I do not concur in the reasoning employed or the conclusion reached in the majority opinion. Precedents established in other jurisdictions become persuasive here only when the facts are parallel and the statutes are similar in context and purpose to those under consideration. These matters, having been affirmatively determined, the conclusion there reached may be found to be faulty and hence the precedent inapplicable. The contest waged here by the relator is to avoid the payment of a balance of $987.37, being a part of the annual tax upon the premiums received by the company for the year 1920. There is a provision in the policies issued by this company which becomes a part of the contract of insurance, whereby the company, each year, apportions to the policyholders a certain amount of *Page 357 the interest earnings on the funds of the company in excess of those anticipated in the calculation of the premium. These earnings, from which this apportionment is made, are termed a surplus. The portion paid to each policyholder therefrom is designated as a dividend, which may, at his option, be paid to him in cash or applied to the payment of a premium, or converted into participating insurance or deposited with the company, which will as due by the company is, as stated, $987.37.
The stipulated or contractual premiums required to be paid by policyholders during the year 1920 on all policies issued in this State by the company during all or any part of that year aggregated $417,325.54. During that year the company declared dividends on Missouri policies in the sum of $48,918.06, all of which the policyholders elected might be applied in payment or part payment, as the fact might be, of premiums due on their policies for that year. The company contends that the total amount of the sum of the dividends thus applied should be deducted from the aggregate amount of business done by the company in this State for that year; and that the two per cent tax required to be paid by the company under Section 6387, Revised Statutes 1919, for the privilege of doing business in this State, should be calculated on the remainder. The difference between the amount of tax claimed by the State and that admitted as due by the Company is, as stated, $987.37.
The majority opinion sets out the statute (Sec. 6387, supra) which requires construction in the determination of the matter at issue. What constitutes "the premiums received" as the term is used in the statute is the vexed question. We have shown that a declared dividend becomes the property of the"Premiums insured. This is evident from the nature of theReceived." transaction, but the conclusion is rendered absolute under the terms of the policy which, among other things, provides that declared dividends become absolutely the property of the insured. As such, they are held in trust by the company until disposed of by the owners under *Page 358 one of the options referred to. While so held, if the company should refuse to apply them as directed by the owners, they would have a right of action to compel a compliance with such directions. This simply to illustrate the complete character of the ownership by the policyholders in the dividends.
The obligation of the company to pay dividends and that of the policyholder to pay premiums are correlated only in that both are created by the same instrument, viz., the policy, the perpetuity of which is necessary to the continued life of the entire transaction. The binding force of either is to no further extent dependent on the other. The fact that an option is given the policyholder to pay his premiums in part or in whole with dividends in no wise affects the character of such premiums or renders one of the obligations dependent upon the other beyond the privilege extended. The amount required to be paid by the policyholder to continue the contract of insurance is a stipulated premium. It is not changed by the fact that a portion of it may be paid by the application of a dividend and the balance by a direct remittance. Whether the obligation is satisfied in this manner or by a direct payment of the entire amount, a payment in full by the policyholder of the stipulated premium then due, is effected; the result is that the company transfers the cash it held in trust for the policyholder, and owned by him, to its own coffers as a part of the fund arising from the payment of premiums. In short, the total amount of cash received by the company for the year 1920 in payment of premiums was not affected by the manner of such payments. Of what concern, except to refine a technicality based on an assumption, is it whether these premiums were paid in part by money owing to policyholders or wholly by direct payments made by them? To contend that such payments do not constitute premiums received within the meaning of the statute is not tenable under any reasonable rule of interpretation. *Page 359
The practice of the mutual adjustment of obligations by setting off one against the other is as old as the custom of barter and trade; but it has remained for the relator in applying a fund in its possession belonging to another to the payment of a debt due by the latter to it to contend that such application does not constitute a receipt by it of the amount thus applied.
The relator does not deny that it held the money of the policyholders in the manner stated, nor that all of the stipulated premiums have not been paid in full; but in some undefined way, that the manner of the payments of same changed their character and, hence, its obligation to the State should be reduced. There is no merit in this contention. It should be required to pay taxes on the full amount of all business done during the year, and this writ should be denied.
The reasoning in State ex rel. v. Wilson, 102 Kan. 752, is faulty, if the payments made there were as in the case at bar, in assuming that payments made on premiums from dividends constitute an abatement or credit on the amount due. This conclusion may be correct under the facts presented in that case, but under our statute, and as matter of fact, the payment of premiums out of dividends constitutes no abatement. In all instances the full amount of the premium is required to be paid; it cannot be construed as a credit except in the same sense that any other payment made by a debtor is a credit; in so far, however, as it assumes that the application of a dividend to the payment of a premium constitutes a favor to the policyholder, its conclusion is unfounded; he pays "as nominated in the bond," and the company demands and receives the full amount due it.
The facts in Comm. v. Penn. Mut. L. Ins. Co., 252 Pa. 512, are not parallel with those at bar. There the deductions sought by the company to be made from the maximum premiums are stated to have never been received by it, and hence the company should not be taxed on same. No such facts are present here. *Page 360
In Comm. v. Met. L. Ins. Co., 254 Pa. 510, it is held that a statute which authorized the levying of a tax upon the entire amount of premiums received did not apply to allotments in reduction of premiums. There is no reduction of premiums in the instant case.
It is difficult to follow the reasoning of the majority opinion wherein it is held that the imposition of the tax authorized by the statute (Sec. 6387, supra) upon the full contractual premiums instead of only upon the actual premiums received willIncidence be passed on as an added cost of insurance to theof Tax. policyholder. The use of the terms "actual premium received" is misleading. The actual premiums received, as we have repeatedly said, are represented by the aggregate sum of $417,325.54. The burden assumed by the holders of the policies on which these premiums were paid is fixed by their contracts, and cannot be passed on "as an added cost of insurance to them;" nor under our regulatory laws can the cost of insurance be increased in future contracts of insurance unless legislative provision is made therefor.