Mayor & City Council of Caltimore v. Price, 41.

• Decision Date: 20 July 1931
• Docket Number: No. 41.,41.
• Citation: 155 A. 739
• Parties: MAYOR AND CITY COUNCIL OF CALTIMORE v. PRICE et al.
• Court: Maryland Court of Appeals

155 A. 739

MAYOR AND CITY COUNCIL OF CALTIMORE

v. PRICE et al.

No. 41.

Court of Appeals of Maryland.

July 20, 1931.

Appeal from Baltimore City Court; George A. Sorter, Judge.

Application by the Union Shipbuilding Company for an exemption from taxation of property used in connection with manufacturing. An order of the Appeal Tax Court declaring the property subject to taxation was reversed by the State Tax Commission, and, on appeal of the City of Baltimore, the City Court sustained the action of the State Tax Commission, and the City of Baltimore appeals.

Affirmed.

Argued before BOND, C. J., and PATTISON, URNER, ADKINS, OFFUTT, DIGGES, PARKE, and SLOAN, JJ.

Joseph R. Walter and W. Wallace Rhynhart, Asst. City Sols., both of Baltimore (A. Walter Kraus, City Sol., of Baltimore, on the brief), for appellant.

William L. Marbury and William L. Rawls, both of Baltimore, for appellees.

SLOAN, J.

The question, and only question, involved in this appeal is whether the machinery, tools, and materials of the Union Shipbuilding Company, one of the appellees, are "used entirely or chiefly in connection with manufacturing" and as such, entitled to exemption "from taxation for all ordinary municipal purposes" under the provisions of section 10, c. 82 of the Acts of 1918.

The Union Shipbuilding Company had applied to the Appeal Tax Court of Baltimore for an exemption from taxation for the year 1930 on machinery valued at $250,000 and raw material, $600,000, under the Act of 1918, chapter 82, and an order was passed deducting as exempt, $82,730, representing the value of a plant manufacturing acetylene and oxygen gases used in connection with its operations, and declaring the balance of the items claimed were subject to taxation. From this order, an appeal was taken by the applicant, as to the property held taxable, to the state tax commission of Maryland, which reversed the order of the Appeal Tax Court. The city of Baltimore then appealed, to the Baltimore city court, which sustained the action of the state tax commission, holding that the Union Shipbuilding Company should be "classed as a manufacturer" and entitled to the exemption on the property scheduled, except certain machinery and equipment scheduled at a value of $23,419.39, which the parties agreed was assessable, and it is from the order of the city court that this appeal is taken by the city of Baltimore.

The Union Shipbuilding Company had been for many years engaged at Fairfield, Curtis Bay, in the city of Baltimore, on a large scale in the business of shipbuilding. After the World War, that line of business disappeared, leaving the company with a large plant on its hands. Since 1921, it has been engaged in the purchase and dismantling of steel vessels, and the transformation or cutting of the metal parts of such vessels into sizes suitable for use in the manufacture of steel and other metallic-products. Practically all of the vessels so cut to pieces are bought from the government of the United States under agreements whereby they must be dismantled and every usable part rendered unfit for use as installed on the vessel so purchased. According to the statement of one of the company's witnesses read in evidence, "Upon arrival at our plant the vessels are placed alongside piers and stripped of all wood and miscellaneous equipment, after which they are cut into sections approximately 24 feet long by 5 feet wide, by use of acetylene torches and the sections are then removed by locomotive cranes, placed in railroad cars and transferred to shears, where they are cut into sections five feet long by eighteen inches wide, the prescribed open hearth large box size. Material so cut is then loaded by overhead magnetic cranes into cars and shipped to steel mill furnaces, where, in connection with a certain percentage of pig Iron, it is converted into steel ingots, which in turn are rolled into various shapes." The conversion is not done by the company, but by its customers. "Non-ferrous material (brass, copper and bronze) is removed from vessels, transferred to shears, where it is cut into small pieces for melting into ingots." "The Union Shipbuilding Company is now engaged in the production of approximately 12,000 tons of heavy melting steel per month and it is employing from 600 to 650 men...