Document: 368 U.S. 146 82 S.Ct. 282 7 L.Ed.2d 199 FEDERAL LAND BANK OF WICHITA, Petitioner,v.BOARD COUNTY COMMISSIONERS the KIOWA, STATE KANSAS, et al. No. 25. Argued Oct. 16, 1961. Decided Dec. 11, J. William Doolittle, for petitioner. Robert C. Londerholm, Kansas City, Mo., respondents. Mr. Chief Justice WARREN delivered opinion of Court. 1 A political subdivision a State has levied personal property tax on federal instrumentality despite claim immunity by virtue statute. 2 Petitioner, Federal Land Bank Wichita, acquired mortgage realty in Kiowa County, Kansas, course its business as duly organized under Farm Loan Act.1 Upon default, foreclosure, purchase at sheriff's sale, and confirmation, petitioner became owner land. Subsequently land was conveyed to third party, deed reserving an undivided one-half interest mineral estate. By time this conveyance had recovered entire loss occasioned default mortgage. Petitioner executed oil gas lease reserved estate, discovery pool area ultimately led payment royalties. 3 statute declared that leases royalties derived therefrom were subject taxation counties.2 Pursuant statute, County petitioner's year 1957. 4 levied, owned estate some 14 years. The which authorized banks acquire mortgaged lands limited period ownership five years unless special permission could be obtained from Credit Administration.3 That agency promulgated regulation granting blanket all hold rights longer than years.4 5 sought injunction against collection state court, claiming exemption 12 U.S.C. § 931, U.S.C.A. 931,5 provides, part, 'shall exempt * State, municipal, local taxation, except taxes upon real held provisions (section) 781.'6 denied. On appeal, Supreme Court affirmed,7 holding Congress did not intend 931 because being express limit established after been recouped serve governmental function assigned Bank. also no implied. Certiorari granted order determine whether exacted forbidden Supremacy Clause Constitution.8 365 841, 81 800, 807. 6 correctly concedes is plenary power States tax,9 determine, within limits Constitution, extent instrumentalities shall enjoy taxation,10 bank constitutionally created instrumentality,11 immunized it activities furtherance lending functions.12 controversy arises over alternative grounds apply circumstances case.13 I. 8 found retention incurred and, intended only protect function, here. define type perform. Legitimate governments are sometimes classified 'governmental' or 'proprietary';14 however, our decisions have made clear Government performs 'proprietary' functions.15 If enabling Act constitutional if instrumentality's activity authority Act, performed. Since establishing constitutional, Smith v. City Title Co., 255 180, 41 243, 65 L.Ed. 577, we need challenged comes purview 9 purpose subsequent amendments provide loans agricultural purposes lowest possible rates.16 One method keeping rate low authorize make profit distributed shareholders form dividends.17 Because associations farmer-borrowers required law shareholders,18 distribution dividends effectively reduced rates. This earned two ways: gains sale 781 Fourth.19 construes Fourth (b) grant sell satisfaction debt recoup default. We find such limitation expressed mortgages percentage current value considerably less full value, but there amount price. therefore best price, absorbing losses reserve accounts20 distributing profits dividends. It follows restricted price merely sufficient any losses. might well increasing recovery through defaults. Consequently, involved here bank's function. II. 10 ground relied concluding confer relates asserted illegality Section may own can Administration. Mineral estates law,21 levy years, relying following Administration supply requisite permission: 11 'Holding more In cases where, connection with bank-owned retained royalty other minerals, desires excess considered both 'title possession' meaning section 13 (12 (b))). However, minerals periods when do so, approval Administration.'22 Although reasons altogether clear, invalid, is, therefore, owning without authority. First, 'much said' trial court's effective delegate interests banks, so 'special permission' given. Assuming highest delegation problem presented. Analytically, given licensing power,23 rulemaking, adjudicating, investigating power. states retain exercise license, it. second invalidating necessary defaulted As indicated, Congress, thus permission. 15 While court below challenge give (b), interpretation placed interpreted exclude estates.24 We, review interpretation25 examine jurisdiction, any, statutory construction administrative collateral attack issuance license. 16 decision, least efforts successive sessions amend accomplish result achieved these failed.26 considerable: owns approximately 283,000 acres; 9,900,000 acres.27 III. 17 infirmities petitioner, basis implying case. conferred, consider doctrine implied applies. conclude imposed must fall unconstitutional Constitution. 18 Reversed. 19 BLACK concurs result. July 17, 1916, 39 Stat. 360, amended, currently codified 641 seq., seq. General Statutes 1949, §§ 79—329 79—334. reads follows: 'Oil personalty. valuation wells, producing capable paying quantities, together casing, tubing material therein, equipment used operating wells hereby assessed taxed such.' 'Fourth. Acquiring disposing property.—To dispose of— '(a) Such property, personal, convenient transaction business, which, part leased others revenue purposes. '(b) Parcels debts purchased sales judgments, decrees, But title possession secure due it, writing.' Fourth, 372, 13, Fourth. CFR 10.64. See text U.S., p. 153, S.Ct., 287. 'Every including capital surplus therein income therefrom, Federal, held, purchased, taken said title. *' note 3, supra. 187 Kan. 148, 354 P.2d 679. Article VI, cl. 2. McCulloch Maryland, Wheat. 316, 579; Osborn United States, 738, 204. Carson Roane-Anderson 342 232, 72 257, 96 257; Cleveland 323 329, 280, 89 274; Maricopa Valley National Bank, 318 357, 67 587, 87 834; St. Paul Bismarck Lumber 314 95, 62 1, 86 65; Pittman Home Owners' Corp., 308 21, 60 15, 84 11; Graves New York ex rel. O'Keefe, 306 466, 59 595, 83 927; Des Moines Fairweather, 263 103, 44 23, 68 191; First Gulfport, Miss. Adams, 258 362, 42 323, 66 661; Owensboro Owensboro, 173 664, 537, 43 850. 577. 65. Crosland, 261 374, 385, 703. Cf. Priddy, 295 229, 55 705, 79 1408. Oil characterization accepted parties below. situation characterized law. See, e.g., Stokely 149 435, 115 So. 563; Terry Humphreys, 27 N.M. 564, 203 P. 539; Stephens Mid-Kansas & Gas 113 Tex. 160, 254 S.W. 290, 29 A.L.R. 566. Other jurisdictions classify prendre incorporeal interests. generally 1A Summers, Gas, 151 170. Concepts nature discussed footnote infra. These general terms determining, inter alia, sovereign protects municipality liability tort committed one servants, see, Dallas Louis, 338 S.W.2d (Mo.); Clark Scheld, 253 N.C. 732, 117 S.E.2d 838; Akron, 171 Ohio 361, N.E.2d 492; Wade Salt Lake Utah 2d 353 914; Francke West Bend, Wis.2d 574, 107 N.W.2d 500; McQuillin, Municipal Corporations, 53.01, 53.23, 53.24 (3d ed. 1950). cf. 326 572, 310, 90 326. 'The argument functions proprietary rather misconceives government respect every performs. delegated powers, necessarily powers governmental. that, creates corporation lawfully acts, (citing cases).' 102, 5, 32, 477, 596, 927. S.Rep. 144, 64th Cong., 1st Sess. 2, 4, 7—9; H.R.Rep. 630, 5; H.Doc. 494, Sess., 8; 53 Cong.Rec. 6696, 7021, 7023, 7024. Nothing called attention modifies purpose. Faulkner, American Economic History, 388—390 (6th 1949); Bogart Kemmerer, History People, 698 (1944). 233, 707, now 901 seq.; 5. 10. Persons engaged agriculture class borrow banks. To obtain loan, application membership association comprised solely borrowers. prospective borrower subscribe stock proportion loan he obtain. approaches bank, obtains subscribes loan. 721, 733, 733. 723, 723. 20 901, 901. 21 take statement paid receive varying characterizations among States. Some recognize horizontal severance freehold into surface estates; treat hereditaments. Compare Co. Indiana, 177 190, 576, 729, 166, 291, Wilson Holm, 164 188 899. Masterson, 1952 Survey Basic Law, Sw.L.J. 1; Walker, Fee Simple Ownership Texas, Tex.L.Rev. 125. 22 23 word 'license,' means permission, authority; license particular thing, thing; person having transfers grantee right whatever purports authorize. certainly him grantor transfer, what license.' Gibbons Ogden, 213—214; 23; Sinnot Davenport, How. 227, 240, 243; Southern Pac. Olympian Dredging 260 205, 26, 213; Pan-Atlantic S.S. Corp. Atlantic C.L.R. 436, 77 999, 963; Administrative Procedure 2(e), 1001(e), 1001(e). 24 10.64 quoted 153 287 25 Skidmore Swift 134, 139 140, 161, 164, 124; Unemployment Comp. Comm. Aragon, 329 143, 245, 250, 91 136; 10(e), 1009(e), 1009(e); see also, Witherspoon, Discretion Determine Statutory Meaning: High Road.' 35 63; ibid., Low Road,' 38 392, 572; Nathanson, Interpretation Statutes, Vand.L.Rev. 470. 26 H.R. 9290, 76th 3d Sess.; 667, 79th 583, 80th 1721 2358, 82th 1264, 81st S. 2904, 82d 428, 75, 102 1313, 83d 538, 84th Petition writ certiorari, pp. 8, 9.

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