Hawkeye Ins. Co. v. French

• Decision Date: 26 October 1899
• Parties: HAWKEYE INS. CO. ET AL. v. FRENCH, ASSESSOR.
• Court: Iowa Supreme Court

109 Iowa 585

80 N.W. 660

HAWKEYE INS. CO. ET AL.

v.FRENCH, ASSESSOR.

Supreme Court of Iowa.

Oct. 26, 1899.

Appeal from district court, Polk county; S. F. Prouty, Judge.

Suits in equity to enjoin defendant, who is an assessor for the city of Des Moines, from listing and assessing the property and capital stock of plaintiffs, who are corporations organized under the laws of this state for the purpose of doing business of fire insurance. The trial court denied the relief asked, and plaintiffs appeal. Affirmed.J. B. Johnson, Read & Read, J. S. Clark, J. A. Dyer, and McVey & McVey, for appellants.

Thomas A. Chesire and J. E. Mershon, for appellee.

Milton Remley, Atty. Gen., for the State.

DEEMER, J.

Section 1333 of the Code of 1897, in so far as it is material to this controversy, reads as follows: “Every other insurance company or association doing business in this state, not including those otherwise taxed under the provisions of this section, and not including county mutuals and fraternal beneficiary associations, shall at the time of making the annual statements as required by law, pay into the state treasury as taxes one per cent. of the gross amount received by it on assessments, fees, dues, or premiums for business done in this state, including all insurance upon property situated in this state and upon the lives of persons resident in this state during the preceding year, after deducting amounts actually paid for losses and the amount of premiums returned. At the time of paying said taxes, said companies and associations shall take duplicate receipts therefor, one of which shall be filed with the auditor of state, and upon filing of said receipt, and not till then, the auditor shall issue the annual certificate as provided by law, and the taxes provided in this section shall be in full for all taxes, state and local, against such corporations or associations, except taxes on real estate and special assessments. No deduction or exemption from the taxes herein provided shall be allowed for or on account of any indebtedness owing by any such insurance company or association.” Appellants paid into the state treasury the taxes provided for by this act. Section 1323 of the same Code provides that: “The shares of stock in corporations organized under the laws of this state, except those which are not organized for pecuniary profit, and except corporations otherwise provided for in this act, shall be assessed to the owners thereof, at the place where its principal business is transacted, the assessment to be on the value of such shares on the first day of January in each year; but in arriving at the total value of the stock of such corporations the amount of their capital actually invested in real estate and owned by them, either in this state or elsewhere, shall be deducted from the real values of such shares, and such real estate shall be assessed as other real estate, and the property of such corporation, except real estate situated within the state shall not be otherwise assessed.” At the time of the commencement of these suits the defendant, who is an assessor for the city of Des Moines, was about to list the shares of stock in the plaintiff companies under the provisions of this act, and the action was brought to restrain him from so doing.

Plaintiffs' contention is that, having paid the taxes required of them by section 1333, before quoted, they are relieved from all other taxes, state and local, except taxes on real estate and special assessments; while defendant contends that that part of said section which relieves them from the payment of state and local taxes is contrary to the provisions of section 2, art. 8, of the constitution, which is in these words: “The property of all corporations for pecuniary profit shall be subject to taxation the same as that of individuals.” But for the clause contained in section 1333, relieving insurance companies organized in this state, that have paid the tax therein provided, from the payment of state and local taxes, there would be no question of the right and duty of the defendant to list their shares of stock as required by section 1323 of the Code; and the sole question for solution is, is that provision valid? We may also assume that, but for the clause we have quoted from the constitution, the legislature would have the right to provide for a tax upon the gross receipts of companies engaged in the insurance business, and relieve them from the payment of any other tax. Reduced to its last analysis, the question is a narrow one, and must find its solution in the construction of the constitutional provision relied upon by appellee. That provision not only requires that the property of corporations be taxed, but that it be subject to taxation the same as that of individuals. This does not mean, of course, that the methods should be identical, but that the property of corporations organized for pecuniary profit should assume the same burdens as are placed upon the property of individuals, and that the taxes should be for the same purposes and objects. It will not do to say that the constitutional provision is a mere grant of power to the legislature to impose taxes on corporate property. That power would exist in the absence of any constitutional grant. Indeed, it is fundamental that a state constitution is not a grant of power, but a limitation upon the powers of government. Generally speaking, a state may do whatever is not prohibited by its constitution. Morrison v....