State Tax Commission v. Eagle-Picher Min. & Smelting Co., EAGLE-PICHER

• Decision Date: 19 January 1951
• Docket Number: No. 5200,EAGLE-PICHER,5200
• Parties: STATE TAX COMMISSION et al. v.MINING & SMELTING CO.
• Court: Arizona Supreme Court

Page 555

226 P.2d 555

71 Ariz. 290

STATE TAX COMMISSION et al. v. EAGLE-PICHER MINING & SMELTING CO.

No. 5200.

Supreme Court of Arizona.

Jan. 19, 1951.

Fred O. Wilson, Atty. Gen., Perry M. Ling, Asst. Atty. Gen., for appellants.

Ben C. Hill, of Tucson, and Norman S. Hull, of Phoenix, for appellee.

STANFORD, Justice.

Appellee, The Eagle-Picher Mining and Smelting Co., owner of mining property in Pima County, Arizona, excepted to the evaluation of its property, as made by the Arizona State Tax Commission, for taxation purposes for the year 1946. Protest, filed with the Commission, was heard on August 5, 1946, by it, sitting as the State Board of Equalization.

The Board, on August 10th of that year, denied appellee's protest and request for reduction of the valuation fixed, and placed the value of appellee's property, including the mine, plant, railroad and other physical assets, at $493,500.00.

The appellee, under protest, paid the tax as fixed, and appealed from the assessment fixed by the Board, to the Superior Court of Pima County.

The following facts, taken from the appellants' brief, were uncontradicted by the appellee:

'Both appellee and appellants submitted testimony of mining engineers as to the actual cash value of the mine based upon the formula approved in the United Verde Extension and Magma Copper Co. cases. From the evidence and briefs submitted by the respective parties, the court found the value of the mine and salvage value of the plant to total the sum of $216,265.00. In the opinion and order of the court an allowance of the sum of $74,271.00 for development work below the 340-foot level is made, whereas the total net value of the ore recovered below the 340-foot level as the result of this expenditure is fixed at only $10,000.00. * * * The lower court also found that the net profit on the ore mined and treated was $8.26 per ton.

'The mine, at the time the valuation for the year 1946 was made, was developed to the 340-foot level, and had been operated by the Eagle-Picher Mining Co. since 1943. No mining other than diamond drilling had been done below the 340-foot level, although the diamond drilling cut ore in a number of places at various depths below that level.

'A total of 43,000 tons of ore had been developed but not yet mined at the time the valuation was made.'

The above stated facts show that $74,271.00 were to be spent in developing ore below the 340-foot level.

Judgment of the trial court was rendered for appellee, and this appeal followed. It is directed only at the action of the trial court in allowing a deduction of $74,271.00 for development of ore which would bring an estimated profit of only $10,000.00.

Appellants submitted as their only assignment of error, the following: 'The trial court erred in concluding that appellee's deduction of $74,271.00 from the value of known ore, and the use of such sum for development of new ore to which new ore a value of only $10,000.00 was given was justified by the testimony and in entering judgment for appellee and against appellants based upon such conclusion.'

Appellants also submitted the following proposition of law: 'In fixing the value of a producing mine for tax valuation purposes, where an allowance is made for a deduction from the value of the existing ore of the...