Case ID: dc_10/html/0405-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice MacArthur", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

IN RE THE CAPITAL PUBLISHING COMPANY, ALLEGED BANKRUPT.
    Bankruptcy. —
    No. 290.
    I. Words in a statute are to be taken in their ordinary signification, and the courts will presume that they were used to express their meaning in common usage.
    II. A corporation engaged in the business of printing and publishing a weekly newspaper, is not a manufacturer within the meaning of the bankrupt law.
    III. A petition against an alleged bankrupt as a manufacturer, on the ground that the bankrupt has failed to pay his promissory notes, is defective if it does not allege that said notes were made and passed in his alleged business of a manufacturer.
    STATEMENT 0E THE CASE.
    Ou June 14,1877, Henry Hill, Jr., filed a petition in bankruptcy, claiming to be the holder of certain overdue and unpaid promissory notes of the Capital Publishing Company, which he stated was a trader in the District of Columbia, and claiming also to be a creditor of the said company on an open account, and that he constituted one-fourth in number of the creditors of said company, whose debts exceed $250, and that the debts he held amounted to one-third of all the debts provable against the company. To this petition the company filed its answer. Subsequently the petitioner filed his petition for leave to amend his original petition, by striking out the word “ trader” and inserting in place thereof the word “ manufacturer,” which permission was granted by the court. Thereupon the petitioner filed his amended petition, which was a reiteration of his original petition, with the substitution of the word “ manufacturer ” for that of “ trader.”
    To this amended petition the company demurred, and the case comes here upon the question: 1. Is the company a manufacturer within the meaning of the bankrupt act, and therefore capable of being declared a bankrupt? 2. Whether the petition of the petitioner is not defective for the reason that it has nowhere alleged or shown that the promissory notes referred to in it were or are the commercial paper of this company, made or passed in the course of its business as a manufacturer ? 3. Has the petitioner any rights cognizable in a court of bankruptcy for the debt on the open account claimed to be held by him against the compauy ?
    The court in bankruptcy sustained the demurrer, holding that the company was not a manufacturer within the meaning of the compulsory clause of the bankrupt laws.
    The petitioning creditor brought the case here by appeal.
    
      W. D. Davidge and Fred. W.. Jones, for petitioning creditors.
    The only question to be decided is, whether or not the alleged bankrupt corporation is a “manufacturer” within the meaning of the bankrupt act. The opinion of the District Court was, that it was not a manufacturer, and therefore not liable to be adjudged a bankrupt.
    But one decision exactly in point can be found in the published Bankruptcy Reports, and this is the case of “ Kenyon and Fenton,” reported in 6 Bankruptcy Register Reports, p. 238, in which the court says:
    “ The printing and publishing of a daily newspaper is manufacturing,in the strict sense of the law. A newspaper publication is as much the result of manufacture as that of books, or cards, or bill-heads.”
    The weekly newspaper the manufacture of which is the only business of the defendant, is an unbound book of eight pages, and contains more reading matter than many bound “ books,” especially those called juvenile books.
    The alleged bankrupt is not a “ trader,” because the decisions are numerous and harmonious in their construction of the word, and are all embodied in the definition of the word “ trader,” as follows:
    “ One who makes it his business to buy merchandise, or goods, or chattels, and to sell the same for the purpose of making a profit.” (Bouv. Law Dic., 14th ed., 1876.)
    A trader bestows no labor upon an article to give it an increased value, but sells it in the same condition in which it was bought, and this, it is asserted, is the principal feature distinguishing “traders” from “ manufacturers.”
    It will scarcely be deuied that a person who should purchase sole leather from one person, upperleather from another, thread and wax from another, nails and pegs from another, tools and implements from another, and by the use of the tools and materials thus gathered, and contribution of manual labor, makes a shoe or boot for the purpose of sale, is a “ manufacturer” within the meaning of the law.
    What does the alleged bankrupt do, and what its business ? Its charter states :
    “ To carry on the busiuess of printing and publishing a newspaper called The Capital,’ and all business connected therewith, and such other business as ordinarily appertains to the printing and publishing a newspaper.”
    To carry on this business, it must purchase types from a type founder; type cases from a carpenter or case-maker; a printing-press from a press-maker; blank paper from a paper manufacturer; employ editors and writers to furnish reading matter; printers to set the types; pressmen to do the printing; and by the combination of all these, makes or manufactures a “ newspaper ” for the purpose of selling the same. It makes “a new combination of old materials, constituting a new result or production in the form of a vendible article,” precisely within the definition in Bonvier’s Law Dictionary, 14th edition, title.Patents.
    
      R. T. Merrick and Henry Wise Garnett, for alleged bankrupt.
    The following passages are extracted from Mr. Garnett’s brief:
    In short, the burden of proof is upon the appellant; in this case he states and claims that the appellee is a manufacturer with the meaning of the bankrupt act. He must therefore prove that it is such a manufacturer. In this he has clearly failed. How is he to prove it ? Not, I submit, by technical definitions of the word manufacturer, but upon a construction of the word as taken in its connection with other words in the statute. The counsel for the appellant have exhausted the dictionaries in their search for dictionary definitions of the word manufacturer, taken simply and alone. It is not. by tying ourselves down to the mere naked definition of a word that we can arrive at the meaning of the law; if we were to accept the interpretation the counsel for the appellant desire to put upon this law, the simple act of whittling a tooth-pick would make the whittler a manufacturer within the meaning of the bankrupt law. This is not the spirit with which this law is to be construed.
    The compulsory or involuntary clause in the bankrupt law is in the nature of a penal statute, and is therefore to be construed with the greatest strictness. It is a harsh, summary proceeding, which is not to be favored or extended beyond the narrow boundaries within which it has been confined; indeed, compulsory bankruptcy has been opposed by some of the greatest minds of this country as inexpedient and not in harmony with the spirit of our institutions. In the debate on the bankrupt bill of 1841, Mr. Webster, Mr. Calhoun, and Mr. Clay all took these grounds, and, with many illustrious companions, opposed and voted against the compulsory clause in that bill. And the present act shows the distinction intended between voluntary and involuntary bankruptcy; for while any resident of the United States owing three hundred dollars of debt can become a voluntary bankrupt, only in a few limited instances is the compulsory feature of the law allowed to operate and become effective.
    In England, since the act of 1861, all debtors, whether traders or non-traders, are liable to bankruptcy, but the temper and spirit of our law is different; and with us this'severe and dangerous liability is bounded and circumscribed with the greatest care, and regarded with no favor beyond that which the closest construction of the law compels.
    This being the spirit of the law, I submit that the appellee is not a manufacturer within the meaning of that law.
    If I take a sheet of paper, and with pen and ink write certain characters upon it, I have, according to the dictionaries of the appellant’s counsel, manufactured a letter, for I have applied the art of waiting and the labor of penmanship to the paper, and by my hand I have made a letter, and yet this would not be manufacturing within the meaning of the bankrupt lava Going a step further, suppose I rewrite the letter a number of times and sell the copies, still I would not be liable to be declared a bankrupt as a manufacturer. If, instead of rewaiting this letter, I see fit to buy a press and employ printers to print it for me, I am still not a manufacturer within the meaning of the bankrupt law; but, say the counsel for the appellant, you are a manufacturer, for you buy paper and print your letter on it. But the reply to this is, I make no change in the paper; it is merely an incident. I only use it for the purpose of writing or printing on it such ideas or statements as are contained in my letter; it is these ideas or statements that the public buy — not manufactured paper. The paper is a matter of indifference; it is only the material on which it is most convenient to mark or print the characters which express the ideas, or convey the intelligence, which could be wi’itten or printed on many other substances as well as paper. If, then, I have not changed the nature of any article, and 'have made nothing by my hand, or the hands of my employees, except a record of my ideas or the information I desire to give, upon a substance which remained the same after the record as it was before, I do not come within the meaning of the bankrupt law when it uses the word “ manufacturer.”
    The bankrupt law was passed for the relief of business men. It was and is a business, a commercial, measure. It was made for bankers, merchants, traders, miners, and manufacturers in a business acceptation of the term; which certainly does not embrace the publication of a newspaper, which, as we have seen, is defined to be a “ sheet of paper printed and published at stated intervals for conveying intelligence of passing events.” The newspaper is the medium of the conveyance of intelligence and ideas; for the exchange of thought. It is the surest protector of the liberties of the people, for its vital breath is the air of freedom, and it reaches its highest perfection only in those countries where that air is purest. The press moulds public opinion, and by the universal intelligence which it diffuses prevents covert attacks upon our liberties. It is the great educator of the masses and at the same time the reflector of their sentiments. Many of our people depend upon their newspaper for their knowledge of the political measures upon which they are called to cast their votes; its power is felt and respected by the law-maker, for he knows that through its columns his every action is held up before the scrutinizing eyes of his constituents for their criticism or approval.
   Mr. Justice MacArthur

delivered the opinion of the court:

This is a petition in bankruptcy to have the Capital Publishing Company declared an involuntary bankrupt. The petition was filed June 14,1877, and after an answer had been put in by the company, the petitioning creditor, George Hill, Jr., obtained leave to amend his original petition by striking out the word “ trader ” and inserting “ manufacturer ” in lieu thereof. So that the petition as amended charged that the company, on the 28th day of April, 1877, being a manufacturer, omitted to pay its promissory note dated March 26, 1877, and payable thirty days after date, with interest at the rate of eight per centum per annum, but suffered the same to be and remain unpaid and be protested for non-payment, and still omits, refuses, and neglects to pay the same; said note being for the sum of $395.45, and being commercial paper, and so has suspended payment of its commercial paper and has not resumed payment within a period of fourteen days.

The company demurred to the petition as amended, on the ground that the company was not a manufacturer within the meaning of the bankrupt act, and therefore not capable of being declared a bankrupt; and that the petition of the appellant was defective for the reason that it has nowhere alleged that the promissory notes referred to in it were or are the commercial paper of the company, made or passed in the course of its business as a manufacturer.

The petition describes the alleged bankrupt to be a corporation organized under and by virtue of the acts- of Congress in such case made and provided in the District of Columbia, which for a period of six months has had its habitat and carried on business at the city of Washington, in the District aforesaid. The point was raised on the argument that the demurrer admitted the company was a manufacturer. But in determining this question we may properly look at the act of incorporation thus referred to in the petition. The certificate of incorporation describes the object of the company in the following words: “ To carry on the business of printing and publishing a newspaper called ‘ The Capital,’ and all business connected therewith, and such other business as ordinarily appertains to the printing and publishing a newspaper.”

The first question raised upon the demurrer is whether the company is a manufacturer within the meaning of the bankrupt act.

Words in a statute are to be taken in their ordinary and familiar signification, and regard is to be had to their general and popular use. The court will presume that they were . used to express their meaning in common usage. Keeping in mind this rule of interpretation, we can determine the judicial construction to be placed upon the word “ manufacturer” when it is used in the bankrupt law.

There can be no doubt but the word “manufacturer” was used in the statute in the limited sense in which it is commonly understood. The agriculturist is engaged in the most extensive industry of this or any other country, and he brings to the market many commodities which are produced without the direct aid of the soil, or of the vegetative powers of nature, but he is never spoken of in common parlance as a manufacturer. The industries to which the dictionaries and the writers on political economy limit this term are where the raw materials or natural substances are wrought by hand, art, or machinery into commodities for use; and the examples given are cloths, iron, shoes, cabinet-work, glass, cotton and silk goods, &c. This limitation of the term manufacturer is to be adopted as the true meaning of the bankrupt law. Perhaps there is no substantial difference between the various •branches of industry in any respect, except only in regard to the different processes which they employ." To manufacture is to change and modify natural substances so that they become articles of value and use. Chantrey was in the habit of receiving $3,000 for a single bust, Bierstadt $25,000 for a single picture, and the representation of Lincoln’s Cabinet was purchased at a cost of $20,000, and presented by a noblehearted American lady to the Congress of the United States. These are called works of art, but in a legitimate sense they may be comprised amoUg the productions of manufacturing industry. -The artists use material and natural substances. They oftentimes employ a variety of subordinates. They work with their hands, and perfect an article of great pecuniary value. It symbolizes their art and genius. In a word, the artist accomplishes all that is implied by, but he is never included in, the term manufacturer. The definitions and rules which obtain in the Patent Office are not applicable here. ' A newspaper is not regarded as a manufacture any more than a painting, and an editor a manufacturer as little as an artist. We have been referred to the case in re Kenyon and Fenton, decided by the Supreme Court of Utah. It was a case where the bankrupts carried on the business of printing blank books, cards, bill-heads, in addition to which they published a daily paper, and the petition alleged that they published the newspaper and “are manufacturers of books, cards, bill-heads,” &c. And the court say: '

“ Though it is not necessary to decide that the printing and publishing of a daily newspaper is manufacturing in the strict sense of the law, yet my brother j udges have expressed the opinion that it would be, and I am inclined to the same conviction.”

It will be observed that the decision is placed upon the ground of the bankrupts being manufacturers of books, bill-heads, &c.; and in this respect they were undoubtedly within the meaning of the act. Having come to this conclusion, the court further say that it is not necessary to decide that the publishing of a newspaper is manufacturing within the strict sense of the law, but express tbe opinion “ that it would be.” No more weight can be given to this voluntary case than to any other conditional obiter dictum. It might be respectfully suggested that the substantial difference between the strict sense of the term “manufacturer” in the abstract, and the strict sense it is to receive in the law, has been overlooked in this decision. We have already stated the proposition that every branch of industry which converts any material or substance into useful commodities, strictly speaking, comes under the term “ manufactures,” and in that sense a newspaper or a painting would be included. But we are of opinion that this is not the strict sense of the statute, which only includes those industries which commonly pass under that designation. This is an important distinction ; for while all employments rest upon the same faculty in man to labor, to contrive, and to • mould the refractory elements of matter, common usage and the convenience of society have given a limited signification to the word. The rule already adverted to for the interpretation of statute law limits its'import to the sense in which it is usually received. Now, no definition of the word “manufacturer” has ever included the publisher of a weekly newspaper, and the common understanding of mankind excludes it. You may reason by analogy, or reason from the nature of things, that it is; and so you may do the same thing with anybody who labors himself or employs others. But surely a bankrupt law is not to be expanded to cover every employment. It was by express terms limited to certain classes, who are designted by names well known in the business world. The husbandman prepares the soil; the inventor his models; the orator his address, for which he receives $200 a night; the lawyer makes his brief, for which he scarcely ever gets enough; the physician formulates his prescription; and so on through all the divisions of labor and industry. By these means man acquires a certain mastery and is furnished with inestimable results. So of the newspaper. It has grown within a century into the most popular vehicle for the spread of information. Its vigor and influence are felt in every household. Indeed, it may be called the people’s storehouse of intelligence. It claims to be an institution, and even our statesmen, with great complacency, have denominated it “ the fourth estate.” It does not come within the popular meaning of the term “ manufacture,” unless, indeed, when its contents are slenderly endowed with the truth, or when its articles appear to be made out of whole cloth. It gives employment to printing-presses and types and editors; and yet, in the whole history of newspapers, from the close of the seventeenth century, this word “ manufacturer” has never been applied to them, or appropriated by them, in the whole range of English literature. „ No author has ever so used it, and it is never so applied by any statute or by any authority, except by way of opinion in the solitary case from Utah.

All the judges who heard the case are of opinion that the alleged bankrupt corporation is not a manufacturer within the meaning of the bankrupt act, and not amenable to bankrupt proceedings, except the chief justice. We are unanimous in holding that the petition is defective in form, for the reason that it does not allege that the promissory notes therein mentioned were the commercial paper of the alleged bankrupt, made or passed in its alleged business of a manufacturer. This, however, may be the- subject of amendment, and for that purpose we sustain the demurrer, with leave to the petitioner to amend as he may be advised, and should he desire to take the case further. We have, however, decided the question that the corporation is not liable to be adjudged a bankrupt. So that after the formal corrections are made there will be no necessity for a rehearing of the case, and the final judgment of the court will be to sustain the demurrer and dismiss the petition.