American Newspapers, Inc. v. McCardell

• Court: Maryland Supreme Court
• Citation: American Newspapers, Inc. v. McCardell, 174 Md. 56, 197 A. 574 (Md. 1938)
• Decision Date: 09 March 1938
• Docket Number: 18.
• Parties: AMERICAN NEWSPAPERS, Inc., v. McCARDELL et al.

197 A. 574

174 Md. 56

AMERICAN NEWSPAPERS, Inc., v. McCARDELL et al.

No. 18.

Court of Appeals of Maryland

March 9, 1938

Appeal from Baltimore City Court; Robert F. Stanton, Judge.

Proceeding by the American Newspapers, Incorporated, to establish a claim for exemption from taxation of its machinery, tools and raw materials, against A. LeRoy McCardell and Fred P Adkins, constituting the State Tax Commission, and others. From an order affirming an assessment which allowed no exemption, the claimant appeals.

Affirmed in part, reversed in part, and case remanded with directions.

Under statute, a Baltimore newspaper publisher which, in addition to its daily edition, published two weekly papers of general circulation outside the state for sale in bulk to other newspapers, was entitled to exemption from taxation of its machinery, tools, and raw materials as a "manufacturer" to the extent that the machinery etc., was used in the production of the weekly publications. Code Pub.Loc.Laws 1930, art. 4, § 6(28)(c); Code Pub.Gen.Laws Supp.1935, art, 81, § 7, subsecs. (25, 26). Karl F. Steinmann and Arthur W. Machen, both of Baltimore (Alexander Armstrong, of Baltimore, on the brief), for appellant.

Michael J. Hankin and Lawrence B. Fenneman, Asst. City Sols., both of Baltimore (R. E. Lee Marshall, City Sol., of Baltimore, on the brief), for appellees.

Argued before BOND, C.J., and URNER, OFFUTT, PARKE, SLOAN, SHEHAN and JOHNSON, JJ.

SLOAN Judge.

This appeal is from an order of the Baltimore city court, affirming an assessment by the State Tax Commission of the property of the American Newspapers, Incorporated, which issues and publishes in Baltimore a newspaper, known as the 'News-Post' daily for six days a week, Monday to Saturday, both inclusive, and a weekly newspaper on Sundays known as the 'Sunday American.' The appellant, American Newspapers, Inc., had made a claim for exemption from taxation of its machinery, tools, and raw materials on the ground that it was a manufacturer under subsections (25) and (26), section 7 of article 81, Code Supp.1935, Act 1935, c. 225, which read as follows:

'(25) Tools (including mechanical tools), implements, whether worked by hand, steam or other motive power, machinery, manufacturing apparatus or engines used in manufacturing, whether temporarily idle or not, in any county (including the City of Baltimore) in which by law, resolution or ordinance the same are or may be exempt from county or city taxation; and the County Commissioners of any county and the Mayor and City Council of Baltimore are hereby authorized to pass such resolution or ordinance.

'(26) Raw materials on hand and manufactured products in the hands of the manufacturer in any city and/or county in which by law, resolution or ordinance the same are or may be exempt from county and/or city taxation; provided that nothing on this subsection shall exempt any such property from State taxation of from assessment therefor.' (These subsections are a re-codification of section 169, article 81 of the Code of 1924 to the same effect), and under the authority of a local law, passed prior to the general law, and subsequently amended, and now appearing as section 6(28)(c), article 4, Code of Public Local Laws, to the same effect, and still in force in Baltimore City. In pursuance of this local law, the mayor and city council enacted an ordinance, No. 140, Baltimore City Code of 1928, art. 46, § 80, providing for the exemption from taxation of the machinery and tools of manufacturers, which excepted gas and electric companies, and printers and publishers 'of any journal or other periodical or other periodical publication.' In Frederick Electric Light & Power Co. v. Frederick, 84 Md. 599, 36 A. 362, 36 L.R.A. 130, it was held that an electric light company was not a manufacturing industry, and therefore not entitled to such exemption, and the same rule had been applied to the gasometers and mains of a gas company in Consolidated Gas Co. v. Baltimore, 62 Md. 588, 50 Am.Rep. 237. The statutes made no exceptions, and the local law, art. 4, § 6(28)(c), P.L.L., authorized the mayor and city council of Baltimore 'To provide by general ordinance * * * for the abatement of any or all taxes levied * * * upon any or all personal property, * * * actually employed or used in the business of manufacturing in said city.' The plain meaning of this is that the city could not exempt some manufacturing businesses and exclude others from the benefit of the act, but that the ordinance should be general in its nature, and whatever the property exempted, it should be to all manufacturers alike. The exception of 'any journal or other periodical' does not depend on the ordinance, but whether in fact it is a 'manufacturing business,' within the meaning of the statute.

The facts in Rowe Co. v. State Tax Commission, 149 Md 251, 131 A. 509, were not the same as those presented here, but the test applied in determining whether the publisher was a manufacturer is just as applicable here as it was there. In that case this court, in an opinion by Judge Offutt (at page 260 of 149 Md., 131 A. 509, 512) said: 'A publisher may...