Manufacturers' Mut. Fire Ins. Co. v. Clarke

• Decision Date: 11 June 1918
• Docket Number: No. 477.,477.
• Citation: 103 A. 931,41 R.I. 277
• Parties: MANUFACTURERS' MUT. FIRE INS. CO. v. CLARKE, City Treasurer.
• Court: Rhode Island Supreme Court

103 A. 931

41 R.I. 277

MANUFACTURERS' MUT. FIRE INS. CO.

v. CLARKE, City Treasurer.

No. 477.

Supreme Court of Rhode Island.

June 11, 1918.

Case Certified from Superior Court, Providence & Bristol Counties.

Action by the Manufacturers' Mutual Fire Insurance Company against Walter L. Clarke, as Treasurer of the City of Providence. Case certified on constitutional question from Superior Court under Gen. Laws 1909, c. 298, § 1. Case remitted to superior court.

See, also, 100 Atl. 400.

Archibald C. Matteson and William J. Brown, both of Providence, for plaintiff. Elmer S. Chace, City Sol., and Charles P. Sisson, Asst. City Sol., both of Providence, for defendant.

SWEETLAND, J. This is an action brought to recover the amount of a tax paid under protest by the plaintiff to the defendant as city treasurer of Providence. The constitutionality of the act under which said tax was assessed was brought in question upon the record in the superior court, and the case has been certified to this court for the determination of such constitutional question.

The plaintiff is a corporation duly created and organized under the laws of this state, and is doing business therein as a mutual fire insurance company. The law in accordance with the provisions of which said tax was assessed and the constitutionality of which is questioned is section 5, c. 784, of the Public Laws, approved March 28, 1912, amending paragraph 11 of section 39, c. 769, of the Public Laws approved February 15, 1912; the latter being called the Tax Act of 1912. Section 5, c. 784, Public Laws 1912, is as follows:

"Sec. 5. Paragraph eleventh of section 39 of the Tax Act of 1912, is hereby amended to read as follows:

"'11. Every mutual insurance company and every mutual surety company incorporated by this state, shall be liable to taxation on its intangible personal property in the town where the corporation is located. Every stock insurance company incorporated by this state which pays a tax upon premiums and assessments under the provisions of section 35 of this act shall be exempt from taxation on its intangible personal property in the town or city where such corporation is located.'"

Section 35 of the Tax Act of 1912, referred to in this section, is as follows:

"Sec. 35. Section 5 of chapter 39 of the General Laws is hereby amended to read as follows:

"'Sec. 5. Every mutual insurance company incorporated and doing business in this state shall annually, on the first Monday in April, pay to the general treasurer a tax of one per centum, and every other insurance company incorporated and doing business in this state shall annually, on the first Monday in April, pay to the general treasurer a tax of two per centum, on the premiums and assessments received by such company during the year ending on the thirty-first day of December next preceding (without any deductions for dividends or unearned premiums applied in part payment of such premiums or returned to policyholders in cash or otherwise), on property and upon the lives of individuals insured by such company within the state, and on property and upon the lives of individuals insured by such company in any other state on which such company has not paid, and is not liable to pay, a tax to such other state: Provided, that such companies issuing the standard form of fire policy prescribed by chapter 222 of the General Laws may deduct from such premiums and assessments so much thereof as shall have been returned to the holders of such policies during said year upon cancellations thereof as required by section 5 of said chapter 222.'"

The constitutional question certified to us is as follows:

"Is the tax assessed by the assessors of the city of Providence against the plaintiff on its intangible personal property on the 15th day of June, 1915, illegal and void for the reason that the legislation, chapter 784, § 5, of the Public Laws of 1912, in accordance with which the tax was assessed, is repugnant to and in violation of article 1, § 2, of the Constitution of Rhode Island, which requires that the burdens of the state ought to be fairly distributed among its citizens, and article 14 of the Amendments to the Constitution of the United States, which requires that no state shall deprive any person of life, liberty or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws, the effect of such legislation being, to relieve stock insurance companies incorporated and doing business in this state from taxation upon their intangible personal property while subjecting mutual insurance companies incorporated and doing business in this state to taxation upon their intangible personal property?"

The plaintiff claims that the statute in question, by making the plaintiff liable to taxation on its intangible personal property and by exempting stock insurance companies incorporated by this state from such taxation, creates an unjust and arbitrary discrimination against it as a mutual fire insurance company incorporated by this state and in favor of said stock fire insurance companies; that such stock fire insurance companies and the plaintiff are each engaged in the same kind of business and belong to the same class.

The plaintiff has sought to introduce evidence before us tending to show the inequality between the burden of taxation imposed upon it and that placed upon certain stock tire insurance companies under the provisions of said section. The plaintiff contends that unless it is permitted to introduce such evidence, this court will be unable either to see that the alleged discrimination exists, or to appreciate its extent. This court will make every intendment in favor of the constitutionality of an act of the General Assembly. It is generally recognized that while the burden of taxation should be distributed fairly among the citizens, absolute fairness and equality is unattainable. In re Dorrance Street, 4 R. I. 230. We must assume that the General Assembly in enacting said law had in mind the constitutional direction and restriction; and, that after a consideration of all the facts bearing upon the matter, it did so impose the burdens of taxation provided for in said section as to its judgment seemed reasonably fair and equal. If, in our opinion, the plaintiff was justified in its contention that although they differed in the manner of...