Oil Co v. Walker
| Decision Date | 13 April 1925 |
| Docket Number | No. 256,MID-NORTHERN,256 |
| Citation | 69 L.Ed. 841,45 S.Ct. 440,268 U.S. 45 |
| Parties | OIL CO. v. WALKER, State Treasurer, et al |
| Court | U.S. Supreme Court |
Messrs. F. D. Anderson and C. S. Thomas, both of Denver, Colo., for plaintiff in error.
[Argument of Counsel from page 46 intentionally omitted] Mr. C. E. Pew, of Helena, Mont., for defendants in error.
This suit was brought by the Oil Company to enjoin the enforcement of an annual license tax imposed by a state statute (Rev. Codes Mont. 1921, §§ 2397-2408)1 upon persons producing petroleum, etc., equal to 1 per centum of the gross value of the oil produced during the year. The statute, as applied to the company, is assailed as invalid, upon the ground that the company, by assignment of the original leases, is a lessee of the United States of certain public lands entered as homesteads, but not yet granted by patent, upon which it is engaged in prospecting for and producing crude petroleum, under the provisions of the Leasing Act of February 25, 1920, c. 85, 41 Stat. 437 (Comp. St. Ann. Supp. 1923, §§ 4640 1/4-4640 1/4ss), and, therefore, 'is a governmental agency, means or instrumentality whose operations cannot be taxed by the state.' The state Supreme Court held otherwise. 65 Mont. 414, 211 P. 353; 68 Mont. 550, 219 P. 1119.
Whether the company under its leases is an agency, means or instrumentality of the United States, or in the absence of congressional consent would be outside the reach of state taxation, we need not stop to consider, since we are of opinion that the authority of the state exists in virtue of such consent. Section 32 (41 Stat. 450) of the act contains the following proviso:
'Provided, that nothing in this act shall be construed or held to affect the rights of the states or other local authority to exercise any rights which they may have, including the right to levy and collect taxes upon improvements, output of mines, or other rights, property, or assets of any lessee of the United States.' Comp. St. Ann. Supp. 1923, § 4640 1/4pp.
The contention on behalf of the company is that this proviso, which saves from the effect of any possible adverse construction of the act, rights of the states 'which they may have,' relates to, and is confirmatory of, existing rights only—that is to say, rights existing when the act was passed. But we find nothing in the body of the act which, by any stretch of meaning, purports to detract from or render less certain any such pre-existing rights, and in that view, the theory advanced fails for want of material upon which to operate. It fairly cannot be supposed that Congress would indulge in the altogether idle ceremony of enacting a law to save rights which, being in no way challenged or affected, stood in no need of being saved. The more natural view, and the one we adopt, is that Congress, having provided for leasing the public lands to private corporations and persons whose property, income, business and occupations ordinarily were subject to state taxation, meant by the proviso to say in effect...
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