Court Opinion

ID: 3270325
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:38:45.806012+00
Date Added: 2024-06-11T07:41:22.875443
License: Public Domain

In this case, the appellee railway company owned land in fee, and employed Peck  Son to sever the gravel from the land. The railway company then used the gravel to ballast its tracks anywhere that ballast might be needed, but entirely away from the land from which the gravel was severed. Is the railway company liable to the State of Arkansas for the severance tax on the gravel so severed? That is the question.
The original severance tax act was No. 118 of 1923. There have been several amendments, a few of which are Act No. 283 of 1929, Act No. 116 of 1933, and Act No. 138 of 1933. These acts, as compiled, are found in 13371 ff. of Pope's Digest. By 13371, the tax was levied on any person, firm or corporation "engaged in the business of mining, cutting or otherwise severing from the soil or water for commercial purposes natural resources, including . . . gravel." The majority holds that the railway company is not liable for severance tax in this case. I dissent for the two reasons which I now discuss:
First: The railway company was engaged in the business of severing for commercial purposes within the purview of the act. What is the business of severing? Business, as defined by Webster's Dictionary, means more than mercantile transactions. Business means: "quality or state of being busy; . . . that which one has to do or should do; . . . that which engages time, attention or labor." See, also, 9 C.J. 1102. Mr. Justice BATTLE, in Hickey v. Thompson, 52 Ark. 234,12 S.W. 475, said: "The primary signification of the word `business' is employment — `that which employs time, attention and labor.'" So, with "business" defined by this court in 1889, the Legislature could well use the word in 1923 expecting this court to give the word its primary and judicially defined meaning. "Thus words which have been defined by statute or which have previously been given a well-defined meaning by the courts, are presumed to have that same meaning in the statute." 59 C.J. 1012. So the words, "engaged in the business of severing," as used in the statute — when read in the light of this court's definition of "business," as *Page 287 
aforesaid — mean "engaged in the time, attention or labor of severing." Certainly the railway was so engaged even in severing gravel from its own land, for the severing required time, attention and labor.
What is meant by "commercial purposes"? Webster's Dictionary defines "commercial" as "of or pertaining to commerce"; and "commerce" is defined as "business intercourse; . . . the exchange of merchandise on a large scale between different parties or communities." It seems elementary that a railroad is engaged in commerce when it sells its service to the public. The gravel severed from the land was used to make the road bed so that trains could carry commerce. Certainly the gravel was therefore used for commercial purposes.
So, by simple definitions, I believe the statute means that the time, attention and labor of severing for use in commerce was the taxable act concerning the gravel of the railway company, and this taxable act occurred even though the railway company never sold the gravel to a third person, but used it on its own property.
The majority hold that because the railway company did not re-sell the gravel there was no severance within the meaning of the Act. Such a construction makes the ultimate disposition of the gravel the test as to whether the State's natural resources have been depleted. The purpose of the Act was to prevent the natural resources from being severed without a tax being paid therefor. The severance is just as complete — the natural resources are just as despoiled — if the gravel be used by the severer, as if the gravel be sold to and used by a third party. Under the holding of the majority, a large corporation is greatly favored over a small individual. An individual would take the gravel to some construction company for re-sale, and would thus be liable for the severance tax. But a large railroad company — by owning its own gravel pits and owning its own stone quarries and owning its own forests — could despoil the State of its natural resources in gravel, stone and timber for the purpose of building railroads, depots and other facilities, *Page 288 
and still would never be liable for the severance tax. I cannot believe that the Legislature ever intended to pass such an Act as the majority has construed this to be.
Second: The Exemption. The second reason for my dissent is because I believe the majority has failed to give any effect to the exemption clause contained in 13374 of Pope's Digest. This clause reads: "Provided, this Act shall not apply to nor shall any severance tax be required of the individual owner of timber who occasionally severs or cuts from his own premises such stocks, logs, poles or other forest products as are utilized by him in the construction or repair of his own structures or improvements, the purpose of this clause being to exempt therefrom such severers as utilize forest products to their own personal use and not for sale, commercial gain or profit."
It is a cardinal rule of construction of statutes that effect must be given, if possible, to the whole statute and every part thereof. 59 C.J. 995. An interpretation which gives effect to the entire statute should be selected, as against one which does not. Summers v. Cole, 144 Ark. 494,223 S.W. 721; West's Arkansas Digest "Statutes," 206.
The majority's construction renders the exemption clause above quoted to be entirely useless, a mere waste of words, because under the majority's construction, everyone is exempt from severance tax as long as such severer does not sell the severed resources. If the Legislature meant what the majority has held, then why did the Legislature place in the Act an exemption clause in favor of "an individual owner of timber who occasionally severs or cuts from his own premises . . . forest products as are utilized by him in the construction or repair of his own structures; the purpose of this clause being to exempt therefrom such severers as utilize forest products for their own personal use . . ."?
It seems clear to me that the Legislature, in exempting only severers using timber on their own lands, intended to tax all severers of any other resource except timber, even though such other resource was used on the *Page 289 
severer's own property. The exemption clause in 13374 shows what the legislature intended to exempt, and the holding of the majority rides roughshod over this exemption clause and renders it entirely nugatory.
Therefore, for the reasons stated, I respectfully dissent.