(dissenting): I shall endeavor to state my views rather briefly.
I concur in the statement of law contained in syllabus 1 and the corresponding portion of the opinion. After careful consideration of all aspects of this case, I cannot escape the conclusion that taking the most charitable view of defendant’s contention, the right to exact the tax remains in grave doubt, if in fact defendant’s contention is not entirely unsound. It is, therefore, my view that the statement of law contained in syllabus 1 controls the instant case. I concur in the correctness of the general statement of law as contained in syllabus 2. I dissent, however, from the application made of sylla*15bus 2 for the reason the language employed in G. S. 1935, 40-252, and other pertinent statutes does not justify the conclusion that it was the legislative intent and purpose to require the payment of the tax in question as a prerequisite for the privilege of transacting every kind of business by insurance companies in this state. The statute expressly provides otherwise. It requires only the payment of fees and taxes “specified in the following schedule.” The schedule specifies only fees and taxes on “premiums.” This is not a case in which an exemption from taxation is claimed and which exemption the taxpayer must clearly show he is entitled to receive. Here the question is whether a tax on “considerations for annuity contracts,” is within the purview of the statute. If a reasonable doubt exists with respect to that question, the doubt must be resolved in favor of the taxpayer. (See authorities cited in majority opinion.)
I dissent from syllabus 3, first, for the reason the “annuity contracts” are not insurance, and second, “considerations for annuity contracts” are not premiums in the ordinary meaning of the word “premiums”; and, third, if the lawmakers intended to include “considerations for annuity contracts,” under the term “premium,” such intent is not clear and the tax cannot be exacted.
Defendant refused to issue a certificate to plaintiff for authority to do business in this state for the year beginning May 1, 1939, unless plaintiff first paid taxes in the sum of $126,876.23 on “considerations for annuity contracts” it had received in this state since 1927. No such tax had been demanded of plaintiff by defendant under G. S. 1935, 40-252, the statute in question, prior to May 25, 1936. Plaintiff is a New York corporation. In that state and under a statute essentially the same as ours, it was held, prior to 1927, that “considerations for annuity contracts” were not'taxable as “premiums” even though the contracts employed the word “premium.” (People v. Knapp, 193 App. Div. 413, 184 N. Y. S. 345, affirmed in 231 N. Y. 630, 132 N. E. 916.) To the same effect are State v. Equitable Life Assur. Soc., 68 N. D. 641, 282 N. W. 411 (1938); State, ex rel. Equitable Life, v. Ham, 65 Wyo. 148, 88 P. 2d 484 (1939). Of course, the nature of a thing must be determined by what it is and not by what it is called. If that were not true plaintiff could easily evade the tax on “premiums” for life insurance by simply using some other name to denote premiums. Plaintiff made its annual report of business transacted in this state on forms prepared by defendant. The forms contained no place for a report of *16“considerations received for annuity contracts,” and plaintiff did not report them until requested to do so by defendant.
I do not deem it necessary to review the various contentions of the parties touching' the alleged operative interpretation of the statute by the defendant commissioner. It is my personal view that defendant prior to 1936 probably did not believe the statute covered a tax on “consideration for annuity contracts.” Defendant is not to be censored for that view. In my opinion it was correct. All decisions at that time, including a decision from the state of plaintiff’s domicile, supported the view that such considerations were not taxable under a statute practically identical with our own. (People v. Knapp, 184 N. Y. S. 345; Commonwealth v. Metropolitan Life Ins. Co., 254 Pa. 510.) Nor is defendant to be criticized for having the question at issue determined now. That is the duty of every public officer when in doubt. I may say, however, the contention that it was presumed plaintiff, prior to 1936, had been paying a tax on “considerations for annuity contracts,” does not impress me as being the actual reason for failure to make a demand on plaintiff for such tax payments prior to 1936. Such a presumption is not in keeping with the careful and efficient manner in which other business affairs of the commissioner’s office, which have come to my attention, have been transacted. The fact, however, remains and is conceded that no demand for such a tax was made on plaintiff prior to 1936.
It is not my position that the state could not or should not exact a tax from insurance companies for the business in question. That decision rests solely in the province of the lawmakers. My position is, first, that they did not intend to exact the tax and did not do so; second, if they intended to do so, they have not done it in a manner reasonably free from doubt. Since it is not clear the tax was intended, the doubt must be resolved in favor of the taxpayer. (See cases cited in the majority opinion.)
Nothing could be clearer, it seems to me, than the fact that the lawmakers themselves deliberately and clearly distinguished in G. S. 1935, 17-202, and G. S.-1935, 40-401, between life insurance business and annuity business. In the latter statute pertaining expressly to insurance companies, they definitely provided companies could “make insurance upon the lives of persons and every insurance appertaining thereto or connected therewith, and to grant, purchase or dispose of annuities.” This language seems too clear to require ex*17position. If the lawmakers had thought that dealing in annuities constituted life insurance business it would have been wholly unnecessary to add after the above italicized portion of the statute the additional words “and to grant, purchase or disposg of annuities.” (People v. Knapp, supra; Commonwealth v. Metropolitan Life Ins. Co., supra.)
The instant contracts are either life insurance contracts or annuity contracts. It is not contended they are some other kind of insurance. Here, again, the testimony of insurance experts is in hopeless conflict as to whether the instant contracts constitute life insurance or annuity contracts. The result again is in doubt insofar as the oral testimony of the experts is concerned. While the contracts involve some of the characteristics of life insurance, they are essentially not life insurance but annuity, contracts. They are not, properly speaking, indemnities for death, but- investments for life. They are not intended to create an estate at the death of the annuitant, but constitute essentially an investment to be liquidated, substantially, if not entirely, during the life of the annuitant. They are designed as safeguards against misfortune and want during the life of the annuitant. In short, as has been well stated, they are essentially provisions for life and not provisions for death. (Commonwealth v. Metropolitan Life Ins. Co., 254 Pa. 510, 514-515; People v. Knapp, 193 App. Div. 413, N. Y. S. 345; State v. Equitable Life Assur. Soc., 68 N. D. 641, 651; State, ex rel. Equitable Life, v. Ham, 54 Wyo. 148, 154-159; Daniel v. Life Ins. Co., [Tex. Civ. App.] 102 S. W. 2d 256, 257-259; Carroll v. Equitable Life Assur. Soc. of the United States, 9 F. Supp. 223, 224; 3 C. J. S., Annuities, pp. 1375, 1376.)
Such investment of capital, whether in the sum of $5,000, $25,-000, $50,000, $100,000, or any other amount, is not a premium in the ordinary or proper acceptation of that term. (See last above cited cases.)
The questions whether annuity contracts similar to the instant ones constitute insurance contracts or annuity contracts, and whether the considerations received for annuity contracts constitute premiums, have received exhaustive consideration and discussion in the opinions last above cited, and I do not deem it necessary to repeat or extend at length what is there said upon those subjects. A statement from the Texas case, supra, conforms to the majority view and, in my opinion, correctly summarizes that view. It reads:
*18“From a careful examination of the authorities upon the subject, it is quite manifest that in general parlance insurance does not include contracts of annuity. This has been the invariable holding wherever the subject has reached the courts for decision. . . . We are not here concerned with annuities created ¿>y deed or will, which are of ancient origin. The granting of annuities by corporations upon consideration paid is a more recent practice. It appears to have been engaged in first by insurance companies, to which it is largely confined at the present day. It is essentially a form of investment, and uniformly held to be purely such, regardless of the fact that in its usual form payments are contingent upon continuity of the life of the grantee. In some forms of annuity, not even this contingency exists. The fact of the existence of such contingency is held not to bring it within the classification of insurance, which, generally speaking, is indemnity for loss suffered from some risk. In a broad and general sense investment may be said to have the same objective. The uncertainties arising from a constantly changing business and economic world involve an infinite variety of risks, security or insurance for which men constantly seek through investment of various kinds. But this is not the character of insurance or risk which is cannoted in the business of writing insurance policies. The terms have a more narrow and restricted meaning. For many years there has been an ever-growing tendency of life insurance companies to encroach upon the field of investment by loading their policies with an increasing variety of purely investment features. This fact, however, does not affect the character of a contract made by an insurance company as to whether it is insurance vel non, nor does it broaden the definition to include as insurance that which is not in fact properly so classified.” (pp. 257, 260.) (Emphasis supplied.)
And the court, holding that considerations for annuities are not premiums, further stated:
“This is especially true in view of the general rule that statutes creating taxes are strictly construed, and not extended ‘by implication beyond the clear import of the language used.’ ‘Such laws are to be interpreted liberally in favor of the taxpayer.’ ” (p. 261.)
I concur in the decisions from New York, Pennsylvania, North Dakota, Wyoming, Texas, the federal court decision, all swpra, and in the dissenting opinions in the Mississippi and Arkansas cases. The decisions from Massachusetts, Iowa and New Hampshire, relied upon by defendant, clearly are not in point. The decisions in the last three states were compelled by statutes dissimilar to our own. I cannot concur in the Mississippi and Arkansas cases, relied upon by defendant, and cited in our majority opinion. None of the decisions following the majority view were noted in the Mississippi majority opinion. The interpretation by the Arkansas court of that portion of Prof. Solomon S. Huebner’s treatise on “Life Insurance” which forms the basis of the Arkansas decision has been repudiated *19by Professor Huebner and that decision naturally is weakened, if not destroyed, by his subsequent interpretation of his own book.
Plaintiff directs our attention to the fact that if the tax demanded by defendant is required to be paid, Kansas insurance companies dealing in annuities in other states under statutes similar to our own, will also be required, on the basis of reciprocity, to pay enormous back taxes on their annuity business in such states. That is a subject of interest but, of course, is not directly involved in the instant case.
Plaintiff states it has no reserve fund in its annuity business out of which to pay the taxes demanded, and that it would be required to pay the same out of its reserve insurance fund, with the result that it would affect the dividends paid on life insurance policies. In view of the fact the court has determined to retain jurisdiction of the instant case for the purpose of determining the amount of back taxes plaintiff shall be required to pay, it is unnecessary to consider that contention now.
There are other points of interest stressed by defendant, such as the fact that some insurance companies paid the tax on considerations received for annuity contracts sold in this state. That circumstance does not alter the fact that no demand for such payment was made on this plaintiff prior to May, 1936, nor does it determine the correct interpretation of the statute any more than the fact that plaintiff and numerous other insurance companies did not pay the tax.
If the legislature, in the exercise of its wisdom, desires to tax annuity investments in the same manner as premiums for insurance it may easily do so in plain and simple language. As long, however, as the question of legislative intent is not free from reasonable doubt, the uncertainty must, under well-established principles, be resolved in favor of the taxpayer. I think the writ should be allowed.
Smith and Hoch, JJ., join in the foregoing dissent.