People ex rel. Metropolitan Life Insurance v. Knapp

Kiley, J. (concurring):

I cannot find that any other term has been used to designate the amount paid for an annuity contract than the word “ premium.” The relator is doing business under articles of incorporation, a franchise, granted under the laws of the State of New York. It carries on two lines of business, to wit, issues fife insurance contracts and sells annuity contracts. It could not engage in either branch of the business without the right or permission conferred and granted by the State. Judge Vann in People ex rel. Provident Savings Life Assurance Society v. Miller (179 N. Y. 227). makes it plain that the taxes are “ upon the privilege of exercising the corporate franchises and carrying on business in a corporate capacity in this State.” The amount taken in for doing that business is the basis upon which the State reckons its compensation for the permission and protection given. Note the language of section 187 of the Tax Law, the section involved here: “An annual State tax for the privilege of exercising corporate franchises or for carrying on business in their corporate or organized capacity within this State.” (See, also, Laws of 1917, chap. 796, amdg. said Tax Law, § 187.)* Then follows the word “premiums,” the definition of which is now making trouble for the first time in this State, so far as I can find after quite an extended examination. What other business could the relator carry on except that referred to in the disjunctive clause last appearing in the above quotation, and upon the income from which the tax provided for in section 187 could be levied? Selling annuities is the only other business it is doing under its charter, at least, that is subject to a franchise tax. (See Laws of 1868, chap. 49, § 3.) It seems to me that the Legislature must have understood that this word “premiums” covered *418the income from the sale of annuities; otherwise this branch of the business would have been specifically exempted from the provisions of the statute. In this connection the argument that the income from the sale of annuities had always been treated as premiums,” by both the State and the insurance companies, is potent. As to the construction given to what is alleged as a similar (situation in the State of Pennsylvania, Commonwealth v. Metropolitan Life Ins. Co. (254 Penn. St. 510, 513) says: “A difference is recognized between the ordinary insurance contract and the granting of an annuity.” Notwithstanding what is said at page 515 of that case of People v. Security Life Ins. & Annuity Co. (78 N. Y. 114), I fail to find any such distinction in this State. It seems that the construction is practically the other way. Here we naturally and easily slide to the next proposition, viz., thirty or forty years’ continuous practice in the interpretation of a statute, rule of law, or of business by those who enforce it and by those who operate under it. In City of New York v. New York City R. Co. (193 N. Y. 543) Judge'Vann makes this observation: Under these circumstances the practical construction of the parties by a uniform course of conduct under all administrations of the city government for more than forty years is of controlling importance. When the parties to a contract of doubtful meaning, guided by self-interest, enforce it for a long time by a consistent and uniform course of conduct, so as to give it a practical meaning, the courts will treat it as having that meaning, even if as an original proposition they might have given it a different one.” (See, also, Matter of City of New York, 217 N. Y. 1; Wintersteen v. City of New York, 220 id. 57; Bullock v. Cooley, 225 id. 567; Adamson v. Schreiner, 176 App. Div. 95; Kings County Lighting Co. v. City of New York, No. 2, Id. 175.) If custom has in fact prevailed, giving to this statute the interpretation as urged by the State, we ought not to reverse the whole policy of the State and exempt from taxation the relator and other corporations similarly situated and acting in harmony with the State for such a long period of time.

As to the application of the rule of practical construction Mr. Justice H= T. Kellogg raises the question that no evidence appears in the record that warrants a consideration of this *419proposition; there seems to be no escape from the force of that objection so far as the evidence produced upon this hearing is concerned. (Grimmer v. Tenement House Department, 205 N. Y. 549.)

I concur that there must be a reversal.

Since amd. by Laws of 1919, chap. 625.— [Rep.