Opinion
No. 68.
Argued January 10, 1910. Decided February 21, 1910.
"Manufacturing," as used in the Bankrupt Act of 1898, has no meaning from adjudication as used in former laws, nor has it any technical meaning. In construing the act the intention of Congress to include corporations engaged in manufacturing will be regarded by giving the term a liberal, rather than a narrow, meaning. A corporation organized to construct railroads, buildings and other structures, whose principal business is making and constructing arches, walls, bridges and other buildings out of concrete, and which buys and combines together raw materials in making the concrete and supplies labor, machinery and materials at the place that the contracts call for, is a corporation engaged principally in manufacturing within the meaning of § 4 of the Bankrupt Act as amended February 5, 1903, c. 487, 32 Stat. 797. 158 F. 593, reversed.
Mr. Alexander J. Barron, with whom Mr. Richard A. Ford was on the brief, for appellants:
A corporation engaged in the erection of concrete walls, piers, abutments, bridges, etc., is, from the very nature of its work, of necessity, principally engaged in manufacturing. Re Bank of Belle Fourche, 152 F. 64; Columbia Iron Works v. National Lead Co., 127 F. 99, 102; Re Niagara Contracting Co., 127 F. 782; Re Marine Const. Co., 130 F. 446; Re Matthews Slate Co., 144 F. 737; Re Quincy Granite Quarries Co., 147 F. 279; Re Leighton Co., 147 F. 311; Re Troy Steam Laundering Co., 132 F. 266; White Mountain Paper Co. v. Morse Co., 127 F. 643; Re Church Construction Co., 157 F. 298; Tidewater Oil Co. v. United States, 171 U.S. 216.
Manufacture is transformation — the fashioning of raw materials into a change of form for use; so held in Kidd v. Pearson, 128 U.S. 1, 20, and this definition is generally adopted by the lexicographers such as Bouvier and Anderson, Webster (1901) and Worcester. See also Carlin v. Western Assurance Co., 57 Md. 526; 5 Words and Phrases, 4347.
The bankruptcy act is not limited to those merely engaged in manufacturing commodities. Re Rutland Realty Co., 157 F. 296.
Construction companies are not necessarily excluded from the operation of the bankruptcy act. Re Garrison, Fed. Cases, No. 5,254. Under the act of 1898, the companies have been held to be engaged in manufacturing in Re Columbia Iron Works, 127 F. 99; Re Niagara Contracting Co., 127 F. 782; Re Church Construction Co., 157 F. 298; Re Marine Construction Co., 130 F. 446. See also state courts' decisions. People v. Morgan, 70 N.Y. 516; Commonwealth v. Keystone Bridge Co., 156 Pa. 500; Commonwealth v. Pittsburg Bridge Co., 156 Pa. 507.
The act of 1898, § 4 b and its amendment should receive a liberal construction. Re Mary Hatch Riggs, 214 U.S. 9.
Where Congress enacts legislation containing words or phrases which have been judicially construed under other acts upon the same subject, it is presumed to know of such construction and to have adopted the construction of such words and phrases previously made. United States v. Hermanos y Compania, 209 U.S. 337; United States v. G. Falk Bro., 204 U.S. 143, 152; The Devonshire, 13 F. 39, 42.
Acts of Congress should be construed in view of the history and circumstances surrounding their enactment. Pratt v. Union Pacific Railroad, 99 U.S. 48, 62; United States v. Laws, 163 U.S. 258, 262; Mobile Ohio R.R. Co. v. Tennessee, 153 U.S. 486, 502; Church of the Holy Trinity v. United States, 143 U.S. 457, 463; Bond v. Hoyt, 13 Pet. 273. In order to determine the purpose of Congress earlier legislation upon the same subject may be examined to arrive at a proper interpretation of a given act. Lawrence v. Allen, 7 How. 785, 792; Re Morton Boarding Stables, 108 F. 791, 794. The legislative intent prevails over the strict wording of the statute. Church of the Holy Trinity v. United States, 143 U.S. 457; Oates v. National Bank, 100 U.S. 239, 244; Wheeler v. McCormick, 8 Blatchf. 267, 276.
Mr. Geo. L. Roberts, with whom Mr. Eugene H. Baird was on the brief, for respondent:
The words "engaged principally in manufacturing" have their ordinary and usual significance. Manufacturing in the ordinary acceptance of the term, means the making of articles or commodities that can be transported or sold at some other place than that where they are made. Loveland's Bankruptcy, 147. See definitions of "manufacturing" by the leading lexicographers, such as Webster, Worcester, Universal, Standard. In no definition given by any lexicographer, is the term "manufacturing" applied to one engaged in the production or construction of an article which must be affixed to the realty, and whose use and value is destroyed the moment it is detached from the real estate to which it is affixed. See Re Keystone Coal Co., 109 F. 872; Re Chicago-Joplin Lead Co., 104 F. 67; Re Columbia Iron Works v. National Lead Co., 127 F. 29; Re Niagara Construction Co., 127 F. 782, and other cases cited by appellant. Butt v. C.F. MacNichol Const. Co., 140 F. 840.
In arriving at the construction of the words in this case, debates in Congress are not to be considered any more than in the construction of other acts passed by it. United States v. Freight Association, 166 U.S. 290. The words in controversy should be construed according to their common and accepted meaning. Lewis v. United States, 92 U.S. 618, 621. There should be no construction where there is nothing to construe. United States v. Wiltberger, 5 Wheat. 95; Cherokee Tobacco, 11 Wall. 621; United States v. Temple, 105 U.S. 97.
Section four of the Bankrupt Act, as amended by § 3 of the act of February 5, 1903, c. 487, 32 Stat. 797, reads thus:
"Any natural person, except a wage-earner, or a person engaged chiefly in farming or the tillage of the soil, any unincorporated company, and any corporation engaged principally in manufacturing, trading, printing, publishing, mining or mercantile pursuits, owing debts to the amount of one thousand dollars or over, may be adjudged an involuntary bankrupt upon default or an impartial trial, and shall be subject to the provisions and entitled to the benefits of this act. Private bankers, but not national banks or banks incorporated under State or Territorial laws, may be adjudged involuntary bankrupts."
The single question is, whether the Monongahela Construction Company, upon the facts stated above, was a corporation principally engaged in the business of "manufacturing," within the meaning of the act. If it was, the adjudication should stand.
The corporate powers of the company were very broad. It is possible that it might have so limited its functions as not to have come under any reasonable definition of manufacturing; but at last the question of whether it was principally engaged in manufacturing must turn more upon what it was actually doing than upon what it was authorized to do.
It must be conceded that the word "manufacturing," as used in the bankrupt act, has no definite legislative meaning by reason of adoption from other bankrupt acts, as is the case with the words "trader" or "trading," and perhaps other words with well-understood common law meanings.
Though British bankrupt acts were in existence from the time of Henry VIII, they applied only to "traders" until 1860, when they were extended to other persons. Our own original act, that of 1800, applied only to traders, bankers, brokers and underwriters. The act of 1841 added "merchants." The act of 1867 extended practically to all persons and corporations. That of 1898 limited the wide application of the act of 1867 to the class of business corporations enumerated. Thus it is that the words "manufacture" and "manufacturing" have no meaning derived from adjudications of any former law.
Undoubtedly Congress intended that that class of business corporations engaged in any class of manufacturing, as its principal business, and not as a mere minor incident to some larger work, should be subject to the law; and this intention should be regarded by giving to doubtful words and terms a liberal rather than a narrow meaning. "Manufacturing" has no technical meaning. It is not limited by the means used in making, nor by the kind of product produced. In Kidd v. Pearson, 128 U.S. 1, 20, Mr. Justice Field said that "manufacture is transformation, the fashioning of raw material into a change of form or use."
In Tide Water Oil Company v. United States, 171 U.S. 210, 216, Mr. Justice Brown, referring to the expansion of the meaning of the word "manufacture," said that "the word is now ordinarily used to denote an article upon the material of which labor has been expended to make the finished product."
Concrete is an artificial stone. It is a product resulting from a combination of sand or gravel or broken bits of limestone, with water and cement; a combination which requires ordinarily the use of both skill and machinery. It is not denied that if concrete in a shape adapted to use and in finished form is supplied to others for the making of a house, bridge, pier, arch or abutment, that the corporation making such blocks or shapes would be in the most narrow sense one engaged in manufacture. But it is urged that this corporation made these blocks or shapes at the place where used, and that, as finished, they became a part of a principal structure and affixed to the realty; and that, therefore, they were not engaged in manufacturing, which, say counsel, is a business confined to those who make articles which may be "transported and sold at some other place than that where made."
The production of concrete arches, or piers, or abutments, is the result of successive steps. The combination of raw material, the sand, the limestone, the cement and the water produced a product, which undoubtedly was "manufactured." This concrete had then to be given shape. That required the manufacture of moulds, which remain in place until hardening occurs. If the concrete is reinforced, as is the case where great strength is required, then the adjustment of the bars of steel within the moulds was another step. Do all of these steps, each a step in "manufacturing," cease to be "manufacturing" because the moulds into which the concrete is poured, when in a fluid state, are upon the spot where the finished product is to remain? That the operation of making and shaping the concrete is done at the place used seems rather a matter of convenience, due to the quick hardening in moulds and difficulties of transportation. But, as we may take notice, the operation which in the end is to produce an arch, or abutment, or pier, or house, is not necessarily a single operation, but one of successive repetitions of the process. The business is not identical with that of a mere builder or constructor who puts together the brick, or stone, or wood, or iron, as finished by another. If the builder made his brick, shaped his timbers, and joined them all together, he would plainly be a manufacturer as well as a builder; and if the former was the principal part of the business, he would be within the definition of the bankrupt act. To say that one who makes and then gives form and shape to the product made is not engaged in manufacturing because he makes his product and gives it form and shape in the place where it is to remain, is too narrow a construction.
In a case styled In re First National Bank, 152 F. 64, the Circuit Court of Appeals for the Eighth Circuit, in an opinion by Sanborn, Circuit Judge, sustained an adjudication of bankruptcy against a precisely similar corporation.
In Columbia Iron Works v. National Lead Company, 127 F. 99, the Sixth Circuit Court of Appeals adjudged that a corporation engaged principally in the business of building and repairing large steel ships for sale and upon order, who prepared and gave shape to much of the raw material, was engaged in manufacturing.
The judgment of the Circuit Court of Appeals must be reversed and that of the District Court affirmed.