Court Opinion

ID: 3514350
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:25:31.214406+00
Date Added: 2024-06-11T14:18:04.805735
License: Public Domain

DISSENTING OPINION.
Before the adoption of the Constitution of 1890 the Legislature possessed broad and extensive powers in adopting schemes for taxing property and exempting it from taxes. For instance, it enacted a statute authorizing the City of Aberdeen to assess lots within the municipality ". . . to any amount that they deem proper and necessary for the purpose of making improvements on the streets in front of said lot or lots." This Court upheld that exercise of power. Smith v. Aberdeen Corp., 25 Miss. 458, 459. It was but natural with such far-reaching powers that many discriminations and injustices crept into the statutes. It was to limit that power and to prevent such injustices that Section 112 of the Constitution of 1890 was adopted. City of Jackson v. Deposit Guaranty Bank  Trust Co., 160 Miss. 752, 133 So. 195. *Page 693
That Section requires taxation to be uniform and equal throughout the State and property to be taxed in proportion to its true value. That the Act under consideration (Chapter 409, General Laws 1946) does not comply with these requirements can be demonstrated, I think, by a simple example: John Doe owns 200 acres of land. The ad valorem tax thereon amounts to $80 per year. Richard Roe and others own the minerals under the land, a 20 year oil and gas lease and the royalty rights thereon. No oil is being produced on the land, but it is sufficiently near oil producing lands to make the value of the minerals and royalty rights equal to the value of the surface, which we know, from common knowledge and cases coming to this Court, is a fact in many, many instances. Richard Roe and others pay a total tax of $16 on their property. They pay that only once and that is all they ever pay so far as this Act is concerned. During the 20 years John Doe pays a total of $1,600 taxes, not counting annual interest on his money. I have used an example where the respective values are equal. Hundreds of examples might be used where the value of the mineral and royalty rights is several times that of the value of the surface. The extent of the injustice simply depends upon the comparative values. The injustice exists in every case. There is neither uniformity nor equality nor justice in this tax and the mineral and royalty interests are not taxed in proportion to their value.
Section 9770, Code of 1942, provides: "Whenever any . . . mineral, gas, oil, timber or similar interests in real estate, . . . are owned separately and apart from and independently of the rights and interests owned in the surface of such real estate, or when any person reserves any right or interest, or has any leasehold in the elements above enumerated, all of such interests shall be assessed and taxed separately from such surface rights and interest in said real estate, and shall be sold for taxes in the same manner and with the same effect as other interests in real estate are sold for taxes." *Page 694 
Now let's reverse the situation: The Act calls the tax on the mineral conveyance a documentary or transfer tax. There is no such tax on the deed conveying the land. The leasehold owner must pay $16 to get this lease recorded, whereas the owner of the land will pay for this service only the regular fees of the clerk for recording the deed, usually between one and two dollars. It is true that question is not involved in this case, because it is not shown that appellant owns a lease and is offering to record it, but the principle is involved, although the discrimination in this instance involves a much lesser amount than does the first illustration. Both illustrations show the injustice and lack of uniformity in the statute.
But it is said the legislature has the power to classify property and exempt that classification from taxation under certain conditions. That is true, but such exemption cannot violate the uniformity, equality and true-value provisions of the Constitution. The exemption must not be arbitrary, nor for the benefit of one individual or group of individuals, but there must underlie its exercise some justifiable benefit to the general public at large, and be based upon reasonable grounds bearing a just, proper and a rational relation to the promotion of the public welfare. The grant of an exemption rests upon the assumption that it will serve a public policy and benefit the body of the people, and not upon the idea of lessening the burdens of the individual owners of property. This Act undertakes to justify itself by enumerating therein the reasons and objects for its adoption.
The first stated object is to encourage the purchase of oil and mineral leases. It may well be doubted whether this is such a general public benefit as justifies a tax exemption. It deals purely with private property. It involves no proper general public policy, like, for instance, the ownership of homes, with the security, means of support, promotion of family life and good citizenship, resulting from such ownership. *Page 695 
Again, it is the prospect of discovery of oil and not the exemption of the lease from taxation which accelerates the purchase of oil leases.
The second stated object is to encourage the drilling for and production of minerals in this State. Oil, gas and other minerals are natural resources. It may well be doubted whether it is for the permanent public benefit to quickly deplete these natural resources. At least, such depletion is not in its nature the kind of public benefit which justifies the exemption of property from taxation. But aside from that idea, it cannot be said with any semblance of reason that exempting the leases and mineral rights from taxes will stimulate quick production and exhaustion of these resources. The natural result of such exemption is to delay operations. If it costs the owner nothing to retain the leases, that is certainly not a reason to hurriedly extinguish his right. The reason would defeat the object.
The third stated object is to relieve county officials of the "onerous" duty of collecting the tax. This, to say the least, is a novel public benefit. Carried to its logical conclusion it becomes absurd. If county or state officials are seen working after office hours, or they appear weary from much work, the solution is to pass an act abolishing a part of their duties, or, to have a perfect law, abolish the duties entirely and thereby bring about an ideal situation under which the county officials receive pay but do no work whatever. This may be a humane object, but it can hardly be said to be in its nature the kind of general public benefit which justifies a tax exemption. Besides, the compensation of the tax collector depends upon the amount of taxes he collects, and I have heard of no demand by these officials that a statute be enacted reducing their compensation.
Summed up: This law abitrarily exempts from taxation millions of dollars of property and throws that tax burden on other property owners without serving any proper *Page 696 
public policy or interest. It is not uniform, it is not equal, and the classified property is not only not assessed at its true value but it is not assessed at all. In my opinion, it is unconstitutional and should be so declared.