Cole v. Pond Fork Oil & Gas Co.
Citation | 35 S.E.2d 25,127 W.Va. 762 |
Decision Date | 26 June 1945 |
Docket Number | C.C. No. 697. |
Parties | COLE et al. v. POND FORK OIL & GAS CO. |
Court | Supreme Court of West Virginia |
Rehearing Denied Sept. 10, 1945.
Certiorari Denied Nov. 5, 1945.
Syllabus by the Court.
1. Where a statute is sought to be amended by the Legislature and the title to the act refers to the statute being amended by chapter, article and section without further reference to the purposes thereof, the enactment must be germane to the purposes of the original act, and where it goes beyond that purpose is invalid under Section 30, Article VI of the Constitution of this State, requiring the object of the act to be stated in the title thereof.
2. A tax on royalty accruing from an oil and gas lease may not be constitutionally laid by an act purporting to amend a statute imposing a tax on the privilege of engaging in certain businesses and occupations, because not germane thereto.
3. An act purporting to apportion a tax laid on a producer of oil, gas or other petroleum products, as between the lessor and lessee in an oil and gas lease, whereby the lessee may meet his obligations to his lessor under such lease by the payment of a less sum in money or in kind than that undertaken to be paid therein, is unconstitutional and void as impairing the obligation of a contract, being in violation of Section 10 of Article I of the Constitution of the United States, and Section 4 of Article III of the Constitution of this State.
Campbell & McNeer, of Huntington, for plaintiff.
Harold A. Ritz and Lively & Lively, all of Charleston, for defendant.
Harry G. Shaffer, of Madison, and Robert S. Spilman and M. O. Litz both of Charleston, amici curiae.
This case comes to this Court on certification by the Circuit Court of Kanawha County on its own motion, and involves the constitutionality of Chapter 127, Acts of the Legislature 1939, now incorporated in Michie's Code 1943 as Section 2j of Article 13 of Chapter 11. The circuit court sustained a demurrer to a notice of motion filed by the plaintiffs, and therefore the plaintiff below has the affirmative in this Court, and the parties hereto occupy the same relative positions in which they stood in the court below, and will be referred to as such.
On March 18, 1924, Albert H. Cole and others, acting in the capacity of Trustees of the Cole & Crane Real Estate Trust, executed a lease to C. A. Croft, whereby they leased for oil and gas purposes a certain parcel of land situate in Boone County, by which it was agreed in general that the lessors should receive one-eight of the oil and gas produced and saved from the leased premises, and an equal one-eighth part of the proceeds from the marketing or sale of natural gas from said premises, but in no case to be less than one cent for each one thousand feet of gas produced, and the equal one-eighth part of all gasoline manufactured from said premises either from oil or natural gas, and the equal one-eighth part of all lamp black manufactured from said premises. This lease agreement is set out in full in plaintiff's notice of motion. Some transfers of the lease and the property covered thereby have been made on the part of both plaintiff and defendant. No question is raised as to the right of the plaintiffs to maintain this action, nor that the defendant is the owner of the lease in question, under transfer direct or indirect from Croft, and that it has assumed the obligations created thereby. The leased property has been developed and a number of producing gas wells drilled thereon, from which substantial royalties have accrued to the lessors. The royalties so accruing for the months of June, July and August, 1943, aggregate $1,289.89, and when defendant undertook to make settlement for these royalties it deducted therefrom the sum of $1,246.03, consisting of $958.49 paid under Section 2a of Article 13, and $287.54 under Section 3a of Article 13 of Chapter 11 of the Code, as amended, on account of taxes claimed to have been paid by the lessee to the State under said two Sections 2a and 3a for a period of approximately four years, beginning with the effective date of Chapter 127, Acts of the Legislature, 1939, and paid the balance of $43.26 to the plaintiffs. These deductions were made by the defendant under the supposed authority of Chapter 127 aforesaid.
In this situation plaintiffs instituted their suit to recover $1,246.03. In their notice of motion they admit the payment by the defendant to the State of that amount; but they deny the right of the defendant to deduct the same, or that they have become obligated to pay the same. It is stated that the deduction was made under the supposed authority of Chapter 127 aforesaid. The situation presented was one in which the court could say that, on the face of the notice of motion, if the Act of 1939 was valid, plaintiffs had not made out a case; and, therefore, taking the view that the Act aforesaid was constitutional and valid, sustained a demurrer to the plaintiffs' notice of motion.
Immediately before the enactment of Chapter 127 of the Acts of the Legislature, 1939, the statute covering taxation of the privilege of engaging in the business of producing oil and gas, and of collecting rents for the use of real and personal property was contained in four sections of Article 13 of Chapter 11 of Michie's Code, 1943. For a full understanding thereof we quote said sections in full:
* * *
* * *.'
Sections 2, 2a and 2i were enacted by Chapter 86, Acts of the Legislature, 1935, and Section 3a by Chapter 120, Acts of the Legislature, 1939. On March 11, 1939, the Legislature, then in regular session, enacted what now appears in Michie's Code, 1943, as Section 2j of Article 13 of Chapter 11, being Chapter 127 of the Acts of that session. We quote the title to the act and the body thereof in full:
'An Act to amend article thirteen, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, by adding thereto section two-j, relating to tax on oil and gas.'
'No person shall be required to pay the tax imposed by section two-i of this article, upon income which is included in the measure of the tax imposed upon the production of oil,...
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