Gully v. Pilot Life Ins. Co
| Decision Date | 10 February 1936 |
| Docket Number | 32066 |
| Citation | 174 Miss. 834,165 So. 610 |
| Court | Mississippi Supreme Court |
| Parties | GULLY, STATE TAX COLLECTOR, v. PILOT LIFE INS. CO |
1 INSURANCE.
Life insurance company paying privilege tax for year held liable for additional premium tax on premiums collected during tax year on policies written during such year, notwithstanding company withdrew from state before year expired (Laws 1932 chapter 89, sections 111, 111 (a), 111 (b)).
2 INSURANCE.
Where life insurance company, having paid privilege tax for year, withdrew from state before year expired, statute held not intended to lay tax on premiums collected after year expired on policies previously written (Laws 1932, chapter 89, sections 111, 111 (a), 111 (b)).
HON. V. J. STRICKER, Chancellor.
APPEAL from the chancery court of Hinds county HON. V. J. STRICKER, Chancellor.
Bill by J. B. Gully, State Tax Collector, against the Pilot Life Insurance Company. Judgment for defendant, and complainant appeals. Reversed in part and remanded.
Reversed in part and remanded.
Lotterhos & Travis, of Jackson, for appellant.
It is the contention of the appellant in this case that under the provisions of chapter 89, Laws of 1932, section 111, which is the reenactment of the long standing statute imposing premium taxes on life insurance companies, the defendant could not, by withdrawing its agents from the state on November 1, 1932, and stopping the soliciting and issuance of new policies after that date, terminate its liability for premium taxes.
The Mississippi premium tax statute imposes a tax for the year in which a company is engaged in business in the state, measured by premiums collected during that year and by premiums collected in subsequent years upon business written in the state.
Equitable Life v. Pennsylvania, 86 A. 787, 238 U.S. 143, 59 L.Ed. 1239; Slater Mills v. Gilpatric, 117 A. 806.
A life insurance policy is of a continuing nature and the payment of each annual premium after the first is just as much a part of the act of putting the original policy into being as is the payment of the initial premium.
37 C. J. 413; New York Life Ins. Co. v. Statham, 93 U.S. 24, 23 L.Ed. 789.
We submit to the court that when the Pilot Life Insurance Company qualified in the state and exercised the privilege of writing a large number of policies in the state, it became bound under the statute to continue to pay a premium tax for the privilege which it had exercised, said tax to be measured by receipts of premiums on account of this business in future years, regardless of whether it continued to write new policies in future years or not.
The Pilot Life Insurance Company has continued to do business after its attempted withdrawal from the state to an extent making it taxable under the Mississippi statute.
Cowan v. London Assurance, 73 Miss. 321, 19 So. 298; Swing v. Brister, 87 Miss. 516, 40 So. 146, 12 C. J., page 37, page 112, note 49a; 61 C. J., page 161, page 164, sec. 112; Moses v. State, 65 Miss. 56, 3 So. 140; Pennsylvania Lumbermen's Mutual Fire Ins. Co. v. Meyer, 197 U.S. 407, 49 L.Ed. 810; Connecticut Mutual Life Ins. Co. v. Spratley, 172 U.S. 602, 43 L.Ed. 569; Hagler v. Insurance Co., 244 F. 863; Mutual Reserve Fund Life Assn. v. Phelps, 190 U. S, 147, 47 L.Ed. 987; Commercial Mutual Accident Co. v. Davis, 213 U.S. 245, 53 L.Ed. 782; Equitable Life v. Pennsylvania, 86 A. 787.
The Pilot Life Insurance Company could, in no event, escape liability for premium taxes for the year ending March 1, 1933.
Smith, Wharton & Hudgins, of Greensboro, N.C. and Wells, Wells & Lipscomb, of Jackson, for appellee.
The appellant argues at great length with reference to the intent of the Legislature and states it was the intention of the Legislature to impose this premium tax on premiums collected through the mail, upon insurance written on the lives of the residents of the state of Mississippi, after the company writing the insurance has withdrawn from the state.
After a careful reading of chapter 89, section 111, of the Laws of 1932, we cannot find a single word or phrase which would in any manner denote such an intention by the Legislature at the time this chapter was passed.
No state may tax a person or property over which it does not have jurisdiction. There is no question, we take it, but that the tax sought to be collected in this suit is a license or privilege tax.
Henry, Ins. Com'r, v. Alexander, 94 So. 846, 131 Miss. 588; Fidelity & Casualty Co. v. City of Louisville, 106 Ky. 207, 50 S.W. 35; Flint v. Stone Tracy Co., 220 U.S. 144, 55 L.Ed. 411.
The tax sought to be collected here is a privilege tax imposed for the privilege of doing business within the state.
The state cannot tax a license or privilege which it does not grant.
The Horn Silver Mining Co. v. The People of the State of New York, 143 U.S. 305, 36 L.Ed. 164.
The state cannot tax subjects which are not within its jurisdiction.
Louisville & Jeffersonville Ferry Co. v. Commonwealth of Kentucky, 188 U.S. 385, 47 L.Ed. 513; Buck v. Beach, 206 U.S. 392, 51 L.Ed. 1106; Farmers Loan & Trust Co. v. Minnesota, 280 U.S. 214, 74 L.Ed. 376; Nevada-California Power Co. v. Hamilton et al., 235 F. 317.
The Legislature of the state of Mississippi, in enacting section 111 (b) of chapter 89 of the Laws of 1932, did not intend to impose the premium tax set out in this section upon premiums collected by insurance companies after they had ceased to do business in the state of Mississippi.
It is admitted by the appellant that the appellee paid all taxes due by it to the state of Mississippi up to October 31, 1932. We submit that the facts in this case, as disclosed by the record, do not show that the appellee was doing business in the state of Mississippi after October 31, 1932.
Swing v. Brister, 87 Miss. 516, 40 So. 146; Hunter v. Mutual Res. Life Ins. Co., 218 U.S. 573, 53 L.Ed. 755; Provident Sav. Life Assurance Soc. v. Commonwealth of Kentucky, 239 U.S. 103, 67 L.Ed. 167.
At no place in the appellant's brief has he sighted a single case dealing with the question of the collection of a privilege tax imposed on premiums collected by the insurance company, after it had ceased to do business in the state.
A few isolated acts on the part of a corporation within a state does not constitute the doing of business in the state.
Harleston v. West Louisiana Bank, 91 So. 423, 129 Miss. 111; Long Beach Canning Co. v. Clarke (Miss.), 106 So. 646; Item Co. v. Shipp, 106 So. 437, 140 Miss. 699; Hunter v. Mutual Reserve Life Ins. Co., 218 U.S. 573, 54 L.Ed. 1155; State v. Connecticut Mutual Life Ins. Co., 61 S.W. 75; Minnesota Commercial Men's Assn. v. Benn, 261 U.S. 140, 67 L.Ed. 573.
The appellee cannot be taxed for the acts of its policyholders in sending premiums to it on contracts of insurance lawfully written at a time when they qualified to do business in the state of Mississippi.
Hunter v. Mutual Reserve Life Ins. Co., 218 U.S. 573; People of the State of New York ex rel., The Provident Savings Life Assurance Society v. Miller, 179 N.Y. 227, 71 N.E. 930; New York Life Ins. Co. v. Head, 234 U.S. 149, 58 L.Ed. 1259; E. Allgeyer v. State of Louisiana, 165 U.S. 578, 41 L.Ed. 832; Frawley, Bundy & Wilcox v. Pennsylvania Casualty Co., 124 F. 259; The Horn Silver Mining Co. v. People of the State of New York, 143 U.S. 305, 36 L.Ed. 164; Flint v. Stone Tracy Co., 220 U.S. 144, 55 L.Ed. 411; Louisville & Jeffersonville Ferry Co. v. Commonwealth of Kentucky, 188 U.S. 385, 47 L.Ed. 513; Delaware, Lackawanna & Western Railroad Co. v. Commonwealth of Pa., 198 U.S. 341, 49 L.Ed. 1077; Provident Savings Life Assurance Society v. Commonwealth of Kentucky, 239 U.S. 103, 67 L.Ed. 167.
Argued orally by Fred Lotterhos, for appellant, and W. R. Newman, Jr., for appellee.
The state tax collector, appellant, filed a bill against the Pilot Life Insurance Company, appellee, seeking to collect the premium tax levied by chapter 89, sections 111 (a) and 111 (b), Laws of 1932. He alleged that the appellee, prior to November 1, 1932, was engaged in the life insurance business in Mississippi, having offices and agents to solicit business, collect premiums, and adjust claims, and was duly qualified to do business in this state, having complied with the laws of Mississippi, and having made the necessary reports of its business and its premium collections, and having paid such taxes as were required of it under the laws of Mississippi; that on or about November 1, 1932, the appellee attempted to withdraw from the state of Mississippi, and since that date has failed to make such reports as are required of it, and failed to pay the taxes due by it to the state of Mississippi.
He further alleged that the appellee qualified for business in this state as of March 1, 1932, under the insurance laws of the state, paying the flat privilege tax imposed upon life insurance companies for the year beginning March 1, 1932, and premium taxes for business done in the state during the first ten months of 1932,...
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