Guarantee Mut. Life Ins. Co. v. Harrison

• Decision Date: 23 May 1962
• Docket Number: No. 10968,10968
• Citation: 358 S.W.2d 404
• Parties: GUARANTEE MUTUAL LIFE INSURANCE COMPANY, Appellant, v. William A. HARRISON, Commissioner of Insurance, et al., Appellees.
• Court: Texas Court of Appeals

Page 404

358 S.W.2d 404

GUARANTEE MUTUAL LIFE INSURANCE COMPANY, Appellant, v. William A. HARRISON, Commissioner of Insurance, et al., Appellees.

No. 10968.

Court of Civil Appeals of Texas, Austin.

May 23, 1962.

Rehearing Denied June 13, 1962.

Dan Moody, Jr., Austin, for appellant.

Will Wilson, Atty. Gen., Bob E. Shannon and Dudley D. McCalla, Asst. Atty. Gen., for appellees.

RICHARDS, Justice.

Guarantee Mutual Life Insurance Company, appellant, brought suit against William A. Harrison, Commissioner of Insurance of the State of Texas, Jesse James, State Treasurer of the State of Texas, Will Wilson, Attorney General of Texas, and the State Board of Insurance of the State of Texas, appellees, under the provisions of Art. 1.05, Title 122A, Taxation-General, Vernon's Civil Statutes, for the refund of certain gross premium taxes assessed and collected from appellant under the provisions of Art. 4769, V.C.S., for the calendar years, 1957 and 1958, which taxes were paid under protest. After trial before the Court without a jury, the Trial Court entered a 'take nothing' judgment against appellant, from which judgment this appeal has been perfected.

Appellant bases its appeal upon three points of error to the effect that the Trial Court erred in holding that in computing its taxes for the years 1957 and 1958, the ratio of its 'Texas securities', to its similar securities owned in the State of Nebraska for the purpose of determining the applicable tax rate under Art. 4769, V.C.S., appellant was required to include any part of its Nebraska real estate which was of such character that it would not have been included, if located in Texas, within the term 'Texas securities' as that term is defined in Art. 3.34, Texas Insurance Code, V.C.S.

In its brief appellant asserts that the principal issue to be decided is the construction of the phrase 'similar securities' as used in Art. 4769, V.C.S., the 'gross premium' tax statute. This statute provides that the tax rate applicable each year for an insurance company not organized under the laws of Texas shall be based on the ratio of the amount the company had invested in 'Texas securities' on December 31st of the preceding year to 'the amount that it had invested in similar securities in the State in which it then had the highest percentage of its admitted assets invested.'

The present controversy arises from different interpretations of the following portion of Art. 3.34, Insurance Code:

'The investments required by this chapter may be made by the purchase of not more than one building site, and in the erection thereon of not more than one office building, or in the purchase, at its reasonable market value, of such office building already constructed and the ground upon which the same is located in any city of the State of more than four thousand (4,000) inhabitants. * * *'

Art. 3.40, Texas Insurance Code, also provides that a life insurance company organized under the laws of Texas may secure, hold and convey 'one building site and office building for its accommodation in the transaction of its business and for lease or rental * * *.'

On December 31, 1957, appellant owned and used a building site and office building in Nebraska. It also owned certain real estate in Nebraska which it has acquired for the purpose of erecting thereon an office building for its use upon completion. On December 31, 1957, the new office building was being constructed upon the property so acquired but not having been completed as of that date, it was not being utilized by appellant. The building haveing been completed during the year 1958, appellant moved its office into the new building which was included in its tax return for the year ending December 31, 1958. The controversy concerning the taxes which appellees assert that appellant should be required quired to pay are therefore confined to taxes due based upon the tax return for the year 1957, since the old office property which was then utilized by and included in the 1957 tax return of appellant was separate and distinct from the uncompleted new office building.

The specific issue involved is whether the building site which was acquired and owned by appellant during the year 1957 for the purpose of erecting an office building thereon which had not been completed for appellant's use on December 31, 1957 constituted a similar security in computing the ratio in addition to the building site and office building which appellant was using on December 31, 1957 or whether only the building site and office building which was then in use by appellant constituted a 'similar security' if located in Texas. Appellant contends that since Art. 3.34 permits an insurance company organized under the laws of Texas to legally own only one building site and office building thereon, the inclusion of the building site acquired in 1957 upon which an office building was being erected but not completed for use on December 31, 1957, could not have been a legal investment in 'Texas securities' since a domestic insurance company would have been prohibited from owning and holding more than one building site and building thereon under the provisions of Arts. 3.34 and 3.40 of the Insurance Code.

Appellees' position in requiring appellant to report the investment in the building site and the uncompleted office building in addition to the building site and office building then in use by appellant as a 'similar security' in its 1957 tax return is based upon an Attorney General's opinion rendered to the Board of Insurance Commissioners, dated December 7, 1951, holding that the use by the Legislature of the phrase 'similar securities' rather than 'identical securities' implied a legislative intent to include property of a character which would not be included within the term 'Texas securities' if located in Texas and if the Legislature had intended that the word 'similar' should mean 'identical,' then it would have sued the latter word, in which case the position taken by appellant would be correct.

Webster's New International Dictionary (2nd Ed.) defines 'similar' as 'nearly corresponding; resembling in many respects; somewhat like; having a general likeness.' It is a word with different meanings depending on the context in which it is used.

Art. 3.41, Texas Insurance Code, governing authorized investments in securities or property for foreign life insurance companies reads as follows:

'The assets of any 'foreign company' shall be invested in securities or property of the same classes permitted by the laws of this State as to 'domestic' companies or by other laws of this State in other securities approved by the Board of Insurance Commissioners as being of substantially the same grade.' (Italics supplied.)

Appellees contend that the use by the Legislature of the words 'of the same classes' and 'of substantially the same grade' in Art. 3.41 indicates a legislative intent that such words should be construed as having the same meaning as the words 'similar securities' used in Art. 4769. With this contention we are unable to agree for the reason that if the Legislature had intended that the words 'similar securities' in Art. 4769, V.C.S., were to be given the same meaning as the words 'of substantially the same grade' or 'of the same classes' as used in Art. 3.41, Insurance Code, it would have adopted and used the same words in each article. Presumably, in the use of the different phrases or words in the two articles, the Legislature intended to differentiate between the meaning and construction of the words when used in statutes enacted for different purposes.

Art. 3.34, Insurance Code, provides that cash deposits in regularly established National or State banks or trust companies in Texas on the basis of average monthly balances throughout the calendar year constitute 'Texas securities'. Assuming arguendo that the Legislature had omitted deposits in National banks from its definition of 'Texas...