State Of West Va. v. Black Band Consol. Coal Co.
Decision Date | 16 May 1933 |
Docket Number | (CC 465) |
Citation | 113 W.Va. 872 |
Court | West Virginia Supreme Court |
Parties | State of West Virginia v. Black Band Consolidated CoalCompany, et cd. |
Taxation
When a tract of land, under lease for oil and gas, is sold by the state as forfeited, after having become delinquent for non-payment of taxes and purchased by the state at a sheriff's sale, such lease is not extinguished by the said delinquency and forfeiture where the lease was separately assessed to the owner thereof as personalty and the taxes thereon paid for the year of the delinquency of the land.
Case Certified from Circuit Court, Kanawha County. Suit by the State of West Virginia against the Black Band Consolidated Coal Company and another. The circuit court sustained a demurrer to the answer of the defendant Cambridge Gas Company, and certified its ruling for review.
Reversed and remanded.
Homer A. Holt, Attorney General, and Ira J. Partlow, Assistant Attorney General, for the State.
P. H. Murphy, for School Land Com'r of Kanawha County.
Price, Smith & Spilman and John J. D. Preston, for Cambridge Gas Co.
On this certification there is presented the question of the sufficiency of the answer of Cambridge Gas Company filed in the chancery cause of the State of West Virginia v. Black Band Consolidated Coal Company and others. The trial chancellor sustained a demurrer to the said answer and certified his ruling to us for examination and review.
The suit is prosecuted on behalf of the state by the commissioner of school lands for Kanawha County to subject to sale for the benefit of the public school fund certain described parcels of land alleged to have become forfeited to the State.
Numerous parcels are involved in the suit, but those about which the respondent is concerned are the Garnet Pickens Wisman lands (five parcels), acquired by her from her father, Roman Pickens, deceased, which lands are subject to leases for oil and gas purposes owned by said respondent. These lands were assessed for taxation for the year 1927 in the name of Roman Pickens. The taxes for said year not being paid, the lands were returned delinquent and later sold by the sheriff, the State of West Virginia becoming the purchaser. The said parcels not being redeemed within one year after the sheriff's sale, the auditor certified them to the commissioner of school lands for Kanawha County as forfeited to the State. This suit followed.
The State asserts its right to sell the Pickens lands free and acquit of the said oil and gas leases. By its said answer, the Cambridge Gas Company challenges that position and asserts that if and when the said lands are sold by the State for the benefit of the school fund, such sale must be subject to the rights of the respondent under its oil and gas leases.
It appears from said answer that the respondent and its predecessors have caused the said leaseholds to be regularly assessed against them on the personal property books of said county for the district in which said lands are located, and that since the creation of said leaseholds the taxes thereon, including the year 1927, have been regularly and fully paid.
The precise question is this: Is an oil and gas lease extinguished when the land to which it pertains is sold by the state as forfeited, after having become delinquent for nonpayment of taxes and purchased by the state at a sheriff's sale, though the lease was separately assessed to the owner thereof as personalty and taxes thereon paid for the year of the delinquency of the land?
An oil and gas lease is a chattel real. Coal & Coke Co. v. Tax Com'r., 59 W. Va. 605, 621, 53 S. E. 928. Chattels real are specifically subjected to taxation. Code 1931, 11-5-2. And, by provision of the same section, the assessed value of a chattel real is to be deducted from the assessed value of the principal estate "to the end that the valuation of such leasehold estate and the remainder shall aggregate the true and actual value of the estate." When the owner of the leasehold (chattel real) has complied with this law and has paid taxes on his property, what becomes of it when the land is sold by the state as forfeited? By way of analogy, in seeking an answer to the query, let us look to another phase of our tax laws and ascertain the situation there.
The law requires the separate assessment of any mineral in land, or the timber thereon, when the ownership of such mineral or timber is vested in a person other than the owner of the surface. Code 1931, 11-4-6. This requirement is found in the Codes of 1913 and 1923, section 39 of chapter 29. The cases hold that a tax deed based on taxes assessed to the owner of the surface, who was not the owner of the minerals or timber, does not pass title to the minerals or timber.
In McGhee v. Sampselle, 47 W. Va. 352, 34 S. E. 815, where marked timber had been sold, it was held that title to the timber did not pass to a purchaser of the land at a forfeiture sale, made by the state, based on a delinquency in payment of taxes charged against the owner of the land from which the timber had been sold prior to the delinquency, the timber having been separately assessed and the taxes thereon paid.
In Dingess v. Huntington Development and Gas Company, 271 Fed. Rep. 864, the Circuit Court of Appeals, Fourth Circuit, interpreting the West Virginia statute (Code 1913, chapter 29, section 39), held that when one person is the owner of the surface and another of the mineral under it, a tax deed, based on taxes assessed to the owner of the surface did not convey title to the mineral rights. And further, that case held that where there has been a severance, there is presumption that the law was complied with and separate assessments made. Of like import: Miller v. Estabrook, 273 Fed. Rep. 143; Huntington Development & Gas Co. v. Stewart, 44 Fed. Rep. (2d) 119. Of course, even though there has been a severance of the mineral or timber from the surface, if it affirmatively appears that such mineral or timber, separately owned, has not been separately assessed, but that the entire estate has been assessed to the surface owner, delinquency and forfeiture of the estate charged to the surface owner carries with it the mineral and timber. Peterson v. Hall, 57 W. Va. 535. 50 S. E. 603; Wellman v. Hoge, 66 W. Va. 234. 66 S. E. 357.
The rule that estates in minerals or timber, separately assessed, are protected by the law from forfeiture of the principal estate, is consonant with our statutory provisions which limit the estate acquired by the state and sold by it for tax delinquency, to the exact estate against which the taxes were assessed. When sale of real estate is made by the sheriff at a tax delinquency sale, and, in due course, a deed for such real estate is made to the purchaser by the county clerk, there passes to the purchaser under the deed "such right, title and interest in and to such real estate as was vested in the person or persons charged...
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