Court Opinion

ID: 6655723
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:57:36.79616+00
Date Added: 2024-06-11T15:59:54.465286
License: Public Domain

The following opinion on rehearing was filed June 30, 1904. Demurrer to answer sustained:
3. Insurance Companies: Taxation. The fact that a less reserve fund is required of domestic companies organized under the laws of this state, than is required of all companies doing business in the state of Pennsylvania under its laws, does not militate against the enforcement of the provisions of ■ the reciprocal tax law on companies organized under the laws of Pennsylvania, and doing business in this state, such reciprocal tax law being otherwise applicable and enforceable.
4. Reciprocal Tax Law. The provisions of said section 33, chapter 43, Compiled Statutes, for a reciprocal tax on insurance companies organized under the laws of other states, whose laws discriminate against insurance companies organized under the laws of the state of Nebraska, apply and become operative from the time of the enactment of such laws by such other states requiring companies of this state to make deposits, or pay fines, taxes, penalties or license fees not required of all other companies, whether any company of this state shall have established agencies there or not. „
5.-■. The act mentioned is in force and effect, and requires a foreign insurance company doing business in this state to pay the same license fees, etc., required by the laws of the foreign state of companies of this state doing business therein, whenever the existing or future law of such other state shall require companies of this state to pay license fees, etc., for the privilege of doing an insurance business therein.
Holcomb, C. J.
Section 38, article I, chapter 77 of the revenue law, as it existed prior to the 1903 enactment, provided that every insurance company transacting business in this state should be taxed upon the excess of premiums received over losses and ordinary expenses incurred within the state, during the year previous, and at the same rate that *337all other personal property is taxed. The section closed as follows:
“Insurance companies shall he subject to no other tax, fees or licenses under the laws of this state, except taxes on real estate and the fees imposed by section 32 of an act regulating insurance companies, passed February 25, 1873.”
In the opinion handed down in this case, it is held that the provision quoted, in so far as it purported to exempt insurance companies from the payment of taxes on personal property, is in contravention of section 1, article IX of the constitution, x>roviding for the raising of needful revenues, by levying a tax by valuation, so that every person and corporation shall pay a tax in proportion to his, her or its property and franchises, and it is also held that, notwithstanding the unconstitutional feature referred to, yet, the section as a whole would yield only to the extent of the repugnancy, and otherwise would be enforceable, and that the effect of the part of the section quoted, notwithstanding its invalidity in so far as it attempted to exempt personal property from taxation, was to repeal by implication the reciprocal tax feature found in section 33, chapter 43, Fompiled Statutes. In arriving at the conclusion announced in the former opinion, the mind of the writer was centered‘especially on the exception clause contained in the sentence Avherein certain exactions were excepted from the exemption generally of all other forms of taxation or other exactions; and, by applying the familiar rule that a statute will yield only to-the extent of the repugnancy, it was believed that the legal effect was to add personal property to the exception clause, and that the section otherwise would remain-a valid enactment and operate as a repeal by implication, as therein announced. Further consideration of the matter leads to the conclusion that the latter provisions of the section referred to, dominating the unconstitutional part, were incorrectly construed. We are satisfied with the holding that the purported exemption of personal *338property from taxes is an unconstitutional exercise. of legislative power. We think there can be no doubt but that the attempted exemption of personal property from taxation contravenes the fundamental law, and that the section of the revenue act, in so far as it purports to do this, is invalid. State v. Poynter, 59 Neb. 417. We were, we think, in error in holding to the view that the section in this respect was invalid, and at the same time that it operated as a repeal by implication of the reciprocal tax provision of section 33 of the act of 1873. The effective words of the section, those which contravene the fundamental law and which must be held unconstitutional, are found in the clause, “Insurance companies shall be subject to no other tax, fees or licenses, under the laws of this state.” These are the words which purport to exempt insurance companies from taxation on their personal property. Such attempted exemption is invalid, as was held in the former opinion. The legislature can not, after providing for a tax on net receipts, say that insurance companies shall be subject to no other tax, under the laws of this state. This language is as repugnant to the constitution as would be the case; if no exception were made regarding taxes on real estate. Personal property can not be exempted any more than real estate, nor can both together. The words found in the invalid portion of the section, those which declare that insurance companies shall be subject to no other tax, fees or licenses, under the laws of this state, are the only words which can effectual e a repeal by implication of the reciprocal tax feature of section 33 of the act of 1873. No language can be found which can be appealed to as repealing by implication the provisions of the act under which a recovery is sought in this case, except the language of section 38 quoted, and that which we say is inimical to the constitution. That part of the act, therefore, which attempts to relieve insurance companies from other taxes, fees and licenses than those mentioned, being void, for the reasons stated, is void for all purposes, and as though it had never been enacted *339by the legislature, and therefore has no legal force and efficacy for any purpose. Boales v. Ferguson, 55 Neb. 565. Such being the case, there is no repeal by implication of any part of section 33, chapter 43 of the laws of 1873, and the former opinion holding to the contrary is therefore disapproved.
Having reached the conclusion just announced, it becomes necessary to consider one further point in the case, which ivas only mentioned, but not discussed or passed on in the former opinion. It is contended by counsel for the defense that the retaliatory law of this state can not be enforced against the defendant, a company incorporated under the laAArs of Pennsylvania, because no Nebraska company is incorporated, or can be incorporated, pursuant to the laws of this state, Avhich does or can conform to the requirements made by the state of Pennsylvania of all insurance companies doing business therein. The argument in support of the proposition is predicated on the theory that a larger reserve is required of fire insurance companies doing business in Pennsylvania, by the laAvs of that state, than is required by companies organized and doing business under the laws of this state. It is said, companies created under the laws of this state do not maintain any such reserve, and are required to keep only a less percentage of their premiums, and that they may pay out the excess in dividends without violating any provisions of laAV. There is nothing in the argument which even remotely suggests the inability of Nebraska companies to fully, and in all respects, comply with the laAV and requirements of the state of Pennsylvania. The fact that they may operate upon a different plan or Avith a smaller reserve, under the laAvs of this state, than is required by the state of Pennsylvania, does not argue that they can not and do not measure up to the standard set by the laAvs of the latter state, and may not enter into that state, and engage in business therein, along with the domestic companies, or those organized under the laws of other states. If all are on common ground, in a fair field, with *340no favors, there is no tenable ground for saying that Nebraska companies have not the ability to successfully compete with all others. If our companies do not engage in business in Pennsylvania, it may fairly be inferred that it is because of discrimination against outside companies, and not on account of the provisions of law, equally applicable to all companies, which may in some respects differ from the laws governing their creation and authority to do business in their home state. We may assume that the sole reason no Nebraska companies are doing business in Pennsylvania, if such be the case, is because of the severity of the restrictions imposed by the laws of Pennsylvania upon insurance companies organized under the laws of other states, which are not applicable to domestic companies. Germania Ins. Co. v. Swigert, 128 Ill. 237; Phœnix Ins. Co. v. Welch, 29 Kan. 672, and State v. Fidelity & Casualty Co., 77 Ia. 648, all support the right of enforcement of the reciprocal tax law, regardless of the question of the establishment of an agency, or the attempt to do business, in the state against whose companies the law is made to operate. The law is effective when conditions it provides for are existent. If the laws of Pennsylvania are such as were contemplated by the legislature in the. enactment of section 33, then those provisions are at once operative upon companies seeking to do business in the state, which are incorporated under the laws of that state, whether or not Nebraska companies haw; agencies established in Pennsylvania or whether, under the laws of this state, they may do business on a plan different from all companies doing business in Pennsylvania. In Germania Ins. Co. v. Swigert, supra, it is held, under a law in all essential features the same as the one under consideration, that the provisions of such a law apply, and become operative, from the time of the enactment of such laws, by other states, requiring companies of this state to make deposits or pay fines, taxes, penalties or license fees, whether any company of this state shall have established agencies .there, or not. It is also held that such a *341law is operative and in force, and requires a foreign insurance company, doing business in this state, to pay the same license fees, etc., required by the laws of the foreign state of companies of this state doing business therein, whenever the existing or future laAV of any other state shall require companies of this state, to pay license fees, etc., for the privilege of doing an insurance business therein. The other authorities cited fully support the Illinois case. The former judgment overruling the demurrer to the answer is vacated, and the demurrer is sustained. Judgment will he entered in conformity therewith.
The judgment heretofore entered in this cause adhered to.
Judgment accoedingly.