Hancock County v. Imperial Naval Stores Co.

Whitfield, C. J., delivered the opinion of the court. This case was tried by agreement between the parties before the judge, a jury being waived, upon an agreed statement of facts. The agreed statement of facts is in substance as follows: That the plaintiff possessed a turpentine license or right, evidenced, in the only parts necessary for our consideration, by the following instrument: “John Smith to Imperial Naval Stores Co., State of Mississippi, Hancock County. This agreement, made and entered into on this the 23d day of May, A. D. 1902, by and between the Imperial Naval Stores Company, of Hancock county, Mississippi, and the said John Spiith of said county and state, witnesseth as follows, to-wit: The said John Smith hereby bargains and leases to the Imperial Naval Stores Company, all the pine timber on the following described land, to-wit: * * * —in Hancock county, Mississippi, to be used for turpentine purposes for the term of three years from date of cutting boxes; said lease not to exceed ten years from date. The said Imperial Naval Stores Company agrees to pay $12.50 per thousand boxes for said lease; the sum of $500 being paid, and said Imperial Naval Stores Company to pay the balance when trees are boxed and counted. Given under my hand and seal, this the 23d — 828 — day of May, A. D. 1902. John J. Smith. [Seal]. ¡Witnesses : Thos. Haithcoke. Joseph Davis. “State of Mississippi, Hancock county. Personally appeared before me, J. P. Mauffray, a member of the board of supervisors of the county of Hancock, and said state, the within named Jno. J. Smith, who acknowledged that he signed and delivered the foregoing instrument on the day and year therein mentioned" Given under my hand this the 11th day of September, A. D. 1902. J. P. Mauffray. M. B. S.” That said lease, license, or grant, by whatever words it may be called by the court, was duly assessed at the sum of fifty cents per. acre on said turpentine right, for every acre of- land embraced in said lease, by the assessor of Hancock county, on the land roll of said county, as an .interest in the said lands, and that the assessment roll was duly approved by the board of supervisors at a regular meeting thereof, all of which assessment, equalization, and approval of said assessment concerning said turpentine rights were had over the objection of said plaintiff. That the said plaintiff is a foreign corporation and is a corporation of the state of Louisiana, with its principal place of business in New Orleans. That the said lands described in said lease were duly and regularly assessed at their true and full value, the said turpentine right thereon not having been taken into consideration as affecting the actual assessable value of said lands, which lands were assessed at the same valuation they would have been assessed at had the said turpentine right not existed. That the purpose of presenting this cause, is to have the court decide two questions: First, is a turpentine license, right, or lease an interest in lands, and so assessable? and, second, if not, is such license or right assessable at all, and, if so, is a nonresident corporation assessable with said right or lease under the laws of this state? It is conceded that this last proposition is not necessarily involved in this record. The court below held that the instrument passed no interest in the land as land and that it was not assess — 829 — able. It is conceded in tbe case that the land embraced in tbe instrument was assessed at its full value as land, and that the pine trees were in that assessment treated as part of the land both belonging to the plaintiff. In treating of a precisely similar lease the supreme court of Alabama in the case of Ashe Carson Co. v. State, 138 Ala. 108, 35 South. p. 38, said: “The statute above quoted, under which it is claimed the state has the right to tax the interest the lessees acquired under their lease as an interest in land, is one which must be strictly construed against the state. The purpose of the statute was to tax the ownership of the land, and when the title to some substantial part of the land is vested in one person, and the general title is vested in another, the interests are taxable separately. It does not extend to a person who has a mere right to go upon land of another to derive some profit therefrom. Construing the statute most strictly against the state (Cooley on Taxation, 266), it would seem that the right given to the lessees by the lessors under their contract to tahe crude turpentine from standing trees was not a special possessory interest in the land itself within the meaning of the statute. Kennedy S. & C. Co. v. Sloss Iron Co., 137 Ala. 401, 34 South. 372. The turpentine was the only thing to be acquired by the lessees from the timber and land. Under the lease the land and timber remained the property of the lessors. The sole object of the lessees in entering into the contract was to extract from the trees the crude turpentine as a product from the land, leaving the trees and the soil to the lessors, the owners of the land, after the expiration of the lease.” The statute referred to by the supreme court of Alabama is section 3911, subd. 1, of the Code of 1896, which provides as follows: “Every separate or special interest in any land, such as mineral, timber, or other interest, when such interest is owned by a person other than the owner of the surface or soil,” is subject to taxation. The instrument in this Alabama case is substantially identical with the instrument in this case, and the decision of the Alabama supreme court is squarely in point here. No interest — 830 — in the land, passed by this instrument, and, by whatever name it may be called, it was nothing but the grant of a right to take ;the crude turpentine from the trees during the period stipulated for at the consideration named. The crude resin or product of the tree might itself be taxed as personal property when severed from the tree, or the turpentine made from such crude product itself be taxed as personal property; but the intrument conveys no interest in the land as land. Now, the precise point presented for our determination is whether the right granted by this instrument was taxable as an interest in the land itself at fifty cents per acre. It was so assessed on the land roll, it was dealt with by the court below in that view alone, and consequently the point made by the learned attorney general, that if we should hold that the crude products are taxable as personal property then this judgment should not be reversed under the principle announced in Tunica County v. Tate, 78 Miss. 294, 29 South. 74, is not tenable on the point presented by this record. It is true, as held in that case, “that the law taxes the property, and is not to be defeated by its being put on one assessment roll rather than another;” but dealing, as we must on the face of this record, with an assessment on this right on the land assessment roll as an interest in the land, the only question for decision here is whether that particular judgment is correct. All the crude products obtained from these pine trees, or all the turpentine made from them, certainly should be assessed to the appellee, and taxes paid on them by the appellee, just as they would be paid on any similar personal property; “but that is another story.” In 27 Am. & Eng. Ency. of Law (2d Ed.) at page 642, it is said that “a license to go on land and sever and remove the products thereof has been held to be not such an interest-in the land as is taxable as real property,” and in the note thereto certain authorities are cited, including Ashe Carson Co. v. Sate, supra. We think this is the correct announcement of the law on this point. In the case of Millikin v. Carmichael, 139 Ala. — 831 — 226, 35 South. 706, 101 Am. St. Rep. 29, the Alabama supreme court held that a turpentine lease was valid without the wife’s having joined in the acknowledgment of the lease, though the subject-matter, the land, was a homestead. In other words, the effect of that decision was squarely to hold that such an instrument grants merely the right of user of the homestead for a particular turpentine purpose, as distinguished from, an alienation of any interest therein as a homestead. There were two such alleged leases in that ease, one with such acknowledgment and one without it, and the instrument first executed was the one without the acknowledgment, and the one which the court upheld in a contest between the two. The case of Gex v. Dill, 86 Miss. 10, 38 South. 193, in no way conflicts with this view. It held nothing except that an instrumeat like this was not revocable by the death of the grantor when it was based upon a valuable consideration. In the case of Orrell v. Bay Mfg. Co., 83 Miss. 842, 36 South. 561, 70 L. R. A. 881, we held that an instrument like this does not pass or alienate any interest in the land as land; but that case considered section 2291, Rev. St. U. S. (U. S. Comp. St. 1901, p. 1390) which declared that “no part of such land has been alienated,” etc., and our holding, perfectly sound, and which we now reaffirm, was that such an instrument as this is no alienation of any part of the land as land. That case was thoroughly well considered, and the opinion in that case by Judge Truly is full and careful and thoroughly sound, and is, we think, decisive of the controversy in this case. In the Alabama ease referred to and criticised in Orrell v. Bay Mfg. Co., supra, to-wit, Millikin v. Carmichael, 134 Ala. 623, 33 South. 9, 92 Am. St. Rep. 45, it seems to have been conceded in argument., curiously, that the separate homestead acknowledgment was necessary, and, secondly, that the instrument was violative of the policy of the federal statutes in respect to homesteads. We have refused in the Orrell case to follow the Alabama supreme court on the second proposition — 832 — that such an instrument as this is. in violation of the policy of the federal statutes in respect to homesteads; and the Alabama .supreme court in the late case of Millikin v. Carmichael, 139 Ala. 226, 35 South. 706, 101 Am. St. Rep. 29, squarely held that the homestead acknowledgment was not necessary to such an instrument as this. These two cases, Orrell v. Bay Mfg. Co., 83 Miss. 800, 36 South. 561, 70 L. R. A. 881 and Millikin v. Carmichael, 139 Ala. 226, 35 South. 706, 101 Am. St. Rep. 29, in effect decide, also, as a necessary corollary, that such an instrument as this conveys nothing which in any wise diminishes or impairs the value of the land as land, or of the trees as trees. Mr. Justice Truly, in the Orrell case, sufra, quotes approvingly from Bryant v. United States, 105 Fed. 943, 45 C. C. A. 148, this passage: “We think it is not a matter of common knowledge that such cutting and boxing of pine trees destroy the value of the trees as timber, or that it has a tendency to retard the growth of the trees. It is, however, we think, a matter of common knowledge, of which we may take notice, that on March 2, 1831; and long before that date, the Turpentine business’ was an industry most prevalent in all parts of the country where there were, pine trees growing on public lands, and if it had been the intention to protect these public lands from the ravages of that business it would have been easy to make that intention clear by the use of appropriate words.” We thoroughly agree with this statement that it cannot be said to be a matter of common knowledge that the cutting and boxing of pine trees destroys the value of the trees as timber; and we further agree that everywhere .in the country where pine trees were growing on public lands this turpentine business had been, in vogue since before 1831. It is said in the course of argument, and with great force, that if such an instrument as this could be held to convey any interest in the land as land, then the value of the land for assessment purposes should be reduced by the value of - this interest in land for assessment purposes; the one (the value of the land) being assessed to the grantor. — 833 — and the other (this particular and special interest) being assessed to the grantee in this instrument, so as to avoid double taxation. But there is no interest, as we have held, in the land as land granted or which passes by this instrument. See, as throwing material light on this particular point, Boston Mfg. Company v. Newton, 22 Pick. (Mass.) 23, Fall River v. County Commissioners, 125 Mass. 567, and especially Hughes v. Vail, 57 Vt. 43, and Clove Spring Iron Works v. Cone, 56 Vt. 603. These cases, just referred to, indubitably establish the proposition that no title to this crude resin, or turpentine, passes under this instrument until there shall have been a severance of it from the trees, and it must follow, as a necessary corollary, that the grantee under this instrument never had any interest in the land, as land. There has been a great deal of confusion in the books about what is and what is not a lease. Many cases are collected in the valuable note to Heywood v. Fulmer, 186 L. R. A. 491. That case approves, and we approve, the following definition taken from 12 Am. & Eng. Ency. of Law, p. 976: “No particular form of expression or technical words are necessary to constitute a lease; but whatever expressions explain the intention of the parties to be that one shall divest himself of the possession of his property, and the other shall take it for a certain space; of time, are sufficient and will amount to a lease for years as effectually as if the most proper and permanent form of words had been made use of for that purpose.” In a number of cases cited in the note to this case, a clear distinction is drawn between a grant of the right for a term of years to take from certain premises ore or mineral, coupled with the right of ingress and egress, etc., to do so, and an outright sale of minerals dr ore in place; in the last class of cases it being always held that the conveyance is an outright sale, and of course, a conveyance of an interest in the land. Speaking of these two classes of cases, the author of the note then says: “But the cases above (i. e., those of the first class referred to) are to be — 834 — clearly distinguished from those 'in which all the minerals within certain land are expressly conveyed. Such a conveyance grants an interest in the land, and excludes the grantor from the mine.” This second class of cases is well .illustrated by one of tire casbs cited by the learned counsel for the appellant, to-wit, Consolidated Coal Co. of St. Louis v. James D. Baker, 135 Ill. 550-551, 26 N. E. 651, 12 L. R. A. 247. That cáse hold that where there was no division of ownership, as between the land and the minerals in it, the land should all properly be assessed, with the fee, to the owner, but where the fee and the coal were owned by different persons they should be separately assessed as real estate, meaning, of course, where the ore was still in place in the land; and that case further held that in such case the two assessments must equal the value of the land proper augmented by the value of the coal, and that wherever coal underlying the land, in place in the land, is dealt with, it may be conveyed by a proper instrument, so as to pass the title to the same, with the right to mine it, and that an instrument of that, sort is much more than a mere license to enter and mine the coal. It is a conveyance of the coal itself, as it lies in its natural state, and the subject of such grant is real property in the grantee, which is liable to taxation as such. But that case was in construction of chapter 120 of the Revised Statutes of Illinois of 1874, set out at page 549, and the reasoning set out on page 551 of 135 Ill., and on page 652 of 26 N. E., is simply to the effect we have previously stated, with this further thought: That such coal of mineral is to be assessed as real estate while so in place in the ground, where there is an absolute conveyance of the coal, not where the instrument is like the one here, granting nothing but the mere fight to enter and take away the property. This same principle is announced in Sanderson v. City of Scranton, 105 Pa. 474, which simply holds that, where there is a divided ownership, there must be a divided taxation in cases of this sort. It is very aptly said, so aptly that we think it worthy of quo — 835 — tation as a part of this opinion, by one of the learned Counsel for the appellee, as follows: “For illustration, if A. sells to B. the right to gather all of the pecans that shall be produced on his (A.’s) pecan orchard, or all the grapes which his vineyard shall yield in three years, certain it is that such privilege would not be assessable, because A. pays the taxes on his lands, in assessing which the pecan orchard or the vineyard is taken into consideration as a part thereof, and the fact that it may bear fruit is considered as an element of value in assessing such lands, and then B. is assessed with the personal property as such; that is to say, the fruits after they shall have been gathered. Any other mode of taxation would be inequitable as double taxation. If, again, A. were to say to B. ,‘I give you the right and privilege, fop a certain pribe, to gather all of the cabbages that shall grow to-maturity upon a certain tract cf land, which I have sown with cabbage seeds,’ certain it is that all that B. could be assessed with would be the cabbages, as personal property, when gathered. Now, what is the difference between the annual product of the pecan orchard or the vineyard or the cabbage field, and the annual product of the pine tree? All yield a yearly crop, and in the cases of the pecan orchard and the vineyard the fruit of the tree or vine is what is gathered, while in the case of the turpentine it is likewise the annual product of the tree for three consecutive years' that is gathered by the grantee,” This seems to ris the very essence of the whole point involved in this case, and the common sense view- — the view, too, supported, as we have shown, by the authorities. We conclude, therefore, that whatever this instrument may be called technically, whether a lease or a license, undoubtedly what it- grants is not any interest in the land as land, but a mere irrevocable right, during the life of the contract, to enter upon the land and take from the pine trees the crude resin or turpentine. Confining ourselves strictly to the precise point presented for adjudication by this record, which is, merely and simply, whether this instrument passes any in — 836 — terest in the land as land, and therefore assfessable as land, we say that it does not. Wherefore the decree of tbe court below is affirmed.