State v. Praetorians

• Decision Date: 26 January 1933
• Docket Number: 3 Div. 43.
• Citation: 146 So. 411,226 Ala. 259
• Parties: STATE v. PRAETORIANS.
• Court: Alabama Supreme Court

146 So. 411

226 Ala. 259

STATE v. PRAETORIANS.

3 Div. 43.

Supreme Court of Alabama

January 26, 1933

Rehearing Denied March 9, 1933.

Appeal from Circuit Court, Montgomery County; Leon McCord, Judge.

Action to recover license tax by the state of Alabama against the Praetorians. From a judgment of nonsuit, plaintiff appeals.

Affirmed.

Thos E. Knight, Jr., Atty. Gen., and Frontis H. Moore, Asst. Atty Gen., for the State.

Goodwyn & Goodwyn and Hill, Hill, Whiting, Thomas & Rives, all of Montgomery, for appellee.

GARDNER Justice.

Appellee is a fraternal life insurance company authorized and doing business in Alabama, and by this proceeding the state seeks the collection of what is designated by the parties a license or excise tax attempted to be imposed under the latter provisions of section 8505, Code 1923. As originally enacted (General Acts 1911 page 700, § 30), this statute contained only the exemption feature as follows: "Every fraternal benefit society organized or licensed under this act, is hereby declared to be a charitable and benevolent institution, and all of its funds shall be exempt from all and every State, county, district, municipal and school tax, other than taxes on real estate and office equipment."

In the process of codifying this particular statute there was added by the code committee the following provision: "But whenever any fraternal benefit society issues policies of life insurance based on the adequate rate plan as provided by the statutes of any state, or issues any health or accident insurance contracts or policies, then such societies shall pay to the state one per cent of all premiums on such policies or contracts issued to citizens of this state."

This new provision was included in, and adopted as a part of the Code, and appears in its completed form as section 8505.

Numerous objections on constitutional grounds are aimed at this feature of the statute. All objections save two will be laid out of view, and we gather from argument here presented these two are the grounds upon which the trial court rested his decision that this feature of the statute was invalid. They will be briefly considered. The first relates to section 221 of our Constitution, which prohibits the Legislature from permitting any person, firm, or corporation to pay a privilege, license, or other tax to the state and relieves him or it from the payment of all other privilege and license taxes in the state. This constitutional provision was considered in the recent case of Exchange Drug Co. v. State Tax Commission, 218 Ala. 115, 117 So. 673, 676, where it was held the words "all other" meant both municipal and county, and, if the prohibition applied to only one and not the other, there was no violation of this section of our Constitution. But speaking to this constitutional provision the court said: "In other words, section 221 forbids the Legislature to levy a license tax for the use of the state and at the same time relieve licenses of all other taxes of like kind."

The first part of section 8505 clearly and unequivocally relieved appellee from all such taxes as here involved, not only as to the state but also counties and municipalities.

But the latter part, that new to the Code of 1923, attempts to impose a tax for the state alone, and it is conceded that if the statute is to be read as a unit the position that it contravenes section 221 of our Constitution is most plausible.

The state insists, however, the Code section should be divided and construed to show a classification of fraternal insurance companies into those which are purely charitable and those issuing policies based on the adequate rate plan; and that it is the duty of the court to so construe the statute in view of the rule that the courts will incline to a construction favoring its validity unless invalidity plainly appears ( Fitzpatrick v. State, 169 Ala. 1, 53 So. 1021), and the further rule that where a statute is capable of two constructions, one of which would render it invalid, and the other valid, the construction which will uphold its validity will be adopted. Wilkinson v. Stiles, 200 Ala. 279, 76 So. 45; Reynolds v. Collier, 204 Ala. 38, 85 So. 465.

The argument is ingenious, but not sufficiently persuasive. The statute as originally enacted exempted appellee from this character of tax, not only from the state, but all political subdivisions thereof. It attempted no distinction or classification but included "every" such fraternal society.

The added feature, which attempts to impose this tax, is in the form of an exception to the statute as originally enacted (see definition of the word "but" in vol. 1, Words and Phrases, Second Series, pages 540, 541; vol. 1, Words and Phrases, Third Series, page 978; vol. 1, Words and Phrases, First Series, page 926, and 9 Corpus Juris, p. 1106), and is to be construed as a limitation thereof. The original statute exempts every such society from this character of tax, and the exception added limits this exemption so as to take from without its operation those fraternal organizations issuing policies based on the adequate rate plan. This is all it purports to do, and the language gives no indication of any intention to limit the original statute to any greater extent. The language in this respect is plain and unambiguous, and in such a case the Legislature should be understood to mean what they plainly expressed, leaving no room for construction. Louisville & N. R. Co. v. Western Union Tel. Co., 195 Ala. 124, 71 So. 118, 124, Ann. Cas. 1917B, 696.

"The courts must confine themselves to the construction of the law as it is, and not attempt * * * to supply defective legislation, or otherwise amend or change the law under the guise of construction." 59 Corpus Juris 945.

Still another rule is applicable which runs counter to the argument for the state, and that is that exceptions, as a general rule, should be strictly, though reasonably construed, and are to be extended only so far as their language warrants. 59 Corpus Juris 1092. And our own decisions are in accord with this generally accepted rule. "If there is doubt about an...