delivered the opinion of the Court.
The Compañía General de Tabacos de Filipinas, hereafter to be called the Tobacco Company, brought this suit in the Court of First Instance in Manila to recover from the'Philippine Collector of Internal Revenue certain sums paid under protest as internal revenue taxes on insurance *89premiums.which the Tobacco Company during the year' 1922, through its head- office in Barcelona, Spain, paid to the Guardian Insurance Company of London, England, and to Le Comité des Assurances Maritimes de Paris of Paris, France.. These two insurance companies we shall hereafter designate as the London Company and the Paris Company. The case was heard on an agreed statement of facts. The Tobacco Company is a corporation,. duly organized under the laws of the Kingdom of Spain, and licensed to do business’ in the Philippine Islands, maintaining its chief office in the Islands in the city of Manila. During the year 1922 the Tobacco Company purchased and placed in its warehouses in the Philippines, merchandise, and from time to time notified its head office in Barcelona of its value. -The Tobacco Company at its head office in Barcelona then insured the merchandise against fire under open and running policies of insurance carried by it with the London Company, and paid premiums of forty-eight hundred and thirty-five and 32/100 pesos. Subsequent to thé purchase of the merchandise, the Tobacco Company from time to time shipped it to' Europe, and by cable notified its head -office in Barcelona of the value of the shipments. The head office thereupon insured with the Paris Company these shipments for and on behalf of the Tobacco Company against marine risks under open and running policies, premiums on which amounted during the year 1922 to 100,050.44-pesos, and the premiums thus paid were charged to the expense of the Tobacco Company at Manila. The London Company is licensed to do insurance business in the Philippine Islands and has an agent there. The Paris Company is not licensed' to ‘ do business in the Philippines and has no agent there. Losses, if any, on these policies weré to be paid to the Tobacco Company by the London Company in London and.by the Paris Company in Paris. - The insurance effected was secured without the use of any agent, company, corpora*90tion or other representative of the companies doing business in the Philippine Islands. The collector in 1923 assessed and collected from the Tobacco Company a tax of one per cent, upon the premiums paid by it to the London Company of 4832.25 pesos, or 48 32/100 pésos, and on those paid by it to the Paris Company 100,050 44/100 pesos, or 1000 50/100 pesos. These sums were paid under protest in writing. The protests were overruled on the 27th day of July, 1923, and on the 16th of August the plaintiff filed this action for the recovery of the taxes.
The taxes were collected under § 192 of Act No. 2427, as amended by Act'No. 2430, of the Statutes of the Philippines. 9 Public Laws 292. That section provides that it shall be unlawful for any person or corporation in the Philippines to procure, receive or forward applications for insurance in, or to issue or to deliver or accept policies .of, or for, any company or companies not having been legally authorized to transact business in the Philippine Islands, and that any. person or company violating this section shall be guilty of a penal offense and upon conviction shall be punished by a fine of two hundred pesos, or imprisonment for two months, or both in .the discretion of the court. The section contains a proviso that insurance may be placed by- authority of a certificate of the insurance commissioner to any regularly authorized fire or marine insurance agent of the Islands, subject to revocation at any time, permitting the person named therein to procure policies of insurance on risks located in the Philippine Islands in companies not authorized to transact business in the Philippine Islands. Before the agent named in the certificate shall procure.any insurance in such company, it must be shown by affidavit that the person desiring insurance after diligent effort has been unable to procure in any of the companies authorized to do business in the Philippine Islands the amount of insurance necessary. *91The agent is to make a yearly report to the Collector of Internal Revenue of all premiums received by the company he represents under the previous authority, and he is to pay to the collector of internal revenue a tax equal to twice the tax imposed by § 79 of Act No. 2339, [i. e., 1% thereof] which tax shall be paid at. the same time and be subject to the same penalty for delinquency as the tax imposed by Act No. 2339. 9 Public Laws, of Philippine Islands, February 27, 1914, p. 296. It is provided further that the prohibitions of the section shall not prevent an owner of property from applying for and obtaining for himself policies in foreign companies in cases where he does not make use of an agent residing in the Philippine Islands. In such cases it shall be his duty to report to the Insurance Commissioner each case where the insurance has been effected and shall pay a tax of one per centum on premiums paid in the manner required by law of insurance companies, and shall be subject to the same penalties for failure to do So.
The court of first instance sustained the validity of the tax. as to each insurance company. The Supreme' Court, of the Philippines affirmed the judgment. Two judges of the latter court dissented on the ground that the tax violated thé rule of uniformity, and was a denial of the equal protection of the law.
The Philippine Organic Act (39 Stat. 545, 546, c. 416, § 3) imposes upon the legislature of the Philippine Islands the same limitation by which' the Fourteenth Amendment restrains the States of the Union, to wit, that no law shall be enacted in said Islands which shall dé-prive any person of life, liberty or property without due process of law, or deny to any person the equal protection of the laws. The question of the validity of the tax on the premiums differs in respect to those paid the two insurance companies.
*92Coming then to the tax on the premiums paid to the Paris Company, the contract of insurance on which the premium was paid was made at Barcelona, in Spain, the headquarters of the Tobacco Company, between the Tobacco Company and the Paris Company, and any losses arising thereunder were to be paid-in Paris. The Paris Company had no communication whatever with anyone in the Philippine Islands. The collection of this tax involves an. exaction upon a company of Spain, lawfully doing business in the Philippine Islands, effected by' reason of a contract made by that company with a company in Paris on merchandise shipped from the Philippine Islands for delivery in Barcelona. It is an imposition upon a contract not made in the Philippines and having no situs there, and to be measured by money paid as premium in Paris,, with the place of payment of loss, if any, in Paris. We are very clear that the contract and the premiums paid under it are not within the jurisdiction of the government of the Philippine Islands. The taxpayer, however, is resident in the Philippine Islands and within the governmental jurisdiction of those Islands. Its-property in the Islands and its agents doing business there are within the reach of the government' of the Islands. The Company may be compelled to pay what the government in its quasi sovereignty chooses to exact as a matter of power, unless restrained by law. A legal restriction upon the taxing power of the Philippine government over citizens and residents of the Islands is. found in the liberty secured by the Organic Act, which embraces the right to make contracts and. accumulate property, and do business outside of the Philippine Islands and beyond its jurisdiction, without prohibition, regulation, or governmental exaction.
In Allgeyer v. Louisiana, 165 U. S. 578, a law of Louisiana provided that any person who should do any act in Louisiana to effect for himself or for another, *93insurance on property then in.that state, in any marine' insurance company which had not complied in all respects with the laws of the state, should be subject to a fine of $1,0Q0 for each offense. Allgeyer was sued for violating the statute, because he had mailed a letter in- New Orleans to the Atlantic Mutual Insurance Company of New York, advising that company of a shipment of 100 bales of cdtton to foreign ports, with bill of lading . and an insurance certificate in accordance with the terms of. an open marine policy of its issuing. Action was brought to recover for three sfich' violations of the act the sum of $3,000. The answer was that the act- was unconstitutional, in that it deprived the defendant of its liberty without due process of law; that the business concerning which the defendants were sought to be made liable and the contracts made in reference to such business were beyond the jurisdiction of the state, because the contract of insurance was made with an insurance company in the State of New York, where the. premiums were to be paid and where the losses thereunder, if any, were to be paid. This Court held that citizens- of a state had a right to contract outside the state for insurance on their property, a right of which the state legislature could not deprive them, because coming within the “ liberty "• protected by the Fourteenth Amendment, and that the letter sent sto the company was a proper act, which the state legislature had no right to prevent, this even though the property which was the subject of the insurance had been within the state.
On the authority of the Allgeyer case, this Court decided St. Louis Cotton Compress Company v. State of Arkansas, 260 U. S. 346. That was a suit by the State of Arkansas against the Compress Company, a corporation of Missouri, authorized to do business in Arkansas. It was brought to recover 5 per cent, on the gross premiums paid by the Compress Company for insurance upon its property *94in Arkansas to companies not authorized to do business in that state. A statute of Arkansas in terms imposed a liability for this 5 per cent, as a tax. The answer alleged, and the proof showed, that thé policies were contracted for, delivered and paid in St. Louis, Missouri, where the rates were less than those charged by companies authorized to do business in Arkansas. The plaintiff demurred. The Supreme Court of the State .justified the imposition as an occupation tax. This Court said:
“ The short question is whether this so-called tax is saved because of the name given to it by statute when it has been decided in Allgeyer v. Louisiana, 165 U. S. 578, that the imposition of a round sum, called a fine, for doing the same thing, called an offense, is invalid under the Fourteenth Amendment. It is argued that there is a distinction because the Louisiana statute prohibits (by implication) what this statute permits. But that distinction, apart from some relatively insignificant collateral consequences, is merely in the amount of the detriment imposed upon doing the act. . . . Here it is five per cent, upon the premiums — which is three per cent, more than is charged for insuring in authorized companies. Each is a prohibition to the extent of the payment required. The Arkansas tax manifests no less plainly than the Louisiana fine a purpose to discourage insuring in companies that do not pay tribute to the State. The case is stronger than that of Allgeyer in that here no act was done within the State, whereas there a letter constituting a step in the contract was posted within the jurisdiction. It is true that the State may regulate the activities of foreign corporations within the State but it cannot regulate or interfere with what they do outside.”
The authority of these cases is controlling in disposing of the one before us. The effect of them is that, as a state is forbidden to deprive a person of his liberty without due process of law, it may not compel any one within its juris*95diction to pay tribute to it for contracts or money paid to secure the benefit of contracts made and to be performed outside of the state.
But it is said that these two cases were really cases of penalties, althoügh in the Compress Company case the law called the imposition an occupation, tax. We are unable to see any sound distinction between the imposition of a so-called tax and the imposition of a fine in such a case. A so-called tax is just as much an interference with the liberty of contract as is a penalty by fine, where the subject matter giving rise to the imposition is beyond the jurisdiction of the state. Reference was made in the Compress case to the fact that that which was imposed was larger than would have been the tax in'the state if all parties had been in the state and the contract had been made there, but the decision itself clearly does not depend for its basis upon discrimination as between a tax and a prohibition or the amount of it. This Court said, in comparing the Allgeyer case and the Compress case:
. “ In Louisiana the detriment was $1,000. Here it is five per cent, upon the premiums — which is' three per cent, more than is charged for insuring in authorized companies. Each is a prohibition to the extent of the payment required. The Arkansas tax manifests no less plainly than the Louisiana fine a purpose to discourage insuring in companies that do not pay tribute to the State.”
And that is just what this tax is for. Even though it is only equal to the tax upon normal premiums paid in the Philippine Islands, it is imposed for the purpose of' discouraging insurance in companies that do not pay tribute • to the state because but of its taxing or penalizing jurisdiction. As the language above quoted from the opinion in the Compress case shows, the action of Arkansas was invalid, because of its attempt to regulate ” the conduct qf the Compress Company in respect of a matter not *96within its local jurisdiction.' Taxation is regulation just as prohibition is.
It is sought to take this case, out of the Allgeyer and the Compress cases by reference to Equitable Life Assurance Society v. Pennsylvania, 238 U. S. 143. The Equitable Life Assurance Society of New York did business in Pennsylvania. The Legislature levied an annual tax of 2 per cent, upon the gross premiums,of every character received from businéss done by it within the state during the preceding year; The company paid large taxes, but appealed to the state courts to relieve it from charges for such of the premiums for .five years as had been paid outside the state by residents of Pennsylvania. It was contended by the company that' such taxation was of property beyond the jurisdiction of the state, rélying on the Allgeyer case. This Court held that the tax was a tax for the privilege of doing business in Pennsylvania, and that .the fact that the state cóuld not prevent the contracts did not interfere with its right to consider the benefit annually extended to the Assurance Society by Pennsylvania in measuring the value of the privileges so extended; that the tax was a tax upon a privilege actually used, and the only question concerned the mode of measuring the tax.' This Court said as to that:
“A certain latitude must be allowed. It is obvious that many incidents of the contract are likely to' be attended to in Pennsylvania, such as payment of dividends when received in cash,. sending an adjuster into the State in case of dispute, or making proof of death. See Connecticut Mut. Life Ins. Co. v. Spratley, 172 U. S. 602, 611; Pennsylvania Lumbermen’s Mut. Fire Ins. Co. v. Meyer, 179 U. S. 407, 415. It is not unnatural to take the policy holders residing in the State as a measure without going into nicer if not impracticable details. Taxation has to be determined by general principles, and it seems to us *97impossible to say that the rule adopted in.Pennsylvania goes beyond what the Constitution allows.”
The cabé is not in conflict either with the Allgeyer case or with the Compress case, decided as late as December, 1922. It turns entirely on the fact that the taxpayer had subjected. itself to the jurisdiction of Pennsylvania. in doing business there, and it was for the state to say what the condition, of its doing that business in the matter.of the payment of taxes should be. This Court said that the Equitable Society was doing business in Pennsylvania when it was - annually paying dividends in Pennsylvania, or sending an adjuster into the state in case of dispute, or making proof of death, and therefore that it was not improper to measure the tax for doing business in the state by the number of individuals whose lives had been insured and with respect to whom, and the execution of whose contracts, the company was necessarily doing business in the state, even if the premiums paid by some of them had not been paid in the state.-
It is true that, in considering the question of the measure of the tax, this Court referred to the argument of the Supreme-Court qf Pennsylvania that the tax might be properly measured by New York, contracts because Pennsylvania protected the individuals insured therein' dining their lives in Pennsylvania. Our Court accepted this as one of several reasons for including such individuals in the measure ef the tax, because of' the incidental business done by the Insurance’ Company in Pennsylvania which the living of such individuals in that state, after the making of the., contract, brought into, its performance and consummation. But such, reference cannot be made a basis for an argument that-such protection ¿s the Government "of the Philippine Islands gave to the merchandise while being shipped at Manila furnished any jurisdiction for a tax by that Government on the premiums paid in Barcelona upon the insurance contract. *98If that were to be admitted, then neither the Allgeyer nor the Compress case could be sustained, for the property in each of those cases was ’ protected by the government "seeking to impose the forbidden exactions upon the owner^ who obtained the insurance out of the state, on that property within it. The tax here is not on the property insured. It is a tax on the contract, or its proceeds, which were not in the Philippines, or éxpected to be there. The Equitable Society case does not control or affect the question we are considering. Unless we are to reverse the Compress and Allgeyer cases, the judgment of the Supreme Court of the Philippines in respect of the tax on the premiums paid to the Paris Company must be held to be erroneous.
Second. We come now to the question of the tax upon the premiums paid to the London Company, which was licensed and presumably was doing business in the Philippine Islands. Does the fact that, while the Tobacco Company and the London Company were within the jurisdiction of the Philippines, they made a contract outside of the Philippines for the insurance of merchandise in the Philippines, prevent the imposition upon the assured of a tax of one per cent, upon the money paid by it as a premium to the London Company? We may properly assume that this tax, placed upon the assured, must ultimately be paid by the insurer, and treating its real incidence as such, the question arises whether making and carrying out the policy does not involve an exercise or use of the right of the London Company to do business in the Philippine Islands under its license, because the policy covers fire risks on property within the Philippine Islands which may require adjustment, and the activities of agents in the Philippine Islands with respect to settlement of losses arising thereunder. This we think must be answered affirmatively under Equitable Life Society v. Pennsylvania, 238 U. S. 143. The case is a close one,' but in deference to the conclusion we *99reached in the latter case, we affirm the judgment of the court below in respect to the tax upon the premium paid to the London Company.
The judgment of the Supreme Court of the Islands is reversed in part and affirmed' in part.