Cochrane v. BANKERS'LIFE CO.
| Decision Date | 14 February 1929 |
| Docket Number | No. 8022.,8022. |
| Citation | 30 F.2d 918 |
| Parties | COCHRANE, Insurance Com'r of Colorado, et al. v. BANKERS' LIFE CO. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Jean S. Breitenstein, of Denver, Colo. (William L. Boatright and Oliver Dean, both of Denver, Colo., on the brief), for plaintiffs in error.
L. Ward Bannister, of Denver, Colo. (Samuel M. January, of Denver, Colo., and R. B. Alberson, of Des Moines, Iowa, on the brief), for defendant in error.
Before BOOTH, Circuit Judge, and POLLOCK and DEWEY, District Judges.
This is an action originally brought by the Bankers' Life Company, defendant in error, to recover from the state of Colorado certain taxes which were paid under protest, and involves the construction of certain Colorado and Iowa statutes.
To an opinion of this court filed November 2, 1928, affirming the action of the District Court in permitting a recovery of the taxes so paid under protest, the plaintiff in error has filed a petition for rehearing, calling the court's attention to an error in the statement of certain facts made by the writer of the opinion.
The principles involved are the same, but accuracy of a statement of the facts requires that the former opinion be and the same is hereby withdrawn, and the following opinion substituted therefor:
The action is brought against the insurance commissioner and treasurer of the state of Colorado, and sets forth that the Bankers' Life Company is an Iowa corporation authorized and qualified to carry on the business of life insurance in Colorado; that the company was incorporated in 1887 under an Iowa statute as an assessment life insurance association, and until October, 1911, transacted business in Iowa and Colorado as an assessment association; that in 1911 the association amended its articles of incorporation, so as to permit it "to transform this corporation into a legal reserve or level premium insurance company," under the name of Bankers' Life Company, and with the provision in the articles of incorporation that it "shall be a continuation of the original corporation and retain all of its original rights, powers, privileges, and franchises so far as may be necessary to carry out all its contracts heretofore made with its members including the issuance of certificates upon examinations made at the time these articles become in force as such association, and this amendment shall not be construed to affect existing suits, rights or contracts; and these articles are and shall be construed as a substitute for the original articles except in so far as the rights of existing members are concerned."
Since 1911 the company has engaged in life insurance business in Colorado under both the assessment and level premium plan. During the years 1921 to 1925, inclusive, the assessment premiums collected by the company in the state of Colorado amounted to $312,750.74, the level premiums amounted to $1,542,043.06, making a total of $1,854,793.80. The normal tax on insurance companies under the Colorado law required a payment of 2 per cent. as taxes on all insurance premiums received by an insurance company each year.
The state of Colorado has a retaliatory statute (C. L. § 2550) as follows:
"Whenever, by the laws of any other state or country, any taxes, fines, penalties, licenses or fees in addition to or in excess of those imposed by the laws of this state upon foreign insurance companies and their agents doing business in this state, are imposed on insurance companies of this state and their agents doing business in such other state or country, or whenever any conditions precedent to the right to do business in such other state or country are imposed by the laws thereof beyond those imposed upon such foreign companies by the laws of this state, the same taxes, fines, penalties, licenses, fees and conditions precedent shall be imposed upon every similar insurance company of such other state or country and their agents doing or applying to do business in this state, so long as such foreign laws remain in force; and upon the failure of any such foreign company to comply therewith, the commissioner of insurance of this state shall revoke its certificate or license to do business in this state, or shall refuse to grant such license or certificate in the first instance."
The laws of Iowa impose a premium tax of 2½ per cent. on foreign companies, but exempts, it is claimed, companies such as the company of the defendant in error, so far as the assessment business is concerned.
The statute (section 1333 of the Iowa Code of 1897), so far as pertinent, provides:
"Every insurance company incorporated under the laws of any state of the United States other than the state of Iowa, not including associations operating under the provisions of chapter seven, title nine of this Code, or fraternal beneficiary associations doing business in the United States, shall, at the time of making the annual statements as required by law, pay into the state treasury as taxes two and one-half per cent. of the gross amount of premiums received by it for business done in this state, including all insurance upon property situated in this state and upon the lives of persons resident in this state during the preceding year."
"Chapter seven, title nine of the Code," referred to in the above quotation, is the law under which the plaintiff company was originally incorporated, and refers to and defines insurance associations doing business under an assessment plan.
Iowa has two retaliatory laws. Section 1736 of the Iowa Code of 1897 is as follows:
"When, by the laws of any other state, any taxes, fines, penalties, licenses, fees, deposits of money, securities or other obligations or prohibitions are imposed, or would be imposed, on insurance companies of this state doing or that might seek to do business in such other state, or upon their agents therein, so long as such laws continue in force the same obligations and prohibitions of whatever kind shall be imposed upon all insurance companies of such other state doing business in this state or upon their agents here."
Section 1810 of the Iowa Code of 1897 further provides that:
"If by the laws of any state, or the rulings or decisions of the appropriate officers thereof, any burden, obligation, requirement, disqualification or disability is put upon any company or association of any class organized in this state affecting its freedom to do business in that state, then the same or like burden, obligations, requirement, disqualification or disability shall be put upon every such company or association of the same class from that state doing or seeking to do business in this state; and the commissioner of insurance shall enforce the provisions of this section, and in doing so may refuse to revoke the certificate of such company or association of such other state; and it shall be unlawful for the commissioner of insurance to impose upon companies or associations organized under chapter seven of this title any rules or regulations, requirements or limitations, that shall not be imposed with equal force upon like companies or associations from other states doing a like business in this state."
Under the foregoing statutes the commissioner of insurance of the state of Colorado claims that the company owes the state of Colorado 2 per cent. on all the premiums (level and assessment) received by it during the years under investigation, being the normal tax of Colorado, and by virtue of its retaliatory law an additional one-half of 1 per cent. on all level premiums received.
The company admits the 2 per cent. indebtedness, but claims that, if the commissioner is to invoke the retaliatory law of Colorado and increase the tax on the level premiums to 2½ per cent., being the rate imposed on level premiums by the laws of Iowa, the commissioner should deduct from the one-half of 1 per cent. increase on the level premiums a sum equal to 2 per cent. on the assessment premiums, which the laws of Iowa do not tax, as even after such a decrease the state of Colorado would still be receiving a greater sum or amount than a tax of 2 per cent. on the total premiums received.
An accounting between the respective parties showing the amounts received and tax actually paid, and the amount in dispute is substantially as follows:
Total level premiums received during
the years 1901-1925 ...................... $1,542,043 06
Total assessment premiums received
during the years 1901-1925 ............... 312,750 74
Total all premiums received during the
years 1901-1925 .......................... 1,854,793 80
Two per cent. paid on $1,854,793.80 ....... 37,095 87
Insurance commissioner wants to add on
level premiums under Colorado retaliatory
statute one-half per cent
on $1,542,043.06, or .................... 7,710 21
Company wants to deduct therefrom permitted
by the Iowa statute, 2 per cent
on
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