State ex rel. Pew v. Independent Order of Foresters
| Decision Date | 20 June 1939 |
| Docket Number | 44764. |
| Citation | 286 N.W. 425,226 Iowa 1339 |
| Parties | STATE ex rel. PEW, Commissioner of Insurance, et al. v. INDEPENDENT ORDER OF FORESTERS. |
| Court | Iowa Supreme Court |
Appeal from District Court, Polk County; Russell Jordan, Judge.
Action at law to recover gross premium tax claimed to be due the State from appellee society on its Iowa business transacted during the year 1936. Appellee denied that the tax was due and counterclaimed for the amount of gross premium tax paid under protest for the year 1935. Trial court dismissed the petition of the State, and rendered judgment in favor of appellee on its counterclaim.
Affirmed.
Fred D. Everett, Atty. Gen., and John E. Mulroney, Asst. Atty Gen., for appellants.
Stipp Perry, Bannister & Starzinger, of Des Moines, for appellee.
This is an action at law. The petition of the State alleges that appellee is a fraternal beneficiary association, organized under the laws of the Dominion of Canada, with its principal place of business at Toronto, and that it is authorized to do and has been doing business as such association in the State of Iowa; that in 1936 appellee's business in Iowa amounted to $55,688.12; that a gross premium tax of two and one-half per cent of said sum, or $1,392.20, was demanded of appellee by the State and payment thereof refused. The prayer of the petition was for judgment for the amount of the tax claimed and for costs.
Appellee's answer is in two divisions. Division I constitutes an answer to the petition of the plaintiffs. It contains a general denial of all facts stated in the petition except those admitted by the answer. Appellee admits that it is a fraternal beneficiary order, organized under the laws of the Dominion of Canada with its principal place of business at Toronto, and that it was authorized to do and did business in Iowa in 1936. It alleges that since 1896, in obedience to Section 10, Chapter 21, Acts of the 26th G. A., now Section 8822 of the Code, it filed annual reports and secured annual licenses to do business in Iowa; that it ceased issuing certificates to new members in Iowa in June, 1937, and at that time transferred its Iowa members to its camp at Buffalo, New York. It admits the demand of the State for a gross premium tax on its 1936 business, and its refusal to pay the same. It asserts, as grounds for such refusal, that it had developed a large business in Iowa at labor and expense, which represents an investment of substantial worth that it complied with the Iowa statutes in the course of such development; that at no time except in 1936 and 1937 was a gross premium tax demanded of it by the State; that, under the law, it was exempt from such a tax; that the Iowa Insurance Department had so construed the statutes from 1897 to 1936, and during that time there has been continuous legislative acquiescence in such construction; that the State is now estopped and foreclosed from claiming that appellee is liable for such a tax and, to impose such tax on appellee would violate the 14th Amendment to the United States Constitution, U.S.C.A., and Sections 6 and 10 of Article I and Section 30 of Article III of the Constitution of Iowa.
In Division II of its answer, by way of counterclaim against the State, the appellee reasserts the allegations of Division I with considerable elaboration, which it is not necessary to set forth herein. Appellee also alleges a demand in March, 1936, for a gross premium tax of $1,511.55 on its 1935 business in Iowa, and the payment of the same under protest, reserving the right to contest the validity of such tax. Appellee alleges that the tax was wrongfully exacted and prays for judgment for the amount so paid and costs.
In the State's answer to appellee's counterclaim, it admits certain allegations, denies others, and specifically denies that the gross premium tax collected on the 1935 business of appellee was wrongfully exacted. The State prays for dismissal of the counterclaim.
The case was tried to the court, a jury being waived by stipulation of the parties. Most of the facts were stipulated. The findings of fact made by the trial court, all of which have substantial support in the evidence, are as follows: Appellee is a fraternal beneficiary society or order, within the contemplation of Section 8777 of the Code, organized under the laws of the Dominion of Canada, with its principal place of business at Toronto; it commenced business as such society in 1890 and entered the State of Iowa in 1892, built up a large business here, acquired large property rights and continued the issuance of certificates to members in Iowa until June, 1937, at which time its Iowa members were transferred to a camp or lodge without the state; it complied with Chapter 21 of the Acts of the 26th G. A., as later codified, continuously until and including the year 1937; no gross premium tax was ever levied or assessed against any domestic fraternal beneficiary society under the laws of Iowa, no gross premium tax was ever levied or assessed against any foreign fraternal beneficiary society other than appellee; appellee was never required to pay a gross premium tax until 1936, when a tax of $1,511.55 was assessed on its 1935 business, and was paid under protest, reserving the right to contest the validity thereof; such tax is the only such tax ever paid by appellee; a license was issued to appellee annually from 1896 to 1935 without any such tax being demanded or paid; on April 1, 1937, a license was issued to appellee without the imposition of any such tax on its 1936 business; the legislature did not amend Chapter 335 of Title XVI of the Code of 1935 while in session in 1937.
The trial court's conclusions of law are as follows: that appellee is a foreign fraternal beneficiary order within the meaning of Section 1333 of the Code of 1897, carried forward in Chapter 335 in the Code of 1935, and as such has been exempt from the payment of a gross premium tax on dues and assessments collected by it from its members residing in Iowa; that, by reason of continuous executive and departmental construction of the statutes, and a legislative acquiescence in such construction for over forty years, the State is now estopped and foreclosed to assert or claim that appellee is liable to pay a gross premium tax on its 1936 business; that to impose such tax would violate the 14th Amendment to the Constitution of the United States and Sections 6 and 10 of Article I and Section 30 of Article III of the Constitution of Iowa; that the collection of the gross premium tax in the sum of $1,511.55 on appellee's business in Iowa for 1935 was wrongfully exacted, and that appellee is entitled to recover the same.
Pursuant to such findings of fact and conclusions of law, the court dismissed the State's petition, and entered judgment in favor of appellee for $1,511.55 on its counterclaim and for costs. From such judgment the State has appealed to this court.
The briefs and arguments submitted herein discuss at length many interesting questions. However, in view of the fact that our decision on one of the questions presented is controlling as to the result of this appeal, we do not undertake to decide the other questions that are argued.
The position of the State is that fraternal beneficiary societies, doing business in Iowa, fall within three classifications; first, those organized under the laws of Iowa; second, those organized under the laws of any state of the United States, other than Iowa; third, those organized under the laws of any state or nation, other than the...
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