Glass v. Prudential Ins. Co. of America

Decision Date26 April 1945
Docket Number3 Div. 430.
Citation22 So.2d 13,246 Ala. 579
PartiesGLASS, Superintendent of Insurance, v. PRUDENTIAL INS. CO. OF AMERICA.
CourtAlabama Supreme Court

Wm N. McQueen, Acting Atty. Gen., and J. W. Arbuthnot and John O. Harris, Asst. Attys. Gen., for appellant.

Rushton, Weil, Stakely, Johnston & Williams and Hill, Hill, Whiting & Rives, all of Montgomery, for appellee.

GARDNER Chief Justice.

Complainant the Prudential Insurance Company of America, a foreign corporation, is now and has been for a long number of years engaged in a rather extensive insurance business in the State of Alabama. The privilege or license tax for conducting its business in this state is fixed in Title 51, § 816, Code 1940, the sum to be paid being largely in excess of that required of domestic insurance companies engaged in business in the state, as set out in § 819, Title 51, Code 1940. In June 1944, the Supreme Court of the United States in United States v. Southeastern Underwriters Ass'n, 322 U.S. 533 64 S.Ct. 1162, 88 L.Ed. 1440, held that insurance companies which conduct a substantial part of their business transactions across state lines are engaged in commerce among several states and subject to regulation by Congress under the commerce clause. Acting upon the theory that the State is not permitted to discriminate against interstate commerce in favor of local commerce (Art. 1, § 8; Amend. Art. 14, § 1, United States Constitution; Hale v. Bimco Trading, Inc., 306 U.S. 375, 59 S.Ct. 526, 83 L.Ed. 771; Best & Co. v. Maxwell, 311 U.S. 454, 61 S.Ct. 334, 85 L.Ed. 275), complainant filed this bill on February 26, 1945, against Brooks Glass, as superintendent of Insurance of the State of Alabama, seeking a declaratory judgment to the effect that the imposition of the tax was as against complainant unconstitutional and void, and in aid of the suit sought the issuance of an injunction against the defendant from cancellation of its license to do business in Alabama because of the failure to pay the tax required to be paid within the first sixty days of the calendar year at the time a verified statement is filed showing the total amount of premiums received by it for business done in this state for the preceding calendar year. Title 51, § 815, Code 1940. The application for temporary injunction was set down for hearing, as authorized by the statute, and upon consideration thereof the temporary writ was issued as prayed. From this decree the defendant has prosecuted the appeal.

For the protection of its right to do business a temporary injunction pendente lite was proper without the necessity of a decision in favor of the complainant upon the merits of the cause. Clearly there was a substantial question here to be decided and if the bill is properly filed, a temporary injunction to preserve the status quo was in order. Coxe, Ex'r, v. Huntsville Gaslight Co., 129 Ala. 496, 29 So. 867. As observed in Berman v. Wreck-a-Pair Bldg. Co., 234 Ala. 293, 175 So. 269, such an injunction does not depend on any advance finding for complainant on the merits. See also Odoms v. Woodall, Ala., 20 So.2d 849. It therefore appears that the real merits of the controversy are not here for review. It was so treated on oral argument and in brief and will be so considered here.

Construing our declaratory judgment statute, Code 1940, Title 7, § 156 et seq., this court has held resort could not be had thereto if adequate relief and appropriate remedy are presently available to the complainant party through the means of other existing forms of action or proceedings, noting some few exceptions not here pertinent. State v. Inman, 238 Ala. 555, 191 So. 224. At the time this bill was filed, there was lacking only a few days of the expiration of the sixty-day period (that is, dating from December 31, 1944) within which the complainant was due to pay the tax and file the required statement. If, therefore, there was a plain and adequate remedy at law, the declaratory judgment statute would be to complainant of no avail, nor would the bill have equity otherwise on the broad ground of public policy, which cannot lend its sanction to any remedial proceeding which might clog the machinery of civil administration. This court has often held that a taxpayer cannot resort to a court of equity to enjoin the collection of taxes claimed to be illegal unless with the illegality of the tax there is connected some recognized ground of equitable jurisdiction. Crow, Tax Collector, v. Outlaw, 225 Ala. 656, 145 So. 133. But as observed in Nachman v. State Tax Commission, 233 Ala. 628, 173 So. 25, 29, if the taxpayer should be required to pay the tax under protest without an adequate and complete remedy at law for its recovery if its payment was illegally exacted, this would justify the interposition of a court of equity to restrain the collection until there could be a judicial determination of the legality of the tax. 'Ordinarily, however, a taxpayer will not be allowed to tie up the revenues of the State--its very lifeblood, without which it cannot function--unless, in addition to the illegality of the tax, there is connected with it some ground for equitable interposition.' Nachman v. State Tax Commission, supra.

This case as here presented, therefore, resolves itself into a single question--was there a plain and adequate remedy at law? The Legislature attempted in what is now §§ 890 and 891, Title 51, Code 1940, to provide a remedy for a refund of the taxes so paid, if found to be illegally exacted of the taxpayer. This court in considering these provisions which were formerly§§ 379 and 380, General Acts 1935, p. 568, concluded and so held that the plan therein outlined contravened Art. 1, § 14, Constitution of 1901, to the effect that the State of Alabama should never be made a defendant in any court of law or equity. Raible Co. v. State Tax Commission, 239 Ala. 41, 194 So. 560. And the holding of this court has likewise been to the effect that this constitutional immunity from being sued cannot be waived by the State. Alabama Industrial School v. Adler, 144 Ala. 555, 42 So. 116, 113 Am.St.Rep. 58; State Docks Commission v. Barnes, 225 Ala. 403, 143 So. 581. In discussing the invalidity of the refund statute as found in §§ 890 and 891, supra, this court laid stress upon the fact that the taxes paid under protest were to be distributed to the various governmental agencies and that upon a judgment being rendered as to the illegality of the taxes, the same were to be repaid by the State or the agencies receiving the same. In an effort to remedy the difficulty as found by the court of the refund statute of 1935, the Legislature amended §§ 890 and 891, supra, by an act approved July 10, 1943, General Acts, 1943, p. 369, which amendatory statutes now appear in the 1943 Cumulative Pocket Part, Code 1940, as §§ 890 and 891. If these amended statutes are held to be valid, we are of the opinion that they present a plain and adequate remedy at law. They are designed to cover license taxes of this nature. The amended § 890 gives the taxpayer who claims that the tax is either excessive or invalid in whole or in part, the right to pay such tax under protest, with the duty of the official receiving the same to note on the receipt that it was so paid under protest. Within sixty days after the protest payment, the taxpayer must commence suit against the officer for the recovery of such excessive or invalid tax, as the case may be, and unless the suit is commenced within that period of time, the taxpayer should be deemed to have waived the payment under protest and to thereby become a voluntary taxpayer. If suit is filed for the recovery of any tax paid under protest within the prescribed time and it is determined that the tax so paid was excessive or illegal, it should be refunded as provided in amended § 891. This amended section requires that the officer receiving the money which is paid under protest shall certify such sum of money to the State Treasurer with notice to the Treasurer it was paid under protest by the identified taxpayer and the Treasurer is required to hold such sum of money in an identified suspense account until it is judicially determined whether the tax was legally collected or the taxpayer abandons recovery of the money by failure to bring suit within the period of sixty days after payment thereof. The Treasurer is required to give notice to the Comptroller that such sums were set up in a suspense account and are, therefore, not available for allotment, allocation or disbursement until the validity of the tax is determined by the court. If in the suit brought by the taxpayer it is determined that any portion of the tax paid under protest was excessive or illegally assessed or collected, the Comptroller shall issue his warrant upon the Treasurer for a refund of such sum.

It is first insisted that §§ 890 and 891, as amended, are unconstitutional as violative of § 45 of the Constitution. This argument is based upon the theory that the title of the Act of 1943 was 'To amend Sections 890 and 891, Title 51 of the Code of Alabama of 1940,' and that as these sections thus sought to be amended had been declared unconstitutional, the title is defective and does not meet the requirements of § 45. That a section of the Code may be amended by reference to the section number only is well settled by our decisions. Of course, it is understood that the amendatory act must be germane to, supported by and supplemental to the sections of the act sought to be amended. State ex rel. Troy v. Smith, 187 Ala. 411, 65 So. 942. As observed in Harris v. State, 228 Ala. 100, 151 So. 858, 862, the 'theory is that the reference is for identification. When so identified, the amending act is complete in itself, and is...

To continue reading

Request your trial
58 cases
  • Clark Const. Co., Inc. v. Pena
    • United States
    • U.S. District Court — Middle District of Alabama
    • April 18, 1996
    ...of Educ., 280 Ala. 635, 197 So.2d 428 (1967); Southall v. Stricos Corp., 275 Ala. 156, 153 So.2d 234 (1963); Glass v. Prudential Ins. Co., 246 Ala. 579, 22 So.2d 13 (1945). The Supreme Court of Alabama has recently emphasized that where a state official acts "willfully, maliciously, illegal......
  • Donoghue v. Bunkley
    • United States
    • Alabama Supreme Court
    • February 28, 1946
    ...was the declaratory judgment statute was not available. We are of the opinion the instant case is readily differentiated from Glass v. Prudential Ins. Co., supra, and presents situation justifying resort to this remedial statute. And upon the question of the application of section 106 of th......
  • Patterson v. Gladwin Corp.
    • United States
    • Alabama Supreme Court
    • May 17, 2002
    ...787 [(1944)]. (2) Actions brought to enjoin State officials from enforcing an unconstitutional law. Glass v. Prudential Insurance Co. of America, 246 Ala. 579, 22 So.2d 13 [(1945)]....(3) Actions to compel State officials to perform ministerial acts. Curry v. Woodstock Slag Corp., 242 Ala. ......
  • Magee v. Boyd
    • United States
    • Alabama Supreme Court
    • March 2, 2015
    ...did not have the effect of validating an unconstitutional statute. 206 Ala. at 409, 90 So. at 785-86. In Glass v. Prudential Insurance Co. of America, 246 Ala. 579, 22 So. 2d 13 (1945), superseded by statute on other grounds as recognized by Mooney v. Weaver, 262 Ala. 392, 79 So. 2d 3 (1955......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT