*110On Motion for Rehearing.
(Submitted October 2, 1917. Decided December 12, 1917.)
MR. JUSTICE SANNERdelivered the opinion of the court.
The motion for rehearing in this ease proceeds upon the assumptions that this court by its opinion has overruled Northern Pacific Ry. Co. v. Mjelde, 48 Mont. 287, 137 Pac. 386, and has in effect decided that reservations such as the one here involved are not taxable. The briefest glance at the opinion will suffice to dispel the latter assumption, while the former is equally groundless, as we shall endeavor to show.
In the Mjelde Case two sections of land conveyed to different grantees were involved; one supposed to contain coal, whereas the presence of coal in the other was unknown. The question before the court was “whether that which the company reserved to itself in each of these parcels of land constitutes property which is subject to taxation under the Constitution and laws of this state. ’ ’ The company claimed immunity on the ground that the subject of the reservations — coal in place — is a mine within the meaning of section 3, Article XII, of the state Constitution, taxable as such only when there are net proceeds. Manifestly this did not, and could not, meet the issue, because it ignored the interest in real estate, regardless of coal-content, asserted by the reservations. We held them to be taxable as an interest in real estate, saying, arguendo, that a mining claim is a tract of land to which title and right of possession has been acquired under the mineral or coal land laws of the United States; that a mine, in the revenue sense as employed in section 3, “is a mineral deposit, whether metallic or nonmetallic, developed to the point of production and actually yielding, or capable of yielding, proceeds”; that the character of legislation under which title has been acquired has nothing to do with the existence or nonexistence of a mine; and that coal in place and undeveloped is not a mine. These reflections lead to an interesting situation which may be exemplified as follows: Smith owns a tract acquired under *111the homestead laws, and the assessor thinks it contains valuable deposits of coal; it is not a mining claim, because not acquired under the mineral or coal land laws; it is not a mine, because the deposit has not been developed to the point of production. The assessor, however, rates it not only upon the surface value for agriculture, but additionally upon the supposed value of the coal deposit; Smith is compelled to pay accordingly, but, driven by the exactions, opens up the deposit, brings it to the point of production, makes it capable of yielding proceeds, which proceeds, however, are inadequate to pay the cost of operation; it is then a mine, but not taxable, because there are no net proceeds. Can it be that such a result was within the contemplation of section 3, Article XII? That a burden may be imposed upon Smith in consequence of pure speculation, only to be relieved when, at a further burden, he has shown its utter futility ? In the revenue sense it is doubtless true that a mine is a deposit of coal or mineral developed to the point of yielding net proceeds; but it is no less a mine because development has not reached or has passed that point. The very use of the term “mine” in collocation with the phrase “net proceeds” implies that there may be, as there are, mines with net proceeds, mines without net proceeds, mines with no proceeds at all; and the last are familiar spectacles on many hillsides. In point of fact, the discussion of the meaning of the term “mines” was not essential to the conclusion reached in the Mjelde Case, for several reasons, among them this: There was nothing to show that the assessment had been based, in whole or in part, upon assumed coal or mineral content — -a fact which forms the very foundation of the present controversy. We took occasion to point out, however — and these are the true data of the decision — that the provisions of Article XII of the Constitution, including section 3, are designed to aid, not to prevent, the raising of public revenue; that the reservations constitute property with a value, taxable because not exempt, and that the difficulty which might confront the assessor in ascertaining the value is no bar to such taxation. From these postulates there is no recession in the *112[6] instant case, notwithstanding it is now held that the coal reserved constitutes a mine subject to taxation as such.
That we are justified in the position taken, if not in all the language employed, will, we think, be granted by whoever may consider the premises. The reservation in question is dual: A corporeal hereditament, as to the coal and iron; an incorporeal hereditament, as to the right to enter the lands conveyed, to explore for coal or iron, and to extract the same when found, using so much of the surface as may be necessary. In the nature of things, the latter could not be a mine, but it is property, presumably valuable, not exempt, and therefore taxable as an interest in realty; and the difficulty which may confront the assessor in ascertaining the value can be no bar to such taxation. With the former, however — the corporeal hereditament —the situation is somewhat different. It, too, is property; but it consists, by the hypothesis, of coal or iron in place; coal or iron in place may be a mine in a proper sense of that term (Colorado Coal & Iron Co. v. United States, 123 U. S. 307, 327, 328, 31 L. Ed. 182, 8 Sup. Ct. Rep. 131; Davis v. Weibbold, 139 U. S. 507, 518, 35 L. Ed. 238, 11 Sup. Ct. Rep. 628; 1 Lindley on Mines, 3d ed., 136), and we are convinced that it is such within the meaning of the word as used in section 3 of Article XII.
Distinguished counsel for respondents asserts that the conclusion reached in the opinion ignores or annuls the important phrases, “after purchase thereof from the United States,” and “at the price paid the United States therefor.” Quite the contrary is true. We considered these phrases most carefully, and we give to them the place and meaning which their words and context demand. They have to do with mines and mining claims acquired under the mineral or coal land laws of the United States, and are designed to furnish a basis for taxing the surface only of such lands in the event — frequént, as a matter of fact — that the surface may have no other value. To give them a different application, to say they restrict the net proceeds basis to mines so acquired, would compel the lack of *113uniformity and the unreasonable classification mentioned by the Chief Justice. Under section 3, Article XII, all mines and [7] mining claims are to be taxed; this because they are property, and all property not exempt is subject to taxation. They are to be taxed upon their annual net proceeds without regard to the source of title or to whether the operator has title; if there are no net proceeds, either because development has not progressed so far or for any other reason, then, for the time being, this basis of taxation is in abeyánce. They are also to be taxed upon the value of the machinery and improvements used in connection with them, if there are any. Finally they are.to be taxed upon their surface (a) if bought from the United States, at the price paid therefor, unless (b) such surface is used and has a value for other than mining purposes, in which event they are taxable at such value; or (c) if not bought from the United States, then at the value of such surface considered as real estate, without reference to mineral content below the surface.
It follows, too, that the taxable value of the incorporeal part of the reservation is to be deducted from the whole value of the surface; or, as stated in the opinion, “from the cash value of the land, omitting the deposit from the estimate,” because the rights reserved — apart from the deposit — all relate to the surface and limit the owner’s dominion over the surface.
It is said in the opinion that such value as the surface of a mine or mining claim purchased from the United States may have for other than mining purposes must be added to the purchase price and taxed accordingly. This was an inadvertence. Our view, as stated above, is that the purchase price in such cases is the standard of value, unless the surface is used and has a value for other purposes, in which event the latter is the taxable value.
With the clarification suggested above, we feel constrained to adhere to the decision.
Mr. Chief Justice Brantly and Mr. Justice Holloway concur.