Schedule 125 of the Revenue Code of 1923, being the same as Schedule 122 of the Revenue Act of 1919 (Acts 1919, p. 437), provides a license tax for each person, firm, or corporation engaged in operating a sawmill, the amount being fixed by the capacity of the mill operated. Schedule 129 of the 1923 Code, being the same as schedule 126 of the 1919 acts, provides a license tax for each exporter, wholesale dealer, or jobber of lumber and timber. The corporation of which defendant was manager, paid the license under schedule 125, supra, but refused to comply with schedule 129, supra, claiming that whatever business was done by the corporation was protected by its license under schedule 125. It is admitted that whatever business was done was the act of defendant as the alter ego of the Kentucky Lumber Company, a corporation of which he was manager. It also appears that the only *Page 614 business carried on by the Kentucky Lumber Company was through its sawmill at Sulligent, Ala., which sawmill was equipped with complete machinery for the manufacture of lumber, and that for the most part this manufacture began with rough logs, and ended when the finished product was in standard shapes, sizes, and grades, ready for market. A small percentage of the material for standard lumber was purchased from small and inferior mills near by, none of which had been completely manufactured into standard product. When the rough dimension product was purchased, it was in every instance put through a process of manufacture in defendant's mill to bring it to standard requirements necessary for it to be sold as standard lumber.
From a reading of schedule 125, supra, covering sawmills of every capacity then being operated in this state, we have no doubt that in fixing this license the Legislature had in mind lumber plants such as is operated by the defendant, which includes all machines necessary to bring lumber from the crude to the finished product, and certainly there can be no doubt as to the right of defendant to dispose of this product by sale from the mill, either at wholesale or retail, under schedule 125. If the defendant had maintained a separate business where lumber was bought and sold at wholesale, whether the stock was confined to the product of one mill or any other number, he would be required to pay the license demanded by schedule 129.
In this case the only business engaged in by defendant and for which a license is demanded is the sale of the manufactured product of the mill of his principal the Kentucky Lumber Company. Schedule 129 is applicable to those persons whose business is that of buying, selling, and handling lumber and timber substantially in the form in which it is bought, and does not apply to those who buy the crude lumber or timber, and by skill and labor convert it into a finished manufactured product. Such a one is a manufacturer, and not a trader. In this lies the distinction between schedules 125 and 129. Schedule 125 applies to a manufacturer, who takes the crude material, and by the aid of machinery, skill, and labor converts it into a higher and more finished product. As such he has the right to sell and dispose of his product under a license issued in pursuance to schedule 125. Schedule 129 applies to those persons who trade in lumber or timber, buying, selling, and handling the product as it comes to their hands, and without substantial change. State v. Chadbourn,80 N.C. 479, 30 Am. Rep. 94; 26 R. C. L. p. 239, par. 212. The trial judge was in error in rendering judgment of conviction, to which exception was properly reserved.
The judgment is reversed, and the cause is remanded, with instructions that the same shall be dismissed, unless on another trial the facts should be materially different.
Reversed and remanded.