United States Supreme Court Cases & Opinions

U.S. Supreme Court

Burnet v. Coronado Oil & Gas Co., 285 U.S. 393 (1932)

Burnet v. Coronado Oil & Gas Co.

No. 341

Argued January 15, 1932

Reargued March 16, 1932

Decided April 11, 1932

285 U.S. 393

Syllabus

Lands granted by the United States to the State of Oklahoma for the support of common schools and dedicated to that purpose by the state constitution were leased by the State to a private company for extraction of oil and gas, the State reserving a part of the gross production, the proceeds of which were paid into the public school fund, and the lessee taking the remainder.

Held:

(1) The lease was an instrumentality of the State in the exercise of a strictly governmental function. P. 285 U. S. 398.

(2) Application of the federal income tax to he income derived from the lease by the leasee was therefore unconstitutional. Gillespie v. Oklahoma, 257 U. S. 501, followed; Group No. 1 Oil Corp. v. Bass, 283 U. S. 279, distinguished. Id.

60 App.D.C. 233; 50 F.2d 998, affirmed.

CERTIORARI, 284 U.S. 606, to review a judgment overruling a decision of the Board of Tax Appeals sustaining an income and excess profits tax, 14 B.T.A. 1214.

Page 285 U. S. 397