Opinion
07-11-1893
In re CONSOLIDATED ELECTRIC STORAGE CO.
W. Y. Johnson, Asst. Atty. Gen., for the State. Henry Weston, for defendant.
Petition by the state, at the relation of the attorney general, to restrain the Consolidated Electric Storage Company from exercising its corporate franchises without payment of certain taxes. Petition dismissed.
W. Y. Johnson, Asst. Atty. Gen., for the State.
Henry Weston, for defendant.
BIRD, V. C. Since the case of In re Electro-Pneumatic Transit Co., (N. J. Ch.) 26 Atl. Rep. 463, it seems to me quite plain that the questions involved in this controversyshould have been determined in a court of law. 1 came to the conclusion, upon a careful consideration of the law, in that case, that the only province of this court, in issuing an injunction, is to act in aid of the courts of law. The court of law first settles and determines the rights of the parties, fixes the amount that each company is liable to be assessed for, and proceeds to execute the judgment rendered, in every case; and in cases of a failure to make the tax by the ordinary process, in such cases, then the aid of this court may be invoked by injunction. It is my conclusion that this court has no other or further jurisdiction. But, upon the opening of this case before me, 1 understood that these conclusions were admitted, but that neither side would raise the question of jurisdiction.
That the defendant in this case is a manufacturing company, admits of no dispute; but it is seriously questioned whether or not, under all the circumstances of the case, it comes within the purview of the supplement of the act of April 18, 1884, which supplement was passed March 16, 1891. Previous to the passage of the supplement, it was subjected to a tax of one-tenth of 1 percent. upon the whole amount of its capital stock, unless it was actually engaged in the business of manufacturing in this state. The supplement provides that, in case such manufacturing company has 50 per cent. of its capital stock employed in the business of manufacturing, then it shall be exempt from such taxation. That this company has 50 per cent. of its capital stock employed in its business in this state is admitted; the insistment being that the whole amount of 50 per cent. is not in reality employed in the business of manufacturing, within the true meaning of the supplement. Among other things, the certificate filed by the company, with the view of becoming organized, shows that its object was not only "the manufacturing, dealing in, furnishing, and supplying of electricity, light, heat, and power, and the manufacturing, using, and selling, and leasing and licensing to others the right to manufacture, use, and sell, electrical accumulators or storage batteries, electric motors, gearing, regulators, and dynamos, switches, lamps, electrical devices for lighting, heating, and power, and all electrical machinery and apparatus that may be required for electric traction, electrical lighting, electric power, or other uses in connection with electricity, but also the manufacture, furnishing, and supplying of electric street and railway cars, vehicles, and vessels, and their equipments, and the purchase, sale, and exchange thereof; to install systems of electric or street railways or modes of transportation on land and water, and to transport goods, persons, and merchandise by land and water, by means of electric traction, or electricity in any other form. And also manufacturing electricity, and supplying of the same through appropriate conductors. And also the business of contracting to build, construct, and equip railways, manufactories, buildings, cars, vehicles, and vessels, and other works or improvements, and to operate the same, within the states and territories, or either of them; to build, construct, complete, or cause to be built, constructed, and completed, all kinds of railways, manufactories, buildings, cars, vehicles, and vessels, and other works of improvement and construction, for any person, corporation, or body politic. And also the carrying on of any and all business in any wise appertaining to, or connected with, the manufacturing, distribution, and furnishing of electricity for heating, power, and light purposes, including the transaction of any and all business in which electricity, gas,—artificial or natural,—or steam, is now or hereafter may be utilized, and all matters incidental or necessary to the distribution of light, best, and power, or the cause and manner of, or means by which, light, heat, and power are, or may hereafter be, produced, conducted, or utilized. Also, the production, sale, and supply of all and every kind of light, heat, and power, by means of electricity, in every way, manner, and by every means, not prohibited by the laws of the state of New Jersey." Reading that which has just been quoted shows to the mind that three distinct kinds of business are provided for, namely, that of manufacturing, that of building, and that of transporting or carrying. As I understood the brief of counsel in behalf of the state, the argument is that this corporation has no constitutional grounds to rest upon, because it attempts to secure protection for these different kinds of vocation under and by virtue of a single franchise. As the case stands before me, I think it is not necessary that the question thus presented should be discussed. There is nothing to establish the fact that the company claiming the benefit of this franchise is engaged in more than one kind of business, namely, that of manufacturing. It will be time enough to determine what foundation a corporation has to rest upon, who has filed such a certificate as this, when it is engaged in two or more kinds of business enumerated in such certificate. In this case the company has been assessed, and, I believe, for one year prior to the passage of the supplement in question, paid the assessment imposed. In this respect the state authorities have recognized its legal existence, and have accepted the burdens imposed by the granting of the charter.
The only question which I shall pass upon is the one first suggested,—whether or not the company has in reality 50 per cent. of its capital stock invested in manufacturing in this state. The testimony shows that it issued $3,000,000 worth of stock, and invested all of it, but about $40,000 worth, in patent rights, which patents are used in the manufacture of electrical dynamos, and other apparatus necessary for the storage, use, or application of electricity to the various purposes named in the certificate. The fact that a portion of the capital stock referred to may be employed in disposing of the manufactured product cannot, by any means, be objected to in estimating the capital stock actually employed in manufacturing. It cannot be conceived that men would,engage in the manufacture of goods of any kind, if they were not permitted to make disposition of them. The object of the act is to encourage, within our borders, every sort of legitimate industry; but to what purpose does the sun shine, the rains descend, or the dews distill, if the products of the earth are not to be harvested and marketed? So why should the paternal hand give favor, or encourage classes of individuals to employ their capital, and exert their ingenuity, skill, and labor, if the productions thereof are not to be utilized by them? I do not mean to say that the legislature intended to be so liberal as to allow the genius of mankind to assume the business of manufacturing, with the intent and purpose of carrying on merchandising; but, till the latter has been established, it must be presumed that the former was honestly engaged in. Before the court can declare that this corporation is engaged in building railroads, or in transporting freight thereon, so as to subject it to taxation, it must appear in proof that it is engaged in one or both of such enterprises, unless it be insisted that it has a franchise for such purpose, and that corporations enjoying such franchises are not exempt from taxation, and that, therefore, this company being exempt, on the one hand, because it is a corporation with 50 per cent. of its capital stock invested in that business, it is nevertheless liable to be assessed because it is also a corporation enjoying the right and privilege of franchise of building railroads, and of transporting freight thereon, to which I have not, because not necessary, turned my attention. 1 think the petition in this case should be dismissed.