State ex rel. Cornell v. Poynter

• Decision Date: 19 December 1899
• Citation: 81 N.W. 431,59 Neb. 417
• Parties: STATE EX REL. CORNELL, AUDITOR OF PUBLIC ACCOUNTS, v. POYNTER, GOVERNOR.
• Court: Nebraska Supreme Court

59 Neb. 417

81 N.W. 431

STATE EX REL. CORNELL, AUDITOR OF PUBLIC ACCOUNTS,

v.POYNTER, GOVERNOR.

Supreme Court of Nebraska.

Dec. 19, 1899.

Syllabus by the Court.

1. The judiciary may not declare an act of the legislature unconstitutional unless it is clear that it contravenes some provision of the fundamental law.

2. By section 1, art. 9, of the constitution, the public revenues are required to be imposed by the levying of a tax by valuation, “so that every person or corporation shall pay a tax in proportion to the value of his, her or its property and franchises.”

3. The rule of uniformity prescribed by section 1, art. 9, of the constitution, inhibits the legislature from discrimination between taxpayers in any manner whatever.

4. Under section 4, art. 9, of the constitution, the legislature is powerless to pass a law releasing or discharging any individual or corporation or property from the payment of any portion of the taxes to be levied for state or municipal purposes.

5. Sections 36, 37, c. 47, Sess. Laws 1899, in so far as they attempt to exempt the property of insurance companies from taxation, or release or commute the taxes of such companies, are inimical to sections 1, 4, art. 9, of the constitution, and void.

6. When the invalid part of an act influenced or induced the passage of the residue, the entire act will be declared void.

7. The unconstitutional provisions of sections 36, 37, c. 47, Sess. Laws 1899, induced the passage of the remainder of said chapter, and invalidate the entire act.

Quo warranto by the state, on the relation of John F. Cornell, auditor of public accounts, against William A. Poynter, as governor. Judgment for plaintiff.W. B. Price and Robert Ryan, for plaintiff.

C. J. Smyth, Atty. Gen., W. D. Oldham, Dep. Atty. Gen., Wilbur F. Bryant, and Arthur J. Weaver, for defendant.

NORVAL, J.

The legislature of 1899 passed an act, which received executive approval, by its terms, inter alia, creating a state insurance bureau; naming the governor as commissioner in charge of such bureau; charging him with the duty of enforcing the laws relative to insurance and the supervision of insurance companies; and providing for the organization and incorporation of insurance companies, for their admission from other states and counties, and to regulate their conduct. Sess. Laws 1899, p. 207, c. 47. Prior to said act, for more than a quarter of a century, the state insurance department was under the supervision and control of the auditor of public accounts, which department was by the said act of 1899 attempted to be wrested from the auditor, and placed under the supervision of the chief executive of the state. This is an original action in quo warranto, in the name of the state, on the relation of John F. Cornell, auditor of public accounts, against William A. Poynter, as governor, to test the validity of said chapter 47, Sess. Laws 1899. Our attention has been challenged to numerous alleged infirmities and imperfections on the face of the act in question, which it is confidently asserted by counsel for relator invalidate the whole law; but we do not deem it essential that we should now consider them, since questions of graver import have been urged upon our attention. The act has been assailed as unconstitutional upon various points,--among others, that sections 36 and 37 of said chapter 47 contravene sections 1 and 4 of article 9 of the constitution, which are as follows:

“Section 1. The legislature 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 and franchises, the value to be ascertained in such manner as the legislature shall direct, and it shall have power to tax peddlers, auctioneers, brokers, hawkers, commission merchants, showmen, jugglers, inn keepers, liquor dealers, toll bridges, ferries, insurance, telegraph and express interests or business, venders of patents, in such manner as it shall direct by general law, uniform as to the class upon which it operates.”

“Sec. 4. The legislature shall have no power to release or discharge any county, city, township, town or district whatever, or the inhabitants thereof, or any corporation, or the property therein from their or its proportionate share of taxes to be levied for state purposes, or due any municipal corporation, nor shall commutation for such taxes be authorized in any form whatever.”

Sections 36 and 37 of the act assailed follow:

“Sec. 36. Insurance companies shall pay fees in this state as follows: Domestic companies organized or incorporated under this act, shall pay fifty dollars ($50.00) for charter and all the necessary filings and papers to complete their incorporation. Domestic companies so incorporated, and those incorporated under any act repealed by this act, or in any way complying with this act, shall pay for filing each annual statement, twenty dollars ($20.00). For each agent's certificate, fifty cents. Two certificates of publication, one dollar. The company's annual license, or copy of same, one dollar. Each and every such domestic insurance company shall also be taxed upon the excess of premium received over losses and ordinary expenses incurred within the state during the year previous to the year of listing in the county where the agent conducts the business, properly proportioned by the company at the same rate that all other personal property is taxed, and said agent shall render the list and be personally liable for the tax; and if he refuse to render the said list or to make affidavit that the same is correct the amount may be assessed accordingly to the best knowledge and discretion of the assessor. The fees and taxes herein provided for shall be in lieu of all fees and taxes, except taxes upon real estate and other taxes, provided in the general revenue law. Also an occupation tax or volunteer fire department tax not to exceed ($5.00) five dollars per annum for each agency, which any city, town or village in this state may impose by ordinance for the support of such fire department.

Sec. 37. Every other state company shall pay one hundred dollars ($100.00) for depositing copy of charter, statement, and all the papers to comply with this act, and the certificate of admission from the insurance commissioner. For filing copy of amended charter, seventy-five dollars ($75.00). Filing annual statement, fifty dollars ($50.00). Each agent's certificate, two dollars ($2.00). Companies doing a life and accident business, shall file separate statements for each department of their business, and pay one hundred dollars ($100.00) each year for filing the two statements. Life insurance companies that also transact industrial business, shall file separate statements for each department of their business, and pay one hundred dollars ($100.00) each year for filing the two statements. Miscellaneous companies shall report all their transactions on one statement, and pay the one fee of fifty dollars ($50.00) each year. Every other state insurance company, and every such miscellaneous company shall each year in the month of January, report under oath, to the insurance commissioner, the gross amount of premiums received for the preceding calendar year, upon or on account of life, accident, fire or miscellaneous business, or insurance effected on property located within this state; such report shall be sworn to by the president and treasurer, or other chief fiscal officer. Such companies shall pay two per cent. of their gross premiums so reported, as an additional license fee to the state treasurer, and shall not be re-licensed for the year, until this payment is made. Provided, any such life or accident company, which is, under reciprocal provisions in this act, obliged to pay more than two dollars for the annual license hereinafter provided in this section, or is required to pay any sum into the state treasury for the school fund, shall be allowed to deduct such excess over two dollars, from its bill for taxes before paying the same. Every other state company shall annually pay two dollars for two certificates of publication, two dollars for annual license of the company, or copy of same. For every copy of paper filed, as herein provided, the sum of ten cents per folio, and one dollar for certifying the same and affixing the seal of the office thereto. The taxes and fees above provided shall be paid to the state treasurer, and shall be in full of all fees and taxes, except taxes on real estate, which may be imposed by any county, municipality or state, unless otherwise provided by this act. Provided, that in cities of the first class having more than ten thousand inhabitants and in cities of the second class having more than five thousand inhabitants that maintain a fire department, the city council may by ordinance impose an occupation tax on all fire insurance companies maintaining an agency in, or doing business in such city, not to exceed ten dollars per annum; for the benefit of such fire department. Provided further, that in cities of the second class having less than five thousand inhabitants and in villages that maintain a fire department, the city council or board of trustees may, by ordinance, impose an occupation tax on all fire insurance companies maintaining an agency or doing business in such city or village not to exceed five dollars per annum, for the benefit of such fire department.”

Before entering upon a discussion of the constitutional question to which we have alluded, it is important that there ever be kept in view that the judiciary will not declare an act of the legislature unconstitutional unless it is clear that such act is inhibited by the fundamental law. If a reasonable doubt exists, it must be solved in favor of the validity of the statute. Turner v. Althaus, 6 Neb. 55;State v. Lancaster Co., 4 Neb. 537;Pleuler v. State, 11 Neb. 547, 10 N. W....