Associated Producers' Co. v. Board of Sup'rs of Estill County

• Decision Date: 25 March 1924
• Citation: 260 S.W. 335,202 Ky. 538
• Parties: ASSOCIATED PRODUCERS' CO. v. BOARD OF SUP'RS OF ESTILL COUNTY.
• Court: Kentucky Court of Appeals

260 S.W. 335

202 Ky. 538

ASSOCIATED PRODUCERS' CO. v. BOARD OF SUP'RS OF ESTILL COUNTY.

Court of Appeals of Kentucky.

March 25, 1924

Appeal from Circuit Court, Estill County.

Proceeding between the Board of Supervisors of Estill County and the Associated Producers' Company. From a judgment of the circuit court sustaining an assessment against it, the latter appeals. Affirmed.

Clay J., dissenting.

B. R Jouett, of Winchester, for appellant.

John W Walker, of Irvine, for appellee.

SAMPSON C.J.

The appellant, Associated Producers' Company, owned a large acreage of oil and gas leases in Estill county in 1921, on which there were a number of producing wells, which it assessed for purposes of taxation at a valuation of $6,112. When the county board of supervisors met in April, 1922, it raised this assessment to $30,450, basing the raise upon the admitted fact that the Producers' Company had merely listed the leases without the producing wells, and had omitted the producing wells on the property, in pursuance to the construction which the oil company put upon section 4223c1, Kentucky Statutes, which reads in part:

"Every person, firm, corporation or association producing crude petroleum oil in this state shall, in lieu of all other taxes on the wells producing said crude petroleum, annually pay a tax equal to one per centum (1%) of the market value of all crude petroleum so produced, and such tax shall be for state purposes, and, in addition, any county in the state may impose a like tax for road purposes, county purposes or school purposes not to exceed one-half of one per centum (1%) of the market value of all crude petroleum produced in such county."

There is no controversy about the facts. The company admits it did not list the wells, and further admits that, if the wells be listed as a part of the lease the valuation fixed by the board of supervisors, $30,450, would be reasonable for purposes of taxation. The company appealed to the quarterly court, where the assessment made by the board was upheld. It then appealed to the circuit court with like results, the judgment in part reading:

"It appearing to the court that the assessment list as originally made up and filed by the Associated Producers' Company in the year 1921, for its assessment of that year, fixing the value of its oil and gas leases and mineral rights in the sum of $6,112, did not include any value for that part of said leases from which the oil is drained and produced by the producing wells, on said leased premises, and it appearing to the court that the appellee, the board of supervisors of Estill county, in April, 1922, upon a hearing duly and legally held, at which the appellant, the Associated Producers' Company, was represented, increased said assessment from $6,112 to $30,450, said increase of $24,338 being the value of those portions of said leased premises from which oil is drained and produced by the producing wells on appellant's leases, which value had not been included by appellant in its assessment list, but which amount is conceded by appellant to be fair and just if the board of supervisors of Estill county had the right to make said increased assessment by including the value of those portions of said leased premises from which oil is drained and produced by the producing wells thereon, as said board of supervisors did, and the court being of the opinion that said oil lease and all the oil rights therein as a whole are subject to the ad valorem tax and that the leases included every

...