Kansas City v. Travelers Ins. Co., 22281

• Decision Date: 05 December 1955
• Docket Number: No. 22281,22281
• Citation: 284 S.W.2d 874
• Parties: KANSAS CITY, Missouri, a municipal corporation, Plaintiff-Appellant, v. TRAVELERS INSURANCE COMPANY, a corporation, Defendant-Respondent. . Missouri
• Court: Missouri Court of Appeals

Page 874

284 S.W.2d 874

KANSAS CITY, Missouri, a municipal corporation, Plaintiff-Appellant, v. TRAVELERS INSURANCE COMPANY, a corporation, Defendant-Respondent.

No. 22281.

Kansas City Court of Appeals. Missouri.

Dec. 5, 1955.

David M. Proctor, Maurice E. Benson, Kansas City, for appellant.

Clay C. Rogers, Kansas City, Rogers, Field & Gentry, Kansas City, of counsel, for respondent.

CAVE, Judge.

This is a proceeding under the Declaratory Judgments Act, Ch. 527 RSMo 1949, V.A.M.S. For brevity, we shall refer to the appellant as the "city" and to the respondent as the "company".

The fundamental question presented is whether the city, under Sec. 148.440 RSMo 1949, V.A.M.S. has the authority to levy and collect an occupation license tax from the defendant company for the 6 separate individuals, firms and corporations doing its business in the city, in addition to the license tax which the company has paid or tendered for the location of its principal office and place of business in the city. The trial court found the issues for the company, and the city appealed. The maximum amount claimed by the city is $4,200, consequently this court has jurisdiction.

There was an agreed statement of facts and we shall refer to such as are necessary during the course of the opinion. The defendant was a foreign insurance company licensed to do business in this state and was engaged in the business of writing life, accident and health, personal liability and workmen's compensation insurance. It maintains a branch office in Kansas City where the business of the company, for a specified territory, is transacted. At all times in issue, the company had appointed six agents, who operate as independent contractors; and are variously known as "insurance counsellors, insurance agents, brokers, insurance agencies". Under their appointment, said agents are not employees of the company, and the sole basis of their compensation is the commission which the agents receive for insurance tendered by them and accepted by the company. The "question of these agencies or firms acting as brokers is not at issue in this proceeding; ***". The company is not a fire insurance company.

It is conceded that the city ordinances are sufficiently broad to require the company to pay an occupation license tax for each separate office or agency doing business for it in Kansas City, and we need not review such ordinances. It is also conceded that the city's sole statutory authority to make such a levy is Sec. 148.440. The pivotal point of dispute is whether this section qualifies or restricts the authority of the city to make such a levy. The section reads:

"1. The agent or agents of any such insurance company doing insurance business in any city in this state, having a population of more than five hundred thousand inhabitants, in addition to the tax on premiums as above provided for against such companies, shall also pay to the collector of said city, if said city shall so declare by ordinance, on or before the first day of February of each and every year, not more than the sum of two hundred dollars for each such fire insurance company, and for each such other insurance company not more than the sum of one hundred dollars, for the use of said city, which sum shall be considered in full for and in lieu of all taxes and licenses which said city may possess the power to impose on such agencies; and such collector shall, upon such payment being made, issue to such agent or agents a license, in the name of such city, to do the business of such agency for one year, which license shall be renewed from year to year, if demanded. This section shall be construed as authorizing but one such tax for each such insurance company in each such city regardless of the number of agents which such company may have in such city.

"2. Any such insurance company and any insurance agent doing insurance business in any city in this state having a population of more than one hundred thousand inhabitants and less than five hundred thousand inhabitants, in addition to the tax on premiums as above provided for against such companies, shall also pay to the collector of said city, if said city shall so declare by ordinance, on or before the fourth day of January of each and every year, not more than the sum of two hundred dollars for each such fire insurance company, and for each such other insurance company not more than the sum of one hundred dollars, for the use of said city for each agent, agency or office doing an insurance business for such company in said city; which sum shall be considered in full for and in lieu of all taxes and licenses which said city may possess the power to impose on such agencies; and such collector shall, upon such payment being made, issue to such agent or agents a license, in the name of such city, to do the business of such company at such agency or office for one year, which license shall be renewed from year to year, if demanded."

All italics in this opinion are supplied.

In construing a statute and arriving at the intent thereof, it is proper and helpful to consider its historical background. The forerunner of Sec. 148.440 was first adopted in 1865, and Chapter 90, Sec. 12 of the General Statutes of that year provided that: "The agent or agents of any foreign insurance company, doing *** business in the city of St. Louis, in addition to the tax on gross premiums, as above provided for *** shall also pay to the collector ***, the sum of one hundred dollars for the use of said city, which sum shall be considered in full for and in room of all taxes and licenses which said city may possess the power to impose on such agencies; and such collector shall, ***, issue to such agent or agents a license *** for the carrying on of the business of such agency for one year, ***, and shall not be subject to any other taxation of any kind whatever by said city."

With some minor amendments this section was carried into the Revisions of 1879, 1889 and 1899. During that interim the section was amended to become applicable to any city "having a population of more than one hundred thousand". It is conceded that in 1890, Kansas City had a population in excess of 100,000, and therefore the section became applicable to Kansas City as well as St. Louis.

In 1903, and while the statute read as above indicated, this court, in Kansas City v. Oppenheimer, 100 Mo.App. 527, 75 S.W. 174, reviewed the statute and held that Kansas City could not, by ordinance, provide for the collection of a license tax from an insurance company doing business in the city and also a separate license tax from its agent or agents. The court said in 100 Mo.App. at page 531, 75 S.W. at page 175: "It follows that the passage of an ordinance like that in issue, requiring such companies to pay an annual license tax of $100, and also its agents to pay a further license of $25 each, is manifestly the exercise of a power greatly in excess of that permitted to it by the statute. *** The ordinance so far contravenes the restriction imposed by the statute on the power of the city, under its charter, to tax and license foreign insurance companies and insurance agencies, that we must hold it invalid."

In 1909, Laws of 1909, pp. 607-608, the section was again amended in certain respects. The most important amendment is the addition of the language which is found in paragraph 2 of the 1949 Revision as above quoted. The language of paragraph 1 of the Revision of 1949 has remained substantially the same since the Revision of 1889, except the last sentence thereof. One of the effects of the amendment of 1909 was to make two classifications of cities for the purpose of levying a license tax on insurance companies and agents. The first classification applied to cities of "more than five hundred thousand inhabitants,"--the City of St. Louis; and the second classification applied to cities having a population of "more than one hundred thousand inhabitants and less than five hundred thousand inhabitants,"--Kansas City.

The last amendments were made in 1919, Laws of 1919, pages 396-397. The first amendment, which was made applicable to both St. Louis and Kansas City provided: "*** two hundred dollars for each such fire insurance company, and for each such other insurance company not more than the sum of one hundred dollars".

The second amendment, which was inserted in the middle of the section, provided: "This section shall be construed as authorizing but one such tax for each such insurance company in each such city regardless of the number of agents which such company may have in such city".

The city argues that the last quoted amendment, "This section shall be construed ***", applies only to that part of the section preceding it, or to St. Louis. The company contends that such amendment applies to the entire section, or to both St. Louis and Kansas City. Thus the line of controversy is sharply drawn. What do the words "this section" mean?

For more than a century, it has been the policy of this state to publish the revised statutes by arranging the general subjects of legislation into "Chapters", which generally incorporate most of the statutory law affecting a certain subject matter; and the "Chapters" are divided into "Articles", which...