Harvey Coal & Coke Co v. Dillon
Decision Date | 16 June 1905 |
Citation | 69 W. Va. 605,53 S.E. 928 |
Parties | HARVEY COAL & COKE CO. v. DILLON, Tax Commissioner, et al. |
Court | West Virginia Supreme Court |
A sealed writing witnesses that "the lessors do demise, let and lease for coal mining and coke manufacturing purposes for a period of thirty years" a tract of land; and that the lessors "do also grant unto the lessee the sole and exclusive right and privilege of mining, shipping and selling the coal from the above leased premises * * * and the right to erect and use all buildings and structures necessary for the purposes of mining, coking and shipping the coal and coke"; and also that "it is expressly agreed between the respective parties to this lease that if at the expiration of the said period of thirty years, all the available merchantable coal which can be profitably mined, and which is hereby let to the lessee for that purpose, has not been mined and removed, then the lessees shall have the privilege of an extension of this lease upon the same terms and conditions as those hereinbefore set forth, for a reasonable additional time until the whole of said coal can be so mined and removed." The writing provided for a rent or royalty to the lessors of ten cents a ton for all coal mined, and also contained a clause of forfeiture for non-compliance by the lessee with the covenants of the writing. Held, that this writing created a lease, a chattel real, taxable to the lessee under chapter 35, p. 285, Acts of 1905.
Chapter 35, p. 285, Acts of 1905, in its taxation of chattels real is not in violation, as double taxation or otherwise, of the state Constitution.
Chapter 35, p. 285, Acts of 1905, is not in violation of amendment 14 of the national Constitution, as wanting due process of law, or denying equal protection of the law.
(Syllabus by the Court.)
Appeal from Circuit Court, Payette County.
Bill by the Harvey Coal & Coke Company against C. W. Dillon, tax commissioner, and others. Decree for defendants and plaintiff appeals. Affirmed.
St. Clair, Walker & Summerfield, Brown, Jackson & Knight, Vinson & Thompson, Rucker, Anderson & Hughes, Sheppard & Goodykoontz, and Jos. H. Gaines, for appellant.
C. W. Dillon, Mollohan, McClintic & Mathews, and Geo. C. Baker, for appellees.
BRANNON, P. The Harvey Coal & Coke Company, a corporation, presented to the Honorable W. R. Bennett, judge of the circuit court of Fayette county, a chancery bill setting up that on 20th of May, 1893, it made a contract with Morris Harvey and others for the purchase of all the coal in the Sewell seam in certain land, together with the right to enter upon the surface and use so much of the surface as might be required in mining, for which the company was to pay Harvey and others 10 cents per ton for all coal mined; that it had actually developed the coal mine and was engaged in mining coal and making coke on the land. The bill complains that under certain legislation enacted in 1905 for the taxation of personal property C. W. Dillon, state tax commissioner, had issued such instructions to B. E. Ware and S. T. Carter, assessors of Fayette county, as would require them to assess said mining property under the head of chattels real, and that the assessors would assess it, and praying that said commissioner and assessors be enjoined from making such assessment, on the theory that it was unwarranted by law. The court sustained a demurrer to the bill and dismissed it, and the plaintiff appeals.
The deed from Harvey and others to the plaintiff contains the following language: "That the lessors do demise, let and lease for coal mining and coke manufacturing purposes for a period of thirty years from and after the 1st day of January, 1893, the following tract or body of land lying." And the lessors "do also grant unto the lessee the sole and exclusive right and privilege of mining, shipping and selling the coal from the above-leased premises from the said Sewell seam, and the right to erect and use all buildings and structures necessary for the purposes of mining, coking and shipping the coal and coke therefrom and for all other purposes connected with or necessary for the free exercise and enjoyment of the privileges above granted or demised." The question of equity jurisdiction was waived, and is not considered. This is a very important case. It is vastly important to the state, as it involves large revenue imposed by recent legislation, and the construction and even validity of that legislation. The tax commissioner claims that there is a value of $200,000, 000 in leaseholds in this state, which has never been charged with taxes. That these leaseholds involve great value is not denied. So also it is of great importance to the owners of leaseholds, as it imposes upon them taxation. Able and elaborate oral and printed arguments by distinguished counsel demand that we write a perhaps too lengthy opinion, as well also does the gravity of the case.
As to the state's power of taxation: In Loan Association v. Topeka, 20 Wall. (U. S.) 655, 22 L. Ed. 455, it is asserted that "the power to tax is the strongest, the most pervading, of all the powers of the government, reaching directly or indirectly to all classes of the people." It was said by Chief Justice Marshall, in McCulloch v. State of Maryland, 4 Wheat (U. S.) 431, 4 L. Ed. 579, that "the power to tax is the power to destroy." "The power to impose taxes is one so unlimited in force, so searching in extent, that the courts scarcely venture to declare that it is subject to any restrictions whatever, except such as rest in the discretion of the authority which exercises it." Justice Field said, in State Tax on Foreign-Held Bonds, 15 Wall. (U. S.) 319, 21 L. Ed. 179, as follows: Cooley on Taxation, 9, says: In May or June, 1905, the Supreme Court of the United States decided the case known as the "New York Franchise Tax Case, " and sustained the constitutionality of an act taxing the franchises of corporations. The case asserts again very wide powers of taxation in the states. See People v. Tax Commissioners (U. S.) 25 Sup. Ct. 705, 50 L. Ed. —. I have not the text of the case. In it Justice Brewer delivered the opinion holding that the intangible assets of a corporation are subject to taxation, and that corporations owning franchises must contribute their share to the expense of the government. Justice Brewer said, in delivering the opinion for the court: "
The Constitution of this state gives the Legislature power, Indeed, a mandate, to "tax all property, real and personal." Therefore, the question is material: Does the deed in this case vest what is in law property in the Harvey Coal Company? The very suit in itself is a concession by the company that its right under said deed is property, because that suit is to defend that property against taxes. But, aside from such concessions, it is quite plain that the company's right is a property right. Anything capable of beneficial ownership is property—in this instance a valuable right arising by contract, a right to take coal from the body of land, using the land for that purpose, and convert it into salable coal, a commodity of great commercial value. "Man's rights in respect to things constitutes property." 2 Minor's Institutes, 1. The...
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