Mutual Benefit Life Insurance Co. v. County of Martin

• Decision Date: 08 May 1908
• Docket Number: 15,569 - (113)
• Parties: MUTUAL BENEFIT LIFE INSURANCE COMPANY v. COUNTY OF MARTIN
• Court: Minnesota Supreme Court

116 N.W. 572

104 Minn. 179

MUTUAL BENEFIT LIFE INSURANCE COMPANY v. COUNTY OF MARTIN

Nos. 15,569 - (113)

Supreme Court of Minnesota

May 8, 1908

The county treasurer of Martin county being unable to determine whether plaintiff company was entitled to record a certain agreement for the extension of a mortgage in its favor without payment of the registration tax required by Laws 1907, c. 328, the treasurer indorsed the fact of his uncertainty upon the instrument and the company paid the amount of the tax to the clerk of the district court for that county. The plaintiff having brought the hearing of the matter whether the amount should be repaid to it before the district court, the facts being stipulated, the court, Quinn J., made findings and ordered that the proceeding be dismissed and judgment be entered in favor of defendant. From this order, plaintiff appealed. Affirmed.

SYLLABUS

Mortgage Registry Tax.

Chapter 328, Laws 1907, known as the mortgage registry tax law, is constitutional. It provides for a proper classification of the subjects of taxation and for a uniform tax upon the subjects of the class.

Mortgage Registry Tax.

The subject of taxation under this statute is the security and not the debt secured.

Extension of Mortgage.

The registry tax must be paid upon the filing for record of an agreement for an extension or renewal of the mortgage.

Percentage on Premiums.

The two per cent. paid annually on all premiums received in the state by a foreign insurance company doing business in the state as provided by R.L. 1905, § 1625, is not a tax on the gross earnings of the company. Real and personal property owned by such a corporation within the state are taxable the same as like property of individuals.

Foreign Insurance Company not Exempt from Registry Tax.

A foreign insurance company which has paid the two per cent, tax required by R.L. 1905, § 1625, is not exempt from the payment of the registry tax required by chapter 328, Laws 1907, upon the filing for record of a real estate mortgage owned by it.

Stuart & Finstad and Lane & Waterman, for appellant.

E. T. Young, Attorney General, J. E. Palmer, County Attorney, and E. C. Dean, for respondent.

OPINION

ELLIOTT, J.

This is an appeal from an order denying the right of the appellant to the return of certain money paid by it to the clerk of the district court under the provisions of chapter 328, p. 448, Laws 1907.

The Mutual Benefit Life Insurance Company, a foreign corporation, with its home office in Newark, New Jersey, engaged in business in Minnesota under the authority of the laws of this state, as required by section 1625, R.L. 1905, on March 1, 1907, paid to the state treasurer of the state of Minnesota a sum equal to two per cent. of all premiums received in cash or otherwise by it in Minnesota for business done within that state for the year 1906. Ever since its execution the company has been the owner of a certain mortgage upon real estate located in Martin county, Minnesota, given to secure the payment of a promissory note for the sum of $2,500, payable April 1, 1907. The mortgage bore date of August 15, 1902, and was duly recorded in the office of the register of deeds in and for Martin county. On June 5, 1907, the insurance company executed an extension agreement whereby it extended the time for payment of the note for a period of five years from the maturity thereof. This extension agreement was on July 24, presented to the county treasurer of Martin county, Minnesota, with the request that the treasurer indorse the agreement for extension as "exempt from registration taxes" in order that the mortgagee might have the extension agreement filed and recorded in the office of the register of deeds of Martin county, without the payment of the registration tax provided for by chapter 328, p. 448, Laws 1907. The insurance company claimed that the agreement for the extension of the mortgage was exempt from the payment of any tax, and, the county treasurer being unable to determine the question so certified, the mortgagee thereupon paid the amount of the tax claimed to the clerk of the district court for Martin county to abide the order of the court. The insurance company then applied to the district court for an order requiring the clerk to return the money which it had thus deposited. A hearing was had upon the motion, and the court made findings of fact and conclusions of law, and thereon ordered judgment to the effect that the company was not entitled to the relief asked for. The court thus held that the registration tax should be paid.

The statute contemplates that the right to the return of the money thus deposited with the clerk of the court shall be determined upon motion. The making of findings of fact and conclusions of law is not required; but as the appellant elected to treat the order for judgment as equivalent to an order determining a motion, and appealed from it as such, the irregular practice may be disregarded.

The appellant attacks the constitutionality of chapter 328, p. 448, Laws 1907, upon various grounds, and claims that, even if the statute is constitutional, it does not apply to an agreement extending the time for the payment of a debt secured by a mortgage upon real estate, and, further, that this insurance company, having fully complied with R.L. 1905, § 1625, is exempt from the operation of the registry statute.

The amendment to article 9 of the constitution of the state (chapter 168, p. 216, Laws 1905), which was adopted at the 1906 general election, provides that "taxes shall be uniform upon the same class of subjects and shall be levied and collected for public purposes." This amendment removes some of the restrictions which were imposed upon the legislature by the constitution as it stood before the adoption of the amendment. It provides for the classification of the subjectmatter of taxation, and requires that taxes shall be uniform upon the subjects of the particular class upon which they are imposed. In making a classification the legislature has a very wide range of discretionary power. The classification must be reasonable, and such as is suggested by essential differences of nature situation, or circumstances, or by characteristics, which make it desirable on grounds of public policy to apply to the members of the class a particular method of taxation, and impracticable to apply thereto the ordinary methods of taxation. This mortgage registry tax statute declares that mortgages upon real estate shall constitute a class, and provides for the taxation of the security thus provided through the payment of a stated fee when the mortgage is recorded. The subject of the taxation is the security and not the debt which it secures. Whatever is of value to a person may be made the subject of taxation. It may be real estate or personal property, securities or privileges, and the tax should be imposed upon the...