We held in People v. Wemple, 14 N. Y. Supp. 859, that the practice in that case, which is substantially the same as in this, was authorized, and brought up for reviéw both the law and the facts upon which the relator’s claim of erroneous or illegal taxation, in whole or in part, was based. We therefore pass to the consideration of this case upon its merits. The relator presents two objections to the imposition of the tax in question: First, that it is a manufacturing company, and is therefore, by the terms of the statute, exempt from the tax; second, that that portion of the capital stock of the relator' invested in patent-rights was not liable to any taxation by the state. It also claims that the cumulation of penalties is erroneous.
Whether the relator was incorporated under the gas companies’ act, or under the comprehensive industrial act of 1848, c. 40, with its many amendments and additions, usually called the “Manufacturing Act,” we do not deem material. In either case no question is made as to its right to obtain electricity, and use and supply electrical currents for illuminating purposes. It is an electric lighting company. Whether such a company is a manufacturing company ¡jeeras to depend upon the question whether electricity is manufactured by the relator, or whether it is already in existence, and is simply collected or gathered by the relator and utilized. The processes adopted by the relator are stated in the case, and-we have the differing opinions of learned experts laid before us. As a scientific question, it would seem to be still in the debatable stage. Something also seems to depend upon the definition of terms. We ' cannot repose with much.confidence upon the conclusion of the learned comptroller. Polio wing our impressions, however crudely formed they may be,, we conclude that electricity exists in a state of nature, and that the relator collects or gathers it, and does not manufacture it. We refrain from any exposition of the premises upon which this conclusion is based. If this conclusion is true the relator is not a manufacturing corporation, and therefore not within the exemption of the statute.
The relator, however, contends that it is manifest, from the legislation upon the subject, that electric light companies were exempt from the franchise tax until the passage of chapter 353, Laws 1889, and therefore exempt during the years here in question. Section 3, c. 361, Laws 1881, provided that “every corporation * * * except * * * manufacturing corporations carrying on manufacture within this state, which exception shall not be taken to include gas companies or trust companies, shall be subject to and pay a tax, as a tax upon its corporate franchise or business, into the treasury of the state annually,” etc. Chapter 353, Laws 1889, amended the section by excluding from the exemption “electric or steam heating, lighting, and power companies.” The relator contends that that amendment is a legislative declaration of opinion that electric companies were previously within the exemption. People v. Ice Co., 99 N. Y. 181, 1 B. E. Rep. 669, and Peoples. Dry-Dock Co., 92 B. Y. 487, are cited. In the first case the ice company sought exemption from the franchise tax, alleging that it was a manufacturing corporation. It collected and marketed naturally formed ice. The court held that it was not a manufacturing company. It was incorporated under the so-called “Manufacturing Act,” (chapter 40, Laws 1848,) as the act was supplemented by chapter 301, Laws 1861, extending its provisions to companies formed for collecting, storing, preserving, and vending ice. The court held that the supplementary act indicated the legislative opinion that such ice business was not embraced within the terms of the original act. The conclusion seems to be just, under the circumstances. The Dry-Dock Case presented similar features, and a similar ruling was made, So, it might be assumed that the enlargement of the gas companies act so as to permit such companies to use *713electricity imnlied that before the enlarging act the companies could not use electricity. But the addition of electric companies to the non-exempt companies may have been either to enlarge the non-exempt list, or to settle an unwarranted claim to exemption raised by the electric companies. If the legislature regarded these companies as non-manufacturing, then the amendment of 1889 should be construed as setting the contrary claim at rest. The case of People v. Davenport, 91 N. Y. 574, 591, holds that the circumstances under which an amendment is enacted are to be regarded in construing its effect; and, if the circumstances imply a repudiation by the legislature of the construction sought by interested parties to be placed upon the original act, the amendment, instead of being declaratory of a change in the law, is to be regarded as the legislative opinion of its proper construction. Applying this rule, we see that lighting by electricity is more recent than lighting by gas; that the practical result is much the same; that the propriety of imposing a tax upon an electric lighting company is not obviously distinguishable from the propriety of imposing it upon a gas company; that one company may perform either or both kinds of service; that the gas companies were placed in the list of non-exempts because the court held that the companies which manufactured illuminating gas were manufacturing companies, (Gas-Light Co. v. Brooklyn, 89 N. Y. 409;) that, if electricity is also a manufacture, it is less easily determinable to be so. When, therefore, the electric companies claimed an exemption which had been denied to the gas companies, and was denied to non-manufacturing companies, we can readily understand that the amendment of 1889 was the legislative response to such claim, and a repudiation of it. We conclude that the defendant was not entitled to the exemption claimed.
2. Although a part of the relator’s capital stock was invested in patent-rights, no deduction should be made from the tax upon that account. The tax is declared by the statute to be upon the “corporate franchise or business;” and as said in Insurance Co. v. New York, 134 U. S. 594, 10 Sup. Ct. Rep. 593, affirming same case in 92 1ST. Y. 328, “it cannot be affected in any way by the character of the property in which the capital stock is invested.” The same case requires us to overrule the constitutional objection presented.
The comptroller added to the taxes for 1882 a penalty of 80 per centum, and also added a penalty of 10 per centum for each of the years during which payment of the taxes for the years 1883 to 1885, inclusive, had been in default. Section 2, c. 361, Laws 1881, provides that in case the company defaults in making the proper report to the comptroller, and in paying the tax, “it shall be the duty of the comptroller of the state to add ten per centum to the tax of said corporation, company, or association for eacii and every year for which such report or certificate of appraisement and oath or affirmation were not so furnished, or for which such tax shall not have been paid.” We think the penal portion of this section should be construed favorably to the relator; that the language used does not necessarily import that 10 per centum shall be added every year that the tax is in default, but is satisfied by adding 10 per centum to every year’s tax that is in default. The clauses of the paragraph may be transposed thus, “add ten per centum to the tax for each and every year of said corporation,” etc., and the meaning is clearer. The determination of the comptroller must be modified by deducting from the aggregate of the taxes and penalties the aggregate of the excess of the penalties above 10 per centum, and, as so modified, affirmed, without costs; and the said excess must be restored to the relator.
Learned, P. J., concurs.