Superior Coal Co. v. Musselshell County

41 P.2d 14 | Mont. | 1935

STATEMENT OF THE CASE BY THE JUSTICE DELIVERING THE OPINION. In this action the plaintiff sought an injunction restraining the defendants Musselshell county, H.P. Bennett, its county clerk, Walter Scott, its treasurer, and Carl O. Larson, its assessor, from levying and collecting taxes against its estate and interest in the lands described in its first cause of action, and from classifying the same in the manner in which the taxing authorities of the county had theretofore done.

1. In the first cause of action plaintiff avers its ownership in lands specifically described. In some it is averred that plaintiff was and is the owner of all the coal and coal deposits therein; in others of all the coal, iron, oil, gas, hydrocarbons and other minerals therein; and as to 80 acres plaintiff was and is the owner of all thereof "save and except the surface thereof"; such being plaintiff's sole interest in the lands.

The trial court found that, "in addition to the above-described estate and interest in said lands, plaintiff is now, and was at all the times in said complaint mentioned, the owner of the right to enter upon the surface of said lands, and all thereof, for the purpose of exploring for, mining and removing the coal, coal deposits and other minerals thereon belonging to said plaintiff, if any be found."

All of plaintiff's lands were purchased by its predecessors in interest from the United States as coal lands at the price of $20 per acre, under the Act of Congress of March 3, 1873 (sec. 1 [see 30 U.S.C.A., sec. 71]).

Plaintiff alleges that the lands are undeveloped, the extent and value of the coal and other minerals therein being unknown; the surface thereof at all times mentioned in the complaint has been used for other than mining purposes, to-wit, for agricultural and grazing purposes, and has a separate and independent value for such other purposes, and the same was assessed for the year 1933 at valuations ranging from $1.75 per acre to $3 per acre.

It appears from the complaint that there are situate within Musselshell county approximately 6,000 acres of coal lands likewise purchased by divers persons from the United States, which are now owned, in tracts of different and varying areas, by divers firms and corporations; some of these tracts are of the same character as the lands in which plaintiff is interested, "undeveloped coal lands," the surface of which has been and is used for grazing and agricultural purposes, and having a separate and independent value for such purposes, and the same was assessed for such purposes.

Prior to the sale of plaintiff's lands by the United States, the same were examined by the United States Geological Survey and by it classified as coal lands.

The plaintiff alleges in paragraph XI that there are situate in Musselshell county approximately 74,800 acres of undeveloped coal land granted to the Northern Pacific Railroad (now Railway) Company by the Act of Congress of July 2, 1864, 13 Stat. 365, which are of the same kind, character and class as the lands of the plaintiff, being undeveloped coal lands from which no coal or other mineral of any kind has ever been mined, and that the extent and value of the coal and minerals therein and thereunder is wholly unknown and cannot be ascertained until the coal or other minerals, if any be found of commercial value or in commercial quantities, are mined and brought to the surface, and that the surface of these Northern Pacific lands is now, and has been at all times mentioned in the complaint, used for and valuable for grazing and agricultural purposes only, and never has been used for mining purposes, and the same is assessed for taxation in the year 1933 upon its value for agricultural and grazing purposes. (To the owners thereof, not the railway company, which has only a right of entry therein.)

Answering this paragraph, the defendants admitted that there are situated in Musselshell county approximately 77,000 acres of undeveloped coal land so granted to the Northern Pacific Railroad (now Railway) Company, and that a part of these lands are of the same kind, character and class as the lands in which plaintiff has an interest or estate, and that under a part of the lands the extent and value of the coal and minerals therein and thereunder are unknown and cannot be ascertained unless and until the coal and other minerals are mined and brought to the surface.

Defendants also admitted that the surface of a part of the railway company's lands is now, and has been, used and is valuable for grazing and agricultural purposes only, not used for mining purposes, and that "such surface was assessed for the purposes of taxation for the year 1933 upon the separate and distinct value for grazing and agricultural purposes."

Plaintiff alleged that its lands and those of the other owners, and of the railway company, are situate in the same area, and some of the lands of the respective owners are adjacent and contiguous one to the other. Defendants admitted that some of the parcels and tracts of plaintiff's lands, and of the lands of the other owners and of the railway company, are adjacent and contiguous, but some are widely separated.

Plaintiff in paragraph XIV alleged that the assessor, for the purpose of taxation, in the year 1933 valued its lands at the price paid to the United States therefor, $20 per acre; but in assessing the lands of the railway company, based solely upon the value of the right of entry upon the surface of the land for removing and exploring for and mining and removing the minerals, the assessor valued the same at fifty cents per acre. Defendants in effect admitted the allegations of this paragraph, with the modification that the assessor, for the purposes of taxation for the year 1933, made an assessment upon plaintiff's interest in the lands as patented mining claims at the price paid the United States therefor.

In paragraph XV plaintiff alleged that the above-mentioned assessments and the values mentioned were fixed and determined by the assessor deliberately, designedly, intentionally and systematically and pursuant to a general plan, scheme, system and design on his part to classify all estates in coal lands, consisting of the coal or other minerals therein, and the right to enter upon the surface thereof for mining purposes, in Musselshell county, solely with reference to the law through which title to such coal lands was obtained from the United States, and that it was the "general plan, scheme, system and design on the part of the said defendant county assessor to assess and tax all estates consisting of the coal or other minerals in, and the right to enter upon the surface of, lands purchased from the United States pursuant to the Acts of Congress relating to coal lands and mineral lands, upon the basis of the price paid the United States therefor, and to assess and tax all estates consisting of the coal or other minerals in, and the right to enter upon the surface of, lands included in the above-mentioned grant to the Northern Pacific Railroad Company solely upon the basis of the value of said right to enter upon the surface of such lands for the purpose of exploring for, mining and removing the coal and other minerals therein and thereunder," and the assessor has refused to classify or assess estates in coal lands within the county of Musselshell upon any other than that alleged.

Answering paragraph XV, defendants alleged "that the defendant assessor made the assessment upon all patented mines and mining claims purchased from the United States at the various prices paid to the United States therefor, and allege the fact to be that said assessor assessed the lands granted to the Northern Pacific Railway Company under the terms of the grant hereinbefore mentioned upon the basis of the value of said right to enter upon the surface of such lands for the purposes of exploring for, mining and removing coal and other minerals therein and thereunder," and denied the other allegations of that paragraph.

This method of assessment, the plaintiff says in paragraph XVI is discriminatory and constructively fraudulent as against the plaintiff, for that an undue, disproportionate and illegal share of the burden of taxation in Musselshell county was intended to be and is thereby imposed upon the plaintiff; this method and manner of assessment, plaintiff alleges in paragraph XVII, was and is in violation of the provisions of the Fourteenth Amendment and in violation of the provisions of section 1, Article XII, of the Constitution of Montana, and thereby plaintiff is denied its right to have its property assessed and taxed at a uniform rate with other property of the same kind, character, class and nature, and is void and illegal.

The allegations of paragraphs XVI and XVII were denied by the defendants. Defendants admitted that it is the intention of the assessor to continue to assess plaintiff's lands as mining claims at the price paid the government therefor, and to assess the railway company upon its rights of entry.

2. In the second cause of action plaintiff, after making allegations respecting its ownership in the lands similar to those in the first cause of action, set forth, in effect, that on or about April 12, 1933, it made and delivered to the county assessor its sworn statements setting forth specifically therein its right of entry upon all the respective tracts of land described for the purpose of exploring for and mining and removing the coal or other minerals therein; that being all the property owned by it or in its possession or under its control at 12 o'clock noon on the first Monday in March, 1933.

Plaintiff alleged that without giving it any notice the defendant assessor assessed the interest of the plaintiff in the lands severally, as "patented mining claims, coal and coal deposits," and wholly disregarded the sworn statements of plaintiff; and "that the change and increase made by the assessor in the assessment and valuation of the property of the plaintiff" was and is wholly without warrant and authority of law, and that the excess assessment and valuation made by the defendant county assessor over and above the valuation of fifty cents per acre, and all taxes levied upon such excess, were and are wholly void and illegal."

Answering, the defendants alleged: That the assessor on the first Monday in March, 1933, assessed the lands and premises of the plaintiff, save and except the surface thereof, which had a separate and distinct value for agricultural and grazing purposes, as "patented mining claims, coal and coal deposits," the same having been purchased from the United States of America as patented mining claims, at $20 per acre; that on that day the assessor mailed separate assessment lists, each containing a separate and distinct parcel of land, as divided and shown in the complaint, to the plaintiff at its address in Roundup, Montana, with directions that the same be returned to him within ten days of the receipt thereof; that the assessment lists were each and all forwarded to plaintiff for its sworn declaration and statement as provided by law, but plaintiff failed and neglected and refused to return the same within the time appointed by the assessor, and the assessor thereupon assessed the same pursuant to section 2007, Revised Codes 1921; that on or about the 12th of April, 1933, the plaintiff returned to the assessor certain statements sworn to, containing a purported statement of all the property owned by it or in its possession and control at 12 o'clock noon on the first Monday of March, 1933, situate and taxable in Musselshell county. In the return made by the plaintiff it valued its estate and the lands as simply the right of entry thereon for the purpose of exploring for, mining and removing coal therefrom, at fifty cents an acre.

3. In the third cause of action plaintiff alleged that from and after the twentieth day of March, 1930, it has been and now is the owner of all the mineral, coal, iron, oil and gas in certain lands, which are described, 1,900 acres in extent, together with the right to enter upon the surface thereof for the purpose of exploring for, mining and removing the minerals therefrom, and that it never owned any other right, title, estate or interest in the lands other than, or in addition to, that hereinbefore described. Plaintiff pleaded that it is the successor in interest of the Bair-Collins Company in and to the property described in this cause of action; that in an action between the Bair-Collins Company, as plaintiff, and Musselshell county, its county clerk, treasurer and assessor, as defendants, which went to final judgment on August 6, 1929, it was adjudged that defendants be perpetually enjoined and restrained from assessing the minerals, coal, iron, gas and oil in and under the above-described lands for the purposes of taxation.

Answering, the defendants admitted plaintiff's ownership in the lands, but averred the fact to be that the lands were purchased from the United States as coal mining claims at the price of $20 per acre, and that the assessor, defendant in the present action, assessed the interests of the plaintiff in the lands accordingly; alleged that not any assessment was made on the right of plaintiff to enter upon the surface of the lands for the purpose of exploring for, mining and removing minerals, coal, iron, gas or oil therefrom; they admitted the allegations respecting the judgment, and, in effect, denied that it is resadjudicata in this action.

4. The fourth cause of action is somewhat similar to the third, the plaintiff having pleaded itself to be the successor in interest of Louis L. Hinz in certain lands, and that in an action pending in the district court of Musselshell county, wherein Hinz was plaintiff, and Musselshell county and its treasurer were defendants, it was finally adjudicated and settled that the defendant Musselshell county and its officers had no right, warrant or authority of law to assess the coal, iron, oil, gas, hydrocarbons and other minerals under the above-described lands, and that by that judgment it was further adjudicated and settled that the assessment of the coal, iron, oil, gas, hydrocarbons and other minerals, together with the right to enter upon the surface of the lands for the purpose of exploring for, mining and removing the same, rendered the entire assessment, and all taxes levied by virtue thereof, wholly illegal and void.

Defendants admitted plaintiff to be the successor of Hinz in the lands, and the judgment pleaded, and alleged that plaintiff's interests and estates in the lands were assessed as "patented mining claims, coal and coal deposits," purchased from the United States at the price of $20 per acre. The allegations of plaintiff to the effect that the judgment was res adjudicata in this action were denied.

When the cause came on for trial, oral testimony was received by the court, sitting without a jury. The assessor testified that in assessing the lands which were purchased by plaintiff's predecessors in interest as coal lands, he valued the same at the price paid the United States by the purchasers therefor, $20 per acre; that is to say, he assessed the various tracts of land so purchased as patented mining claims. Where the surface was used for other than mining purposes and had a distinct and independent value for such purposes, he assessed the same at an appropriate value. If the land were grazing land, he assessed it for its grazing value; if agricultural land, for its agricultural value. The right of the railway company, which was simply a right to enter upon the land and to explore for and extract the coal and coal deposits therefrom, he assessed at fifty cents per acre. It was his intention to continue this course in assessing the properties involved. In assessing a patented mining claim he did not take into consideration the value of the right to enter upon the surface as that was included in the claim.

With respect to the first cause of action, the court found that for the purposes of taxation for the year 1933 the assessor in behalf of Musselshell county assessed the estate and interest of the plaintiff in the lands in question at the price paid for the lands when originally purchased from the United States, that is, he assessed the lands as patented mining claims, and he pursued a like course with respect to others in like situation; that for the year 1933 he assessed the interest and estate of the railway company solely upon the value of the right of entry upon the surface of the land for the purpose of exploring for, mining and removing the minerals, including coal, therefrom, at the value of fifty cents per acre; that the above-mentioned assessments were severally made by the assessor, and the values were fixed by him designedly and systematically pursuant to a general plan on his part to classify all estates in coal lands, consisting of the coal or other minerals therein; he did this solely with reference to the law by which title to such lands was obtained from the United States; that the above-mentioned method of assessment and classification was followed by the assessor in good faith and by reason of his understanding that the laws of the state of Montana relating to the taxation of coal and mineral lands required him to do so.

The court found that by such method of assessment an undue and disproportionate share of the burden of taxation in Musselshell county is not imposed upon the plaintiff, and that the assessment of plaintiff's properties as made by the assessor does not deny plaintiff the equal protection of the laws of the state of Montana relating to the method of taxation and does not deny the plaintiff its right to have its property assessed and taxed at a uniform rate with other property of the same kind, character, class and nature; that the coal and other minerals belonging to plaintiff, in place beneath the lands, were not assessed for the purposes of taxation, being included in the assessment of a patented mining claim, as was the right of entry upon the surface thereof.

Upon its finding of fact the court made conclusions of law. One is "that the defendants are wholly without right, warrant, or authority of law to assess for the purposes of ad valorem taxation, or to tax, the coal and other minerals in place beneath the lands hereinbefore specifically described; and the said coal and other minerals in place are subject to taxation only upon the net proceeds thereof." Further, that the method adopted by the assessor is not an assessment of the coal and other minerals in place beneath the land, the interest of plaintiff therein being assessed as patented mining claims at the price paid the United States government therefor; and no portion of the tax sought to be imposed upon said interest is illegal or void; that the assessment of the estate and interest of the plaintiff for the purposes of taxation for the year 1933, as made by the county assessor, is valid. That inasmuch as the assessor is compelled to assess the plaintiff's properties at the price paid the United States therefor, the increase or change made by the assessor, without notice to the plaintiff of the valuation of such properties set forth in the sworn statements delivered by the plaintiff to the county assessor, is immaterial. That the Bair-Collins Company and Hinz judgments are not res adjudicata in the present action.

Thereupon the court entered its judgment denying the injunction and dismissing plaintiff's complaint. From this judgment the plaintiff has appealed. From the foregoing statement it is seen that plaintiff's chief grievance is that it has been discriminated against in the taxation of its "interest and estate" in the lands described in its first cause of action for the reason that the lands have been taxed as mining claims at the price paid the United States therefor; while the Northern Pacific Railway Company, owning lands of the "same kind, character and class," has been taxed at the rate of fifty cents per acre solely upon the value of the right of the railway company to enter upon the surface of the lands for removing or exploring for and mining and removing the minerals therefrom. Upon this hypothesis it is argued that the plaintiff has not been given the equal protection of the laws, and if section 3 of Article XII of Montana's Constitution authorizes a discrimination of this sort, it offends the provisions of the Fourteenth Amendment and is void.

Section 3 of Article XII reads as follows: "All mines and mining claims, both placer and rock in place, containing or bearing gold, silver, copper, lead, coal or other valuable mineral deposits, after purchase thereof from the United States, shall be taxed at the price paid the United States therefor, unless the surface ground, or some part thereof, of such mine or claim, is used for other than mining purposes, and has a separate and independent value for such other purposes, in which case said surface ground, or any part thereof, so used for other than mining purposes, shall be taxed at its value for such other purposes, as provided by law; and all machinery used in mining, and all property and surface improvements upon or appurtenant to mines and mining claims which have a value separate and independent of such mines or mining claims, and the annual net proceeds of all mines and mining claims shall be taxed as provided by law."

We begin with the postulate that one who has purchased a[1-3] mining claim from the United States is estopped from denying that it is a mining claim, and this is so whether the claim contains coal, or gold, silver, copper or lead. For the purpose of taxation, coal mining claims, lode mining claims and placer mining claims alike are governed by the provisions of the Constitution. This court also has determined that no matter what the source of title is, if a mine is developed upon a tract of land it is to be taxed as a mine (Northern Pacific Ry. Co. v.Musselshell County, 54 Mont. 96, 107, 169 P. 53, 56), but it has never intimated that a mine can be said to exist upon land patented by the government otherwise than as a mining claim, until the mine has actually been developed thereon and is, in fact, shown to be a mine. What we shall term for convenience plaintiff's lands, "including both the surface and the subsurface," in the language of the trial court, were purchased as patented mining claims in tracts of various area, by different persons, from the United States of America, for the price of $20 per acre. Prior to the sale of the lands by the United States, the same, and all thereof, were examined by the United States Geological Survey and by it classified as coal lands.

Plaintiff is a successor in interest of the original purchasers thereof. It is not material that these claims have not been developed or that "the extent and value of the coal, coal deposits, and other mineral deposits therein and thereunder is wholly unknown," etc. This is true to a greater or less extent with respect to a gold-bearing mining claim, for which patent is obtained. A lode mining claim upon which only enough work has been done to enable its owner to obtain patent, may promise in its undeveloped state to become a bonanza, and yet the miner's hope of to-day may "be frustrated by the stroke of the pick tomorrow," as Mr. Clark, President of the Constitutional Convention, said in the course of debate when the convention was considering the taxation of mines. (And see Northern Pacific Ry.Co. v. Musselshell County, supra, page 106 of 54 Mont.,169 P. 53.)

It may be that every acre of the lands described in plaintiff's complaint is worth more than the price paid therefor in coal alone; some, or all, may be worthless. He who obtains a patent for coal or other mineral-bearing lands takes that risk. As to this we have no concern; for the purposes of taxation every acre is worth what was paid the United States therefor. With respect to the sale of coal lands by the United States, the supreme court has said: "It is not to be presumed that the small price per acre required from those desiring to obtain a title to such lands had any influence in determining the policy to be adopted in opening them to entry. They were held in trust for all the people; and, in making regulations for disposing of them, Congress took no thought of their pecuniary value, but, in the discharge of a high public duty, and in the interest of the whole country, sought to develop the material resources of the United States by opening its vacant coal lands to entry by individuals and by associations of persons at prices below their actual value." (United States v. Trinidad Coal etc. Co.,137 U.S. 160, 170, 11 Sup. Ct. 57, 61, 34 L. Ed. 640.)

The law denies the assertion, repeatedly made by plaintiff, to which defendants seem to assent, that the United States granted to the Northern Pacific Railroad Company "coal land." When one speaks of the grant of "coal land" by the government to a purchaser one has in mind land which has been classified as such, and which has been sold pursuant to the Act of Congress of March 3, 1873, 17 Stat. 607 (see 30 U.S.C.A., sec. 71 et seq.).

The railway company's lands were granted to the Northern[4] Pacific Railroad (now Railway) Company by the Act of Congress of July 2, 1864, "An Act granting Lands to aid in the Construction of a Railroad and Telegraph Line from Lake Superior to Puget's Sound, on the Pacific Coast, by the Northern Route." (13 Stat. 365.) By section 3 of the Act (13 Stat. 367) the United States granted to the railroad company "every alternate section of public land, not mineral, designated by odd numbers, to the amount of twenty alternate sections per mile, on each side of said railroad line," etc. Provided, "that the word `mineral,' when it occurs in this Act, shall not be held to include iron or coal."

Apparently the railway company has sold approximately 70,000 acres of these lands lying within Musselshell county, reserving the coal and iron therein, if any, and the right to enter upon the surface for mining the same. The assessor has taxed the railway company only upon that right of entry. The minerals insitu he has not assumed to tax.

The court found (evidently upon admissions in the pleadings) that the lands upon which the railway company has the right of entry are undeveloped coal lands from which no coal or other mineral of any kind has ever been mined, and that the extent and value of the coal and minerals therein and thereunder are unknown.

So plaintiff is confronted with this condition of affairs: The lands which it owns (less certain surface rights) have been officially determined to be mining claims; a fact which plaintiff is estopped to deny. The "railway" lands are not mining claims, and do not contain any mines. If mines eventually are developed in the railway lands they will be taxed as mines. (NorthernPacific Ry. Co. v. Musselshell County, supra; NorthernPacific Ry. Co. v. Musselshell County, 74 Mont. 81,238 P. 872.) The tracts of land purchased by plaintiff's predecessors in[5] interest are mining claims still. One who purchases a mining claim may not change its character and destroy its taxability as such by the simple device of selling the surface with reservations and retaining the subsurface contents. That would indeed be a transparent subterfuge to escape the payment of taxes. (Compare Murray v. Hinds, 30 Mont. 466,76 P. 1039; Barnard Realty Co. v. City of Butte, 50 Mont. 159,145 P. 946, 947.) Yet, in the final analysis, plaintiff's first cause of action rests upon the theory that, the coal deposit in situ in its lands being free from taxation, and there being no annual net proceeds, as the surface ground is used for other than mining purposes and has a separate and independent value for such other purposes, that value must be taken as the basis for taxing mining claims. The argument in support of this theory centers about the word "unless" in section 3 of Article XII. It is said that "unless" means "if it be not that," or "except where," and if unless is given either of these meanings, the section commands the taxation of the surface at the price paid the government for the land; but if it is used for other than mining purposes, and has a separate and independent value for such other purposes, then that value shall be the basis of taxation. Let us analyze that portion of the section, emphasizing by italics essential words:

"All mines and mining claims, * * * after purchase thereof from the United States, shall be taxed at the price paid the United States therefor, unless the surface ground, or some partthereof, of such mine or claim, is used for other than mining purposes, and has a separate and independent value for such other purposes, in which case said surface ground, or any partthereof, so used for other than mining purposes, shall be taxed at its value for such other purposes, as provided by law."

That a more apt word than the conjunction "unless" could have been used to express the evident meaning of the quoted language, when it is analyzed as a whole, will be conceded. What is to be taxed at the price paid the United States therefor? First, the mine or mining claim, in its entirety, including the surface ground, and everything beneath, except as otherwise provided by law. When is the surface ground to be taxed, and to what extent? When the surface ground, or some part thereof, of such mine or claim is used for other than mining purposes, and has a separate and independent value for such purposes.

This brings us to inquire as to the meaning of the word[6] "surface" in section 3 of Article XII, or perhaps we had better say "surface ground." There is no agreed definition of a surface (Encyclopedia Britannica). Nor are the courts agreed upon a definition of the word "surface." Surface or superficies, prima facie, means, of course, nothing more than the mere vestimentaterrae — "the top of the earth and whatever is upon the face thereof." (Stroud's Judicial Dictionary.) Generally speaking, its meaning must be determined from the context in which it is used.

The supreme court of West Virginia says that when used in a deed without any qualifying phrase, the word "surface" signifies only the superficial part of the land. (Drummond v. White OakFuel Co., 104 W. Va. 368, 140 S.E. 57, 58, 56 A.L.R. 303;Jeffrey v. Spruce-Boone Land Co., 112 W. Va. 360,164 S.E. 292, 86 A.L.R. 966.) "In using the word `surface,' the layman in casual conversation, as well as the judge in a considered opinion, ordinarily refers merely to the superficial part of land." (Drummond v. White Oak Fuel Co., supra.)

The context considered thus is the meaning of the words "the surface ground" in section 3 of Article XII. This definition does not contemplate that the use of the surface ground, for purposes other than mining, shall be more extensive than proper surface uses require, as, by way of illustration, for grazing, agricultural, residential or town-site purposes.

Now as to the taxability of the surface ground. The grantee of[7, 8] the United States when he receives letters patent for his mine or mining claim owns the same from and including the surface to the center of the earth, save for such reservations as may be made in the patent, or as may be provided by law. (Hinz v. Musselshell County, 82 Mont. 502, 267 P. 1113, 1116; Musselshell County v. Morris DevelopmentCo., 92 Mont. 201, 11 P.2d 774, 776.) Speaking for the court in Barnard Realty Co. v. City of Butte, supra, wherein the question of taxing the surface of a mining claim, under the provisions of section 3, Article XII, was involved, Mr. Chief Justice Brantly had this to say respecting the taxation of surface ground: "But when the property, having by its location acquired a value for some independent use, is devoted by the owner to such use, it becomes at once subject to taxation at that value as is other real estate, to be ascertained by the assessing officer just as he ascertains the value of other land for the purpose of taxation. By devoting it to the new use, the owner, so to speak, creates an estate which, in the eye of the law, is regarded as independent of the original estate and is subject to taxation as such."

In Hinz v. Musselshell County, supra, after quoting fromBarnard Realty Co. v. City of Butte, supra, we said: "The design, then, was, first, to tax the mining claim reckoned upon its acreage; in addition, to tax the surface if it came to pass that the surface, when used for purposes other than mining, had a separate and independent value for such purposes; in addition, to tax the machinery used in mining, and all property and surface improvements upon or appurtenant to mines and mining claims which have a value separate and independent of such mines and mining claims; and, finally, to tax the annual net proceeds `of all mines and mining claims.' Certainly it cannot be contended that the separate and independent value which the surface, not used for mining purposes but being used for other purposes and having a value for such other purposes, shall constitute the assessable value of the mining claim rather than the value fixed by the Constitution. A process of that nature would fritter away by construction the plain language and purpose of section 3, Article XII. A familiar condition will serve for illustration: A mining company has a group of adjoining lode mining claims, let us say ten, to which it has received patent from the United States. Supposing the claims are of the full size allowed by law, the group embraces over 216 acres. The price paid the United States was $5 per acre. The company has ceased mining. The claims, lying on the grassy slopes of the mountain furnish pasture for sheep, and the company rents them for that purpose at ten cents per acre per annum. Thus the surface ground of the mining claims has a separate and independent value for pasturing sheep, and is used for that purpose. But can it be possible that the value of the claims as a sheep pasture and not the price paid the government is to be reckoned as the assessable value of the mining claims? It cannot be."

Plaintiff's predecessor in interest could not purchase at $20 an acre a tract of coal land from the United States, and then, by selling the entire tract except the surface ground worth $3 an acre for agricultural purposes, bring the whole claim within an assessment of only $3 an acre.

In Musselshell County v. Morris Development Co., supra, we said: "It is asserted by defendants that by the use of the phrase `reckoned upon its acreage,' as used in the foregoing excerpt, as well as by the language appearing in prior decisions, the court added to the wording of the Constitution something that is not therein written. It is true that these words are not in the constitutional section under consideration. The constitutional mandate is that `all mines and mining claims * * * shall be taxed at the price paid the United States therefor.' The price paid to the United States for the claim here involved was based upon a stated sum per acre, and to tax it in the same manner is a direct compliance with the Constitution. This method of taxation does not signify that the tax on the mining claim, as such, is on the surface only. The mine or mining claim that should be taxed at the price paid the government consists not only of the surface rights for mining purposes, but embraces the subsurface contents as well. Such a tax does not operate as a tax upon the minerals in place as such. The subsurface contents, inclusive of the minerals in place, constitute a part of the mine or mining claim as much so as the surface rights used for mining purposes. The two together constitute the property that must be taxed at the price paid the government. The land here involved was purchased from the United States as a part of a mine or mining claim. The taxable value of the mine or claim is fixed by the Constitution at the price paid the United States therefor, and `that value is fixed and immutable,' and the command of the Constitution is clear and imperative. (Hinz v. MusselshellCounty, supra; State ex rel. Hinz v. Moody, 71 Mont. 473,230 P. 575.)"

We reaffirm the foregoing language from the Hinz and MorrisDevelopment Co. Cases. It follows, then, that in the first instance the Constitution places upon a mine or mining claim for taxation purposes as an arbitrary value that which the patentee paid to the government per acre; the surface ground by itself is not taxed at any value; it is part of the mine; it is presumed that it has no value except for use in working the mine. When the surface ground of a mining claim, or some part thereof, is used for some purpose other than mining, and the owner of the mining claim sells that surface, or some part thereof, reserving sufficient thereof to enable him to conduct his mining operations, to all intents and purposes he is still the owner of the mining claim; all he has sold is the newly created estate "which, in the eye of the law, is regarded as independent of the original estate." This is the purport of the conclusions we reached in the Hinz Case (with an exception presently to be noted) and in the Morris Development Co. Case, and after a careful consideration of all Montana decisions upon the subject, we are satisfied that it reflects the true meaning of section 3 of Article XII, with respect to the taxation of surface ground which is used "for purposes other than mining and which has a separate and independent value for such purposes."

Some confusion has arisen from the use of the generic terms "corporeal hereditament" and "incorporeal hereditament" in prior cases, notably in Northern Pacific Ry. Co. v. MusselshellCounty, 54 Mont. 96, 169 P. 53, and in the Hinz Case. The right of the Northern Pacific Railway Company to enter upon lands which it has sold for the purpose of exploring for and extracting the coal beneath the surface, if any be found, is an incorporeal hereditament, as was the right of Hinz to purchase surface ground which his predecessor had sold in order to exploit his mining claim, but it was unnecessary in the Hinz Case to refer to the mining claim as a corporeal hereditament, or to attempt to distinguish between the two estates. Hinz was the owner of the mining claim and the only result following the ownership of his right to purchase surface land was to lessen the taxable value of the estate in surface ground which his predecessor's grantee had purchased. So here, the use of the surface ground by the plaintiff, or the right to the use thereof, has a tendency to lessen the value of the estate in the surface ground of plaintiff's mining claims which others may own. To the[9, 10] extent that the value of the separate and independent estate is lessened by plaintiff's superior rights therein, to that extent the value of the separate estate is lessened in value, which should be taken into consideration by the assessor in assessing the surface rights of others. But this does not affect the duty of plaintiff to pay taxes upon its mining claims at the price paid the United States therefor. (MusselshellCounty v. Morris Development Co., supra.) If there be anything in the Hinz Case which may be deemed contrary to what we now hold, to that extent the opinion is disapproved.

Montana has a clear and undoubted right to place mines and mining claims of every kind in the same class for purposes of taxation, and especially is this so when its Constitution so commands. As has been shown, the source of title to mines is not the controlling factor. It is true that there may be some inequality in the taxation of the surface ground in case a valuable mine be developed upon a farm acquired as a homestead under the laws of the United States, theretofore taxed at its value as a farm, or upon lands granted to the Northern Pacific Railway Company, which, before the discovery of the mine, yielded large crops of grain and hay. But this is of no material consequence; otherwise the mine will be taxed as other mines are taxed. (Northern Pacific Ry.Co. v. Mjelde, 48 Mont. 287, 137 P. 386; Northern PacificRy. Co. v. Musselshell County, 54 Mont. 96, 107, 169 P. 53,56; Musselshell County v. Morris Development Co., supra.)

What was said in State ex rel. Hinz v. Moody, 71 Mont. 473,230 P. 575, 577, adequately answers points raised in behalf of plaintiff. In that case, as in this, the property of the relator consisted of coal lands classified and approved as such by the department of the United States government, which had been purchased by the relator at the price of $20 per acre. The court, speaking through Judge Leiper, observed: "The Constitution of Montana was adopted by our constitutional convention and ratified by the people of Montana in 1889. The Act of Congress of March 3, 1873, supra, was therefore in force at the time of the adoption and ratification of our Constitution; and we think it may fairly be assumed that the framers of our Constitution had in mind this act of Congress when the provisions of section 3 of Article XII of the Constitution were under consideration." The property involved, the court went on to say, consisted of mining claims, and an arbitrary rule having been fixed for taxing the same, the query was presented, Is the tax to be upon that value, or upon some part of it? which the court answered by saying: "The language used is that this property `shall be taxed at the pricepaid the United States therefor.'" Continuing, the learned judge said: "Counsel for relator insists that to tax the property in question at the price paid the United States therefor is violative of the provisions of the Constitution, providing for the uniform assessment and taxation of property. The requirement of uniformity is a limitation upon the powers of the legislature. Section 1 of Article XII of the Constitution, as above noted, imposes upon the legislature the duty to `prescribe such regulations as shall secure a just valuation for taxation of all property, except that specially provided for in this Article.' Section 16 of the same Article provides: `All property shall be assessed in the manner prescribed by law except as is otherwise provided in this Constitution.' But, where the Constitution itself fixes the value at which property shall be taxed, the uniformity rule does not apply. (Hilger v. Moore [56 Mont. 146,182 P. 477], supra; Northern P. Ry. Co. v. Musselshell County [54 Mont. 96, 169 P. 53], supra.) It is urged that, if this property is taxed at the full price paid the United States therefor, some inequalities will result. With this contention we[11] cannot agree; but, even if such be the fact, the responsibility must rest with the framers of our Constitution and with those who ratified it. (Northern Pacific Ry. Co. v.Musselshell County, supra; 12 C.J. 702, 703; Cooley on Constitutional Limitations, supra.) The language used, `shall be taxed at the price paid the United States therefor,' is plain, clear, unambiguous. For this court to say that the property in question shall be taxed upon a valuation other than the price paid to the government therefor is to read into our Constitution a provision which is not there."

Notwithstanding that the plaintiff has attempted to differentiate, to some extent at least, between the character of the interests which it owns in the properties described in its complaint, the fact remains that from what has been said heretofore the properties it owns all consist of mining claims of which it has the ownership with the right to enter upon the surface for mining the same. As it is and has been the purpose of the state of Montana under its Constitution to place mines and mining claims in one classification, and the county authorities of Musselshell county have pursued that course with substantial accuracy as appears from the record, the claim that there has been an unfriendly discrimination against the plaintiff cannot be sustained.

It has been remarked frequently that no perfect system of taxation has been devised, and it is to be expected that occasionally inequalities will result. But this is not the unfriendly discrimination which is fatal to the tax. Clearly, there is not any unfriendly discrimination in favor of the railway company and against the plaintiff; the railway company possesses the right of entry upon lands which are neither mining claims nor mines — there being no showing that any mining claim has ever been developed on any of them — and the lands of the plaintiff which are mining claims. It is not shown in this record that the operation of the provisions of section 3, Article XII, impinges upon the provisions of the Fourteenth Amendment in any degree.

We think, as it was said in the leading case of Bell's GapRy. Co. v. Commonwealth of Pennsylvania, 134 U.S. 232,10 Sup. Ct. 533, 535, 33 L. Ed. 892, that the law does not make any discrimination in this regard which the state is not competent to make. In that case the court said: "The provision in the fourteenth amendment, that no state shall deny to any person within its jurisdiction the equal protection of the laws, was not intended to prevent a state from adjusting its system of taxation in all proper and reasonable ways. It may, if it chooses, exempt certain classes of property from any taxation at all, such as churches, libraries, and the property of charitable institutions. It may impose different specific taxes upon different trades and professions, and may vary the rates of excise upon various products; it may tax real estate and personal property in a different manner; it may tax visible property only, and not tax securities for payment of money; it may allow deductions for indebtedness, or not allow them. All such regulations, and those of like character, so long as they proceed within reasonable limits and general usage, are within the discretion of the state legislature, or the people of the state in framing their Constitution. But clear and hostile discriminations against particular persons and classes, especially such as are of an unusual character, unknown to the practice of our governments, might be obnoxious to the constitutional prohibition. It would, however, be impracticable and unwise to attempt to lay down any general rule or definition on the subject that would include all cases. They must be decided as they arise. We think that we are safe in saying that the fourteenth amendment was not intended to compel the states to adopt an iron rule of equal taxation. If that were its proper construction, it would not only supersede all those constitutional provisions and laws of some of the states, whose object is to secure equality of taxation, and which are usually accompanied with qualifications deemed material, but it would render nugatory those discriminations which the best interests of society require; which are necessary for the encouragement of needed and useful industries, and the discouragement of intemperance and vice, and which every state, in one form or another, deems it expedient to adopt." (Merchants' Manufacturers' Nat. Bank v. Pennsylvania, 167 U.S. 461,17 Sup. Ct. 829, 42 L. Ed. 236; Magoun v. Illinois Trust Sav.Bank, 170 U.S. 283, 18 Sup. Ct. 594, 42 L. Ed. 1037; AmericanSugar Refining Co. v. Louisiana, 179 U.S. 89, 21 Sup. Ct. 43,45 L. Ed. 102; King v. Mullins, 171 U.S. 404, 18 Sup. Ct. 925,43 L. Ed. 214; Travelers' Ins. Co. v. Connecticut,185 U.S. 364, 22 Sup. Ct. 673, 48 L. Ed. 949; Michigan C.R. Co. v.Powers, 201 U.S. 245, 26 Sup. Ct. 459, 50 L. Ed. 744; Citizens'Telephone Co. v. Fuller, 229 U.S. 322, 32 Sup. Ct. 833,57 L. Ed. 1206; Farmers' M. Sav. Bank v. Minnesota,232 U.S. 516, 34 Sup. Ct. 354, 58 L. Ed. 706; Heisler v. Thomas CollieryCo., 260 U.S. 245, 43 Sup. Ct. 83, 67 L. Ed. 237; Stebbins v.Riley, 268 U.S. 137, 45 Sup. Ct. 424, 69 L. Ed. 884, 44 A.L.R. 1454; Ohio Oil Co. v. Conway, 281 U.S. 146, 50 Sup. Ct. 310,74 L. Ed. 775; State Board of Tax Commissioners of Indiana v.Jackson, 283 U.S. 527, 51 Sup. Ct. 540, 75 L. Ed. 1248, 73 A.L.R. 1464; Woco Pep Co. of Montgomery v. Butler, 225 Ala. 256,142 So. 509.)

It has been declared by the supreme court of the United States that the fourteenth amendment was not "intended to compel the state to adopt an iron rule of equality" (Giozza v. Tiernan,148 U.S. 657, 13 Sup. Ct. 721, 37 L. Ed. 599), and, also, that that amendment was not intended "to subvert the systems of the states pertaining to general and specific taxation." (Cass FarmCo. v. Detroit, 181 U.S. 396, 21 Sup. Ct. 644, 45 L. Ed. 914 [916]; Kellaher v. City of Portland, 57 Or. 575,112 P. 1076; State v. Lawrence, 108 Miss. 291, 66 So. 745, Ann. Cas. 1917E, 322; see, also, Merchants' Nat. Bank v. Dawson County, 93 Mont. 310, 19 P.2d 892; O'Connell v.State Board of Equalization, 95 Mont. 91, 25 P.2d 114;Lake Superior Mines v. Lord, 271 U.S. 577, 46 Sup. Ct. 627,70 L. Ed. 1093; Brannon on the Fourteenth Amendment, 323.)

We conclude that the plaintiff has no just cause for complaint upon its alleged first cause of action.

2. Nor do we think the plaintiff has sustained its alleged[12] second cause of action. It appears that the assessor sent out the customary blanks to the plaintiff in which the lands were valued as mining claims, which was proper, with the request that the plaintiff return the blanks properly sworn to within ten days. This the plaintiff did not do, waiting until the 12th of April, when it returned the statements, claiming its right to be assessed upon its right of entry upon the lands taxed at fifty cents per acre.

Regardless of whether the assessor did or did not make an arbitrary assessment upon the lands because of the failure of plaintiff to return the blanks within time, under the provisions of section 2007, Revised Codes 1921, in the circumstances no good purpose would have been served if the assessor had followed the provisions of section 2270, Id. (as amended by Laws 1925, Chap. 142, sec. 1), which provides that, when the assessor has increased the value which the taxpayer has placed upon property in the return made by him, the assessor shall give the owner notice of the increase, thus affording the taxpayer an opportunity to appear before the board of equalization. The assessor retained without change the amount which he placed in the assessment blanks when he forwarded the same to the plaintiff; he maintained his position that it was his duty to assess plaintiff's lands as mining claims. No change in the amount could have resulted from a hearing if one had been had. We agree with the trial court that, as the assessor is compelled to assess the plaintiff's properties at the price paid the United States therefor, if it be assumed that an increase or change was made by the assessor without notice to the plaintiff, such action did not affect plaintiff's rights. The law does not require idle acts, and disregards trifles. (Secs. 8761, 8762, Rev. Codes 1921.)

3. The pleas of res adjudicata set forth in the third and[13] fourth causes of action were of no avail. In the action in which the Bair-Collins Company, a predecessor in interest of plaintiff, was the plaintiff, and Musselshell county and its county officers were defendants, it was adjudged that the defendants be perpetually enjoined and restrained from assessing the minerals, coal, iron, gas and oil in and under the lands described. In the judgment obtained by plaintiff's predecessor Hinz against Musselshell county and its treasurer, a somewhat similar judgment was entered. Those judgments have no application here. They were rendered upon conditions obtaining at the time, which were not present when this action was begun.

"The estoppel of a judgment extends only to the facts and conditions as they were at the time the judgment was rendered, and to the legal rights and relations of the parties as fixed by the facts so determined; and when new facts or conditions intervene, before the second suit, furnishing a new basis for the claims and defenses of the parties respectively, the issues are no longer the same, and hence the former judgment cannot be pleaded in bar in the subsequent action." (34 C.J. 808; In rePomeroy, 51 Mont. 119, 151 P. 333.)

In the Hinz Case the court went no further than to restrain the sale of the property and the issuance of a deed thereto, and to declare that the taxes for certain years were illegal and void. It did not restrain the levying of taxes against the property as to any year following 1927.

Moreover, in this action the method adopted by the assessor was not an assessment of the coal or other minerals in place beneath the land, but the assessment upon plaintiff's lands as mining claims at the price paid the United States therefor.

The judgment is affirmed.

ASSOCIATE JUSTICES ANGSTMAN, MATTHEWS, STEWART and ANDERSON concur.

Rehearing denied January 18, 1935.