It is well settled that the " power of taxation among independent nations is unrestricted as to things, and, with the exception of Foreign Embassadors and agents, and their retinues, is unlimited as to persons." It may extend to all professions, trades, occupations, and business property. People v. Coleman, 4 Cal., and People v. Naglee, 1 Cal., page 232.
From the foregoing it follows, necessarily, that the Legislature has the power to tax " money invested in mining claims," or " capital invested in the business of mining."
" Capital, as applied to individuals," is those objects whether consisting of money or property which a merchant trader or other person adventures in an undertaking, or which he contributesto the common stock of a partnership."
It also, when used in a limited sense, " signifies money put out at interest."
The rule is, that " words of a statute, when not used in a technical sense, must be construed according to their ordinary signification."
Apply the rule to the Revenue Act, and the unavoidable conclusion is, that the Legislature meant by capital " that which a person adventures in an undertaking." This position is fortified by other language formed in the same section of the Act; for in the enumeration of objects and things which shall be held to be included within the term " personal property," we find preceding the word capital, " all money at interest secured by mortgage or otherwise."
If I am in error, the Legislature was guilty of repetition and an unnecessary use of terms; but if correct, then all is consistent and coherent.
" Invest" comes from the Latin word " investio ," which signifies to " clothe" or adorn; and when applied to money means literally to clothe it (money) in something.
Ordinarily we mean, " to lay it (money) out in such manner as to bring in a revenue," though it is evident that the use of the term may be extendedbeyond the definition given.
Webster defines " Business" thus: " Employment; that which occupies the time, attention and labor of men for the purpose of profit or improvement; a word of extension, use, and indefinite signification. Business is a particular occupation, as agriculture, trade, mechanic art or profession; the subject of employment; that which engages the care and attention."
Mining occupies the time, attention and labor of men, and they follow it for profit. It is the one employment of the largest class of our population; in a word, it is their business. We speak of it daily as such; and if you ask a man who engages in that employment what his business is? he readily answers you, " Mining."
Mining was the business in which appellant was engaged when he gave the list of his property.
When the Legislature used this term, they meant it to be taken in its ordinary signification.
It therefore follows, from what has been said, that when a man's money is invested in a mining claim, or his " capital" is so " clothed" or " employed," he is the owner of " personal property" within the meaning of the Act which " declares" that the term " personalproperty," whenever used in that Act, shall be taken to include " all capital" loaned, invested or " employed in any trade, commerce, or business whatsoever."
But they say that this is an indirect mode of assessing the mining claim, and that the Act expressly exempts the claim. I admit the latter, but deny the former position.
The tax upon the business of mining, or the capital invested, is no more a direct tax upon the claim, than the tax upon the business of consigned goods is a tax upon the goods, or a license given to a foreigner to work in the mines, is an interference with the power of the General Government, to make rules and regulations respecting the territory of the United States; both of which points have been passed upon by this Court, in the case of the People v. Naglee, and the People v. Coleman, which I have cited. In fact, upon a review of those cases I find the distinction so clearly drawn below the exercise of the power to tax a particular business, and that of an object with which such business is connected, as to render it unnecessary to dwell longer upon this point.
I submit, that if the language used in the Revenue Act will bear two constructions, then it is incumbent upon this Court to adopt that which will bring about an " equal and uniform operation" of the law, and compel each class of the community to contribute its quota toward the support of that Government from which it receives protection.
The argument in reference to first branch of the case, applies equally to the question of the tunnel valued at five hundred dollars.
The tunnel was an " improvement upon lands of the United States" owned by appellant, and was therefore " personal property" within the meaning of the Act. It should have been assessed at such sum as he valued it, or, if he refused to value it, then the law requires the Assessor to do so. 1 McCord's Rep., S. C., page 217.
JUDGES: Terry, C. J., delivered the opinion of the Court. Baldwin, J., and Field, J., concurring.
OPINION
TERRY, Judge
Defendant is the owner of a certain mining claim, for which he paid the sum of twenty thousand dollars, and upon which, since the purchase, he has expended the sum of five hundred dollars in opening a tunnel.
These sums were assessed against him, as money invested in the business of mining. The object of this action is to test the legality of this assessment, and the questions presented are: 1st. Whether, under the Constitution, it is in the power of the Legislature to tax mining claims; and 2d. Whether money invested in the purchase and opening of such claims, is within the provisions of that portion of the Revenue Act which provides for the levy of a tax on " all capital loaned, invested or employed in any trade, commerce or business whatsoever."
Upon the first of these propositions we entertain no doubt. The only objection to the power of the Legislature to impose such a tax arises from the fact that the mines are the property of the Government, and are exempt from taxation under the Act admitting California into the Union. This fact, however, if admitted, does not, in our view, militate against the right to levy a tax upon the interest of the possessor of such claim. The whole course of legislation and judicial decisions in this State, since its organization, has recognized a qualified ownership of the mines in private individuals. Contracts affecting mining claims have been constantly enforced; remedies have been afforded to those whose possession has been disturbed, or whose claims have been trespassed upon by others, and the right of the locator to sell, hypothecate, or in any manner dispose of his property in a mining claim, has been upheld, as well by legislative enactment as by judicial decisions.
In Tarter v. Spring Creek Company, 5 Cal. 395, the Court held that " the policy of this State, as derived from her Legislature, is to permit sellers, in all capacities, to occupy the public lands, and by such occupation, to acquire the right of undisturbed enjoyment against all the world but the true owner."
In evidence of this, Acts have been passed to protect the possession of agricultural lands acquired by mere occupancy; to license miners; to provide for the recovery of mining claims, etc., " and that an appropriation of a portion of the public domain, or any of its incidents," establishes a quasi private proprietorship which entitles the holder to be protected in its quiet enjoyment.
In the Merced Mining Company v. Fremont, 7 Cal. 312, we held that the possessor of a mining claim " by his appropriation acquires a vested interest in the exclusive occupation and enjoyment of the land as against all the world, subject only to the right of the Government by whose license and permission his possession was acquired; and his right to protect the property for the time being, is as full and perfect as if he were the tenant of the superior proprietor for year or for life; " and in McKeon v. Bisbee, 9 Cal. 137, we held that the interest of the possessor of a mining claim was property under the law, and subject to be seized and sold under execution.
The Legislature recognized a proprietary interest in the possessor of mining claims by authorizing their hypothecation. See Wood's Dig., page 108, art. 416.
The term " property in lands" is not confined to title in fee, but is sufficiently comprehensive to include any usufructuary interest, whether it be a leasehold or a mere right of possession. Several persons may have, in the same land, a property which is subject to taxation, and it is not perceived that the fact, that the property of the Government is exempt from taxation, affects the right to tax the interest which private individuals have acquired in the same property. Exemption from taxation is a privilege of the Government not an incident to the property.
In the hands of the Government, the lands are exempt, but the moment the title vests in a private individual, it becomes liable to the burthens which are imposed on other property of like character. If the acquisition of the fee by a private person subjects the property to taxation, it follows that the acquisition of a lesser estate would equally subject such estate.
There is no force in the objection that the value of a mining claim, which depends upon the amount of precious metals it contains, must necessarily be left to conjecture.
The universal standard of value is the amount of money which can be realized by a sale of the property, and this will apply as well to mining claims as other lands. Sales and hypothecations of mining claims are of every-day occurrence, and we apprehend their value can be ascertained with sufficient accuracy.
Upon the second proposition it is contended that though mining claims are by the statute expressly exempted from taxation, yet the money expended in their purchase and working is liable, as so much capital invested in the business of mining.
This rule would be manifestly unequal, and would in a large class of cases be productive of palpable injustice, hardship and oppression; it would exempt the first locator of a claim from taxation, while his vendee would be compelled to pay a percentage upon the purchase price, although the value of the claim at the date of the assessment might not be a tithe of the sum. The claim may yield no return whatever; may prove entirely valueless for any purpose; yet the price paid would, under the rule contended for, be a permanent " investment of capital," and the party compelled to pay yearly a percentage on the amount.
Or take the case of a party who, after locating a claim, sells a moiety to another for a large sum, the interest of each is equally valuable and equally protected by the Government, yet one is required to contribute to the support of the Government in return for the benefits afforded, while the other, who is in the enjoyment of the same benefits, contributes nothing. We think a consequence so manifestly absurd, unjust and oppressive, was never intended by the Legislature.
We do not understand a sum paid for the purchase of specific property to be so much capital invested. The mere purchase of property can in no just sense be said to be an investment of capital in the business for which the property is adapted or might be used. The purchaser parts with all interest in the money paid; he has no longer any claim upon it; and if the transaction constitute an investment of capital, the value of the property, and not the sum paid for it, is the amount of the " capital invested." As well might the purchaser of a farm be required to pay taxes on the price paid as so much " capital invested in the business" of farming as the purchaser of a mining claim upon the cost of such claim.
For the purposes of taxation there is no distinction between a thing and its value; it is the value which is assessed, and upon which the tax is imposed, and an exemption of certain property from taxation exempts its value also.
Our conclusions are: 1st. That the interest of the occupant of a mining claim is property liable to be subjected, at the will of the Legislature, to such burthens as are imposed on other property. 2d. That the Legislature having expressly exempted mining claims from the operation of the Revenue Act, we cannot presume that it intended indirectly to subject them, by levying a tax on the price paid for them, which would, as we have shown, be a partial and unequal mode of ascertaining the value, and, in a majority of cases, be productive of great injustice.
It follows that the judgment of the Court below is erroneous, and it is reversed with costs.