State v. Shamblin

• Decision Date: 09 May 1939
• Docket Number: 28628.
• Citation: 90 P.2d 1053,185 Okla. 126,1939 OK 244
• Parties: STATE v. SHAMBLIN.
• Court: Oklahoma Supreme Court

90 P.2d 1053

185 Okla. 126, 1939 OK 244

STATE v. SHAMBLIN.

No. 28628.

Supreme Court of Oklahoma

May 9, 1939

Syllabus by the Court.

1. The power to tax is legislative, and there must be distinct authority of law for every levy upon the people under that power.

2. Property itself is a creature of law, and the discretion to select subjects of taxation rests solely with the Legislature.

3. Where the Legislature has omitted to provide for the assessment of certain kinds of property, it is not within the province or power of the court to make such assessments. No property can be assessed until the Legislature has made proper provision for this purpose.

4. The Legislature of this State has not selected oil and gas leases as subjects of taxation.

5. The Legislature has not provided for a severance of the various interests which may be held in real property for purposes of taxation.

6. By virtue of Section 12331, O.S.1931, 68 Okl.St.Ann. § 29 "real property," which, for the purpose of taxation, means "the land itself, and all buildings structures and improvements or other fixtures of whatsoever kind thereon, and all rights and privileges thereto belonging or in any wise appertaining, and all mines, minerals quarries and trees on or under the same," must be listed and assessed in the name of the owner of the land.

7. Oil and gas, while lying in the strata of earth from which they are produced, must be taxed as real property to the owner of the land, if the land is taxable, under which for the time being they may lie.

Appeal from County Court, Creek County; George D. Willhite, Judge.

Tax ferret proceedings by the State of Oklahoma against Ernest Shamblin to subject an oil and gas lease to ad valorem taxation. From a judgment in favor of the defendant, the plaintiff appeals.

Judgment affirmed.

Everett S. Collins, Co. Atty., A. J. Mauldin, and T. L. Blakemore, all of Sapulpa, for the State.

George H. Jennings and J. E. Thrift, both of Sapulpa, for defendant in error.

C. B. Cochran, of Oklahoma City, amicus curiae.

CORN Justice.

This is a tax ferret proceedings prosecuted by the county attorney of Creek county, wherein the county treasurer, and the county court, on appeal from the ruling of the county treasurer, successively held that non-producing oil and gas leases are not subject to ad valorem taxation, and from the final order and judgment of the county court so holding said county attorney brought this appeal.

The case presents the question as to whether the lessee of a non-producing oil and gas lease is subject to ad valorem taxation under the laws of this State.

The plaintiff in error admits that this court has held in numerous decisions contrary to its contention that the rights and interests of a lessee under an oil and gas lease are subject to ad valorem taxation, separately and apart from the land, but advances the argument that these decisions are in direct contravention of the provisions of the Constitution and Statutes of the State of Oklahoma, and contends for an overruling of all such decisions, and for a judicial construction of the statute requiring a separate rendition of such rights and interests for taxation by the ad valorem method.

The question here presented is a settled question in this State, at least until such time as the Legislature may enact specific legislation subjecting oil and gas leaseholds, as such, to ad valorem taxation. In the case of In re Indian Territory Illuminating Oil Co., 43 Okl. 307, 142 P. 997, 1000, this court, in construing our tax laws, used the following language:

"The provisions of the statute already adverted to provide a complete system for the levying of all taxes upon an ad valorem basis; and we can find no warrant in any of them for levying an ad valorem tax upon an oil and gas lease as such. Generally, an oil and gas lease, a school land lease, or a lease of any sort, for that matter, undoubtedly is property. But, as we have hereinbefore stated, property itself is a creature of the law, and the classification thereof for purposes of taxation belongs exclusively to the legislative department. The Legislature, in classifying property for purpose of taxation, is not required, and does not, always follow the common-law classification of property for other purposes. It will frequently be found that the enumeration of property in statutes as real or personal for the purposes of taxation differs considerably from what it would be for other purposes in the same state. Steere v. Walling, 7 R.I. 317.

To determine that a certain article is property, according to the common-law or general classification, is not to determine whether it is taxable; to be taxable it must be selected as a subject of taxation according to the legislative classification for that purpose. Therefore the general rule is, no property can be assessed until the Legislature has made proper provision for this purpose; and, where the Legislature has omitted to provide for the assessment of certain kinds of property, it is not within the province or power of the court to make such assessment. Willis' Ex'r v. Commonwealth, 97 Va. 667, 34 S.E. 460; In re Taxation Patented Min. Lands, 9 Colo. 622, 21 P. 471; People v. Feitner, 167 N.Y. 1, 60 N.E. 265 82 Am.St.Rep. 698; Wisconsin Ry. Co. v. Taylor Co., 52 Wis. 37, 8 N.W. 833; Daugherty v. Thompson, 71 Tex. 192, 9 S.W. 99; Trammell v. Faught, 74 Tex. [557] 600, 12 S.W. 317; De Witt v. Hays, 2 Cal. 463, 56 Am.Dec. 352; Carter v. Tyler County, 45 W.Va. 806, 32 S.E. 216, 43 L.R.A. 725; Williams v. Triche, 107 La. [92], 93, 31 So. 926. It is also observable that in many jurisdictions various interests in real property for purposes of taxation are made severable and assessable in the names of the owners of the respective interests. That, however, is not the case in this state. Under our system of taxation, real property, which for purposes of taxation means the 'land itself, all buildings, stocks, improvements, or other fixtures of whatsoever kind thereon and all rights and privileges thereto belonging or in anywise appertaining, and all mines, minerals, quarries or trees under or on the same,' must be assessed in the name of the owner of the land. This is in consonance with the general rule, which seems to be that where the law does not provide for a severance for purposes of taxation, and the lease is silent upon the subject, the obligation to pay taxes upon the leased premises devolves upon the lessor. Freeman v. State, 115 Ala. 208, 22 So. 560; People v. Barker, 153 N.Y. 98, 47 N.E. 46; East Tennessee, etc., R. Co. v. Morristown (Tenn.Ch.) 35 S.W. 771. However, the lessee's assumption of the payment of taxes and assessments does not relieve the lessor from his liability, nor does it enable the taxing authority to secure a personal judgment against the lessee. 1 Desty on Taxation, 436; Yazoo & M. V. R. Co. v. Adams, 76 Miss. 545, 25 So. 366; Miles v. Delaware & H. Canal Co., 140 Pa. 623, 21 A. 427; C., R.I. & P. Ry. Co. v. Ottumwa, 112...