State v. Philadelphia Underwriters

LAND, J.

In the court a qua the state tax collector ruled the defendant, through Friedrichs, Palfrey & 'Redersheimer, agents, to show cause why it should not pay $225.10, with interest, attorney’s fees, and costs, for a license for the privilege of conducting the business of fire insurance during the year 1901.

The Fire Association of Philadelphia and the Insurance Company of North America came into court, and .answered under oath the rule sued out by the tax collector.

Their answer was as follows:

“(I) That there is no such insurance company as the Philadelphia Underwriters; that the policy known as the ‘Philadelphia Underwriters’ is simply the result of a contract between the two companies hereinabove named, and is the joint act of the said two companies, without independent existence of its own.
, “(2) That a license has been paid to tb;e state of Louisiana for all the premiums earned on the joint policies so issued under the name ‘Philadelphia Underwriters.’
“(3) That for the year 1900 the Fire Association made returns to the Secretary of State for $42,906.31, of which amount $14,-738.84 was one-half of the business written in the ‘Philadelphia Underwriters’ policies; and a license of $600 was paid for the year 1901 in accordance with the requirements of the statute.
“<4) That for the year 1900 the Insurance Company of North America made returns to the Secretary of State of $120,610.17, of which amount $14,738.84 was one-half of the business written in the ‘Philadelphia Underwriters Policies,’ and a license of $1,800 was paid for the year 1901 in accordance with the requirements of the statute.
“(5) That the said returns of business written in the ‘Philadelphia Underwriters’ policies were in accordance with the directions and requirements of the Secretary of State.
“(6) That this suit is an attempt to collect double taxes, in contravention of article 225 of the Constitution of 1898.
“Wherefore respondents pray that this rule he dismissed with costs.”

The rule was tried, and there was judgment in favor of defendants rejecting plaintiff’s demand with costs. The state, represented by the tax collector, has appealed.

The facts set forth in the answer are sustained by the evidence, which shows beyond question that the ‘Philadelphia Underwriters’ is hut a name under which joint policies of the two companies are issued by their joint agents. ‘ It is further shown that all business transacted by such agents was em*49braced in tbe returns of said companies for tbe year' 1900, on which their licenses for 1901 were based and issued.

The license law of 189S, where an insurance business is carried on or conducted in this state, exacts a separate license on said business for each company represented, said license to be based on the gross annual amount of premiums on all risks located within this state, and upon risks located in other states or foreign countries upon which no license has been paid therein. See section 9, Act No. 171 of 1898.

In this case the defendant is proceeded against as “an association, corporation, organization, company, society, or firm” conducting “the business of fire insurance” without license from the state, and it is alleged “that its gross receipts exceed the sum of fifteen thousand dollars per annum.”

Where it is shown that defendant is not a legal entity, but merely a name under which two regularly licensed insurance companies conducted business through joint agents, the only question between them and the state is whether the gross annual amount of premiums collected through such agency has been returned according to law.

If so, the state can have no possible legal claim against them or the agency for additional license.

The license on the business of insurance is based on the gross annual amount of premiums, and not on the number of agents or agencies within the state.

If defendant was an agency, no separate return was required of the business transacted in its name. In returning the annual amount of premiums received during the year 1900 by each company, the business transacted by all of its agents was included.

Evidence dehors the returns was clearly admissible to show that a certain amount of the total premiums was derived from the business transacted by the defendant agency. It could be shown in no other way. The certificate of the Secretary of State required by section 7 of the license act of 1898 (No. 171) is a mere statement of the amount of business transacted during the preceding year as shown by the sworn return on file in his office.

In this case the state has received the proper license fees on all the premiums earned by the two companies in the conduct of their insurance business, and perforce must rest satisfied.

It is therefore ordered, adjudged, and decreed that the judgment appealed from be affirmed.

PRO YOSTS', J., dissents.