Court Opinion

ID: 8146008
Source: CourtListenerOpinion
Date Created: 2022-09-09 20:23:37.64972+00
Date Added: 2024-06-11T16:39:34.265220
License: Public Domain

Mr. Justice Brandéis,
dissenting.
The property taxed is lead and zinc ore in bins. The land from which the ere was extracted belongs to a Qua-,paw allottee under the Act of March 2, 1895, c. 188, 28 Stat. 876, 907. Restrictions on alienation of the land will not expire until 1946. Act of March 3,1921, c. 119, § 26, 41 Stat. 1225, 1248. But the allottee may lease the lapd for mining and business purposes for ten years unless he is incompetent, in which case the power to lease is vested in the Secretary of the Interior. Act of June 7, 1897, c. 3, 30 Stat. 62, 72. The ore in question had been detached from the soil and is personal property. It is owned wholly by the Mining Company, a private Oklahoma corporation organized for profit. The ore is assessed under the general laws of the State which lays an ad valorem property tax on all property, real or personal, not exempt by law from taxation. Payment of the tax will not affect the financial return to the Indian under the lease. No state legislation exempts this property. There is no specific or general provision in any act of Congress which purports to do so. If an exemption exists, it arises directly from the Federal Constitution: Does ownership by an incompetent Indian of the land from which the ore was taken or ownership of the ore by an instrumentality of the Government create an exemption?
Is the ore exempt because it has been extracted out of restricted lands? The Quapaw might have cóMucted the mining operations himself. If he had been competent he might, without the approval of the Secretary of the Inte*616rior have leased the land to others for mining purposes for a period of ten years. If he had operated the mine himself, I see no ground on which it could be held that his ore in the bins would not have been taxable to him, like any other unrestricted property to which he had absolute title.1 The fact that he was incompetent does not render such property exempt from taxation.2 Such incompetency results simply in the imposition of restrictions upon the alienation of his realty, exempting that from taxation. The Kansas Indians, 6 Wall. 737. But such restrictions cannot by implication be deemed to extend to personalty, even though the product of the realty, so as to exempt them from taxation. Compare McCurdy v. United States, 246. U. S. 263; United States v. Gray, 284 Fed. 103; United States v. Ransom, 284 Fed. 108. Any exemption that attached to the land is limited thereto and does not extend to the ore extracted therefrom. Forbes v. Gracey, 94 U. S. 762, 765-766. Compare South Utah Mines v. Beaver County, 262 U. S. 325.
Is the ore exempt because it is the property of an agency employed by the Government for the benefit of the Indian, its ward? We are not dealing here with property owned by the United States as in Van Brocklin v. Tennessee, 117 U. S. 151, or Lee v. Osceola, etc., Improvement District, 268 U. S. 643; nor with an agency all of whose property was acquired and is used solely for the purpose of serving the Government as in Clallam County v. United States, 263 U. S. 341. We are dealing with a private “ corporation having its own purposes as well as those of the United States and interested in profit *617on its own account,” ibid, p. 345. And we are dealing with a property tax, as distinguished from an occupation tax. Choctaw, Oklahoma & Gulf Ry. Co. v. Harrison, 235 U. S. 292; Oklahoma v. Texas, 266 U. S. 298, 301. Whether, under the circumstances, Congress had power to exempt the ore from the general property tax, we need not consider. It has not done so in terms; and I see no reason for assuming that it intended to do so. Compare Mid-Northern Oil Co. v. Montana, 268 U. S. 45, 49; Thompson v. Kentucky, 209 U. S. 340; Swarts v. Hamer, 194 U. S. 441.
In 1873 this Court said: “It may, therefore, be considered as settled that no constitutional implications prohibit a State tax upon the property of an agent of the government merely because it is the property of such an agent.” Railroad Co. v. Peniston, 18 Wall. 5, 33. The rule there applied with respect to a railroad incorporated under a federal charter has since been followed as to other federal instrumentalities also. Western Union Tel. Co. v. Massachusetts, 125 U. S. 530; Central Pacific Railroad Co. v. California, 162 U. S. 91; Baltimore Shipbuilding Co. v. Baltimore, 195 U. S. 375; Gromer v. Standard Dredging Co., 224 U. S. 362; Choctaw, Oklahoma & Gulf Ry. Co. v. Mackey, 256 U. S. 531, 537. Compare Thompson v. Pacific Railroad, 9 Wall. 579; National Bank v. Commonwealth, 9 Wall. 353, 362. It has been specifically applied to agencies, such as this mining company, whose employment was in aid of the Government’s policy of protecting and developing the properties of its Indian wards. Thomas v. Gay, 169 U. S. 264; Wagoner v. Evans, 170 U. S. 588; Catholic Missions v. Missoula County, 200 U. S. 118. Those decisions seem to me controlling in the case at bar.
The rule that the property of a privately owned government agency is not exempt from state taxation rests fundamentally upon the- principle that such a tax has only a remote relation to the capacity of such agencia *618efficiently to serve the Government.3 Such a tax, as distinguished from an occupation or privilege tax, does not impose a charge upon the privilege of acting as a government agent and thereby enable a State to control the power of the Federal Government to employ agents and the power of persons to accept such employment. The tax is levied as a charge by the State for rendering services relating to the protection of the property, which services are rendered alike to agents of the Government and of private persons. Such a tax cannot be deemed to be capable of deterring the entry of persons as agents into the employ of the Government. Conceivably an operating company might pay a higher royalty or bonus if it were assured that it would enjoy immunity from taxation for the small quantity of the year’s output of the mine which might be in the ore bins , on the day as of which property is assessed. Conceivably also, the cattle owner in Thomas v. Gay, supra, might have paid higher for the grazing rights if the cattle while on the reservation were immune from taxation. But, in either case, the effect of the immunity, if any, upon the Indian’s financial return would be remote and indirect. If we are to regard realities we should treat it as negligible.
*619The difference in the legal effect of acts which are remote causes and of those which are proximate pervades ihe law. The power of a State to tax property and its lack of power to tax the occupation in which it is used .exist in other connections. In Baltimore Shipbuilding Co. v. Baltimore, 195 U. S. 375, 382, where the State had levied a tax upon property conveyed by the United States to the Shipbuilding Company on the condition that it construct a dry dock there for the use of the United States and that, if such dry dock were not' kept in repair, the property should revert to the United States, this Court said: “But, furthermore, it seems to us extravagant to say that an independent private corporation for gain, created by a State, is exempt from state taxation, either in its corporate person, or its property, because it is employed by'the United States, even if the work for which it is employed is important and takes much of its time.”
I suspect that my brethren would agree with me in sustaining this tax on ore in the bins but for Gillespie v. Oklahoma, 257 U. S. 501. The question there involved was different. Any language in the opinion which may seem apposite to the case at bar, should be disregarded as inconsistent with the earlier decisions. It is a peculiar virtue of our system' of law that the process of inclusion and exclusion, so often employed in developing a rule, is not allowed to end with its enunciation and that an expression in an opinion yields later to the impact of facts unforeseen. The attitude of the Court in this respect has been especially helpful when called upon to adjust the respective powers of the States and the Nation in the field of taxation.4

 Pennock v. Commissioners, 103 U. S. 44; Goudy v. Meath, 203 U. S. 146.

 Keokuk v. Ulam, 4 Okla. 5. The exemption granted the personalty of the Indians in United States v. Rickerts, 188 U. S. 432, and in United States v. Pearson, 231 Fed. 270, rested upon the express ground that title to the property was held by the United States in trust for the Indians.

 “It is, therefore, manifest that exemption of Federal agencies from State taxation is dependent, not upon the nature of the agents, or upon the mode of their constitution, or upon the fact that they are agents, but upon the effect of the tax; that is, upon the question whether the tax does in truth deprive them of power to serve the government as they were intended to serve it, or does hinder the efficient exercise of their power. A tax upon.their property has no such necessary effect. It leaves them free to discharge the duties they have undertaken to perform. A tax upon their operations is a direct obstruction to the exercise of Federal powers.” Railroad Co. v. Peniston, 18 Wall. 5, 36. See T. R. Powell, “ Indirect Encroach.ment on Federal Authority by the Taxing Powers of the States,” 31 Harvard Law Rev. 321, 327; J. H. Cohen and K. Dayton, ‘‘Federal Taxation of State Activities and State Taxation of .Federal Activities,” 34 Yale Law Journ. 807.

 See Sonneborn Bros. v. Cureton, 262 U. S. 506, qualifying Texas Co. v. Brown, 258 U. S. 466; Bowman v. Continental Oil Co., 256 U. S. 642; Aderen v. Continental Oil Co., 252 U. S. 444; Standard Oil Co. v. Graves, 249 U. S. 389; also Galveston, Harrisburg & San Antonio Ry. Co. v. Texas, 210 U. S. 217, 226, qualifying Maine v. *620Grand Trunk Ry. Co., 142 U. S. 217; Leloup v. Port of Mobile, 127 U. S. 640, 647, qualifying Osborne v. Mobile, 16 Wall. 479; Philadelphia S. S. Co. v. Pennsylvania, 122 U. S. 326, qualifying State Tax on Railway Gross Receipts, 15 Wall. 284; Mercantile Bank v. New York, 121 U. S. 138, 147, qualifying Boyer v. Boyer, 113 U. S. 689; Railway Co. v. McShane, 22 Wall. 444, qualifying Railway Co. v. Prescott, 16 Wall. 603. Compare First Nat’l Bank of Guthrie Center v. Anderson, 269 U. S. 341, 348, explaining Merchants’ National Bank v. Richmond, 256 U. S. 635; Texas Transportation & Terminal Co. v. New Orleans, 264 U. S. 150, and Crew Levick Co. v. Pennsylvania, 245 U. S. 292, 296, limiting Fecklin v. Shelby County Taxing District, 145 U. S. 1; Baltimore & Ohio Southwestern R. R. Co. v. Settle, 260 U. S. 166, 173, qualifying Gulf, Colorado & Santa Fe Ry. Co. v. Texas, 204 ,U. S. 403.