State v. Christhilf

• Court: Maryland Supreme Court
• Citation: State v. Christhilf, 170 Md. 586, 185 A. 456 (Md. 1936)
• Decision Date: 10 June 1936
• Docket Number: 40,41.
• Parties: STATE v. CHRISTHILF ET AL. STATE v. CONSOLIDATED ENGINEERING CO., INC.

185 A. 456

170 Md. 586

STATE v. CHRISTHILF ET AL.

STATE v. CONSOLIDATED ENGINEERING CO., INC.

Nos. 40, 41.

Court of Appeals of Maryland

June 10, 1936

Appeals from Superior Court of Baltimore City; Samuel K. Dennis Judge.

Separate suits by the State against Francis D. Christhilf and John H Ensey, copartners trading as Christhilf & Ensey, and against the Consolidated Engineering Company, Inc. From judgments in favor of the defendants, the State appeals.

Judgments affirmed.

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

Herbert R. O'Conor, Atty. Gen., and Edgar Allan Poe, Jr., Sp Asst. Atty. Gen. (Wm. L. Henderson, Asst. Atty. Gen., on the brief), for the State.

G. C. A. Anderson, of Baltimore (Keech, Carman, Tucker & Anderson, of Baltimore, on the brief), for the appellees Christhilf and Ensey.

Morris Rosenberg, of Baltimore (Allan Sauerwein and Tydings, Sauerwein, Levy & Archer, all of Baltimore, on the brief), for appellee Consolidated Engineering Co.

Herman M. Moser, Walter C. Mylander, and Nathan Patz, all of Baltimore, amici curiæ.

SLOAN Judge.

The question involved is whether the emergency gross receipts tax, as enacted by chapter 188 of the Acts of 1935, applies (1) to road contractors for materials entering into the construction of a public road, and (2) to a contractor for the materials used in the erection of a building. The trial court held the contractor not to be chargeable with the tax imposed by the act, and from judgments in favor of the defendants the state appeals.

The first appeal, No. 40, is the case of Francis D. Christhilf and John H. Ensey, copartners, trading as Christhilf & Ensey, who contracted with the state for the construction of 3.1 miles of highway on the road known as the Annapolis boulevard, under what is known as a "unit bid contract." A separate bid was made for each unit, and the aggregate of forty-four units constituted the estimated contract price. The total contract price was estimated at $202,172.45, and the actual price paid $235,420.35, due to the difference between the estimated units and the actual requirements for the completion of the road; the increase having been made on the basis of the original unit prices. The contract was signed July 26, 1934, and the completed road accepted by the state roads commission November 12, 1935. Eliminating receipts prior to April 1, 1935, when the act took effect, the comptroller estimated the materials entering into the construction of the road at $106,513.08, and on this basis demanded the 1 per cent. tax imposed by the statute. The assessed price of materials was their cost to the contractors, and was also the selling price, if there was a sale by the contractors to the state.

The second appeal, No. 41, is in the case of the Consolidated Engineering Company, Inc., which contracted May 4, 1934, with the board of regents of the University of Maryland for the erection of an arts and science building at College Park, for $259,850. The comptroller has made an assessment for materials entering into the structure since March 31, 1935, on the basis of $133,363.38, and demanded the tax on the same at 1 per cent.

The tax is demanded of the defendants in both cases on the theory that they sold the materials which went into the contracts at retail, a conclusion with which this court disagrees.

The section of the Act of 1935, chapter 188 (section 72-B), which the state invokes, reads as follows: "For the privilege of engaging in the business of selling tangible personal property at retail, there is hereby imposed upon every person engaging in such business a license fee or tax, in addition to all other fees or taxes imposed by law, at the rate of one per centum of the gross receipts of any such person, on and after April 1st, 1935, to and including March 31st, 1936, from the sale of all tangible personal property at retail."

The title of the act, which must show its purpose and object, so that "he who runs may read" (Constitution, art. 3, § 29), provides "for the levy and collection of a tax for the privilege of engaging in the business of selling tangible personal property at retail at the rate of 1% of the gross receipts from such sales." It is apparent from the wording of the titling of section 72-B that ordinarily the decision would depend on the definition of the word "retail," qualified, however, by the definitions set out in section 72-A of the Act of 1935 (Jones v. Gordy, 169 Md. 173, 180 A. 272), and, unless the act so defines it as to bring it within the facts of this case, then the commonly accepted meaning will prevail.

Section 72-B, which provides for the levy of the tax, also in terms makes of it an occupational tax when it says it is the consideration "for the privilege of engaging in the business of selling tangible personal property at retail," so that it is implied that these defendants are engaged in the business of retail merchandising, wherein the tax is measured or calculated from retail sales of merchandise, and this is the only inference to be drawn from subsection (b) of section 72-A, where the word "business" is defined to include "all activities or acts engaged in or caused to be engaged in by any person with the object of gain, profit, benefit or advantage, either direct or indirect, through the sale of goods, wares, merchandise or other tangible personal property to the ultimate consumer, user, customer or patron." Subsection (c) defines the word "sale" to mean "any transfer of the ownership or title of tangible personal property to the consumer for use and not for purposes of resale for a monetary consideration."

By subsection (d) a "vendor" means "any person who engages in the business of selling at retail tangible personal property subject to the tax imposed by this Act, whether such person is a manufacturer, producer, wholesaler, jobber or retailer." Subsection (g) defines the "consumer" to mean "the purchaser at final sale or the user of any tangible personal property subject to the tax imposed by this Act."

Reading these definitions and section 72-B together, it does not require any abstract reasoning nor...