The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-06-11
INSURANCE CASE TODAY
BRIEFS FILED BY THE ATTORNEY
GENERAL AND COMPANIES.
Some Alleged Absurdities of the Conn
pnnies' Contention Set Forth by
State--OrnI Argument.

| court to-day. The action of the court in
| advancing the case gives room to believe
| that an early adjourned meeting of the
&C urt will be held to agree upon decision.
The appellants brief was ilel by the at
/ tCrney general. After making a brief
| statement of the case, admitting that pol
/ icies have not heretofore been listed for
taxation, and making a statement of the
complaint, he launches into his argument.
/ He says:
AT the threshold of this discussion we
| viii inquire, to some extent, into the ma
! ture and character of life insurance con-
tracts. The same general characteristics
| apply equally to the so-called mutual and
| stock companies. In making its contracts,
a life insurance company must take into
account three things. no one of which can
be certainly foreknown, but which are APP
! proximdted by mathematical calculation by
the use of what is known as the standard
mortality tables. The three things thus to
be Appropriated are: First, the mortality
1t Will likely experience, or in other words,
| its probable losses; second, the expenses ii
! will have in conducting its business: third,
| the rate of interest it can earn on its in
! Vestments and the losses thereby ii may
meet, or the profits it may make by such
| il vestments,
| Having thus figured out the probabli-
| ties and fixed rate of premium that shall
| be level and uniform during the term of
| Insurance for each policy holder, the next
| duty of the company is to divide each an
rual premium paid by each policy holder
| into three factors which shall be carried in
three separate accounts, viz: First, that
| portion estimated to be required to defray
| expenses; second, the risk fund, supposed
| to cover the average mortality loss it will
! / ave through the period of the contract
based upon estimates from the mortality
tables; third, the portion passed TO the re-
serve fund and it's accumulations, annually
compounded at per cent. In addition to
the three accounts mentioned, the company
carries an account known as the surplus
fund account. This account is made up by
transferring to it any excess that may be
left over and unused in the expense ac-
count and the amount in the reserve fund
of all policies. The surplus fund is used
to cover deficiencies and assist in sustain
ing the mortality fund in cases of unusual
losses caused by epidemics. and a stated
| periods it is in part used to pay dividends
t. policy holders upon certain classes of
policies.
The amount apportioned to the expense
fund from each annual premium is always
fxed, uniform and definite sum; the
lule, gradually increasing until near the
close of the contract period, and then grad
ually decreasing until it is eXtinguiShed;
While the annual reserve deposit varies
with risk fund, decreasing as the risk fund
increases. and increasing as the amount re-
quired to cover the risk Increases. tab
ular illustration of the division of pre-
miums and growth of the reserve fund will
be found in the record. The element of
value in a life insurance policy Is, there
fore, the reserve accumulated thereon, to
gether with Its proportion OF the surplus
fund 1t is in evidence in this case, and I'M
disputed, that the reserve fund cannot be
drawn upon by the company for any pur-
pose other than the payment of death
THE complaint in this case shows that
| policies issued by the New York Life In
surance Company represent their proper
| tionate part of the reserve fund, and that
| after a certain number OF annual payments
| the holders of such policies have a right to
| demand p1id-up policy for the proportion
| ate amount of the reserve fund represented
| shows that such policies have a surrender
| cash value in proportion to time of exist
ence and payments; that such policies have
| q security value for the loan of money from
| the company. 1t is not important now to
| discuss or demonstrate the actual value of
| each policy in suit, nor the accuracy or
| the estimates made by the witness, Will
| liams, shown at record pages. 1t is suffi-
| cient for this court to determine that such
| policies have property values.
CLASSIFICATION OF PROPERTY.
"Our contention is that such policies are
| claims and dem ands ir- favor of the
! policy holder against the company issu-
| ing such policy, and for the basis of a right
| Of action between them; that they are per-
| sonal property. 1t is not necessary for us
| to cite authorities defining personal prop
erty, for statutes of Indiana have done
| that, and the definition is in point in this
contention"
The attorney general then quotes a num-
| Der OF decisions TO snow Jfldt the pOncy OF
| insurance is a ~chose in action" and thus
| included in the definition of personal prop
| erty. He quotes more decisions to show
| that failure heretofore to list a class of
property for taxation can have nothing to
| do with the case Upon the contention that
the company pays the special insurance tax
| and pays taxes in New York he declares
| that the special tax is an excise or privilege
| tax and not an ad valorem tax, and that
when property is taxable in this state 1t
| is immaterial how much 1t is taxed else
where.
! The attorney then submits a number of
general propositions and backs them with
authorities. Among them are these: What
| ever property is worth for sale or income
| it is worth for taxation; the State Constitu-
| ton provides for the taxation of all prop
| erty not specially exempted by law; the
state tax law contains the same provision;
| the power to place on the duplicates prop
| erty not specifically set forth in the lists
| adopted by the Legislature has been upheld
| by the courts of the State; the tax list itself
| does not constitute the assessment; the
| special excise tax and this ad Valorem tax
| do not constitute double taxation
| ABSURDITIES OF THE LISTS.
| In closing his brief the attorney general
seeks to show the absurdity of the con-
tention that nothing is taxable except the
articles enumerated in the legislative list
| thus
There are many items of property held
| by taxpayers in the State of Indiana upon
| which taxes ought to be and are levied
which are not mentioned in the statutory
| list. We give some OF them, feeling sure
] that the court viii see AT a glance that
| there has never been any intention on the
| part of the Legislature to omit these arti-
| cles or to exclude these articles from prop
| erty of the State, upon which taxes should
| be paid. Some of them are as follows:
| Sewing machines are listed but not type
writer's. This burdens seamstresses and
| exempts and faVors stenographers Again
| business houses that use a monograph to
save the salary of a stenographer pay moth
| ing on a machine that cost more than any
| sewing machine ever cost. The grand
| fathers clock and the out-of-date velocipede
are listed, but the grandsons opera glasses
are exempt. The w 1rners Safe Cure tele-
scope, really salable at a half million dol
lars. and invaluable to the patent-medcine
proprietor as an advertisement, goes free
while the inoftenSlVe pigeonhole and the in
| iquitous bagatelle table get into the list as
No. SO.
IF we limit our taxables to the schedule
| provided by law we must pay our gal
| Ions of wine and whisky, while we are
| suffered TO drink of untaXed beer and min
eral Waters-a cruel discrimination. our
| chairs and sofas are assessed while carpets
and stepladders go free. Maple sugar and
maple syrup pay their share of public dues
while plain sugar pays nothing. Autograph
| collections, foreign coins and stamps, cut
| glass and fine china, paintings and etchings
| all these things have recognized money
| value, and some of them q very great val
ue when the Angelus can be sold for thou
| tituted to the base purposes OF soap ad-
| Vertisement at a cost of a few thousand
| pounds And yet. because paintings are not
| named by the General Assembly, except as
! said by Intelligent men that they shall es.
! cape their fare snare OF the
| public burden? ticket scalpel
often has in his possession a col,