Fire insurance company business includes the business of writing automobile physical damage insurance. Sheffield v. Home Insurance Co., 234 Ala. 382, 174 So. 779; City of Sheffield v. Gen. Exchange Ins. Co., 234 Ala. 386, 174 So. 782; Motors Ins. Corp. v. City of Birmingham, 269 Ala. 339, 113 So.2d 147; Act No. 132 of the 1945 Regular Session of the Legislature of Alabama (Title 28, Section 363, Code of Ala., 1940, Recompiled 1958). The rule that taxing statutes are to be construed strictly against government and in favor of taxpayer does not take precedence over the fundamental rule that a statute is to be construed in accordance with its real intent and meaning and not so strictly as to defeat the legislative purpose.
In making that determination we rely on the "functional" test adopted by this Court in City of Birmingham v. State Farm: "It is notable that in [ City of Sheffield v. Home Insurance Co., 234 Ala. 382, 174 So. 779 (1937), and City of Sheffield v. General Exchange Insurance Corp., 234 Ala. 386, 174 So. 782 (1937),] and in [ Motors Ins. Corp. v. City of Birmingham, 269 Ala. 339, 113 So.2d 147 (1959),] as well, both the trial court and this Court looked to the evidence to determine the nature of the insurance company. Indeed, the emphasis of the statutes under consideration is not upon the amount of earned premium allocable to fire insurance, but upon the character of the company itself.
That kind of insurance, Birmingham contends, is "property" insurance which is a class of "fire insurance," making State Farm a fire insurance company. Birmingham cites as authority for this proposition several cases, including City of Sheffield v. Home Insurance Co., 234 Ala. 382, 174 So. 779 (1937); City of Sheffield v. General Exchange Insurance Corp., 234 Ala. 386, 74 So. 782 (1937); and Motors Insurance Corp. v. City of Birmingham, 269 Ala. 339, 113 So.2d 147 (1959). The decisions in the Sheffield cases were based upon stipulations of facts. It is apparent that neither of those cases dealt with the nature of the insurance companies involved therein — it appears to have been assumed for the question in issue that the insurance companies were "fire and marine" companies and thus subject to the rate of up to four percent of gross premiums.
146 A.L.R. 456. The business of a fire insurance company, for the purpose of license taxation, includes all branches that it may conduct under its charter and the laws of the state. State ex rel. Hartford Fire Ins. Co. v. Fitzpatrick, 133 La. 115, 62 So. 494. Fire insurance company business includes the business of writing automobile physical damage insurance. City of Sheffield v. Home Ins. Co., 234 Ala. 382, 174 So. 779; City of Sheffield v. General Exchange Ins. Co., 234 Ala. 386, 174 So. 782. The rule that taxing statutes are to be construed strictly against government and in favor of taxpayer does not take precedence over fundamental rule that a statute is to be construed in accordance with its real intent and meaning and not so strictly as to defeat the legislative purpose. Ingalls Iron Works Co. v. City of Birmingham, 248 Ala. 417, 27 So.2d 788. Court should construe statutory terms in light of accepted and well known trade customs.
Our case of Brown Plumbing Heating Co. v. McDowell, 240 Ala. 485, 200 So. 104, refers to this license as a charge for accepting and executing the contract. The acceptance of this contract is not an incident in a business conducted in Alabama, either by a resident here or by a foreign corporation qualified to do business here, such as was considered by this Court in City of Sheffield v. Home Insurance Co., 234 Ala. 382, 174 So. 779. But this situation is within the principle declared by the United States Supreme Court in Connecticut General Life Ins. Co. v. Johnson, 303 U.S. 77, 58 S.Ct. 436, 438, 82 L.Ed. 673, as follows: "Hence it is that a state which controls the property and activities within its boundaries of a foreign corporation admitted to do business there may tax them.
The question presented by the seventh ground of demurrer is whether or not municipal corporations having a population of more than 100,000 is within the influence of the proviso to schedule 160.17, section 348, of the General Revenue Law of 1935, Gen.Acts 1935, p. 555. The parties and Court of Appeals overlooked the facts that section 2156 of the Code 1923 was superseded and repealed by the Act approved July 22, 1927, Acts 1927, pp. 150, 151, § 3(b); City of Sheffield v. Home Insurance Co., 234 Ala. 382, 174 So. 779. However, the provisions of said schedule 160.17, supra, is in the identical language of section 2156. Said schedule 160.17, is in the following language: "No fire insurance company doing business in any municipality in this State having a population of less than 100,000, according to the last preceding Federal Census, shall be required to pay to such municipality for any license or license tax, a sum greater than four per centum of its gross premiums, less return premiums, received by such company on risks in such municipality, including any sum, or sums, required to be paid or contributed by such insurance company to any Firemen's Compensation, or Relief Fund in such municipality.
By this action the City of Sheffield seeks to recover of General Exchange Insurance Corporation amounts alleged to be due as privilege or excise taxes on gross premiums collected on insurance policies issued in connection with sales of automobiles in Sheffield on the installment plan. The claim is based on the same ordinance, and enabling statute (Gen.Acts 1927, p. 148, § 3), considered and applied in City of Sheffield v. Home Insurance Company, ante, p. 382, 174 So. 779, this day decided. The cases differ only as to details.
The meaning of the former is not changed by the latter. Sheffield v. Home Ins. Co., 234 Ala. 382, 174 So. 779. A license statute must be strictly construed in favor of the taxpayer and its application cannot be enlarged by implication of inference.