State ex rel. Hines v. President of the Insurance Co. of North America

Gbason, J., delivered the opinion of the Court. The question presented in this case is, whether the appellee is liable for three per cent, tax on two hundred thousand dollars of its gross premiums received in this State, and invested in two bonds or certificates of the Water Stock of the City of Baltimore. The case was tried by the Judge of the Court below, without a jury, upon an agreed statement of facts, which is set out in the record, who rendered a judgment in favor of the appellee. It is admitted that the appellee was duly incorporated by the laws of the State of Pennsylvania; that it transacts business in this State by its authorized agents and that a license for the year 1879 was granted to it by the Insurance Commissioner of Maryland, which expired on the last day of that year, and that it has continued its business from that time in- this State under a license.

It is also admitted that the appellee purchased the two bonds or certificates of said water stock, each for one hundred thousand dollars, out of the gross premiums received in this State in the year 1879, with the intention of holding the same for not less than two years, and that said bonds were issued to the appellee by the Mayor and City Council of Baltimore in accordance with the laws of this State, and the ordinances of said city duly enacted. It is further admitted that the tax of three per cent, on said two hundred thousand dollars so invested is due the State unless the amount of the premiums, so invested in said Water Bonds, are exempted from taxation by the provisions of the Act of 1878, chap. 106. The thirty-first section of said Act imposes a tax of one and one-half per cent, upon the gross premiums of all foreign insurance companies received in this State, less the losses, dividends and ⁴⁹⁴ ■annuities paid in this State during the year; and provides that all premiums loaned in this State for a period not less than two years shall be exempt from such tax, and also from the retaliatory clause of said Act, which is contained in its thirty-sixth section, under which the appellee was liable to a further tax of one and one-half per cent, upon its premiums. No question is made as to the power of the General Assembly to exempt from taxation the premiums of insur-ance companies doing business within this State, nor as to the proper exercise of such power, in exempting from taxation all such premiums loaned in this State for a period not less than two years, by the passage of the Act •of 1818, ch. 106, sec. 31.

But the question is, whether the acquisition of the bonds in this case was a purchase or a loan of its gross premiums