*1
those circumstances
property,
it was
or a seizure
person
against
the person
termination
favor of
coupled with
rise to a cause
brought
gave
the suit was
whom
process.
use of civil
action for malicious
Lud-
against
lawsuit
Nernberg
underlying
filed the
When
make him
time could not
mer,
actions he took at that
process
use of civil
even
to a suit for malicious
subject
This
terminate in favor of Ludmer.
may
his suit
though
malice.
brought
if he
the suit with
was true even
unfounded, cannot
suit,
malicious or
mere
however
“[A]
If a
damages.
of an action
ground
made the
seized,
is unim-
or his
property
not arrested
person be
be; as
may
unfounded the action
how futile and
portant
law,
is punished
in consideration of
plaintiff,
of costs.”
payment
Walter,
(1870).
Mayer 8351) (42 I that the statute Pa.C.S.A. Although believe as an essen- requirement the arrest or seizure eliminating long of action wise and tial elemént of the cause was nonetheless, overdue, it, underlying does not to the apply to its enactment. prior in this case which was initiated suit Superior I of the Court would reverse Order sustaining Nern- of the lower court reinstate Order objections. berg’s preliminary A.2d 928 INC., ROUNDTOP, Appellant, v. SKI Pennsylvania, Appellee. COMMONWEALTH Pennsylvania. Supreme Argued May 1988.
Decided 1989. Feb. *2 Hershner, York, Ronald L. appellant. for Barbin, Gen., E. for Bryan Deputy Atty. appellee. NIX, C.J., LARSEN, FLAHERTY, Before McDERMOTT, ZAPPALA, PAPADAKOS, STOUT, JJ. THE
OPINION ANNOUNCING JUDGMENT OF THE COURT FLAHERTY, Justice.
Pennsylvania imposes capital upon stock tax certain entities, from exempts “orga- business but taxation those develop- or manufacturing, processing, for research nized 4, of March The Stock Tax Act purposes____” Capital ment 2, VI, 7602. P.L. No. art. 72 P.S. § Roundtop, in this case is whether Ski presented issue capital exempted should be from taxpayer, partially theory manufacturing exemption tax under stock its are used some of taxable assets otherwise manufacturing process. through 1979. years
The taxes at issue concern the
these
Roundtop paid
years,
its
stock taxes for
capital
Ski
refunds,
partial
filed
for
timely petitions
but
thereafter
en-
for
snow were
claiming
making
that the assets used
were, therefore,
manufacturing activity
in a
gaged
tax. The Board of Finance
exempt
capital
from
stock
for refund on
taxpayer’s petition
refused the
and Revenue
manufacturing.
is not
Ski
ground
making
snow
filed
Com-
timely petitions
then
review with
Roundtop
*3
15,1987, a
of
three-judge panel
Court.
June
monwealth
On
for
request
Commonwealth Court denied the
taxpayer’s
refund,
snow-making activity
on
is
again
ground
the
manufacturing,
trained workers walk the adjustments trails and make guns snow so as to direct the correct amount and placement snow, snow trails. Different types e.g., heavy, snow, dense or light snow fluffy pro- be may in guns, duced the snow depending on what is required by the steepness and condition of the various slopes. Ski Roundtop management amount, decides placement, and timing of artificial produced snow machines. Approximately one gallons million of water are used in a full day’s operation, in large addition to amounts of electric- ity to run compressors pumps.
Although the manufacturing exemption from the capital stock tax has been for existence nearly years, 100 it is not defined. statutorily turn, therefore, We must understanding caselaw an of the term. The defini tion of “manufacturing” used our caselaw has been well summarized in Bindex Corp. City Pittsburgh, 584, 587-88, Pa. (1984): 475 A.2d In Philadelphia School District v. Parent Metal Prod- ucts, Inc., we [stated] “manufacturing”: ...
... in the application labor skill to material [c]onsists whereby original is changed new, article into a different and useful article ... or Whether not an article ais manufactured product depends upon wheth- gone er or not it through has a substantial transforma- form, tion in qualities and adaptability in use from the original material, so that a new article or creation has If emerged merely superficial ... there change in materials, any without substantial and well *4 signalized inform [sic], qualities transformation and use, adaptability in it is not a new article or new product ...
Id., at
[******] evident, As is the the concept underlying definition is the things transformation of material or into something dif- ferent from that received. difference cannot be a change thing. does not alter or change that superficial change performed merely a cosmetic example, For or storing, packing ship- of handling, facilitate the ease constitute manufac- or material does not ping product materials or is that the basic turing. required What producer, a new the current goods given identity by be This producer. traced to such easily one which can be and labor. Skill of skill identity product must be one education, learning, knowledge or experience involves business, profession; trade or acquires particular a methods characteristics physical while labor is labor is used employ utilized to one’s skills. When product a different than produce with skill to conjunction manufacturing a new has original, identity, one with occurred. omitted.)
(Footnote Bindex preceded the cases it can be summa- which (1) following: application rized labor requiring (4) (3) changes substantially skill a material which new, different and useful item. into a argues only that because snow is
The Commonwealth water, undergone a state of the water has not temporary a has oc manufacturing and thus no change, substantial Co., v. American Ice citing Commonwealth curred, in American Ice (1962). The stated: originally is still it was
Ice is not a new article.
It
what
fact,
in a
In
if it is allowed to remain
warm
—water.
human or
any
it reverts to water without
temperature
of any
This cannot be said
interposition.
mechanical
a manufactured
generally accepted
be
product which
or a chair.
It
A
or a chair remains
table
product.
table
wood,
abuse,
kindling
reduced to
use or
may, through
tree____
new
goes
being
back
but
never
[T]he
in manufactured article must be a
find
shape which we
stated,
As
water
at
shape.
already
may
new
permanently
making
form.
If the
to its
any moment revert
*5
ice
se
per
constituted manufacture then it could be said
that
Arctic Zone is a
ice factory.
vast
Id.,
329-30,
Ski Roundtop, other argues that its snow- making activity significantly different from ice-making, and that it has met the criteria mentioned earlier for manu- facturing. respect criteria, With to manufacturing Com- monwealth Roundtop Court found that Ski applied the req- uisite skill and labor the snow-making activity, but that the snow produced by this not activity was product new different substantially material, from the original which Commonwealth Court identified as water: “the essential Roundtop’s fact is that man-made snow is still frozen only water.” agree
We with Commonwealth Court that Ski Roundtop’s snow-making activity requires skill and labor. The skill knowledge involves a of meteorological conditions, of the functioning of pressurized snow-making and of machinery, timing use this machinery respect to weath- er slope conditions. The labor consists of mainte- nance and operation machinery way such a that cooled, pressurized air and water mixture forms snowf- lakes, and in directing the snow to will areas where it useful skiers. however, disagree,
We the original material from which the made taxpayer’s only snow is water. Without pressurized air, proper cooled then temperature and depressurized water, as isit mixed with the snow could not view, therefore, air, be made. It is our as pressurized though not physically, which is water, is a material well snow. produce water to chemically, combined with air, therefore, materials, pressurized water and are not alone. water *6 identify one must is because significant
This conclusion product one used to make before original the materials substantially are these materials can determine whether different use has a new and product into a which changed relates to whether materials. It also original from the ice such that is a form of essentially taxpayer’s product concerning cases by prior is controlled taxpayer’s activity ice-making. snow taxpayer’s that question, the first we believe
As to is from which it from the materials substantially is different air, if they on glide Skiers cannot made, air and water. water, descending not while skis on it would use their that man- inescapable seems mountain. The conclusion mate- changed from its substantially made snow is for resulting material suitable way rials in such a that from it from the materials which use a new and different was made. this case is controlled of whether
Concerning question Ice was that Ice, the rationale American by American skill, not activity require did taxpayer’s ice-making regarded not product secondly, that —ice—was retain its form ice does not article because manufactured distinguishable from present case is permanently. required, skill to the labor and respect American Ice snow-making taxpayer’s that the determined since we have labor, it is not skill and but requisite activity involves prod- of the respect permanency distinguishable with therefore, question, Our Both ice and snow melt. uct. re- non-permanent quality snow becomes whether product. not a manufactured us to conclude quires requirement perma- added the Although American Ice had other- manufacturing definition of which to the nency decades, can dis- unaltered for we substantially wise been in fact or either requirement this new cern no basis for logic. Many items which would be commonly understood as manufactured, cream, such as ice are impermanent. More- over, in Rieck-McJunkin Dairy Co. v. Pittsburgh School District, (1949), this Court expressly ice held that cream making manufacturing.1 We reject, therefore, the notion products that manufactured must be permanent, conclude, and we since the taxpayer’s snow- making activity meets all of the other requirements manufacturing, taxpayer’s snow-making activity is manufacturing.
Reversed and remanded to the Board of Finance and Review for a calculation and refund of the taxpayer’s overpayment of capital stock taxes the appropriate years.2
NIX, C.J., files a concurring opinion is joined which PAPADAKOS, J. *7 LARSEN, J., joins Opinion the Majority and files a concurring opinion. J.,
McDERMOTT, files dissenting a opinion which is ZAPPALA, joined by J.
NIX, Justice, Chief concurring.
Any to inquiry as the of applicability exemption an must begin with the recognition underlying that all tax exemp- 1. The Commonwealth attempts distinguish to Rieck-McJunkin from present by pointing the mixture true, case out that melted ice cream of consists components, single component. Although of not a this is nothing it permanence, has to do with the notion of since both Furthermore, impermanent. ice cream and snow are it does not snow, cream, taxpayer's account for the fact that like ice is also composed viz., component: pressurized of one more than air only water. The snow, therefore, difference between melted ice cream and melted component parts is that the of melted snow do not all liquid pressurized manifest themselves in escapes form. The air gas. ambiguity 2. application Because there is no the in of the facts of this legal manufacturing, case the of definition we need not address the claims, earlier, Commonwealth’s sumptions pre- other mentioned which concern applied to be squarely where the facts of the case do not fit Here, requirements. into the relevant definitional taxpayer's the clearly manufacturing, activities legislative are so considerations of purpose ambiguous and construction of terms or facts are irrelevant.
235
Appeal
See
origin.
statutory
tions must be traceable to
Pittsburgh, 383
Men’s Christian Association
Young
of
of
(1955)
the
176,
(affirming
opinion
117
743
Pa.
A.2d
186).
statutory
D
at 4 Pa. & C.2d
reported
court below
Tax Act
Capital
in
origin in this instance
found
Stock
602,
2,
VI,
72
4, 1971, P.L. No.
art.
P.S.
of March
§
§
the limita-
acting within
only
legislature,
Since
7602.
Constitution,
to determine what
empowered
tions of
shall
be
subject
shall
to taxation
what
property
Authori-
Municipal
County
Southwest Delaware
immune,
(1964),
are
Pa.
198
867
courts
Tp.,
Aston
413
A.2d
ty
scheme.
legislative
to the
strictly
constrained
adhere
creating
in
has come
legislature,
what
Unfortunately
failed to
exemption”,
“manufacturing
to be known as the
as used in
“manufacturing”
term
offer its definition
void,
attempted
this
1961
fill the
this context. To
Philadel
purpose.
definition
this
a workable
supply
Inc.,
Products,
v. Parent Metal
phia School District
(1961).
legislature
Since the
has not
Pa.
meaning
intended
term
seen fit to further
its
clarify
Products, Inc.,
Metal
Parent
our definition offered
since
given therein
it
assumed that the definition
may properly be
re
e.g.,
In Obrado
See
intention.
comports
legislative
342, 126
(“[I]t
A.2d
Appeal,
vich’s
legislation as
exists
the function of a court to construe
therein it
legislature
changes
and for the
to enact whatever
desirable____”). The
of that definition is
may deem
essence
whereby
labor or skill to material
application
“the
new,
changed
article is
into
different
useful
*8
Products,
Inc.,
The clearly is “different” and “useful” appeal in this applied article under the Parent Products, Metal Inc. test. more question difficult is whether it a “new” substance within the criteria established. Clearly the housewife who trays fills the ice places them in refrigerator to have ice available in the morning is not in engaged manu- facturing ice. While the ice resulting is the water in a form, “different” it has not undergone a substantial trans- formation as would justify concluding product that “new” had been It true, created. as Mr. Justice McDermott argues, that snow is an but altered form of water. The distinction is as Mr. Justice Flaherty suggests, that sophistication involved in the process altering the form provides key. I agree also that the perma- element of nency supplied by our Court in Commonwealth v. Ameri- Co., can Ice (1962), was an unfortunate not gratuity by warranted lan- statutory guage. I
Finally, am opinion constrained to note that the of Mr. Flaherty Justice speaking for the Court does not reflect an adoption of the “flexible approach” urged Mr. by Justice Larsen since his dissenting in Triangle Golden opinion Inc., Broadcasting, City Pittsburgh, 1147, 1152 (Larsen A.2d dissenting, joined by Mr. Manderino). Justice This view urges essence that we as a adopt rule of the principle “any thumb doubts concerning appellants’ the status of activity must be re appellants.” solved in favor of As previously discussed herein, it is responsibility our to strictly carry out statutory mandate. Having meaning determined the of the term “manufacturing” accepted which has been by legisla ture, as evidenced their inaction since 1961 to offer any attempt change it, modify or we are bound it apply each case without suggestion modification. The well meaning established manufacturing should be ad justed on a case-to-case satisfy basis to a perceived legisla manufacturing is, tive intent to foster in my opinion, juris If prudentially unsound. the established definition does not intent, conform legislative the responsibility of the legislature adjustment. to make that
237 herein, of opinion I expressed join For the reasons Mr. by Flaherty. authored Justice concurring PAPADAKOS, J., opinion. in this joins LARSEN, Justice, concurring. I to separately
I of the but write join opinion majority, adopted approach the flexible my colleagues note that have Inc. Broadcasting, Triangle Golden in espoused I which A.2d 1147 483 397 City Pittsburgh, J., (Larsen, dissenting). Tax En- concerned the Local Triangle
The Golden case Act, 31, 1965, P.L. Act of December abling § (1972), and the term “manu- application P.S. of those in the radio tele- facturing” to the activities I have held that such broadcasting would industry. vision thereof, manufacturing, in support activity constituted I stated: placed limitation important to remember that the
[I]t to authority tax intended legislature City’s manufacturing in this encourage growth of Com- to courts, development of in their stan- monwealth. particular enter- determining or not dards whether concerned manufacturing, should be prise engaged end, To that legislative objective. achieving with willing courts must be and the standards must be flexible rapid comport technologi- to adapt the standards development As research and progress. scientific cal and processes produces techniques areas countless of, rigidly we must not have hitherto unheard may been As the “Star concepts____ ourselves to outmoded bind lives, must our this Court era into Trek” is ushered and its progressive its keep perspectives prepared fail flexible, or this will else Commonwealth definitions modern, operations. technological manufacturing acquire Id., 537-38, at 1153. at 397 A.2d case to reverse and remand this
Accordingly, I would also and Review. the Board Finance McDERMOTT, Justice, dissenting.
To say, as the majority does, that the cooling of water to make ice is not manufacturing, but that the cooling *10 water to make snow is manufacturing, is a distinction without difference. Either our decision in Commonwealth Co., 322, 178 Ice v. American 406 Pa. (1962), A.2d 768 must reversed, be or this case must decided consistent there with. I
Since agree that the making ice does not constitute “a substantial transformation in form ... that a new [such] article or creation has emerged,”1 I would not reverse Co.; and, American Ice I consequently, agree cannot the majority that the making of ice the form of snow constitutes manufacturing.
ZAPPALA, J., joins this dissenting opinion. COMPANY, Appellant,
The KIMBERTON Pennsylvania, Appellee. COMMONWEALTH Supreme Pennsylvania. Court of
Argued 11, May 1988.
Decided Feb. 1989. April Reconsideration Denied 1989. Philadelphia Products, Inc., 1. School District v. Parent Metal 361, 367, (1961). 167 A.2d