Gooch v. Rogers

• Decision Date: 21 November 1951
• Parties: GOOCH et al. v. ROGERS et al.
• Court: Oregon Supreme Court

Page 274

238 P.2d 274

193 Or. 158

GOOCH et al. v. ROGERS et al.

Supreme Court of Oregon, En Banc.

Nov. 21, 1951.

John D. Galey, Sweet Home, argued the cause for appellants. On the brief were Galey & Galey, Sweet Home.

Melvin Goode, of Albany, formerly Dist. Atty. for Linn County, argued the cause and filed a brief for respondents.

ROSSMAN, Justice.

This is an appeal by the plaintiffs, owners of a tract of reforestation land, from a declaratory judgment which held that the penalty provision of § 107-125, O.C.L.A., is valid, and that the court had no power to relieve the plaintiffs from a penalty which was imposed upon them in the latter part of 1948 under that section of our laws.

The plaintiffs contend that the circuit court erred (1) 'in not declaring the penalty provision of O.C.L.A. § 107-125 unconstitutional and void', and (2) 'in failing to waive and remit the penalty.'

Section 107-125, O.C.L.A., was § 10 of Oregon Laws 1929, ch. 138. Since amendments which were made to that act after 1948 are not applicable to the penalty which was assessed in that year against the plaintiffs, we shall omit mention of them from the summary of the act which we shall now make.

The act, as set forth in our compiled laws, consists of twenty sections, §§ 107-101 to and including 107-143, O.C.L.A. The first section states:

'The purposes of this act are:

'(1) To encourage the growth and protection of forest crops on lands chiefly valuable therefor.

'(2) To provide a fair, stable, continuous tax revenue from such lands.'

Subsequent sections authorize the board of forestry, the tax commission and the county assessors to pursue the course of which we shall now take notice. Section 107-111, as amended by Oregon Laws, 1943, ch. 143, § 2, empowers the tax commission, upon recommendation of the board of forestry, to classify appropriate land within the state as 'reforestation lands' which, as defined in § 107-102, as amended by Oregon Laws 1943, ch. 143, § 1, are 'lands suitable chiefly for forest crop production'. When a tract of land has been classified as reforestation lands, it is removed by the local assessor on the following March 1 'from the list of properties assessed and taxed under the ad valorem property tax', § 107-122, and at that time the assessor enters it upon a separate roll whereby it becomes subject to an 'annual forest fee' and eventually to a 'yield tax', § 107-121, as amended by Oregon Laws 1943, ch. 143, § 3. Seemingly, to render it clear that reforestation lands shall not pay any taxes except the two just mentioned, § 107-129 says: 'Any land and forest crop taxed under the provisions of this act shall not be otherwise assessed and taxed under the laws of this state; * * *.'

The 'forest fee' is an annual charge of '5 cents per acre on lands west of the summit of the Cascade mountains and 2 1/2 cents per acre on lands east of the summit', § 107-121, as amended by Oregon Laws 1943, ch. 143, § 3. The plaintiffs' land lies west of the summit of the Cascade Range.

The yield tax becomes payable after the 'forest crops' have been harvested, and its amount is 12.5 per cent of the value of the crop as estimated by the forestry board, § 107-123. In view of the fact that there is no issue concerning the amount of the yield tax which was assessed against the plaintiffs' lands, we shall not mention the manner in which the amount of that tax is computed.

Owners of reforestation land are prohibited by the act from cutting its timber without first obtaining a written permit from the forestry board. The exact words of the act, § 107-124, O.C.L.A., are: 'It shall be unlawful for any person to harvest or cause to be harvested any forest crop, or to remove or cause to be removed any forest growth, from privately owned lands which have theretofore been classified as reforestation lands, without first having obtained a written permit so to do from the board, which said permit shall set forth the unit value, by units of proper measurement, of the respective kinds of forest crops on said premises; said unit value to be determined by the board, from all evidence it commands, to be the true unit market value of such respective products, immediately prior to harvesting.'

The section provides for a hearing before the forestry board if the owner is dissatisfied with the values fixed by it and for an appeal to the circuit court from the action taken by the board.

Section 107-123 requires owners who, pursuant to the required permit, cut their timber 'to keep an exact record of the number and kind of units of all forest products harvested.' It also renders it the duty of the owner 'within 15 days after the thirtieth day of June and within 15 days after the thirty-first day of December of each year to report, under oath, to said board and to the tax collector of the county wherein the lands are situated the number and kinds of units of all forest products harvested from such lands during the preceding six months.' Finally, the section provides that 'the report to the said tax collector shall be accompanied by the owner's remittance, in legal tender, of the yield tax due hereunder.'

The foregoing sketches the manner in which reforestation lands are removed from the regular tax roll and placed upon a separate roll whereby they become liable for nothing more than the 'forest fee' until they have subjected themselves to the 'yield tax'.

We now come to the section, § 107-125, which is the subject matter of this controversy. Its pertinent part follows: 'Any person or owner harvesting forest crops from lands which have theretofore been classified as reforestation lands who shall have failed first to obtain a permit from the board, or shall have failed to make his remittance of yield taxes due hereunder within said 15-day period, shall be subject to a penalty of an additional yield tax of 10 per cent of the fixed value of said products, and the amount of such yield tax shall be a first lien against the said forest crops and a debt due and owing to the county from the owner of said lands at the time said forest crops are harvested, and the tax collector of the county wherein such lands are situated shall, in addition to the remedies provided by statute for the collection of taxes against real and personal property, maintain an action against such owner for the collection thereof with the aforesaid penalty and with interest thereon from said 15-day period at the rate of 10 per cent per annum until paid; * * *.'

It will be observed that the 10 per cent provision is applicable only to the yield tax, and not to the forest fee. Although the section says that delinquent owners 'shall be subject to a penalty', it terms the appended amount an 'additional yield tax'. Next, the section, through the use of the term 'such yield tax', refers to the combined sums and renders their total 'a first lien against the said forest crops' and a personal debt of the owner. Evidently the legislature wished the appended amount to partake of the twofold character of a penalty and a tax.

Some of the other sections of the act provide: All lands not classified as reforestation lands shall remain subject to the ad valorem property tax laws, § 107-127; Classification is not final, and the agencies aforementioned may for cause re-classify, § 107-112, as amended by Oregon Laws 1945, ch. 63, § 1; all forest fees and yield taxes shall be deposited by the tax collecting officer with the county treasurer in the same manner as all other taxes, § 107-128, as amended by Oregon Laws 1943, ch. 143, § 4; any person who knowingly makes a false return shall be deemed guilty of a misdemeanor and shall receive the penalty which the act prescribes, § 107-142; any person 'shall, upon request, be granted a hearing before the board on any subject pertaining to the activities of said board under this act affecting his or their properties or interests as a taxpayer. * * * An appeal from any decision of the board or commission under this act may be taken * * * to the circuit court', § 107-143; and any person who harvests 'forest products from reforestation lands * * * without first having obtained a permit in writing so to do' is subject to fine and penalty,s 107-126.

We see from the foregoing that the act undertakes to achieve the purposes announced in § 107-101 by encouraging owners of reforestation lands, through favorable tax treatment, to grow new forests upon their property. Evidently the modest forest fee, which is all that the owner of reforestation lands pays until his trees have reached maturity, is intended to stimulate reforestation and thus promote the welfare of the state. Presumably, when the timber has been felled, the owner is in a better financial condition to contribute to the cost of government his fair share and, accordingly, at that time the yield tax exacts of him an amount which possibly is intended to bridge the gap between the forest fee and the amount which he would have paid had his property remained on the tax roll. In order to prevent arbitrary and unwarranted action, the act makes ample provision for agency review and for appeals to the courts.

Pursuant to the provisions of the act which we have reviewed, the property owned by the plaintiffs was classified as reforestation lands and later, upon their application, the plaintiffs were granted the permit which § 107-124 requires of those who wish to cut timber. Between January 1 1948, and June 30, 1948, the plaintiffs removed 766,598 board feet of Douglas fir saw logs of a value, as determined by the forestry board, of $4,599.39. Based upon that valuation, the yield tax of 12.5 per cent was $574.95. The plaintiffs make no contention that any error is present in any of those figures.

By reverting to § 107-123, it will be observed that the yield tax should have been paid 'within 15 days after the thirtieth day of June,' 1948, but the plaintiffs did not pay it until September 21, 1948. As a...