In re Thomas Page

• Decision Date: 07 October 1899
• Docket Number: 11495
• Citation: 60 Kan. 842,58 P. 478
• Parties: In re THOMAS PAGE
• Court: Kansas Supreme Court

58 P. 478

60 Kan. 842

In re THOMAS PAGE

No. 11495

Supreme Court of Kansas

October 7, 1899

Decided July, 1899.

Original proceedings in habeas corpus.

Troutman & Stone, for petitioner.

A. A Godard, attorney-general, and J. S. West, for respondent.

OPINION

JOHNSTON, J.:

At the last session of the legislature there was' passed a law entitled "An act to provide for the taxation of contracts of insurance made with insurance companies not authorized to do business in Kansas, and providing for the enforcement thereof." (Laws 1899, ch. 249.) On May 26 1899, Thomas Page, owner of the Mid-Continent mills in Topeka, wrote to the Indiana Millers' Mutual Fire Insurance Company, of Indianapolis, Ind., proposing to take out insurance on his mill property with that company. At the same time he remitted thirty dollars to pay for a five-year policy on $ 2000 of insurance. The money was received and accepted by the company, and on May 29, 1899, the company, at its office in Indianapolis, issued a policy in accordance with the request of Page, placed it in the post-office, and by due course of mail it was received by Page at Topeka. The company was not authorized to do business in Kansas, and had no office, agent, solicitors or representatives in the state. In June, 1899, the superintendent of insurance made a demand on Page to exhibit his contracts and policies of fire insurance, and especially those issued by companies not authorized to do business in Kansas, but the demand was refused. Page never reported the policy mentioned to the superintendent of insurance, and never paid any tax on the premium therefor. The demand was made and the payment of the tax required in an attempt to enforce the act above mentioned. The statute provides that persons insuring property in Kansas with companies not authorized to do business in the state shall report the contracts of insurance to the superintendent of insurance for the purpose of taxation. All such contracts are to be taxed "in a sum equal to ten per cent. of the amount of premiums paid or contracted to be paid thereon, which said tax shall be paid by such insured to the superintendent of insurance, and the payment thereof shall be enforceable by process of law as other like taxes are, and said tax shall be a lien on said property so insured together with other taxes lawfully assessed against the same." It further provides that the taxes when collected shall be applied as follows: "Three-fifths thereof to the payment of the expenses of the insurance department, and two-fifths thereof shall be paid by said superintendent of insurance to the treasurer of the city or township in which said property so insured is situate for the benefit of the fire department thereof, if such department exists or be organized, whether paid or volunteer; otherwise, to be used in the general fund of said city or township." There is a provision requiring the owners of property to exhibit on demand to the superintendent of insurance, and to certain city or township officers, all policies or contracts of insurance, other than life and accident, made by companies or parties not authorized to do business in the state, but such policies or contracts are not required to be exhibited oftener than once every six months. Any violation of the provisions of the act is deemed to be a misdemeanor, and the failure to report the making of such a contract of insurance to the superintendent of insurance is punishable by a fine not exceeding $ 100; and a like penalty is inflicted on any person who fails or refuses to exhibit such insurance policies on demand of the officers. Page denied the validity of the law and refused to comply with its requirements, and with a view of testing its validity and to enforce its provisions the superintendent of insurance caused the arrest of the petitioner. It is challenged on several grounds, one of which is that it conflicts with section 1, article 11, of the constitution, requiring that "the legislature shall provide for a uniform and equal rate of assessment and taxation."

It will be observed that the burden imposed by the act is not a license, nor a charge placed upon a privilege, franchise, or occupation. It is specifically designated as a tax, and is levied upon insurance contracts, which are treated as taxable assets and property of the insured. The act is an anomaly in the method of raising public revenues, and constitutes a wide departure from the means of taxation heretofore employed in this state. It is said that a tax is ordinarily levied on the property, income or receipts of the taxpayer, and not upon what he has paid out. Counsel for the petitioner assert that "this is the pioneer effort to tax losses and disbursements, instead of profits and accumulations. It is the only recorded instance of requiring a man to pay a tax not upon what he hath or seemeth to have, but confessedly upon what he hath not." Such contracts, however, indemnify the insured against loss, and have some of the characteristics of bonds, mortgages and other like securities which are made the subjects of taxation. They...