Moses Lake Homes, Inc. v. Grant County

PETITIONER: Moses Lake Homes, Inc.
RESPONDENT: Grant County
LOCATION: Convertible Top Replacement Co.

DOCKET NO.: 212
DECIDED BY: Warren Court (1958-1962)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 365 US 744 (1961)
ARGUED: Mar 23, 1961
DECIDED: Apr 17, 1961

Facts of the case

Question

Media for Moses Lake Homes, Inc. v. Grant County

Audio Transcription for Oral Argument - March 23, 1961 in Moses Lake Homes, Inc. v. Grant County

Earl Warren:

Number -- Number 212, Moses Lake Homes, Incorporated, et al., Petitioners, versus Grant County.

Lyle L. Iverson:

May it please the Court.

Earl Warren:

Mr. Iverson.

Lyle L. Iverson:

This is an action involving an application by Grant County, Washington to impress upon the deposit of estimated compensation in a condemnation case alleged tax liabilities or taxes against a leasehold.

Now, all that we have in the condemnation case is a condemnation of a leasehold, not a condemnation of buildings.

This case involves what is known as a Wherry housing project.

Felix Frankfurter:

What it -- I'm sorry.

Lyle L. Iverson:

A Wherry housing project.

It arises under Title VIII of the Federal Housing Act and a Wherry Housing Act -- Wherry housing project operates this way.

On a military reservation, a lease is given for a period of 75 years and the -- the sponsor that is -- that's the terminology, the sponsor corporation erects the buildings and then leases them to tenants assigned by the military commander for that period of 75 years.

He is financed by an FHA guaranteed loan.

Now, in this case, Grant County levied taxes against this property.

In their listing of the property, they designated it as buildings on the military reservation.

Actually, the Circuit Court of Appeals has had some discussion of this question, and the Court has held that notwithstanding that they designated buildings, that they were really trying to tax the leasehold.

But the Court, the Circuit Court held that this -- some of this --

Felix Frankfurter:

Would you mind telling in greater detail the effect, namely, what it is before you get to the holding, what it is and who is -- what it is that was taxed against whom it was taxed?

Lyle L. Iverson:

Yes.

We have --

Felix Frankfurter:

Financial relations and so forth.

Have you --

Lyle L. Iverson:

If the Court please.

We have three corporations here, each which has a separate Wherry housing project, and they have these 75-year leases.

Grant County, Washington in -- in which Moses Lake -- Larson Air Force Base is located, undertook to assess personal property taxes against these buildings.

Now, by the terms of the lease, which rendered for 75 years, buildings immediately upon construction became the property of the Federal Government, and Grant County undertook to assess the leasehold upon the basis.

Felix Frankfurter:

It's 75-year old --

Lyle L. Iverson:

That's correct, Your Honor --

Felix Frankfurter:

-- leasehold.

Lyle L. Iverson:

Upon the basis of the valuation of the buildings.

Now, we have approximately $6 million in mortgages outstanding against the property.

They assessed the property at a figure which if we disregard equalization figures and so forth would -- would put these -- put the market value at approximately $2 million.