206 Wis. 489 | Wis. | 1932
The plaintiff was organized on the 27th of August, 1923, as a private corporation with a capital stock of $25,000. All of its stock is owned by the Ford Motor Company except three qualifying shares owned by Edsel B. Ford, Henry Ford, and B. J. Craig. Prior'to the organization of the plaintiff company the. Ford Motor Company purchased a dam site and other lands for flowage purposes in the town of Aurora, bordering on the Menominee river and extending to the middle of this river. At the same time the Ford Motor Company purchased a dam site and other lands for flowage purposes in Dickinson county, Michigan, across the river from the Wisconsin site. After the organization of the plaintiff company the Ford Motor Company conveyed to it the dam site and flowage rights on the Wisconsin side of the river in return for the issuance of its' stock to the Ford Motor Company. It became necessary thereafter to acquire other lands for flowage purposes, and being unable to secure the necessary lands by negotiations, the plaintiff, in 1924, for the purpose of securing to itself the right of condemnation, amended its articles to include in its powers and purposes the “acquiring, owning, leasing, holding, and disposing of any lands, properties, water-power sites, waterpower rights, and such transportation facilities within or without the state of Wisconsin,” and “securing flowage rights and obtaining the necessary permits or licenses required in connection with or involving the objects herein contained; and the production, transmission, delivering, and furnishing of electric light, heat, and power directly or indirectly to and for the public, which, said business is to be carried on within the state of Wisconsin, and especially within the county of Florence, in said state.” The power house and a portion of the dam site on the Michigan side of the Menominee river were leased to the plaintiff company from year to year by the Ford Motor Company. The plaintiff company operates one power line extending from the power house in the state of Michigan to the Ford Motor
On the 24th of December, 1925, the Railroad Commission of Wisconsin issued to the plaintiff company a certificate of authority to issue certificates of stock, and thereafter the plaintiff made annual reports to the Railroad Commission but did not file with the commission a schedule of rates. None of its reports to the Tax Commission shows either profit or loss from the operation, and all of the correspondence between the Tax Commission and the plaintiff was written upon stationery of the Ford Motor Company.
From 1924 to 1929 the Tax Commission of Wisconsin valued the property of the plaintiff company and certified the
The validity of the tax depends upon whether the plaintiff company falls within the provisions of sec. 76.02 (5) of the Statutes, which is as follows :
“Any person, association, company or corporation engaged in this state in any of the businesses enumerated in paragraphs (a) to (e) of this subsection, excepting only business enterprises carried on exclusively for the private use of the person, association, company or corporation engaged therein, whose property extends into two or more assessment districts shall be deemed a light, heat and power company.
“(a) . . .
“(b) ...
“(c) Generating, transforming, transmitting or furnishing electric current for light, heat or power;
“(d) . . .
“(e) ...
“The property, both real and personal, including all rights, franchises and privileges used in and necessary to the prosecution of the business of a light, heat and power company shall be deemed personal property for the purposes of taxation and shall be valued and assessed together ag a single item. . . .”
Ch. 76 is entitled “Taxation of Public Utilities and Insurance Companies.” The whole context of the chapter indicates that its application is intended to be limited to public utilities. .Hence it must be determined whether plaintiff company is a public utility. The first contention of the appellant is that the purpose clause of its articles unequivocally makes it a public utility. Citation is made to In re De Peyster’s Estate, 210 N. Y. 216, 104 N. E. 714, in which the court there said:
“It was quite unnecessary in this case for the purpose of construing the act of incorporation to inquire what had been done under it by its incorporators. Its purpose, as expressed, needs no explanation or interpretation.”
The conclusion in that case was that “the purpose of the corporation as stated in the act pf incorporation and its bylaws is clear and unambiguous” and is final and conclusive. But in that case the object of inquiry was the corporate purposed It was held that evidence that-the corporation had gone beyond its powers was not admissible to show that it was organized for purposes other than those stated in the purpose clause.
The powers and purposes of a corporation are one thing, and whether it is a public utility is quite a different thing.
“The plaintiff is a Virginia corporation authorized by its charter, with copious verbiage, to build, buy, sell, let and operate automobiles, taxicabs, and other vehicles, and to carry passengers and goods by such vehicles; but not to exercise any of the powers of a public service corporation. It does business in the District, and the important thing is what it does, not what its charter says.”
The court then proceeds to hold that in certain of its activities it is a common carrier subject to the jurisdiction of the public utility commission.
In State ex rel. M. O. Danciger & Co. v. Public Service Comm. 275 Mo. 483, 205 S. W. 36, it is said:
“In determining whether a corporation is or is not a public utility, the important thing is not what its charter says it may do, but what it actually does. In short, if the things*496 done constitute the corporation a public service company, it ought not to be, and will not be, heard to urge its own wrongful aggressions in order to escape regulation.”
It is next contended that the mere fact that a plant has only one customer or a few customers does not prevent it from being a public utility, provided the plant is built and operated for furnishing power to the public generally. To this proposition Cawker v. Meyer, 147 Wis. 320, 133 N. W. 157, is cited. In that case it appeared that the plaintiffs had built a plant for the purpose of furnishing the tenants of their own building with heat, light, and power; that the completed plant proved to be large enough, when economically run, to furnish more heat, light, and power than the tenants of their own building required, and that they sold the surplus to three of their adjoining neighbors. The court held that the plaintiffs did not thereby become a public utility. “It was not the furnishing of heat, light, or power to tenants, or, incidentally, to a few neighbors that the legislature sought to regulate, but the furnishing of those commodities to the public, that is, to whoever might require the same.” The court says: “The use to which the plant, equipment, or some portion thereof is put must be for the public in order to constitute it a public utility.” It is stated, however, that “whether or not the use is for the public does not necessarily depend upon the number of consumers; for there may be only one, and yet the use be for the public — as where a plant is built and operated for furnishing power to the public generally, but for a time finds one consumer who uses it all. If the product of the plant is intended for and open to the use of all the members of the public who may require it, to the extent of its capacity, the fact that only one or two thereof consume the entire product renders the plant none the less a public utility.”
This case furnishes the test to be applied in ascertaining whether plaintiff was a public utility. The fact that it serves
It is also contended that the mere fact that as yet no public services have been performed does not militate against the conclusion that plaintiff is a public utility company. In Kilbourn City v. Southern Wis. Power Co. 149 Wis. 168, 135 N. W. 499, it was held that it is not necessary that service by such corporation shall actually begin before its duties and liabilities as such arise or are imposed. Otherwise, it is pointed out, it might contract prior to actual service to evade the law as to uniformity of rates. This case is cited with approval in Wisconsin T., L., H. & P. Co. v.
It is further contended that the plaintiff, by entering the field of furnishing and selling water power created by a dam upon a navigable stream, dedicated such water power to the public use and thereby became a public utility. In In re Southern Wis. Power Co. 140 Wis. 245, 122 N. W. 801, the court said:
“Where a dam is constructed in a navigable stream in aid of navigation, the purpose of its construction is public, and also that the taking of property for the generation of electric power for the purpose of sale is a taking of property for a public purpose.”
See, also, Wisconsin T., L., H. & P. Co. v. Green Bay & M. C. Co., cited supra; Wisconsin River Imp. Co. v. Pier, 137 Wis. 325, 118 N. W. 857.
Citation is also made to sec. 31.27, Stats., which provides that “upon complaint by any party affected, setting forth that any grantee of a permit to develop hydraulic power and generate hydro-electric energy for sale or service to the public is not furnishing citizens of this state with adequate service at a reasonable rate in consequence of sales of such energy outside of the state, the commission shall have power to declare any or all contracts entered into by said grantee for such sales null and void in so far as they interfere with such service or rate.”
While this contention may lead to the conclusion that a user of water power, may be compelled to enter the public utility field and to furnish power at reasonable rates to citi
An examination of the provisions of sub. (5), sec. 76.02, fortifies the conclusion heretofore reached. That subdivision provides: “Any person, association, company or corporation engaged in this state in . . . (c) generating, transforming, transmitting or furnishing electric current for light, heat or power.” The plaintiff is engaged in none of these businesses in this state, in the sense that it is furnishing light, heat, and power to the residents of Wisconsin, or maintaining any facilities for that purpose. It is extremely unlikely that the legislature intended to tax as a utility a light, heat, and power company which did not serve a single Wisconsin customer, and in whose rates and service the people of Wisconsin had not the slightest present interest! Further than this, sub. (5) exempts from its operation business enterprises carried on exclusively for the private use of the person, association, company, or corporation engaged therein. While,' literally speaking, the plaintiff company is as distinct from the Ford Company as one person is from another, and while technically it occupies the position of a vendor of power to the Ford Company, it must be considered, if we are permitted to look to the substance rather than to the form, that the plaintiff company is the Ford Motor Company and is operated solely for its use and benefit. The facts supporting this conclusion have heretofore been set out, and it is unnecessary to repeat them. It is contended by the plaintiff that any attempt to identify the plaintiff with the Ford Motor Company constitutes a collateral attack upon the corporate franchise of the plaintiff. We think this is not sound. No claim is made that the plaintiff has not the power to become a public utility. It is simply
In Miller v. Wis. Tax Comm. 195 Wis. 219, 221, 217 N. W. 568, the plaintiff organized a corporation and transferred his property to this corporation, in retúrn for a transfer of its stock to him. The question was whether he had thereby made a sale of his property in such a way as to subject him to an income tax, and it was held that he had not; that the court might look to the substance of the transaction, and that by reason of the transaction his interest in the property was .simply evidenced by a different muniment of title. His interest in and control over the property remained the same. It was concluded that there had been no sale which could be made the basis of an income tax._ The reasoning of this case applies to the present situation.
It is our conclusion that plaintiff was subject to local taxation: first, because it is not presently a public utility; second, because it is not engaged in this state in the light, heat, and power business; and third, because there is such an identity between the Ford Motor, Company and the plaintiff as to lead to the conclusion that' in substance the two corporations are the same, and that the business of the plaintiff is carried on exclusively for the benefit of itself, within the meaning of sub. (5), sec. 76.02.
The final question is whether the assessment was void because of the fact that the tax levied by the town was er
For this reason the judgment of the trial court must be reversed.
By the Court. — Judgment reversed, and cause remanded with directions to enter judgment in accordance with the demand of the complaint.