
    No. 10,569.
    C. H. Parker, Tax Collector, vs. North British and Mercantile Insurance Company.
    1. The power o£ taxation is derived from, and regulated by, the State Constitution, and the Legislature, in exercising such power, is bound to conform to the Constitution.
    2. The Constitution contemplates two kinds oí taxes, viz: property tax and license tax.
    8. The tax imposed on the “ gross receipts ” oí foreign insurance companies by Sec. 10 of Act 76 oí 1886 is not a license tax, but is levied, assessed and collected as a property tax.
    4. Ataxon “ gross receipts ” is not a tax on the “capital” or “capital stock” oí the corporation; it is an “ income tax.”
    3. "Whether or not the Legislature may constitutionally levy an income tax (which is not decided), if it have such power, it would be an indispensable condition of its exercise that the tax should embrace the income of all, and it could not single out a particular and limited class of persons and require them to pay an income tax, while exempting all others.
    <6. The claim here presents a distinct exercise of the taxing power; being levied as a tax, assessed as a tax, and claimed by the tax collector as a tax, in proceedings applicable exclusively to the collection of taxes.
    7. Different questions would be presented if the act merely required the foreign corporation to pay a certain percentage of its premiums to the State as the condition of a permissive license to enter and transact business in the State.
    APPEAL from the Civil District Court for the Parish of Orleans. Ellis, J.
    
    
      Walter H. Rogers, Attorney General, and Wynne Rogers, Attorney for Tax Collector, for Plaintiff and Appellee:
    The British Mercantile Insurance Company is a foreign company, doing business in the State of Louisiana, its principal oilice is in the city of New Orleans and its agent is L. II. Terry; therefore an assessment of its gross receipts in the city of New Orleans was properly made under the provisions of Sec. 10, Act 76 of 1886.
    It was the duty oí said agent to pay the tax; failing in that after the legal notices and demand was served on him, it was the proper remedy on the part of the tax collector to take the rule in accordance with the ltevenue Act of 1888 to . produce the property.
    Act 76 oí 1888 does not violate Art. 208 of the Constitution, because it imposes the same burden equally upon all foreign insurance companies, and said article does not prevent the Legislature from dividing objects of taxation into classes, but obliges it to impose an equal burden upon all those who find themselves in the same class.
    If the State of Louisiana has thought fit to recognize foreign charters of incorporation to the extent of permitting foreign corporations to transact business in their corporate name, through agents within her limits, the Legislature had jui undoubted right to attach what conditions it thought fit to the privilege.
    
      It being proved that at the time of service of the rule the agent had under his control the property assessed, and refuses to deliver on the ground that, iiaving paid to his principal in advance for it, the property is his, the rule will be made absolute notwithstanding, and the agent ordered to deliver. The law can not thus be defeated by acts between the principal and agent.
    The company will not now be allowed to question the correctness of the assessment, not having taken the legal steps to correct it.
    
      W. B. Sommerville, Assistant City Attorney, and Charles Carroll, Attorney for Collection of State Licenses, s,s Amici Curise:
    
    A foreign insurance company which has an agent located in this city, which agent is furnished with policies .signed in blank, and which policies are given life and effect by the agent filling out and countersigning and issuing them, is doing business here. I-Iine and Nicholls* New Digest of Ins., page 29, q. 1; page 8.3, See. to; page 27 (d); page 34, Sec. 12; page 173 (a).
    
      Harry H Hall for Defendant and Appellant: •
    1. There is no authority under the general revenue acts to levy a property tax upon the “premiums received” of a foreign insurance company placing risks in this State by “insurance agents.” Acts 1886, pages 138,'134; Acts 1888, pages 112,113.
    2. If the tax attempted to be levied upon “premiums received” be considered, not as a property tax, but an income tax, then there is no law under which its imposition could be justified. 35 An. 825; Cooley on Taxation, page 28.
    3. Act 76 of 1886, the title of which provides for “determining capital subject to taxation, and which, in its body, attempts to levy a tax upon “ cross receipts,” is violative of Art. 29 of the Constitution of Louisiana, which declares that every law shall embrace but one object, and that shall be expressed in its title. 4 An. 297; 33 An. 568; 38 An. 6S9.
    Because:
    
      {a) Said Act 76 of 1886 docs not attempt to declare that “gross receipts” are capital; nor if it did would the Legislature be competent by such arbitrary a declaration to change the nature of things.
    
      (b) “Gi'oss receipts” are not capital. Income is not property. Property, labor or capital is the tax; income the fruit. Desty on Taxation, page 357; 60 Ga. 100.
    The annual receipts of a foreign insurance company paid to its agent as premiums are not property. 29 Iowa 13.
    (cj) The imposition of a tax upon gross receipts, when not considered an income tax, has been held to be in the nature of a license tax; but never as a property tax. 99 111. 872; 93 N. Y. 313.
    4. The premiums received by such foreign company and not retained here have no locus in this State, but follow the domicil of the foreign corporation, and are not taxable here. 3 Col. 350; 4 Wall. 210; 21 Vt. 152; 40 111. 204; 43 Me. 497; 5 Mete. 73; 7 Minn. 198; 1L N. Y. 563; 3 Ore. 13; 8 B. Mon. 2; 47 Conn. 484; 30 Conn. 394,
    The ex*editor can not he taxed when not within territorial limits; nor can debts due to him by debtors therein be considered as being elsewhere than at the domicil of the foreign creditor. 15 Wall. 319; Man. 268; l’Nev. 334; Barber Asphalt, 41 An.-; 11 An. 268.
    5. The foreign insurance company, which permits insurance agents or brokers within this State to take risks for it, does not thereby bring itself within this State for the purpose of taxation. 33 An. 11; 31 An. 781; 40 An. 175.
   The opinion of the court was delivered by

Fenner, J.

Act No. 76 of 1886 is entitled “An Act in relation to insurance companies, corporations, associations, partnerships and individuals of foreign governments doing fire, river, inland navigation or marine insurance business in this State, limiting publication or rendering of statements, determining capital subject to taxation, collection of same, penalties and requirements.”

Various sections of the act deal with the terms and conditions on which foreign insurance companies are permitted to conduct business in this State, with various duties required of them in the conduct of such business, and with the estimation and fixing of the capital stock of such company as the standard in proportion to which the size of its risks is to be regulated in accordance with the general insurance laws of the State.

Section 10 of the act then provides:

“ The capital, etc., so determined and certified, shall be subject to taxation, the same as the capital of fire insurance companies organized under the laws of this State, to be levied, assessed and collected as prescribed by the laws of this State, at such place in this State as such foreign insurance company shall have its principal office; provided, however, that said capital has not been taxed and paid by the main agency or company in any other State, then taxation shall be levied upon the gross receipts, less deductions governing companies organized under the laws of this State.”

Under this section, the defendant company was assessed for the years 1887, 1888 and 1889 on the gross amount of premiums received in this State.

Having failed to pay the tax the tax, collector takes this proceeding under Sec. 54 of Act 85 of 1888, to compel the company (through its agent) to deliver up the property assessed, or so much thereof as may be necessary to satisfy the tax.

The defendant denies its liability for the tax on various grounds, of which we only find it necessary to consider one, viz: that there is no valid warrant of law for the assessment and collection of the tax.

The State, in this matter, is undoubtedly exercising the power of taxation. This power is derived from, and regulated by, the Constitution of the State. No matter who may be the subject, or what may be the object of the tax, the State, in exercising this power, is bound to conform to the requirements of the Constitution.

That instrument makes no distinction of persons, and a tax which would be unconstitutional, if levied on property belonging to citizens of the State, is equally unconstitutional as against foreigners, whether individuals or corporations.

The decisions of the Supreme Court of the United States, holding that "the States may impose such terms as they see fit, as the conditions of their consent to permit foreign corporations or corporations organized in other States to enter and do business in a different State, without thereby violating the Constitution of the United States, have no application to this question. Paul vs. Virginia, 8 Wall. 168; Ducat vs. Chicago, 10 Id. 410; Doyle vs. Ins. Co., 94 U. S. 535.

These decisions only held that State laws of this character, though making discriminations against foreign corporations, did not conflict with those provisions of the Federal Constitution with reference to the privileges and immunities of citizens of different States and the regulations of commerce.

No protection of the Federal Constitution is invoked here.

The tax is resisted on the ground that it is without warrant under the Constitution and laws of the State.. The Constitution contemplates only two kinds of taxes, viz: property taxes and license taxes.

We are not prepared or required to say whether such a tax, if imposed in proper terms as a license tax, would be valid.

It is not, and does not purport to be, a license tax. A license tax is not covered or contemplated by either the title or body of the act.

The very proceeding taken by the State is one provided exclusively for the collection of property taxes, and under the terms of the pleadings, as well as under the assessment itself, it is claimed and denominated as a tax on property.

Then the question simply stated is, whether a property tax levied on the “ gross receipts” of a limited and particular class of persons, and not levied upon the “ gross receipts” of any other class, is valid.

The plain constitutional mandate that “ all property shall be taxed in proportion to its value,” would seem peremptorily to settle this ■question. If “ gross receipts” be properly subject to taxation, the “ gross receipts” of all, or of none, must be taxed.

It is vain to call “ gross receipts” “capital;” they are not “ capital” or “capital stock,” and no legislative declaration can make them so.

The only class of taxes under which this can possibly fall is that of an “ income tax.”

It is not necessary for us to decide whether or not, under the Constitution, the Legislature has power to levy an income tax. It suffices to say that, if the Legislature had such power, it would be an indispensable condition of its exercise that the tax should embrace the-incomes of all persons not exempted; and whatever power of classification the Legislature might possess as to the subject matter of taxation, that power could, under no pretext, be stretched so as to embrace the right to single out a particular class of tax payers and to require them to pay such a tax while exempting all others.

This is what the Legislature has attempted to do in this instance, and we are bound to hold that it can not be constitutionally done.

As we have heretofore intimated, if this act merely imposed on-the foreign insurance company the duty of paying to the State a-certain percentage of its premiums received, as the condition of a permissive license to transact business in this State, different questions would be presented. That would not be a tax, and would not involve the exercise of the taxing power.

But the imposition here is levied as a tax, assessed as a tax, claimed as a tax by the tax collector, under proceedings provided exclusively for the collection of taxes. It is a distinct exercise' of the taxing power, and must be governed by all constitutional requirements and limitations applicable thereto.

It is therefore ordered, adjudged and decreed that the judgment appealed from be annulled, avoided and reversed, and that there be now judgment in favor of defendant, rejecting plaintiff’s demand at his cost in both courts.  