P. I. Wilsey & Co. v. County of San Bernardino

STONE, J. pro tem.* The United States Government, as

lessor, acting through the Department of the Navy, entered into a lease with Marine Palms Housing Corporation, a California corporation. The government leased certain lands in San Bernardino County for a period of 75 years at a rental of $100 per year upon the condition the lessee construct a housing project consisting of approximately 493 units, the housing units to revert with the land to the government at the end of 75 years. The housing units were primarily for the use of military personnel and civilian employees of the military, but under certain conditions could be rented to the general public. Thereafter Marine Palms Housing Corporation, the lessee, entered into a contract with the appellant construction company to erect 493 housing units on the leased premises. Respondent county collected a total of $3,822 for building permits and inspection charges which fees were paid involuntarily and were accompanied by a written protest.

Appellant contends that because the Navy owned the land subject to the lease and because the housing units would become the property of the government upon completion, subject to the 75-year term of the lease, the houses were the property of the government. Therefore, appellant contends the contractor building the houses could not be required to secure permits from the county of San Bernardino or pay the county inspection charges. Appellant bolsters his position by pointing out that the lease provides that the 493 units should be constructed substantially in accordance with detailed plans and specifications submitted by the Department of the Navy, to be approved by the Federal Housing Commissioner.

The United States Government is sovereign and the state and its political subdivisions do not have the power to 'tax or regulate a federal agency unless the federal government divests itself of sovereignty in the particular aspect of government involved. It may do that by the Constitution or by act of Congress. The lease in this case provides:

“That, under authority of the Act of August 5, 1947 (61 [147]Stat. 774; 34 USO 522a), and Title VIII of the National Housing Act, as amended (63 Stat. 571; 12 USC 1748-1748h), the Secretary of the Navy has determined that the lease of the hereinafter described premises will effectuate the purposes of the said Title VIII, and the Secretary, in consideration of the observance and performance by the Lessee of the covenants and conditions hereinafter set forth. ...”