Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-12-19

county, secured q temporary OrueF re-
straining the state from collecting the
license tax. and finally an entry or
judgment in favor Of the company.
The state, through its officials named
as defendants, J. w. Walker. treasur-
Stewart, secretary Of state: George 7.
Porter, auditor, and Wellington ID.
Rankin, attorney general, failed a de.
murrer, which was overruled. and
moved to quash the temporary RESTRAIN
ing order. which was denied. The
states appeal was on the overruling OF
the demurrer, the denial Of the motion,
and on the judgment itself.
Company Protests
The position of the d-Northern
Oil company, as set forth in its brief
to the supreme court, was that the
law constituted a license measure IN
the nature Of an occupation or privi-
lege tax, and that it could not upon
any theory, be construed as a direct
property tax. that Tic license tax. occu-
patton or privilege tax can lawfully be
imposed on a governmental agency;
that in operating the oil leases in Mon
ANA the company was a governmental
agency, and that therefore the company
is immune from the imposition Of this
license tax. and the law authorizing it
was unconstitutional.
The brief of Attorney General Wei
lington u. Rankin and of Assistant At
torney General A. III. Angstman, field
with the supreme court. replied to the
contention of the company that, as an
agentof the federal government. it was
exempt from the payment of the tax.
by quoting from the federal oil and
gas leasing act of February %. 1920.
which contains the following phrase:
provided, that nothing in this act
shall be construed or held to affect
the rights Of the states or other local
authority to exercise any rights which
they may have. including the right to
levy and collect taxes upon improve
ments. output Of mines, or other
rights. property or assets of any les
see of the United States"
This section, the attorneys for the
state argued, was evidently intended
to confer upon the states the rights 10
impose a tax such as that provided for
by the state law.
The attorneys for the state also
argued that by the terms Of the feder-
al lease the rights of the state to i'm
pose such a tax was conceded, and
quoted the provision in the lease that
the leasing company agreed, ito pay
when due all taxes lawfully assessed
under the laws of the state upon i'm
provenents. oil and gas produced from
the ground hereunder. Or other rights
property or assets Of the lessee
Statutory Provision
The statutory provision, with the
terms of the lease, constituted. accord
ing TO the state. Il positive declaration
on the part of the federal government
that a lessee of governmental oil lane
is not a government agency. so as tt
be exempt from the payment Of a tar
such as that in question.
The company's attorneys in their
brief. retorted that the provision il
the federal leasing act specified that
nothing in the act should be construed
as affecting the right of the state OIL
other local authorities to exercise any
rights which they may have" ant
constituted a declaration and confir.
nation Of pre-existing rights in thu
state. but in no sense constituted {
granting of rights.
The brief of the company's attorney
continued: 1T is consistent with the
rules already announced in the de.
cisions cited that the states shall have
the power to levy direct taxes upor
the operators personal property stu
ate within their borders, and its Ian
guage is designed to set at rest any
doubts which may arise as to the RICH
of such states to tax such property
upon an nd valorum basis. This sec.
ton specifically declares that the Law
shall not be construed to affect exist
ing rights-'rights which they may
bave'-which rights shall be deemed
to include the rights to levy and collect
taxes on improvements. output o.
mines or other rights. property or as
sets of the lessee"
The brief submitted, however, "tha'
by no stretch Of the Imagination or ju
dicia1 Interpretation can be Language
Of the section in the federal leasing
act, or the language in the lease il
self, be construed to mean that thu
United States has surrendered to thu
state Of Montana or any other state
the right to impose a license, occupa
ton or privilege tax upon its duly con
stituted agent
The attorneys for the state argued
in their brief that the statute was no
objectionable as being retroactive. Thu
company's attorneys, while not waiv
ing their contention that the law wa
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