Palos Verdes Corp. v. United States

In 1913 a syndicate purchased 16,004 acres of unimproved land commonly known as Rancho Palos Verdes. The property consists of the semi-arid hump of land or foothill lying westerly of San Pedro and Wilmington in Los Angeles County, California, about twenty-five miles south of the main business section of Los Angeles City. The hump slopes off rather gradually from around 1400 feet above sea level southerly and westerly to- high, bold bluffs at the sea’s edge, and northerly to the plain leveling off toward the center of Los Angeles City. The Rancho contains little level land and is cut by many arroyos and small, rough canyons. Until the early nineteen-hundreds, the area was of little use except for seasonal grazing.

In 1913 the growth of Southern California, inclusive of the metropolitan district of the City of Los Angeles and its sea ports at San Pedro and Wilmington, attracted Mr. Frank Vanderlip and associates to the large area of the Rancho. The evidence is sketchy as to whether it was purchased as an investment or for development and sale.

In 1925 the syndicate in effect was changed into a Delaware corporation, taking deed to 12,245 acres of the Rancho. The corporation was…