Colonial Life & Acc. Ins. Co. v. South Carolina Tax Commission, 17428

• Decision Date: 20 May 1958
• Docket Number: No. 17428,17428
• Citation: 103 S.E.2d 908,233 S.C. 129
• Court: South Carolina Supreme Court
• Parties: COLONIAL LIFE & ACCIDENT INSURANCE CO., Respondent, v. SOUTH CAROLINA TAX COMMISSION, Appellant.

Page 908

103 S.E.2d 908

233 S.C. 129

COLONIAL LIFE & ACCIDENT INSURANCE CO., Respondent, v. SOUTH CAROLINA TAX COMMISSION, Appellant.

No. 17428.

Supreme Court of South Carolina.

May 20, 1958.

As Amended June 15, 1958.

T. C. Callison, Atty. Gen., James M. Windham, Asst. Atty. Gen., for appellant.

McKay, McKay, Black & Walker, Columbia, for respondent.

Robinson, McFadden & Dreher, Columbia, amici curiae.

LEGGE, Justice.

Appellant assessed against respondent, a domestic corporation engaged in the business of life and accident insurance, additional license taxes for the years 1950-1953, inclusive, in respect of dividends on shares and interest on deposits owned by it in building and loan associations located in South Carolina, Alabama, Georgia, North Carolina and Tennessee, and also in respect of interest received on bonds of the cities of Valdosta, Georgia and Tuscaloosa, Alabama, owned by it. Respondent paid under protest the taxes so assessed, plus interest, and brought this action pursuant to Section 65-2662 of the 1952 Code to recover the amount so paid.

In the court below, respondent challenged the assessments upon the following grounds:

1. That, properly construed, Section 97 of Act No. 1053 of 1950 (Act June 3, 1950, 46 Stat. at L. 2656), under which the assessment for the year 1950 was levied, and Section 96 of Article I of Act No. 379 of 1951 (Act April 19, 1951, 47 Stat. at L. 656), under which the assessments for the years 1951, 1952 and 1953 were levied, do not apply to and make taxable: (a) income from shares or deposits in building and loan associations either within or without the State of South Carolina, or (b) interest on bonds of municipalities without the said State.

2. That, as construed by appellant, the sections of the 1950 and 1951 Acts before mentioned are arbitrary, discriminatory, and not based upon a reasonable classification for tax purposes, and are therefore, as to respondent and others similarly situated, violative of the due process and equal protection clauses of the State and Federal Constitutions.

3. That Section 96 of Article I of the 1951 Act contravenes Article III, Section 17 of the Constitution of South Carolina, in that is subject is not expressed in the title of that Act.

The trial court sustained respondent's position under the first of these grounds, rejected its contentions under the other two, and decreed the relief prayed for; and from that decree the Tax Commission has appealed.

In due time after service upon it of appellant's proposed case for appeal, respondent served upon appellant proposed amendments thereto, among them the addition, as 'Additional Sustaining Grounds':

1. That the trial court should have held the statutes in question, as construed by appellant, violative of the due process and equal protection clauses of the State (art. 1, § 5) and Federal (Amend. 14) Constitutions; and

2. That the trial court should have held that Section 96 of Article I of Act No. 379 of 1951 was in contravention of Article III, Section 17 of the Constitution of South Carolina.

The proposed amendments having been disallowed by appellant, the matter came before the trial judge for settlement of the case for appeal. By his order of October 8, 1957, he excluded from the case for appeal these 'Additional Sustaining Grounds', stating as his reason therefor: 'I have carefully considered the arguments of the parties as covered in their briefs and I am of the opinion that the matter attempted to be raised by the Additional Sustaining Grounds is an attempt by plaintiff-respondent to raise questions on appeal which were presented in the Court below and specifically ruled upon adverse to the plaintiff-respondent. No objection was made to these rulings by plaintiff-respondent; no appeal taken therefrom, and time therefor has long since expired.'

On October 14, 1957, respondent served upon appellant notice of intention to appeal from the order settling the case, and 'that such appeal will be based upon appropriate portions of the record to be embodied in an Appendix to the Brief of Respondent'.

On March 18, 1958, respondent served upon appellant notice that upon the opening of this court on the day when the appeal herein would be argued it would move this court for leave to file 'for the consideration of the court, an Appendix to the case for Appeal as settled, to be annexed to its brief', the 'Additional Sustaining Grounds' before mentioned, the trial judge's order settling the case for appeal, and respondent's exceptions to that order. The notice stated that 'the grounds of such motion are that the contents of such appendix could not, under the order of the Presiding Judge dated October 8, 1957 settling the case for appeal, be included in the Transcript of Record, and that the motion may be requisite under Supreme Court Rule 8, Section 7.'

Respondent's brief here is followed by an appendix, stated to have been inserted under authority of Rule 4, Section 7 of this court. This appendix consists of:

1. The 'Additional Sustaining Grounds' as presented to the court below;

2. The order of the lower court dated October 8, 1957, settling the case for appeal; and

3. Respondent's exceptions to the order settling the case for appeal, the same assigning error on the part of the trial judge in excluding from the transcript of record the 'Additional Sustaining Grounds' before mentioned.

Respondent's motion last mentioned was resisted by appellant, and briefs on both sides have been filed with this court. The importance of the questions raised by the 'Additional Sustaining Grounds' requires their determination; and we shall determine them. But since both the parties and the lower court appear to have misapprehended the rule governing presentation in this court of 'additional grounds' for sustaining the judgment of the trial court, we shall first endeavor to clarify that rule and the procedure thereunder.

The pertinent portions of Rule 4, Section 7 are:

'When the appellant shall serve a proposed case * * * the respondent shall, within ten days thereafter, serve upon appellant any proposed amendment thereto, including any additional grounds upon which this Court will be asked to sustain the rulings of judgment below * * * If all amendments proposed are not agreed to, the appellant shall, within four days after service upon him, serve upon respondent notice of his allowance or disallowance of each proposed amendment, and, at the same time, serve notice of the time and place at which the case will be submitted to the trial Judge for settlement * * *. Any party aggrieved by the order of settlement, may appeal thereupon and insert in an appendix to the case as settled, such matters as may be necessary for the proper consideration of his appeal. * * *'

It seems that as late as 1884, when Walker, Evans & Cogswell Co. v. Bollmann Bros., 22 S.C. 512, was decided, a respondent was not permitted to urge, as a ground for sustaining the judgment of the trial court, a matter upon which that court had found adversely to him, except by appeal from such finding. But as early as 1889 (Hardin v. Clark, 32 S.C. 480, 11 S.E. 304) the practice of giving notice of 'additional sustaining grounds' appears to have been recognized, although there was no rule of court thereabout. On December 22, 1982, Rule V of this court, relating to the 'case' on appeal, was amended by the addition of the following: 'If a Respondent in a case, in which such a practice is allowed, desires to sustain the judgment appealed from upon other grounds than those upon which it is rested by the Circuit Judge, he must give written notice thereof to the Attorney for Appellant stating the additional grounds upon which he proposes to rely; and said notice must be served in time to have the same printed in the 'Case' as prepared for argument in the Supreme Court.' Rev.Stat.1893, Vol. 2, p. LXII; Code of Laws 1902, Appendix to Vol. II, at p. 265.

Since the 1892 amendment the rule has not required, as a condition precedent to respondent's urging affirmance on such additional grounds, either exception to or appeal from the trial court's ruling on such matters. But the relief from such requirement afforded by the rule as so amended appears to have been overlooked by counsel in one case and by this court in another. In Cothran v. Knight, 1894, 45 S.C. 1, 22 S.E. 596, where plaintiff had appealed from an order of nonsuit, the 'case' showed that respondents had excepted to the trial judge's order overruling their demurrer to the complaint; but this court, reversing the judgment of nonsuit, declined to consider the respondents' exceptions because respondents had not given notice (referred to in the syllabus as 'the usual notice') to appellant's counsel that they desired to sustain the judgment appealed from upon other grounds than those upon which the circuit judge had rested it. And in Hyder v. Metropolitan Life Insurance Co., 1936, 183 S.C. 98, 119, 190 S.E. 239, 248, where the respondent had asked that the judgment of the lower court be sustained upon certain grounds, the court said: 'As to the first and second of these we may say that it does not appear from the record that respondent excepted to nor appealed from the rulings of the presiding judge touching the matters therein referred to.'

The purpose of the 1892 amendment, as now embodied in the quoted provisions of our present Rule 4, Section 7, was, and is, to relieve a respondent who, in the trial court, has obtained a judgment giving him all the relief that he sought, from the necessity of appealing from adverse rulings that did not affect the result of the lower court's decision. To be entitled to consideration under this rule, an 'additional ground' for affirmance must relate to a matter that was presented before the trial court for its ruling, Carter v. Peace, 229 S.C. 346, 93 S.E.2d 113; and it must be such that its acceptance would lead to the same result that ...