Clarksdale Insurance Agency v. Cole

Citation40 So. 228,87 Miss. 637
CourtUnited States State Supreme Court of Mississippi
Decision Date19 March 1906

40 So. 228

87 Miss. 637



Supreme Court of Mississippi

March 19, 1906

November, 1905

FROM the circuit court of, second district, Coahoma county, HON. SAMUEL C. COOK, Judge.

The Clarksdale Insurance Agency, a corporation, the appellant, was plaintiff in the court below; Cole, the insurance commissioner of the state, the appellee, was defendant there. The object of the suit was to recover privilege taxes which the plaintiff had paid under protest. From a judgment in favor of defendant the plaintiff appealed to the supreme court.

The case was tried on an agreed statement of facts, in substance as follows: Plaintiff was a corporation, organized under the laws of the state of Mississippi, its business being exclusively that of an insurance agency. The business transacted by plaintiff was the same as that transacted by all other insurance agencies in the state--to wit, acting as agent of fire-insurance companies engaged in business in the state and collecting premiums from the insured. The business of the agency was conducted by the officers of the agency, and was of like character with the business of other agencies conducted by private individuals acting as insurance agents in the state. The privilege-tax law of 1904 (Laws 1904, ch. 76, sec. 49, p. 69) taxes insurance agencies operating in towns of less than three thousand inhabitants with a privilege tax of fifty dollars, and it was admitted that Clarksdale, in which the plaintiff operated, has less than three thousand inhabitants. The same section levies a tax of fifteen dollars on each insurance agent. The managing officers of the plaintiff each paid such tax of fifteen dollars per year, which amount was refunded to each officer by the agency. In addition to this privilege tax, the agency was required to pay a tax of fifty dollars per year, and they paid this privilege tax under protest for the years 1904 and 1905.


John W. Cutrer, for appellant.

There are three grounds upon which the tax imposed upon appellant is assailed:

First--It is unconstitutional, because it seeks to impose and put in operation upon the appellant--solely because it is a corporation--unequal, illegal, and burdensome taxes and assessments not imposed upon other persons not corporated, similarly situated, exercising the like privileges, and following the same business in the state of Mississippi.

Second--Because the taxes by the said act sought to be imposed upon appellant are double taxations and burdens not imposed upon other persons similarly situated and circumstanced and pursuing the same vocation, whereby it is sought to tax appellant twice for the performance of the same rights and privileges which are exercised by other persons and agents not corporated, who act and exercise rights and privileges and pursue a vocation and business exactly the same, under the identical circumstances and conditions, as those exercised and pursued by appellant, solely because appellant is a corporation.

Third--Because the said statute denies to the appellant the equal protection of the law guaranteed to it by the fourteenth amendment to the constitution of the United States.

It is admitted necessarily that a corporation is a person within the meaning of all constitutional provisions which require uniformity of taxation and inhibit the imposition of unequal burdens upon taxpayers. San Mateo County v. Southern Pacific R. R. Co., 13 F. 722; Santa Clara County v. Southern Pacific R. R. Co., 18 F. 385 (116 U.S. 138).

This rule is maintained and enforced, not only by the courts of the United States, but by the courts of all the states. Ballard v. Oil Co., 81 Miss. 507 (S. C., 34 So. 533).

Corporations are entitled to be treated by the law as individuals, and before there can be any discrimination or classification made which can legally have the effect to impose burdens on corporations there must be a classification which shall rest upon some difference which bears a reasonable and just relation to the business in respect to which the classification is proposed, and this can never be made arbitrarily.

All persons, natural and artificial, are held entitled to the same privileges under the same conditions. If there is an effort to impose burdens upon one in respect to the same business which are not imposed upon the other, then there is a discrimination which impairs their legal rights before the law.

The facts disclosed by the record show that appellant, as a corporation, was and is engaged in identically the same business as all other insurance agents in the state of Mississippi, except that other agents are natural persons, while appellant is an artificial person.

There must be uniformity of taxation and an equalization of the burdens of government.

The business of an insurance agent is one open to all. The tax imposed in this instance is for the purpose of raising revenue, and it is, therefore, a revenue tax. 1 Desty on Taxation, 305.

With reference to this class of revenue tax, the constitutional requirement of uniformity and equality is satisfied by the tax being levied on all persons alike who engage in the occupation taxed, without discrimination on account of the business done or the person, natural or artificial, who may engage in the business. 1 Desty on Taxation, 301.

Our own court has held that, in the levying of privilege taxes, it is necessary that "all persons pursuing the same occupation shall be taxed the same amount or in the same ratio." Holberg v. Town of Macon, 55 Miss. 112.

While it is not necessary that all persons pursuing every occupation should be taxed, nevertheless, where taxes are imposed upon any trade or vocation, the rule of uniformity must be strictly maintained.

The same rule has been held by other courts wherever the question has been presented, and that is, that if there is a want of uniformity in the tax imposed, the statute levying the tax is void, for the reason that no tax can be maintained which violates the requirement of uniformity. State v. Moore, 22 L. R. A., 472.

In like manner, it has been held that the business of a hawker, or peddler, is so far a legitimate and moral business that the distinction attempted to be made between peddling by the manufacturer, mechanic, and farmer, and the peddling of the same articles by the purchasers from these parties, constitutes no proper classification, and that the classification so attempted or fixed has no proper or natural distinction, but is arbitrary and contravenes the constitutional rule of uniformity and equality before the law. Srare v. Wagoner, 38 L. R. A., 677.

Not only is this the rule which is maintained by the state courts as dealing with the question in the light of state constitutions, but the same view is taken by the courts when considering this question with reference to the effect of the fourteenth amendment to the constitution of the United States.

It has been uniformly held that the effect of the fourteenth amendment is that every person, natural or artificial, shall be entitled to the equal protection of the courts, and that,...

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