The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-10-27
INSURANCE CASE BRIEF.
Points Made by Messrs Finch for the
Defense.


for the appellees in the suit of the State
Board of Tax Commissioners VS.. John H.
Holiday ct al, now pending in the SUI
IRENE Court, have filed brief covering
the case The court is to hear oral argu-
ment to-day In their brief Messrs. Finch
say:
THE effort Of the State Board to tax life
insurance policies is based on certain as
sumptions false in fact or false in law. 1t
was assumed that life insurance policy
fer the purpose of taxation was the prop
erty of the person on whose life it was
written, and that such person should pay
the tax on the values as ascertained ac-
cordng to the formulate prepared for the
board by it's expert. AS matter of fact,
nearly all life insurance policies are writ
ten on the life of the husband, father,
brother or near relative of the beneficiary.
ard the policy, from the moment of issue,
is the property of such beneficiary; and
the person on whose life 1t was written has
no property interest therein. The State
Board assumed. as a matter Of law, that
under the Constitution and laws of Indiana,
all property, of whatever kind not specific
ally exempted by the Legislature, as au-
thorized by the Constitution, is subject to
taxation without legislative action. AS a
matter of law, no property in Indiana can
be taxed except by legislative enactment
The Constitution is not self-operative.
All property not exempt by the Consti-
tuition may be, or should be, taxed by the
Legislature; but the Legislature, under the
clause provide regulations, etc, cannot
abdicate its power to some creature 1t may
bring into life.
''The State Board of Tax Commissioners
assumed, as a matter of law, that the Leg
is,ature had given TO it power to alter the
schedule enacted by the Legislature, and
to add new items to the schedule and under
this it altered the schedule and added the
items to have life Insurance policies taxed
AS a matter of law the State Board had
no such power, and, under the Const1tu-
ton, no such power could be given It,
That no such power was intended to be
given it is proven by the fact that the
Legislature has always, as Wen after Gre
alton of the board as before, carefully. en-
acted the schedule enumerating by item
what should be taxed.
NO RESERVE IN INDIANA.
''It was assumed that the law Of Indiana
had some provision under which life in
surance companies were required to main
tain a reserve upon some table of mortall-
ty, computed at some rate per cent, and
that the reserve thus required to be main
tanned was of more or less private concern
to the policyholder, apd that the policy
holder had some rights concerning it. AS
matter of law and fact there is no statute
in Indiana requiring life insurance COM
panies doing business here to maintain a
reserve The law of Indiann has no
knowledge of life insurance re-
serve liability The statute law of New
York where the company is located which
issued the policies of appellees has such
requirement; but 1t is simply test OF
solvency of the company, and not matter
of concern to the policyhoder; nor does
it in any way affect his rights as stated
in the policy.
Board that, under the Constitution and law
of Indiana all property of whatever kind
not exempted by the Legislature as au-
thorized by the Constitution, is subject to
taxation without action Of the Legislature.
There are many kinds of property which
have never been made subject to taxation.
AS instances the following may be men
Suppose a lease for twenty years sub
ject 20 assignment at will of the lessee is
executed for 800 per year on building to
ba erected, upon which ten years rent is
paid in advance with condition that the
lease may be surrendered at any time
within ten years and the lessee receive
ratable proportion of the money paid. And
further, suppose that by reason of business
changes the building will now rent for $500
per year, and the lease may be sold and
assigned under the contract upon the basis
of such increased value. Under such as
suned case it will hardly be claimed that
this lease, under the present law, is subject
to taxation, either because of its surrender
value so called, or because it can be sold
for a cash sum.
NOT ALL VALUES TAXABLE.
IF everything under present laws may
be taxed which may be sold or mortgaged
then all property citizens of Indiana may
own which produces a revenue or which is
subject to sale or mortgage no matter in
what Jurisdiction it is located, is subject
to taxation "A citizen Of Indiana may own
a farm in Illinois from which he derives
revenue, which he can at any time sell or
mortgage for money. On the theory of the
State Board, carried to its logical conclu-
sion, the citizen should pay a tax on the
money he could thus procure. The fact
that he pays a tax on the land does not
relieve him, for as shown by the brief
of appellants, Page 10, when property is
taxable by the law CT this State ii is inn
material how much it is taxed elsewhere
Citing Seward VS.. City of Rising Sun ct
AL 70 Ind 351 and other cases. This illus
tration is conclusive. If it is not con-
elusive, then, so much of Section of the
act of 1891 as excerpts from taxation prop
erty actually and permanently invested in
business in another State, is unconstitu-
tional.
If the Legislature cannot. by failure to
enact proper regulations. exempt from
taxation the interest which is held in a life
insurance policy by the person on whose
life it Is issued, and the interest held by
the benefciaries in the policy (the policy
being issued by a company in a foreign
State where all Of its assets are situate
STATED. 1t cannot by direct enactment ex-
empt property owned by a citizen OF this
State actually and permanently invested
in business In another State
The attorneys contend that 1t is by no
means true that everything that is of value
is Sflblerf f9XatfOn. that mo