City of Reading v. Forty-Five Noble St., Inc.

• Decision Date: 10 April 1980
• Docket Number: Appeal of 45 NOBLE STREET,INC.
• Parties: CITY OF READING, a Municipal Corporation v. FORTY-FIVE NOBLE STREET, INC., d/b/a O. B. Dyers.
• Court: Pennsylvania Commonwealth Court

413 A.2d 1153

50 Pa.Cmwlth. 431

CITY OF READING, a Municipal Corporation v. FORTY-FIVE NOBLE STREET, INC., d/b/a O. B. Dyers.

Appeal of 45 NOBLE STREET, INC.

Commonwealth Court of Pennsylvania.

April 10, 1980

Argued March 13, 1980.

Jan L. Deelman, Levan & Deelman, Reading, for appellant.

Adam B. Krafczek, City Sol., Peter F. Cianci, Asst. City Sol Reading, for appellee.

Before CRUMLISH, Jr., President Judge, and ROGERS and CRAIG, JJ.

CRAIG, Judge.

Forty-five Noble Street, Inc. d/b/a O. B. Dyers (O. B.) here appeals to contest liability for annual business privilege taxes of the City of Reading (city) for the years 1976 and 1977. The city levied the tax pursuant to the authority of The Local Tax Enabling Act, Act of December 31, 1965, P.L. 1257, as amended, 53 P.S. § 6901 et seq.

O.B. is engaged in the preparation, dyeing and finishing of textiles. O.B. contends that these operations constitute manufacturing and that it is entitled to the manufacturing exemption in Section IIIc(5) of the local ordinance, which is similar to the exemption in Section 2(4) of The Local Tax Enabling Act 53 P.S. § 6902(4).

After a nonjury trial, the Common Pleas Court of Berks County ruled that O.B. was not engaged in manufacturing within the exempting provision of the tax and entered a verdict in favor of the city in the amount of $10,346.00 plus interest of $2,350.02. After dismissal of O.B.'s exceptions, this appeal followed.

First, O.B. contends that the lower court erred in admitting, over O.B.'s objection, an excerpt from O.B.'s answer to the city's petition to discover O.B.'s income tax returns. The excerpt, regarding the nature of O.B.'s business, states in part that O.B. is engaged in: "(T)he dyeing and treating of textiles and fibers in order to add to and alter the qualities of such textiles and fibers to create the sizes, colors, textures and other characteristics desired."

Because neither the city's pre-trial memorandum nor the court's pre-trial conference order includes reference to this answer, O.B. states that Pa.R.C.P. No. 212 prohibits the city from introducing the excerpt into evidence.

Further, O.B. argues that introduction of this excerpt is unjust because the city failed to introduce any other evidence to carry its burden to prove that O.B. was subject to the business privilege tax. Thus, O.B. also contends that the lower court erroneously refused to enter compulsory nonsuit against the city.

A judgment of nonsuit may only be entered where a defendant has offered no evidence. In F. W. Wise Co. v. Beech Creek Railroad Co., 437 Pa. 389, 391-92, 263 A.2d 313, 315 (1970), the Pennsylvania Supreme Court stated that:

"A defendant's right to request a nonsuit is based on his offering no evidence, and the court cannot grant a nonsuit after the introduction of evidence by the defendant. (Citations omitted.) If a nonsuit motion made at the close of the plaintiff's case is refused by the trial judge, the defendant has an option either to rest on that motion and present no evidence, or to put in a case. If the defendant elects to proceed, . . . the correctness of the court's ruling is moot." (Footnote omitted.)

In the present case, after the judge denied O.B.'s motion for nonsuit, O.B. introduced its case, and therefore, as in F. W. Wise Co., supra, 437 Pa. at 391, 263 A.2d at 315, we hold, "that the refusal of a motion for nonsuit is not a valid reason for a new trial in . . . any case where the defendant offers testimony."

Further, we do not believe that O.B.'s claim of error as to the discovery pleading admission, concerning the nature of O.B.'s business, constitutes sufficient grounds to grant a new trial.

The court's pre-trial order specifically outlined the controlling legal issue as whether or not the defendant's business activity comprised manufacturing, and limited the admissions in the pleadings to those listed in the city's pre-trial memorandum. The admission at issue was not one so listed.

However, as stated in Golden Triangle Broadcasting, Inc. v. City of Pittsburgh, 31 Pa.Cmwlth. 547, 377 A.2d 839 (1977), where the statute is devoid of a definition, the term "manufacturing" is an issue of law under the facts of the particular case meaning all the facts. O.B. elected to and did present evidence from which the court determined that the business was not manufacturing. Hence, the admission was not critical. We cannot say that O.B. was unduly harmed or prejudiced by its own pleading.

Having disposed of these procedural issues, we reach the merits of the case and affirm the determination of the court below that the dyeing and processing of cloth is not manufacturing, and that O.B. is not entitled to the manufacturing exemption from the business privilege tax.

We are guided by the Pennsylvania Supreme Court decision in Commonwealth v. Keystone Laundry Co., 203 Pa. 289, 291, 52 A. 326 (1902) affirming per curiam a court of common pleas determination that a business incorporated for the purpose of "cleansing, bleaching, starching, and smoothing textile fabrics by the use of machinery . . . and the application of skilled manual operation" was not engaged in manufacturing for purposes of exemption from a capital stock tax.

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