State ex rel. Equitable Life Assur. Soc. of United States v. Ham

• Decision Date: 21 March 1939
• Docket Number: 1902
• Parties: STATE EX REL. EQUITABLE LIFE ASSUR. SOC. OF UNITED STATES v. HAM, INSURANCE COMMISSIONER
• Court: Wyoming Supreme Court

88 P.2d 484

54 Wyo. 148

STATE EX REL. EQUITABLE LIFE ASSUR. SOC. OF UNITED STATES v. HAM, INSURANCE COMMISSIONER

No. 1902

Supreme Court of Wyoming

March 21, 1939

ORIGINAL proceeding in mandamus by the State of Wyoming, on the relation of the Equitable Life Assurance Society of the United States, against Arthur J. Ham, as Insurance Commissioner of the State of Wyoming, to enjoin the Commissioner from revoking the license of plaintiff to do business as a life insurance company in the state.

Prayer of petition granted.

For the relator, the cause was submitted upon the brief of John U Loomis, of Cheyenne.

The Taxing statute does not impose a tax upon the considerations received from annuity contracts. Sec. 115-117, W. R. S. 1931. Statutory construction may not be substituted for legislation. 1 Honnold 542. Caminetti v. U.S. 242 U.S. 470. Lake County v. Rollins, 130 U.S. 662. Thompson v. United States, 246 U.S. 547. Hamilton v. Rathbone, 175 U.S. 414; United States v. Goldenberg, 168 U.S. 95. Van Camp & Sons v. American Can Company, 278 U.S. 245. Harvester Company v. Lumber Co., 25 Wyo. 367. Brennen v Midwest Ref. Co., 29 Wyo. 116. Words used in a statute shall be taken in their ordinary sense, technical words in their technical sense. Sec. 112-101, R. S. Portland Co. v Boston and M. R. R. (Me.) 144 A. 390. Katzman v. Com. (Ky.) 130 S.W. 990. Gilbert v. Greene (Ky.) 216 S.W. 105. 59 C. J. 975. Ward v. Board, 36 Wyo. 460. Where a statute is uncertain, the Court may look to prior and contemporaneous statutes, to determine its meaning. 59 C. J. 1041. McCamy v. Payne (Fla.) 116 So. 267. McKinney v. McClure (Ia.) 220 N.W. 354. Grannis v. Court (Calif.) 79 P. 891. Morrison v. Co., 38 Wyo. 190. Eq. Life Ins. Soc. Co. v. Thulemeyer, 49 Wyo. 63. Common usage and practice or a course of construction indicating a particular understanding, will be of great value in determining the meaning of a statute. 59 C. J. 1023. Wellman v. Board (Kansas) 252 P. 193. Brewster v. Gage, 280 U.S. 327. The introduction of a new word into an amendatory statute may be considered in determining the intent of the legislature. Wellman v. Board, supra. Sarlls v. United States, 152 U.S. 570. Johnson v. U.S. 225 U.S. 405. Statutes are not to be applied retroactively unless that purpose plainly appears. 1 Honnold 553. United States v. Ry. Co., 270 U.S. 1. United States F. Co. v. Struthers Co., 209 U.S. 306. Insurance policies and annuity contracts are distinct in character. Bouvier Law Dictionary 8th Ed. 201, 2 R. C. L. 2. 3 C. J. 200. Wilkin v. Board (Okla.) 186 P. 474. Town of Hartland v. Estate (Vt.) 156 A. 518. Webster 2nd Ed. 14 R. C. L. 839. 37 C. J. 359. 3 C. J. 202. People v. Annuity Co., 78 N.Y. 114. Com. v. Met. Co. (Pa.) 98 A. 1072. Daniel v. Insurance Co. (Texas) 102 S.W.2d 256. The Wyoming legislature has recognized the distinction between life insurance and annuity contracts. Sec. 57-408, R. S. Laws Wyoming 1911, Ch. 5, Sec. 1. Laws 1917, Ch. 92, Sec. 1. Com. v. Insurance Co. (Pa.) 98 A. 1072. The statute cannot be construed to impose a tax upon considerations received for annuities. People v. Knapp, 184 N.Y.S. 345. Aff. 132 N.E. 916. Daniel v. Ins. Co., 102 S.W.2d 256. The tax is limited to premiums on insurance. Eq. Life Assur. Co. v. Thulemeyer, 49 Wyo. 63. Mandamus is an appropriate remedy in this case. State v. Jay, 37 Wyo. 189.

For the respondent the cause was submitted upon the brief of Ray E. Lee, Attorney General; Thomas F. Shea, Deputy Attorney General; and Wm. C. Snow, Assistant Attorney General, of Cheyenne.

No corporation shall have power to engage in more than one general line of business, Art. 10, Sec. 6, Wyo. Constitution. The granting of annuities is a part of the life insurance business, authorized by the Wyoming statutes, Sec. 57-438, R. S.; Secs. 57-223-224, R. S.; Sec. 57-408, R. S.; Sec. 115-117, R. S. Considerations paid for annuities or premiums, Laws 1935, Ch. 48. Insurance Co. v. Murphy, 271 N.W. 899. Insurance includes annuities. New York Life Co. v. Sullivan (N. H.) 192 A. 207. Hult v. Company, 213 Ia. 890 and cases cited. Mutual Benefit Life Co. v. Com. (Mass.) 160 N.E. 469 and cases cited. The tax due has not been lost by delay in taking action to collect the same. Auditor v. Lake George R. R. Co., 46 N.W. 730. Iowa Land Co. v. Douglas County, 67 N.W. 52. 10 R. C. L. 704, 21 C. J. 1191. Exemptions from the taxation must be strictly construed. State Board v. Henderson (Calif.) 241 P. 560. Cypress Ass'n. v. San Francisco (Calif.) 295 P. 813. Our statute does not exempt from taxation premiums paid on annuities.

BLUME, Justice. RINER, Ch. J., and KIMBALL, J., concur.

OPINION

BLUME, Justice.

This is a direct action in this court to enjoin the insurance commissioner of this state from revoking the license of the plaintiff to do business as a life insurance company in this state. The facts have been stipulated, the material ones being hereinafter set out.

For many years the plaintiff has been licensed to do business as a life insurance company in this state, and held such license at the time hereinafter mentioned. On July 19, 1934, the insurance commissioner wrote to the plaintiff that it had come to his attention that companies generally were not reporting annuity considerations for tax purposes, and that he wanted such report and payment of taxes thereon for the years 1929 to 1933 both inclusive. After some correspondence between the parties and after refusal of the plaintiff to pay such taxes the insurance commissioner, on October 23, 1934, wrote to the plaintiff that its license would be revoked on November 1, 1934, unless the tax demanded were paid prior to that date. Thereupon this action was commenced. It was stipulated that:

"The granting or creation of annuities is generally not confined to insurance companies. The annuity contracts sold by such life insurance companies as engaged in an annuity business are ordinary unconditional agreements for the payment to the annuitant of a fixed income annually, or at other stated intervals during the life of the annuitant. The consideration for the contract is usually paid by the annuitant, and may be paid either in the form of a single sum, or in the form of periodic payments, in which case the income payments do not commence until after the termination of the periodic consideration payments. Such consideration is dependent upon the age of annuitant, the amount, frequency and period of the income payments, and the method of payment of the consideration, and is calculated according to special tables of mortality among annuitants. For all annuity contracts the company maintains a reserve which is calculated according to tables of mortality as a sum, which, together with interest and future considerations as they become due, will be just sufficient to meet future income payments as they become due."

It is further stipulated that until recently the volume of annuity business transacted by life insurance companies has been comparatively small, but has increased sharply during recent years, particularly during the existing depression; that no demands for taxes due upon considerations paid on annuity contracts had heretofore been made of plaintiff, although considerations for such annuities were reported by the plaintiff in its annual reports, without, however, separating those pertaining to the State of Wyoming; that plaintiff has no forms for use in connection with the collection of considerations due it under annuity contracts written by it; that most of the annuity contracts entered into by the plaintiff with persons residing in the state of Wyoming require the payment of single or lump sums, although in a few instances the payment is made by installments; that each annuity contract and each application state that the consideration is a premium; that the plaintiff charges the same premium or consideration for annuities of the same class in all states in which it issues annuity contracts; that no annuity forms have been filed in Wyoming later than June, 1930, except survivorship annuity forms which the plaintiff reports as life insurance and upon which it pays premium taxes as life insurance in Wyoming and elsewhere.

The statute under which the taxing power is claimed is Section 115-117, R. S. 1931, which was passed during the session of 1897, reading, in so far as material here, as follows:

"There is hereby imposed and levied upon each and every insurance company transacting the business of insurance within this state, a tax of 2-1/4 per centum per annum upon the gross premiums received by it for insurance within this state."

This law was amended by Ch. 48 of the Session Laws of 1935, which specifically taxes premiums received on annuity contracts. Other statutes pertinent herein or to which reference has been made are as follows: The Session Laws of 1877, on page 59, provided that an insurance company had the right "to make insurance on the health of individuals, and against the personal injury, disablement or death resulting from traveling or general accident by land or water." That remained the law until 1911, when it was provided by Section 1 of Chapter 50 of the Session Laws of that year that an insurance company should have power "to make insurance upon the lives and health of persons and every insurance appertaining thereto or connected therewith, and to grant, purchase or dispose of annuities." An insurance code was adopted in 1921, and the wording of the right to issue policies of insurance as well as of annuities was changed to some extent, reading as follows (now Section 57-408, R. S. 1931):

"To issue contracts of insurance covering all forms of life contingencies and also all forms of accidental death, bodily injury or disease, issue all forms of endowment...