Massachusetts Bonding & Ins. Co. v. Chorn

Decision Date04 March 1918
Docket NumberNo. 20385.,20385.
Citation274 Mo. 15,201 S.W. 1122
CourtMissouri Supreme Court
PartiesMASSACHUSETTS BONDING & INS. CO. v. CHORN, State Ins. Superintendent.

Appeal from Circuit Court, Cole County; J. G. Slate, Judge.

Suit for injunction by the Massachusetts Bonding & Insurance Company against Walter K. Chorn, as Superintendent of Insurance for the State of Missouri. Prom an order sustaining a demurrer dismissing the amended petition, plaintiff appeals. Affirmed.

This was instituted by petition for injunction filed in the Cole county circuit court April 30, 1917. A preliminary restraining order was granted on the same day. On the first day of the following June term the defendant appeared and demurred generally to the petition. On the fifth day of the same term the plaintiff filed an amended petition in words and figures (omitting caption and signatures) following:

"Now comes the plaintiff and for its cause of action against the defendant states that it is a corporation organized under the laws of the state of Massachusetts and authorized to transact business in the state of Missouri as a foreign insurance company; that Walter K. Chorn is the duly elected, qualified, and acting superintendent of insurance in the state of Missouri.

"Plaintiff further states that during the year ending December 31, 1916, plaintiff issued a great number of contracts of insurance in the state of Missouri, consisting of policies of indemnity, known as liability policies, health and accident policies, surety bonds, and so forth; that the premiums on all of said contracts of insurance received by the plaintiff under sections 7099 and 7100 of the Revised Statutes of Missouri, 1909, as construed by the defendant, amounted to one hundred ninety-five thousand, three hundred eighty-four dollars and sixty-one cents ($195,384.61); in other words, under the construction placed upon said sections 7099 and 7100 of the Revised Statutes aforesaid by the defendant, the plaintiff received as premiums under said year on its business done in the state of Missouri during the said year the sum of one hundred ninety-five thousand, three hundred eighty-four dollars and sixty-one cents; that in truth and in fact plaintiff did not receive the said sum of one hundred ninety-five thousand, three hundred eighty-four dollars and sixty-one cents on business done in the state of Missouri during said year; that part of the contracts issued by it in the state of Missouri during said year were returned and the premiums refunded to the persons to whom, on the face of said contracts said contracts were issued; that by the terms of a large number of said contracts the parties to whom they were issued were given the right to cancel the same, in which event the plaintiff was required to refund the unearned premium from the date of the cancellation, and the plaintiff was given the right to cancel the same by refunding the unearned premium; that of the amount of one hundred ninety-five thousand, three hundred eighty-four dollars and sixty-one cents, the plaintiff returned to applicants for its contracts of insurance the sum of twenty-three thousand, five hundred four dollars and eleven cents on account of policies and bonds not taken or canceled during said year; that during said year the plaintiff paid out of said sum of one hundred ninety-five thousand, three hundred eighty-four dollars and sixty-one cents to other insurance companies transacting business in the state of Missouri under the authority of the laws of the state of Missouri the sum of twenty-three thousand, ninety-six dollars and eighty-five cents for reinsurance on policies and bonds on account of which it had as aforesaid received the sum of one hundred ninety-five thousand, three hundred eighty-four dollars and sixty-one cents; and that therefore it has only actually received on business done in the state of Missouri during said year the sum of one hundred forty-eight thousand, seven hundred eighty-three dollars and sixty-five cents ($148,783.65), which amount includes premiums received from other companies authorized to transact business in the state of Missouri for reinsurance written by plaintiff for such other companies.

"Plaintiff further states that the defendant, acting under the assumed authority of sections 7099 and 7100 of the Revised Statutes of Missouri, 1909, has demanded from the plaintiff as a tax the sum of three thousand, nine hundred seven dollars and sixty-eight cents ($3,907.68), which is 2 per cent. on said sum of one hundred ninety-five thousand, three hundred eighty-four dollars and sixty-one cents.

"Plaintiff further states that, as construed by defendant, said section 7099 is violative of and is in conflict with section 3, art. 10, of the Constitution of Missouri and with section 4, art. 10, of the Constitution of Missouri in that said section imposes a double tax on the property of plaintiff and all companies similar to plaintiff, and in that it imposes a tax that is not uniform upon objects of the same class, and in that it imposes a tax that is not in proportion to the value of plaintiff's property sought to be taxed.

"Plaintiff further states that it is willing to pay a tax of 2 per cent. on said sum of one hundred forty-eight thousand, seven hundred eighty-three dollars and sixty-five cents, amounting to two thousand, nine hundred seventy-five dollars and sixty-eight cents ($2,975.68), and has offered to pay the same to G. H. Middlecamp, state treasurer of the state of Missouri, and has tendered said sum to said state treasurer, and now offers to pay the same into court, and that said state treasurer has refused to accept the same.

"Plaintiff further states that defendant, acting under the assumed authority of section 7100 of the Revised Statutes of Missouri, 1909, has threatened to suspend plaintiff from the further transaction of its business in the state of Missouri and will, unless restrained by this court, suspend plaintiff from the further transaction of business in this state. Plaintiff states that, if the defendant is permitted to suspend plaintiff from the further transaction of business in this state, it will be irreparably damaged and that it has no adequate remedy at law.

"Wherefore, plaintiff prays for an order of this court perpetually enjoining the defendant from suspending the plaintiff from the transaction of its business in the state of Missouri, because of its failure to pay said illegal tax of three thousand, nine hundred seven dollars and sixty-eight cents ($3,907.68), and for such other and further relief as in equity and in good conscience the plaintiff may be entitled to."

The demurrer previously filed was on the same day taken up, and, being treated as applicable to the amended petition, was sustained, and, the plaintiff declining to plead further, final judgment was entered dismissing its petition, from which this appeal was duly taken.

Harding, Deatherage, Murphy & Harris, of Kansas City, for appellant. Frank W. McAllister, Atty. Gen., and John T. Gose, Asst. Atty. Gen., for respondent.

BROWN, C. (after stating the facts as above).

As will be seen from the foregoing statement, the object of this suit is to enjoin the defendant, in his capacity of insurance commissioner of this state, from suspending the plaintiff, a corporation of the state of Massachusetts, from the further transaction of its business in this state as a foreign insurance company, until it shall have paid the full sum of $3,907.68 demanded of it as tax assessed upon premiums received in this state, or upon business done in this state, under the provisions of section 7099 of the Revised Statutes of Missouri, 1909.

The petition states, in substance, that during the year ending December 31, 1916, plaintiff issued a great number of contracts of insurance in the state "consisting of policies of indemnity, known as liability policies, health and accident policies, surety bonds, and so forth," the premiums received on all of which amounted to $195,384.61, as construed by defendant, while in fact it did not receive that amount, because out of the said amount of premiums so received it returned to applicants for its contracts of insurance the sum of $23,504.11 on account of policies and bonds not taken, or canceled during said year, and paid to other insurance companies lawfully transacting business in this state the further sum of $23,096.85 for reinsurance on policies and bonds on which it had received premiums included in said amount on which the tax was charged, so that it had actually received on business done in the state during that year the sum of $148,783.65, which included premiums received from other companies authorized to transact business in this state for insurance written for them by plaintiff. On this sum the plaintiff offers to pay the 2 per cent. tax imposed by the section cited.

The exactions complained of are, it will be observed, divided into two classes only: (1) The tax on premiums returned to the insured on policies undelivered or canceled; and (2) the tax on premiums expended for reinsurance by plaintiff on the same risks in other companies doing business in the state. It is perhaps intimated, but not stated, in the petition that the first of these includes three subclasses: (1) Premiums collected on contracts issued and returned and the premiums refunded; (2) premiums collected and returned on policies cancelled by plaintiff, at its own instance; and (3) premiums collected and returned on policies canceled at the instance of the insured under the terms of such policies. There is nothing, however, in the terms of the petition which indicates the amount of the returned premiums, if any, belonging to any one of these three subclasses. Its theory seems to be that all premiums received and returned to the insured, either by reason of the nondelivery of the policies for which they had been paid or on account...

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