Opinion
No. 22516
Decided March 4, 1931.
Municipal corporations — Occupational tax on insurance business — Ordinance applies to foreign insurance agent and broker — Section 5482, General Code.
The provisions of an ordinance of the City of Cincinnati levying an occupational tax upon persons engaged in the business of selling, soliciting or negotiating various forms of insurance, who maintain a place of business therefor in such city, are valid, and are applicable to one who maintains an insurance office in that city and in addition to being the agent of certain foreign insurance companies, which have complied with Section 5432, General Code, and are duly authorized to do business in this State, is also engaged in the business of an insurance broker.
ERROR to the Court of Appeals of Hamilton county.
This case originated in the court of common pleas of Hamilton county, where the plaintiff, William Stredelman, sought the issuance of a writ restraining the defendants from collecting an occupational tax under an ordinance of the city of Cincinnati.
The averments of plaintiff's petition relative to his business were in substance that he was a duly commissioned and licensed agent of certain foreign insurance companies, which have been duly admitted according to law to do business in Ohio; that the business of said companies in Ohio of necessity must be conducted by agents, and that their right to do said business extends to every part of the state, including the territory within the limits of the city of Cincinnati; that he transacts no business except the business of said foreign insurance companies and the business of certain other foreign companies with whose agents he "brokers" certain business, and thereby, by virtue of Section 9586, General Code, becomes the agent of the foreign companies writing such "brokered" business; that he is compensated by said foreign companies for his services by commissions on net premiums on their said business; and that the insurance companies for which he acts as agent have paid the taxes levied and assessed upon their privilege of doing business in Ohio, and likewise paid the license fee on account of plaintiff acting as their agent.
The answer of the city and its officers was substantially a general denial.
The court, pursuant to the request of plaintiff, stated separately in writing its findings of fact and its conclusions of law. These are very voluminous, and it is deemed unnecessary to set them out in full. The essential portions thereof will be referred to in the opinion.
The decision of the Court of Appeals was adverse to the plaintiff, and the injunction prayed for was denied. Thereupon plaintiff filed a petition in error in this court as of right, claiming the cause presents questions arising under both the state and federal constitutions, and that he has been denied rights secured to him thereby.
Messrs. Harmon, Colston, Goldsmith Hoadly, for plaintiff in error.
Mr. John D. Ellis, city solicitor, Mr. Jacob Hauptman and Mr. John J. O'Donnell, for defendants in error.
The question of the constitutionality of the ordinance of the city of Cincinnati herein involved has heretofore been presented to and decided by this court in the case of State, ex rel. Zielonka, City Solicitor, v. Carrel, Aud., 99 Ohio St. 220, 124 N.E. 134. Its constitutionality was there upheld. That decision was subsequently approved and followed in the case of Globe Security Loan Co. v. Carrel, Aud., 106 Ohio St. 43, 138 N.E. 364, and also in the cases of Marion Foundry Co. v. Landes, Aud., and Clawson v. Landes, Aud., 112 Ohio St. 166, 147 N.E. 302, and was adhered to in the case of City of Cincinnati v. American Telephone Telegraph Co., 112 Ohio St. 493, 147 N.E. 806.
We therefore regard it as unnecessary to again discuss or consider that question in its general aspect, but shall consider and discuss it only in its application to the situation presented by the record in this case.
It is contended by counsel for plaintiff that the limitation upon the power of a municipality to levy an occupational tax, recognized and applied in the case last cited, has like application to this case, and that inasmuch as the plaintiff's business is that of representing foreign insurance companies which had paid the taxes levied and assessed upon their privilege of doing business in Ohio, in accordance with the provisions of Sections 5432 and 5433, General Code, and have likewise paid their license fee on account of plaintiff's acting as their agent, as provided by Section 644 et seq., General Code, the levy of such occupational tax is invalid.
The Court of Appeals concluded, and its conclusion is amply warranted by the record, that the business conducted by plaintiff is not exclusively the business of the insurance companies which have commissioned him their agent, nor of the insurance companies which have not commissioned plaintiff as their agent, but which issue policies on applications solicited by the plaintiff, but, on the contrary, that the business conducted by him is his independent business; that the business conducted by plaintiff is a business of selling, soliciting, or negotiating the sale of the forms of insurance mentioned in the city ordinance in question, and within the intent and meaning of said ordinance.
The particular provision of the occupational tax ordinance of the city of Cincinnati here brought into question is as follows: "Every person, association of persons, firm, agency, company, corporation or insurance solicitor engaged in the business of selling, soliciting or negotiating the sale of all forms of health, accident, fire, wind, cyclone, tornado, plate glass, burglary, casualty, automobile and other forms of insurance, except life insurance, including the soliciting of surety bonds, maintaining an office or place of business in the city of Cincinnati, the expense of which is not borne by a foreign corporation engaged in the business of selling, soliciting or negotiating such insurance, which shall have complied with Section 5432 et seq., General Code, shall be taxed as follows."
There is evidence that the plaintiff maintained an office for the purpose of engaging in, and did engage in, an insurance brokerage business in addition to representing certain designated foreign insurance companies, and that in that business he accepted applications for insurance not carried by any of the companies which he directly represented, but which he placed with various other agents, or, in the term used rather commonly, he "brokered" the business. His business was therefore not confined to merely representing as agent the foreign insurance companies referred to.
We find ourselves in accord with the conclusion of the Court of Appeals that plaintiff was engaged in a business of his own within the terms of the ordinance, and therefore that the assessment of the occupational tax upon his business does not result in an indirect tax upon foreign corporations doing business in Ohio such as to warrant an exemption within the rule announced by this court in City of Cincinnati v. Amer. Tel. Telegraph Co., supra. Judgment affirmed.
MARSHALL, C.J., DAY, ALLEN, KINKADE and ROBINSON, JJ., concur.