Tallon v. Vindicator Consol. Gold Min. Co.

• Decision Date: 05 April 1915
• Docket Number: 8484.
• Citation: 59 Colo. 316,149 P. 108
• Court: Colorado Supreme Court
• Parties: TALLON, Treasurer of Teller County, et al. v. VINDICATOR CONSOL. GOLD MINING CO. et al.

149 P. 108

59 Colo. 316

TALLON, Treasurer of Teller County, et al. v. VINDICATOR CONSOL. GOLD MINING CO. et al.

No. 8484.

Supreme Court of Colorado, En Banc.

April 5, 1915

Rehearing Denied June 7, 1915.

Error to District Court, Teller County; J. W. Sheafor, Judge.

Suit by the Vindicator Consolidated Gold Mining Company and another against Thomas A. Tallon, as Treasurer of the County of Teller, and others. There was a decree for plaintiffs, and defendants bring error. Reversed and remanded, with directions.

Hill White, and Teller, JJ., dissenting on motion for rehearing.

Guy P. Nevitt, of Cripple Creek, Fred Farrar, Atty Gen., and Norton Montgomery, Asst. Atty. Gen., for plaintiffs in error.

Clarence C. Hamlin, of Colorado Springs, West &amp Strickland, of Denver, and N. Walter Dixon, of Denver, for defendants in error.

GARRIGUES J.

This is an equitable action for relief by injunction brought March 5, 1914, by the Vindicator and Granite Gold Mining Companies, as plaintiffs, on their own behalf and for others similarly situated, against the county treasurer and board of county commissioners of Teller county, defendants, to restrain the collection of the taxes based upon the assessment and county levy for 1913 against producing mines; to have the assessment declared void; to substitute therefor the legal assessment; to have the 6-mill levy for ordinary county expenses declared void, and to substitute therefor the legal levy; to restrain the collection of the taxes other than such as the court shall find and decree valid, and to substitute the lawful for the void tax. Plaintiffs attack the rule followed by the assessor in fixing the valuation of producing mines, his construction of the rule, and the 6-mill rate of levy made by the board for county expenses. It is claimed the object and purpose of the suit is to secure the payment of the county taxes based upon a legal levy and assessment. The Colorado tax commission became a party by intervention. The findings and decree were in favor of plaintiffs, and defendants bring the case here on error. The same principle is applicable to all producing mines as a class, and the levy affects alike all the taxpayers of the county, so that for convenience we will refer only to the mines of the Vindicator Company.

Regarding the assessment, the complaint alleges that this company owns two producing mines, the Hull City and the Vindicator; that in 1913 it delivered to the assessor the sworn statement required by law regarding the output of each mine for the preceding year; that from this and other sources he ascertained and determined that the gross value of all the ore produced during the preceding year from the Hull City was $91,386, and the net proceeds $20,520; that the gross value of all the ore produced from the Vindicator was $752,100, and the net proceeds $283,390; that in making the assessment of the mines for 1913 he disregarded the provisions of section 81c, p. 80, Laws 1902, and proceeded under section 2, p. 566, Laws 1913, valuing all the producing mines of the county at a sum equal to one-half the gross value of the ore each produced, plus all the net proceeds during the preceding year. He fixed the assessed valuation for taxation of the Hull City mine in 1913 at $66,210, and of the Vindicator mine at $659,440. A tabulated statement taken from the records of the assessor's office shows the producing mines of Teller county are very numerous, and it is alleged they were all assessed in 1913 in this manner. The statement gives the owners, tons of ore produced, gross value of the ore, cost of production, cost of transportation, cost of reduction or sale, net proceeds, and assessed valuation of each mine for 1913.

Regarding the levy, it is alleged that the total assessed valuation of all the taxable property in the county for 1913 was $19,677,570, and that the maximum levy which the board could lawfully make on such valuation under chapter 137, Laws 1913, for county purposes was 2.7 mills on the dollar; that instead of keeping within the limit fixed by law, the board by resolution duly entered December 16, 1913, levied 6 mills on the dollar for county expenses without being authorized so to do by the Colorado state tax commission or by the electors under the provisions of section 12, p. 560, Laws 1913; and that the increase beyond the fixed limit is void. It is then alleged that the assessor computed the tax on the void levy against all taxable property, which was extended on the tax roll, and before the 1st of January, 1914, delivered the tax list, with his warrant, to the county treasurer for collection; that he computed the taxes on the Hull City to be $2,130.63, and on the Vindicator $14,705.51, based on the void assessment and levy. It is then alleged that the actual value for taxation of each producing mine was and is the amount of its net proceeds as ascertained by the Laws of 1902; that the assessable value of the Hull City, measured by this rule, is $20,520, and the tax, computed upon the lawful levy, is $573.04, and the assessable value of the Vindicator is $283,390, and the tax $5,115.19; that the assessor followed the same rule in assessing all producing mines in Teller county, and that the taxes upon all the mines, as a class, in excess of an amount obtained by computing the net proceeds ascertained under the act of 1902 by the legal levy is void; that on September 6, 1913, the Supreme Court of Colorado, in the Cresson Case, announced a decision construing 'gross proceeds' to mean the gross value of the ore, and that the assessor in 1913 followed this decision; that March 2, 1914, upon rehearing, this opinion was withdrawn, and a final decision handed down in which 'gross proceeds' was held to mean not the gross assay value of the ore the mine produced, but the amount of money actually received for his ore by the owner. Therefore it is claimed that, if the amendment of 1913 is held to be constitutional, and provides the rule for assessing producing mines, still the 1913 assessment, as to the excess, is void because in violation of the statutory rule for ascertaining the assessable value of producing mines for taxation. It is then alleged that these void taxes are an apparent lien upon producing mines; that the treasurer threatens to enforce the liens by tax sale if the whole tax is not paid, and, unless restrained, will proceed to advertise and sell the property at public sale and deliver tax deeds to the purchasers, thereby creating a cloud upon plaintiffs' title; that plaintiffs have no adequate remedy at law; that a multiplicity of suits will follow between the owners of producing mines and the county, and great expense, unnecessary annoyance, and litigation will ensue not only to the plaintiffs and other taxpayers, but to the county, unless the court interferes by virtue of its equitable jurisdiction; that one purpose of the action is to have annulled the tax in so far as it is void, and the proper tax substituted so that the collection of taxes will be relieved from embarrassment, delay, and litigation; that March 5, 1914, plaintiffs tendered defendants the lawful tax and interest, which was refused. Plaintiffs ask for permission to prosecute on their own behalf and for others similarly situated, and pray that the levy in excess of the limit set by the statute be decreed void; that the assessable value for taxation of each producing mine for 1913 be decreed to be the amount of the net proceeds for the preceding year, as provided by the Laws of 1902, unless the court finds that section 2, c. 139, Laws 1913, is controlling, in which event the excess assessment be declared void on account of the assessor computing the gross assay value of the ore produced instead of the gross proceeds; that all the taxes for 1913 upon producing mines in excess of an amount arrived at upon computing the legal levy by the lawful assessment be decreed void; and that the court substitute the legal for the void tax and enjoin the collection of the void. After demurrers were overruled answers were filed admitting that, if the taxes are not paid, the treasurer would proceed to enforce the lien by advertising and offering for sale the mines, as well as all other property in the county on which taxes have not been paid, and alleging, in substance, that the board, prior to making the levy on December 16, 1913, submitted to and secured the permission of the Colorado state tax commission to make the increased levy; that plaintiffs have a full, complete, and adequate remedy at law for any illegality, irregularity, or error in the valuation made by the assessor; that any grievances mentioned in the petition can be remedied by a suit at law; that plaintiffs are seeking a new assessment upon producing mines which the court is without jurisdiction to make or direct; that the acts of the assessor are final and conclusive upon the court; that plaintiffs' remedy, if any they have, is the action at law provided by section 5750, R. S. 1908, and plaintiffs can maintain no action, because they have not first paid the taxes.

The testimony shows that on November 6, 1913, and before making the increased levy on December 16, 1913, the board of county commissioners, being of the opinion that it was necessary to make an increased levy, submitted to and obtained a recommendation from the tax commission for such increase. It also shows that some time in January, 1914, the board was informed that the tax commission had kept no record of this recommendation, and thereupon the members again went to Denver, and after consultation with the Attorney General's office, filed a petition with the commission asking a recommendation for the increased levy, which was granted. The board then made a 6-mill levy in the...