1. Although the title to mineral lands may remain in the United
States, the ores, when dug or detached from the lands under a
mining claim, are free from any lien, claim, or title of the United
States and, becoming personal property, are as such subject to
state taxation in like manner as other personal property.
2. The words "mines or mining claims" in the sixth section of
the Act of the Legislature of Nevada of Feb. 28, 1871, imposing a
tax upon such ores and making it "a lien on the mines or mining
claims from which the ores or minerals bearing gold or silver are
extracted for reduction," were evidently intended to distinguish
between cases in which the miner is the owner of the soil, and
therefore has a perfect title to the mine, and those in which he
works under a mining claim, the title to the land remaining in the
United States. In the first case, the tax is a valid lien on the
mine itself, but in the second, only upon his possessory right,
under existing laws and regulations, to work and explore the
mine.
3. Such a claim is property in the fullest sense of the word. It
is subject to a lien for taxes, and may be sold for the nonpayment
of them without infringing the title of the United States.
The case is stated in the opinion of the Court.
MR. JUSTICE MILLER delivered the opinion of the Court.
This was a suit brought by appellant to enjoin the Collector of
Taxes for Story County, Nevada, from collecting a tax imposed by
the law of that state upon the property of the Consolidated
Virginia Mining Company, the appellant being a stockholder in the
company and an alien subject of the Queen of Great Britain. The tax
is, by the state statute, imposed upon the proceeds of the mine
worked by the corporation, and is resisted on the ground that the
title to the land from which
Page 94 U. S. 763
the mineral is taken is in the United States, and is not for
that reason liable to state taxation.
The case is prepared and submitted to us on printed arguments in
the very last days of the term, and we are urged to decide it on
the ground that it involves a question of vast interest to all the
mining operations in the Pacific states, and is of vital importance
to the state of Nevada, as it affects her largest source of
revenue. In view of its importance, we should postpone the decision
until next term if the questions presented were either doubtful or
difficult of solution. We think a very few words -- all we can give
to the subject at this late day -- will show that it is
neither.
It is very true that Congress has, by statutes and by tacit
consent, permitted individuals and corporations to dig out and
convert to their own use the ores containing the precious metals
which are found in the lands belonging to the government without
exacting or receiving any compensation for those ores and without
requiring the miner to buy or pay for the land. It has gone further
and recognized the possessory rights of these miners, as
ascertained among themselves by the rules which have become the
laws of the mining districts as regards mining claims.
See
Revised Statutes, title xxxii. chap. 6, secs. 2318-2352. But in
doing this, it has not parted with the title to the land except in
cases where the land has been sold in accordance with the
provisions of the law on that subject. If the tax of the state of
Nevada is in point of fact levied on this property right of the
United States, we are bound by our previous decisions and by sound
principle to hold that it is void. If, on the other hand, it is
levied on property of the miner and may be collected without
affecting or embarrassing the title of the United States to
property which belongs to that government, then there is no ground
for interference with the processes of the state in its collection.
A few extracts from the statute of Nevada showing the nature and
character of the property on which the contested tax is imposed and
the manner of its enforcement and collection will enable us to
decide whether it belongs to the one or the other of these classes.
We copy here the important sections of the Act of Feb. 28, 1871,
imposing this tax:
Page 94 U. S. 764
"SECTION 1. All ores, tailings, and mineral-bearing material of
whatever character shall be assessed for purposes of taxation for
state and county purposes in the following manner: from the gross
yield, return, or value of all ores, tailings, or mineral-bearing
material of whatever character there shall be deducted the actual
cost of extracting said ores as minerals from the mine, the actual
cost of saving said tailings, the actual cost of transportation of
said ores, mineral-bearing material, or tailings to the place of
reduction or sale, and the actual cost of such reduction or sale,
and the remainder shall be deemed the net proceeds, and shall be
assessed and taxed as provided for in this act,
provided
that in no case whatsoever shall the whole amount of deductions
allowed to be made in this section from the gross yield, return, or
value of said ore, mineral-bearing material, or tailings exceed the
percentage of gross yield, value, or return of such ore, mineral,
or tailings, as hereinafter specified; on all ores, tailings, or
mineral-bearing material the gross yield or value of which is $12
per ton or less, the whole amount of deductions shall not exceed
ninety per cent of such gross yield, return, or value; on all ores,
tailings, or mineral-bearing material, the gross yield, value, or
returns of which is over $12 and under $30 per ton, the whole
amount of deductions shall not exceed eighty per cent of such gross
yield, value, or return; on all ores, tailings, or mineral-bearing
material, the gross yield, return, or value of which is over $30
and less than $100 per ton, the whole amount of deductions shall
not exceed sixty per cent of such gross yield, value, or return; on
all ores, tailings, or mineral-bearing material, the gross yield,
return, or value of which is $100 per ton or over, the whole amount
of deductions shall not exceed fifty per cent of such gross yield,
return, or value,
provided that an additional exemption of
$15 per ton may be allowed on all ores, tailings, or minerals
worked by the Freiburg process."
"SEC. 2. It shall be the duty of the several county assessors
within this state to compare and complete quarterly, on or before
the second Monday in February, May, August, and November, in each
year, a tax list or assessment roll of the proceeds of the mines,
alphabetically arranged, in a book furnished them by the board of
county commissioners for that purpose, in which book shall be
listed or assessed the proceeds of all mines in their respective
counties, as provided in this act."
"SEC. 6. Every tax levied under the authority or provision of
this act on the proceeds of the mines is hereby made a lien on the
mines or mining claims from which ores or minerals bearing gold
Page 94 U. S. 765
or silver, or either or any other valuable metal, is extracted
for reduction, which lien shall attach on the first days of
January, April, July, and October of each year, for the quarter
year commencing on those days respectively, and shall not be
satisfied or removed until the taxes, as provided in this act, on
the proceeds of the mines, are all paid, or the title to said mines
or mining claim is absolutely vested in a purchaser, under a sale
for the taxes levied on the proceeds of such mines or mining
claims."
"SEC. 10. The collection of the tax authorized to be levied
under this act shall be enforced in the same manner in which the
tax on any other kind of personal property is enforced and
collected."
What is this manner of enforcement is to be found in sec. 110 of
a previous statute, which reads as follows:
"At any time while the assessment roll of any quarter is in the
hands of the assessor for collection, the assessor may seize upon
the personal property, or so much thereof as may be sufficient to
satisfy the taxes and costs, of any person, firm, corporation,
association, or company who shall neglect or refuse to pay such
taxes for one week after such demand of the assessor or his deputy,
and shall post a notice of such seizure, with a description of the
property, and the time and place whereon it will be sold, in three
public places in the township or precinct where it is seized, and
shall, at the expiration of five days, proceed to sell at public
auction, at the time and place mentioned in the notice, to the
highest bidder for cash, a sufficient quantity of such property to
pay the taxes and costs incurred."
From the first section of the statute we ascertain what it is
that is taxed -- namely all the ores, tailings, or mineral-bearing
material of whatever character, after deducting the actual cost of
extracting said ores as mineral from the mines, and other expenses,
such as transporting them to the place of reduction, &c.
From this it is clear that it is the ore after it has been
separated from the bed in which it is found, and its proceeds and
products, which are taxed, and not the ore or mineral in the earth.
Indeed, this latter idea is not advanced by anyone, and it would be
preposterous.
As we construe the statutes of the United States and the
recognized rule of the government on this subject, the moment this
ore becomes detached from the soil in which it is embedded, it
becomes personal property, the ownership of which is in the
Page 94 U. S. 766
man whose labor, capital, and skill has discovered and developed
the mine and extracted the ore or other mineral product. It is then
free from any lien, claim, or title of the United States, and is
rightfully subject to taxation by the state as any other personal
property is.
The truth of this proposition is too obvious to need or admit of
illustration or elaboration, and, as we have already said, the
pressure of business does not admit of it.
In regard to the taxing of this personal property, and the mode
of collecting it by sale as provided in the section last cited, it
does not seem to us that there can be any reasonable ground for
asserting that the United States has any interest in the tax or in
the sale of the property taxed. It is, however, urged with more
show of reason that sec. 6, which makes this tax "a lien on the
mines or mining claims from which the ores or minerals bearing gold
or silver are extracted for reduction," is an interference with the
right of property of the government in the lands in which the
mineral remains are extracted.
An examination of the language we have quoted will show that it
was carefully prepared to avoid this objection, and we think it
does.
The use of the words "mines or mining claims" is evidently
intended to distinguish between the cases in which the miner is the
owner of the soil, and therefore has perfect title to the mine, and
those in which the miner does not have title to the soil, but works
the mine under what is well known in the mining districts, and what
is, as we have said, recognized by the act of Congress as a mining
claim. In the first case, the statute makes the tax a lien on the
mine, because the title to the mine is in the person who owes and
should pay the tax. In the other, the tax is a lien only on the
claim of the miner -- that is, on his possessory right to explore
and work the mine under the existing laws and regulations on the
subject.
In the former case, of course, the United States has no interest
to be protected, and the state is at liberty to declare and enforce
such a lien for her taxes. In the latter also, such right as the
mining laws allow and as Congress concedes to develop and work the
mines is property in the miner, and
Page 94 U. S. 767
property of great value. That it is so is shown most clearly by
the conduct of the mining corporation in whose interest this suit
is brought, which, for the purpose of evading this tax, permits its
investment in this mine, said to be worth from fifty to a hundred
millions of dollars, to rest on this claim, this mere possessory
right, when it could, at a ridiculously small sum compared to the
value of the mine, obtain the government's title to the entire
land, soil, mineral, and all. Those claims are the subject of
bargain and sale, and constitute very largely the wealth of the
Pacific Coast states. They are property in the fullest sense of the
word, and their ownership, transfer, and use are governed by a well
defined code or codes of law, and are recognized by the states and
the federal government. This claim may be sold, transferred,
mortgaged, and inherited without infringing the title of the United
States. Why may it not also be made subject to a lien for taxes,
and the claim, such as it is, recognized by statute, be sold to
enforce the lien? We see nothing in principle or in any interest
which the United States has in the land to prevent it.
We are of opinion that the decree of the circuit court
dismissing the bill of appellant on demurrer was right. It is
therefore
Affirmed.
MR. JUSTICE FIELD took no part in the decision of this case.