Planters' Ins. Co. v. Tennessee, 161 U.S. 193 (1896)
U.S. Supreme CourtPlanters' Ins. Co. v. Tennessee, 161 U.S. 193 (1896)
Planters' Insurance Company v. Tennessee for use of Memphis
Argued January 20-22, 1896
Decided March 2, 1896
161 U.S. 193
In 1860, the Legislature of Tennessee incorporated the Energetic Insurance Company of Nashville, with a proviso in the charter limiting its taxation to one quarter of one per cent on its capital stock. In 1870, a new constitution was adopted by the state, forbidding such limitation. In 1884, the surviving corporators of the Energetic Insurance Company, which had not then been organized, met and organized the company under that name. In 1885, the name of the company was changed by legislative act to Planters' Fire and Marine Insurance Company, and it was authorized to remove its sites to Memphis, which it did, and increased its capital stock. Since that time, it has regularly paid its taxes at the rate named in the act of 1860. In a suit to recover taxes at the regular tax rate, which was in excess of the statutory limitation, held that the organization of the corporation having been made subsequently to the adoption of the Constitution of 1870 and of its coming into force, the corporation was subject to the provisions of that instrument regulating taxation.
This is another bill filed by the State of Tennessee, for the use of the City of Memphis, against defendants below to
recover taxes alleged to be due on the capital stock or shares of stock in the corporation plaintiff in error. The Supreme Court of Tennessee gave judgment in favor of the plaintiff below, and the plaintiffs in error have brought the case here for review. The case was tried upon an agreed statement of facts, among which are the following: on the 24th day of March, 1860, the Energetic Insurance Company of Nashville was incorporated. By the sixtieth section of that charter, it was provided
"that said company shall pay to the state an annual tax or bonus of one-fourth of one per cent. on each share of the capital stock subscribed, which shall be in lieu of all other taxes."
On the 10th day of December, 1866, the Planters' Insurance Company was incorporated, and thereafter it conducted a general fire insurance business in the City of Memphis up to the year 1885. No immunity from taxation was granted that company. On the 27th day of March, 1885, the name of the Energetic Insurance Company was changed to the Planters' Fire & Marine Insurance Company of Memphis, and the company was authorized to remove its situs and office to the then taxing district of Shelby County, now the City of Memphis.
From the time of the passage of the act providing for the incorporation of the Energetic Insurance Company in 1860 down to the 30th day of January, 1884, no action was taken by the incorporators named in the act towards organizing a corporation accepting the charter. On the last named date, a meeting was had of some of the incorporators named in the act, and the first minutes which can be found in the office of the defendant corporation, or which it can produce, are the minutes of the incorporators, stockholders, and directors held on that day. Six individuals were named in the original charter as incorporators, together with such other persons as might thereafter be duly associated with them, and at this meeting of the stockholders in January, 1884, four of them were present, and the other incorporators mentioned in the charter were dead at that time. It appears from those minuted that, pursuant to the terms and stipulations of an act of the Legislature of Tennessee, a meeting was that day --
January 30, 1884 -- called of the incorporators of the Energetic Insurance Company of Nashville, and in response to that call four of such incorporators appeared. A moderator was selected and books were opened, or ordered to be opened, for subscriptions to the capital stock of the company, and it was resolved that the first directory should consist of five persons. Stock was then subscribed by the various persons, amounting to $100,000, and, the stockholders thus subscribing being present either in person or by proxy, it was unanimously agreed by the incorporators present that the stockholders should go into an election for directors, and that the incorporators, as such, should adjourn. Thereupon, on the same day, it appears from the minutes that a meeting of the stockholders of the company was held and a board of directors elected, and the stockholders them voted to call a meeting of the directors for the same day. A meeting of the directors was then held, and a president, secretary, and treasurer of the company elected, and from that day (January, 1884) the organization of the corporation plaintiff in error was regular and continuous.
After its name was changed by the legislature to the Planters' Fire & Marine Insurance Company and it was authorized to remove its situs to the City of Memphis, its stock was increased to $150,000 and it removed its place of business to Memphis, and bought out the assets and property of the Planters' Insurance Company, and reinsured its risks. Since that time, the defendant has regularly paid the commutation tax of one-fourth of one percent on each share of capital stock subscribed to the State of Tennessee, pursuant to the terms of the charter, up to the present time. By virtue of the general revenue laws of the state, the corporation plaintiff in error, or its stockholders, have been taxed upon the capital stock or shares of stock at a greater rate than that provided for in the sixtieth section of the act of incorporation, and the plaintiffs in error claim that by virtue of that sixtieth section, they are entitled to exemption from all taxation except that therein provided for.