Lowry, Ins. Com'r. v. City of Clarksdale

• Decision Date: 06 May 1929
• Docket Number: 27796
• Citation: 122 So. 195,154 Miss. 155
• Parties: LOWRY, INS. COM'R., et al. v. CITY OF CLARKSDALE et al
• Court: Mississippi Supreme Court

122 So. 195

154 Miss. 155

LOWRY, INS. COM'R., et al. v. CITY OF CLARKSDALE et al

No. 27796

Supreme Court of Mississippi

May 6, 1929

APPEAL from circuit court of First district, Hinds county.

(In Banc.)

1. CONSTITUTIONAL LAW. Guaranty of "equal protection" requires that all persons subject to legislation be treated alike under like circumstances and conditions.

Guaranty of equal protection of the laws does not prohibit legislation which is limited either in objects to which it is directed or by territory within which it is to operate, but it merely requires that all persons subject to such legislation shall be treated alike under like circumstances and conditions both in privileges conferred and liability imposed.

2. CONSTITUTIONAL LAW. Guaranty of equal protection is not infringed by legislation applying only to those persons falling within specifield class, if it applies alike to all persons of class and reasonable grounds exist for classification.

Guaranty of equal protection of laws is not infringed by legislation which applies only to those persons falling within a specified class, if it applies alike to all persons within such class and reasonable grounds exist for making distinction between those who fall within such class and those who do not.

3. CONSTITUTIONAL LAW. Classification for taxation must be based on substantial distinction bearing reasonable relation to purposes sought to be accomplished.

Classification for purposes of taxation must be based upon some real and substantial distinction, which bears a reasonable, just, and proper relation to objects sought to be accomplished, and this within field of subject-matter concerning which classification is made.

4. TAXATION. No tax may be laid to raise funds for private purpose. No tax may be laid to raise funds for a mere private or personal purpose.

5. CONSTITUTIONAL, LAW. Taxation. Statute imposing tax on insurance premiums to create and maintain fireman's disability and pension fund held to violate equality provisions of Federal Constitution (Laws of 1924, chapter 189, and section 7).

Laws of 1924, chapter 189, providing that fireman's disability and pension fund shall be created and maintained by tax on insurance premiums, held to violate equality provisions of Federal Constitution, especially in view of section 7 of the Act, providing for addition of such tax, with consent of rating bureau, to premiums fixed and collected in municipality establishing such fund.

HON. W H. POTTER, Judge.

HON. W H. POTTER, Judge.

Petition for writ of mandamus by the city of Clarksdale and others against Ben S. Lowry, Insurance Commissioner, and others. From a judgment awarding the writ, respondents appeal. Reversed, and petition dismissed.

Reversed, and petition dismissed.

R. L McLaurin, of Vicksburg, and Watkins, Watkins & Eager, of Jackson, for appellants.

POINT I.

Chap 189, Laws of 1924, violate both state and Federal Constitutions. (a) Section 112 of the Constitution of the state of Mississippi; (b) Section 14 of the Bill of Rights of the Constitution of the state of Mississippi; (c) Section 96 of the Constitution of the state of Mississippi; (d) Paragraph 1 of the Fourteenth Amendment to the Constitution of the United States.

Pearl River County v. Lacey Lbr. Co., 86 So. 755, 124 Miss. 85; Norwood v. State, 126 Miss. 272; 6 R. C. L., page 92; Section 16 of the Act; Section 17 of the Act; Section 18 of the Act.

Act violates sec. 96 of the state Constitution objection to act, as to Fourteenth Section of Bill of Rights of Constitution of state of Mississippi, Fourteenth Amendment to Constitution of United States and sec. 112, Constitution of state of Mississippi.

(a) Tax arbitrary, unjust, unequal and discriminatory.

(1) Arbitrary fixation of amount contributed by fire insurance companies without reference to their obligation to contribute to fund, without relation to benefits to be received by taxpayer, with no provision for notice to insurance companies or judicial determination of assertion by taxpayer that amount required is excessive, discriminatory and out of proportion to benefits received.

(2) If true that fire insurance companies benefited by act, and tax imposed has any just and reasonable relation to proportionate benefits, the following additional persons would receive benefits, upon whom no tax is provided.

(a) Property in state of Mississippi in the corporate limits, subject to the same protection;

(b) Property of the county in which the municipality is situated in corporate limits subject to same protection;

(c) Property of municipality in municipality subject to same protection;

(d) Persons who carry no fire insurance owning property inside or just outside of the municipality, which would receive protection;

(e) Persons within the municipality, and on the outside who would receive protection, whose property is inadequately insured;

(f) Insurance companies doing overhead writing, receiving benefits of system, none of which required under the terms of the act to contribute anything thereto.

Clark v. Miller, Rev. Agt., 105 So. 502, 142 Miss. 123; State of La. v. Mer. Ins. Co., 12 La. Ann. 802; Philadelphia Ass'n v. Wood, 39 Pa. St. 73; San Francisco v. L. & L. & G. Ins. Co. (Cal.), 5 A. S. R. 425; Henderson v. L. & L. & G Ins. Co., 135 Ind. 23, 41 A. S. R. 410; State v. Zeigenheim (Mo.), 66 A. S. R. 420; State v. Wheeler, 50 N.W. 770; Meade v. Acton, 138 Mass. 341; Aetna Ins. Co. v. Jones (S. C.), 58 S.E. 148, 13 L. R. A. (N. S.) 1147.

Construction of meaning of sec. 96, state Constitution.

City of Vicksburg v. Sun Ins. Co., 72 Miss. 67; R. D. Moore v. Walley, So. .

POINT II

Tax one-half of one per cent on premiums arbitrary, and has no relation to benefit intended to be secured.

La. v. Merchants Ins. Co., 12 La. Ann. 802.

Classes of persons equally benefited by the fund: (a) Uninsured property owner; (b) Property owner insured for less than value of property destroyed; (c) The city, county and state; (d) Property owners situated beyond limits of the municipality benefited by the fire department; (e) Unauthorized fire insurance companies.

Sick v. City of Bay St. Louis, 74 So. 272, 113 Miss. 175; Baker v. Bruesdown, 263 U.S. 137, 68 L.Ed. 212; Batters v. Oakland, 263 U.S. 162, 68 L.Ed. 228; Myers Salt Co. v. Bd. of Comm'rs, 239 U.S. 478, 60 L.Ed. 392; Saunders v. Shaw, 244 U.S. 317, 61 L.Ed. 1163; Gast R. & I. Co. v. Granite Co., 240 U.S. 55, 60 L.Ed. 523.

Discrimination in that tax-benefited parties not taxed.

Southern Bell Tel. Co. v. Calhoun, 287 F. 381.

Sec. 112, state Constitution, as well as sec. 14, Bill of Rights, state of Mississippi and Fourteenth Amendment to the Constitution of United States, requires that all persons similarly situated shall receive same kind of treatment.

Wirt Adams, Rev. Agt., v. Standard Oil Co., 53 So. 692, 97 Miss. 879; Chicago, St. L. & N. O. R. Co. v. Moss, 60 Miss. 614; G. & S. I. R. Co. v. Adams, 90 Miss. 559; City of Vicksburg v. Mullens, 106 Miss. 217; Sorensen v. Webb, 71 So. 273, 111 Miss. 87; Wirt Adams, Rev. Agt., v. Miss. Lbr. Co., 84 Miss. 23; Hyland, Sheriff, v. Sharp, 41 So. 264, 88 Miss. 567.

POINT III.

No provision for judicial ascertainment or review by aggrieved taxpayer.

Ohio Valley Water Co. v. Borough, 253 U.S. 287, 64 L. Ed., 908; Ex parte Young, 52 L.Ed. 714; Bluefield Waterworks v. Service Com., 262 U.S. 679, 64 L.Ed. 1176; Washington, State of, v. Roberge, Sup. Ct., U.S. 73 L.Ed. 39.

POINT IV.

Act complained of violates Fourteenth Amendment, Constitution of the United States because not applicable to domestic companies.

Chap. 261, Miss. Laws, 1926; Royster Guano Co. v. Virginia, 253 U.S. 412, 64 L.Ed. 989; Hanover F. Ins. Co. v. Carr, 272 U.S. 494, 71 L.Ed. 372; Quaker City Cab Co. v. Pennsylvania, 607 S.Ct. Vol. 48, page 553; Yick Wo v. Hopkins, 118 U.S. 356, 30 L.Ed. 220.

POINT V.

Tax levied for a private purpose.

Robinson v. Dunn (Cal.), 11 A. S. R. 297; Mahon v. Bd. of Education (N. Y.), 63 N.E. 1107, 89 A. S. R. 110; Dodge v. Mission Tp. (C. C. A. 8), 107 F. 827; Sutherland v. Evart (C. C. A.), 86 F. 597; McClelland, Trustee, v. State (Ind.), 37 N.E. 1089; St. Paul Trust & Sav. Bd. v. American Clearing Co. (D. C., Fla.), 291 F. 212.

APPENDIX.

Firemen's Pension Fund Act of 1926 held unconstitutional, opinion, RUSH H. KNOX, Attorney-General, State of Mississippi.

REPLY BRIEF.

Constitutionality of the act to be determined by what may be done.

12 Corpus Juris, page 786; Minneapolis Brewing Co. v. McGillivray, 104 F. 258; Grainger v. Douglas Park Jockey Club (C. C. A. 6), 148 F. 513, 8 A. & E. Cases, 997; Larabee v. Dolley, 175 F. 365; Moore v. Otis (C. C. A. 8), 275 F. 747; Savage v. Jones, 225 U.S. 501, 56 L.Ed. 1182; Clark v. Poor, 274 U.S. 554, 71 L.Ed. 1199; State v. Newman Lumber Co., 102 Miss. 802, 59 So. 923; Section 92, Constitution of Mississippi; Section 93, Constitution of Mississippi; Section 96, Constitution of Mississippi; Thompson v. State, 44 So. 989, 91 Miss. 662; Section 272, Constitution of Mississippi; Aetna Fire Insurance Co. v. Jones, 13 L. R. A. (N. S.) 1147; Ethridge, Mississippi Constitution, page 466; Ethridge, Mississippi Constitution, page 52; State v. Henry, 87 Miss. 125, 40 So. 152; Daily v. Swope, 47 Miss. 367.

Benefits allowed. (a) Section 16 of the Act; (b) Section 17 of the Act; (c) Section 18 of the Act.

Moore v. Walley, State Treasurer, Brief, page 31.

The Act delegates legislative authority. (1) Petition required to be signed by two members of fire department and no one else. (2) Legislature cannot submit to qualified electors, right to vote a tax affecting fire insurance companies, as to which no notice given companies sought to be charged and no right of...