Arthur Goldberg,
Paragon Jewel Coal Company v. Commissioner of Internal Revenue…
“ I cannot agree with the Court's decision that a lessee of mineral lands, whose total investment may consist merely of a promise to pay a small royalty for minerals produced, is entitled to the full allowance for depletion and that no share of this allowance is to be apportioned to a mining company with substantial investment in digging and maintaining a particular coal mine. ”
Arthur Goldberg,
Paragon Jewel Coal Company v. Commissioner of Internal Revenue…
“ I conclude that the depletion allowance should be properly apportioned between the lessee and the coal mine operators. The operators were not employees or independent contractors hired to perform services. Unlike a man hired to mow a lawn, or shovel snow, or strip-mine coal, they made a substantial investment in opening and developing each individual mine and could look only to proceeds of the sale of coal extracted for a return of that investment. ”
Arthur Goldberg,
Paragon Jewel Coal Company v. Commissioner of Internal Revenue…
“ The Court tries to assimilate this case to Parsons by stating that Paragon could have terminated the interest of the operators in the coal at any time and that the rators had no right to mine their coal veins to exhaustion. The actual facts, however, reveal that Paragon has never taken steps, nor given the slightest information that it might take steps, to terminate anyone's contract. As a matter of practical fact the operators could count on mining the coal vein so long as coal remained and selling that coal to Paragon at a rate which varied slightly with the market price of coal. ”
