State ex rel. Missouri State Life Ins. Co. v. Gehner

• Decision Date: 03 July 1928
• Docket Number: 27810
• Citation: 8 S.W.2d 1068,320 Mo. 691
• Parties: The State ex rel. Missouri State Life Insurance Company v. Frederick Gehner, as Assessor, and as President and A. R. Schollmeyer et al. as Members of Board of Equalization of City of St. Louis
• Court: Missouri Supreme Court

8 S.W.2d 1068

320 Mo. 691

The State ex rel. Missouri State Life Insurance Company v. Frederick Gehner, as Assessor, and as President and A. R. Schollmeyer et al. as Members of Board of Equalization of City of St. Louis

No. 27810

Supreme Court of Missouri

July 3, 1928

Record quashed.

Jourdan & English and Allen May for relator.

(1) A domestic life insurance company must make return of and be assessed first, on its real estate, and, second, on the net value of all its other assets in excess of reserves and unpaid policy claims. Secs. 6386, 6397, 12775, R. S. 1919. (2) In the levying of taxes against the corporate entities themselves life insurance companies are assessed on the same basis as banking corporations, but in the case of banking companies there is a tax on the capital stock assessed against the shareholders. There is no other difference. Sec 6397, R. S. 1919; State ex rel. v. Brinkop, 238 Mo 309; Laws 1911, p. 417; State ex rel. v. Schramm, 271 Mo. 223. (3) The statutes under which domestic life insurance companies are assessed are constitutional and do not violate the provisions of Art. 10, sec. 4, of the Constitution. State ex rel. v. Schramm, 271 Mo. 226; State ex rel. Am. Central Ins. Co. v. Gehner, 280 S.W. 416; Valle v. Ziegler, 84 Mo. 214; Leavell v. Blades, 237 Mo. 700; State ex rel. v Lesseur, 237 Mo. 318. (4) Domestic life insurance companies are taxed in their corporate names only on their net assets. Board of Tax Commrs. v. Holliday, 49 N E. (Ind.) 14; Cooper v. Board of Review, 207 Ill. 472; State ex rel. v. Snyder, 139 Mo. 549; Jasper Land & Imp. Co. v. Kansas City, 239 S.W. 864; State ex rel. v. Shyrack, 179 Mo. 424. (5) The omission of a statute to tax any person or thing may not be supplied by the Board of Equalization or the courts. Kansas City v. Bldg. & Loan Assn., 145 Mo. 50; Valle v. Ziegler, 84 Mo. 214.

Julius T. Muench and Charles J. Dolan for respondents.

(1) Sec. 12775, R. S. 1919, imposes a tax on the property of relators. This section is self-explanatory. See Life Assn. of America v. Bd. of Assessors, 49 Mo. 512; St. Louis Mutual Life Ins. Co. v. Bd. of Assessors, 56 Mo. 503; State v. Ry. Co., 77 Mo. 213; State ex rel. v. Shipman, 290 Mo. 65, regarding the general policy of the law in Missouri. (2) Secs. 6386 and 6397, R. S. 1919, subjecting the property of relators to taxation and providing that "net assets" only shall be assessed for taxation, violate Section 4 of Article 10 of the Constitution, which requires that all property subjected to taxation shall be taxed in proportion to its value. Standard Life Ins. Co. v. Atlanta, 151 Ga. 153; Life Assn. of America v. Bd. of Assessors, 49 Mo. 512; St. Louis Ins. Co. v. Bd. of Assessors, 56 Mo. 503; Railway v. Worthen, 46 Ark. 312, 120 U.S. 97; In re Assessment and Collection of Taxes, 4 S.D. 6; State ex rel. v. Shipman, 290 Mo. 65. (3) Sec. 12766, R. S. 1919, provides for and governs the assessment of the property of all corporations as well as of all natural persons, with the exception of corporations for the assessment of whose property provision has been made otherwise by a valid special law. See Sec. 12967, R. S. 1919, providing that the word "person," as used in Section 12766, shall include a corporation. (4) Since Secs. 6386 and 6397, R. S. 1919, violate the Constitution of Missouri and are null and void, and since there is no valid special law providing for the assessment of the property of relators, the assessment of their property for taxation is provided for and governed by the provisions of Sec. 12766, R. S. 1919. (5) The assessments levied on relators by respondents are made mandatory by the provisions of Secs. 12775 and 12766, R. S. 1919. Secs. 12752, 12766, 12775, 12802, R. S. 1919; Life Assn. of America v. Bd. of Assessors, 49 Mo. 512; St. Louis Ins. Co. v. Bd. of Assessors, 56 Mo. 503; Judson on Taxation in Missouri, p. 52. (6) The revenue law of the State is complete in itself, providing regular methods for the assessment of all property in accordance with the provisions of Section 12752. Sections 6386 and 6397, invoked and relied upon by relators, are not part of the revenue law and were never intended to control the operation of any provision of the revenue law. On the contrary, the General Assembly has expressly provided that their operation shall be "subject to the provisions of said laws" (i. e., the revenue laws). (7) Section 6386 was enacted in 1879. Its purpose was to provide a tax on "net assets" of domestic insurance companies to supplement the tax imposed under authority of the general revenue laws. To construe it as being in lieu of the tax provided for in the general revenue laws would be to ignore the plain intent of the Legislature. The primary rule of statutory construction is to ascertain and give effect to the intent of the legislative body. "To find out the intent is the object of all interpretation." Lewis' Sutherland Stat. Const. (2 Ed.) 696, sec. 364. (8) Relators argue that the tax imposed by Section 6386 should be construed as being in lieu of all other taxation. This court declared the predecessor section of Section 6386 unconstitutional, null and void for the reason that it purported to be in lieu of all other taxes. If relators' construction of Section 6386 be correct, it should be declared unconstitutional, following the prior ruling of the court. If their construction be incorrect, the statute cannot help their case. Life Assn. of America v. Bd. of Assessors, 49 Mo. 512; St. Louis Ins. Co. v. Bd. of Assessors, 56 Mo. 503. (9) The tax levied on the property of relator by Section 12775 cannot be construed as identical with the tax levied on "net assets" by Section 6386 without violation of Section 4 of Article 10 of the Constitution, requiring that all property subject to taxation shall be taxed in proportion to its value. Authorities under Point 2. (10) If the term "net assets," as used in Section 6386, means the taxable property owned by relator, i. e., money, notes, bonds, etc., the money, notes and bonds of relator are assessed at less than the money, notes and bonds of other taxpayers. If, on the other hand, by "net assets" is meant something different from the money, notes and bonds owned by relator, the tax on "net assets" cannot be said to be identical with the tax imposed on the "property" of relator by Section 12775. (11) Section 6386 violates the rule of uniformity, because it purports to confer a privilege in the matter of taxation which is not extended to all insurance companies, but is confined to domestic insurance companies. Hanover Fire Ins. Co. v. Carr, 71 L.Ed. 224.

OPINION

Ragland, J.

Relator is a life insurance company organized under the laws of this State, having its principal office and place of business in the city of St. Louis. On June 1, 1925, it made a return for taxation of its property and assets in conformity with the provisions of Section 6386, Revised Statutes 1919. Such return disclosed, among other things, that relator's capital stock was $ 2,000,000; that its undivided profits, premiums or earnings, were $ 1,413,151.18; that its gross assets amounted to $ 56,789,844.53, which included real estate valued at $ 4,974,030.48; that the legally required reserve necessary to reinsure its outstanding risks was $ 52,243,822.91; and that the amount of unpaid policy claims pending against it was $ 403,074.42. It thus appeared from the return that there was no personal property of relator's subject to taxation under the provisions of said Section 6386. For after deducting the value of the real estate from the gross assets the remainder was less than the required legal reserve and the unpaid policy claims. Said Section 6386 and Section 6397, Revised Statutes 1919, which supplements it, are as follows:

"Sec. 6386. The property of all insurance companies organized under the laws of this State shall be subject to taxation for state, county, municipal and school purposes as provided in the general revenue laws of this State in regard to taxation and assessment of insurance companies. Every such company or association shall make returns, subject to the provisions of said laws: First, of all the real estate held or controlled by it; second, of the net value of all its other assets or values in excess of the legally required reserve necessary to reinsure its outstanding risks and of any unpaid policy claims, which net values shall be assessed and taxed as the property of individuals. . . .

"Sec. 6397. All life insurance companies organized under the laws of this State shall make return for taxation of their property and assets as provided for in Section 6386 of the Revised Statutes of Missouri, 1919, and such property shall be assessed for taxation upon the same basis of valuation as may be adopted by the assessor or by the board of equalization for the taxation of the taxable property of banks or joint stock institutions doing a banking business."

Notwithstanding relator's return, which was not found to be in any respect untrue, and notwithstanding the statutory provisions just set out, the Board of Equalization of the City of St. Louis arbitrarily assessed relator's personal property at $ 1,000,000. Relator seeks in this proceeding to have such assessment and the tax bill based thereon quashed.

Respondents contend: First, that said Sections 6386 and 6397, when properly construed, provide for a tax on the "net assets" of insurance companies in addition to a tax imposed under the general revenue laws of the State; and second, that, if those sections are construed to mean that only the net assets are subjected to taxation, they not only violate the requirements of the Constitution that taxation shall be uniform and in proportion to value (Sections 3 and 4, Article X), but fall...