3 Cal.2d 83, 14732, Connecticut Gen. Life Ins. Co. v. Johnson

Docket Nº:14732
Citation:3 Cal.2d 83, 43 P.2d 278
Opinion Judge:[9] Preston
Party Name:Connecticut Gen. Life Ins. Co. v. Johnson
Attorney:[7] Raymond Benjamin and Hartley F. Peart for Appellant. [8] U. S. Webb, Attorney-General, and Neil Cunningham, Deputy Attorney-General, for Respondent.
Case Date:April 02, 1935
Court:Supreme Court of California
 
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Page 83

3 Cal.2d 83

43 P.2d 278

CONNECTICUT GENERAL LIFE INSURANCE COMPANY (a Corporation), Appellant,

v.

CHARLES G. JOHNSON, as Treasurer, etc., Respondent.

CONNECTICUT GENERAL LIFE INSURANCE COMPANY (a Corporation), Appellant,

v.

CHARLES G. JOHNSON, as Treasurer, etc., Respondent.

S. F. No. 14732., S. F. No. 14733.

Supreme Court of California

April 2, 1935

In Bank.

Page 84

COUNSEL

Raymond Benjamin and Hartley F. Peart for Appellant. U.S. Webb, Attorney-General, and Neil Cunningham, Deputy Attorney-General, for Respondent.

Page 85

OPINION

PRESTON, J.

This cause is styled a consolidated action by plaintiff, a life insurance corporation, organized under the laws of the state of Connecticut, to recover from the state of California, through the treasurer thereof, certain sums alleged to be overpayments of taxes, made involuntarily under article XIII, section 14 (b) of the California Constitution, which states the rate base for the calculation of such taxes to be the total gross premiums received by the corporation during the period involved from insurance business done in this state. Defendant's demurrer to the complaint in each case was sustained without leave to amend and judgment passed for him. Plaintiff appealed.

The controversy arises over the propriety of the state's action in including within the tax base certain payments made without the state by original insurers to plaintiff at its home office, for reinsurance respecting risks assumed and policies issued and delivered in California. The case brings to the foreground the proper interpretation of the above-mentioned section of the Constitution, which, so far as here material, reads:

"Every insurance company or association doing business in this state shall annually pay to the state a tax of ... per cent upon the amount of the gross premiums received upon its business done in this state, less return premiums and reinsurance in companies or associations authorized to do business in this state; provided, that there shall be deducted from said ... per cent upon the gross premiums the amount of any county and municipal taxes paid by such companies on real estate owned by them in this state. This tax shall be in lieu of all other taxes and licenses, state, county and municipal, upon the property of such companies, except county and municipal taxes on real estate, and except as otherwise in this section provided; provided, that when by the laws of any other state or country, any taxes, fines, penalties, licenses, [43 P.2d 279] fees, deposits of money, or of securities, or other obligations or prohibitions, are imposed on insurance companies of this state, doing business in such other state or country, or upon their agents therein, in excess of such taxes, fines, penalties, licenses, fees, deposits of money, or of securities, or other obligations or prohibitions, imposed upon insurance companies of such other state or

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country, so long as such laws continue in force, the same obligations and prohibitions of whatsoever kind may be imposed by the legislature upon insurance companies of such other state or country doing business in this state."

Appellant states the question involved as follows: "Is the money paid to plaintiff in Connecticut, under an agreement made in Connecticut, for indemnifying another insurance company organized under state laws other than California as against possible loss by that other insurance company under some insurance policy it has written and issued in California, taxable against plaintiff under this provision of the Constitution as 'gross premiums received upon its business done in this state'?"

The facts alleged in one of the complaints (the other being identical save as to the year involved) show plaintiff to be a life insurance corporation regularly organized under the laws of the state of Connecticut, with home office at Hartford, and duly authorized at all times herein to transact business in California. That during the year 1927 plaintiff, acting pursuant to agreements made in 1926 without the state of California, with certain other foreign insurance companies, did, by covenants executed wholly without the state of California, indemnify said insurers against possible loss in part upon insurance risks secured, written and issued in California and for payment therefor received at its home office certain sums commonly styled "reinsurance payments". That for these payments plaintiff issued no policies of insurance to the insurer companies nor to the policyholders and that, respecting said reinsurance, it performed no act of any kind and transacted no business of any...

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