Scottish Union National Insurance Company v. Bowland
These cases are cross appeals from a decree rendered in the circuit court upon bill and demurrer. The Scottish Union & National Insurance Company, a corporation of Great Britain, filed its bill to enjoin the defendants, Willis G. Bowland, treasurer, and L. Ewing Jones, auditor, of Franklin county, Ohio; Arthur I. Vorys, superintendent of insurance, and William S. McKinnon, treasurer, of the state of Ohio, from the collection of taxes levied on certain bonds deposited by the complainant under the laws of Ohio regulating the right of foreign insurance companies to do business in that state. It appears from the averments of the bill that the bonds were deposited under § 3660 of the Revised Statutes of Ohio, as amended in 1894. 91 Ohio Laws, 40. They were municipal bonds of the county of Lucas and state of Ohio. Fifty thousand dollars thereof was deposited on September 14, 1894, and $50,000 on November 7, 1894. The bonds were registered in the name of the superintendent of insurance, in trust, for the benefit and security of the policy holders of the insurance company, residing in Ohio, and were delivered by him to the state treasurer for safe keeping, and remained in the office of the treasurer of the state at Columbus, Franklin county, Ohio, until withdrawn on April 2, 1903, when United States bonds were substituted therefor.

The insurance company is transacting the business of insurance in Ohio, but it avers that its home office is in the city of Edinburgh, Scotland and its chief office and managing agency for this country is at Hartford, Connecticut, from which office it conducts its business in Ohio.

Acting under the Ohio statute, § 2781a (94 Ohio Laws, 62), the auditor of Franklin county, by notice served on one of the local agents of the Scottish Union & National Insurance Company, notified it to appear and show cause why the said bonds should not be taxed against it on the duplicate of Franklin county, Ohio, and taxes collected thereon for the years 1895 to 1900, inclusive. The auditor entered upon the tax duplicate taxes against the insurance company for $2,700 each for the years 1895 to 1897, inclusive, and $2,750 each for the years 1898 to 1900, inclusive, and 5 per cent penalty thereon. On November 15, 1900, the treasurer of Franklin county brought a civil action against the company for taxes so assessed. This action, at the time of the filing of the bill, was still pending in the court of common pleas of Franklin county, Ohio.

On December 4, 1903, another notice was served upon the company, through its local agent, and the auditor entered taxes against such company for the years 1901, 1902, and 1903, in all, the sum of $8,935.50. On April 2, 1904, the treasurer of Franklin county procured a warrant of distraint, and upon such warrant demanded of the superintendent of insurance and the state treasurer the United States bonds so substituted on April 2, 1903, for such municipal bonds, for the purpose of seizing and selling the same to satisfy the taxes which had been assessed against the company with respect to the municipal bonds for the years 1895 to 1900, inclusive. It is averred that to permit the collection of these taxes by suit for personal judgment or distraint will be violative of complainant's treaty rights as a subject of Great Britain, and will be taking complainant's property without due process of law, in violation of the 14th Amendment to the Constitution of the United States.

The prayer of the bill is that the defendant the treasurer of Franklin county be restrained from collecting or attempting to collect any of the taxes against the complainant personally; that the said treasurer be restrained from collecting or attempting to collect said taxes or any portion of them by distraint against either such bonds of the United States so deposited or any personal property of complainant which may now or hereafter be situated in the county of Franklin or in the state of Ohio; that the defendants the superintendent of insurance and treasurer of the state of Ohio be enjoined from delivering or attempting to deliver said United States bonds or any part thereof to the said county treasurer, and for such other relief as equity and good conscience may require.

The respondents having interposed demurrers to the bill, the court held that the municipal bonds on deposit in Ohio were subject to taxation under the laws of the state; that there was no personal liability of the complainant on account of said taxes, and therefore a civil action to recover the taxes should be enjoined; that for the year 1903 the collection of taxes could not be enforced, as the United States bonds were substituted before the time for returning property for that year; that the bonds might be seized by distraint to satisfy the taxes levied upon the municipal securities for the years they were on deposit, and the court therefore refused to enjoin the execution of the distress warrant except for the taxes and penalty for the year 1903, and rendered a decree enjoining the collection of the taxes by civil action.

Both parties appealed; the company from so much of the decree as permitted distraint of the United States securities for the collection of taxes levied with respect to the municipal bonds, the treasurer and auditor of Franklin county from so much of the decree as denies the right of the state to prosecute a civil action against the company to recover the taxes aforesaid, and from so much thereof as restrained the officials from attempting to collect the taxes assessed against the municipal bonds for the year 1903.

Judson Harmon, Hartwell Cabell, and W. O. Henderson for the Scottish Union & National Insurance Company.

[Argument of Counsel from pages 614-617 intentionally omitted]

Messrs.Angustus T. Seymour, Edward L. Taylor, Jr., Karl T. Webber, Thomas N. Ross, and Wade H. Ellis for Bowland et al.

[Argument of Counsel from pages 617-619 intentionally omitted]

Mr. Justice Day, after making the foregoing statement, delivered the opinion of the court: 

Notes
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