Metropolitan Life Ins. Co. of New York v. Board of Assessors for Parish of Orleans

• Decision Date: 20 November 1905
• Docket Number: 15,501
• Citation: 39 So. 846,115 La. 698
• Court: Louisiana Supreme Court
• Parties: METROPOLITAN LIFE INS. CO. OF NEW YORK v. BOARD OF ASSESSORS FOR PARISH OF ORLEANS

39 So. 846

115 La. 698

METROPOLITAN LIFE INS. CO. OF NEW YORK v. BOARD OF ASSESSORS FOR PARISH OF ORLEANS

No. 15,501

Supreme Court of Louisiana

November 20, 1905

Rehearing Denied January 2, 1906.

Appeal from Civil District Court, Parish of Orleans; John St. Paul Judge.

Suit by the Metropolitan Life Insurance Company of New York against the board of assessors for the parish of Orleans. From a judgment for plaintiff, defendants appeal. Reversed.

Francis Charles Zacharie, for appellant tax collector.

Henry Garland Dupre, Asst. City Atty., for appellant city of New Orleans.

George Hitchings Terriberry, for appellant board of assessors.

J. Zach Spearing, amicus curiae.

Howe Spencer & Cocke, for appellee.

OPINION

NICHOLLS J.

Statement of the Case.

The plaintiff, a corporation created and existing under the laws of the state of New York, appearing in the suit through its duly authorized agent in the city of New Orleans, alleged:

That it is a corporation engaged in the business of life insurance in various portions of the United States, and its domicile is in the city of New York, where its general or home offices are situated and its officials reside. That it has an office in the city of New Orleans, where it is represented by subordinate managers only. That, in accordance with law, in the month of January, 1904, to wit, on or about the 21st day of January, 1904, it duly filed with the board of assessors for the parish of Orleans its sworn statement of all the property owned by it subject to taxation under the laws of this state. That, notwithstanding the fact that petitioner had made a true return of its taxable property to the said board of assessors, said board did, nevertheless, proceed to and did assess petitioner upon property not owned or held by it, or any of its officers, in the state of Louisiana, and said board, despite the due and seasonable protest of petitioner, did make an erroneous, illegal, and void assessment on the following, to wit, $ 10,000 credit, money loaned, etc., $ 10,000, money in possession, etc. Petitioner averred that it did not have at any time during the current year, on hand or on deposit within the state of Louisiana, funds exceeding the sum of $ 1,500, as set forth in their sworn return. That the assessment in the sum of $ 10,000, made by said board on account of credits, money loaned, etc., was illegal, null, and void, for the reason that any credits, bills receivable, or moneys loaned by and due petitioner are not located and payable in this state, but are located and payable and taxable only at the domicile of petitioner, and are not subject, under the Constitution of the United States and the laws of this state, to taxation by the state of Louisiana, and that said assessment by the board of assessors was an attempt to extend the taxing privilege of the state of Louisiana beyond the territorial jurisdiction thereof, and constituted a taking of property without due process of law, in violation of the fourteenth article of amendment of the Constitution of the United States, which this petitioner expressly pleaded and claimed the benefit of.

That in accordance with the statutes made and provided petitioner duly and seasonably applied to said board of assessors and to the revision committee of the city council for the cancellation of said illegal assessment, and for the reduction of said assessment of money on hand to the amount returned, under oath by this petitioner to the board of assessors. That the said board of assessors, upon application, reduced the said amount of $ 10,000, assessed to petitioner as money in possession, to the sum of $ 7,500, instead of to $ 1,500, as prayed, but persisted in assessing petitioner with the sum of $ 10,000 for credits, bills receivable, etc.

That petitioner thereupon made a legal tender of the sum of $ 46 to the treasurer of the city of New Orleans, being in full of the amount of taxes legally due by it for the current year, which tender was refused. That it had been notified by the said treasurer and by John Fitzpatrick, State Tax Collector for the First district, to pay the taxes based upon said illegal assessment, and that they would impose penalties and seize the property of petitioner unless enjoined and restrained by this honorable court. In view of the premises, petitioner prayed that the city of New Orleans through its proper officer, the board of assessors, through its proper officer and John Fitzpatrick, the State Collector for the First district, be duly cited to appear and answer hereto, and that, after due proceedings had, there be judgment in favor of petitioner and against said defendants, decreeing that the assessment against petitioner in the sum of $ 10,000, on account of credits, money loaned, etc., be declared to be null and void, and that the assessment against petitioner, on account of moneys in hand, etc., be reduced to the sum of $ 1,500, and that the defendants, and each of them, be restrained and prohibited from collecting or attempting to collect any taxes based upon said illegal assessment, and petitioner prayed for all costs and for general relief.

The board of assessors and State Tax Collector filed an answer in which they pleaded the general issue, and prayed that plaintiff's demand be dismissed. They prayed that they have judgment for 10 per cent. attorney's fees on the aggregate amount of the taxes and penalties involved in the case until paid, or so much thereof as might be named for the court and for all and general relief.

The city of New Orleans pleaded the general issue, and prayed that plaintiff's demand be dismissed, and that there be judgment in its own favor.

The district court declared that the law and the evidence were in favor of the plaintiff and against the defendants, and for the reasons assigned in open court in the written opinion it rendered judgment in favor of plaintiff.

The judgment adjudged and decreed that there be judgment in favor of plaintiff, the Metropolitan Life Insurance Company of New York, and against the defendants, the city of New Orleans, the board of assessors for the parish of Orleans, and John Fitzpatrick, State Tax Collector for the First district of New Orleans, decreeing and ordering that the assessment for the year 1904, against the plaintiff company on moneys in hand, etc., be reduced to the sum of $ 4,000. and further decreeing the assessment for said year against said company in the sum of $ 10,000 on account of credits, money loaned, etc., to be null and void.

It further ordered that said defendants, and each of them, be, and they are hereby, restrained and prohibited from collecting or attempting to collect any taxes based upon said illegal assessment and that defendants pay all costs of this suit.

The written reasons were as follows:

This is an action for reduction of assessment on money in possession, on deposit, etc., and for the cancellation of an assessment upon credits, money loaned, bills receivable, etc.

The evidence shows, and it was admitted at the bar by all counsel, that the average of money in possession and on deposit by plaintiff does not exceed $ 4,000, and that item ought therefore to be reduced accordingly.

The evidence also shows, and it is not disputed, that the only "credits, money loaned, and bills receivable" belonging to plaintiff, and intended to be taxed, consist of loans made to their policy holders in this state, and evidenced by their notes secured by pledge of its own policies, all of which as soon as executed are transmitted to the home office in the city of New York, and are returned to this city only for purposes of collection or renewal.

The authority under which it is proposed to assess and tax these notes is the seventh section of Act No. 170 of 1898, the last clause whereof reads as follows: * * * "And all bills receivable, obligations or credits arising from business done in this state are hereby declared assessable within this state and at the business domicile of said non resident, his agent or representative."

This section is identical in terms with the corresponding section of Act No. 106 of 1890, a statute which stood unrepealed when the Supreme Court of this state declared, substantially in Liverpool, etc., Ins. Co. v. Board of Assessors, 44 La.Ann. 760, 11 So. 91, 16 L.R.A. 56, that "no legislative power existed to change the situs of debts due to non-residents," unless such debts had assumed some "concrete form" in the evidence thereof, and "such evidences are situated in the state," language tantamount to a declaration that this provision of the statute was repugnant to some higher law; i. e., was "unconstitutional." Under this high authority, then, I am constrained to declare that so much of the seventh section of Act No. 170 of 1898 as attempts to make assessable in this state any bills receivable due to nonresidents, unless the same are "situated in the state," is unconstitutional, and therefore void, and any assessment made in pursuance thereof is therefore null.

The defendants appealed.

Opinion.

In the brief on behalf of the insurance company the statement is made that on the trial defendant's counsel made such admissions as reduced this cause to the sole question of the legality and unconstitutionality of the attempted tax on credits, money loaned, etc.

"The plaintiff is a corporation under the laws of New York. It had duly complied with the statutes of the state regulating the entry and doing of business by foreign insurance companies and has and maintains an office in the city of New Orleans. Following the usual notice on January 21, 1904, it filed its sworn return of property owned by it and subject to taxation in this state. The board of assessors proceeded to...