[Crouse v. Commonwealth.]

above the seventh class, and in $500 for all in and below the seventh, conditioned "for the faithful observance of all the laws of this Commonwealth relating to the business of the principal obligor." Clearly that bond was not forfeited for violation of any law not relating to the business of licensed vendors of liquors. The Act of 1875, declares much severer fines and penalties than prior acts, for various offences. For selling intoxicating drink on election day, or on Sunday, or at any time to a minor, or to a person visibly affected by intoxicating drinks, the fines are largely increased. The act also provides that any husband, wife, parent, child or guardian of any person having the habit of drinking to excess, may give written notice not to sell or deliver intoxicating liquor to the person having such habit, and if the person so notified shall, within twelve months thereafter, sell or deliver such liquor to the person having such habit, the one who gave the notice may recover of the one notified damages not less than $50, nor more than $500. In case of death of either the action and right of action shall survive to or against his executor or administrator, without limit as to damages. Larger fines declared and damages allowed by the Act of 1875, called for an increased penal sum in the bond; and the provision for damages explains the verbal change in its condition. Apt words are used to include the very things for which the principal obligor may become liable for violation of laws relating to his business. The context, instead of showing a different meaning was intended, demands adherence to the usual sense of the words directed for the bond.

Wilfully furnishing intoxicating drinks by sale, gift or otherwise, for use as a beverage, to any person of known intemperate habits, to any person when drunk or intoxicated, to a minor, or to an insane person, is made a misdemeanor by the Act of May 8th 1854. In the numerous changes of the license laws, that act has remained undisturbed. It applies to all persons in whatever business or occupation. Whether the person violating it was licensed or not, is not an element of the offence, nor of an aggrieved person's right to recover damages. A judgment for an injury occasioned by its violation is on an equal footing with judgments for injuries by whatever negligence or default. Surviving relatives have like security, and no better, for the damages recovered, as if the deceased had died of a beating, or of injuries caused by other negligence of the same offender. The Act of 1854, cannot be considered as a part of the license system. No just interpretation of the Act of 1856, would make the bond therein required a security for damages arising from violations of the Act of 1854, and it is safe to say never was so understood. To hold such damages within the Act of 1875, requires too much implication and too great departure from the obvious meaning of the bond, which is in a sum scarcely sufficient as a security for the damages, costs and penalties specified in its condition. Judgment reversed.

it

Insurance Company of North America versus The Commonwealth.

By the Act of March 20th 1877, imposing a tax upon

"the entire amount

of premiums received by insurance companies," it was intended to tax all the business of such companies as evidenced by the entire premiums received by them from all sources, whether within or without the state; and such act is not repugnant to the provisions of the constitution of the United States, prohibiting any interference with inter-state commerce.

May 20th 1878. Before AGNEW, C. J., MERCUR, GORDON, PAXSON, WOODWARD and TRUNKEY, JJ. SHARSWOOD, J., absent. Error to the Court of Common Pleas of Dauphin county: Of May Term 1878, No. 159.

Debt by the Commonwealth of Pennsylvania against the Insurance Company of North America, to recover a balance of taxes on premiums of insurance received by the defendant company.

The facts were these: The defendants entered an appeal from a settlement of the account of the Insurance Company of North America with the Commonwealth, made by the auditor-general, in the month of August 1877, charging the company with a tax of eight-tenths of one per cent. (per Act of March 20th 1877,) on the sum of $681,629.57, being the gross amount of premiums received by the company in other states than the state of Pennsylvania, from the date of the passage of that act to June 30th 1877, a period of less than four months; the said tax amounting to $5485.04. The account charged against the company was The company was credited with payment of the tax on all premiums received in the state of Pennsylvania

Leaving a balance unpaid, as per settlement

$6746.65

1301.61

$5485.04

The 6th section of the Act of 1877, under which the settlement was made by the auditor-general, is as follows:

"That hereafter it shall be the duty of the president, secretary, or other proper officer of each and every insurance company or association, incorporated by or under any law of the Commonwealth, except companies doing business upon the purely mutual plan, without any capital stock or accumulated reserve, and purely mutual beneficial associations whose fund for the benefit of members, their families or heirs, is made up entirely of the weekly or monthly contributions of their members, and the accumulated interest thereon, to make report in writing to the auditor-general, semi-annually, upon the 1st day of July and January in each year, setting forth the entire amount of premiums received by such company or association during the preceding six months, whether the said premiums were received in money, or in the form of notes, credits, or any other substitute for money; and every such company or association

[Insurance Co. of North America v. Commonwealth.]

shall pay into the state treasury, at the dates aforesaid, a tax of eight-tenths of one per centum upon the gross amount of said premiums: Provided, That said report shall be made under oath or affirmation, and that it shall be the duty of the accounting officers of the Commonwealth to add ten per centum to the account of any company or association whose officers shall neglect or refuse, for a period of thirty days, to make the said report or to pay into the state treasury the tax imposed by this section."

The declaration was in debt to recover the above balance.

The defendants pleaded, first, the general issue; and afterwards, by consent, on the trial of the cause, two additional special pleas were filed, setting forth that the defendants were a corporation. created by the state of Pennsylvania, authorized to effect insurance against fire and the perils of the seas, and that $5230.05, part of the sum claimed, was a tax of eight-tenths of one per cent. assessed by the auditor-general on $653,757.22, received as gross premiums on contracts of insurance effected and entered into by the defendants in the several other states and territories of the United States of America, between the time specified in the several amounts therein mentioned. And that the said company so received and collected the said premiums, at agencies established in such other states and territories, by virtue of licenses and permissions granted to the defendants by the lawful authorities thereof, to transact therein said business of insurance under the laws of such other states and territories. And that no part of the said sum was received for business transacted or premiums taken within the state of Pennsylvania, nor for insurances on property or effects within the state of Pennsylvania. And that in all such other states and territories the defendants were obliged to and did pay taxes imposed by the laws of such other states and territories while transacting their business.

The second special plea was a similar averment as to the remainder of the sum claimed for premiums received outside of Pennsyl vania, in the British provinces of New Brunswick, Newfoundland and Canada, amounting to $214.98.

The plaintiff demurred to the two special pleas, and on the trial of the issue raised by the general issue on the 11th of March 1878, admitted the truth of the facts set forth in these two special pleas, and the learned judge who tried the cause directed the jury to find in favor of the Commonwealth for the sum of $5989.54, reserving the following points for the opinion of the court:

If the court shall be of opinion that the defendants are not liable for the tax laid by the legislature of Pennsylvania on premiums of insurance received by the defendants in other states of the United States, and within the limits of the state of Pennsylvania, upon contracts of insurance made by the defendants in places without the limits of Pennsylvania and with citizens of

[Insurance Co. of North America v. Commonwealth.]

other states, then the verdict shall be set aside, and judgment shall be entered for the defendants.

If the court shall be of opinion that the defendants are liable for taxes assessed upon such premiums, then judgment shall be entered for the plaintiffs upon the verdict.

Afterward, April 11th 1878, the court below, Pearson, P. J., gave judgment in favor of the Commonwealth on the points reserved and the demurrer to the special pleas, which were argued at the same time, delivering the following opinion :

"The points reserved, in effect, present two questions: 1. Does the sixth section of the act of March 20th 1877, impose a tax on the gross receipts of the defendant corporation, for business done without as well as transacted within the state of Pennsylvania, on which it received money, notes, credits, or any other substitute for money ? And, 2. Can the tax on business done out of the state be lawfully imposed by our legislature?

"The language of the statute in the present case, imposing the tax, is quite as strong and almost identical with that found in the act of the 23d of March 1866, imposing a tax on the gross receipts of railroads, which was construed by the Supreme Court of the United States, in the Reading Railroad case, 15 Wall. 284, to extend to all receipts, as well on business done within as that without the limits of the state of Pennsylvania.

"When the same words, substantially, are used in the Act of Assembly they should receive the same construction; especially when applied to a corporation doing business of a kind where it is more objectionable than that transacted by this company.

"The Insurance Company of North America owes its whole existence to the laws of Pennsylvania. It received a perpetual charter from this state in the year 1794, under which it continued to transact its business within this Commonwealth until the 27th day of February 1854, when it was authorized by statute to extend it to any of the states of the Union, or without its limits, giving its contracts the same validity as if made in this state. It is by virtue of the authority contained in that law that the contracts were made on which the present tax is imposed. We cannot doubt but that it was the intention of the legislature, in enacting this statute, to tax all of the receipts of this company, whether arising from contracts made and business transacted without as well as within the state. The design was to impose it on all of the receipts from its business, wherever done.

"2. Is there anything in the constitution of this state or of the United States which prevents the imposition of the tax on business done or money due in another state? It certainly is not a tax on commerce between the states. It is said in the argument that insurance is as necessary to commerce as bills of lading, decided to be protected in 24 How. 169. In that case it was not merely the

[Insurance Co. of North America v. Commonwealth.] bill of lading that was exempted, but the gold dust or bullion which it represented. An insurance, although common, is not necessary to commerce. Many strong merchants or wealthy firms never insure. But this very point is decided in Paul v. Virginia, 8 Wall. 168: A policy of insurance is not a transaction of commerce, it is

a mere contract.'

"This tax is much less objectionable than that imposed on the gross receipts of railroads. In many cases they were not incorporated by the laws of Pennsylvania, but were the creation of other states, and barely permitted to pass through this; yet a tax of $76,788 was imposed on the New York and Erie Railway, which only ran about forty-five miles through Pennsylvania, and that was sustained in Erie Railway, 21 Wall. 492.

"The Supreme Court of the United States decided that a tax could not be imposed on goods by the ton carried through Pennsylvania to or from other states, in the Reading Railroad Company case, 15 Wall. 232, which met my entire approbation; yet held the same company liable to a tax on the gross receipts of freight in the case of the same road: Ibid. 284.

"We are unable to see the difference between taxing the freight and the money paid for its transportation; each has the same effect on the commerce between the states, and each state through which the road passes might impose a tax on the gross receipts ad libitum, until the commerce would be wholly excluded, as fully as if imposed on the article carried by the barrel, the bushel, or the ton. The law on both points is too firmly settled to be shaken: 18 Wall. 206; 21 Id. 492. The individual opinion of one lawyer or judge is of no consequence whatever.

"It is urged that the business done or obligations held out of the state cannot be taxed. This is not done by a natural but by an artificial person, over which the state has entire control. It is only when the premium is received, or the same secured to the corporation in the form declared in the act, that the tax is imposed. Then, in contemplation of law, it comes to the corporation in this state. It is within its power, and considered to be in its treasury.

"It may be considered that money at interest, whether secured by note or mortgage, cannot be taxed as such. The state must have jurisdiction of the person or property, and money at interest is not considered as property, except in the state where the owner resides. See reasoning of the court in the Foreign Bond case, 15 Wall. 300, and the principles there laid down.

"The same doctrine has been reiterated in many other cases and in different states. A mortgage must be taxed where the owner lives, not where the mortgaged land lies: 19 Md. 13. Yet the state of Pennsylvania has, for nearly forty years, taxed her citizens for money at interest due in other states, and the right has never been questioned. In the language of Chief Justice Mar