Commonwealth ex rel. McCormick v. Keystone Electric Light, Heat & Power Co.

Opinion by

Mr. Justice Fell,

The question presented by this appeal is whether the purchasers at a sheriff’s sale of the rights and franchises of an electric light, heat and power company are authorized by the Act of May 25, 1878, P. L. 145, to reorganize the company. This depends upon whether an electric light, heat and power company is a manufacturing company within the meaning and intent of the act. The learned judge of the common pleas who decided the case felt that he was concluded upon the subject by the decision in Commonwealth v. Northern Electric Light & Power Co., 145 Pa. 105, followed in Commonwealth v. Edison Electric Light and Power Co., 170 Pa. 231, and that in the light of these decisions the statute does not authorize a reorganization by the purchasers of an electric light, heat and power company.

The question in Commonwealth v. Northern Electric Light & Power Co., supra, was whether the defendant came within the provision of the Act of June 30,1885, P. L. 193, which repealed the Act of June 7, 1879, P. L. 112, in so far as it related to manufacturing corporations. In the common pleas it was held, (1) that the defendant had not so clearly shown itself to be a manufacturing corporation as to warrant the court in holding that it was exempt from taxation on its capital stock; (2) that corporations of the kind to which the defendant belonged did not come within the policy of the legislation exempting manufacturing corporations from taxation on their capital stock.

The first finding did not receive the assent of this Court, and it was said, in substance, in the opinion by Williams, J., that the testimony showed that the defendant was a manufacturing corporation. The judgment was affirmed on the second finding, and on the ground stated by Judge Simonton, although other reasons were given, that exemptions from taxation are to he construed strictly, and that electric light companies do not come within the policy of the legislature in enacting section 20 of the act of 1885, which was to encourage manufacturing companies to carry on their business within the limits of the state rather than heyond its borders. In the opinion of this Court it was said that companies performing a quasi-public or municipal function “ are not included in any of the legislation provided for the encouragement and protection of manufacturing corporations, and they have no right to share in the benefits of such legislation. They really form a class by themselves.”

The ground on which the decision is said to rest, the definition of manufacturing companies adopted by the legislature, will not bear the test of the act of 1874 in the light of later decisions, or of the legislative interpretations of the earlier act by more recent ones which are in pari materia. Clause 11 of section 2 of the Act of April 29, 1874, P. L. 73, provides for the incorporation of companies for the manufacture and supply of gas or the supply of light or heat to the public by any other means ; and as amended by the Act of May 8, 1889, P. L. 136, for the supply of light, heat or power by means of electricity or any other means.

In the recent decision of Southern Electric Light & Power Co. v. Philadelphia, 191 Pa. 170, it was said: “ The distinction which is urged between the ‘ manufacture of electricity ’ and ‘ the supplying of it ’ is without force. The power to supply includes the power to manufacture.” Clause 1 of section 34 of the act of 1874 authorizes companies incorporated under it to erect and maintain “ the necessary buildings, machinery and appliances for manufacturing gas, heat or light from coal or other materials; ” and the word “ manufacture ” is used in the Act of May 20, 1891, P. L. 90, which authorizes boroughs to manufacture electricity. The Act of June 25, 1895, P. L. 302, makes it unlawful “ to connect or disconnect electrical conductors belonging to any company engaged in the manufacture and supply of electrical currents for the purpose of light, heat or power.”

What we have said is not intended to affect the decisions in Commonwealth v. Northern Electric Light & Power Co. and Commonwealth v. Edison Electric Light Co., supra. Those eases were properly decided. The reason assigned for the decision in Commonwealth v. Northern Electric Light Co., however, is not satisfactory. Carried to its logical conclusion, as was done in this case by the learned judge who decided it in the common pleas, it leads to a wrong result. Electric light, heat and power companies are manufacturing corporations within the meaning of the act of 1874 and its supplements. They are not exempt from a tax on their capital stock under section 20 of the act of 1885, because they are not within the policy of the legislature in passing that act, and it ivas not intended that they should share in its benefits. They are included, however, with other manufacturing corporations, in the act of May 25, 1878, and the purchasers at a sheriff’s sale of the franchises of such companies are authorized to reorganize as provided by that act.

The judgment is reversed.