Home Insurance Co. v. Swigert

Mr. Justice Mulkey

delivered the opinion of the Court:

It will be perceived from the statement which precedes this opinion, as well as from the argument of counsel for the appellant, that the theory upon which the company seeks to recover back the money paid by it to the Auditor under protest, rests upon the legal assumption that it is not competent for the legislature to provide a general rate of taxation and of fees to be paid by foreign insurance companies for the privilege of doing an insurance business' in this State, as is done by the 30th and other sections of the Insurance act, and by another provision of the same law prescribe higher rates and different scales of fees to be paid by such companies upon certain contingencies therein provided for, as is done by the 29th section of the act,—and this is really the main question in the ease.

The 30th section of the act requires all‘agents of foreign insurance companies doing business in this State to return, for purposes of taxation, to the proper officer of the county, town or other municipality in which their respective agencies are established, in the month of May, annually, the amounts of the net receipts of such agencies for the preceding year, which are declared to be subject to the same rates of taxation, for all purposes, that other personal property is in said municipalities, respectively,—such tax to be in full of all town and municipal license. The 27th section • requires certain fees to be paid by all companies proposing to do an insurance business under the act. Of course the several sections relating to this subject must be construed together, and when so considered, they in effect declare that the rates of taxation and scale of fees to be paid by foreign companies doing business here shall, in all cases, be governed by the general provisions of the Insurance act relating to that subject,, exclusive of the 29th section, except where the statute ■ of the State to which any such foreign company belongs, has or may hereafter impose upon our own companies doing business therein a higher rate of taxation than is required by the general provisions of our own act, in which case the 29th section is made to govern,—or, in other words, upon such contingency the higher rate of taxation imposed by such foreign State upon our companies doing business there, will, by virtue of the 29th section of our act, be applied to its own companies doing business here.

It is clear that if this 29th section is operative and valid at all, and the Auditor may rightfully enforce it whenever a case is brought within its provisions, there can be no recovery in the present action. But it is earnestly insisted that such is not the case; that the section in question has for twelve years past been a dead letter upon the statutes of the State ; that if it now has any vitality at all, it has been recently infused into it by the statute of New York, and that to admit this is in effect to hold the legislature of the State may abdicate its legislative functions, and surrender them to the legislature of a foreign State, which all concede can not be done. This, to our apprehension, is an extreme and unsound view of the matter, although it- seems to be sustained" by Clark & Murrell v. The Port of Mobile, 10 Ins. Law Journal, 357. But that case can not, on principle, as we understand it, be reconciled with numerous other well considered cases, and, moreover, we do not regard the reasoning by which the conclusion is reached as sound, and for these reasons we respectfully decline to follow it. As opposed to the reasoning in that ease, we cite Alcorn v. Hamer, 38 Miss. 652; Locke’s Appeal, 72 Pa. St. 498; 'The People v. Reynolds, 5 Grilm. 1; The People ex rel. v. Salomon, 51 Ill. 37; Guild v. Chicago, 82 id. 472; Erlinger v. Boneau, 51 id. 94.

Whatever the rule may be in other States, it is well settled in this, as will appear from the eases just cited, that it is competent for the legislature to pass a law the ultimate operation of which may, by its own terms, be made to depend upon some contingency, as, upon an affirmative vote by the electors of a given district, or upon any other indifferent contingency the legislature in its wisdom may prescribe. Where the contingency upon which the ultimate operation of a law is made to depend, -consists of a vote of the people, or the action of some foreign deliberative or legislative body, as is the case here, it is erroneous to suppose the legislature in such case abandons its own legislative functions, or delegates its powers to the people in the one case, or to such foreign deliberative or legislative body in the other. In either case the law is complete when it comes from the hands of the legislature, otherwise it would be inoperative and void, for we fully recognize the principle a law, properly so called, can not have a mere fragmentary or inchoate existence; and even if it could, neither the people by a vote, nor any other independent body, could complete the unfinished work of the legislature, and thus make it a law. But while this is so, nothing is better settled than that the operation and even remedial character of a perfect and complete law may, by virtue of limitations contained in the law itself, based upon contingent extrinsic matters, be enlarged, diminished, or wholly defeated. Such laws, though adopted absolutely and perfect in all their parts, yet by their own limitations they are applicable to a hypothetical condition of things only, and which may or may not ever happen. That it is perfectly competent for the legislature to pass such laws is shown by long legislative experience, and a decided weight of judicial authority. Indeed, we have not the slightest doubt of the validity of laws of this character, and to hold otherwise would clearly lead to the most serious consequences. Who has ever doubted the validity of that portion of our statute which declares that deeds executed without the State may be acknowledged, before any one authorized to take such acknowledgments, by the laws of the State or. country in which they are made ? Or who has ever questioned the constitutionality of that provision of our statute which makes all wills and testaments made in a foreign State or country binding and valid here, if executed and proven agreeably to the laws and usages of such foreign State or country, although not in accordance with our general law on the subject? And yet, in either of these cases, there is just as much reason for claiming that our legislature has abdicated its legislative functions, and attempted to delegate its constitutional and legitimate powers to a foreign State or country, as there is that it has done, or attempted to do so, in the present case; and to apply the doctrine contended for to those provisions of our statute, .would unsettle and destroy a vast number of titles which have never heretofore been questioned, and would thereby give rise to a train of evils the magnitude of which can hardly be conceived. We can not, therefore, either upon authority or upon grounds of public policy, give the doctrine our sanction.

It is not an objection to the validity of this provision of the statute that no attempt has ever before been made to enforce it, and that it has, as counsel put if, “lain dormant for the last twelve years. ” In this sense all penal laws are dormant until the facts or circumstances arise which constitute a breach of them. Until the legislature of New York, in 1880, passed the act in question, and commenced enforcing it against our own companies doing business there, no case had arisen here to which the 29th section of our own act could apply,—nevertheless it was in full force and effect all that time. It is also a misapprehension to suppose that in giving effect to this section of our statute we are simply enforcing the statute of a foreign State. It is a fundamental principle that courts can only enforce the laws of the State or sovereignty from which they derive their powers and jurisdiction. Take the ordinary case of enforcing a contract by legal proceedings in one of our own courts which was made in a foreign State, whose law regulating such contract differs. from our own general law on the subject. In such case the court here does not simply administer the foreign law, for, as already stated, it has no power to do that, but, as in all other cases, it administers the law of this State only,—that is, it administers the law of this State regulating all foreign contracts of the same character, made under like circumstances. In all cases of this kind the law which obtains here, and by which the rights of the parties are governed, is identical with the foreign law where the contract was made; but it is the law here, and not the foreign law, that is enforced by our own courts. So in the present case, while our own law regulating the terms upon which New York companies may do business here, is identical with the law of that State prescribing the terms upon which insurance companies may do business there, it is nevertheless the law of this State, and not the law of New York, which is enforced by our courts here.

It is further contended by appellant’s counsel, that the 29th section of our Insurance act is in conflict with section 1, article 9, of the present constitution, which is as follows: “The General Assembly shall provide such revenue as may be needful by levying a tax by valuation, so that every person and corporation shall pay a tax in proportion to the value of his, her or its property, such value to be ascertained by some person or persons to be elected or appointed in such manner as the General Assembly shall direct, and not otherwise. But the General Assembly shall have power to tax peddlers, auctioneers, brokers, hawkers', merchants, commission merchants, showmen, jugglers, inn keepers, liquor dealers, toll bridges, ferries, insurance, telegraph and express interests or business, and persons or corporations owning or using franchises and privileges, in such manner as it shall, from time to time, direct by general law uniform as to the ■ class upon which it operates. ”

This position, to have any force at all, necessarily assumes as true two other propositions, namely, first, that the amount required to be paid by New York companies doing business here, is, under the 29th section of our Insurance act, a tax, within the meaning of the constitution; and second, that all foreign insurance companies doing business here, are, for the purpose of assessment or taxation, necessarily of the same class. In the view we take of the second proposition it will not be necessary to discuss the first.

While we concede that all insurance companies organized under the laws of other States are to be distinguished from those organized under our own laws, for some purposes, by a common characteristic,' namely, that of being created and organized under the laws of a foreign State, still, in our judgment, it does not legally or logically follow that all such companies are, for the purpose of assessment or taxation, to be deemed of the same class, within the meaning of the section of the constitution above cited, for it is hardly necessary to remark there may well be one or more attributes or characteristic marks common to several classes, and yet each class, for some purposes, be quite distinct from the other. The framers of the constitution having failed to classify insurance companies for these purposes, the power to do so rests exclusively with the legislature, and, as we understand it, that power has been exercised by the adoption of appropriate legislation for that purpose, already referred to. The insurance companies of each foreign State doing business here, whose laws require companies organized under the laws of this State doing business there to pay a higher rate of taxation than is required to be paid by the general provision of our own law on the subject, are, by the express provisions of the 29th section of our Insurance act, constituted a distinct class for the purposes of assessment and taxation here. As already stated, the power to classify such companies has been left by the framers of the constitution with the legislature, and we can perceive no good reason, nor has any been suggested, Avhy a classification of these companies may not Avell be based, as it has been, upon the legislative policy of their respective States towards our own companies doing business there. On the contrary, we can see many good reasons (which we will not noAY stop to enumerate) for classifying these companies upon such a basis, and we have no doubt it was perfectly competent for the legislature to do so, a S' it did, by the adoption of the 29th section.

Whatever grounds there may be for doubt on the question, Ave can not believe them of so serious a character as to require us to hold the 29th section unconstitutional. It is a familiar doctrine that courts will not declare an act of the legislature unconstitutional, unless it is clear, beyond reasonable doubt, it has transcended its constitutional powers. We can not say that such is the case here, hence we must and do hold the act a valid law.

The judgment will be affirmed.

Judgment affirmed.

Mr. Chief Justice Scott :

I do not concur in this opinion.