Millers' Mut. Fire Ins. Co. v. City of Austin

• Decision Date: 26 March 1919
• Docket Number: (No. 6198.)
• Citation: 210 S.W. 825
• Parties: MILLERS' MUT. FIRE INS. CO. v. CITY OF AUSTIN.
• Court: Texas Court of Appeals

210 S.W. 825

MILLERS' MUT. FIRE INS. CO. v. CITY OF AUSTIN.

(No. 6198.)

Court of Civil Appeals of Texas. San Antonio.

March 26, 1919.

Appeal from District Court, Travis County; George Calhoun, Judge.

Suit by the City of Austin against the Millers' Mutual Fire Insurance Company. From judgment for plaintiff, defendant appeals. Affirmed.

E. C. Gaines, of Austin, for appellant.

J. Bouldin Rector, J. W. Maxwell, and Lightfoot, Brady & Robertson, all of Austin, for appellee.

FLY, C. J.

This is a suit instituted by appellee to recover taxes alleged to be due for the years 1904, 1905, 1906, 1909, 1910, 1911, 1912, and 1913 on certain property owned by it in the city of Austin. The court heard the cause without a jury, and rendered judgment in favor of appellee for the taxes of 1904, 1905, 1906, 1909, 1910, 1911, 1912, and 1913, declaring a lien on notes owned and deposited by appellant on the respective dates named; the total taxes for the eight years named being in the aggregate $1,867.03, with interest as therein provided.

The first assignment of error assails the action of the court in overruling a general demurrer to the petition. It is stated in a parenthesis attached to the assignment that the second and seventh assignments of error are the same in substance as the first, and the only proposition under the assignment purports to be made also under the second and seventh assignments. Those assignments are not copied in the brief, and this court is not in position to know what they contain, and the proposition can be considered only with reference to the first assignment, which attempts an attack on the sufficiency of the petition to state a cause of action. The statement under the assignment is totally inadequate to show the allegations or want of allegations which render the petition open to attack through a general demurrer. The only facts stated are that the petition alleges appellant's name to be "Millers' Mutual Fire Insurance Company," and that appellant was incoporated and doing business under Act April 3, 1903, Twenty-Eighth Legislature of Texas, c. 109, and has paid the required tax to the commissioner of insurance. Of course, the sufficiency of the petition cannot be tested by any fact that was in evidence before the court, but must be tested by its allegations. It follows that the attack is made on the petition because the name of the appellant was stated in it, and the inference is, although not stated, that the name of appellant brings it within the class of insurance companies known as "mutual insurance companies." Instead of an attack on the petition, the only proposition under the assignment of error is a defense of the authority of the Legislature to provide a tax on gross premiums in lieu of all other taxes. It is not stated that the allegations of the petition show that appellant is endeavoring to collect taxes from a company claimed to be exempt from taxation by the city of Austin, and no attempt is made to disclose what the petition did allege except to state the name of appellant. The statement is utterly insufficient under rule 31 for Courts of Civil Appeals (142 S. W. xiii), and should not, under numerous decisions, be considered.

The brief of appellant, as hereinbefore stated, fails to name the property belonging to appellant upon which the tax was sought to be collected, and the only assignment of error that seeks to attack the authority to collect the tax because of exemption by the state is the first, which is defective and attempts to urge error in overruling the general demurrer. The statement following the assignment does not disclose any allegation whatever of the petition upon which to base the proposition that—

"The Legislature may provide a tax on the gross premiums of an insurance company which shall be in lieu of all other taxes, and such a statute will not violate the constitutional provisions against exemption of property from taxation and that all taxation shall be equal and uniform and according to value."

At the probable expense of rules, and at the risk perchance of delivering dicta, we have considered the question attempted to be raised by the assignment.

The law relied on by appellant to exempt it from all further taxation of any character on any property, real, personal, or mixed, in the state of Texas, is section 10, Acts of 1903, p. 169, which provides:

"Each and every mutual insurance company operating under this act shall pay to the insurance commissioner annually on the 31st day of December, one-half of one per cent. of all the gross premiums received during the year, and no other tax shall be required of such mutual insurance companies, their officers and agents, except such fees shall be paid to the commissioner of insurance as is required by law."

The act of 1903 was amended in 1913, and the amendment is carried into chapter 10, Vernon's Revised Statutes, and in article 4907n of that chapter, while the taxes named are different, the same provision exists as to exemption from further taxes.

The contention is that the words "no other tax" were intended to and do cover all taxes, occupation, ad valorem, or otherwise, and under such contention the insurance company might purchase land and erect very valuable office buildings in every city in Texas where it desired to do business, and not only would the state of Texas, but municipalities in which the property was situated, be precluded from taxing it. We cannot imagine that any such legislative intention existed, but, if it did, it would be clearly an exemption from taxation of the rankest kind, and plainly violative of the provisions of article 8, § 2, of the Constitution, which, after enumerating property which may be exempted from taxation, provides that—

"All laws exempting property from taxation, other than the property above mentioned, shall be null and void."

It has been held by a number of courts, both federal and state, that—

"Where a certain sum is specified for a certain percentage upon valuation, or upon receipts or acquisitions in any form, this is in the nature of a commutation of taxes, the state agreeing that the sum named is, under the circumstances, a fair equivalent for what the customary taxes would be, or the fair proportion which the person bargained with ought to pay, and the power thus to commute, though liable to abuse, is undoubted." Cooley, Taxation, p. 110.

It is also held that the "commutation," to employ the tenderer term than "exemption," must clearly appear from the terms of the law, and it cannot be extended by construction or implication beyond the clear import of its terms. There must be no room for doubt or controversy. As said by the Supreme Court of the United States, in Railroad v. New Orleans, 143 U. S. 192, 12 Sup. Ct. 406, 36 L. Ed. 121:

"Exemption from taxation is never to be presumed. The Legislature itself cannot be held to have intended to surrender the taxing power, unless its intention to do so has been declared in clear and unmistakable words."

The tax provided for in the law of 1903 is undoubtedly a tax allowing mutual insurance companies to pursue their business in Texas, an occupation tax, and it is not an ad valorem tax on property. A similar tax on railroad companies has been held to be an occupation tax by the Supreme Court of this state. State v. Railway, 100 Tex. 153, 97 S. W. 71; Texas Co. v. Stephens, 100 Tex. 639, 103 S. W. 481; Fire Association v. Love, 101 Tex. 376, 108 S. W. 158, 810; Life Ins. v. Love, 101 Tex. 531, 109 S. W. 863; Producers' Oil Co. v. Stephens, 44 Tex. Civ. App. 327, 99 S. W. 157. Being an occupation tax, under a strict construction of the statute, which is always applied to statutes exempting, or commuting, if such be the proper term, taxation, it must be held that the exemption applied alone to occupation taxes, and not to ad valorem taxes. The taxation of property was not in contemplation of the Legislature when the exemption from further taxation was granted, but it was confining its attention to the business before it, that of fixing an occupation tax, and providing that no further such tax should be collected by state. It has no reference to ad valorem taxes. Any other construction of the statute would render it discriminatory and unconstitutional and void.

The decision in the case of State v. Railway, 100 Tex. 153, 97 S. W. 71, herein cited, was reversed by the Supreme Court of the United States, by a five to four decision, found in 210 U. S. 217, 28 Sup. Ct. 638, 52 L. Ed. 1031, but only on the ground that the imposition of the taxes affected, and was a burden on, interstate commerce. The decision of the federal court cannot, however, have influence in this state so far as its state taxes on a state corporation doing business in this state are concerned. We do not understand that the Supreme Court of Texas, in following the doubtful opinion in the case cited, has repudiated its holding that the taxes under consideration are occupation taxes. Railway v. State, 108 Tex. 314, 192 S. W. 1054. It has never been questioned in this state that an occupation tax, as in the case of the former liquor dealer, could be levied as well as ad valorem taxes, and we are dealing with a domestic corporation.

The third assignment of error is not followed by a statement. Reference to the petition to ascertain the allegations attacked through the special demurrer is not a compliance with the rules as to briefing.

The fourth assignment of error assails the action of the court in not sustaining a special exception to the petition on the ground that it showed that taxes had been assessed for several years back on omitted property. This court is not informed in any statement what was contained in the petition on the subject of back taxes. However, there is nothing in the petition which shows that the city did not have the authority under the charter and laws of Texas to make the assessments alleged. On the other hand, it...