reservation by West Virginia of concurrent jurisdiction did not operate to deprive the United States of the enjoyment of the property for the purposes for which it was acquired, and we are of the opinion that the reservation was applicable and effective."

If exclusive jurisdiction was accepted under section 25.1, the contention must be sustained; but if the grant of exclusive jurisdiction was accepted under section 25, the contention is without merit. It cannot be seriously contended that the federal[9] government has not accepted exclusive jurisdiction at some time over the lands of the townsite. We summarized the facts in our former opinion in the following paragraph, relative to the manner in which the governmental affairs of the town of Fort Peck were conducted: "The townsite of Fort Peck is in Valley county. In the fall of 1933 the United States by purchase from the then owners, acquired various tracts of land included within and located in the vicinity of the site of the dam. On lands thus acquired the United States, about December 1, 1933, commenced the laying out of the town of Fort Peck. At its expense it constructed streets, alleys, sidewalks, waterworks, sewers, and buildings for administrative, school, and residential purposes, and for other services proper and convenient for the inhabitants of the town. Buildings were erected for stores and the usual mercantile pursuits, many of them by the United States. All of the lands in the townsite are owned by the United States. Some buildings have been erected on the townsite by individuals or private corporations for the use of the occupants, with the consent and approval of the federal government. The town is not incorporated; it is governed by a town manager who is an officer of the United States Army Corps of Engineers, and a subordinate of the District Engineer under the United States Army Chief Engineer. Fire and police protection is provided by the United States. Water supply, garbage disposal, and sanitation are maintained by the same. School facilities are provided by the Fort Peck Recreational Association. Law violators are prosecuted in the United States District Court of Montana. No elections are held in the town and no registration of electors is conducted there."

The only facts tending to support any other conclusion are as follows: In the winter of 1933-34, contracts were entered into by the United States and various contractors on United States government form No. 51. Article 10 thereof required the contractor to obtain all required licenses and permits. Article 21 required the contractor to furnish compensation insurance for employees on this project and compliance with the Workmen's Compensation Law of the state, territory, or district in which the work was to be performed. Specification No. 22 provided that the contractor would comply with the laws of the United States and of the state as to the inspection of equipment and the licensing of employees. These contracts were entered into prior to the enactment of the Act of Congress of June 25, 1936 (49 Stat. 1938, 40 U.S.C.A., sec. 290). These contracts were on forms provided for general use in governmental activities in the various states, territories, and districts. At no place therein was any reference made to the laws of the state of Montana by direct or special provision. Such provisions in contracts are said to be incompatible with exclusive legislative authority. (Atkinson v. State Tax Com.,[10] supra.) A state may qualify its Act of cession by reservations not inconsistent with the governmental use, and the federal government may accept or decline such grant. (SilasMason Co. v. Tax Com., supra.) A reservation in the Act of cession of a power in the state, such as the right to tax property of others, does not operate to destroy the Act of cession, nor does it prevent the assumption of exclusive jurisdiction by the federal government. (Fort Leavenworth Ry.Co. v. Lowe, 114 U.S. 525, 5 Sup. Ct. 995, 29 L. Ed. 264.) It must, therefore, follow, that the federal government may accept a less portion of the grant than the entire offer, if agreeable to the state. Here the federal government has furnished most, if not all, of the governmental services usually supplied to dwellers in urban communities in modern times. The state and its various political subdivisions have not supplied these services. The facts, with the one slight exception noted supra, are all to the effect that the federal government has assumed and is exercising exclusive jurisdiction over all of these lands purchased by it.

It is argued that Congress alone has the power to accept the grant of exclusive jurisdiction. Congress by law has authorized the project, the acquisition of these lands, and the expenditure of funds for the building of the project. It is not indicated by the recent decisions of the Supreme Court of the United States that proof of acceptance of the grant of exclusive jurisdiction can only be made by a specific Act of acceptance by Congress. That court has said, "Acceptance may be presumed in the absence of evidence of a contrary intent." (Silas Mason Co. v. TaxCom., supra; Atkinson v. State Tax Com., supra.) In theSilas Mason Case the failure to perform the usual governmental services was held to evidence an intent not to accept a grant. Here the converse of the situation must lead to the conclusion that the intent was to accept exclusive jurisdiction.

The purchases were made prior to the operative date of section 25.1. The purpose for acquiring the lands was within Article I, section 8, clause 17, of the federal Constitution. The acceptance of the grant in section 25 is presumed unless the contrary intent is established. The facts fail to disclose any such contrary intent; hence, section 25 is the applicable statute, and not section 25.1.

It is argued that section 25, in so far as it may operate to[11] prevent the imposition of taxes for state purposes upon the property of persons and private corporations, is in violation of certain sections of our state Constitution, namely, sections 1, 2 and 11 of Article XII. These sections provide for the levy of uniform taxes upon all the property in the state, except such as is therein exempted, either by the constitutional provision itself, or by the exercise of clearly defined authority vested in the legislature to exempt certain specified classes of property. Admittedly, the property here sought to be taxed is not exempt under these constitutional provisions. It is said that these sections apply to all property within the geographical limits of the state.

The framers of the Constitution were familiar with Article I, section 8, clause 17, as is clearly indicated by Article II of that document. They knew the legislative assembly was the proper body to pass an Act of cession, and they so provided in that article. They adopted the Constitution of the United States, Ordinance I, section 5. The Fort Leavenworth Case cited supra, had been decided previously to the writing and adoption of our Constitution. That decision clearly indicated the power of the legislature of the state to include a reservation in[12] an Act of cession. Our state Constitution is a limitation upon the power of the legislature, and not a grant of power unto it. If the framers of the Constitution had intended to limit the right of the legislature in the enactment of Acts of cession within Article I, section 8, clause 17, of the federal Constitution, they would have done so by apt language.

Reservations over which the United States is exercising[13] exclusive jurisdiction, although within the geographical limits of a state, are not within the taxing jurisdiction of the state. (Standard Oil Co. v. California, 291 U.S. 242,54 Sup. Ct. 381, 78 L. Ed. 775.)

We conclude that the county taxing officers are without right[14] or authority to tax any of the property within the area of any county over which the United States has assumed exclusive jurisdiction, where the lands were purchased by the United States prior to the passage and approval of section 25.1, Revised Codes. On the land within the purview of section 25.1 which was acquired by purchase or condemnation subsequent to the passage and approval of section 25.1 and all lands which were a part of the public domain, all property located thereon, belonging to persons or private corporations, is subject to taxation. All lands acquired by purchase or condemnation since the enactment of section 25.1 are subject to all reservations and exceptions found in that section.

Since the facts in the instant case do not indicate that there is any property involved except such as is located on lands purchased by the United States prior to the approval of section 25.1, this proceeding is ordered dismissed.

ASSOCIATE JUSTICES STEWART and MORRIS, and HONORABLE GEORGE W. PADBURY, JR., District Judge, sitting in place of MR. CHIEF JUSTICE SANDS, absent on account of illness, concur.