181 Ky. 416 | Ky. Ct. App. | 1918
Opinion of the Court by
Overruling motion for an injunction.
The American Tobacco Company instituted this action against the city of Bowling Green, its tax collector and its assessor, seeking to enjoin them from collecting taxes for city purposes for the year 1918 on the raw material, consisting of leaf tobacco, belonging to the plaintiff, and actually on hand at its plant in Bowling Green, Kentucky, and to cancel the assessment and tax bill.
The company claims that its tobacco is not subject to taxation for city purposes under section 4 of chapter 11
“4. All property subject to taxation for state purposes, as provided in section 4020, Kentucky Statutes, shall be subject also to taxation in the county, city, school or other taxing district, in which same has a taxable situs, except the following classes of property, which shall be subject to taxation for state purposes only.
“ (1) Farm implements and farm machinery owned by a person actually engaged in farming and used in his farm operations.
“(2) Machinery and products in course of manufacture of persons, firms or corporations, actually engaged in manufacturing, and their raw material actually on hand at their plants for the purpose of manufacture. ” Acts 1917, Special Session, p. 44.
The plaintiff contended below, and repeats the contention here, that as it is a corporation actually engaged in the manufacture of plug tobacco, chewing tobacco, smoking tobacco, cigarettes, fine cut and possibly other forms of tobacco, its raw material actually on hand at its plant in Bowling Green for the purpose of manufacturing tobacco is exempt under the statute above quoted. The chancellor was of opinion that the manufacturing referred to in the exempting statute meant manufacturing at the place of taxation; and that as the plaintiff did not manufacture tobacco at Bowling Green its tobacco located in that city was subject to taxation. Consequently, the chancellor denied the motion for an injunction, whereupon the plaintiff applied to a judge of the Court of Appeals for an injunction similar to that which was denied it below; and since the case presents an important question of taxation, it has been considered by the whole court, except Judge Hurt, who was absent.
The proof shows the plaintiff to be a manufacturer of plug tobacco, chewing and smoking tobacco, cigarettes, fine-cut, and possibly other kinds of tobacco, having its principal factories for that purpose at Durham, N. C.; Reidsville, N. C.; Richmond, Va.; Baltimore, Md.; Jersey City, N. J.; Milwaukee, Wis., and Louisville, Ky. It manufactures more than a hundred different brands of tobacco, including “Tuxedo” smoking tobacco, at its Louisville, factory. It maintains a tobacco warehouse at Bowling Green, Ky., under the control of a local manager,
Unquestionably the plaintiff is actually engaged in manufacturing tobacco at Durham, N. C., and the other places above mentioned, where its principal factories are located. But does that fact bring them within the exempting provisions of the statute above quoted, which exempts “machinery and products in course of manufacture of . . . corporations actually engaged in manufacturing, and their raw material actually on hand at their plants for the purpose of manufacture?” Clearly the first clause of the second sub-section of the statute above quoted has no application here, since the plaintiff has no machinery or products in course of manufacture at its warehouse in Bowling Green. It has raw material on hand at that plant; but we do not think its plant at Bowling Green can properly be termed a manufacturing plant.
Plaintiff insists, however, that the work done at the Bowling Green warehouse is the initial step in the process of manufacturing the various kinds of tobacco, and that it is therefore exempt, although the intermediate and final acts in the process of manufacturing and turning out the finished product axe performed in places other than Bowling Green.
It is somewhat difficult to formulate a satisfactory definition as to what constitutes manufacturing, from the decisions of the courts, or to say when it begins. In Words and Phrases, Vol. 5, p. 4348, it is said:
“The primary meaning of the word ‘manufacturing’ is something made by hand as distinguished from a natu
The generic meaning of the term “manufacture,” is “made by hand,” but in the development of business manufacturing has come largely to mean a process of making things by machinery. But there is no hard and fast rule which can be applied generally; each case must be decided under its own facts and with a view of carrying out the intention of the legislature by giving a reasonable interpretation to the statute involved. Thus, in In Re Troy Steam Laundering Company, 132 Fed., 266, where the laundering company was engaged chiefly in taking collars and cuffs from the companies that manufactured them and putting the final polish on the collars and' cuffs before they were sold as a part of the completed garment, it was held that the laundering company was engaged in manufacturing. But where a steam laundering company receives the soiled collars and cuffs from a customer for the purpose of washing and ironing them, can it be said that it is then engaged in manufacturing? Clearly not, although the two processes are substantially identical. Muir v. Samuels, 23 Ky. L. R. 14, 62 S. W. 481.
In Bogard v. Tyler’s Admr., 21 Ky. L. R. 1452, 55 S. W. 709, it was held that a saw mill at which lumber was
In State v. American Sugar Refining Company, 108 La., 603, it was held that a sugar .refiner was a manufacturer, the court there approving the following definitions given in other cases:
“A manufacturer is not one who creates out of nothing, for that would surpass human power. Neither is he one who produces a n,ew article out of materials entirely raw. He is one who gives new shapes, new qualities, new combinations, to matter which has already gone through some artificial process. City v. LeBlanc, 34 La. Ann. 597.”
“A manufacturer is defined to be one who is engaged in the business of working raw materials'into wares suitable for use, who gives new shapes, new qualities, new combinations to matter which has already gone through some artificial process. City v. Ernst, 35 La. Ann. 746.
“The word manufacture means the making of anything by hand or artifice. Railroad Co. v. Fulghaus, 91 Ala. 555.”
These and many similar cases have been cited by plaintiff for the purpose of showing that the “curing” of its tobacco in its Bowling Green plant is the initial step in, and a part of, the process of manufacture. If that be true, it might well be argued that the plaintiff’s raw material is exempt from taxation under the letter of the statute of 1917. But, in construing statutes their words and phrases are to be construed and understood according to the common and approved usage of language. Ky. Sts. sec. 460. Moreover, exemption provisions must be strictly construed, and no one will be exempted from bearing his share of the public burdens unless the exemption be clearly given. Applying these rules to the case before us, we are of opinion that the phrase ‘ ‘ actually engaged in manufacturing, ’ ’ and ‘ ‘ actually on hand at their plants for the purpose of manufacture, ’ ’ mean manufacturing at the place of taxation, and not at some other place.
This conclusion is supported by a consideration of other provisions of the statute. Thus, it will be observed that the statute deals also with farming implements and farm machinery, and places such implements and machinery in the class of property which shall not be taxed for local purposes, when “owned by a person actually engaged in farming and used in his farm operations.”. It would hardly be contended that farming implements or farm machinery owned by a resident of Bowling Green and used in farming operations in a different county should be relieved from the burden of local taxation.
So the case is reduced to this proposition: Is the handling of plaintiff’s tobacco in Bowling. Green in the