169 P. 53 | Mont. | 1917
Lead Opinion
delivered the opinion of the court.
This is an appeal from a judgment rendered and entered after an order sustaining defendants ’ demurrer to the complaint
On August 27, 1908, the plaintiff conveyed to one Magnus Lindstrand section 35, township 8 N., range 25 E., in Mussel-shell county, reserving ‘1 all coal and iron upon or in said land, and also the use of such surface ground as may be necessary for the exploring for and mining or otherwise extracting and carrying away the same.” In the year 1913 the assessor of Musselshell county assessed the reservation so made, for the purpose of taxation, at a valuation of $18 per acre, making a total valuation of the reservation for the entire section of $11,520. The amount of tax levied for that year was $276.48. The plaintiff having failed to make payment, the reservation was sold by the treasurer and bought in for the county in January, 1914. For each of the years 1914, 1915 and 1916, the reservation was again assessed at the same valuation. Taxes were levied as in 1913, but were not paid. The land contains coal. This, however, has never been explored or developed, and, it is alleged, the quantity, quality and value of it are speculative and matters of opinion. No use of the surface of the land for the purposes stated in the reservation has ever been made by the plaintiff. It is alleged: “That the assessor in making said assessment in the year 1913 and said other assessments took into consideration and fixed and determined the valuation of such reservation on the basis of the quantity and quality of the coal in said land and the value thereof according to his opinion, and did value and assess said coal, and said taxes for which said property was sold were imposed and levied upon said coal and other property so reserved. ’ ’ The defendant treasurer of the county threatens to make and deliver to the county a tax deed conveying to it the reservation including the coal. To prevent this action on his part, and thus the casting of a cloud upon plaintiff’s title, this action was brought.
The theory upon which the action proceeds is that the tax is wholly illegal, and hence that under the decision in Barnard Realty Co. v. City of Butte, 50 Mont. 159, 145 Pac. 946, the
That decision is conclusive of this case, if based upon a correct conception of the purpose had in view by the constitutional convention. Upon a more mature consideration of the subject, however, aided by the light shed upon it by a study of the de
The debates had in the convention are not easily accessible be-
So far as these views are in conflict with the final conclusion announced in the Mjelde Case, the latter is to be considered as
This brings us to the question: How is its value to be ascer
It is contended by the Attorney General that though the coal
We know of no case in which the same question has been examined and determined. We think, however, that under the anomalous situation in which the plaintiff finds itself, it ought not to be denied the relief demanded. Hence we conclude that the district court erred in sustaining the demurrer, and that the judgment should be reversed.
It is proper to say of the Mjelde Case that in determining It this court did so on the theory that undeveloped coal deposits ought to be considered an element in ascertaining the value of the land in which they are found, and that the levy had been properly made. It is also proper to say that in view of the conclusion announced therein, the district judge was fully justified in sustaining the demurrer and denying the injunction.
Rehearing
(Submitted October 2, 1917. Decided December 12, 1917.)
delivered the opinion of the court.
The motion for rehearing in this ease proceeds upon the assumptions that this court by its opinion has overruled Northern Pacific Ry. Co. v. Mjelde, 48 Mont. 287, 137 Pac. 386, and has in effect decided that reservations such as the one here involved are not taxable. The briefest glance at the opinion will suffice to dispel the latter assumption, while the former is equally groundless, as we shall endeavor to show.
In the Mjelde Case two sections of land conveyed to different grantees were involved; one supposed to contain coal, whereas the presence of coal in the other was unknown. The question before the court was “whether that which the company reserved to itself in each of these parcels of land constitutes property which is subject to taxation under the Constitution and laws of this state. ’ ’ The company claimed immunity on the ground that the subject of the reservations — coal in place — is a mine within the meaning of section 3, Article XII, of the state Constitution, taxable as such only when there are net proceeds. Manifestly this did not, and could not, meet the issue, because it ignored the interest in real estate, regardless of coal-content, asserted by the reservations. We held them to be taxable as an interest in real estate, saying, arguendo, that a mining claim is a tract of land to which title and right of possession has been acquired under the mineral or coal land laws of the United States; that a mine, in the revenue sense as employed in section 3, “is a mineral deposit, whether metallic or nonmetallic, developed to the point of production and actually yielding, or capable of yielding, proceeds”; that the character of legislation under which title has been acquired has nothing to do with the existence or nonexistence of a mine; and that coal in place and undeveloped is not a mine. These reflections lead to an interesting situation which may be exemplified as follows: Smith owns a tract acquired under
That we are justified in the position taken, if not in all the language employed, will, we think, be granted by whoever may consider the premises. The reservation in question is dual: A corporeal hereditament, as to the coal and iron; an incorporeal hereditament, as to the right to enter the lands conveyed, to explore for coal or iron, and to extract the same when found, using so much of the surface as may be necessary. In the nature of things, the latter could not be a mine, but it is property, presumably valuable, not exempt, and therefore taxable as an interest in realty; and the difficulty which may confront the assessor in ascertaining the value can be no bar to such taxation. With the former, however — the corporeal hereditament —the situation is somewhat different. It, too, is property; but it consists, by the hypothesis, of coal or iron in place; coal or iron in place may be a mine in a proper sense of that term (Colorado Coal & Iron Co. v. United States, 123 U. S. 307, 327, 328, 31 L. Ed. 182, 8 Sup. Ct. Rep. 131; Davis v. Weibbold, 139 U. S. 507, 518, 35 L. Ed. 238, 11 Sup. Ct. Rep. 628; 1 Lindley on Mines, 3d ed., 136), and we are convinced that it is such within the meaning of the word as used in section 3 of Article XII.
Distinguished counsel for respondents asserts that the conclusion reached in the opinion ignores or annuls the important phrases, “after purchase thereof from the United States,” and “at the price paid the United States therefor.” Quite the contrary is true. We considered these phrases most carefully, and we give to them the place and meaning which their words and context demand. They have to do with mines and mining claims acquired under the mineral or coal land laws of the United States, and are designed to furnish a basis for taxing the surface only of such lands in the event — frequént, as a matter of fact — that the surface may have no other value. To give them a different application, to say they restrict the net proceeds basis to mines so acquired, would compel the lack of
It follows, too, that the taxable value of the incorporeal part of the reservation is to be deducted from the whole value of the surface; or, as stated in the opinion, “from the cash value of the land, omitting the deposit from the estimate,” because the rights reserved — apart from the deposit — all relate to the surface and limit the owner’s dominion over the surface.
It is said in the opinion that such value as the surface of a mine or mining claim purchased from the United States may have for other than mining purposes must be added to the purchase price and taxed accordingly. This was an inadvertence. Our view, as stated above, is that the purchase price in such cases is the standard of value, unless the surface is used and has a value for other purposes, in which event the latter is the taxable value.
With the clarification suggested above, we feel constrained to adhere to the decision.