Lawrence Lewis.

American and English corporation cases : a collection of all corporation cases, both private and municipal (excepting railway cases), decided in the courts of last resort in the United States, England, and Canada [1883-1894] online

. (page 44 of 73)
Online LibraryLawrence LewisAmerican and English corporation cases : a collection of all corporation cases, both private and municipal (excepting railway cases), decided in the courts of last resort in the United States, England, and Canada [1883-1894] → online text (page 44 of 73)
Font size
QR-code for this ebook


combination of materials, or the application of forces, or
otherwise. It collects, stores, and preserves that which nat-
ural causes created and which other natural causes would de-
stroy and waste. It seeks only to hold these last in check.
Similar applications would equally apply to water, fruit, sand,



Digitized by



Google



420 KNICKERBOCKER ICE COMPANY V. PEOPLE.

gravel, coal, and other natural productions. Water might be
improved by filtration, fruit by judicious pruning of the tree
or vine, or protection by glass, sand and gravel by screening,
cobble-stones by selection, and coal by breaking, and each, by
various processes, stored until the season of demand, when,
having been " collected, stored, preserved and prepared for
sale," the natural articles and no other would be put upon the
market.

No doubt ice may be manufactured and frigoric eflFects pro-
duced by artificial means. Corporations exist for that pur-
pose and come literally within our manufacturing laws.
Their methods in no respect resemble those of the defendant
Its tools and implements are for convenience in handling and
marketing a product, and not at all for making it. Many
cases are cited by the learned counsel for the appellant, but
we find none so comprehensive as to include this case. They
all, so far as they have any application, require the produc-
tion of some article, thing, or object, by skill or labor, out of
raw material, or from matter which has already been sub-
jected to artificial forces, or to which something has been
added to change its natural condition. Whether, therefore,
the words of exemption in the act of 1881 (supra) are taken in
their usual and ordinary sense, or according to their legal in-
terpretation (Gas-light Co. v. Brooklyn, 89 N. Y. 409), they
do not include the defendant. The statute (Laws of 1855,
supra), under which the existence of the defendant was made
possible, seems to require the same conclusion. By it the
Manufacturing Act of 1848 (supra) was extended so as to per-
mit the formation of such a company. It became a law on
the 1 2th of April, 1855, and on the 19th day of the same
month the defendant was organized, and its object, as above
described, follows literally the language of the act. We have,
therefore, both a practical and a legislative interpretation of
the earlier act — that of 1848. The defendant did not rely
upon it in describing the purpose for which the company was
to be formed, and it cannot be assumed that the later act
would have been passed if, in the opinion of the legislature, it
did not provide for a new subject No doubt it is the prov-
ince of the court to declare what the law is, but where there
are two statutes relating to the same general purpose, they
are both to be considered and each construed in the light of



Digitized by



Google



KNICKERBOCKER ICE COMPANY V, PEOPLE. 42 1

the Other. Here the act of 1855 may be regarded as a leg-
islative declaration that the object to which it was directed
was not included in the act ol 1848. it is, however, provided,
that a corporation organized under the act of 1855 {supra^ % 2),
shall be entitled to the privileges conferred by the act of 1848
{supra), and hence the learned counsel for the appellant argues
that a legislative intent may be implied to put it on the same
footing in all respects as a manufacturing corporation. This
does not toUow. Equality under that act is provided for, but
nothing more. Exemption from taxation is not given by it
That subject is regulated by the statute under which this
action was brought (Laws of 1881, supra), and it is limited to
corporations which are in fact manufacturing corporations,
and do carry on manufacture. We think the defendant is of
a different character.

The judgment appealed from should therefore be affirmed.

All concur.

Who are not Manufacturers. — One who carries on the business
of buying timber and converting it into lumber is a manufacturer, and not
a trader. State 7/. Chadbourn, 80 N. C. 479. A gas company is a manu-
facturing company. Commonwealth v, Lowell G. L. Co., 12 Allen, Mass.
75 ; Williams v, Rees, 2 Fed. Repr. 882. An aqueduct company is not a
manufacturer, although it uses filters and screens in preparing its water for
circulation through mains into a city. Dudley z/. Jamaica Pond A. Co., 100
Mass. 183. *' But an aqueduct company manufacturers nothing," said the
court. " Nothing is put into the article which it supplies to change its
natural condition, and the whole operation of the water-works is designed
merely to keep foreign substances from mingling with it." An ice cream
confectioner is not a manufacturer. New Orleans v, Mannassier, 32 La.
Ann. 1075. " We cannot assent to the proposition," said the court " that a
person making and selling ice-cream is a manufacturer in the sense of the
law, or in any other sense of the word. The attempt to magnify a confec-
tionery, which is defendant's business, into a manufacture must fail. We
are told that any one seeing the steam engine, complicated apparatus, and
large force needed to produce defendant's goods, would at once conclude
that he is a manufacturer. With as much force it might be said that any
one visiting the mammoth kitchen of the Grand Union Hotel at Saratoga,
together with their myriads of employees and their colossal apparatus,
would at once magnify the cooks and pastrymen into manufacturers."
In People v, N. Y. Floating Dry Dock Co., 63 How. Pr. 451, it is decided
that the builder and repairer of vessels is a ship-carpenter, or builder, and
not a manufacturer.

Undoubtedly in a certain broad sense any builder may be called a manu-
facturer — that is, he takes raw material, and, either by hand or machinery,



Digitized by



Google



422 GALVESTON WHARF CO. V. CITY OF GALVESTON.

fashions it into shape for use. But this is not what is ordinarily and gen-
erally understood as meant by " manufacturing/' — and it is in the general
ordinary sense that " manufacturing" is to be taken in a tax law, or other
statute.



The Galveston Wharf Co.

V.

The City of Galveston.

(63 Texas Reports, 14.)

The decree of the District Court of Brazoria County, rendered April i.
1869, in the case of The City of Galveston v. The Galveston Wharf Com-
pany, consolidating the interests of the respective parties thereto, vested
the undivided one third of the property of the consolidated wharf com-
pany in the city of Galveston, with the exception of certain property
specified in the decree. Said one third interest was represented by one
third of the stock of the consolidated company.

The effect of said decree was to vest in the city of Galveston, not only
the right to receive one third of the dividends accruing to the wharf
company, but the further right to one third of the entire property of the
company as consolidated ; it being, however, subject to the control of the
Galveston Wharf Company for the uses and purposes for which the con-
solidation was made.

The power to alienate one third of the wharf company property, which
was reserved to the city in said decree, is inconsistent with any other re-
lation to the one third interest than that of ownership by the city.

Said decree clothes the wharf company with a power to be exercised in
the management of said one third interest, through a directory to be
selected, in which the city of Galveston is to be represented as provided
by said decree.

The fact that compensation is received for the use of a wharf across
which the commerce of a country passes does not divest it of its public
character.

Sec. I, art. 8, of the State constitution, which enumerates certain prop-
erty which is exempt from taxation, cannot be construed to subject all
property not specified to taxation ; that section simply indicates the
character of things and the uses to which they must be appropriated in
order to entitle them to the exemption.

In the absence of any statute controlling the subject, such property as
a municipal corporation owns and uses for a public purpose is not aflfected
by general laws regulating taxation.

The city of Galveston owns such a beneficial interest in the property of
the Galveston Wharf Company, and of the dividends to arise from its
use, as renders it improper for the city to impose taxes which would or-



Digitized by



Google



GALVESTON WHARF CO. V. CITY OF GALVESTON. 423

dinarily deprive the city of a part of thci dividends of the company which
it is entitled to receive.

The two thirds interest owned by the wharf company is subject to
State and municipal taxation.

The rights of the city of Galveston and of the wharf company, in re-
spect to dividends, resulting from the fact that the interest of one is tax-
able, and that of the other is not, must be adjusted as would the rights of
persons holding shares of stock in other corporations, except that the city
cannot diminish the dividends by the iipposition of a tax in its own favor
not authorized by law.

An injunction properly issued to restrain the city of Galveston from,
collecting taxes on its interest in the property of the Galveston Wharf
Company.

Appeal from Galveston. Tried below before Hon. Wm.
H. Stewart.

The opinion states the case.

BallingeTy Mott & Terry ^ and Trezevant & Franklin for ap-
pellant.

James B. Stubbs for appellee.

Stayton, a. J. — The nature and result of this action is
correctly stated in the brief 'of counsel for appellant as fol-
lows : Facts.

" Suit was brought by the Galveston Wharf Company, a
corporation chartered in 1854, against the city of Galveston,
to enjoin the sale of certain property advertised for sale for
the payment of taxes to the city of Galveston from the wharf
company, so far as the taxes were assessed on the one third
interest in certain wharf property in possession of the com-
pany, under compromise between the city and the company,
confirmed by the legislature, on the ground that the said
interest is the property of the city, in trust for its present
and future inhabitants, and is used only for public purposes,
and not taxable by the constitution and laws of the State.
An injunction was granted against the enforcement of the
tax by the district judge of Harris County, in the absence of
the district judge of Galveston County. But on the trial of
the case before the latter judge the injunction was dissolved
and the suit dismissed. There were various other injunc-
tions to the tax as levied by the city, all of which were over-
ruled by the judgment below, and some of which cannot be
considered, owing to a failure to obtain the signature of the



Digitized by



Google



424 GALVESTON WHARF CO. V. CITY OF GALVESTON.

judge to the statement of facts. So far as the case is pre-
sented for review by this court, the pleadin]g^s and special
agreement of the parties concurred in the facts."

The petition sets out very fully the history of the grant to
M. B. Menard, on which is situated the city of Galveston,
through which and subsequent legislation conflicting claims
to the flats and wharf privileges arose between the city of
Galveston and others, who were claiming through the grant
to Menard, out of which grew the suit which was decided in
this court in 1859. A full history of that case and the ques-
tions involved and decided will be found in City of Galves-
ton V, Menard, 23 Tex. 349.

The ownership of the soil in the flats in front of the lots
out of the channel was held, in that case, to be in Menard
and his vendees, who were declared to have the right to de-
vote it to wharf or other like purposes, free from the control
of the public, under the qualification incident to all property ;
that it was not to be so used as to be a common nuisance,
and at the same time, in view of the purposes for which the
grant to Menard was made, it ^fas held that the city had a
like right to build and control wharves in front of the streets
of the city, which might be extended to or over the flats to
the channel.

Within a year after the decision was made in the case of
The City of Galveston v, Menard, a suit was brought by the
city of Galveston against the Galveston Wharf Company,
which has been organized pending the prior litigation, and
was composed of the owners of wharves sued in the former
case, and other owners of wharves and wharf property.
That action was transferred to Brazoria County, where it
was pending until April i, 1869, when, by agreement of par-
ties, a consent decree was entered by the district court of
that county, which was intended by the parties to be a full
settlement and compromise of all matters in controversy be-
tween the city of Galveston and the Galveston Wharf Com-
pany. The decree thus rendered was confirmed by an act of
the legislature of June 23, 1870. There therefore arises no
question as to the binding force and eflfect of that decree,
which might arise but for the confirmatory act.

The assignment of errors are as follows :

I. " The court erred in its judgment in holding that the



Digitized by



Google



GALVESTON WHARF CO. V. CITY OF GALVESTON. 425

interest or share of the city of Galveston in the property
assessed and taxed by the city of Galveston is subject to tax-
ation by the city of Galveston."

2. " The court erred in its judgment in holding that the
sale against which the writ of injunction was sued out could
lawfully be made to satisfy taxes assessed by the city of Gal-
veston on its own interest, held in trust for the public, in the
property assessed by it for taxes."

3. " Because the interest of the city of Galveston in the
wharf property, the subject of controversy, is held by the city
of Galveston in trust for its present and future inhabitants,
and solely for public purposes, as authorized by the legisla-
ture of the State, and is not lawfully subject to taxation by
the city of Galveston, the court erred in its judgment in hold-
ing the same liable to such taxation."

The question which arises is : Has the city such interest in
the one third interest in the property sought to be taxed as
exempts it from taxation by the city?

The character of interest held by the city in the Galves-
ton Wharf Company's property depends on the true con-
struction to be given to the decree of the District Court for
Brazoria County before referred to.

So much of that decree as is necessary to an examination
and determination of that question is as follows :

" It is considered, ordered, adjudged, and decreed by the
court that the present capital stock of the Galveston Wharf
Company, consisting of twelve thousand four hundred and
forty-four shares of stock of $100 per share, amounting in the
aggregate to $1,244,400, shall be increased the full one half
thereof, viz. : by six thousand two hundred and twenty-two
shares of $100 each, amounting to the sum of $622,200, which
said stock of said sum of $622,200 shall be the property of
the mayor, aldermen, and inhabitants of the city of Galveston
and the same shall stand and remain on the books of said
company as the property of said mayor, aldermen, and inhab-
itants of the city of Galveston ; and the equal, undivided one
third of the property of said company, to be consolidated
and vested in it by this decree, shall be owned by said city,
and represented by its said stock; and the said stock, and the
rights and interests therein, and in said property, of said
mayor, aldermen, and inhabitants of the city of Galveston,



Dtgitized by VjOOQ IC



426 GALVESTON WHARF CO. V. CITY OF GALVESTON.

shall be in trust for the present and future inhabitants of the
city of Galveston, and all and every part thereof shall be
alienable, and not subject to conveyance, assignment, trans-
fer, pledge, mortgage, or any liability for debt whatever, in
any other manner than by the vote of four fifths of all the
qualified voters of said city in favor of some clear and spe-
cific proposition therefor. The dividends and net earnings
of said stock shall be regularly paid to said mayor, aldermen,
and inhabitants of the city of Galveston, to be disbursed and
expended for the public good and benefit of said present and
future inhabitants of said city."

Said decree then proceeds to fix the respective representa-
tion and rights of said city and company on the board of
directors, giving the city three directors in said board of
nine^one to be the mayor, and one of the committee on
finance, another an alderman, and the third an alderman or
citizen, but to be elected by the council. And said decree
further provides :

** In consideration of all which, it is further agreed be-
tween the parties, and is now considered, ordered, adjudged^
and decreed by the court, that all the property, rights, and
claims of every kind and description (except certain lots and
property hereinafter specified) of the said Galveston Wharf
Company, and also all the right, title, interest, and claim of
every kind and description whatsoever of the said mayor,
aldermen, and inhabitants of the city of Galveston, in and to
all the land and ground extending from the shore or ordinary
high-water mark of the island of Galveston to the channel of
the bay or harbor, from and including the street known on
the map and plan of said city of Galveston as Ninth Street,
on the east, to and including the street known as Thirty-first
Street, on the west, including all the ground known as the
Flats within said limits, and also all rights, capacity, powers,
and claims of said plaintiffs to build and erect wharves and
take and receive wharfage therefor, at the end of streets now
or hereafter running or extending to said channel, be and the
same are hereby vested in the said Galveston Consolidated
Wharf Company, and to be henceforth the corporate prop-
erty, right, and title of the said Galveston Wharf Company,
and owned, held, possessed, controlled, used, and adminis-
tered by said company — all the said united and consolidated



Digitized by



Google



GALVESTON WHARF CO. V. CITY OF GALVESTON. 427

property, rights, and claims being represented by said aggre-
gate of $1,866,600 — the original two thirds thereof held by
the present stockholders, and one third by the said plaintiff
in trust as aforesaid.**

Said decree further provided that the result of certain suits
then pending should inure to carry out said decree and com-
promise, and also excepted from its operation certain lots and
blocks south of Avenue A, in said city, and others named, the
benefit of which was to belong to the stockholders of said
company, prior to the compromise ; and said decree further
provided as follows :

" It is further the agreement and intention of the parties
that this settlement shall, if practicable, result in and secure
the final settlement of all controversy, and prevent future
controversy in regard to all the wharf privileges in front of the
city of Galveston, and that the whole of said wharf privileges
shall be united and consolidated in the present parties hereto.**

The true construction of this decree is to be arrived at by
considering the whole decree, which had for its object the
settlement of the conflicting claims of the respective parties
to the action.

The city was controverting the ownership of the wharf
company, claiming through Menard, to the property in the
flats, and the resultant right to maintain wharves ; and the
wharf company was controverting the right of the city, not
only to the property in the flats, but also the right of the city
even to use, for wharf purposes, the termini of its streets on
the bay.

The title of the one to property in the soil embraced in the
flats, with the right to use it for wharf and other purposes,
had been practically determined by the former suit ; as had
been the right of the city to use for wharf purposes, notwith-
standing the ownership of the soil had passed by the grant to
Menard, that part of the flats at the termini of its streets.

The last part of the decree, above set out, evidences the fact
that it was intended to consolidate and to put into the hands
of the Galveston Wharf Company all the wharf privileges
possessed by both or either of the contesting parties ; and that
this was done, both parties agree; but it is claimed by the one
that all the property vested by the decree absolutely in the
wharf company ; and by the other, that one third of the entire



Digitized by



Google



428 GALVESTON WHARF CO. V. CITY OF GALVESTON.

consolidated property not excepted from the operation of the
decree vested in the city of Galveston, subject only to the
use and control by the wharf company for the purposes for
which the consolidation was made.

The latter part of the decree, in terms, vests in the ** Galves-
ton Consolidated Wharf Company" all the property, rights,
and claims of every kind and description (except certain prop-
erty specified) of the Galveston Wharf Company ; as did it all
the right, title, interest, and claim of every kind and descrip-
tion of the city of Galveston in and to all land and ground
embracing the flats between and inclusive of Ninth and
Thirty-first streets, and also all rights, capacities, powers, and
claims of the city to erect wharves and receive wharfage at
the ends of streets then extending, or to be extended, to the
channel; and it declared those things and rights "to be
henceforth the corporate property, right, and title of the said
Galveston Wharf Company, and owned, held, possessed, con-
trolled, used, and administered by said company."

The purpose of this part of the decree was, evidently, to
vest in the consolidated company, which, in all instances but
one, is called " The Galveston Wharf Company," the rights,
even of property, as well as of use, which had formerly been
owned or claimed by the wharf company and the city, or
either of them, except as limited on the face of the decree.

The language used seems, in many respects, suflScient to
vest the absolute title in all property and rights to which it
applies in the consolidated company ; but when considered
in connection with the language which imnoiediately follows,
it is not inconsistent with an intention to give to the stock-
holders of the wharf company existing before consolidation
title to two thirds of the property, and to the city one third ;
all to be under such qualified ownership and dominion of the
consolidated company as was necessary to enable it to carry
out the purposes for which the consolidation of the respective
interests was made.

The beneficial interests to accrue from profits, as well as
the proprietary interests which would inure to the respective
parties in interest in case of dissolution of tho Galveston Wharf
Company, are evidenced by the shares of stock of which the
parties were respectively declared the owners and holders.

It is not clear from this part of the decree whether the



Digitized by



Google



GALVESTON WHARF CO. V. CITY OF GALVESTON. 429

declaration in reference to the holding of " one third by the
said plaintiff (the city) in trust as aforesaid " refers to the
shares of stock or to the property as well, but the preceding
part of the decree, to which reference is made, which relates
to the property as well as the shares of stock, renders it highly
probable that it was in this connection used in relation to the
property as well as the shares of stock ; it is, however, imma-
terial in reference to the matter under consideration, whether
it refers to one or both, for in either event the beneficial inter-
est to arise from the use of the property would inure to the
benefit of the " present and future inhabitants of the city of
Galveston."

Prior to this decree, it will be remembered that there was
a contest about the ownership of the property, as well as the
right to use all or parts of it, arid the latter part of the decree
was evidently intended to settle that question by vesting, it
may be, the absolute as well as the qualified rights held by the
respective parties in or to the property in the consolidated
company, as a starting-point for the clear investiture of un-
questioned title in each to shares in the property, as well as
the profits to be derived from its use, to which, by the agree-
ment made the basis of the decree, each party would be en-
titled.

The former part of the decree evidences that it was thought
such a course was necessary before the rights of the parties,
as they desired them to exist in the future, could by the decree
be determined.

The more natural order would have been to vest the prop-
erty in the consolidated company in the first part of the



Online LibraryLawrence LewisAmerican and English corporation cases : a collection of all corporation cases, both private and municipal (excepting railway cases), decided in the courts of last resort in the United States, England, and Canada [1883-1894] → online text (page 44 of 73)