Middletown Iron & Steel Co. v. Evatt
| Decision Date | 24 December 1941 |
| Docket Number | 28652,28653. |
| Citation | 139 Ohio St. 113,38 N.E.2d 585 |
| Court | Ohio Supreme Court |
| Parties | MIDDLETOWN IRON & STEEL CO. v. EVATT, Tax Com'r (two cases). |
Syllabus by the Court.
1. A person who purchases, receives or holds iron and steel scrap for the purpose of adding to its value by processing it in accordance with detailed specifications into such form that it may be used as a charge in an open-hearth furnace in the manufacture of steel, is a manufacturer within the meaning of Section 5385, General Code.
2. Scrap metal, purchased, received or held by such manufacturer for the purpose of so processing it and such as may be finished in such process of manufacturing for use in an open-hearth furnace in steelmaking, when stored as a finished product at the place of manufacture or at a warehouse in the same county therewith, shall be listed and assessed at fifty per centum of its true value in money on the days or at the times as of which it is required to be estimated on the average basis in accordance with Section 5388, General Code.
These two causes involve appeals from decisions of the Board of Tax Appeals concerning respectively 1938 and 1939 personal-property-tax returns of the appellant, The Middletown Iron & Steel Company.
The causes were heard before the board upon a stipulation of facts, exhibit A attached thereto and containing the specifications promulgated by The American Rolling Mill Company, and upon additional evidence.
The stipulation of facts reads:
'1. The Middletown Iron & Steel Company is a corporation organized and existing under the laws of the state of Ohio with its principal place of business located at Middletown Ohio, and its yards are adjacent to the steel plant of The American Rolling Mill Company located on Lebanon Canal Road in the city of Middletown, Ohio.
'2. Such corporation is engaged in the business of buying and selling numerous grades of scrap iron and steel which it sells to The American Rolling Mill Company after processing as hereinafter described.
'3. Such corporation purchases such scrap iron, causes it to be shipped to its yards and, after receiving the same, separates the types of iron and steel. Thereupon, by use of acetylene torches, alligator shears, and electrically driven hydraulic presses which consist of a hopper, a box, a ram, chutes, and compressors, it cuts and separates such iron and steel into substantially uniform shapes and dimensions according to specifications promulgated by The American Rolling Mill Company to which it sells its scrap, a copy of which specifications is hereto annexed marked exhibit A and made a part hereof as though herein written at length.
'4. Such corporation obtains the scrap iron from many sources of supply, including railroads, public utilities, industrial plants, automobile wreckers, used machinery and appliance dealers, demolition projects and peddlers.
'A large proportion of the operations of the corporation consists of the preparation of so-called 'No. 1 hydraulically compressed bundles' which are described as follows:
'These bundles consist of new black steel sheet clippings, shearing, skeleton stamping scrap, side and end sheet scrap, hydraulically draulically compressed into compact rectangular packages, not to exceed 20"" in the longest dimension, weighing not less than seventy-five pounds per cubic foot, free of excessive rust, paint or protective coating of any kind, no detinned scrap, electrical sheets or material of 0.5 per cent. silicon is acceptable. The density of the steel bundle produced and the metallurgical quality of highly densified steel clips produces a form of processed scrap which is specified and required for open hearth use.'
Exhibit A is as follows:
'The American Rolling Mill Company
'Middletown, Ohio
'Specifications for Iron and Steel Scrap
'January 1, 1933
'A. No. 1 Heavy Melting Steel Scrap
'Steel scrap 1/4"" and over in thickness, not over 18"'' in width and not over 5' long. Individual pieces must be cut into such shape that they will be free from attachments and will lie flat in a charging box. Cut boiler plate must be cleaned of lime and free from stay bolts and not over 3' long. Smaller dimensions of plate scrap may be required upon mutual agreement between buyer and seller. No piece to weigh less than 10 pounds.
'May include structural shapes, bars and plates, steel castings, heavy chain, carbon tool steel, heavy forgings, forge butts and similar heavy material.
'This grade may also include new mashed pipe ends, original diameter 4"" and over, thoroughly flattened, sheet bars, billets, blooms, rail ends, railroad steel scrap, such as angles, splices, couplers, knuckles, short rails, draw bars, cut cast steel bolsters, coil and leaf springs (all coil springs to be 3/8"'' or larger diameter).
'No needle or skeleton plate scrap, agricultural shapes, annealing pots, boiler tubes, grate bars, cast iron, malleable iron or curly or unwieldy pieces will be accepted.
'Must be free from dirt, excessive rust or scale, or foreign material of any kind. No alloy scrap will be accepted or silicon material over 0.5 of 1 per cent., or material containing brass, copper, or any foreign metals.
' American Railway Association Specifications Nos. 7, 8, 9, 21, 24, 31, 36 and 44 will be accepted, if within the above specifications.
'B. No. 2 Melting Steel
'Plate scrap such as car sides, automobile frame stock, tank and skelp crops, 1/8"" and heavier, steel parts of agricultural implements, wagons, buggies, and scraped automobiles, auto and buggy springs cut apart, rods and bars, 1/2"" and heavier, punchings, 1/4"" and over in thickness, heavy clippings, new unmashed pipe ends, under 4"'' diameter, horse shoes and similar material. Car sides and all light plates to be sheared 15"" X 15"'' or under and all tires and light rods to be 12"" and under in length. Any curved or twisted pieces must be sheared into such shape that they will lie flat in a charging box and not tangle in handling with a magnet, all to be free from cast iron, malleable iron, burnt scrap, dirt or foreign material of any kind.
'Maximum size 15"" wide by 3' long.
'No alloy steel scrap, silicon material over 1/2 of 1 per cent., material containing brass, copper or any foreign metals or lime deposit, will be accepted.
' Within the limits of this specification, American Railway Association classification No. 25 will be accepted.
'C. Heavy Shoveling Steel Scrap
'Heavy, clean wrought iron and steel scrap, 1/4"" and over in thickness, not exceeding 8"'' in breadth or length and no piece to be less than the equivalent of 1/2"" square 3"'' long. May include clean horse shoes, railroad spikes, bolts, nuts, tie plates, etc., boiler, bridge and structural punchings and clippings, small bar and shafting crops ends and other similar material.
'To contain no burnt material, cast or malleable scrap, cut pipe and tank, skeleton stock, badly corroded material, or any twisted or tangled scrap. Must be free from foreign metals of all kinds, limed material, galvanized, painted, enameled or other coated stock dirt and rubbish of all kinds, brass and copper, alloy steel and scrap containing more than 1/2 of 1 per cent. silicon.
'Must be loaded in separate cars from other grades of scrap.
' American Railway Association classification No. 58 will be acceptable on this specification, if within the limits of the above specifications.
'D. No. 1 Busheling
'Clean iron and soft steel pipes and flues, tank, cut hoops and bands No. 12 gauge and heavier, steel plate punchings and clippings, soft steel and iron forgings, and flashings; no dimension over 8"' '. To be free from burnt material, hard steel, cast, malleable, and galvanized, or coated stock of any kind, limed material, brass and copper and scrap containing more than 1/2 of 1 per cent. silicon.
' American Railway Association specifications Nos. 14 and 58 will be accepted, if within the limits of the above specifications.
'E. Axle Turnings
'Heavy, short first cut turnings from wrought iron and steel railroad axles or heavy forgings, and railchips, to weigh not less than 75 lbs. per cu. ft.
'To be free from dirt, alloy steel, brass, copper, or foreign metals of any kind.
'F. No. 1 Machine Shop Turnings
'New, clean steel or wrought iron turnings, short or curly stock, free from lumps, badly tangled or matted material, cast iron borings, excessive oil, dirt, alloy steel, copper, brass, or foreign materials of any kind. Badly rusted or corroded stock will not be accepted.
'G. Hydraulic Compressed Sheet Scrap
'New, black soft steel sheet clippings, shearings, skeleton stamping scrap, side and end sheet and tin mill scrap, hydraulically compressed into compact, rectangular packages not to exceed 20"" longest dimensions, weighing not less than 75 lbs. per cu. ft.; must be clean and free from excessive rust, paint or protective coating of any kind. No detinned scrap, electrical sheets containing silicon over 1/2 of 1 per cent., alloy steel, brass or copper, will be accepted.
'H. Baled Sheet Scrap
'New, black soft sheet steel clippings, shearings, skeleton stamping scrap, side and end sheet and tin mill scrap, machine baled into rectangular packages, tied with wire or bands, or sufficiently compact not to come apart in handling with a magnet, not over 20"" longest dimension, weighing not less than 45 lbs. per cu. ft.; must be clean and free from excessive rust, paint or protective coating of any kind. No detinned scrap, electrical sheets containing silicon over 1/2 of 1 per cent., alloy steel, brass or copper will be accepted.
'I. Hand-bundled Sheet Scrap
'New black soft steel clippings, shearings, skeleton stamping scrap, side and end sheet and tin...
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