Time: Thu May 29 22:22:31 1997
by primenet.com (8.8.5/8.8.5) with ESMTP id WAA13111;
Thu, 29 May 1997 22:13:26 -0700 (MST)
by usr02.primenet.com (8.8.5/8.8.5) with SMTP id WAA27080;
Thu, 29 May 1997 22:13:09 -0700 (MST)
Date: Thu, 29 May 1997 22:18:15 -0700
To: (Recipient list suppressed)
From: Paul Andrew Mitchell [address in tool bar]
Subject: SLS: Stratton v. Howbert (1 of 2) (fwd)
>Date: Fri, 30 May 1997 00:38:49 -0400
>From: "Dr. Braces" <drbraces@smart1.net>
>Organization: SouthFlorida Orthodontics
>To: pmitch@primenet.com
>Subject: stratton v howbert part 1
>
>-- (Cite as: 231 U.S. 399, 34 S.Ct. 136)
>
> STRATTON'S INDEPENDENCE, Limited,
> v.
> F. W. HOWBERT, Collector of Internal Revenue in and for the
>District of
> Colorado.
> No. 457.
> Argued October 21, 1913.
> Decided December 1, 1913.
> ON A CERTIFICATE from the Circuit Court of Appeals for the Eighth
>Circuit
> presenting questions as to the liability of a mining corporation to the
>Federal
> corporation tax, and as to the right to deduct the value of ore in
>place as
> depreciation. The last question answered in the negative. The others
>in the
> affirmative.
> The facts are stated in the opinion.
>
> INTERNAL REVENUE (s 9*)--EXCISE ON CORPORATION--MINING COMPANIES.
> 1. Mining corporations engaged solely in mining upon their own
>premises are
> subject to the excise tax imposed by the act of August 5, 1909 (36
>Stat. at L.
> 11, chap. 6, U. S. Comp. Stat. Supp. 1911, p. 741), s 38, upon the
>carrying on
> or the doing of business in a corporate or quasi corporate capacity,
>such
> corporations being within the general description of that section,
>which
> comprises every corporation organized for profit and having a capital
>stock
> represented by shares, and engaged in business, and not being among the
>classes
> of corporation specified in that section as exempt from its operation.
> [Ed. Note.--For other cases, see Internal Revenue, Cent. Dig. ss
>13-28; Dec.
> Dig. s 9.*]
> * For other cases see same topic & s NUMBER in Dec. & Am. Digs. 1907
>to
> date, & Rep'r Indexes
>
> INTERNAL REVENUE (s 9*)--EXCISE ON CORPORATION--'INCOME'--PROCEEDS OF
>ORE.
> 2. The proceeds of ore mined by a corporation from its own premises
>are
> 'income' within the meaning of the act of August 5, 1909, s 38,
>imposing an
> excise tax measured by net annual income upon the carrying on or the
>doing of
> business in a corporate or quasi corporate capacity.
> [Ed. Note.--For other cases, see Internal Revenue, Cent. Dig. ss
>13-28; Dec.
> Dig. s 9.*
> For other definitions, see Words and Phrases, vol. 4, pp. 3501-3507;
>vol. 8,
> p. 7685.]
> * For other cases see same topic & s NUMBER in Dec. & Am. Digs. 1907
>to
> date, & Rep'r Indexes
>
> INTERNAL REVENUE (s 9*)--EXCISE OF MINING CORPORATIONS.
> 3. Treating the proceeds of ore mined by a corporation upon its own
>premises
> as 'income' within the meaning of the act of August 5, 1909, s 38,
>which
> imposes an excise tax measured by net annual income upon the carrying
>on or the
> doing of business in a corporate or quasi corporate capacity, does not
>make
> such excise the equivalent of a direct tax upon the property, and
>therefore
> invalid, because not apportioned to population, as prescribed by the
>Federal
> Constitution.
> [Ed. Note.--For other cases, see Internal Revenue, Cent. Dig. ss
>13-28; Dec.
> Dig. s 9.*]
> * For other cases see same topic & s NUMBER in Dec. & Am. Digs. 1907
>to
> date, & Rep'r Indexes
>
> INTERNAL REVENUE (s 9*)--EXCISE UPON CORPORATION--DEPRECIATION--'VALUE
>OF ORE
> IN PLACE.'
> 4. Assuming that the depletion of the mineral supply from the process
>of
> mining is an element to be considered in determining the reasonable
> depreciation that, under the act of August 5, 1909, s 38, is to be
>deducted
> from the net annual income of a mining company when assessing the
>excise
> imposed by that section upon the doing or carrying on of a business in
>a
> corporate or quasi corporate capacity, the difference between the gross
> proceeds of the sales of ores during the year, and the amount expended
>in
> extracting, mining, and marketing such ores, cannot be treated as the
>value of
> the ore in place for such purpose.
> [Ed. Note.--For other cases, see Internal Revenue, Cent. Dig. ss
>13-28; Dec.
> Dig. s 9.*]
> * For other cases see same topic & s NUMBER in Dec. & Am. Digs. 1907
>to
> date, & Rep'r Indexes
>
> COURTS (s 384*)--CASES CERTIFIED--SCOPE OF INQUIRY.
> 5. Only the several propositions of law that are certified by a
>circuit court
> of appeals under the act of March 3, 1891 (26 Stat. at L. 828, chap.
>517, U. S.
> Comp. Stat. 1901, p. 549), s 6, will be answered by the Federal Supreme
>Court.
> Questions of fact or of mixed law and fact will not be considered.
> [Ed. Note.--For other cases, see Courts, Cent. Dig. s 1021; Dec. Dig.
>s 384.*]
> * For other cases see same topic & s NUMBER in Dec. & Am. Digs. 1907
>to
> date, & Rep'r Indexes
> *400 **137 Messrs. William V. Hodges, A. A. Hoehling, Jr., and John R.
> Van Derlip for Stratton's Independence.
> *404 Assistant Attorney General Graham for Howbert, Collector.
> *406 Messrs. Charles S. Thomas, W. H. Bryant, George L. Nye, William
>P.
> Malburn, William Story, William Story, Jr., and *405 William D. Guthrie
>as
> amici curiae.
>
> *406 Mr. Justice Pitney delivered the opinion of the court:
> This action was brought in the district court of the United States by
> Stratton's Independence, Limited, a British corporation carrying on
>mining
> operations in the state of Colorado upon mining lands owned by itself,
>to
> recover certain moneys paid under protest for taxes assessed and levied
>for the
> years 1909 and 1910 under the provisions of the corporation tax act,
>being s 38
> of the act of August 5, 1909 (36 Stat. at L. 11, 112, chap. 6, U. S.
>Comp.
> Stat. Supp. 1911, pp. 741, 946). The case was tried upon an agreed
>statement
> of facts, from which it appears, as to the year 1909, that the company
> extracted from its lands during the year certain ores bearing gold and
>other
> precious metals, which were sold by it for sums largely in excess of
>the cost
> of mining, extracting, and marketing the same; that the gross sales
>amounted
> to $284,682.85, the cost of extracting, mining, and marketing amounted
>to
> $190,939.42, and 'the value of said ores so extracted in the year 1909,
>when in
> place in said mine and before extraction thereof, was $93,743.43.'
>With
> respect to the operations of the company for the year 1910, the agreed
>facts
> were practically the same, except as to dates and amounts. It does not
>appear
> that the so-called 'value of the ore in place,' or any other sum, was
>actually
> charged off upon the books of the company as depreciation. Upon this
>state of
> facts each party moved the court for a directed verdict, at the same
>time
> presenting for consideration certain questions of law, and among them
>the
> following:
> '1. Is the value of the ore in place that was extracted *407 from the
> mining property of the plaintiff during the years in question properly
> allowable as depreciation in estimating the net income of the plaintiff
>subject
> to taxation under the act of Congress of August 5, 1909 (36 Stat. at L.
>chap.
> 6, p. 11, U. S. Comp. Stat. Supp. 1911, p. 741)?
> '2. Is the right to such credit affected by the fact that the
>plaintiff does
> not carry such items on its books in a depreciation account?'
> The court directed a verdict in favor of the plaintiff with respect to
>certain
> amounts **138 that were undisputed and concerning which no question is
>now
> raised; but directed a verdict in favor of the defendant with respect
>to so
> much of the taxes paid as represented the value in place of the ore
>that was
> extracted during the years in question, overruling the contention that
>such
> value was properly allowable as depreciation in estimating the net
>income of
> the plaintiff. To this ruling proper exceptions were taken. The
>resulting
> judgment having been removed by writ of error to the circuit court of
>appeals,
> that court certifies that the following questions of law are presented
>to it,
> the decision of which is indispensable to a determination of the cause,
>and
> upon which it therefore desires the instruction of this court:
> 'I. Does s 38 of the act of Congress entitled, 'An Act to Provide
>Revenue,
> Equalize Duties, and Encourage the Industries of the United States, and
>for
> Other Purposes,' approved August 5, 1909 (36 Stat. at L. p. 11, chap.
>6, U. S.
> Comp. Stat. Supp. 1911, p. 741), apply to mining corporations?
> 'II. Are the proceeds of ores mined by a corporation from its own
>premises
> income within the meaning of the aforementioned act of Congress?
> 'III. If the proceeds from ore sales are to be treated as income, is
>such a
> corporation entitled to deduct the value of such ore in place and
>before it is
> mined as depreciation within the meaning of s 38 of said act of
>Congress?'
> *408 The provisions of s 38 are set forth in the margin. [FN]
> The principal grounds upon which it is contended that the questions
>ought to
> receive answers favorable to the company are expressed in various
>forms; viz.,
> that mining corporations are sui generis, because the *409 natural
>enjoyment
> of mining lands necessarily results in the waste of the estate; that
>the true
> value thereof is impossible of accurate determination, and hence mining
> corporations are not included in general classifications of
>corporations as
> such classifications are employed in other legislation; that the
>provisions
> of s 38 do not fit *410 the conditions of a mining corporation; that
>such
> corporations are not in truth engaged in 'carrying on business' within
>the
> meaning of the act; that the application of the act to them results in
>a tax
> upon the capital, while as applied to other corporations it does not
>result in
> such a tax, the result being an inequality of operation that is
> *411 inherently unjust; that the proceeds of mining operations do not
> represent values created by or incident to the business activities of
>such a
> corporation, and therefore cannot be a bona fide measure of a tax
>leveled at
> such corporate business activities; that the proceeds of mining
> *412 operations result from a conversion of the capital represented by
>real
> estate into capital represented by cash, and are in no true sense
>income; and
> that to measure the tax by the excess of receipts for one marketed over
>the
> cost of mining, extracting, and marketing the same, is *413 equivalent
>to a
> direct tax upon the property, and hence unconstitutional. Next,
>assuming the
> proceeds of ore are to be treated as income **139 within the meaning of
>the
> act, it is yet insisted that such proceeds result solely from the
>depletion of
> capital, and are pari passu; and hence that a mining the provisions of
>the act.
> We do not think it necessary to follow the argument through all its
> refinements. The pith of it is that mining corporations engaged solely
>in
> mining upon their own premises have but one kind of assets, and that in
>the
> ordinary use of them the enjoyment of the assets and the wasting
>thereof are in
> direct proportion, and proceed pari passu; and hence that a mining
>corporation
> is not engaged in business, properly speaking, but is merely occupied
>in
> converting its capital assets from one form into another, and that a
>tax upon
> the doing of such a business, where the tax is measured by the value of
>the
> property owned by the corporation, would be in excess of the
>constitutional
> limitations that existed at the time of the passage of the act of 1909,
>as laid
> down in Pollock v. Farmers' Loan & T. Co. 157 U. S. 429, 39 L. ed. 759,
>15
> Sup. Ct. Rep. 673, s. c., 158 U. S. 601, 39 L. ed. 1108, 15 Sup. Ct.
>Rep.
> 912.
> The peculiar character of mining property is sufficiently obvious.
>Prior to
> development it may present to the naked eye a mere tract of land with
>barren
> surface, and of no practical value except for what may be found
>beneath. Then
> follow excavation, discovery, development, extraction of ores,
>resulting
> eventually, if the process be thorough, in the complete exhaustion of
>the
> mineral contents so far as they are worth removing. Theoretically, and
> according to the argument, the entire value of the mine, as ultimately
> developed, existed from the beginning. Practically, however, and from
>the
> commercial standpoint, the value--that is, the exchangeable or market
>value--
> depends upon different considerations. Beginning from little, when the
> existence, character, and extent of *414 the ore deposits are
>problematical,
> it may increase steadily or rapidly so long as discovery and
>development outrun
> depletion, and the wiping out of the value by the practical exhaustion
>of the
> mine may be deferred for a long term of years. While not ignoring the
> importance of such considerations, we do not think they afford the sole
>test
> for determining the legislative intent.
> As has been repeatedly remarked, the corporation tax act of 1909 was
>not
> intended to be and is not, in any proper sense, an income tax law.
>This court
> had decided in the Pollock Case that the income tax law of 1894
>amounted in
> effect to a direct tax upon property, and was invalid because not
>apportioned
> according to populations, as prescribed by the Constitution. The act
>of 1909
> avoided this difficulty by imposing not an income tax, but an excise
>tax upon
> the conduct of business in a corporate capacity, measuring, however,
>the amount
> of tax by the income of the corporation, with certain qualifications
>prescribed
> by the act itself. Flint v. Stone Tracy Co. 220 U. S. 107, 55 L. ed.
>389,
> 31 Sup. Ct. Rep. 342, Ann. Cas. 1912 B, 1312; McCoach v. Minehill & S.
>H. R.
> Co. 228 U. S. 295, 57 L. ed. 842, 33 Sup. Ct. Rep. 419; United States
>v.
> Whitridge **140 (decided at this term, 231 U. S. 144, 58 L. ed. ----,
>34
> Sup. Ct. Rep. 24.
> For this and other obvious reasons we are little aided by a discussion
>of
> theoretical distinctions between capital and income. Such refinements
>can
> hardly be deemed to have entered into the legislative purpose. Of
>course, if
> it were demonstrable that to read the act according to its letter would
>render
> it unconstitutional, or glaringly unequal, or palpably unjust, a
>reasonable
> ground would exist for construing it according to its spirit rather
>than its
> letter. But in our opinion the act is not fairly open to this
>criticism. It
> is not correct, from either the theoretical or the practical
>standpoint, to say
> that a mining corporation is not engaged in business, but is merely
>occupied in
> converting its capital assets from one form into another. The sale
>outright of
> a mining property might be fairly described as a mere conversion of the
>capital
> from land *415 into money. But when a company is digging pits, sinking
> shafts, tunneling, drifting, stoping, drilling, blasting, and hoisting
>ores, it
> is employing capital and labor in transmuting a part of the realty into
> personalty, and putting it into marketable form. The very process of
>mining
> is, in a sense, equivalent in its results to a manufacturing process.
>And,
> however the operation shall be described, the transaction is
>indubitably
> 'business' within the fair meaning of the act of 1909; and the gains
>derived
> from it are properly and strictly the income from that business; for
>'income'
> may be defined as the gain derived from capital, from labor, or from
>both
> combined, and here we have combined operations of capital and labor.
>As to the
> alleged inequality of operation between mining corporations and others,
>it is
> of course true that the revenues derived from the working of mines
>result to
> some extent in the exhaustion of the capital. But the same is true of
>the
> earnings of the human brain and hand when unaided by capital, yet such
>earnings
> are commonly dealt with **141 in legislation as income. So it may be
>said of
> many manufacturing corporations that are clearly subject to the act of
>1909,
> especially of those that have to do with the production of patented
>articles;
> although it may be foretold from the beginning that the manufacture
>will be
> profitable only for a limited time, at the end of which the capital
>value of
> the plant must be subject to material depletion, the annual gains of
>such
> corporations are certainly to be taken as income for the purpose of
>measuring
> the amount of the tax.
> It seems to us that the first two questions certified must be answered
>in the
> affirmative principally for two reasons. First, because mining
>corporations
> are within the general description of s 38, which comprises 'every
>corporation,
> joint stock company, or association organized for profit, and having a
>capital
> stock represented by shares, . . . and engaged in business in any state
>or
> territory of the United *416 States;' and, secondly, because the act
> specific those classes of corporations that are to be exempt from its
> operation, and mining corporations are not among them. Those exempted
>are
> labor, agricultural, or horticultural organizations, fraternal
>beneficiary
> societies, orders or associations operating under the lodge system,
>domestic
> building and loan associations, corporations and associations organized
>and
> operated for religious, charitable, or educational purposes, etc.
>Moreover,
> the section imposes 'a special excise tax with respect to the carrying
>on or
> doing business by such corporation,' etc. That mining companies are
>doing
> business, within the fair intent and meaning of this clause, seems to
>us
> entirely plain, for reasons already given. The conduct of such
>business
> results in profit, for it cannot be seriously contended that the ores
>are not
> worth more at the mine mouth than they were worth in the ground, plus
>the cost
> of mining. Corporations engaged in such business share in the benefits
>of the
> Federal government, **142 and ought as reasonably to contribute to the
> support of that government as corporations that conduct other kinds of
> profitable business.
> As to what should be deemed 'income' within the meaning of s 38, it of
>course
> need not be such an income as would have been taxable as such, for at
>that
> time (the 16th Amendment not having been as yet ratified) income was
>not
> taxable as such by Congress without apportionment according to
>population, and
> this tax was not so apportioned. Evidently Congress adopted the income
>as the
> measure of the tax to be imposed with respect to the doing of business
>in
> corporate form because it desired that the excise should be imposed,
> approximately at least, with regard to the amount of benefit presumably
>derived
> by such corporations from the current operations of the government. In
>Flint
> v. Stone Tracy Co. 220 U. S. 107, 165, 55 L. ed. 107, 419, 31 Sup. Ct.
> Rep. 342, Ann. Cas. 1912 B. 1312, it was held that Congress, in
>exercising
> the right to tax a legitimate subject of taxation as a franchise *417
>or
> privilege, was not debarred by the Constitution from measuring the
>taxation by
> the total income, although derived in part from property which,
>considered by
> itself, was not taxable. It was reasonable that Congress should fix
>upon gross
> income, without distinction as to source, as a convenient and
>sufficiently
> accurate index of the importance of the business transacted. And from
>this
> point of view, it makes little difference that the income may arise
>from a
> business that theoretically or practically involves a wasting of
>capital.
> Moreover, Congress evidently intended to adopt a measure of the tax
>that
> should be easy of ascertainment and simply and readily applied in
>practice.
> The act prescribed that the tax should be 'equivalent to one per centum
>upon
> the entire net income over and obove $5,000 received by it from all
>sources
> during such year, exclusive of amounts received by it as dividends upon
>stock
> of other corporations,' etc., or, with respect to foreign corporations,
>'upon
> the amount of net income over and obove $5,000, received by it from
>business
> transacted and capital invested within the United States,' etc. And
>the net
> income was to be ascertained by taking, first, the 'gross amount of the
>income
> of such corporation . . . received within the year from all sources,'
>or, in
> the case of foreign corporations, 'from business transacted and capital
> invested within,' etc., and deducting therefrom losses sustained,
>interest
> paid, etc. And the return was to be made under oath by the president
>and
> treasurer, or other officers having like duties, indicating in the
>clearest
> manner that it was to set forth data that with proper accounting would
>appear
> upon the books of the corporation. We have no difficulty, therefore,
>in
> concluding that the proceeds of ores mined by a corporation from its
>own
> premises are to be taken as a part of the gross income of such
>corporation.
> Congress no doubt contemplated that such corporations, amongst others,
>were
> doing business *418 with a wasting capital, and for such wastage they
>made
> due provision in declaring that from the gross income there should be
>deducted
> (inter alia) 'all losses actually sustained within the year,' including
>'a
> reasonable allowance for depreciation of property, if any,' etc.
> This brings us to the third question, which is whether such a mining
> corporation is entitled to deduct the value of ore in place and before
>it is
> mined, as depreciation within the meaning of s 38. This question,
>however, is
> to be read in the light of the issue that is presented to the circuit
>court of
> appeals for determination, as recited in the certificate. From that
> certificate it appears that the case was submitted to the trial court
>and a
> verdict directed upon an agreed statement of facts, and in that
>statement the
> gross proceeds of the sale of the ores during the year were diminished
>by the
> moneys expended in extracting, mining, and marketing the ores, and the
>precise
> difference was taken to be the value of the ores when in place in the
>mine.
> That we do not misconstrue the certificate, and that, on the contrary,
>the
> parties advisedly adopted this definition of 'value of the ore in
>place,' is
> apparent not only from the form of the agreed statement of facts, but
>from the
> arguments presented here in behalf of the plaintiff. The contention is
>that if
> the proceeds of ore sales are to be treated as income, the value of the
>ore in
> place and before it is mined is to be deducted as depreciation, and
>that such
> value is to be arrived at by the process indicated. Briefs submitted
>in behalf
> of amici curioe have suggested other modes for determining
>depreciation; but
> plaintiff stands squarely upon the ground indicated by the certificate,
>as the
> following excerpts from the brief will show: 'Assuming, then, that the
> proceeds of ore are to be treated as income within the meaning of the
>act, we
> submit that such proceeds result solely from depletion of capital, and
>are
> therefore deductible as depreciation under the *419 provisions [of the
>act]
> set out above. . . . And we contend that if a part of the capital
>assets are
> removed and sold, the property, as it originally stood, is actually
>depreciated
> in value to the exact extent of **143 such removal. As an actual
>matter of
> experience, the original cost of the property must, from its very
>nature, be
> highly speculative. The values in the property are invisible and
>impossible of
> determination. They may be worth many times the cost, or they may be
>worth
> nothing. . . . The value of the ore in sight does represent a part of
>the
> capital, but there is no warrant for limiting it to this amount, nor is
>there
> any warrant for limiting the value of ore bodies thereafter discovered
>in any
> case to a standard fixed before their discovery, and therefore, of
>necessity,
> purely conjectural. . . . The true capital of a mining corporation is
>the true
> value of the minerals within the limits of its properties, irrespective
>of
> developed ore bodies or those known to exist at any one moment.
>Investigation
> or development may demonstrate the existence of values theretofore
>unknown, but
> this results in no addition to the actual capital. It remains the same
>as it
> was before. . . .' And again: 'With every dollar's worth removed, the
>land
> from which it is taken contains that much less of value; the
>corporation owns
> precisely that much less real property than it possessed before; for
>every
> dollar of cash received it relinquishes an equivalent amount of ore in
>place,
> and makes no gain or profit by the exchange.'
> Reading these extracts in connection with what is contended respecting
>the
> first and second questions,--to the effect that mining corporations are
>not
> 'doing business,' but are merely converting their capital assets from
>one form
> into another,--it is clear that a definition of the 'value of the ore
>in place'
> has been intentionally adopted that excludes all allowance of profit
>upon the
> process of mining, and attributes the entire profit upon the mining
> *420 operations to the mine itself. In short, the parties propose to
> estimate the depreciation of a mining property attributable to the
>extraction
> of ores according to principles that would be applicable if the ores
>had been
> removed by a trespasser.
> It is at the same time obvious that any method of stating the account
>that
> excludes all element of gain from the process of mining must, through
>one
> process or another, exempt mining companies from liability to tax under
>the act
> of 1909 with respect to their mining operations. And so, an
>affirmative answer
> to the third question as propounded would be the same in effect as an
> affirmative answer to the first or the second. For it is a matter of
>little or
> no moment whether it is to be said (a) that mining corporations are not
> 'engaged in business' at all, or (b) that they are engaged in business,
>but the
> proceeds of ore mined are not income, or (c) that such proceeds are
>income, but
> that there must be allowed as depreciation all that part of the
>proceeds which
> remains after paying the bare outlays of the business. In either case
>mining
> corporations would be exempt from the tax.
> In our opinion, there are at least two insuperable obstacles in the
>way of
> returning an affirmative answer to the third question as certified.
> In the first place, it is fallacious to say that, whatever may have
>been the
> original cost of a mining property or the cost of developing it, if in
>fact it
> afterwards yield ores aggregating many times its original cost or
>market value,
> this result merely proves and at the same time measures the intrinsic
>value
> that existed from the beginning. We are here seeking the correct
> interpretation and construction of an act of legislation that was, at
>least,
> designed to furnish a practicable mode of raising revenue for the
>support of
> the government, and to do this in part by imposing annual taxes upon
> corporations organized for profit, and by measuring the amount of the
> contribution *421 to be required from each corporation according to its
> annual income. The act deals with corporations engaged in actual
>business
> transactions, and presumably conducted according to ordinary business
> principles. It was of course contemplated that the income might be
>derived
> from the employment of property in business, and that this property
>might
> become more or less exhausted in the process; and because of this, a
>reasonable
> allowance was to be made for depreciation of it, if any. But plainly,
>we think,
> the valuation of the property and the amount of the depreciation were
>to be
> determined not upon the basis of latent and occult intrinsic values,
>but upon
> considerations that affect market value and have their influence upon
>men of
> affairs charged with the management of the business and accounting of
> corporations that are organized for profit and are engaged in business
>for
> purposes of profit.
> And, secondly, assuming the depletion of the mineral stock is an
>element to be
> considered in determining the reasonable depreciation that is to be
>treated as
> a loss in the ascertainment of the net income of a mining company under
>the
> act, we deem it quite inadmissible to estimate such depletion as if it
>had been
> done by a trespasser, to whom all profit is denied.
> With respect to the proper measure of damages where ore has been
>unlawfully
> mined by one person upon the land of another, there is much conflict of
> authority. Different modes of determining the damages have been
>resorted to,
> dependent sometimes **144 upon the form of the action, whether trespass
>or
> trover; sometimes upon whether the case arose at law or in equity; and
>often
> upon whether the trespass was willful or inadvertent. See E. E. Bolles
> Woodenware Co. v. United States, 106 U. S. 432, 27 L. ed. 230, 1 Sup.
>Ct.
> Rep. 398, and cases cited; Benson Min. & Smelting Co. v. Alta Min. &
>Smelting
> Co. 145 U. S. 428, 434, 36 L. ed. 762, 765, 12 Sup. Ct. Rep. 877, 17
>Mor.
> Min. Rep. 488; Pine River Logging & Improv. Co. v. United States, 186
>U. S.
> 279, 293, 46 L. ed. 1164, 1171, 22 Sup. Ct. Rep. 920; United States v.
>St.
> Anthony R. Co. 192 U. S. 524, 542, 48 L. ed. 548, 555, 24 Sup. Ct. Rep.
>333;
> Martin v. Porter (1839) 5 Mees. & W. *422 352, 2 Horn. & H. 70, 17 Eng.
> Rul. Cas. 841, 10 Mor. Min. Rep. 75; Jegon v. Vivian (1871) L. R. 6 Ch.
>742,
> 760, 40 L. J. Ch. N. S. 389, 19 Week. Rep. 365, 17 Eng. Rul. Cas. 843,
>8
> Mor. Min. Rep. 628; Livingstone v. Rawyards Coal Co. (1880) L. R. 5
>App. Cas.
> 25, 34, 42 L. T. N. S. 334, 28 Week. Rep. 357, 44 J. P. 392, 10 M
>
>
>With Love, Liberty and Justice for All,
>Alex
>http://www.drbraces.com
>e-mail: drbraces@drbraces.com
>
>"When the people fear their government you have tyranny.
>When the government fears the People, you have liberty."
> Thomas Jefferson
>
>Liberty is NEVER an option... only a condition to be lost!
>
>
========================================================================
Paul Andrew, Mitchell, B.A., M.S. : Counselor at Law, federal witness
email: [address in tool bar] : Eudora Pro 3.0.2 on Intel 586 CPU
web site: http://www.supremelaw.com : library & law school registration
ship to: c/o 2509 N. Campbell, #1776 : this is free speech, at its best
Tucson, Arizona state : state zone, not the federal zone
Postal Zone 85719/tdc : USPS delays first class w/o this
========================================================================
Return to Table of Contents for
Supreme Law School: E-mail