Lee Mutual Fire Insurance v. State ( 1882 )

Chalmers, J.,

delivered the opinion of the court.

The motion to quash the indictment was properly overruled. The woi’ds “association” and “company” are synonymous in the sense here used, both meaning a number of persons banded together for a common business purpose. The use of one of the words was surplusage, but produced no ambiguity or uncertainty. By sect. 585 of the Code of 1880 a tax of $1,000 is imposed upon all fire insurance companies and by sect. 589, a penalty of double this amount is imposed upon all companies transacting business without prepayment of the tax. That the defendant corporation was conducted upon the mutual co-operative plan, owning no property and accumulating no fund for the payment of its losses, but relying solely upon assessments upon its policy-holders to meet each successive loss, and obligating itself to pay only such amount as these assessments might yield, does not strip it of its character of an insurance company, the test is not the mode or manner in which it affords insurance, but whether it undertakes and promises, in consideration of a sum paid, to give security or indemnity against loss by fire, and this it certainly does. The State v. Bunker Ins. Co., 23 Kan. 499, The State v. Merchants’ Ins. Co., 72 Mo. 146; Comm. v. Wetherbee, 105 Mass. 160.

It is argued, however, that it cannot be conceived that the law-giver intended to impose taxes upon, or raise revenue out of a business or enterprise carried on without expectation or desire for profit by anybody, the essential idea in all taxation imposed upon a calling or business being, that it is conducted for pecuniary profit, and the intention of the law being that out of that profit, or chance for profit, a certain sum shall be paid to the State.

The argument is plausible, but the facts of this case do not call for its decisiou. It is shown that by the by-laws of the corporation large fees were exacted from the assured, which, under the name annual dues and membership fees, would amount to large sums, if the enterprise prospered, and that these sums went not to the assured, nor to the payment of losses, but to the charter members or officers or managers of the institution, and undoubtedly the prospect of the profit thus to be realized had much to do with the organization and conduct of the corporation.

It is not true, therefore, that it is a concern from which those connected with it neither expect nor desire profit.

Affirmed.