People ex rel. Iron Silver Min. Co. v. Henderson

• Decision Date: 15 March 1889
• Parties: PEOPLE ex rel. IRON SILVER MIN. CO. et al. v. HENDERSON, Treasurer.
• Court: Colorado Supreme Court

21 P. 144

12 Colo. 369

PEOPLE ex rel. IRON SILVER MIN. CO. et al. v. HENDERSON, Treasurer.

Supreme Court of Colorado

March 15, 1889

Error to district court, Lake county.

By the constitution of the state, mines and mining claims bearing precious metals, except the net proceeds and surface improvements, were exempted from taxation until the year 1886. At the session of the legislature following, viz., in 1887, a law was adopted providing for the taxation of such mines. In pursuance of this act, mining property in Lake county, including that belonging to the Iron Silver Company was duly assessed, and taxes levied thereon. Thereupon an action was brought in the name of the people at the relation of the said company for the purpose of enjoining the collection of such tax, upon the ground, principally, that the legislative act mentioned is unconstitutional. Defendant answered the complaint, and upon the complaint and answer and certain evidence offered by the parties, a decree was rendered in the court below, dismissing the action. To reverse that decree the present writ of error was sued out. The provisions of the statute necessary to a complete understanding of the opinion are sections 1, 3, and 4, found on pages 340, 341, Sess. Laws 1887, to-wit: 'Section 1. All mines and mining property of the class heretofore exempted by the constitution of the state of Colorado shall hereafter levied enforced by sale of the property taxed levied enforceed by sale of the property taxed, in default of payment, in the same manner as is now or may be provided by law in the case of other classes of taxable real estate.' 'Sec. 3. All mines and mining claims, and possessory rights therein, producing mineral during the year, exceeding in value the sum of one thousand dollars, ($1,000,) shall be assessed by the assessor, for the purposes of taxation and revenue, as follows, viz.: The assessor shall compute and ascertain the gross proceeds in dollars and cents derived from the mine and mining claim, to be valued during the preceding fiscal year. Such mine or mining claim shall be valued for revenue purposes at a sum not exceeding one-fifth of the sum thus ascertained, and said mine or mining claim shall be assessed and taxed accordingly; and if such gross proceeds are derived from a group of several mines or mining claims contiguous to each other, owned or held by the same person, company, or corporation, then such ascertained sum shall be equally divided among and prorated to each of such claims, and they shall be valued and taxed accordingly. Sec 4. In case the mine or mining claim shall not be patented, or entered for a patent, but shall be assessable and taxable under this act, on account of producing gross proceeds, then, and in that case, the possession shall be the subject of the assessment, and, if said mining property be sold for taxes levied, the sale for such taxes shall pass the title and right of possession to the purchaser under the laws of Colorado.' The remaining essential facts sufficiently appear in the opinion.

L. S. Dixon and F. W. Owers, for plaintiffs in error.

D. E. Parks, Co. Atty., and H. B. Johnson, for defendant in error.

HELM C.J., ( after stating the facts as above.)

In approaching the consideration of this case we remember that the act challenged is framed in the interest of the public revenue; that to a limited extent it is an exercise of the taxing power; and that, therefore, only upon the most clear and convincing grounds should the court consider favorably objections thereto. We also bear in mind the familiar principles that, except as controlled by constitutional limitation, the authority of a state legislature in enacting laws is plenary, and that, unless there be a clear and positive repugnancy between a statute and the constitution, the statute must be upheld. Section 1 of the act before us contains an express legislative declaration that, after the adoption thereof, mines and mining claims bearing precious metals shall be taxes for revenue. All such property, regardless of its tenure,--that is, whether held under patent, application for patent, or mining location, and regardless of the question as to whether the value thereof be much or little,--is clearly and unequivocally subjected to taxation. In effect, sections 1 and 3 of the act, taken together, divide this species of property into two classes, viz.: First, the mines or mining claims referred to in section 3, i. e., those which during the preceding fiscal year have had a gross output aggregating upwards of $1,000 in value; and, second, and the remaining or non-producing claims, without reference to value. For reasons satisfactory to the legislative mind, mines yielding something, but less than $1,000, are included among the non-producers. As to the first class a specific method for determining valuations in relation to mines belonging thereto is pointed out, but as to the second class no rule for assessment is expressly provided. In the absence of such express provision, however, we must assume that the legislature intended to have mines and mining claims belonging to this class assessed in the manner specified by statute for the assessment of other real estate. The output of less than $1,000 therefrom, if any such there be, may become an element in estimating the valuation, and hence it is not correct to assume that such output necessarily escapes taxation. The latter part of the first section does not refer to the procedure for assessing or levying taxes. It simply provides that when the taxes assessed and levied upon this kind of property shall not be paid, the payment or collection thereof shall be enforced by sale in the same manner as the payment of delinquent taxes upon other kinds of realty. Therefore, by the act in question, we are advised-- First, that all mines and mining claims containing precious metals are subjected to taxation; second, that this species of property is divided into two classes, viz., those mines producing upwards of $1,000 during the fiscal year preceding, and those producing less than that sum or nothing at all; and, third, that a specific method is provided for the valuation of mines belonging to the first class, while all mines and claims included in the second class are to be assessed in the manner indicated by law for the assessment of other taxable real estate. Section 4 is somewhat ambiguous, but its evident purpose is to pass the title where possessory mining interests are sold for taxes, and, considered in connection with the remaining sections, we do not think it seriously affects either of the foregoing conclusions.

Counsel for plaintiff in error strenuously contend that this statute is obnoxious to certain provisions contained in article 10 of the constitution, and especially to section 3 thereof. Section 6 of said article reads: 'All laws exempting from taxation property other than that hereinbefore mentioned shall be void.' The only exemption of mines and mining property allowed by the constitution is contained in said section 3. This section first declares that 'all taxes shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws shall prescribe such regulations as shall secure a just valuation for taxation of all property, real and personal.' It then proceeds with the following proviso: 'Provided, that mines and mining claims bearing gold, silver, and other precious metals (except the net proceeds and surface improvements thereof) shall be exempt from taxation for the period of ten years from the date of the adoption of this constitution, and thereafter may be taxed as provided by law.' Giving the foregoing proviso a construction in accordance with its clear and reasonable purport, we are of the opinion that the word 'may' in the latter part thereof does not mean 'shall.' That is to say, in our judgment, the proviso operates-- First, to exempt the property mentioned wholly from taxation for the period of 10 years, beginning with the date of the adoption of the constitution; and, second, to vest in the legislature a discretionary power to say whether,...