Equitable Life Assurance Society of the United States v. Commonwealth of Pennsylvania

• Decision Date: 14 June 1915
• Docket Number: No. 263,263
• Citation: 59 L.Ed. 1239,238 U.S. 143,35 S.Ct. 829
• Parties: EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, Plff. in Err., v. COMMONWEALTH OF PENNSYLVANIA
• Court: U.S. Supreme Court

238 U.S. 143

35 S.Ct. 829

59 L.Ed. 1239

EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, Plff. in Err.,

v COMMONWEALTH OF PENNSYLVANIA.

No. 263.

Argued May 5 and 6, 1915.

Decided June 14, 1915.

Messrs. Charles W. Pierson, William S. Snyder, and Thomas De Witt Cuyler for plaintiff in error.

Mr. William M. Hargest and Mr. Francis Shunk Brown, Attorney General of Pennsylvania, for defendant in error.

[Argument of Counsel from page 144 intentionally omitted] Mr. Justice Holmes delivered the opinion of the court:

The Equitable Life Assurance Society of the United States, the plaintiff in error, does business in Pennsylvania. By an act of June 28, 1895, that state levies an annual tax of 2 per cent upon the gross premiums of every character received from business done within the state during the preceding year. The company paid large taxes under this act, but appealed to the state courts from charges made by the state accounting officer in respect of premiums for the years 1906, 1907, 1908, 1909, and 1910, paid to the company outside the state by residents of Pennsylvania. The supreme court sustained the charge. 239 Pa. 288, 86 Atl. 787. The whole discussion there was whether these items fell within the statute. On that point, of course, the decision of the state court is final, and as the company is a foreign corporation and this is held to be a tax for the privilege of doing business in the state, it is obvious that the scope of the question before us is narrow, being only whether the statute as construed deprives the company of its property without due process of law, contrary to the 14th Amendment, as alleged. It is true that the plaintiff in error suggests a further infraction of that Amendment in an assumption by the supreme court of an unproved fact: that the beneficiaries of the policies lived in Pennsylvania. But it is enough to answer that we understand the decision, when it uses the word 'beneficiaries,' to mean parties to the contracts, the insured, and that the assumption was warranted by the record as to them.

The grounds for the only argument open are that a state cannot tax property beyond its jurisdiction (Union Refrigerator Transit Co. v. Kentucky, 199 U. S. 194, 50 L. ed. 150, 26 Sup. Ct. Rep. 36, 4 Ann. Cas. 493); that it cannot effect that result indirectly by making the payment a condition of the right to do local business (Western U. Teleg. Co. v. Kansas, 216 U. S. 1, 54 L. ed. 355, 30 Sup. Ct. Rep. 190; Pullman Co. v Kansas, 216 U. S. 56, 54 L. ed. 378, 30 Sup. Ct. Rep. 232; Ludwig v. Western U. Teleg. Co. 216 U. S. 146, 54 L. ed. 423, 30 Sup. Ct. Rep. 280); and that as it could not prohibit the contracts it cannot impose the tax (Allgeyer v. Louisiana, 165 U. S. 578, 41 L. ed. 832, 17 Sup. Ct. Rep. 427). In aid of the effort to make the foregoing decisions applicable it is argued that this is a property tax. But, as we have said, the supreme court of Pennsylvania speaks of it as a tax for the privilege of doing business within the commonwealth; and whether the statement is a construction of the act or not, we agree with it so far, at least, as to assume, that if that characterization is necessary to sustain the tax, the legislature meant to avail itself of any power appropriate to that end.

Without going into any preliminary...