Wilkin v. Board of Com'rs of Oklahoma County

• Decision Date: 14 October 1919
• Docket Number: 9423.
• Citation: 186 P. 474,77 Okla. 88,1919 OK 284
• Parties: WILKIN v. BOARD OF COM'RS OF OKLAHOMA COUNTY et al.
• Court: Oklahoma Supreme Court

186 P. 474

77 Okla. 88, 1919 OK 284

WILKIN v. BOARD OF COM'RS OF OKLAHOMA COUNTY et al.

No. 9423.

Supreme Court of Oklahoma

October 14, 1919

Rehearing Denied Jan. 13, 1920.

Syllabus by the Court.

An "annuity" is a yearly payment of a certain sum of money granted to another in fee, for life or for years, and chargeable only on the person of the grantor. But the term is often used in a broader sense as designating a fixed sum granted or bequeathed, payable periodically but not necessarily annually.

[Ed Note.-For other definitions, see Words and Phrases, First and Second Series, Annuity.]

By the terms of an installment certificate issued by the New York Life Insurance Company in exchange for a policy, which had become a valid claim by the death of the insured, the company obligated itself to pay the beneficiary, a resident of the state of Oklahoma, certain semiannual payments for a stated period, and thereafter, on a date certain, a final payment of a specified sum. Held, that said certificate was subject to taxation as an annuity under the laws of the state of Oklahoma; (2) that for purposes of taxation the situs of the obligation thus created follows the domicile of the annuitant.

Section 8, art. 10, Williams' Constitution, provides that "all property which may be taxed ad valorem shall be assessed for taxation at its fair cash value, estimated at the price it would bring at a fair voluntary sale. ***"

Record examined, and held, that the prevailing discount of 8 per cent. is an equitable basis for ascertaining the fair cash value of the certificates herein involved.

Error from County Court, Oklahoma County; William H. Zwick, Judge.

Assessment proceedings by the Board of Commissioners of Oklahoma County and others against J. L. Wilkin, guardian of the estate of Luther Jones, a minor, and another. Judgment for the plaintiffs, and defendants bring error. Modified and affirmed.

W. F Wilson, of Oklahoma City, for plaintiffs in error.

H. B Hopps, of Oklahoma City, and Rollin E. Gish, of Tulsa, for defendants in error.

KANE J.

This is an appeal from the action of the county court of Oklahoma county in an appeal taken from a certain proceeding had before the county treasurer at the instance and upon the application of the tax auditor of said county.

It seems that in the year 1911 the father of the appellant Luther Jones died, leaving two policies of insurance in the New York Life Insurance Company, in which the appellant was named as beneficiary. The guardian of the appellant, who at the date of the death of his father was a minor, surrendered the policies and received from the company two installment certificates identical in form, except as to their number and the number of the policy upon which each certificate was issued. One of these certificates which will serve as a model for both reads as follows:

"The New York Life Insurance Company.

Installment Certificate No. 152.

The New York Life Insurance Company, in accordance with the provisions of policy No. 3446878, issued by said company on the life of Charles G. Jones, of Oklahoma City, Oklahoma, which policy has become a claim by the death of said Charles G. Jones, and is surrendered to said company in exchange for this certificate,

Agrees to pay to Luther Jones, son of said Charles G. Jones, deceased, at the home office of said company, in the city of New York,

First, forty semiannual payments of one hundred twenty-five dollars each, the first payment to be made May fourth, nineteen hundred and eleven, and the subsequent payments semiannually thereafter, one on each November fourth and May fourth thereafter, until forty semiannual payments in all shall have been made, and,

Second, a final payment of five thousand dollars on May fourth, nineteen hundred and thirty-one.

If said Luther Jones shall die

before all the payments hereinabove specified shall have been made, the balance of said payments shall be discounted at the rate of three per cent. interest, compounded semiannually, and paid in one sum to the executor or administrator of said Luther Jones.

This certificate shall cease and determine upon the payment of the final payment aforesaid, and shall be surrendered to said company.

In witness whereof, the New York Life Insurance Company has caused this certificate to be signed by its vice president and secretary, countersigned by its registrar, and delivered this fourth day of May, one thousand nine hundred and eleven."

The questions involved in this appeal are: (1) Are these installment certificates taxable under the laws of this state; and (2) if taxable, what is their true valuation for purposes of taxation? The trial court held that the certificates were taxable and found their valuation for the years assessed to be as follows:

Year Assessed Valuation Rate Per Thousand Amt. of Tax

1912 $12,904.00 $20.75 $267.77

1913 12,788.00 20.00 255.78

1914 12,670.00 18.30 231.88

1915 12,584.00 22.50 282.33

Counsel for the appellant contends:

"First. That the certificates issued by the New York Life Insurance Company to the minor, beneficiary on the policies of insurance, had no present value, not being capable of being sold, assigned or trafficked in any manner, and were therefore not property in the sense of an annuity taxable under the laws of the state of Oklahoma.

Second. That the money evidenced by said certificates to be paid was and continued to be until payment of each installment the property of the New York Life Insurance Company, and did not constitute property in the hands of the minor or his guardian.

Third. That the money that should finally be applied to the satisfaction of said certificates had no situs for taxation within the state of Oklahoma, and remained at all times in the State of New York.

Fourth. That the taxes so assessed against the certificates were confiscatory, resulting in the creation of the state of Oklahoma and its municipal divisions as the real beneficiary under the policies of insurance, instead of the minor named therein as beneficiary."

We are unable to agree with counsel as to the taxability of these certificates by the state.

Section 7302, Rev. Laws 1910, provides that all property in this state, whether real or personal, shall be subject to taxation, and section 7305, Rev. Laws 1910, in classifying personal property for purposes of taxation, expressly mentions annuities as a proper subject for taxation. The same section excludes from taxation particular classes of annuities, such as pensions from the United States or any state, etc. The first paragraph of section 7311, Rev. Laws 1910, prescribing how personal property shall be listed for taxation, provides:

"Every

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