Rinehart v. Reliance Ins. Co.
Decision Date | 22 March 1962 |
Docket Number | 3 Div. 942 |
Citation | 273 Ala. 535,142 So.2d 254 |
Court | Alabama Supreme Court |
Parties | Edmon L. RINEHART, Superintendent of Insurance, v. RELIANCE INSURANCE COMPANY. |
MacDonald Gallion, Atty. Gen., and David W. Clark, Asst. Atty. Gen., for appellant.
Mead, Norman & Fitzpatrick, Birmingham, for appellee.
Reliance Insurance Company, a foreign corporation, filed its complaint in the Circuit Court of Montgomery County against the Superintendent of Insurance of the State of Alabama, as authorized by § 890, Title 51, Code 1940, as amended, to recover back 'premium tax' in the sum of $2634.13 which it had paid under protest for the calendar year 1958.
From a judgment in favor of the plaintiff below, the Superintendent of Insurance appealed to this court.
Under the provisions of § 816, Title 51, Code 1940, as amended, hereinafter referred to as § 816, foreign insurance companies doing business in this state must pay an 'annual premium tax,' the amount of which is provided at a per centum of the premiums received for business done in this state. The manner in which that tax is to be computed and paid is spelled out in § 816 in the following language:
During the calendar year 1957 and for many years prior thereto, Fire Association of Philadelphia and its wholly-owned subsidiary, Reliance Insurance Company of Philadelphia, both Pennsylvania corporations, did business in Alabama. Those two companies merged as of January 1, 1958. Under the agreement of merger, Fire Association of Philadelphia continued as the surviving corporation under the name of Reliance Insurance Company.
On or before March 1, 1958, Reliance Insurance Company made a payment of 1958 premium tax to the Superintendent of Insurance. It computed the amount of that payment only on the basis of premiums received by Fire Association of Philadelphia for business done by that company in Alabama in 1957, without giving consideration to the premiums received by Reliance Insurance of Philadelphia for business which it did in Alabama in 1957.
The Superintendent of Insurance took the position that the premiums so collected by Reliance Insurance Company of Philadelphia in 1957 should have been included in the computation of the amount of premium tax to be paid by Reliance Insurance Company in 1958 and made demand for the payment of the tax so computed.
Reliance Insurance Company complied with the demand of the Superintendent of Insurance, but protested the payment of that part of the tax computed on the premiums received by Reliance Insurance Company of Philadelphia in 1957 and then instituted this proceeding to recover back the tax paid under protest.
The question for decision is, did Reliance Insurance Company owe a 1958 premium tax based on the premiums received by Reliance Insurance Company of Philadelphia as well as on the premiums received by Fire Association of Philadelphia, whose name was changed to Reliance Insurance Company by the merger agreement?
While the tax required by § 816 is referred to as an 'annual premium tax,' it is actually an excise or license tax imposed for the privilege of doing business in this state.
Reliance Insurance Company (Fire Association of Philadelphia) and Reliance Insurance Company of Philadelphia both had done business in this state for more than two years prior to 1958, so any tax due on...
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