This appeal presents the sole question: Is a patented mining claim, on which there has been expended one hundred dollars or more in labor during the year, subject to assessment and taxation in addition to the tax on its net products?
" Sеction 1. The legislature shall provide by law for a uniform and equal rate of assessment and taxation, and shall prescribe such regulations as shall secure a just valuation for taxation of all property, real, personal and possessory, except mines and mining claims, when not patented, the proceeds alone of which shall be assessed and tаxed, and when patented, each patented mine shall be assessed at not less than five hundred dollars ($500) except when one hundred dollars ($100) in labor has been actually performed on such patented mine during the year, in addition to the tax upon the net proceeds; and also excepting such property as may be exempted by law for municipal, еducational, literary, scientific or other charitable purposes.”
As originally adopted by the constitutional convention and ratified by the people in 1864, the article read:
" Section 1. The legislature shall provide by law for a uniform and equal rate of assessment and taxation and shall prescribe such regulations as shall secure a just valuation for taxation of all property, real, personal, and possessory, excepting mines and mining claims, the proceeds of which alone shall be taxed, and also excepting such property as may be exempted by law for municipal,*181 educational, literary, .scientific, religious or charitable purposes.” (Rev. Laws, 352.)
An amendment to article 10, proposed and passed by the legislatures of 1899 and 1901, inserted the following provision in the body of the original section: "But the acreage of patented mining claims shall also be assessed at a valuation of ten dollars per acre. ” The vote of the electors at the general election of 1902,. in ratifying this amendment, does not appear with certainty to hаve been officially canvassed, although the book of election returns in the office of the secretary of state appears to show that it received a majority of the votes cast. This amendment, however, is unimportant, save as it may throw some light on the proper construction of the article as it now exists by the amendment approved in 1906.
The legislature of 1909 amended section 5 of the general' revenue act (Rev. Laws, 3621) so as to read: "All property of every kind and nature whatsoever, within this state, shall be subject to taxation, except * * * Second— Unpatented mines and mining claims; provided," etc.
Prior to the amendment of 1909, supra, the. exception read: "Second — Mines and mining claims; provided,” etc.
Was the purpose designed to be accomplished by the amendment of article 10 as it now exists to exempt entirely patented mines and mining claims from assessment and taxation, otherwise than upon the net proceeds, where one hundred dollars .or more of labor had been expended upon the same during the year; or was it intended that such expenditure might be taken into consideration in making the assessment, and, when made, permit, but not require, a lower assessment than the minimum otherwise required to be assessed ? It is appellants’ contention that the letter of the provision supports the latter construction. But when the article is considered as a whole, taken in connection with the general policy of the state since its organization, the reasons which prompted the amendment, and what may be done under the provisions оf the section in the event such a construction is held to be the proper one, can it be said that such
This amended section of the constitution first provides for a uniform and equal rate of assessment and taxation of all propеrty, except mines and mining claims, and then provides that the proceeds alone of these, when not patented, shall be assessed and taxed; and the words, "and, when patented, each patented mine shall be assessed at not less than five hundred dollars except when one hundred dollars in labor has been actually performed on such patented mine during the year, in addition to the tax on the net proceeds,” we think, mean that patented mines shall be assessed at not less than five hundred dollars, if one hundred dollars in labor has not been actually performed upon such patented mine during the year; but if such labor is so performed upon a patented mine it becomes exempt from assessment and taxation, except on the net proceeds, the same as an unpatented claim.
There is nothing in the language of the amendment specifically directing that patented mines shall be assessed for less than five hundred dollars, or at all, if the one hundred dollars worth of annual labor is performed. Evidently the purpose of the legislature was to stimulate the prospeсting of patented mines, and not encourage the owners to have them lie dormant and unprospected, and to require them to pay a tax if they did not do the one hundred dollars worth of annual labor, but to exempt them from this tax if they did perform the labor, as an incentive for performing labor, instead of paying the tax. This construction, we believe, is not only in cоnsonance with the language of the amendment, but it is in accordance with the policy of the state regarding the development of its mine,ral resources. But conceding, for the purposes of this case, that the literal construction of the section is as contended by appellants, nevertheless such a construction should not be adopted, as it would violate the manifest intent of the legislature in adopting, and the people in ratifying, the amendment.
In State v. Kruttsehnitt,
In Lewis v. Doron,
In the case of State v. Dovey,
If such a construction of the constitutional provision contended for by the appellants were to be conceded and adopted, then a patented mine could be assessed for its full value, notwithstanding it is also required to pay a tax on its net proceeds. In other words, a patented mine which may justly be valued at a million dollars may be subject to assessment at any figure between one dollar and a million dollars, and the assessment be within the language оf the section, regardless of what tax may have been paid on the net proceeds. Under such construction of the language contended for, double taxation, or at least an unequal or unjust burden of taxation, may be imposed on a mine that has a large net product, which consequently gives to the mine itself a high valuation.
Then, also, it is difficult to see how any uniform system of assessing mining property, under this view, could be enforced in the several counties; for the assessing officers of one county might assess the patented mines at their full value, in addition to the tax on the net income, while the revenue officers of another county might fix but a
At the time of the adoption of the state constitution (1864) the federal mining laws had not been adopted, and patented mines had not come- into existence. Mining claims were then held in accordance with the rules and customs of miners, and their possessory rights were recognized by the federal government. The way in which mining property was then held is referred to at some length in the case of Golden v. Murphy,
Under the territorial laws the possessory rights of miners were held to' be subject to taxation. {Hale & Norcross Mining Co. v. Storey County,
By reference to the constitutions and statutes of the western mining states and territories, it will be observed that two general systems of taxation of mines have been in vogue — one the taxing of mines as real property, and the other the taxing of the proceeds of the mines.
The provision in the exception to the requirement that patented mines be 'assessed at not less than five hundred dollars, relative to the perfоrmance of one hundred dollars in labor during the year, throws light, we think, on what was the legislative intent. In order that an unpatented mining claim may not be subj ect to forfeiture and the rights of the owner cut off by a subsequent location, the federal laws require that one hundred dollars be annually expended thereon for labor or improvements. As long as this annual expenditure is madе, the rights of the owner of an unpatented mine are as secure as though the same were patented. The mine owner may extract and receive the benefit of every pound of ore in the mine and leave the same valueless without ever perfecting a patent to the property. Should the owner fail for a year to do his so-called annuаl assessment work, another may go upon and relocate the ground and become entitled to the possession thereof, but not' so in the case of a patented mine. This leads to the underlying reason for attempting to amend the section. Following the adoption of the federal mining laws, numerous mines were patented in the various mining districts throughout the state. Mаny of these patented claims were never extensively worked, or, if worked at all at one time, work thereafter ceased. In the lapse of years, owners of these patented claims had in many instances either died or left the state. The claims were apparently abandoned. Not being subject to any assessment, they could not be sold for taxеs, and title in another thereby acquired. Not being able to find the owners, persons desiring to work these claims could not obtain title thereto, except possibly through an adverse possession for two years, taking the chance that if a valuable mine were developed in the meantime the owner or some heir or grantee might appear in the last hour аnd oust the intruder of his
It is a matter of common knowledge that this is the historical reаson for the amendments proposed. While the language used is not the clearest to express the intent, and while the letter of the language may permit of a different construction, one, however, which would make it possible to violate a fundamental principle of taxation — that of uniformity and equality — nevertheless, from all the considerations mentioned, we think the intent of the amendment was to put patented and unpatented mines upon an equality, so far as taxation was concerned, to wit, that when one hundred dollars in labor had been expended upon a patented mine it should, so far as taxes were concerned, be in the same position as an unpatented mine, upon which the same amount wаs required to be expended to maintain its existence without liability to forfeiture.
It is our conclusion, therefore, that as one hundred dollars in labor had been actually performed on the several patented mines designated in the complaint during the fiscal year and prior to the time of the assessment that the said mines were exempt for the year from the assessment imposed, and the same was void.
The judgment is affirmed.