Price Paper Corp. v. City of Detroit

• Decision Date: 29 August 1972
• Docket Number: Docket Nos. 11811--11815 and 11838--11839,No. 1,1
• Citation: 202 N.W.2d 523,42 Mich.App. 488
• Parties: PRICE PAPER CORPORATION, a Delaware corporation, Plaintiff- Appellee and Cross-Appellant, v. CITY OF DETROIT and County of Wayne, Defendants-Appellants and Cross- Appellees
• Court: Court of Appeal of Michigan — District of US

Page 523

202 N.W.2d 523

42 Mich.App. 488

PRICE PAPER CORPORATION, a Delaware corporation, Plaintiff- Appellee and Cross-Appellant, v. CITY OF DETROIT and County of Wayne, Defendants-Appellants and Cross- Appellees.

Docket Nos. 11811--11815 and 11838--11839.

Court of Appeals of Michigan, Division No. 1.

Aug. 29, 1972.

Released for Publication Dec. 8, 1972.

Michael M. Glusac, Corp. Counsel, Lawrence W. Morgan, Julius C. Pliskow, Asst. Corp. Counsels, Detroit, for City of Detroit.

William L. Cahalan, Pros. Atty., William F. Koney, Asst. Pros. Atty., Detroit, for Wayne County.

Brownson Murray, Murray & Murray, Detroit, for plaintiff-appellee.

Before V. J. BRENNAN, P.J., and QUINN and O'HARA, ^* JJ.

O'HARA, Judge.

Defendants, City of Detroit and the County of Wayne, appeal the separate successive determinations of the trial court granting plaintiff recovery of certain Ad valorem taxes paid under protest.

The plaintiff, Price Paper Corporation, a Delaware corporation, is in the business of importing newsprint from Canada for resale to various newspapers in the United States. A principal customer is the Detroit Shopping News. In 1967 plaintiff began to rent storage space for its imported newsprint at the facilities of Safran Printing Co. instead of placing it in public warehouses as it had formerly done. At about the same time, Safran became the printer for plaintiff's customer, the Detroit Shopping News. Plaintiff's paper remained stored in its original wrappings until such time as Safran readied it for the presses. At that time, according to plaintiff's supply contract with the Detroit Shopping News, the paper would be identified to the contract and title would pass from Price to the Shopping News.

Defendants levied an Ad valorem tax on the rolls of newsprint stored with Safran commencing with the year 1967. Plaintiff paid under protest, claiming an import exemption under the Federal Constitution, U.S.Const. art. I, § 10(2).

Defendants claim the newsprint lost the character of an import. Inasmuch as the paper rolls stored with Safran were destined for the Shopping News, printed on the premises, and were readily available as part of the printer's working inventory, they thereby passed into the use for which they had been imported, I.e., as part of the current operating requirements of the publishing process. Hooven & Allison Co. v. Evatt, Tax Commissioner, 324 U.S. 652 65 S.Ct. 870, 89 L.Ed. 1252 (1945); Youngstown Sheet & Tube Co. v. Bowers, Tax Commissioner, 358 U.S. 534, 79 S.Ct. 383, 3 L.Ed.2d 490 (1959), and see Knight Newspapers, Inc. v. Detroit, 16 Mich.App. 438, 168 N.W.2d 318 (1969). We find, however, the so-called 'use doctrine' relied on in those cases inapplicable to the cases presently before us and to this plaintiff. Unlike Youngstown Sheet & Tube Company, the United States Plywood Corporation (second plaintiff in Youngstown), or Knight Newspapers, plaintiff here imported the merchandise for resale and not for its own manufacturing or publishing operation. Until the sale is consummated and the paper identified to the contract the holding in Detroit v. Lake Superior Paper Co., 202 Mich. 22, 167 N.W. 852 (1918), controls, I.e., the right to resell imported goods free of prior local property tax goes along with the right to bring them into the country. We affirm the lower court summary judgments to return the assessments.

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