Where a state statute imposes upon a foreign insurance company
for the privilege of entering the State and doing local business a
license tax measured by a percentage of the premiums that will
accrue and be paid to it on policies issued in the State,
throughout the lives of such policies, the State may, consistently
with due process, continue to collect such percentage on premiums
which accrue from such policies after the company's withdrawal from
the State, and which are paid to it at its office in another State.
P. 311 U. S. 6
176 Tenn. 1; 137 S.W.2d 277; 138 id.
APPEAL from the affirmance of a decree of the Court of Chancery
of Davidson County, Tennessee, sustaining the right of the State to
collect from the Assurance Company 2 1/2% of premiums paid to it by
residents of Tennessee after its withdrawal from the State. The
case came before this Court on the appellant's Jurisdictional
Statement and the appellee's Statement in Opposition.
Page 311 U. S. 6
The State of Tennessee brought this suit to enforce payment of
privilege taxes measured by premiums on policies of insurance
issued while appellant was doing business within the State, but
upon which the premiums were paid after its withdrawal from the
State. Appellant contended that, since its withdrawal, it had
transacted no business within the State; that the policyholders
there had mailed their premiums on unmatured policies to the home
office of appellant in another State, and that to hold it liable
for the taxes demanded would deprive it of its property in
violation of the Fourteenth Amendment of the Constitution of the
The Supreme Court of Tennessee sustained the tax. It construed
the statutory provisions to mean
"that the tax is levied upon the right to do business in the
state, measured by a percentage of annual premiums to the exclusion
of all other taxes, the tax on the annual premiums to be paid
throughout the life of policies issued;"
"measured by two and a half percent of premiums received on
policies issued by the company while exercising its license from
the state, the tax was levied upon the privilege of entering the
state and engaging in the insurance business, and not upon the
and that the appellant, "by its compliance with the statute
adopted and agreed to the construction we have given it, and cannot
now repudiate its provisions." 137 S.W.2d 277, 278.
This construction of the statute distinguishes the case from
that of Provident Savings Life Assurance Society v.
Kentucky, 239 U. S. 103
There, the question under the statute, as it had been construed by
the state court, was whether the insurance company continued to do
business within the State for the period under consideration,
despite the fact that it had withdrawn from the State, merely
because of the receipt of premiums after withdrawal. The
Page 311 U. S. 7
tax was not laid upon the privilege of doing business during the
period that the company was actually within the State, the tax on
that privilege being measured by the premiums received during the
life of the policies. Id.,
pp. 239 U. S.
-111. The Supreme Court of Tennessee emphasized the
point of this distinction in its opinion on rehearing. 138 S.W.2d
447. Compare State v. Connecticut Mut. Life Insurance
106 Tenn. 282, 333-335, 61 S.W. 75.
The appeal is dismissed for the want of a substantial federal