Commonwealth v. Northern Elec. L. & P. Co.

22 A. 839, 145 Pa. 105, 1891 Pa. LEXIS 654

• Court: Pennsylvania Court of Common Pleas, Dauphin County
• Decided: October 5, 1891
• Docket: No. 43
• Status: Published

Opinion

Opinion,

Mr. Justice Williams :

This case presents a new and an interesting question, viz.: Is a company that produces electricity, and sells it to customers for the generation of light, heat, or power, a manufacturing company within the meaning of the act of 1885, exempting the capital stock of manufacturing companies from taxation ?

This case was tried without a jurjq and the facts upon which the judgment was based appear in the findings of the court below. One of these, which was based upon the opinion and largely expressed in the words of an expert electrician, who was called as a witness, asserts that the electricity sold by the company was created by the process adopted by the company. The learned judge says : “ The electricity which furnishes the light does not exist until the armature revolves. The revolution of the armature brings into being something that did not exist before; that is, this electric energy, or energy in this electric form.” In the same finding, he describes the process by which this product is evolved or created as follows: Coal is burned under the boilers, producing heat. The heat generates steam in the boilers, which moves the engine. The engine supplies the power by which the armature is made to revolve. The revolution of the armature produces electric currents where they did not exist before. The electricity thus generated is carried over wires provided' by the company, and delivered to its customers, where it is used to produce light. The process by which electricity is made to furnish light is found to consist of the movement of an electric current from one carbon point to another which are made part of its circuit. In leaping from one point to another great heat is developed by the energy of the current. This heat liberates or evolves from the carbons a gas which it burns. The light is thus found to be due partly to the passage of the electric current between the carbon points, and partly to the combustion of the gas furnished by the heated carbons. Notwithstanding these findings, which showed a creation, or “ bringing into being where it did not exist before,” of the electricity sold by the company, the learned judge held as matter of law that the process was not one of manufacture, because the product was not a material substance. Conceding that the thing sold was “ brought into being,” made, “ manufactured,” in the common use of that word, he denied that such making was in a legal sense a manufacture, because it did not appear affirmatively of what the mysterious product was made, and that it was material, as matter is now defined. This conclusion appears to have been drawn from the derivation and definition of the word manufacture, and is forcibly presented in a learned opinion, in which lexicons and books of reference are largely drawn upon. It is very clear that the word originally meant hand-made. It is equally clear, in the light of the definitions collated by the learned judge, that its meaning has expanded with the advance of the arts and sciences, until it has come to mean, as a verb, the making of anything by human art or skill: Burrill’s Law Diet.; and, as a noun, anything made by art or skill: Rap. & L. Law Dict.

The mere appropriation of an article which is furnished by nature is not a manufacture. Thus the liberation of natural gas or oil from the earth, and its transportation to consumers, is not a manufacture, but the production of illuminating gas is: Nassau Gas Light Co. v. Brooklyn, 89 N. Y. 409; also, Emerson v. Commonwealth, 108 Pa. 111. The collection, storage, preparation for market, and transportation of ice is not a manufacture, but the production of ice by artificial means is: People v. Ice Co., 99 N. Y. 181. A telegraph company produces electricity by artificial means, but it uses it in its own business as a carrier of messages for the public; so does a telephone company. Both receive messages for carriage, and deliver them at the point of destination. They transport for their customers. This company whose character we are considering sells the electricity it makes, or “brings into being,” as a commodity. It provides the lamps or appliances for the use of its customers, by means of which the light is produced; it sells them the electricity, measures it as it is delivered, and is paid according to the quantity furnished. Whatever electricity may be, it seems to be absolutely within the power and under the control of the company that brings it into being. It is compelled by the process employed, to come into being. It is secured, stored, poured out, or liberated at will. Its manifestations are both seen and felt. It moves with incredible velocity and power. It carries the tones and inflections of, the human voice, or moves loaded cars, depending on the volume of the current and the manner of its application. It may be, in the hands of the physician, a soothing remedial agent, and, in the hands of the law, an instrument of execution swifter and surer than the headsman’s axe. It may be too early to say just Avhat it is. The scientists whose views the learned judge adopted may be right or wrong. We have no need to decide that question. Laws are written ordinarily in the language of the people, and not in that of science; and if this case depended on the question on which it turned in the court below, we should be led by the findings of fact to a different conclusion of law from that which was there reached, and hold that this company was a manufacturing company.

But we think the controlling question in this case is that of the sense in which the words “ manufacturing companies ” are used in the statute under consideration. It provides that the taxes laid on corporations by the revenue laws of the commonwealth, are repealed or abolished as to manufacturing corporations. Now, if there were a class of corporations existing at that date known by the name of manufacturing companies or corporations, we must assume that the legislature intended that class, when it used the name by which the class had been known in previous legislation; and we need go no farther than the statute book to determine the legislative intent in the act of 1885.

The act of 1879 imposed a capital-stock tax on all corporations alike, so that we get no help from it. Looking back to the laws under which corporations have been created, we find that in 1836

* an act was passed providing for the organization of corporations for the manufacture of iron from the ores, with coke or mineral coal, which was subsequently extended so as to include companies using charcoal. This was followed in 1849* by a law which provided for the organization of “ manufacturing companies ” as a class of corporations. It included the manufacture of woolen, cotton, flax, or silk goods; of iron, paper, lumber, or salt. In 1850, it was extended so as to include the manufacture of glass. In 1851, printing and publishing were taken into the class. In 1852, the making of mineral paints and artificial slate was included. In 1853, quarrying and mining. In 1859, the manufacture of leather and leather goods. Mineral and carbon oils were included by a series of acts passed in 1856,1859, and 1860. It will thus be seen that the words “ manufacturing corporations ” had been employed as the name of a definite class of corporations for many years, and that the kinds of manufacture embraced within the class were not left to be settled by conjecture, or by reasoning built upon definitions, but had been settled by actual enumeration in the statutes referred to and some others. When the constitution of 1873 was adopted,' and when the general corporation act of 1874 † was passed in obedience to its requirements, manufacturing corporations as a class were provided for, and the kinds of manufacture included made certain by a long series of statutes. The act of 1874 provided a uniform mode for the incorporation of companies formed for profit, describing them as corporations of the second class; while corporations not for profit composed the first class. In the second class were included, among others, companies formed for “ carrying on any mechanical, mining, quarrying, or manufacturing business, including all the purposes covered by the provisions of the act of general assembly entitled ‘An act to encourage manufacturing operations in this commonwealth, approved April 7,1849,’ ” and its several supplements. Thereafter any company formed for the prosecution of the objects enumerated in the act of 1849 and its supplements, entered the class of manufacturing corporations through the gate opened by the act of 1874, instead of through previous legislation. But, whether they came in the one*way or the other, if they were within the class as the legislature had made it, the act of 1885 relieved them from the tax imposed by the act of 1879. A company supplying illuminating gas is, in the general sense of the word, a manufacturing company: Nassau Gas-Light Co. v. Brooklyn, supra; but it is not a member of the statutory class built up under the act of 1849, nor is any corporation engaged in the service of its customers in a quasi public capacity. A municipality may furnish water and light to its citizens. A company performing this service may be said to perform a quasi public or municipal function, which the municipality may disturb at its pleasure, or supersede altogether. Such companies have never been included in any of the legislation provided for the encouragement and protection of manufacturing corporations, and have no right to share in the benefits of such legislation. They really form a class by themselves. When the act of 1885 was passed, laws had been made in adjoining states which gave encouragement to the establishment of factories by exempting them from certain forms of taxation. The mischief to be remedied was the danger that such legislation might lead to the removal of capital and labor from this state to others, to the detriment of the business and prosperity of our own. The remedy provided was the removal of the tax imposed by the act of 1879, so as to remove the inducement to leave the state. It was as broad as the mischief which it was intended to meet, and made applicable to the class which since 1836 it had been the policy of the state to encourage, viz., “ manufacturing corporations.” It did not reach financial corporations like banks and insurance companies, nor transportation companies, nor companies performing functions partaking of a municipal character, but that class of productive industries which the legislature had sought to encourage as a means of bringing and keeping within our borders capital and labor, to be employed in the development of our mineral wealth, and in the production of the staples of commerce.

We think the learned judge reached a correct conclusion in this case. The appellant is not within the exemption or immunity provided by the act of 1885, but we prefer*to rest our judgment on the definition of “ manufacturing corporations ” which the legislature has adopted and adhered to for more than half a century, rather than upon the meaning of the word “ manufacture ” as it is given by. lexicographers.

The judgment is affirmed.

Act of June 16, 1836, P. L. 799.

Act of April 7, 1849, P. L. 563.

Act of April 29, 1874, P. L. 73.