Commonwealth v. Wark Co.

• Decision Date: 21 June 1930
• Docket Number: 2
• Citation: 301 Pa. 150,151 A. 786
• Parties: Commonwealth v. Wark Co., Appellant
• Court: Pennsylvania Supreme Court

151 A. 786

301 Pa. 150

Commonwealth v. Wark Co., Appellant

No. 2

Supreme Court of Pennsylvania

June 21, 1930

Argued May 27, 1930

Appeal, No. 2, May T., 1930, by defendant, from judgment of C.P. Dauphin Co., Commonwealth Docket 1928, No. 73, for Commonwealth on appeal from tax settlement, in case of Commonwealth v. Wark Company. Affirmed.

Appeal from tax settlement. Before HARGEST, P.J., WICKERSHAM and FOX, JJ.

The opinion of the Supreme Court states the facts.

Judgment for Commonwealth, in opinion by HARGEST, P.J. Defendant appealed.

Error assigned was judgment, quoting record.

The judgment of the court below is affirmed.

Geo Ross Hull, of Snyder, Miller & Hull, for appellant. -- The appellant is engaged in manufacturing: Com. v. Bridge Co., 156 Pa. 500, 507; Com. v. Swindle & Bros., 22 Dauphin Co. R. 184; Com. v. Paving & Construction Co., 229 Pa. 231; Com. v. Paving & Construction Co., 12 Dauphin Co. R. 57; Com. v. Casing Co., 50 Pa C.C.R. 146.

Philip S. Moyer, Deputy Attorney General, and Cyrus E. Woods, Attorney General, for appellee, were not heard.

Before MOSCHZISKER, C.J., FRAZER, WALLING, SIMPSON, KEPHART, SADLER and SCHAFFER, JJ.

OPINION

MR. JUSTICE FRAZER:

The Commonwealth by its accounting officers settled an account for tax on capital stock for the year ending December 31, 1926, against defendant company, amounting to $3,074.37, from which settlement the corporation appealed to the Court of Common Pleas of Dauphin County on the ground that it was a "manufacturing" corporation within the meaning of that term as used in the Act of July 22, 1913, P.L. 903, amending section 21 of the Act of June 1, 1889, P.L. 420, which imposes a tax on the actual value of the whole capital stock of every corporation liable to tax subject to the following proviso:

"That the provisions of this section shall not apply to the taxation of the capital stock of corporations . . . organized for laundering or manufacturing purposes, which is invested in and actually and exclusively employed in, carrying on laundering or manufacturing within the State, . . . but every laundering or manufacturing corporation . . . shall pay the state tax of five mills herein provided, upon such proportion of its capital stock, if any, as may be invested in any property or business not strictly incident or appurtenant to its laundering or manufacturing business, . . . it being the object of this proviso to relieve from state taxation only so much of the capital stock as is invested purely in the laundering or manufacturing plant and business."

The case was tried without a jury, and the court found in favor of and entered judgment for the Commonwealth in the amount of the tax claim. Defendant appealed.

Appellant argues that, by reason of the nature and operation of its business, that of constructing and erecting buildings on contracts, it is a manufacturing concern within the meaning of the proviso of the act above quoted and accordingly exempt from a tax on its capital stock. The Commonwealth contends that defendant corporation is solely a construction organization and is not engaged in the business of manufacturing, consequently is not included within the proviso and as stated by the learned court below, "the single question is whether the building of houses is 'manufacturing' within the purview of this statute." Language contained in legislative enactments intended to relieve persons or corporations from taxation must be strictly construed: Commonwealth v. Lowry-Rodgers Company, 279 Pa. 361.

Defendant company was incorporated in 1917, "for the purpose of carrying on the business of contractors and general building construction in any of its branches." In 1926 it procured an amendment to its chartered purposes as follows: "Said corporation is formed for the purpose of manufacturing and dealing in builders' supplies, material and equipment of every description, the manufacture of buildings and structures therefrom, and the carrying on of the business of contractors and general building construction in all the various branches thereof." Unquestionably under the original charter, there could be no escape from the tax imposed under the Act of 1889 and its amendment. It did not then profess to be engaged in a manufacturing business. Defendant's contention now is that the words in the amended charter, "the manufacture of buildings and structures," entitle it to exemption under the above quoted proviso.

During the tax year in question appellant was engaged in the construction of approximately twenty buildings, varying from one to sixteen stories in height, including structures for business, apartment, hotel and hospital purposes, the cost of construction of the respective buildings varying from approximately $7,000 to more than two million dollars. We are asked to declare that the construction and erection of these buildings was a "manufacturing business," within the legislative intent as expressed in the Act of 1889.

It is to be noted that the act referred to particularly provides that, "it being the object of this proviso to relieve from state taxation only so much of the capital stock as is invested purely in . . . manufacturing plant and business." The record fails to disclose that defendant manufactured any portion of the materials entering into its construction contracts. It was accordingly not a manufacturing company in that respect; the materials used in such constructions were supplied by others who were the actual manufacturers. The array presented by counsel of definitions of the word "manufacture" is indeed imposing; but we do not deem it essential, in the disposition of this appeal, to here travel over that wide range. We shall not enlarge the accumulation, particularly because, in our examination of judicial deliverances on this subject of our own and other jurisdictions, the question has in the end rested upon and been solved by a reliance upon the ancient and safe rule, to which this court has always adhered, that words in a legislative enactment are to be taken in their ordinary and general sense; and unless the act sufficiently explains or qualifies the terms so as to necessitate an interpretation out of the current and popular signification, they must be deemed to have been used by the legislature in the former sense.

Both the popular and technical use and meaning of the word "manufacture" are and have been for centuries at complete variance with that attributed to it by appellant. It is error to...