American Indemnity Co. v. City of Austin

• Decision Date: 20 December 1922
• Docket Number: (No. 3394.)
• Citation: 246 S.W. 1019
• Parties: AMERICAN INDEMNITY CO. v. CITY OF AUSTIN.
• Court: Texas Supreme Court

246 S.W. 1019

AMERICAN INDEMNITY CO. v. CITY OF AUSTIN.

(No. 3394.)

Supreme Court of Texas.

December 20, 1922.

Error to Court of Civil Appeals of Fourth Supreme Judicial District.

Suit by the City of Austin against the American Indemnity Company to recover taxes. Judgment for the plaintiff was affirmed by the Court of Civil Appeals (211 S. W. 812), and defendant brings error. Reversed, and judgment rendered for defendant.

Terry, Cavin & Mills, of Galveston, for plaintiff in error.

J. Bouldin Rector, City Atty., and J. W. Maxwell, both of Austin, and E. B. Robertson, of Fort Worth, for defendant in error.

CURETON, C. J.

The plaintiff in error, the American Indemnity Company, a private corporation, was chartered on April 19, 1913, under chapter 117 of the General Laws of the Thirty-Second Legislature of this state. It was incorporated for the transaction of an insurance business, its objects and purposes being substantially all those named in section 1 of said chapter, which is article 4942a, Vernon's Complete Texas Statutes, or Vernon's Ann. Civ. St. 1914. These purposes are set out in the opinion of the Court of Civil Appeals (211 S. W. 812, 814), and it is unnecessary to restate them. It is sufficient to say that the purposes authorized by the statute embrace, among others, the usual objects of casualty insurance. The home office of the company is, and has always been, in Galveston, Galveston county, Tex. The city of Austin, in Travis county, is a municipal corporation, chartered by special act of the Legislature. The city filed this suit against the plaintiff in error in the district court of Travis county on April 14, 1917, for the purpose of recovering taxes alleged to be due for the years 1914, 1915, and 1916 on certain bonds and securities deposited by plaintiff in error with the treasurer of the state at Austin under the laws of the state. The case was tried before the court without a jury on an agreed statement of facts. The trial court rendered judgment on the 22d of December, 1917, in favor of the defendant in error for sums aggregating $9,842.33, principal, interest, and costs on the taxes found by him to be due for the years mentioned. The judgment also provided for a foreclosure of the tax lien upon the securities found by the court to have been on deposit with the state treasurer on the 1st day of January of each of the years mentioned. The case was appealed in due form by the plaintiff in error to the Court of Civil Appeals, which affirmed the judgment on April 16, 1919. A writ of error was granted, and the cause is now before this court for review.

The record shows that on January 1, 1914, the plaintiff in error had on deposit with the treasurer securities aggregating in value $100,000, and on the 1st day of January of each of the years 1915 and 1916 sums in excess of $200,000. These several deposits were in securities, interest-bearing notes, and bonds, in which the company's assets had been invested, and were made under articles 4930 and 4942c, Vernon's Sayles' Ann. Civ. St. 1914, for the benefit of the holders of the company's obligations and policies, for which purposes the treasurer was required to receive them. The company, however, had the right to substitute other paper of equal character and value at any time, and to collect interest, dividends, and profits on all securities on deposit. Vernon's Complete Texas Statutes or Vernon's Sayles' Ann. Civ. St. 1914, arts. 4928, 4930, 4942e.

The contention of the city of Austin is that the taxable situs of these deposited securities is in Travis county; while the indemnity company asserts that they were taxable alone at its home office in Galveston county. There were other issues in the case, but this is the only one, under our view of the law, necessary to be considered.

Chapter 117, § 26, Acts of the Thirty-Second Legislature under which plaintiff in error was incorporated, was cumulative as to insurance legislation in the state, and as to the mode and manner of organizing and doing insurance business, and did not repeal any law then in force. Vernon's Complete Texas Statutes or Vernon's Sayles' Ann. Civ. St. 1914, art. 4942z.

The position of plaintiff in error is that the situs of these securities for purposes of taxation, as well as the manner of taxation, not being in express language provided for in the statutes under which the deposits were made, is fixed and determined by Revised Statutes, arts. 4749 and 4764. The last-named article is general in its terms, and provides a special method of taxation for insurance companies.

Article 4749, after authorizing for the deposit of securities in somewhat the same manner as do the statutes under which deposits were made in this case, provides:

"For the purpose of state, county and municipal taxation, the situs of all personal property belonging to such companies shall be at the home office of such company."

The plaintiff in error contends that it is subject alone to these two articles as to the manner of rendering its taxes and as to the situs for taxation of the securities here involved. For each of the years named it did in fact render and pay its taxes in Galveston county, in accordance with these articles of the statute.

The first insistence of the defendant in error to be noted is that article 4749, referred to above, fixing the situs for taxation of securities deposited with the state treasurer at Austin, is unconstitutional, because in violation of section 11, art. 8, of the Constitution of this state, which declares:

"All property, whether owned by persons or corporations, shall be assessed for taxation, and the taxes paid in the county where situated."

We have already determined this question adversely to this contention. This article of the statute is constitutional. Great Southern Life Insurance Co. v. City of Austin (Tex. Sup.) 243 S. W. 778, 785.

Articles 4749 and 4764 were originally parts of chapter 108, General Laws of the Thirty-First Legislature, which act on its face, and article 4749 in particular, by express language relates to life, health, and accident insurance companies. Plaintiff in error asserts that it is to be governed by articles 4749 and 4764 by virtue of Revised Statutes, art. 4955, which reads:

"All the provisions of the laws of this state applicable to the life, fire, marine, inland, lightning, or tornado insurance companies, shall, so far as the same are applicable, govern and apply to all companies transacting any other kind of insurance business in this state, so far as they are not in conflict with provisions of law made specially applicable thereto."

This article is broad enough in its terms to make plaintiff in error subject to and to give it the benefits of articles 4749 and 4764, and make them the law which governs it in the rendition of its property for taxation and fixing the taxable situs of that property at Galveston, where its home office is located.

Defendant in error contends, however, that article 4955 is unconstitutional and void, because its substance was not embraced in the caption of chapter 108, Acts of the Thirty-First Legislature. The language of article 4955 is the same as that of section 55 of chapter 108 of the Acts of the Legislature named, and articles 4749 and 4764 were respectively sections 38 and 25 of that act. The caption of this chapter is fully set out in the National Surety Company Case, cited below, and need not be repeated here.

We agree with the contention that the substance of section 55 or of what is now article 4955 was not embraced in the caption of this act, and that therefore, as originally passed, said section was unconstitutional and void, because in violation of section 35, art. 3, of the state Constitution. Several of the Courts of Civil Appeals have made a similar holding for the same reason. National Surety Co. v. Murphy-Walker (Tex. Civ. App.) 174 S. W. 997; Ocean Accident & Guaranty Corp. v. Northern Texas Traction Co. (Tex. Civ. App.) 224 S. W. 212; Western Indemnity Co. v. Free and Accepted Masons (Tex. Civ. App.) 198 S. W. 1092.

But as to whether or not article 4955 of the Revised Statutes of 1911 is unconstitutional presents an entirely different question, the answer to which is of serious import to the state, as well as of consequence to the parties to this litigation. Chapter 108, Acts Thirty-First Legislature, while passed in the form of an original bill, and in the absence of section 55 thereof applicable only to life, health, and accident insurance companies, was, in fact, as disclosed by an examination of its sections, an amendment in many respects of the general insurance laws of the state, changing the language of some laws, amending others, repealing several, and adding new provisions general in their nature. An extensive review of its contents is not necessary, but we will call attention to some of its general features. Section 69 of the act repealed articles 3049, 3047, 3050, 3051, 3052, 3053, 3085, and 3088, Revised Statutes 1895, all of which were general provisions.

Sections 40, 59, 66, 63, 64, 60, and 61, which became respectively articles 4497, 4493, 4501, 4495, 4496, 4494, and 4763 of the Revised Statutes of 1911, were in reality mere amendments of the articles of the Revised Statutes of 1895 above named, with the exception of the first thereof. The subject-matter of the repealed articles was covered in most, if not in all, respects by the new sections substituted therefor, and were clearly, intended as amendments.

Sections 12, 26, 40, 41, 46, 47, 48, 49, 50, 51, 53, 55, 57, 58, 59, 60, 61, 62, 63, 64, 66, and section 37, as amended by chapter 20, General Laws of the First Called Session of the Thirty-First Legislature, were all apparently general provisions; at least they are general in their terms, and certainly many of them were intended to be general provisions, applicable not only to life, health, and accident insurance companies, but to others as well.

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