32 P.2d 8 | Mont. | 1934
Citing: City of Lexington v. Lexington Leader,
If we understand plaintiff's position correctly, it claims that the words "manufacturing machinery" mean machinery which is actually used in the business of manufacturing. We contend that "manufacturing machinery" should be given a broader interpretation for the reason that, if it had been the intention of the legislature to confine assessments in Class 2 to machinery used in the business of manufacturing, the legislature would have said so. We make this statement with full appreciation of the rule laid down in Chicago etc. Ry. Co. v. Powell County,
Contending that this property properly falls within class 2, which would render it taxable at 20 per cent. of its actual value, the plaintiff exhausted its statutory remedies, paid the first half of the 1932 taxes under protest, and instituted timely action for the recovery of the alleged excess payment, or $245.67. A trial before the court, without a jury, resulted in a judgment in favor of the defendant. The plaintiff has appealed from the judgment and assigns numerous errors, predicated upon the findings of fact and conclusion of law made and filed, but raising the sole question as to the proper classification of the property in dispute.
Section 1999, above, provides that: "For the purpose of taxation the taxable property in this state shall be classified as follows: * * * Class Two. * * * All agricultural and other tools, implements and machinery, gas and other engines and boilers * * * Class Three. Livestock, * * * agricultural products; stocks of merchandise of all sorts * * *. Class Four. * * * Manufacturing and mining machinery, fixtures and supplies * * *."
The property under consideration consists of "6 Marine type coal burning boilers, * * *; 2 Westinghouse electrical *570 engines and generators combined, 2 Watertown electric generators and engines combined; 2 air compressors; several water pumps and fittings * * *."
All of this property constitutes a part of the plaintiff's repair-shops at Miles City, and is used primarily for the repair and maintenance of the rolling stock of the railroad. By the use of coal as fuel, the boilers produce steam power by which the electric generators are operated to produce electric current for the propulsion of the machinery in the repair-shops. The business of the plaintiff is transportation, and all of its activities are but necessary adjuncts to that business; while the shops occasionally "manufacture" a part of the replacement or breakage, the company manufactures nothing to be marketed.
While there are cases holding that electricity is a produce of[1, 2] nature and its generation by the use of power is but the conversion of one form of energy into another and not the manufacture of an article of trade. (In re Hudson River ElectricPower Co., (D.C.) 173 Fed. 934, affirmed (C.C.A.) 183 Fed. 701, 33 L.R.A. (n.s.) 454, and cases cited), the electricity which exists in nature is not subject to use; the current which will cause the wheels of industry to turn, or will light a city, must be produced by the employment of labor and machinery and is, therefore, generally said to be manufactured. (Utah Power Light Co. v. Pfost,
It follows that machinery capable of being used for, and actually used in, the generation of electricity as a business, falls within the designation of "manufacturing * * * machinery"; but, regardless of what specific machinery might *571
be used for, it is the use to which it is actually devoted that controls for purposes of taxation. (Barnard Realty Co. v. Cityof Butte,
Evidence was adduced to the effect that the machinery and the uses to which it was put was identical at Miles City with that at Deer Lodge, held to belong in Class 2 in the Powell CountyCase, above, with the exception that the generators at Deer Lodge were operated by electricity furnished by the Montana Power Company. It is immaterial to the question here considered whether the machinery used in the shops for the maintenance and repair of the rolling stock is powered by the use of energy purchased from the Power Company, or by coal purchased elsewhere; as a witness in the Powell County Case aptly phrased it: It is immaterial whether "white coal" (electricity) or black coal furnishes the power to drive the motors to run the generators.
In like manner you "manufacture" electricity by the operation of an internal combustion motor whenever you run your automobile, but in neither case is the manufacturing of the commodity the purpose of the operation; it is but a means to the end. "The use to which the property is devoted," in the case of your car, is locomotion, travel; in the case of the railroad shops, "the repair and maintenance" of their means of transportation. *572
However, it appears in evidence here that an incidental use of the electricity generated is the lighting of the shops where the work is done, and the lighting of the yards, depot, and offices of the company at Miles City — a use not mentioned in the PowellCounty Case. While this use of the electricity saves the company the expense of purchasing electricity from some company engaged in the business of manufacturing electricity for sale, it has no "productivity"; the electricity so used is not generated with the idea of profit, and none of it is marketed. On this phase of the case, the operation is no different than that of the farmer who installs a Delco system for the lighting of his home and farm buildings.
The word "manufacturing" is not a technical word, but has a[3, 4] "common, ordinary meaning." (Sharpe v. Hasey,
The clear intention of the legislature is that machinery used in the business of manufacturing, "manufacturing machinery," and machinery used in carrying on mining operations, "mining[5] machinery," should fall within "Class 4," while tools, implements and machinery employed as an aid to the operation of a business not devoted to the manufacture of any article of trade should be placed in "Class 2."
The judgment is reversed and the cause remanded to the district court of Custer county, with direction to enter judgment in favor of the plaintiff.
MR. CHIEF JUSTICE CALLAWAY and ASSOCIATE JUSTICES ANGSTMAN, STEWART and ANDERSON concur.