Pelippe A. Broadbent Mantel Co. of Baltimore City v. Mayor & City Council of Baltimore

• Court: Maryland Supreme Court
• Writing for the Court: PATTISON, J.
• Citation: Pelippe A. Broadbent Mantel Co. of Baltimore City v. Mayor & City Council of Baltimore, 134 Md. 90, 106 A. 250 (Md. 1919)
• Decision Date: 03 March 1919
• Docket Number: No. 69.,69.
• Parties: PELIPPE A. BROADBENT MANTEL CO. OF BALTIMORE CITY v. MAYOR AND CITY COUNCIL OF BALTIMORE et al.

106 A. 250

PELIPPE A. BROADBENT MANTEL CO. OF BALTIMORE CITY

v. MAYOR AND CITY COUNCIL OF BALTIMORE et al.

No. 69.

Court of Appeals of Maryland.

March 3, 1919.

Appeal from Baltimore City Court; Chas. W. Heuisler, Judge.

Proceeding by the Felippe A. Broadbent Mantel Company of Baltimore City against the Mayor and City Council of Baltimore and the Judges of the Appeal Tax Court of Baltimore City for a tax exemption. The refusal of the application was, on appeal, affirmed by the Baltimore City Court, and from such affirmance, applicant appeals. Affirmed.

Argued before BOYD, C. J., and BRISCOE, BURKE, THOMAS, PATTISON, URNER, STOCKBRIDGE, and CONSTABLE, JJ.

Randolph Barton, Jr., of Baltimore (James J. McGrath, of Baltimore, on the brief), for appellant.

R. Contee Rose, Asst. City Sol., of Baltimore (S. S. Field, City Sol., of Baltimore, on the brief), for appellees.

PATTISON, J. Section 7 of Ordinance 140, passed by the mayor and city council of Baltimore, approved on July 6, 1912, provides that:

"The appeal tax court is authorized and directed upon the application, as hereinafter provided, of any individual, firm or corporation, actually engaged in the business of manufacturing articles of commerce in the city of Baltimore, to abate any and all personal taxes which may be levied hereafter by authority of the mayor and city council of Baltimore for any of the corporate uses thereof, upon any mechanical tools or implements, whether worked by hand or by steam, or other motive power, or upon any machinery or manufacturing apparatus, owned by such individuals, firm or corporation and actually employed and used in the business of manufacturing articles of commerce in the said city: Provided, that this section shall not be construed as exempting any manufacturing apparatus, tools or machinery used in the business of manufacturing or generating illuminating gas for sale, or any manufacturing apparatus, tools or machinery used in the business of generating or producing for sale electric light or electricity to be used as motive power, or for any other purpose, or any manufacturing apparatus, tools, type or machinery used in the preparation, printing or issuing by the printers or publishers thereof, of any daily journal or other periodical publication."

This ordinance was passed in pursuance of Acts 1912, c. 32, by which the mayor and city council of Baltimore were authorized and empowered:

"To provide by general ordinance, whenever it shall seem expedient for the encouragement of the growth and development of manufactures and manufacturing industry in the said city, for the abatement of any or all taxes levied by authority of the said mayor and city council of Baltimore, or by ordinance thereof, for any of the corporate uses thereof, upon any or all personal property, of every description owned by any individual, firm or corporation in said city, and property subject to valuation and taxation therein, including mechanical tools or implements, whether worked by hand or steam or other motive power, machinery, manufacturing apparatus or engines, raw materials on hand, stock in trade, bills receivable, and business credits of every kind, which said personal property shall be actually employed or used in the business of manufacturing in said city: Provided that such abatement shall be extended to all persons, firms and corporations engaged in the branches of mannfacturing industry proposed to be benefited by any ordinance passed under the provisions of this paragraph of this section." Section 1.

By an agreed statement of facts found in the record, the appellant, a corporation, incorporated under the laws of this state, is the owner of a plant, mechanical tools, and implements, which it for eight years prior to March 22, 1912, had used and employed in the business of manufacturing articles of commerce in the city of Baltimore, during which time it had enjoyed an exemption from taxation thereon, but on March 28, 1912, said plant, tools, and machinery, as well as the building in which they were located, were leased to others; that the appellant since leasing said property—

"has not directly or indirectly operated this or any other plant for its own account, and has not been actually engaged in manufacturing, but has derived its revenue from the rent received under the lease."

The appellant made application to the appeal tax court of Baltimore city for an exemption of its said property for the year 1914, but that court declined to abate the assessment thereon for said year—

"on the ground that the applicant plaintiff was not operating the said machinery nor actually engaged in manufacturing, but derived its revenue from the hiring of its plant and machinery to others."

Upon appeal to the Baltimore city court the action of the appeal tax court was affirmed, and this appeal is taken from the order of that court affirming the action of the appeal tax court.

The question here presented involves the construction of the ordinance, above quoted. The fundamental rule governing the construction of exemptions is that the particular exemption claim cannot be sustained, unless it is shown to be within the spirit as well as the letter of the law (United Railway Co. v. Baltimore City, 93 Md. 634, 49 Atl. 655, 52 L. R. A. 772), and the party asserting the exemption must show that the power to tax in the particular case has been clearly relinquished," and as this court has said in Appeal Tax Court v. Rice, 50 Md. 312:

"If this has not been done, * * * the question whether or not the exemption has been granted must be resolved in favor of the state."

The court said in Sindall v. Baltimore City, 93 Md. 530, 49 Atl. 646:

"The taxing power is never presumed to be surrendered, and therefore every assertion that it has been relinquished must, to be efficacious, be distinctly supported by a clear and unambiguous legislative enactment. To doubt is to deny an exemption."

The exemption, when found to exist, shall not be enlarged by construction. Cooley on Taxation (2d Ed.) p. 205. As disclosed by the record, the appellant company was denied the exemption sought, on the ground that it was not actually engaged in manufacturing. The appeal tax court took the position that, under the ordinance, the exemption was only to be granted to those actually engaged in manufacturing, and, as the appellant was not so engaged it was denied the exemption asked for.

In the case of Portsmouth Shoe Co. v. Portsmouth, 74 N. H. 222, 66 Atl. 1045, the statute there under consideration provided that—

"Towns may by vote exempt from taxation, for a term not exceeding ten years, any manufacturing establishment proposed to be erected or put in operation therein, and the capital to be used in operating the same, unless such establishment has been previously exempted from taxation by some town."

In that case, the Gale Shoe Manufacturing Company, a Massachusetts corporation, wished to go to Portsmouth and there engage in the manufacture of shoes, and the city...