Home Insurance Co. v. Taxing District

Cooper, J., delivered the opinion of the Court. This is an agreed case to test the liability of foreign insurance companies doing business in the Taxing District of Shelby County to pay a privilege tax to the municipality. The -Court held them liable, and they have appealed. By the Act of 1879, chap. 84, sec. 7, sub-sec. — 645 — 53, a tax for the benefit of the Taxing District, of $200, payable quarterly in advance each year, is directly laid “upon the privilege of opening or establishing an insurance 'office or agency for. the insurance of fire, life or accident, in the Taxing District, for companies not chartered by the laws of the State of Tennessee.” By the Act of 1875, chap. 109, entitled “ An Act to regulate the business of fire, and all except- life, insurance companies,” it is provided by see. 8, that every company organized for any of the purposes named in the Act, not incorporated under the laws of the State, shall report semi-annually the premiums received on policies issued in this State, and, at the same time, pay into the treasury of the State the sum of $2.50 upon each one hundred dollars of premiums so ascertained, “ which shall he in lieu of all other taxes.” The companies joining in the agreed case fall within the provisions of the Act of 1875, and have paid the tax as therein prescribed, and claim exemption from the subsequent taxation of the Act of 1879, by reason of the limitation in the clause cited, which, they insist, is still in full force. It has been held by this Court that a provision in the charter of an insurance company in this State for the payment to the State of a specific annual tax, “ which shall be in lieu of all other taxes,” will protect the company from further taxation by the State or any municipal corporation: Memphis v. Hernando Insurance Co., 6 Bax., — 646 — 527. It has also been held that the provision of the Act of 1875, chap. 109, sec. 8, above quoted, stipulating that the payment of the specified tax “shall be in lieu of all other taxes,” equally protected the companies from municipal taxation: Memphis v. Foreign Insurance Cos., MSS. opinion at Jackson. It was conceded, however, in the latter case, that the provision of the Act, being only a privilege by law, not a contract by charter, could of course be repealed. The Act of 1879 does, by the section cited above, undertake to levy an additional tax. The companies resist the collection of such tax upon the ground that the limitation protects them therefrom. If the Act of 1875 had simply provided for the payment of the specified tax to the State, omitting the words, “ which shall be in lieu of all other raxes,” the right of the Legislature to levy the new tax would have been beyond doubt. For, in that event, the legislation would have been the exercise of inherent power, not limited by contract, and the two acts might well stand together. It is equally clear that if our State Constitution contained no provision on the subject, the validity of the subsequent legislation would not be affected by the use in the previous Act of the words, “which shall be in lieu of all other taxes.” For, these words being in a general law not creating a contract, the Legislature might repeal them, directly or by implication. The Constitution of — 647 — 1870 does, however, contain this clause in Art. 2, sec. 17: “All acts which repeal, revive or amend former laws, shall recite in their caption or otherwise the title or substance of the law repealed, revived or amended.” The argument on behalf of the companies is that the Act of 1879, to be operative in the levying of additional taxes on them, must be held to repeal the words, “which shall be in lieu of all other taxes” of the Act of 1875, and is to that extent, unconstitutional, because it neither recites in its caption or otherwise the title or substance of the law repealed. The words relied on, as we have seen, do not amount to a contract, nor limit the power of subsequent Legislatures. They should be read as if the clause was written thus: “which shall be in lieu of all other taxes until the Legislature imposes other taxes.” For that is what in legal effect they mean. In this view, nothing was repealed by the subsequent legislation, the clause in controversy being mere surplusage, and both acts remaining in full force. If this construction be inadmissible, the second Act is incompatible with the first, and does repeal it by necessary implication. The question in this view is squarely raised, whether implied repeals are within the purview of the constitutional provision. It has not, heretofore, been deliberately considered and determined by the Court, although there have been expressions of opinion on the — 648 — point in cases in which its decision -was, perhaps, not absolutely demanded: State ex rel. v. Gaines, 1 Lea, 734; McGee v. State, 2 Lea, 625; State ex rel. v. McConnell, 3 Lea, 332. The present case, although not' absolutely requiring its solution, has been selected in connection with another case in which the question is directly raised, for its discussion and determination. Strictly speaking, a new statute does not repeal an old statute, however inconsistent with it. It is a mere form of expressing the result to say that the one repeals the other by implication. The prior act is not repealed, but rendered inoperative. And this is made plain by the fact that a direct repeal of the latter act, without any reference to the former, will, by a rule of the common law, give efficacy to the former. It was precisely because the old act , never was repealed that it thereby became operative. It is a convenient, though inaccurate- use of language to say that the new law repeals the old, and that the repeal of the new law revives the old. More properly the new act is an obstacle to the operation of the old act, which obstacle is removed by its repeal. It may well be doubted, therefore, whether a repeal by implication falls within the letter of the Constitution. It has usually been considered as if it did. The question, in this view, is not one altogether of first impression. Several of the State Constitutions contain similar provisions; that is, provisions designed for the same purpose, some, of — 649 — them couched in stronger language. A common provision in many of these .Constitutions is thus worded: “ TsTo act shall ever be revived or amended by mere reference to. its title, but the act revived or section amended shall be set forth or published at full length:” Cooley Const. Lim., p. 151, n. 1. “It has been uniformly held,” says Judge Cooley, “ that statutes which amend others by implication are not within these constitutional provisions, and that it is not necessary that they even refer to the acts or sections which by implication they amend.” He cites Spencer v. State, 5 Ind., 41: Branham v. Lang, 16 Ind., 481; People v. Mahoney, 13 Mich., 581; Lehman v. McBride, 15 Ohio, N. S., 593. This conclusion has been reached partly from a consideration of the purpose for which the constitutional provision was adopted, and partly from the argument, ah inconvenienti, that a contrary decision would render legislation well nigh impossible. The first of these reasons, every Judge knows, is one which uniformly influences the judicial construction of statutes, where the meaning is at all doubtful. The evil intended to be remedied is a most potent factor in ascertaining the legislative will. It should have even greater weight. in construing the work of a Constitutional Convention. For the language of a Constitution must necessarily be very general, admitting often of a broader sense than was meant to be conveyed. Error in the former case is, moreover, much less injurious, and more easily corrected than in the latter. And in — 650 — either case, whenever the statute or constitutional provision undertakes to limit the power of the political department, every intendment should he in favor of that department. A doubt, as has often .been said by the courts in relation to the great prerogative of legislation, should inure to the benefit of the Government. The evil which led to the adoption of the constitutional provisions under consideration wras, undoubtedly, the passing of laws without the members of the Legislature being fully advised of what they were doing. “ The mischief designed to be remedied,” says Judge Cooley, “ was the enactment of amendatory statutes in terms so blind that legislators themselves were sometimes deceived in regard to their effect, and the public, from the difficulty of making the necessary examination and comparison, failed to become apprised of the change 'made in the laws:” People v. Mahoney, 13 Mich., 455. The same is equally true of repealing statutes which fail to call the attention of the Legislature to the substance of the act repealed. The evil, it will be noticed, only applies to statutes which purport to repeal, revive or amend. No such evil can follow direct and positive legislation, which precisely because it is positive, repeals by implication previous legislation. For, in such case, the Legislature of course know what they propose to pass into a law, and intend that it shall be the law, whatever may have been previously enacted. “ The very fact,” says the Supreme Court — 651 — of Maryland, “ of establishing a particular rule of conduct for the public pre-supposes an intention on the part of the Legislature that a contrary rule to that which previously existed should prevail, and therefore the enactment of one law is as much a repeal of all inconsistent laws, as if the inconsistent laws had been repealed by express words7 Md. 151, 159. Hot the least possible danger can arise from a repeal by implication. Eor such a repeal is not favored nor admissible unless the positive provisions of the new law are utterly irreconcilable with the old law, thus unmistakably showing to the satisfaction of the judiciary that the repeal was intended. On the other hand, the evils of a different construction of the constitutional provision are obvious and striking. It would result in turning what was intended to prevent unadvised legislation into a barrier to all legislation, and a certain- snare to the legislator. “It would render,” says the Supreme Court of Maryland, “ many wholesome laws wholly inoperative, because of the inability or neglect of members to search thoroughly the statute books for laws which might be inconsistent or repugnant, a work of so great difficulty as to amount almost to an impossibility : ” 7 Md., 159. The difficulty of determining the effect of a new statute of a general nature on the pre-existing system is notoriously great. Time alone, and the practical application of the new law to the varying phases of actual cases can show the ultimate results. To — 652 — require from our legislators in advance what the wisest lawyer or judge would find a hopeless task upon serious study would indeed go far to render legislation impossible. Nor would this be the greatest evil. It would often happen, after a new statute had been acted on and treated as valid for years, that some old statutory provision would be discovered which would annul it ab■ initio. That the constitutional provision under consideration does not apply to repeals by implication seems to be sustained by reason, as it certainly is by authority. The Chancellor’s decree must be affirmed with costs.