1. Where a statute of, or authority exercised under, a state is
drawn in question on the ground of its repugnance to the
Constitution of the United States, or a right is claimed under that
instrument, the decision of a state court in favor of the validity
of such statute or authority, or adverse to the right so claimed,
can be reviewed here.
2. An insurance company conformed to the requirements of the act
of the Legislature of Georgia, and received from the
Comptroller-General a certificate authorizing it to transact
business in that state for one year from Jan. 1, 1874. That act
does not, expressly or by implication, limit or restrain the
exercise of the taxing power of the state, or of any municipality.
An ordinance of the City Council of Augusta, passed Jan. 5, 1874,
imposed from that date an annual license tax "on each and every
fire, marine, or accidental insurance company located, having an
office or doing business within" that city. Held
ordinance is not in violation of that clause of the Constitution of
the United States which declares that "no state shall pass any law
impairing the obligations of contracts."
A statute of the Legislature of Georgia, to regulate insurance
business and insurance agencies in the State of Georgia, passed
March 19, 1869, enacts as follows:
Page 93 U. S. 117
"SECTION 1. That it shall not be lawful for any insurance
company, or agent of the same, excepting masonic, odd fellows, and
religious mutual aid societies, already chartered by this state, to
transact any business of insurance without first procuring a
certificate of authority from the comptroller-general of this
state, and, before obtaining such certificate, such company must
furnish the comptroller-general with a statement, under oath,
the name and locality of the company."
the condition of such company on the
thirty-first day of December then next preceding, exhibiting the
following facts and items, in the following form: namely, 1st,
capital stock; 2d, assets, detailed; 3d, liabilities, detailed;
4th, income preceding year, detailed; 5th, expenditures preceding
year, detailed; 6th, greatest risk; 7th, certified copy of
"SEC. 2. The said statement shall be filed in the office of the
comptroller-general, and the company shall show possession of at
least $100,000 cash capital."
"SEC. 3. Upon filing such statement as aforesaid, the
comptroller-general, when satisfied that the statement is correct,
and that the company has fully complied with the provisions of this
act, shall issue a certificate of authority to transact business of
insurance in this state to the company applying for the same, and
to all agents such company may appoint and commission."
"SEC. 4. Said statement must be renewed annually on the first
day of January in each year, or within sixty days thereafter, and
if the comptroller-general is satisfied that the capital,
securities, and investments remain secured as at first, he shall
furnish a renewal of the certificates. Insurance companies shall
not be required to furnish but the single statement annually. The
comptroller-general shall be entitled to a fee, for examining and
filing each statement of such companies, of seven and one-half
dollars, and for certificates to agents, of two and one-half
dollars -- which fee shall be paid by the company or agent filing
said statements, and to whom certificates are to be issued."
"SEC. 6. That all persons violating the provisions of this act
shall be liable to indictment, and, on conviction, shall be fined
not less than one hundred dollars, nor more than five hundred
dollars, at the discretion of the jury and court trying the
The plaintiff in error, a corporation organized under the laws
of the State of New York, had an agency in the City of Augusta. On
furnishing the required statement, it received
Page 93 U. S. 118
the certificate of the comptroller-general authorizing it to
conduct the business of insurance in that city for one year from
Jan. 1, 1874. Under a general law, it paid a tax of one percent
upon the gross amount of premiums received, and, under a city
ordinance, a tax of one and a quarter percent thereon.
On the 5th of January, 1874, the city council passed an
ordinance, the first section of which provides that, from and after
"The annual license tax on insurance companies shall be as
"1. On each and every life insurance company located, having an
office or doing business within the City of Augusta, $100."
"2. On each and every fire, marine, or accidental insurance
company located, having an office or doing business within the City
of Augusta, $250."
The legislature, by an Act passed Feb. 26, 1874, validated all
existing ordinances of said city council imposing taxes for the
support of its municipal government for 1874. Thereupon the
plaintiff in error filed its bill in the Superior Court of Richmond
County, to enjoin the council from collecting the license tax for
that year imposed upon it, and claimed, as a ground of relief, that
said ordinance impaired the obligation of the contract between the
company and the state, whereby the former was authorized to
transact the business of insurance therein, and thus violated that
clause of the Constitution of the United States which declares that
no state, and, a fortiori,
no political subdivision of a
state, "shall pass any law impairing the obligation of
The Superior Court refused the injunction prayed for, and
dismissed the bill, and the decree having been affirmed by the
supreme court of the state, the company brought the case here.
Page 93 U. S. 120
MR. JUSTICE SWAYNE delivered the opinion of the Court.
Under an Act of the legislature of Georgia of the 19th of March,
1869, the insurance company procured the requisite authority to
transact, by itself or agents, the business of insurance for one
year, from the 1st of January, 1874, and, at the option of the
company, for sixty days longer.
The company thereupon established an office and agency in the
City of Augusta, and thereafter transacted business at that place.
A general law of the state imposed a tax of one percent upon the
gross amount of premiums received. An ordinance of the city imposed
a tax of one and a quarter percent upon such receipts. These taxes
were paid by the company without objection. On the 5th of January,
1874, the city council passed an ordinance which imposed, further,
a license tax of $250 "on each and every fire, marine, or
accidental insurance company located, having an office, or doing
business within the City of Augusta." The bill was filed to enjoin
the collection of this tax. The Superior Court of Richmond County
sustained the validity of the tax, and dismissed the bill. The
supreme court of the state affirmed the decree. The complainant
thereupon sued out a writ of error, and removed the case to this
Page 93 U. S. 121
In the argument here, it was insisted by the defendant in error
that this Court has no jurisdiction of the case. We will first
consider this objection. The bill alleges that the ordinance
imposing the tax in question is void for many reasons, and, among
them, that it is in conflict with the contract clause of the
Constitution of the United States.
Where a judgment or decree is brought to this Court by a writ of
error to a state court for review, the case, to warrant the
exercise of jurisdiction on our part, must come within one of three
1. There must have been drawn in question the validity of a
treaty or statute of, or authority exercised under, the United
States; and the decision must have been against the claim which
either was relied upon to maintain.
2. Or there must have been drawn in question a statute of, or
authority exercised under, a state, upon the ground of repugnance
to the Constitution, or a law or treaty of, the United States; and
the decision must have been in favor of the validity of the state
law or authority in question.
3. Or a right must have been claimed under the Constitution, or
a treaty, or law of, or by virtue of a commission held or authority
exercised under, the United States; and the decision must have been
against the right so claimed. Rev.Stat. 132, sec. 709;
14 Wall. 15; Weston v.
City Council of Charleston,
2 Pet. 449;
McGwyre v. The
3 Wall. 385.
Here there was drawn in question the authority exercised by the
city council under the state in passing the ordinance imposing the
tax complained of. The question raised was as to its repugnancy to
the Constitution of the United States; and the decision was in
favor of the validity of the authority so exercised. A right was
also claimed under the Constitution of the United States. The
decision was adverse to the claim. The case is therefore within two
of the categories we have stated. The jurisdictional objection
cannot be maintained.
This brings us to the consideration of the case upon its merits.
Whether the claims which give us jurisdiction are well founded, is
the question to be considered.
The national Constitution (Art. 1, Sec. 10, clause 1)
Page 93 U. S. 122
that "no state shall pass any law impairing the obligation of
The act of 1869, before mentioned, forbids any company to do the
business of insurance in the state, without first obtaining a
certificate from the comptroller-general of the state. Before
obtaining such certificate, every company is required to furnish a
sworn statement, setting forth certain specified particulars. Upon
being satisfied of the truth of the statement, he is required to
issue the certificate. He is entitled to a fee of seven dollars and
a half for examining and filing each statement, and a fee of two
dollars and a half for each certificate. The fifth section declares
that whatever deposits, taxes, penalties, certificates, or license
fees are exacted from Georgia companies in any other state, shall
be exacted from the companies of such state in Georgia. It does not
appear by the record that any Georgia insurance company was doing
business in New York in the year 1874. This section therefore does
not affect the case in hand. The act contains no other allusion to
the subject of taxation. It does not, therefore, circumscribe in
any degree the taxing power of the state, or of any municipality
within the state clothed with such authority. It left both, in this
respect, standing just where they would have stood if this act had
not been passed. It contained no stipulation, express or implied,
that either should be thereby in any wise limited or
If it were competent for the state to impose the tax of one
percent upon the gross amount of premiums received, would it not
have been equally so for the state to impose a further tax, the
same with that in question, and in the same way? And if it were
competent for the city council to impose the tax of one and a
quarter percent upon the same receipts, why might it not impose the
further burden here in question? If the state could impose the
further tax, why not the municipality? Is there any sensible ground
of contract prohibition upon which the claim of exemption from
either can be placed? This question must necessarily be answered in
the negative. We find no semblance of a contract that additional
taxes should not be imposed.
In The License
5 Wall. 462, the nature of the tax exaction
here in controversy was carefully considered by this Court.
Page 93 U. S. 123
There the revenue laws of the United States required payment in
advance to be made for permission to carry on the business of
selling liquor, and of selling lottery tickets. It was provided
that no license so granted, or special tax so laid, should be
construed to authorize any business within a state forbidden by the
laws of such state, or so as to prevent the taxation by the state
of the same business.
This Court held that the payment required was a special tax,
levied in the manner prescribed; that the penalty provided was a
mode of enforcing its payment; and that the license, when issued,
was only a receipt for the tax. It was held further that, as
regards the reservation of power in favor of the states, the result
would have been the same if the acts of Congress had been silent
upon the subject. This was necessarily so, because the objects
taxed belonged to the internal commerce of the states, and were
within their police power, and the right of Congress and the states
to tax was concurrent. Congress could, therefore, no more restrict
the power of a state than the state could restrict that of
What is said there as to license taxes is applicable to the case
before us. There is no difference in principle between such a tax
and those which have been paid by the plaintiff in error to the
defendant in error, and to the state, without objection.
In the ordinance in question, the tax is designated "a license
tax," but its payment is not made a condition precedent to the
right to do business. No special penalty is prescribed for its
nonpayment, and no second license is required to be taken out. Had
the ordinance been otherwise in these particulars, we have seen,
viewing the subject in the light of the License Tax Cases,
that the result would have been the same.
The case in all its aspects was ably and elaborately examined by
the supreme court of the state. Their conclusion upon the "federal
question" we have considered is the same with ours. There being no
other such question raised in the record, our duty is thus
terminated. We have no authority to look further into the case.