BLACK HAWK CONSOL. MINES CO. v. GALLEGOS, No. 5044

Docket NºNo. 5044
Citation52 N.M. 74, 191 P.2d 996
Case DateApril 23, 1948
CourtSupreme Court of New Mexico
52 N.M. 74
191 P.2d 996


BLACK HAWK CONSOL. MINES CO.
v.
GALLEGOS, Commissioner of Revenue.


No. 5044.

Supreme Court of New Mexico.

March 5, 1948.
Rehearing Denied April 23, 1948.

191 P.2d 997, 52 N.M. 75

J. F. Woodbury and Ben Shantz, both of Silver City, for appellant.

C. C. McCulloh, Atty. Gen., William R. Federici, Asst. Atty. Gen., and Louis C. Lujan, of Albuquerque, for appellee.

LUJAN, Justice.

The appellant, as plaintiff, brought this action against appellee (Commissioner of Revenue), as defendant, under Chapter 94, Section 5, of the New Mexico Session Laws of 1939, 1941 Comp. Section 76-1428, to recover $704.05, money paid under protest, as a tax for the privilege of doing

52 N.M. 76
a mining business within the State, as imposed by the provisions of 1941 Comp. Section 76-1404, subd. A.

Upon appellant's refusal to further plead within the time allowed it after sustaining a demurrer to its complaint, appellee moved the court for dismissal of the complaint. The motion was granted and final judgment entered accordingly. This is a direct appeal from the decree of dismissal.

The facts, which are admitted, necessary to be stated to understand the questions raised by appellant, by his assignments of error, may be briefly stated as follows: That the appellant is a foreign corporation, duly authorized to do business in the state; that it is and has been engaged in the business of operating a gold and silver mine in New Mexico; that prior to the month of July 1941, appellant did not report sales tax upon its mining operations as measured by its gross receipts, but following

191 P.2d 998
the effective date of the 1941 amendments to the Emergency School Tax Act, appellant paid its tax under protest for the months of July, August, September and October 1941; that all of the gold and silver produced by appellant during the period in question was sold to the United States mint at Denver, Colorado, in accordance with the provisions of the Gold Reserve Act of 1934, 48 Stat. 337, and the Emergency Farm Mortgage Act of 1933, 48 Stat. 41, and all amendments thereto and regulations issued under the provisions thereof; that the acts, which antedated the Emergency School Tax Act, provided that all gold produced should become on production subject to requisition by the United States, and the Executive was given power by Executive order to provide rules and regulations by which producers should sell their gold to the United States mint, under which power the Executive provided for the enforced sale of all newly mined gold to the United States mint.

The first point relied upon for reversal is that the lower court erred in granting appellee's motion to dismiss appellant's complaint for the reason that it is exempt from paying the tax in question by the express provisions of Section 76-1405 of 1941 Comp. which reads as follows:

'Exemption of governmental transactions-Constitutional exemptions.-None of the taxes levied by this act shall be construed to apply to sales made to the government of the United States or any agency or instrumentality thereof, except a corporate agency or corporate instrumentality, nor to sales to the state of New Mexico or any of its political subdivisions; provided that deposits of gold and silver with the United States' mint shall not be considered as sales to the government of the United States and shall not be exempt thereunder; nor shall such taxes apply to any businesses or transactions exempted

52 N.M. 77
from taxation under the Constitution of the United States or the state of New Mexico.'

The contention is obviously wrong. At the time of the enactment of this law the question of whether deposits, or transfers, of gold and silver with the United States Mint were sales, was questioned. The early decisions of the Federal District Courts were to the effect that they were not sales, but administrative acts of the Government. Holland, Admr. Etc., v. Haile Gold Mines, 1942, 44 F.Supp. 641; Fox v. Summit King Mines, 1943, 48 F.Supp. 952. The legislature might well have been in doubt as to whether such a transaction constituted a sale and this doubt resolved into a legislative determination that such deposits 'shall not be considered as sales to the government of the United States.' Whether it is in fact a sale is beside the question. It is clear that the legislature intended to exclude transfers of gold and silver to the United States Mint, whether or not such transactions are sales, from the operation of the specific exemption otherwise provided in that section of the statute.

Notwithstanding such deposit results in a transfer of title, and is in effect a sale, Walling v. Haile Gold Mines, 4 Cir., 136 F.2d 102; Luke v. East Vulture Min. Co., 47 Ariz. 220, 54 P.2d 1002, the legislature intended to, and did, exclude it from the statutory exemptions of sales to the United States, even though the tax may be void for constitutional reasons, a question yet to be considered. The Arizona statute construed in the Luke case levied a privilege tax 'upon the gross proceeds of sales or gross income from the business of 'mining * * * or producing * * * gold * * *.'' Laws Ariz.1935, c. 77, art. 2, § 2(c), par. 1. It exempted all sales to the United States, without exception, from the operation of the tax. As the tax was levied upon 'sales,' and the transfer to the United States was a sale, it logically followed that the gold in question was exempted by the statute from the tax, and the Arizona court so held.

The second assignment of error is as follows:

'The trial court erred in sustaining defendant's demurrer to plaintiff's complaint for the reason that sales by appellant to the United States Mint constitute transactions in interstate commerce which are

191 P.2d 999
exempt from taxation by the state under the Constitution of the United States and the express provisions of Section 76-1405 of the New Mexico Statutes, 1941, Annotated.'

That the shipment of gold and silver to the United States Mint, across state lines to Denver, is interstate commerce, has been determined by a number of decisions of the Circuit Courts of Appeal of the United States in construing the Fair Labor

52 N.M. 78
Standards Act, 29 U.S.C.A. § 201 et seq. (Canyon Corp. v. National Labor Relations Board, 8 Cir., 128 F.2d 953; Walling v. Haile Gold Mines, 4 Cir., 136 F.2d 102; Fox v. Summit King Mines, 9 Cir., 143 F.2d 926; and by one Federal District Court in Robertson v. Alaska Juneau Min. Co., D.C., 61 F.Supp. 265), but the early Federal District Court decisions were not in accord. Holland, Adm'r, v. Haile Gold Mines, supra; Fox v. Summit King Mines, supra.

Our research satisfies us that the question has not been decided by the Supreme Court of the United States, but we should, and will, accept as correct the Federal decisions here cited, to the effect that shipment of gold across state lines to a United States Mint is interstate commerce, under the Fair Labor Standards Act; and we believe it has application here. It does not follow, however, that the appellant is not liable to this tax.

It is provided by the Emergency School Tax statute:

'There is hereby levied, and shall be collected by the bureau of revenue, privilege taxes, measured by the amount or volume of business done, against the persons, on account of their business activities, engaging or continuing, within the state of New Mexico in any business as herein defined, and in the amounts determined by the application of rates against gross receipts, as follows:

'A. At the amount equal to the percentages hereinafter in this paragraph specified, of the gross receipts of the business of every person engaging or continuing in the business of mining, quarrying or extracting from the natural resources of this state, for sale, profit or commercial use, any oil, natural gas, carbon dioxide gas, potash, copper, gold, silver, limestone, sand, gravel, or other metalliferous or non-metalliferous mineral products or combination, or compound of mineral products, or felling or producing timber for sale, profit or commercial use; providing that coal shall not be subject to the provisions of this paragraph (A).

'Upon oil, natural gas, carbon dioxide gas and potash, at the rate of two (2) per cent of the gross receipts, and upon all other businesses specified in this paragraph, at the rate of one-half of one percent of the gross receipts.

'The measure of the tax imposed by this paragraph is the value of the entire production in this state, regardless of the place of sale or the fact that delivery may be made to points outside of the state.' (Our Emphasis.) Sec. 76-1404 N.M.Sts.1941.

The following statutory definitions are explanatory of the nature of the tax:

'* * *

52 N.M. 79

'(d) The term 'gross receipts' means the total receipts of a taxpayer received as compensation for personal or professional services for the exercise of which a privilege tax is imposed by this act, the total receipts of a taxpayer derived from trades, business, commerce, and the gross proceeds of sales as hereinafter defined, and without any deduction on account of losses or expenses of any kind.

* * *

'(f) The term 'business' when used in this act shall include all activities or acts engaged in (personal, professional, and corporate) or caused to be engaged in with the object of gain, benefit or advantage either direct or indirect. * * *' Sec. 76-1402 N.M.Sts.1941.

The New Mexico Emergency School Tax is a tax upon the privilege of engaging or continuing in business in New Mexico. It is not limited to taxing those whose gross receipts are derived from sales of property; but it covers the entire range of business activities, with a few specific exceptions. It is sometimes measured by gross sales, but often by gross receipts for professional services, and from

191 P.2d 1000
other businesses or occupations which are in no sense 'sales' as that word is ordinarily used. It has been erroneously denominated a 'sales tax' by this Court, more than...

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3 practice notes
  • PA Against Gambling Expansion Fund v. Com., No. 229 MM 2004.
    • United States
    • United States State Supreme Court of Pennsylvania
    • June 22, 2005
    ...Opinion No. 331, 582 So.2d 1115 (Ala.1991); Barclay v. Melton, 339 Ark. 362, 5 S.W.3d 457 (1999); Black Hawk Consol. Mines Co. v. Gallegos, 52 N.M. 74, 191 P.2d 996 (N.M.1948). Thus, because the General Assembly made numerous changes to the original bill that dealt with fingerprinting at ra......
  • MILLER v. PHOENIX ASSUR. CO., No. 5027
    • United States
    • April 23, 1948
    ...tending to establish the loss, nor does it show that appellants made any efforts to obtain from the Bureau of Revenue copies of sales tax191 P.2d 996reports. The failure to request these records, meanwhile retaining premiums, may well have caused appellee reasonably to believe that appellan......
  • Green v. General Acc. Ins. Co. of America, No. 16886
    • United States
    • New Mexico Supreme Court of New Mexico
    • November 24, 1987
    ...with Green. "A non-waiver agreement itself may be waived by conduct, the same as stipulations in the policies." Miller, 52 N.M. at 73, 191 P.2d at 996. By its acts and conduct, General Accident could be found to have waived the provisions urged as their affirmative defenses against the Janu......
3 cases
  • PA Against Gambling Expansion Fund v. Com., No. 229 MM 2004.
    • United States
    • United States State Supreme Court of Pennsylvania
    • June 22, 2005
    ...Opinion No. 331, 582 So.2d 1115 (Ala.1991); Barclay v. Melton, 339 Ark. 362, 5 S.W.3d 457 (1999); Black Hawk Consol. Mines Co. v. Gallegos, 52 N.M. 74, 191 P.2d 996 (N.M.1948). Thus, because the General Assembly made numerous changes to the original bill that dealt with fingerprinting at ra......
  • MILLER v. PHOENIX ASSUR. CO., No. 5027
    • United States
    • April 23, 1948
    ...tending to establish the loss, nor does it show that appellants made any efforts to obtain from the Bureau of Revenue copies of sales tax191 P.2d 996reports. The failure to request these records, meanwhile retaining premiums, may well have caused appellee reasonably to believe that appellan......
  • Green v. General Acc. Ins. Co. of America, No. 16886
    • United States
    • New Mexico Supreme Court of New Mexico
    • November 24, 1987
    ...with Green. "A non-waiver agreement itself may be waived by conduct, the same as stipulations in the policies." Miller, 52 N.M. at 73, 191 P.2d at 996. By its acts and conduct, General Accident could be found to have waived the provisions urged as their affirmative defenses against the Janu......

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