Weir, Co. v. Jaybird Mining Co.

• Decision Date: 21 October 1924
• Docket Number: Case Number: 14059
• Citation: 104 Okla. 271,232 P. 425,1924 OK 968
• Parties: WEIR, Co. Treas., v. JAYBIRD MINING CO.
• Court: Oklahoma Supreme Court

1924 OK 968

232 P. 425

104 Okla. 271

WEIR, Co. Treas., v. JAYBIRD MINING CO.

Case Number: 14059

Supreme Court of Oklahoma

Decided: October 21, 1924

Syllabus

¶0 1.Taxation--Licenses--Taxation of Federal Agency--Liability of Private Property of Agent.

The state has no power to levy an occupation tax upon the agency of the government nor to levy an income tax on the proceeds thereof, but the state has the power and authority to levy a property tax upon the private property of the agent when such property has a situs within the state.

2.Same--Liability of Lessee's Ores Extracted from Restricted Indian Land.

Where lead and zinc ores extracted from the lands of restricted Quapaw Indians are stored in the bins of the lessee and assessed for taxation on the day fixed by the laws of the state, such ores, being personalty and private property of the lessee, are not exempt from ad valorem taxation.

3.Same--Gross Production Tax not on Federal Agency.

The tax imposed by section 9814,Comp. Stat. 1921, is not upon a federal agency nor upon the right to exercise or operate a federal agency, but is upon the lessee's individual private property.Clifford W. King and Leon S. Hirsh, Asst. Attys.Gen., for the State.

A. L. Commons and John H. Venable, for plaintiff in error.

A. Scott Thompson, for defendant in error.

PINKHAM, C.

¶1 This is an appeal from a judgment of the district court of Ottawa county, Okla., in a cause wherein the Jaybird Mining Company, a corporation, was plaintiff, and the plaintiff in error, Joe Weir, county treasurer of Ottawa county, Okla., was defendant.The Jaybird Mining Company(hereinafter called "the company") was the lessee of certain lands allotted to one Hum-bah-wat-tah Quapaw, a restricted Quapaw Indian, and, by virtue of said lease, had operated a lead and zinc mine upon said lands.The company paid to the State Auditor a gross production tax on ores produced and sold prior to June 30, 1921, but on January 1, 1921, had ores on hand, unsold, in mass, and the royalty interest of the Indian unsegregated, upon which the plaintiff in error (hereinafter called "county treasurer") assessed an ad valorem tax in the amount of $ 2,319.80.This tax was paid, under protest, by the company, and suit was instituted to recover same by virtue of the laws of the state of Oklahoma in such cases provided.The company alleged, in its petition, that by the Act of Congress of March 2, 1895(28 Stat. 907), the lands, of which it was lessee, were patented to the Indian under a 25-year restriction, and that, by Act of Congress of March 3, 1921(41 Stat. 1225, 1248) the restrictions were further extended for an additional period of 25 years.It was further alleged that, by virtue of Act of Congress of June 7, 1897(30 Stat. 72), the lands of Hum-bah-wat-tah Quapaw were leased to the company by direction and with the approval of the Secretary of the Interior, the owners of the land (the allottee's heirs) having been declared incompetent and incapable of managing said estate, and the Secretary of the Interior maintaining control through the Quapaw Indian Agency at Miami, Okla.Hence the company alleged that it was carrying out the terms of a federal agency in developing the mineral lands of the Indian wards of the federal government.The petition then stated that on January 1, 1921, the ores in the bin on said lands were in mass, the royalty or equitable interest of the Indian not having been segregated or paid, the terms of the lease providing for payment of a royalty or percentage of the gross proceeds derived from the sale thereof.It alleged that the company had paid to the Auditor of the state of Oklahoma a gross production tax on the ores "so assessed when sold, and during the tax year in which same was produced and prior to June 30, 1921," but that the taxing officials of Ottawa county, Okla., assessed the ores in the bins on January 1, 1921, for ad valorem taxation, and that such taxing officials caused such ore to be assessed an ad valorem tax in the amount of $ 2,319.80.The company alleged that the taxing officials aforesaid were without authority of law to make such ad valorem assessment, that the tax had been paid under protest, and it prayed judgment for the recovery of such amounts so paid.The county treasurer demurred to said petition, which demurrer, on hearing, was overruled.The county treasurer elected to stand on his demurrer, declined to plead further, and the court thereupon rendered judgment in favor of the company for the amount sued for and costs.From this judgment the county treasurer appeals to this court.

¶2 The one important question to be determined in this appeal is whether the company, being the lessee of restricted Indian land, is entitled to recover from the county treasurer the taxes paid by it under protest on the ores which it had extracted from the leased land during the year 1920, and had stored in its bins on the 1st day of January, 1921, by reason of the fact that the lands from which these ores were mined were restricted Quapaw Indian lands leased by and with the consent of the Secretary of the Interior.It is the theory of the company that it was a federal agency, and as such its personal property was nontaxable by the state except as permitted by Act of Congress.It is the theory of the county treasurer that the status of the company, the lessee of a restricted Indian, cannot be considered as that of such type of a federal instrumentality as to exempt such lessee's personal property from state taxation.In the briefs of both parties numerous cases decided by this court and by the Supreme Court of the United States are cited in support of the conflicting propositions, and in some instances the same cases are relied upon by both the company and the county treasurer.If the company operating under a departmental lease, is exempt from taxation upon its personal property--the ores in question--which it is admitted had been severed from the soil and stored in the bins of the company, and were in its exclusive control and possession on the day fixed by law for the assessment of property for taxes--it must be by virtue of some statute, state or federal.All property of this state, whether real or personal, except such as is exempt, shall be subject to taxation, section 9574,Comp. Stat. 1921.Section 9575,Comp Stat. 1921, enumerates the property that shall be exempt from taxation, but ore in bins is not included therein.Section 9814,Comp. Stat. 1921, provides among other things that "oil in storage, asphalt, and ores bearing the minerals hereinbefore named, mined, produced, and on hand at the date as of which property is assessed for general and ad valorem taxation for any subsequent tax year shall be assessed and taxed as other property within the taxing district in which such property is situated at the time. * * *" Under no statute of this state was the property involved in this case exempt from taxation.

¶3 By the Act of June 7, 1897(30 Stat. L. 72), it is provided that:

"The allottees of land within the limits of the Quapaw agency, Indian Territory, are hereby authorized to lease their lands or any part thereof for a term not exceeding three years for farming or grazing purposes or ten years for mining or business purposes; and said allottees and their lessees and tenants shall have the right to employ such assistants, laborers, and help from time to time as they may deem necessary; provided, that whenever it shall be made to appear to the Secretary of the Interior that by reason of age or disability of any such allottee he cannot improve or manage his allotment properly

...