Factory Inspection. It follows that all the powers and duties of the Department of Factory Inspection relating to the inspection of boilers, pursuant to said Act of 1905, now devolve upon the Department of Labor and Industry. In accordance with the foregoing. I therefore advise you that, in my opinion, boilers used in connection with oil well operations are subject to the inspection and requirements provided and prescribed in Section 19 of said Act of 1905; and that the powers and duties for the enforcement of said provisions imposed upon or vested in the Department of Factory Inspection by said Act are now vested in the Department of Labor and Industry. IN RE BONUS ON INCREASE OF CAPITAL STOCK. A fire insurance company was organized with a capital of $100,000 upon which bonus was paid. On account of the impairment of its capital due to the San Francisco earthquake it regularly reduced the par value of the shares which it had issued from $100 to $25, thus reducing the amount of its outstanding stock to $100,000. It then increased its capital stock $300,000 and issued and sold the stock. HELD: The company is not liable for bonus upon the said increase. Opinion to Hon. A. W. Powell, Auditor General. WM. M. HARGEST, Dep. Atty. Gen., March 22, 1917: Some time ago you requested to be advised as to whether the bonus was due upon an increase of the capital stock of the Franklin Fire Insurance Company. The facts I understand to be as follows: The Franklin Fire Insurance Company was incorporated prior to April 19, 1906, with a capital of $400,000, and bonus thereon was paid. The company filed a certificate on January 12, 1907, containing a return made on September 10, 1906, which showed that a special meeting of the corporation was held on the latter day and that for the purpose of making good the impairment of capital caused by the earthquake and fire of San Francisco, the corporation had regularly reduced the par value of its shares from $100 a share to $25 a share, and issued $300,000 worth of new stock, the amount necessary to restore the original capital of $400,000. The question is whether a bonus should be settled on the $300,000 of new stock issued pursuant to the regulation of September 10, 1906. This question resolves itself into a construction of Section 3 of the Act of February 9, 1901, P. L. 3, which provides, in part, as follows: "Upon the actual increases of the capital stock or indebtedness of such corporation made pursuant thereto, it shall be the duty of the President or Treasurer of such corporation, within thirty days thereafter, to make a return to the Secretary of the Commonwealth, under oath, of the amount of such increase actually made, and concurrently therewith, such corporation shall pay the State Treasurer, for the use of the Commonwealth, such bonus on the actual increases shown by said return as shall then be described by law." The precise question here is whether the bonus should be measured by the aggregate amount of the capital or by the number of shares into which it is divided. All of the bonus acts use the words "capital or amount of capital." They do not impose a bonus on the shares. In the case of Commonwealth vs. Independent Trust Company, 233 Pa. 92, that corporation was organized in 1889 with $1,000,000 capital on which it paid bonus. It decreased its capital stock in 1903 to $75,000, and, subsequently, in 1909, increased it to $2,000,000. The company contended that it was required to pay bonus only upon the actual increase of $1,000,000. while the Commonwealth asserted that bonus was due on $1.925,000. Mr. Justice Elkin, speaking for the Court, said: "As the situation stands, the Commonwealth has received a bonus on $1,000,000, and if now permitted to collect a bonus on an additional $1,925,000 it will then have been paid a bonus on $2,925,000, although, in fact, the corporation never issued more than $2,000,000 of capital stock. The position of the Commonwealth in this respect is technical and entirely ignores the equities of the case. The evident intention of the Legislature was to impose a bonus charge upon the amount of capital stock, and not to exact more than the total capitalization warrants. When an incorporated company pays bonus upon the amount of its original capital bonus upon any subsequent increases thereof, the requirements of the law have been satisfied." I think the reasoning of the case cited applies to the question propounded and I advise you that the Franklin Fire Insurance Company of Philadelphia is not required to pay bonus upon the $300,000 represented by additional shares of stock because it originally paid a bonus on $400,000, which amount included the $500,000 subsequently issued. IN RE LICENSES FOR AGENTS TAKING ORDERS FOR OLEOMARGARINE A manufacturer of oleomargarine who has a license to sell at wholesale in this State and who proposes to send agents about to take orders from housewives and other consumers which orders are to be sent to and filled by the nearest retail dealer in that particular brand of oleomargarine, must secure a license for such agents. Opinion to Hon. James Foust, Dairy and Food Commissioner. construction of the oleomargarine law of June 5, 1913, P. L. 412, is at hand. The facts I understand to be as follows: Manufacturers of oleomargarine in Chicago who have a license to sell oleomargarine at wholesale in Pennsylvania, but who do not have a license to sell at retail therein, propose to send their agents throughout the State to secure orders for oleomargarine at retail from housewives, and other consumers. and when such orders are obtained, to forward them to the nearest licensed retail dealer handling or selling their brands of oleomargarine. The licensed retail dealer will then receive, accept the order, pack the oleomargarine and send or deliver the package to the purchaser. The retail dealer does not pay the salary or any part thereof, of the soliciting agent. I understand your inquiry to be whether such plan can be lawfully carried out without such agents obtaining licenses. Section 2 of this Act provides, in part, as follows: "Every person, firm or corporation, and every agent of such person, firm or corporation, desiring to manufacture, sell, or offer or expose for sale, or have in possession with intent to sell, oleomargarine, butterine or any similar substance not made or colored so as to look like yellow butter, shall make application for a license as to do *** such licenses shall not authorize the manufacture or sale, exposing for sale, or having in possession with intent to sell, oleomargarine, butterine, or any similar substance, at any other place than that designated in the application and license." In an opinion dated February 3, 1916, upon a similar subject, I endeavored to draw the distinction between the regular clerks of a grocery store who would take orders for groceries, and incidentally for oleomargarine, and the agents employed to travel around the country, taking orders for nothing but oleomargarine. In that opinion it was said: "It might be an unreasonable construction to hold that every clerk of a retail dealer who has a license to sell oleomargarine, must be also licensed because the Act says that every agent of such person, firm or corporation desiring to manufacture, sell, offer or expose for sale, oleomargarine, shall make an application for a license so to do. Where a clerk or employe, in the regular course of his business is taking orders for other goods and along therewith, and as incident to such business takes orders for oleomargarine to be delivered with the other products, such transaction may fairly be covered by the retailer's license. On the other hand, it would be just as unreasonable, and do violence to the legislative intent, to say that under this statute, a license to sell oleomargarine at retail, would permit the agents of the holder of the license to travel around into other cities and towns for the purpose of obtaining orders, even though the orders were to be filled by subsequent delivery from the place licensed." Under this proposed plan the agents are not even the employees of the retail dealer who holds the license, but are the employees of the manufacturer of the oleomargarine. They are employees of a license to sell at wholesale, and are taking orders to sell at retail. The Act of Assembly specifically requires not only the person, firm or corporation to be licensed, but "every agent of such person, firm or corporation desiring to manufacture, sell or offer or expose for sale *** oleomargarine," to make application for a license. It is within the latter of this statute to require every agent of a retail dealer to obtain a license before offering oleomargarine for sale. This construction, however, may not be within its spirit, but it is certainly within both the letter and the spirit to require an agent of the manufacturer who holds a wholesale license, to take out a license before he shall be permitted to offer oleomargarine for sale at retail. |