Iowa Mut. Tornado Ins. Ass'n v. Gilbertson
Citation | 106 N.W. 153,129 Iowa 658 |
Parties | IOWA MUT. TORNADO INS. ASS'N v. GILBERTSON, STATE TREASURER, ET AL. (SEVENTEEN OTHER CASES). |
Decision Date | 14 February 1906 |
Court | United States State Supreme Court of Iowa |
OPINION TEXT STARTS HERE
Appeals from District Court, Polk County; James A. Howe, Judge.
Actions at law to recover taxes paid under protest, by the various insurance companies, appellants, to the defendants, who are respectively the Treasurer and Auditor of State. It is claimed that the statute, under which the taxes were exacted, is unconstitutional and void. Defendants' demurrers to the petitions were sustained, and judgments were rendered against the several insurance companies for the costs. They each prosecuted appeals to this court, and here the cases were consolidated and will be considered together. Affirmed.Edmund H. McVey, for appellants.
Charles W. Mullan, Atty. Gen., for appellees.
The statute, under which the taxes sought to be recovered were exacted, reads as follows: 28th Gen. Assem. p. 26, c. 43, § 5; section 1333d, Code Supp. 1902. It is alleged that each of plaintiffs was a corporation organized under chapter 5 of title 9 of the Code, relating to corporations not for pecuniary profit, and that they paid the taxes required by said statute under protest, by reason of defendants' threats, and under compulsion, in order to protect themselves from irreparable injury. The law, under which these taxes were exacted, is said to be unconstitutional and void, in that it discriminates unfairly and illegally against complainants, is unequal in its application, and offends against article 1, § 6, article 3, § 30, and article 8, § 2, of the Constitution of Iowa, the fourteenth amendment to the federal Constitution, and the civil rights act, known as section 1977 of the Revised Statutes of the United States [[[U. S. Comp. St. 1901, p. 1259]. It is also contended that these complainants are exempt from all taxation under section 1304 of the Code of Iowa; and that the law under which they were organized does not contemplate the creation of a fund whereby to meet such taxation.
These propositions are nearly all based upon the fundamental concept that plaintiffs are corporations organized under our statutes as “not for pecuniary profit,” and this is alleged to be the fact in the petitions filed in the several cases. The demurrers filed admit all facts well pleaded, but do not, of course, admit conclusions of law, nor do they admit facts which are contrary to law, nor such as are legally impossible. Wheeler v. R. R. Co., 31 Cal. 46, 89 Am. Dec. 147;Griffin v. R. R. Co., 72 Ga. 423;Scofield v. McDowell, 47 Iowa, 129. To a proper solution of the questions involved it will be necessary first to go to the law authorizing the creation of such insurance companies as are here involved, in order that we may determine their character and understand their legal status. By section 1759 it is provided that “any number of persons may, without regard to the provisions of the preceding chapter, enter into contracts to and with each other for their insurance from loss or damage from fire, tornadoes, lightning, hailstorms, cyclones or windstorms, but such associations of persons shall in no case insure any property not owned by one of their own number, except school or church property within the territory in which they do business as may be approved; and the reinsurance of risks of similar associations.” And by section 1760 we have this differentiation of such associations: “Any association incorporated under the laws of this state for the purpose of furnishing insurance as provided for in this chapter, doing business only within the county in which is situated the town or city named in its articles of incorporation as its principal place of business, or the counties contiguous thereto, shall, for the purpose of this chapter be deemed a county mutual assessment association; all other associations operating hereunder shall, for the purposes of this chapter, be deemed state mutual assessment associations.”
Chapter 1 of title 9 of the Code, under the general head “Of Corporations for Pecuniary Profit,” provides for the organization of corporations to do any kind of lawful business; and chapter 2 of the same title, under the designation “Of Corporations Not for Pecuniary Profit,” section 1642, reads as follows: “Any three or more persons of full age, a majority of whom shall be residents of this state, may incorporate themselves for the establishment of churches, colleges, seminaries, lyceums, libraries, fraternal lodges or societies, temperance societies, trades unions or other labor organizations, agricultural societies, farmers' granges, or organizations of a benevolent, charitable, scientific, political, athletic, military or religious character by signing, acknowledging, and filing for record with the county recorder of the county where the principal place of business is to be located, articles of incorporation stating the name by which the corporation or association shall be known, which shall not be the same as that of any such organization previously existing, its business or objects, the number of trustees, directors, managers or other officers to conduct the same, and the names thereof for the first year.” In chapter 4 of title 9 under the head “Of Insurance Other than Life,” we find section 1684 reading as follows: “Corporations formed for the purpose of insurance other than life, shall be governed by the provisions of chapter one of this title except as modified by the provisions of this chapter.” The sections of the Code first quoted are found in chapter 5 of title 9, under the caption “Of Mutual Fire Assessment Associations.”
The allegations of plaintiff's petitions with reference to the nature of their business are as follows: In the fifth paragraph of the petitions it is alleged:
Plaintiffs contend that they are organized under chapter 2 of title 9 as benevolent institutions; but this manifestly cannot be true, for, under the allegations of their petitions, they were each doing an insurance business. Grimes v. Northwestern Legion of Honor (Iowa) 64 N. W. 806, and cases cited. They are not simply benefit societies or benevolent associations; and if they incorporated they must have done so under chapter 1 of title 9 of the Code. That they had the right to do so is already established. Corey v. Sherman (Iowa) 60 N. W. 232, 32 L. R. A. 490. So that, if incorporated to do business under the general incorporation laws of the state, it must have been under chapter 1, tit. 9, and not under chapter 2 of that title. This then gives them the designation of corporations for pecuniary profit. As to the county mutuals referred to in the act now challenged, we shall have something to say during the course of this opinion. To the proposition that the act should be held not to apply to corporations like those now complaining, it is sufficient to say, that such taxes are a part of the expenses of conducting the business; and that by section 1765 of the Code, such corporations are authorized to make assessments to meet expenses. Even were there no such provision they would undoubtedly have the inherent right to meet all legitimate and proper expenses by assessments. We are then brought directly to the question: Does the act in question offend against any...
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