Raymond v. Hartford Fire Ins. Co.

• Decision Date: 16 April 1902
• Citation: 196 Ill. 329,63 N.E. 745
• Parties: RAYMOND, County Treasurer, et al. v. HARTFORD FIRE INS. CO. et al.
• Court: Illinois Supreme Court

196 Ill. 329

63 N.E. 745

RAYMOND, County Treasurer, et al.

v.HARTFORD FIRE INS. CO. et al.

Supreme Court of Illinois.

April 16, 1902.

Appeal from circuit court, Cook county; E. F. Dunne, Judge.

Bill by the Hartford Fire Insurance Company and another against Samuel B. Raymond, county treasurer and ex officio county collector, and another, to restrain the collection of certain taxes. There was a decree in favor of complainants, and defendants appeal. Reversed.Edwin W. Sims, Co. Atty., and Frank L. Shepard, Asst. Co. Atty., for appellants.

Cary & Walker and Barger & Hicks, for appellees.

The only question presented by this record is the construction and constitutionality of the act entitled ‘An act providing for a tax on gross premium receipts of insurance companies and associations other than life,’ approved April 19, 1899, in force July 1, 1899 (Hurd's Rev. St. 1899, p. 1042), which is as follows: ‘Be it enacted by the people of the state of Illinois, represented in the general assembly: That every insurance company or association, other than life, organized or incorporated under the laws of any other state or nation, and every other insurance company, other than life, whose charter may be owned, or a majority of whose stock may be controlled, or whose business shall be carried on in the interest or for the benefit of any insurance company or association incorporated under the laws of any other state or nation, shall at the time of making the annual statements as required by law, pay to the insurance superintendent as taxes, two per cent. of the gross amount of premiums received by it for business done in this state, including all insurance upon property situated in this state, during the preceding calendar year. The payment of said taxes shall be a condition precedent to the privilege of doing business in this state. Upon compliance with the laws of this state and the payment of said taxes, the insurance superintendent shall issue the annual certificate as provided by law, and the taxes provided in this act shall be in full for all taxes, state and local, against such corporations or associations, except taxes on real estate, and such reciprocal tax as is required by law: provided, where fire insurance companies pay into cities and villages, that have an organized fire department, a tax of two dollars or less, on every $100 of premiums received by the company, in such city or village, said amount shall be deducted from the amount to be paid to the insurance superintendent by provisions of this act.’ The appellees, the Hartford Fire Insurance Company and the Home Insurance Company of New York, filed their bill in the circuit court of Cook county to restrain the appellants, Henry H. Fuller, collector of the town of South Chicago, and Samuel B. Raymond, treasurer and ex officio collector of Cook county, from collecting or attempting to collect a tax levied by the taxing authorities of the town of South Chicago on the personal property of the appellee companies in the city of Chicago. The bill sets out compliance with all the state laws prescribing the terms upon which foreign insurance companies may transact business in this state, due license from the state, and payment of the tax required in the above act of 1899, the Hartford Company paying $7,050.47, and the Home Company, $3,881.92, as such tax. The bill further sets out that the sum of $73.66 is unlawfully assessed against the Hartford Company on its personal property in the city of Chicago, to wit, office furniture, safe, printing press, and supplies, for state, county, city, school, library, drainage, and South Park taxes, on a valuation of $5,000 and an equalized assessment of $880; and likewise the sum of $7.39 against the Home Company on its personal property of a similar character, valued at $500 and assessed at $88. A demurrer to the bill was overruled, and the appellants, abiding by their demurrer, have appealed to this court from the decree enjoining the collection of the tax.

CARTER, J. (after stating the facts).

The grounds upon which appellants base their argument for a reversal of the decree in this case are: First, that by a proper construction of the act of 1899, set out in the statement of the case, the tax of 2 per cent. therein required to be paid to the state superintendent of insurance is to be regarded only as a license fee, to be paid as a condition precedent to the exercise by foreign insurance companies of the privilege of doing business in this state, and is not intended to relieve the company of the burden imposed upon all alike,-that is, the payment of general property taxes; and, second, if it cannot be so construed, then the act is unconstitutional. It is sufficient to say that the plain language of the statute itself is in direct conflict with the first view presented. It provides that ‘the taxes provided in this act shall be in full for all taxes, state and local, against such corporations or associations, except taxes on real estate, and such reciprocal tax as is required by law.’ Hurd's Rev. St. 1899, p. 1042, § 1. It seems clear that the purpose of the act is to require such corporations to pay the 2 per cent. on their gross receipts as taxes. Indeed it expressly so provides, and when paid they are to be in lieu of all other taxes whatsoever, except as therein mentioned. The 2 per cent. is both a license fee for doing business in this state and a state tax, and evidently has the effect, if the act is constitutional, of superseding the tax on net receipts provided for by the act of May 31, 1879 (Hurd's Rev. St. 1899, p. 996), and all personal property taxes, except as otherwise provided in the act itself, notwithstanding the later act does not contain any repealing clause.

The second question then arises,-is the act of 1899 in conflict with the constitution? The appellants insist that it violates each of the following sections of article 9 of the constitution of 1870:

‘Section 1. The general assembly shall provide such revenue as may be needful by levying a tax, by valuation, so that every person and corporation shall pay a tax in proportion to the value of his, her or its property-such value to be ascertained by some person or persons, to be elected or appointed in such manner as the general assembly shall direct, and not otherwise; but the general assembly shall have power to tax peddlers, auctioneers, brokers, hawkers, merchants, commission merchants, showmen, jugglers, inn-keepers, grocery keepers, liquor dealers, toll bridges, ferries, insurance, telegraph and express interests or business, vendors of patents, and persons or corporations owning or using franchises and privileges, in such manner as it shall from time to time direct by general law, uniform as to the class upon which it operates.’

‘Sec. 3. The property of the state, counties and other municipal corporations, both real and personal, and such other property as may be used exclusively for agricultural and horticultural societies, for school, religious, cemetery and charitable purposes, may be exempted from taxation; but such exemption shall be only by general law. * * *’

‘Sec. 6. The general assembly shall have no power to release or discharge any county, city, township, town, or district whatever, or the inhabitants thereof, or the property therein, from their or its proportionate share of taxes to be levied for state purposes, nor shall commutation for such taxes be authorized in any form whatsoever.’

‘Sec. 9. The general assembly may vest the corporate authorities of cities, towns and villages with power to make local improvements by special assessment, or by special taxation of contiguous property, or otherwise. For all other corporate purposes, all municipal corporations may be vested with authority to assess and collect taxes; but such taxes shall be uniform in respect to persons and property, within the jurisdiction of the body imposing the same.

‘Sec. 10. The general assembly shall not impose taxes upon municipal corporations, or the inhabitants or property thereof, for corporate purposes, but shall require that all the taxable property, within the limits of municipal corporations shall be taxed for the payment of debts contracted under authority of law, such taxes to be uniform in respect to persons and property, within the jurisdiction of the body imposing the same. * * *’

The contention that the statute violates the first section above set out is that the second clause of that section does not relate to property taxes, strictly so called, but to taxes which the legislature may authorize to be levied on different kinds of business or occupations, and that such taxes were intended by the framers of the constitution to be in addition to, and not in lieu of, the tax on property by valuation provided for in the first clause, and that, although the legislature has the power to impose the tax authorized by the act of 1899 on foreign insurance corporations as a class, for the privilege of doing business in this state, it has no power to relieve them of their personal property tax imposed by the general revenue law, enacted under the first clause. There is no substantial difference between this section of the present constitution and section 2, art. 9, of the constitution of 1848, and this court has held that said second clause is not confined to occupations, but applies also to property interests, which may be included in the method of taxation adopted by the legislature, and which method may be different from that prescribed by the first clause of said section 1. Illinois Cent. R. Co. v. McLean Co., 17 Ill. 291;Gas Co. v. Higby, 134 Ill. 557, 25 N. E. 660;Coal Co. v. Finlen, 124 Ill. 666, 17 N. E. 11;Porter v. Railroad Co., 76 Ill. 561.

While the legislature may, under the second clause of section 1, and under the second section, adopt a different manner of taxing the subjects or objects of taxation therein provided for, it is a...