Opinion
July 8, 1941. Rehearing Denied, July 25, 1941.
1. INSURANCE: Annuities. Under Section 5800, Revised Statutes 1939, annuities are classified as life insurance solely for the purposes of supervision, regulation and taxation.
2. INSURANCE: Taxation: Annuity Premiums. Considering the purpose of the Legislature under Section 5800, Revised Statutes 1939, money collected on an annuity policy sold in this State is a life insurance premium within the meaning of Section 6094, Revised Statutes 1939.
3. INSURANCE: Annuities: Taxation. An annuity should be classified for taxation purposes as an insurance policy and not a contract, and the money paid for an annuity as a premium.
4. STATUTES: Construction. Absent ambiguity, there is no excuse for considering questions of legislative, departmental and strict construction.
PEREMPTORY WRIT DENIED.
Jones, Hocker, Gladney Grand for relator.
(1) Annuities are neither insurance nor life insurance, and the premiums or considerations therefor are not taxable under Section 5979, Revised Statutes 1929, nor are the annuity contracts (exhibits to the return), or any of them, contracts of insurance or life insurance. Daniel v. Life Ins. Co. of Va., 102 S.W.2d 257; State v. Equitable Life Assur. Society, 282 N.W. 411; State of Wyoming ex rel. Equitable Life Assur. Society v. Ham, 88 P.2d 484; Hall v. Met. Life Ins. Co., 28 P.2d 875; Commonwealth v. Met. Life Ins. Co., 254 Pa. 510, 98 A. 1072; People ex rel. Met. Life Ins. Co. v. Knapp, 184 N.Y.S. 345, affirmed 231 N.Y. 630, 132 N.E. 916; Rishel v. Pac. Mut. Life Ins. Co., 78 F.2d 881; Rinn v. New York Life Ins. Co., 89 F.2d 924; Curtis v. New York Life, 104 N.E. 553; People v. Security Life Ins. Co., 78 N.Y. 114; Cannon v. Nicholas, 80 F.2d 935; American State Bank v. Natl. Life Ins. Co., 17 N.E.2d 256; Bowman v. Comr., 20 N.E.2d 916; Carroll v. Equitable Life Assur. Soc., 9 F. Supp. 233; Coyne v. Pac. Mut. Life Ins. Co., 47 287 P.2d 1079; Wellman v. Board, 252 P. 193; Chisholm v. Shields, 66 N.E. 93; Parson v. Powell, 9 Bing. 320; Old Colony Trust Co. v. Comr. of Int. Rev., 37 B.T.A. 435, affirmed 102 F.2d 380; Moskowitz v. Davis, 68 F.2d 818; In re Walsh, 19 F. Supp. 567; Chemical Bank Trust Co. v. Comr., 37 B.T.A. 535; Cannon v. Nicholas, 80 F.2d 935; Guaranty Trust Co. v. Comr., 16 B.T.A. 314; Schultz v. Comr., 38 B.T.A. 59; In re Sothern's Estate, 14 N.Y. Supp.2d 1; Lynch v. Houston, 138 Mo. App. 167; State ex rel. v. Universal Service Agency, 151 P. 768; Jordan v. Group Health Assn., 107 F.2d 239; State ex rel. Beach v. Citizens Benefit Assn., 6 Mo. App. 163; Schott v. Continental Auto Ins. Underwriters, 326 Mo. 92, 31 S.W.2d 7; Mathews v. Modern Woodmen, 236 Mo. 326, 139 S.W. 151; Logan v. Fidelity Cas. Co., 146 Mo. 114; Lamport v. General Accident, etc., Co., 197 S.W. 95; Wahl v. Interstate B.M. Acc. Co., 207 N.W. 395; Jones v. Prudential Ins. Co., 208 Mo. App. 679; Zimmer v. Central Acc. Co., 297 Pa. 472, 56 A. 1003; Key v. Continental Ins. Co., 101 Mo. App. 344; Artophone Corp. v. Coale, 133 S.W.2d 343; State ex rel. Kansas City P. L. Co. v. Smith, 342 Mo. 75; Leavell v. Blades, 237 Mo. 697, 700; In re Clark's Estate, 270 Mo. 351; Crooks v. Harrelson, 282 U.S. 55; State ex rel. v. Gehner, 325 Mo. 329; State ex rel. v. Phillips Pipe Line, 339 Mo. 459; State ex rel. Natl. Life v. Hyde, 292 Mo. 342; State ex rel. Koeln v. Lesser, 237 Mo. 310; City v. Wenneker, 145 Mo. 230; Berry-Kofron Dental Co. v. Smith, 137 S.W.2d 452; Cleaver v. Central States Life, 142 S.W.2d 474; United States v. Supplee-Biddle Co., 265 U.S. 189; State ex rel. v. Revelle, 257 Mo. 529; Imperial Fire Ins. Co. v. Coos County, 151 U.S. 452; Johnson v. Fidelity Casualty Co., 151 N.W. 593; Vance on Ins. (2 Ed.), pp. 2, 5, 57, 39; Walford, Cyclopedia of Ins., pp. 98, 111, 124, 170; 3 C.J., p. 202; 3 C.J.S., pp. 1375, 1378; Bouvier Law Dictionary, p. 201; 12 Am. Jur., p. 772; 25 R.C.L., pp. 992, 1043, 1060; 2 Bacon on Life Accident Ins., sec. 503, p. 1150. (2) Prior to the levy of the assessment complained of herein, the Missouri Insurance Department and the Legislature had always construed Section 5979, Revised Statutes 1929, as not applying to annuity premiums or considerations, and such departmental construction is entitled to great, if not controlling, consideration. Ewing v. Vernon County, 216 Mo. 681; State ex rel. v. Baker, 316 Mo. 852; Williams v. Williams, 325 Mo. 963; State ex rel. v. Cupples, 283 Mo. 115; State ex rel. Koeln v. St. Louis Y.M.C.A., 259 Mo. 233; Ross v. Railroad, 111 Mo. 18; State v. Frear, 120 N.W. 216; Wellman v. Board of Tax Comrs., 252 P. 193; 25 R.C.L., pp. 996, 997, 971; Bowring v. Bowers, 24 F.2d 918; Helvering v. Bliss, 293 U.S. 144; Lang v. Comr., 304 U.S. 264. (3) Neither the annual licenses issued to relator to transact business in Missouri nor the manner or method of relator's computation of annuity premiums or considerations have any bearing on the question whether such premiums or considerations are taxable under Section 5979, Revised Statutes 1929. Coyne v. Pac. Mut., 47 P.2d 1079. (4) Relator is not subject to the franchise or income tax statutes of Missouri. Rinn v. New York Life Ins. Co., 89 F.2d 924; Bates v. Equitable Life Assur. Soc., 288 N.W. 834; Hawkins v. Smith, 242 Mo. 688; State ex inf. v. Lincoln Trust Co., 144 Mo. 562. (5) The alternative writ of mandamus issued herein should be made permanent, but in any event the court may amend the alternative writ to conform with the proof, and order that the alternative writ as so amended be made permanent. State ex rel. Natl. Life v. Hyde, 292 Mo. 342; State ex rel. Wahl v. Speer, 284 Mo. 45; State ex rel. v. St. Louis School Board, 131 Mo. 505; State ex rel. v. Oliver, 116 Mo. 188; State ex rel. v. West, 272 Mo. 304; State ex rel. Dilliner v. Cummins, 338 Mo. 609; State ex rel. v. Hudson, 226 Mo. 239; School District No. 1 v. Board of Education, 73 Mo. 627; State ex rel. v. Wurdeman, 183 Mo. App. 28; State ex rel. v. Baggott, 96 Mo. 63; State ex rel. Kent v. Olenhouse, 324 Mo. 49; Baker v. Tener, 112 S.W.2d 351; 21 C.J., p. 660.
Roy McKittrick, Attorney General, and McHaney Aschemeyer, Special Counsel, Charles L. Henson, Chief Counsel and Wm. G. Chorn, Assistant Counsel Missouri Insurance Department, for respondents.
I. Considerations for the annuity policies involved here are properly and commonly called "premiums;" and such contracts are properly and commonly referred to as "policies." Knight, Advanced Life Ins. (1926), p. 20; Maclean, Life Ins. (1929), p. 45; Huebner, Life Ins. (1935), pp. 108, 109, 110, 158, 246, 251; Riegel and Loman, Ins. Principles and Practices (3 Ed.), p. 65; Record of American Institute of Actuaries, Vol. XX, pp. 30, 31, Vol. XIX, pp. 101, 106, 188; T.E. Young, Ins. (1904), p. 294; New York Life Ins. Co. v. Sullivan, 89 N.H. 21, 192 A. 297; Northwestern Mut. Life Ins. Co. v. Murphy, 223 Iowa 333, 271 N.W. 899; State ex rel. Holt v. New York Life Ins. Co., 198 Ark. 820, 131 S.W.2d 639; State ex rel. Gully v. Mutual Life Ins. Co., 196 So. 796. II. The evident legislative intent expressed in Sections 5979-80, Revised Statutes 1929, as amended, is to tax life annuity premiums on policies issued in Missouri. Sections 5979 and 5980, since they are sections of the same act, must be construed together and their provisions made to harmonize, if possible. Consolidated School Dist. v. Day, 328 Mo. 1105, 43 S.W.2d 428; State ex rel. Globe-Democrat v. Gehner, 316 Mo. 694, 294 S.W. 1017; State ex rel. Marquette v. Tax Comm., 282 Mo. 213, 221 S.W. 721; State v. Koeln, 278 Mo. 41, 211 S.W. 31; Logan v. Matthews, 330 Mo. 1213, 52 S.W.2d 992. If Section 5979 does not include premiums from life annuity policies, then such section conflicts with Section 5980, and the latter section provides for a tax return upon which it is impossible to assess the tax imposed by Section 5979. New York Life Ins. Co. v. Sullivan, 89 N.H. 21, 192 A. 297; Northwestern Mut. Life Ins. Co. v. Murphy, 223 Iowa 333, 271 N.W. 899; State ex rel. Holt v. New York Life Ins. Co., 198 Ark. 820, 131 S.W.2d 639; State ex rel. Gully v. Mut. Life Ins. Co., 196 So. 796. Where intent of tax statutes is not clear, as here, resort may be had to all recognized rules for the construction of statutes to the end that the legislative intent may be ascertained and made effective. State ex rel. Peck v. Brown, 340 Mo. 1189, 105 S.W. 909. The rule of "strict construction" does not resolve all ambiguities and conflicts against the taxing power. Its proper office is to help solve ambiguities, and to be an element in decision when all other tests of meaning have been employed which experience has afforded. If the intention of the Legislature, under well-recognized rules of construction, has been made clear, then it becomes the duty of the court to make effective such intention. Meyering v. Miller, 330 Mo. 885, 51 S.W.2d 65; State v. Toombs, 324 Mo. 819, 25 S.W.2d 101; State v. Stone, 118 Mo. 388, 24 S.W. 164; State ex rel. v. St. Louis-S.F. Ry. Co., 318 Mo. 285, 300 S.W. 274; Penn Mutual Life Ins. Co. v. Lederer, 247 F. 559; Citizens Bank v. Parker, 192 U.S. 73. A. Section 5980, a subsequent section of the same legislative act, discloses that Section 5979 was intended to apply to "all premiums received on account of policies issued in this state." Sections of the same original act must be construed together and harmonized, if possible, so as to make effective all of the provisions of the act. The only way to harmonize Section 5979 and Section 5980 is to construe such sections as imposing a tax upon "all premiums received on policies issued in this state," which construction would include life annuity premiums. State v. Naylor, 328 Mo. 335, 40 S.W.2d 1079; Black on Interpretations, p. 317. Points and authorities under Point I.B. Statutes in pari materia (Income Tax Act and Franchise Tax Act) can be harmonized with Sections 5979-80 only by construing latter sections as imposing a tax upon "gross premium receipts in this state." Statutes in pari materia must be construed together, and their provisions made to harmonize, if possible. State on inf. Barker v. Koeln, 270 Mo. 174, 192 S.W. 748; State ex rel. v. Gordon, 261 Mo. 631, 170 S.W. 892; State v. Davis, 314 Mo. 373, 284 S.W. 464; State v. Imel, 280 Mo. 554, 219 S.W. 634. The rule requiring statutes in pari materia to be harmonized, if possible, so as to avoid conflicts, has particular significance in regard to revenue laws, since such laws, though enacted at different times, are regarded as one system in which the construction of any separate act may be aided by the examination of other provisions which compose the system. McLaughlin v. Philadelphia Contributionship, 73 F.2d 582, certiorari denied 294 U.S. 718; Black on Interpretations, p. 335. Statutes in pari materia are those statutes relating to the same person or thing, or to the same class of persons or things, and the Income Tax Act and Corporate Franchise Tax Act are statutes in pari materia with Sections 5979 and 5980. Stouffer v. Crawford, 248 S.W. 585; Black on Interpretations (1911 Ed.), p. 334. Unless premiums from life annuity policies are taxable under Sections 5979 and 5980, such sections will conflict with the Income Tax Act and Franchise Tax Act, and cannot be made to harmonize therewith if the intent, purpose and constitutionality of the latter acts are to be maintained. Secs. 4641, 10116, R.S. 1929; Cases cited under Point I.C. The evident object and purpose of Sections 5979-80 is to impose a privilege tax in proportion to the benefits received as a result of the privilege extended, and any construction precluding the taxation of annuity insurance premiums violates the purpose of the act and reduces it to an absurdity. (1) Statutes must be construed so as to effectuate rather than defeat the evident purpose and intent of the Legislature. State v. Hackman, 302 Mo. 558, 258 S.W. 1011. In imposing the tax under Sections 5979 and 5980, the Legislature exercised its power to impose a privilege or occupation tax on foreign insurance companies. Bankers Life v. Chorn, 186 S.W. 681; Northwestern Masonic Aid Assn. v. Waddill, 138 Mo. 628, 40 S.W. 648; Massachusetts Bonding Co. v. Chorn, 274 Mo. 15, 201 S.W. 1122. The primary purpose of Section 5979 was to raise revenue for the State based on the theory that a foreign insurance company permitted to come into the State should contribute to the public revenue in proportion to the benefits received as a result of the privilege granted. Life annuity policies are issued by Aetna and all other foreign insurance companies in this State only as a result of the privilege granted, and hence, unless premiums for such policies are taxable, the apparent and evident intention of the Legislature will be defeated. Secs. 5690-5701, 5722-5727, 5892, 5893, R.S. 1929; Secs. 5811-5822, 5842-5848, 5910, 5911, R.S. 1889. (2) A construction of Sections 5979 and 5980 which would not include a tax upon premiums received in this State on life annuity policies would be absurd and unfair and should be avoided. A construction of Sections 5979, 5980, 10116 and 4641, so as not to include a premium tax on annuity policies and at the same time exclude foreign insurance companies from the payment of an income tax and a franchise tax would not only defeat the expressed intent and object of the Legislature, but would render such acts unconstitutional and extend to foreign corporations a favor which is denied domestic corporations and individuals or natural persons. Such construction cannot be presumed. D. The Superintendent of the Insurance Department and other officers charged with the duty of collection of taxes in this State have consistently construed Sections 5979-80 as imposing a tax upon "all," "gross," or "aggregate" "premiums received in this state," and such construction should be persuasive with the court. State ex rel. v. Baker, 316 Mo. 853; State ex rel. v. Cupples, 283 Mo. 115. E. The Legislature, in subsequent enactments, has uniformly and consistently construed Sections 5979-80 as including a tax "upon gross premium receipts in this state," and grave consideration should be given to such legislative construction. State v. First Natl. Bank, 297 Mo. 397, 249 S.W. 619, affirmed in 44 Sup. Ct. 213, 263 U.S. 640; State ex inf. Gentry v. Long Bell Lbr. Co., 321 Mo. 461, 12 S.W.2d 64; 59 C.J. 1033; Laws 1917, p. 237; Laws 1919, p. 719; Laws 1921 (1st Ex. Sess.), p. 190; Laws 1927, p. 476. F. The construction of Sections 5979-80 to the effect that the tax there imposed included a tax upon "gross premium receipts in this state," as uniformly embodied in decisions of this court and as consistently made in all subsequent legislation, was confirmed and enacted into Section 5979 in 1931 by the Legislature (Laws 1931, p. 242), and this court is bound by such construction under which all premiums involved here are taxable. (1) Since 1895 the Legislature has consistently construed Section 5979 as including a tax upon "gross premium receipts in this state." Franchise Tax Act, Laws 1917, p. 237; Income Tax Act, Laws 1919, p. 719; Income Tax Act — Laws 1921 (1st Ex. Sess.), p. 190; Income Tax Act, Laws 1927, p. 476. (2) In 1931, when Article XII, Chapter 37, Revised Statutes 1929, was amended by repealing Section 5979 and enacting in lieu thereof a new section, which continued the use of the language theretofore legislatively construed, the Legislature enacted into Section 5979 the construction which it had consistently given to such language. State v. Conn, 110 Ohio St. 404, 144 N.E. 130; 59 C.J., p. 1064; Ex Parte Carey, 306 Mo. 287, 267 S.W. 806; State ex rel. Buerk v. Calhoun, 330 Mo. 1172, 52 S.W.2d 742; Kansas City Pub. Serv. Co. v. Ranson, 328 Mo. 524, 41 S.W.2d 169; Black on Interpretations, pp. 298, 299, 607. (3) Section 5979, as enacted in 1931, continued the same language which had theretofore been construed by this court as including a tax upon "gross premium receipts in this state," and, therefore, when it readopted such language, presumably knowing of such construction, the Legislature ratified, adopted and enacted into the statute such construction. (4) Since Section 5979 imposes a tax upon "gross premium receipts in this state," premiums received from life annuity policies in this State are taxable. Points and authorities under Point I.G. The words "insurance of life, property or interest," when construed literally, refer to the subject matter of all kinds of insurance authorized by the Insurance Code of Missouri and the business of issuing life annuity polices is an insurance business, the premiums thereon being taxable under Sections 5979-80. (1) The term "insurance of life, property or interest" construed literally refers to the subject matter of all types and kinds of insurance authorized by the Insurance Code. Webster's New International Dictionary; Webster's Twentieth Century Dictionary, Unabridged; Subdivisions A to G of this Point II. (2) The life annuity premiums involved here are insurance premiums within the intendment of Sections 5979-80 and were intended to be taxed as such because of any or all of the following reasons: (a) Textbooks and insurance experts have consistently referred to life annuity policies, when issued by insurance companies, as a form of insurance. Burt, Life Assurance, pp. 42, 112 (1849); Walford, Journal of the Institute of Actuaries, Vol. XXV, as found in Zartman Price, Yale Readings in Ins., p. 66 (1885); Holcomb, as contained in Zartman Price, Yale Readings in Ins., p. 47; T.E. Young, Ins., p. 294 (1914); Fiske Carpenter, An Epic in Life Ins. — A Third of a Century of Achievement (1924), p. 87; Riegal and Loman, Ins., Principles and Practices (3 Ed.), p. 65 (1924); Knight, Advanced Life Ins. (1926), p. 1; Huebner, Life Ins. (1935 and preceding editions), p. 155. (b) Even in the absence of statutes showing a clear legislative intent, life annuity policies issued by insurance companies are a form of insurance — annuity insurance. The life annuity policies involved here are "agreements on the part of the insurer to pay a certain amount upon the occurrence of some contingency or event and presupposes the element of risk." Aetna's "Suggestions in Support of Petition for Mandamus," p. 12; 32 C.J., p. 975; Home Title Ins. Co. v. United States, 50 F.2d 107; Mutual Life Ins. Co. v. Smith, 184 F. 1; Young v. Stephenson, 200 P. 225, 82 Okla. 239; Smith on Contracts as quoted in Commonwealth v. Provident Bicycle Assn., 36 A. 197, 178 Pa. 636; Parson v. Powell, 9 Bing. 320; Gould v. Curtis, 3 K.B. (1913) 88; Joseph v. Law Integrity Ins. Co., 2 Ch. (1912), 589; Mutual Benefit v. Commonwealth, 227 Mass. 63, 116 N.E. 469; 1 Couch, Cyclopedia of Ins. Law, p. 38. (c) Missouri statutes evidence a clear legislative intent that premiums received for life annuity policies be considered as insurance premiums and taxable under Sections 5979-80. The statutes of Missouri in effect in 1895 (or 1879) when Section 5979 was enacted made the issuance of life annuity policies "a protected and licensed activity" of foreign insurance companies and affirm the legislative intent to tax life annuity premiums as premiums for "insurance." Secs. 5801, 5811-5824, 5841-5848, 5873, 5910, 5911, R.S. 1889; Secs. 5680, 5690-5703, 5722-5728, 5793, 5892, 5893, R.S. 1929; Points and Authorities under Points A to G of this Point II; State v. Chicago Bonding Surety Co., 279 Mo. 535, 215 S.W. 25; Vance on Ins., p. 59. The better reasoned decisions of other states hold life annuity premiums taxable under similar privilege tax statutes. III. Aetna's contentions and decisions upon which it relies are unsound and not applicable to case at bar. (1) The courts rendering the decisions upon which Aetna relies did not have before them the facts and the statutes described in Point II hereof, and particularly did not have before them statutes similar to Missouri statutes described in Subdivisions A, B, E and F of Point II. Points and authorities under Point II. (2) The decisions upon which Aetna relies are based upon facts disproved in this record and unsound conclusions of law. Points and authorities under Point II. (a) Aetna and the decisions upon which it relies erroneously assume that all contracts of insurance are contracts of indemnity. Dalby v. India London Life Assur. Soc., 15 C.B. 365; Sinclair Refining Co. v. Long, 32 P.2d 464, 473, 139 Kan. 632; Reed v. Provident Savs. Life Assur. Soc., 82 N.E. 734, 190 N.Y. 111; Scott v. Dixon, 108 Pa. 6, 56 Am. Rep. 192; Campbell v. Supreme Conclave, 49 A. 550, 66 N.J.L. 274; Wayland v. Western Life Indemnity Co., 148 S.W. 626, 166 Mo. App. 221; 1 Couch, Cyclopedia of Ins. Law, p. 51; Vance, Ins. (1930 Ed.), p. 80; United S.L.I. Trust Co. v. Ritchie, 187 Pa. 173, 40 A. 978; United S.L.I. Trust Co. v. Brown, 270 Pa. 264, 113 A. 443; Authorities cited under Point II, G, 2, b and c. (b) The fact that a life annuity, as defined by Aetna and the decisions upon which it relies, is a yearly payment of a certain sum of money granted to another in fee or for life and chargeable only on the person of grantor does not preclude a life annuity policy from being a policy of insurance. 2 Amer. Eng. Ency. of Law and Procedure (1896), p. 388; Ency. Americana; Authorities under Point II, subdivision G, subsection 2, a and b. (c) In Missouri a company which engages in the business of issuing life annuity policies is engaged in the insurance business. Statutes and authorites cited under Point II, subdivision G, subsection c. And the fact that contracts or deeds or wills providing for annuity payments were made long before the insurance business was recognized is no basis for holding that a life annuity policy, as issued by insurance companies, is not insurance. Points and authorities cited under subdivision G of Point II; Brandt on Suretyship Guaranty, p. 17; Vance on Ins., p. 59. (d) It is a non sequitur to reason that because a life annuity policy is not a life insurance policy then such policy is not an insurance policy. (e) The decisions upon which Aetna relies erroneously state that the consideration of a life annuity policy is not regarded as a premium. Facts and authorities under Point I. (f) Aetna, and the decisions upon which it relies, cite statutes distinguishing a life annuity policy from a life insurance policy, but do not cite statutes distinguishing a life annuity policy from an insurance policy. (g) Aetna, and the decisions upon which it relies, cite statutes similar to Section 5690, Revised Statutes 1929, as authority for holding that a life annuity policy is not an insurance policy, when such statute is only authority for holding that a life annuity policy is not "insurance of life or any insurance connected therewith or pertaining thereto." (h) Aetna, and the decisions upon which it relies, erroneously cite People v. Security Life Insurance Co., 78 N.Y. 114, as holding that life annuity policies are not insurance. (i) Aetna, and the decisions upon which it relies, erroneously state that a life annuity policy does not involve a risk or contingency insured against. Points and authorities under Point II, Subdivision G, subsection 2, a and b. (j) Aetna, and the decisions upon which it relies, erroneously conclude that the purchase of a life annuity policy is a form of an investment greatly different from the purchase of a life insurance policy, when, as a fact, both policies are risk-sharing devices, the same as all other insurance policies. Points and authorities under Point II, subdivision G, subsection 2, a, b and c. (k) Aetna, and the decisions upon which it relies, erroneously conclude that because, as a matter of nomenclature, life annuity policies are not referred to as insurance policies, that such fact is evidence that such policies, when issued by insurance companies, are not insurance and are not considered to be insurance. Treatises and textbooks cited under Point II, subdivision G, subsection 2, a; Statutes cited under Point II, subdivision G, subsection 2, c. IV. The death benefit contained in the so-called refund annuity policy is a life insurance benefit. The premium for that portion of the policy is taxable as "premium . . . for insurance of life," under Sections 5979 and 5980. (1) The death benefit provision in a refund annuity is a promise on the part of an insurer to pay a definite sum or sums to a designated beneficiary (or the assured's estate) upon the death of the assured, which promise is given in consideration of a premium, the premium being less, and greatly less, than the possible liability assumed by the insurer, and under the following authorities should be held "life insurance." State ex rel. Beach v. Citizens Ben. Assn., 6 Mo. App. 163; Logan v. Fidelity Casualty Co., 146 Mo. 124; Reed v. Provident Savs. Life, 190 N.Y. 111, 82 N.E. 734; Tyler v. Treasurer, 226 Mass. 306, 115 N.E. 300; 2 Marshall on Ins. (1810 Ed.), 766; 3 Kents' Commentaries (14 Ed. 1896), p. 560; Couch, Cyclopedia of Ins. Law, p. 49; 37 C.J. 359. (a) All textbooks and treatises relative to the subject of insurance, wherein the subject is discussed, either state or assume that the death benefit provision contained in a refund annuity policy is one of life insurance. Maclean, Life Ins. (1924, 1929 and 1932 Eds.), pp. 60, 62; Huebner, Life Ins. (1935 and preceding editions), p. 272; Record of American Institute of Actuaries, Vol. XIX, pp. 98, 99 and 188; Record of American Institute of Actuaries, Vol. XX, pp. 30, 31; L.G. Fouse (1905), Yale Readings in Ins., p. 282; Alexander, The Life Insurance Company, p. 135. (b) Since the death benefit contained in a refund annuity is a separate benefit, apart from the annuity benefit, and a definite additional premium is charged for such benefit, such premium is taxable under Section 5979, because it is a "premium for insurance of life." Bowman v. Tax Commission, 135 Ohio St. 295, 20 N.E.2d 919; Lamport v. General S.F. L. Assur. Co., 272 Mo. 19, 197 S.W. 95; Makos v. Bankers Accident Ins. Co., 234 S.W. 369. (c) The requirement of insurable interest is applicable to the death benefit contained in a cash refund annuity policy, thereby showing the positive nature of the benefit. Warnock v. Davis, 104 U.S. 775, 26 L.Ed. 924; Singleton v. Ins. Co., 66 Mo. 63; Whitmore v. Sup. Lodge, 100 Mo. 46. V. Premiums received in this State for survivorship annuity policies are "premiums received for insurance of life," and taxable under Sections 5979 and 5980. Maclean, Life Ins. (1924), pp. 49, 53; Maclean, Life Ins. (1929), p. 57; Knight, Advanced Life Ins., p. 23; Huebner, Life Ins. (1935), pp. 185, 186; Cases and authorities defining life insurance, Point IV (1). VI. Aetna owes an income tax and a franchise tax to the State of Missouri for the year 1936. (1) The Income Tax Act and Franchise Tax Act exempt only insurance companies paying an annual tax upon "gross premium receipts in this state." Secs. 4641, 10116, R.S. 1929. (2) The Aetna has not paid a tax upon its "gross premium receipts in this state." Cases cited under I. (3) Sections 10116 and 4641, Revised Statutes 1929, cannot be construed as exempting insurance companies which have not paid a tax upon gross premium receipts in this State, because: (a) There is no such expression of intent in the language of the act. (b) Exemptions from taxation are not favored, and statutes which attempt to grant exemptions must be strictly construed. State ex rel. v. Gehner, 320 Mo. 1172, 11 S.W.2d 30; St. Louis Lodge v. Koeln, 262 Mo. 444, 171 S.W. 329; 61 C.J. 392. (c) To permit companies not paying, in fact, a tax upon their "gross premium receipts in the state" to escape an income tax and a franchise tax would prefer foreign corporations over domestic corporations and natural citizens, would be contrary to the evident legislative intent as shown by the entire statute, and would constitute an unlawful and unconstitutional discrimination. Secs. 4641, 10116, R.S. 1929. (4) Unless Sections 5979 and 5980 are construed as to include a tax upon "gross premium receipts in this state," the "in lieu of" clause contained in Section 5979 will unavoidably conflict with the Income Tax Act and Franchise Tax Act, and the latter acts will prevail, since they were subsequently enacted. Schott v. Continental Auto Ins. Underwriters, 31 S.W.2d 7; Metropolitan Life Ins. Co. v. Stall, 276 Mich. 637. VII. Remedy. (1) Mandamus will not be granted in cases of doubtful right and the relator must show a clear legal right to the specific relief demanded. State v. Kansas City Gas Co., 254 Mo. 515, 163 S.W. 854; State v. Harris, 176 S.W. 9; State ex rel. Kent v. Olenhouse, 23 S.W.2d 83; State ex rel. Frank v. Becker, 9 S.W.2d 153. (2) The applicant for relief, by way of a writ of mandamus, must present himself to the court with "clean hands." State ex rel. Hyde v. Jackson County Medical Society, 295 Mo. 144, 234 S.W. 341; Westerman v. Nims, 111 Tex. 29, 227 S.W. 178; State ex rel. Hathorn v. United States Express Co., 95 Minn. 442, 104 N.W. 556; Turner v. Fisher, 222 U.S. 204. (3) Mandamus must be denied against the State Treasurer and the Superintendent of Insurance because the relator has failed to pay, or make tender of payment, to the State Treasurer of all taxes due the State of Missouri under Sections 4641, 5979, 5980 and 10116, Revised Statutes 1929, as amended. Miller Land Lbr. Co. v. Gerley, 137 Ark. 146, 208 S.W. 426; Salter v. Nelson, 85 Utah, 460, 39 P.2d 1061.
This point, without more, is determinative of this case in respondents' favor.
Relator seeks the cancellation of the assessment of a two per cent premium tax on Missouri annuity premiums collected by it during the year 1936. It contends that there is no statutory imposition of such a tax. The commissioner to take testimony and report sustained the contention of relator, excepting from the ruling certain refund annuity policies which he ruled to be life insurance.
Relator is a foreign insurance company. From 1890 to and including 1936, it was annually licensed to engage in the business of life, accident and health insurance in this State. Under the licenses it was authorized by statute to engage in the annuity business in this State. [Secs. 5722, 5723, 5724, 5725, 5892 and 5893, R.S. 1929.] As usual, relator's tax return for the year ending December 31, 1936, was made on a printed form furnished by the Insurance Department. On this form relator reported gross premiums received during the year for "LIFE BUSINESS ONLY," and separately reported on the form gross premiums received for "ACCIDENT, HEALTH OR LIABILITY BUSINESS." An affidavit to the return by an officer of relator stated that the above report is a correct statement of the gross amount of all premiums received in Missouri during the year ending December 31, 1936. On this return the superintendent assessed a two per cent tax on the amount of premiums reported, which was paid by the relator. As usual, the return did not include premiums received during the year on Missouri annuity policies.
It did include premiums received during the year on accident and health policies, which relator paid from year to year. On April 1, 1937, the superintendent assessed against relator the two per cent tax on the Missouri annuity premiums omitted from relator's 1936 return for taxation, which assessment is the subject of this controversy. This is the first time a Superintendent of Insurance separately assessed against relator's a tax on Missouri annuity premiums. Respondents claim that the Insurance Department assumed, during the years, that relator's gross premium reports for taxation included premiums received on annuities. Relator paid a two or two and one-half per cent tax on annuity premiums in Louisiana, Illinois and Iowa prior to the separate assessment of the two per cent tax on annuity premiums collected in this State. In those states it charged the same rate for annuity insurance that it charged for annuity insurance in Missouri. In other words, relator collected from people of this State a two per cent premium charge on annuities, which it retained, and now claims that no such tax is imposed by statute.
[1, 2] Life insurance companies are authorized in this State by Sec. 5690, R.S. 1929, which follows:
"Any number of persons, not less than thirteen, may associate and form a company for the purpose of making insurance upon the lives of individuals, and every assurance pertaining thereto or connected therewith, and to grant, purchase and dispose of annuities and endowments of every kind and description whatsoever, and to provide an indemnity against death, and for weekly or other periodic indemnity for disability occasioned by accident or sickness to the person of the insured; but such accident and health insurance shall be made a separate department of the business of the life insurance company undertaking it."
This section originated in Laws of Mo. 1869, page 27. It is admitted that under [12] the statute only life insurance companies are authorized to engage in the annuity business in this State. It will be noted that the section requires accident and health insurance to be "made a separate department of the business of the life insurance company." On the other hand annuities are assigned to "LIFE BUSINESS ONLY."
The life insurance business is a matter of public concern. For that reason the section above set forth was enacted. The Legislature knew that annuities were sold by life insurance companies. It knew that accident insurance and health insurance were sold by life insurance companies. It knew that annuities and accident and health insurance were not life-insurance. For these reasons it separately authorized life insurance companies to engage in the business of selling annuities and in the business of selling accident and health insurance. It did so for the purpose of supervision, regulation and taxation. There could have been no other purpose. The section presents no ambiguity. In other words, the Legislature classified annuities and accident and health insurance as life insurance solely for the purpose of supervision, regulation and taxation. If so, the money collected on an annuity policy sold in this State is a life insurance premium within the meaning of Sec. 5979, R.S. 1929, which follows:
"Every insurance company . . . not organized under the laws of this state, shall, . . . annually pay tax upon the premiums received . . . in this state, or on account of business done in this state, for insurance of life, property or interest in this state at a rate of two per cent per annum in lieu of all other taxes . . ."
In 1879 taxation of insurance premiums originated in this State. [Sec. 6057, R.S. Mo. 1879.] It is admitted that "insurance of life," as used in this section, means life insurance.
Relator contends that the agreement for an annuity is a contract and not a policy, and also contends that the money paid for an annuity is a consideration and not a premium.
The contention must be overruled, for textwriters, insurance departments, those familiar with the insurance business, insurance men, including relator's agents, and the public have been, for many years, referring to annuity contracts as policies, and referring to the money paid for an annuity as a premium. Furthermore, relator states in advertisements that "the annuity is one of the oldest forms of insurance."
The sections above set forth clearly impose a tax of two per cent on annuity premiums collected in this State.
Absent ambiguity, there is no excuse for considering questions of legislative, departmental and strict construction. Relator cites cases as follows: Daniel et al. v. Life Insurance Co., 102 S.W.2d 256; State ex rel. v. Equitable Life Assur. Soc., 282 N.W. 411; State ex rel. Equitable Life Assur. Soc. v. Ham, 88 P.2d 484; Hall v. Metropolitan Life Ins. Co., 28 P.2d 875; Commonwealth v. Metropolitan Life Ins. Co., 98 A. 1072; People v. Knapp, 184 N.Y.S. 345; State ex rel. v. Benefit Assn., 6 Mo. App. 163; Artophone Corp. v. Coale, 345 Mo. 344, 133 S.W.2d 343; Bankers' Life Co. v. Chorn, 186 S.W. 681; Carroll v. Equitable Life Assur. Soc., 9 F. Supp. 223.
In those cases the question of the classification of annuities as life insurance for the purpose of supervision, regulation and taxation was not considered.
The peremptory writ should be denied. It is so ordered. All concur.