Salisbury v. Lane , 7 Idaho 370 ( 1900 )

HUSTON, C. J.

This is a submission of a controversy without action. It is unnecessary to set forth the entire stipulation of facts, as shown by the transcript. The question submitted to the court upon this agreed case is as follows: “Were mining claims, for which United States patents had been issued, exempt from taxation in 1898 when the mining claims hereinbefore mentioned were assessed?” This submission involves simply the construction of subdivision 7, section 1401, of the Revised Statutes. Said section provides that “the following property is exempt from taxation: .... Seventh. Mining claims, but machinery, property and improvements upon or appurtenant to mining claims shall not be so exempt.” The tenth subdivision of said section includes “possessory rights to public lands.” It is not, as we consider it, necessary to enter into a philological discussion of the origin or general meaning of the term “mining claim.” What does the term mean as used in the statute under consideration? The organic act of the territory of Idaho contains a provision similar, if not exact, with that of most of the territories. Section 1851 of the Revised Statutes of United States, provides: “The legislative power of every territory shall extend to all rightful subjects of legislation, not inconsistent with the constitution and laws of the United States. But no law shall be passed interfering with the primary disposal of the soil; no taz shall be imposed upon the property of the "United States; nor shall the lands or other property of nonresident be taxed higher than the lands or other property of residents.” Primarily, the title to all lands in this country is in the government, and until the government has parted with the title it remains “the property of the United States,” and as such is not subject to taxation. And it was in recognition of this law that the first legislature of the territory exempted “mining claims” — i. e., claims asserted under the mining laws of the United States, -to certain lands of the government supposed to contain mineral deposits. These claims might, by compliance with the provisions of the United States laws, ripen into a title, at the option of the locator or claimant; but, so long as the title remained in the government they were exempt from taxation by the territory or the state. When, however, the title passed from the government by the issue of patent, they were no longer within the purview of the provisions of the federal law. They were no longer the property of the United States, but became incorporated into the general property of the citizen or citizens of the territory or state, and were a part of "all property .... subject to taxation,” under the provisions of section 1400 of the Eevised Statutes, unless exempted by the express provisions of some statute of the state. The claim, which was an inchoate right had by the acts of the claimant, confirmed by grant of the government, ripened into complete title. The title of the holder of mining property under a patent from the United States government is in no way different from the title by patent to any other lands granted by the United States. “’Twas mine; Tis thine.” By virtue of the paramount law, while it was the property of the United States it was exempt from taxation by the local law. "When it passed from the United States to the citizen, it became subject to the same general law as that of all other property of the citizen.

Section 1400 of the Revised Statutes, which is the existing law in this state, provides that “all property in this territory [state] not exempt under the laws of the United States, except as enumerated in the next section, is subject to taxation as in this title provided; but nothing in this title shall be construed to require or permit double taxation.” The seventh subdivision of section 1401 is as follows (after defining exemptions) : "Seventh. Mining claims, but machinery, property and improvements upon or appurtenant to mining claims shall not be so exempt.” Is not the intention of the legislature clearly apparent in the language of this section? All property which the legislature was authorized to tax they would tax, in obedience to the recognized principle that taxation should, so far as practicable, be equal. The mining industry was the dominant industry of the territory, and yet it is contended that it was the intention of the legislature to exempt it from taxation. If this is a correct theory of taxation, it would be entirely proper for our next legislature to exempt sheep from taxation, because the sheep industry has become dominant in this state. We are not in accord with the position taken by counsel for respondent that, in construing statutes in pari materia, we must follow the word, and not the purpose, of the law. All statutes pertaining to revenue are to be construed most strictly in favor of the object of the statute; that is, in favor of the purpose of the statute. Statutes of exemption are to be strictly construed against exemption and in favor of revenue. Statutes providing for liens are to be construed in favor of the purpose of the statute; that is, to secure to the lienholder or claimant the right intended by the statute to be secured to him. If it was the intention of the legislature to exempt from taxation the most valuable property in the state, such intention should have been clearly and unequivocally expressed in the statute, and, not being so expressed, we cannot think that the courts would be justified in reaching so inequitable a conclusion by construction.

The constitution of Nevada (article 10) prescribes the taxation of “all property, real, personal, and possessory, excepting mines and mining claims, the proceeds of which alone shall be taxed.” It is evident that the makers of the constitution of Nevada, as well as the people who adopted it, recognized a distinction between mining claims and mines. In State v. Kruttschnitt, 4 Nev. 178, the court says: “Whenever the interpretation of a statute or a constitution in a certain way will result in manifest injustice, courts will always scrutinize the statute or constitution closely, to see if it will not admit of some other interpretation/’’ The formulators of the constitution of Idaho, with an experience of more than a quarter of a century before them, declined to follow Nevada,, and provide by a provision in the fundamental law of the state for the exemption from taxation of what was known and recognized as among the most, if not the most, valuable property in the state, when the same had become a legitimate subject of taxation. Of course, so long as the title remains in the government, “mines and mining claims,” like any other claim to land, are not the subject of local taxation; but when they cease to be property of the United States — when the-fee has passed from the United States to the citizen — then they are, as all other property of the citizen is, subject tot taxation, unless exempted by positive and unequivocal law. It is true that many of the richest producing mines in the-country are held as “mining claims,” th)e owners thereof electing, presumably for the very purpose of evading local taxation, to so hold them, rather than perfect title in themselves by securing patents thereto. But this is an option resulting-from the policy of the federal law — a matter which we are not permitted to consider. Uniformity of taxation is an elementary principle, recognized by the constitution. “The legislature may allow such exemptions from taxation from time to-time as shall seem necessary and just, and all existing exemptions provided by the laws of the territory shall continue until changed by the legislature of the state.” (Idaho Constitution, article 7, section 5.)

It will not do, in the consideration of this case, to place too-much reliance upon the decisions in California and Nevada. The conditions are so very different. We have no law in this-state subjecting the product of mines to taxation, and, if the-contention of respondent is to obtain, the result is that all mining property in the state escapes taxation, except the “machinery and improvements thereon,” and this in the face of the fact, well known to all, that the heaviest burden of the expense of the state government comes from the mining counties, not only in the protection of property, but in the punishment of crime.

It is objected that many patented mines are nonproductive. So, also, is much other property in the state. But the law provides (Laws 1899, sec. 1, p. 215) : “All taxable property must be assessed at its full cash value.” If A owns one hundred and sixty acres of land, all of which is under improvement, and from which he is receiving a large yearly revenue, it is not presumable that B, who owns one hundred and sixty-acres of sagebrush land adjoining him, none or but a very small part of which is under improvement, and from which B is receiving no revenue whatever, will “be assessed at the same value as that of A. And it is presumable that the like rule will obtain in regard to mines, certainly if regard is had to the law. That the legislature has the absolute authority to exempt all mines and mining property from taxation is unquestioned, but such intention should be expressed in direct, and unequivocal terms. Questions of such importance, involving such vital consequences to the state and to the people, ought not to be left to the fallibility of construction. The judgment of the district court is reversed, and cause remanded, with instructions to enter judgment in favor of the defendant dismissing the action, with costs of appeal to appellant.