Commonwealth v. Filbert Paving & Construction Co.

• Decision Date: 01 July 1910
• Docket Number: 9
• Citation: Commonwealth v. Filbert Paving & Construction Co., 229 Pa. 231, 78 A. 104 (Pa. 1910)
• Parties: Commonwealth, Appellant, v. Filbert Paving & Construction Company
• Court: Pennsylvania Supreme Court

78 A. 104

Commonwealth, Appellant, v. Filbert Paving & Construction Company

229 Pa. 231

No. 9

Supreme Court of Pennsylvania

July 1, 1910

Argued May 23, 1910

Appeal, No. 9, May T., 1909, by plaintiff, from judgment of C.P. Dauphin Co., Commonwealth Docket, 1907, No. 184, in favor of defendant in case of Commonwealth of Pennsylvania v Filbert Paving & Construction Company. Affirmed.

Appeal by defendant from account settled by auditorgeneral and state treasurer for tax on capital stock. Before McCARRELL, J.

From the record it appeared that the Filbert Paving & Construction Company was a corporation of the state of Delaware engaged in business in the state of Pennsylvania. It was engaged in the business of manufacturing cement floors, asphalt floors pavements, roadways, and structural concrete from cement, sand, crushed stone, cinder, asphaltum, asphalt mastic, bitumen, silica grit, carbonate of lime, petroleum residuum, and various coloring materials as authorized by its charter.

Errors assigned were (3) in reaching the first conclusion of law as follows: "The defendant company is in fact and law a corporation of another state, organized under the laws thereof for manufacturing purposes with all of its capital stock, except $10,800, invested in and actually and exclusively employed in carrying on manufacturing in this state, and is therefore entitled to exemption from any capital stock tax on the capital stock thus invested and employed;" and (5) in directing judgment for defendant.

Judgment affirmed.

William M. Hargest, assistant deputy attorney general, with him J. E. B. Cunningham, deputy attorney general, and M. Hampton Todd, attorney general, for commonwealth, appellant. -- Defendant is not in the legislative class of manufacturing companies: Com. v. Light & Power Co., 145 Pa. 105; Com. v. Keystone Electric Light, etc., Co., 193 Pa. 245; Com. v. Marsh, 3 Pa. Dist. Rep. 489; People v. Dry Dock Co., 63 How. Prac. 451; 92 N.Y. 487.

A grant of exemption from taxation, being in the nature of a renunciation of sovereignty, must invariably be construed most strictly against grantee: Bank of Penna. v. Com., 19 Pa. 144; Jones & Nimick Mfg. Co. v. Com., 69 Pa. 137.

Hampton L. Carson and M. E. Olmsted, with them A. C. Stamm and John Kent Kane, for appellee. -- The court found as a fact that defendant was engaged in "manufacturing," and under the definitions no other conclusion was possible: Com. v. Light & Power Co., 145 Pa. 105; People v. Ice Co., 99 N.Y. 181; Murphy v. Arnson, 96 U.S. 131; Re Niagara Contracting Co., 127 Fed. Repr. 782; Com. v. Allegheny Gas Co., 1 Dauph. 93; Com. v. Keystone Bridge Co., 156 Pa. 500.

Before FELL, C.J., BROWN, MESTREZAT, POTTER, ELKIN, STEWART and MOSCHZISKER, JJ.

OPINION

MR. JUSTICE ELKIN:

The appellee was incorporated in the state of Delaware as a manufacturing company. Its property and assets are all located in the state of Pennsylvania where its principal business is transacted. The commonwealth through its accounting officers made a tax settlement upon its capital stock and insists upon the payment of the same. The learned court below held that it is a manufacturing company and as such is entitled to the exemption provided by our statutes. It is argued for the commonwealth that the appellee company is not within the class of manufacturing corporations intended to be exempted from the payment of capital stock taxes, and in support of this contention it is suggested that the holding of a foreign charter places it in a class not included in our exemption statutes. This position is without force and cannot be sustained. It is not an open question in Pennsylvania. It was settled adversely to the commonwealth then and now in Com. v. American Car, etc., Co., 203 Pa. 302. That case was affirmed on the opinion of the court below which exhaustively considered the question and covered the ground so completely as to leave nothing of value to be added to the discussion.

Again it is argued, that even if this company had been incorporated in our own state, it could not be considered as a manufacturing company within the meaning of our exemption laws. The latest act relating to this subject is that of 1893, which provides that the capital stock of a manufacturing corporation shall not be subject to the payment of a capital stock tax upon that portion of its capital "invested in and actually and exclusively employed in carrying on manufacturing within the state." The only companies expressly excepted from the exempted class by this act are those which enjoy the right of eminent domain, and those engaged in brewing or distilling liquors. The appellee does not possess or enjoy the right of eminent domain, nor is it engaged in the brewing or distilling business, and is not therefore within the class or classes of corporations to which by the express provisions of the statute the exemption does not apply. Nor do we think there is any other sufficient reason why this company is not entitled to the benefits of...