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Show THE SALT LAKE TIMES FRIDAY, MARCH 26, 1976 Utah Supreme Court Opinion MSHIHCIOK BEPORT IN THE SUPREME COURT OF THE STATE OF UTAH ooOoo By Rep. Allan T. Howe The House Interior Committee has reported an in lieu of tax bill, by Congressman Allan Howe, that would increase the federal funds paid to the State of Utah by about $6,280,658 a year. What this bill does," explained Congressman Howe, is provide a method ofcompensating counties for the fact that federally owned lands are tax exempt; the counties would get a payment from the fedeal government in lieu of taxes.' This is of great important to Utah, since our states is nearly 70 percent federally owned. In come counties, the percentage of federally owned land is much higher even than the statewide figure, and this leaves some counties with very little taxable land to bring in revenue." Representative Howe continued, "Of course, counties do now get some payments from the federal government in the form of a share of such things as mineral lease royalties, Bureau of Land Management grazing fees and the like. But when you add up all the revenues collected by all the counties in Utah ffrom the current royalties, it comes out to only about $874,043 a year. Under this bill, all the counties in Utah would collectively receive about $7,154,701 a year. Congressman Howe originally introduced an "In Lieu Tax bill early, last year. "But since that time, he noted, "the bill has gone through several revisions and refinements and what we have now reported out of the Interior Committee, on which I serve, is a committee version' of the bill that provides a method of compensating counties where the federal government is a tax exempt 'landlord,' while at the same time answering the concerns of states where federal ownership of land is minimal. Under my original bill, counties would have simply received a payment equal to what they would have gotten from a private landowner if federal lands were in private hands, but this formula proved unworkable for a variety of reasons. Under the present bill, counties will receive a flat payment per acre and there is a ceiling on how much a county can receive. The ceiling is based on the population of the county. Representative Howe explained that counties could opt to take a payment of 75 cents per acre, in which case they would have to make deductions for payments they currently receive from the federal . government, or they could take a flat payment of 10 cents per acre with no deductions. "For some counties, such as Garfield, Kane, Millard and Wayne counties in Utah, the 10 cents per acre payment, while it sounds low, would actually give them the best deal. "Counties would also have, the option to refuse in lieu payments and simply continue receiving the federal fees they now get if thats to their best advantage. Congressman Howe explained that the ceiling on how much a county can receive through in lieu payments is based on a sliding scale that takes into account the size of the population that the payments will go to. "For instance, he said, "A county with a population of 5,000 or less could receive a payment equal to its population times $50. As population increases, the amount a county could receive per person decreases until you reach the top of the scale, at which point counties with populations of 50,000 or more would receive a payment equal to their populations times $20. Representative Howe pointed out that there are several counties in Utah that would be eligible for all or nearly all the funds allowable on the basis of their populations as determined by the 1970 census. "Garfield would be eligible for $157,850, Kane for $121,050, Millard for $244,580 and Wayne for $74,150, fo example, and all of them would get in lieu payments equal to their ceilings. Some examples of counties that would come veryt close to their allowed ceilings are: Beaver with a ceiling of $190,000, Iron with a ceiling of $365,310, Juab with a ceiling of $228,700, Tooele with a ceiling of $560,170 and Washington with a ceiling of $410,070. Salt Lake County would be eligible for $1,000,000 on the basis of its population, but, since there isnt as high a percentage of federal land in Salt Lake County as there is in many other counties in Utah, Salt Lake would receive only about $68,000. Of course, $68,000 is still a significant amount, Rep. Howe said. The Congressman noted that counties he used in his example are all in Utahs Second Congressional District, but there are many counties in Utahs First Congressional District that would also benefit greatly from his bill. Page Three -- - The Ualvtnlty of Utah, corporal and politic, Plaintiff and Appellant, v. Sail Lako County and Picker a Naur York corporation, Dafeadanta and R.. pendant., Picker support of the position of plaintiff University. Therein it was held proper to Impose a tax upon properly used by the plaintiff corporation though ths title was In the United States. It is urged this supports tha principle that the taxation is determined on the basis of the realities of the possession and use of tha property, rather than upon tha basis of the legal title. It will be noted that that case was governed by Section U.C.A. 1953, the pertinent portion of which 1st No. 14190 From and after the affective data of this act there is Imposed and thars shall bo collected a tax upon the possession or other beneficial use enjoyed by any private Individual, asso- elation, or corporation of any property, real or personal, which for any reason Is exempt from taxation, when such proo-ort- v is used in connection with a business conducted for profit. . FILED March 16, 1976 a New York corporation, Croaa-Plalatl- Allan E, Meehans, ff, Clark Salt Lake County, Cron CROCKETT. -- Defendant. Juctlcct Plaintiff, Ualvcralty of Utah, nought a ruling that certain oqulpmaat It had lea.ed from Picker Company la exempt from being taxed hy defendant, Salt Lako County. It. argument la that became It obtained thla laaeo, with aa option to purcha.c, coupled with proparty under a the facte that It ha, tha poaccialoa and u.e of the property, and that U ha. agreed to pay the tax, thereon, inch loaaod property should bo conaLdored property of the University. From a luminary judgment rejecting plaintiff, contention it appeal. The lease provided that tha equipment would be poi.ae.ed and need by the Unlvoralty for a period of five yaare at a rental to ha paid each month lor tha ilnty month; that the till would remain lu tha la. .or and at tha end of the lea. would bo returned la good condition, reaeoaabla wear and tear xcoptad; that la addition to tha rental, the lee, Unlvaralty of Utah, would pay all tanae, or rolmburia tha laaior for any tanae levied or assessed and paid by the lessor. Tha trial court correctly ruled that because of the terms of the less the University was obliged to pny Picker tha amount of tanas assessed and paid on the aquipmant. That ruling is not Involved In this appeal. Pertinent to the problem here presented I Article XHl, Section 2, of tha Utah Constitution which states in part: The property of the state, counties, cities, towns, school district, municipal corporations and public libraries, . , . shall be exempt from taxation . . ay five-ye- ar 1. ay Neither tha case cited, nor tha statute quoted, has sppllcation hern. Tha University Is not a "private individual" nor is tha property "ussd in connection with a business conducted for profit." A css whose facts maka U analogous la principle to the Instant ana is Hoover Equipment Company v. Board of Tax Roll Corrections of Adair There tha plaintiff had leased road building and maintenance aquipCounty. mant to counties. It challenged the tax assessment on tha ground that tha ca unties wars In practical effect tha owners of the property. Under a constitutional provision similar to our own ths court reasoned that the exemption of "all property of the counties" means that tha property must be owned by tha county. Wa agree with that reasoning. Tha University has no right in tha property other than as a lasses. At the end of the ported, it can declds to purchase tha property or not, according to its than needs and desires. In view of tha fact that th teas provides that title to tha property shall remain in tha Picker Company, tha taxes are assassabla against that company, and in caso of nonpayment of taxes, it Is tha ownership interest of that company that would bn forfaited and sold. It is our opinion that under tha type of lease arrangement described ths University has no taxable ownership in th property; and that neither by tha lease of tha equipment, nor by Its express agreement to pay tha taxes thereof, 1 did It extend it exempt status to the aquipmant. (All nmphasls addad.) Affirmed. No costs awarded. five-ye- ar ay VE CONCUR: ... This Is Implemented by Section U. C. A. 1953: The property of the institutions governed .by the Board of Hlghor Education shall be exempt from all taxes and assessment. Defendant County concedes ths fact that tha Unlvaralty of Utah Is a constitutionally ersatad institution of the State1 whose property Is exempt from taxation. The University argues that tha phrase "property of the institutions11 Is different from saying "property owned by the Institutions"; and from this proceeds to the hypothesis that because tha leased equipment is in tha possession and use of tha University under the lease; and that the University has agreed to pny the lessor the taxes thereon, tha equipment should bs considered In practical effect to be the "property of the Institution" (the Univarsity) and exempt from taxation under foe constitutional and statutory provisions quoted above. The case of Tblokbl Chemical Corporation v. Peterson 3. So also Broadway and Fourth Avenua Realty Company v. Louisville, 303 Kyntucky 202, 197 S. W. 2d 231; Mitchell Aaro, Inc. v. Milwaukee, 42 Wl.2d 160 N.W.Zd 113. 4. 436 P. 2d 443 (Okie. 1967). 3. Sac City of Tampa v. Dal Webb Corporation, 13 Aril. 597, 400 P. 2d 10, is cited in No. 14190 1N THE SUPREME COURT OF THE STATE OF UTAH ..... ooOoo Fade ml Dspoait Insurance Corporation, Successor in Interest to First National Bank of Coalvillo, Plaintiff and Respondent, -- 2- Tha trial court thought the obligation was joint and several and so bald as a matter of law. Whether a contract Is Joint, Joint and several, or sovoral, depends npon the conatrnctlon of tha language used and tea intention of tha parties a manifested by tha language used. That language must bo fattened by tha court. 4 Ordinarily, a promise by two or more in tha singular number la prime facia several, white n promise in tha plural is prime facte Joint. Ns. 14090 v. March 15. 1974 Tha language used in tha agreement appears te be ambiguous in that tha plural verb "agraa" is ussd is several places, a. g. , "the aadsvsigasd agraa"; white tha last paragraph has tha words, "Tha undersigned farther Allan E. Macham, Clark sot. FILED Bismarck Investment Corporation, a corporation, and R. M- - Hart. Defendants and Appellant. ELLETT. Justice: This is aa action to enforce a guaranty agreement sigaod by Bismarck Investment Corporation and R. M. Hart. Tbs case was triad to tha court, sitting without n jury, and Judgment was entered for plaintiff against R. M. Hart in tha sum of (214, 466. Bismarck Investment Corporation filed a petition for an arrangement in bankruptcy undor Chapter 11 and as a consequence all proceedings la this case against Bismarck have been stayed. Mr. Hart contends fast tha guaranty la a joint affair, and tharofora agrees. " However, w bother the guaranty bo Joint or Joint and savural doaa In our opinion, maka any difference in this case. There is aa question but what lass than all joint obligors can bo euad when soma cannot ha found or brought within the jurisdiction of ths court. This is a proper proceadlag, for tha ones sued ara obligated on tha document; and if judgment wars takan against all who wars Jointly obligated, th Judgment creditor could get satisfaction from any ana of ths debtors. The oaa who was com pa lied to pay tha joint obligation would have bis rights te have contribution against his joint obligors, and this would ba true whether tha judgment was against them or not. Furthermore, whara ana obligor sots up a defense which applies only to himself such as infancy, bankruptcy, insanity, ate. , a Judgment of dismissal ta his favor docs not discharge tha others from thair joint obligation. this action cannot go forward against him a Iona, hut must ba stayed until tha bankruptcy proceedings ara terminated in the federal courts. Ha further The bankruptcy proesading takan by tha corporate defendant may taka a long time and w ar unabla to so how Mr. Hart is ta any werso poaltian by roason of Am fact that tha corporate defendant has secured a delay ta trial. The matter would have boon the same had a judgment bean obtained against both defendants and thereafter ana had taken out bankruptcy. last maatiooed contention Is without merit far savural reasons. In tha first placa ths trial court waa not apprised of tha axistaaca of tha security. In tha next place it is not shown that tho.sscurity is actually in Mr. Hart aba cbima feat th trial court should hero dtsndssad tha action and bread tha plaintiff to fib it ta tho federal district court. Thara is no merit te this contention. Tha federal statute which Granted tha pbiatUf provides font it has power; "Fourth. Ta sua and ba suad. complain and defend, in any court of law or equity, state or federal. contends that inasmuch as there is security in tha form of 1, 629 shares of stack tat First American Bank and Trust Company, hold by plaintiff, that thnra can ba no personal judgment until the security has been exhausted. Tha existence or even if it has a valua. In the third pines tha appellant falsely assumes that tha law of mortgages on realty should apply ta personal securities. Prior to 1965 our statute provided that there could ba but ana action of any right secured by a mortgage upon real or personal for the recovery 1 la 1965 the law was amended to one lode the provision relating property. to mortgagor on personal property, b the fourth place tha bares of stock worn not mortgaged in this matter they wars pledged to the plaintiff, and of th Uniform a pledge is not tha soma a a mortgage. Sactioa Commercial Coda1 provides for tha remedies of a sacarad parson, and says: cross-examin- WE CONCUR; Ha may reduce his claim to judgment, foreclose or otherwise aaforca tha security interest by any available Judicial procedure. F. Henri Hurled, aae J. Alba Whan a secured party has reduced Ms claim ta Judgment tha liaa of any lavy which may ho made upon Ms collateral by vlrtus of any execution based upon tha judgment shall relate hack to tha date of tha perfection of th saenrity Interest in such collateral. Tha only contention made by tha appellant In the trial court was that tha obligation was joint, and sines the plaintiff could not procaad against the corporate defendant, it likewise could not proceed asainst him. 1. U.C.A. 1953, L.U. 1951 Ch. 51. sub. ch. 37, suction 1. 2. Campbell v. Peter, 101 Utah 565, 162 P.2d 754 (1945). 3. U.C.A. 1953, Replacement Vol. 7B. ment has the knoriedge and experience to work with you and your attorney to set up and administer a practical estate. Its aQ.part of being a full sendee bank. For all details on how we can help you, Just call up and ask. i tha witnesses b tha trial of this matter Mr. Hart for tha plaintiff, but offered no evidanc aa bis own behalf. Wo do not tho think court errod ta refusing to stay th proceedings as te Mr. Hart and tha judgment is tharofora affirmed. Casts ara awarded to tho respondent. 7QA-9-S- A will has the power to do marvelous things. Like taking care of your family In your absence. And assuring that your estate won't be tied up for months unnecessarily in probate court At First Security Bank, our Trust Depart- iff Chief Justice Crockett, Justice R. L. Tuckott, Justice Richard J. Maughan, Justice 4. 17A C.J.S. Cutracts, Sac. 350. Lovell v. Commonwealth Thread Co. , 172 6. 2 Willistaa Cutracts 3rd Ed. Sec. 327. 7. U.S.C.A., Titta 12, Sac. 1119. 5. u No. 1409 N. E. 77 (Mass. 1930). -- 2- BLM Expects Land Improvement Funds The grazing fee on lands managed by the BLM was 'increased from $1 to $1.51 per animal unit month (AUM). The grazing fee on the National Forests in the six western Forest Service regions was Paul L. Howard, BLM state also increased from $1.11 to $1.60 director for Utah, said these addi- per AUM. An AUM is the equivaltional improvement funds will re- ent of grazing a mature cow, five sult from the 1976 fee increase for sheep, or one horse for one month. Mr. Howard said the projected grazing livestock on additional funds are based on the lands in the state. Approximately $200,000 in additional funds for range improvements are expected to become available to the Bureau of Land Management in Utah next year. BLM-admin-ister- ed $390,000 received for range improvements in Utah during fiscal year 1976. With the 51 percent increase added on, approximately $590,000 would be used for the improvement of range on Utahs national resource bunds in 1977. This is assuming that the number of livestock grazed on lands in Utah stays near the same as it was in 1975, added Mr. Howard. BLM-admin-ister- ed |