Johnston v. Hartford Fire Ins. Co.

• Decision Date: 11 October 1915
• Docket Number: 18212
• Citation: 69 So. 686,109 Miss. 808
• Court: Mississippi Supreme Court
• Parties: JOHNSTON, STATE REVENUE AGENT v. HARTFORD FIRE INSURANCE COMPANY

69 So. 686

109 Miss. 808

JOHNSTON, STATE REVENUE AGENT v. HARTFORD FIRE INSURANCE COMPANY

No. 18212

Supreme Court of Mississippi

October 11, 1915

APPEAL from the chancery court of Coahoma county. HON. R. B CAMPBELL, Special Chancellor.

Suit by J. C. Johnston, State Revenue Agent, against the Hartford Fire Insurance Company. From a judgment for defendant, the plaintiff appeals.

The facts are fully stated in the opinion of the court.

Affirmed.

Cutrer & Johnston, for appellant.

The learned chancellor who passed on this cause did not indicate what his opinion was upon any of the six several contentions presented by the demurrer, but generally sustained the demurrer upon the theory, according to statement made by him that the board of levee commissioners is authorized to levy only such a tax as may be paid in advance before the exercise of the privilege, or occupation, tax, and that inasmuch as the percentage sought to be levied upon insurance companies by the board upon their gross earnings could not be paid in advance, the ordinance of said board was in that regard ultra vires and void, and for this reason, the demurrer was sustained.

This brings up for consideration the construction of chapter 80 of the Laws of 1902. In construing that chapter, the court will bear in mind that the power of the board of levee commissioners to levy taxes comes directly from section 237 of the Mississippi Constitution, by which it is provided that "the legislature shall have full power to provide such system of taxation for said levee districts as it shall from time to time deem wise and proper." Acting under the authority of said section, the legislature, on February 26 1902, enacted chapter 80.

By section one of chapter 80 of the Laws of 1902, express authority was conferred upon the board of levee commissioners for the Yazoo-Mississippi Delta to levy a tax upon all privileges exercised, or thereafter to be exercised, within the limits of the levee district, and to amend, repeal, or change the levy made by them, the sole and only limitation placed upon the power of the levee commission in this regard being that the tax levied by the board shall in no event exceed the tax levied by the state on the same privilege. In our judgment, the purpose of the entire act was accomplished by section one and the remaining sections of chapter 80 are purely directory, providing ways and means for the collection of the tax when levied under the authority conferred by section one of said act.

We submit that the power of the board of levee commissioners to levy the same sort of a privilege tax as is levied by the state is not abridged simply because of the fact that section four provides a penalty to be paid by the person enjoying any privilege tax without first paying the taxes as prescribed. This is the only section in the act in which any mention is made of a requirement that a tax be "first" paid and clearly has reference to the fixed privilege.

The court will not, we submit, resort to a strained construction of the statute in order to curtail the power of the board in the matter of levying a privilege tax, but will so construe the entire act as to give full effect to each and every section thereof.

Section one authorizes the board of levee commissioners to levy a tax upon all privileges exercised, etc. Section two provides that the tax shall be levied by an order upon the minutes of the board, enumerating and designating the privileges taxed and the amount levied thereon.

Upon examination we find that the state of Mississippi imposed upon fire insurance companies a fixed privilege tax of one hundred dollars, and required an additional two and one-half per cent tax, same being a tax levied upon the privilege of doing business within the state. In order to provide funds. The board of levee commissioners following the example of the state, likewise levied a fixed privilege of one hundred dollars and an additional privilege tax of two and one-half per cent. Manifestly, the requirement that the tax be paid in advance, and that a license be procured, and the provision for criminal prosecution in case of a failure to pay the tax in advance and to procure the license applies to the fixed privilege of one hundred dollars, but none of these provisions limit the right of the board to levy an additional privilege tax, which shall be graduated equitably in proportion to the volume of business done, and this is all that the ordinance in question does, or seeks to do.

Originally all privilege taxes were collected by the county tax collector. After the creation of an insurance department, it was provided that the insurance companies should pay their state privilege tax to the commissioner. This, we submit, did not deprive the board of levee commissioners of the right to levy a privilege tax upon insurance companies simply because section three of chapter 80, following the manner of collecting taxes then prevailing, provided that the tax should be collected by the tax collector. We think that under the law as it now stands it is the duty of an insurance company wishing to engage in business within the levee district to apply to the proper collector, namely, the tax collector, or auditor of public accounts, and pay the fixed privilege tax of one hundred dollars, and procure license to do business; and when such company shall have engaged in business within the district for a period of one year, it is then the further duty of that company to report its volume of business and to pay to the levy commissioners through the proper collector, the percentage privilege tax; and for a failure so to do, the company so failing forfeits its right to do business in the future within the levee district. By adopting this theory, full effect is given to the levee ordinance, and likewise to each and every section of chapter 80 of the Laws of 1902.

We submit, therefore, that the ordinance and the act of the legislature, from which it is predicated, are valid and the demurrer interposed by defendant should have been overruled.

McLaurin & Armistead, for appellee.

This matter was submitted to the Hon. R. B. Campbell, as Special Judge and, as shown by the record, he specifically sustained the seventh ground of the demurrer. We don't see that we could enlighten the court in any better way than to copy here in full his letter as Special Judge, dated April 19, 1915, which is as follows:

"I have carefully considered the bill of complaint and the demurrer thereto, in the above styled suit, in the light of the very able arguments presented to me upon hearing the demurrer by the Hon. Amos Armistead, in behalf of the defendant, and the Hon. O. G. Johnston, in behalf of the complainant; and, without considering all of the grounds of the demurrer, I am clearly of the opinion that the demurrer should be sustained, on the ground that so much of section 66 of the ordinance of the board of levee commissioners, adopted August 8, 1912, which levied upon life insurance companies an annual tax of two and a quarter per centum upon the gross amount of their premium receipts in the district, and upon all other insurance companies a tax of two and one-half per centum of gross earnings in said district, less return premiums, was beyond the power conferred upon said board by chapter 80 of the Laws of 1902. While section 1 of that chapter confers the power upon said board to levy a tax 'upon all privileges' exercised in the district, the power thus conferred is limited by subsequent sections of that chapter, notably sections two, three, four and 10 thereof. The 'privileges' that may be taxed, as shown by sections 1 and 3 of said chapter, perhaps, mean every business that may be exercised in the district, whether taxed by the state or not; but, if taxed by the state, the tax levied by the said board, in consequence of section 2 of said chapter, cannot exceed the state tax. Section 3 of said chapter indicates that, where the state has imposed a privilege tax on any business carried on in said levee district, said board can only tax that privilege or business in cases where the tax collector of any county is authorized to collect the privilege tax imposed by the state; and that where the state tax is to be collected, not by a tax collector, but by the Commissioner of Insurance, the privilege is one that cannot be taxed by said board. But, without deciding that to be the true meaning of said chapter (I am clearly of the opinion that the tax, which said board is authorized by said chapter to levy, is such a...