Touart v. American Cyanamid Co.

• Citation: 250 Ala. 551,35 So.2d 484
• Decision Date: 08 April 1948
• Docket Number: 1 Div. 316.
• Parties: TOUART v. AMERICAN CYANAMID CO.
• Court: Supreme Court of Alabama

35 So.2d 484

250 Ala. 551

TOUART v. AMERICAN CYANAMID CO.

1 Div. 316.

Supreme Court of Alabama

April 8, 1948

Rehearing Denied May 13, 1948.

A. A Carmichael, Atty Gen., Gardner F. Goodwyn, Jr., of Bessemer, and Williard W. Livingston, Asst. Atty. Gen., for appellant.

Vickers, Leigh & Thornton and Norvelle R. Leigh, III, all of Mobile, for appellee.

It appears that appellee is a Maine corporation with its principal place of business in New York City, and has qualified to do business in Alabama. It manufactures aluminum sulphate at its plant located Mobile County Alabama. The construction of the plant was begun in 1938 and was completed within a year afterwards. On October 22, 1946, construction was started upon an enlargement of this plant. The enlargement or addition consists of a process to make sulphuric acid, which is used to make

the aluminum sulphate. Prior to this new construction the sulphuric acid used by the appellee was purchased by it. The new construction work is located on the plant site and the sulphuric acid is pumped direct from its process of manufacture into the main plant by pipe line. Most of the construction took place during 1947.

The original plant consisted or four buildings connected by pipe lines, steam lines, and the like. The structure that was begun in 1946 is a steel building of the new type of commercial plant, with a control room. The equipment is outside and is governed by a control room which is enclosed. None of the new work begun in 1946 is inside the old buildings. The sulphuric acid is piped from the new structure direct to the old buildings. Only sulphuric acid is manufactured in the new building. The sulphuric acid is mixed with bauxite or aluminum ore, which forms aluminum sulphate, the ultimate product of the entire plant. Aluminum sulphate is used in the paper industry, in water purification, and in other ways. It is not used in manufacturing aluminum metal. The approximate cost of the new structure was about $250,000.00, and it is finished at this time to a point where it can be used, although there is still some general work to do around the plant. The plant started running acid on August 5, 1947. The new structure consists of metal vats and pipes and boilers and the like. There is a tremendous amount of foundation, a big concrete slip and pits. The equipment sets outside. The new plant is run from the control room but not the old plant.

It further appears that appellant, tax assessor, from year to year recognized that the plant of appellee, begun in 1938, was exempt from State, County and municipal taxation, and had so marked same exempt. Appellee applied to appellant for exemption on extensions made on its plant in 1946 and 1947, and appellant advised appellee of his refusal to recognize these exemptions and would refuse to mark them as exempt on appellee's returns, and would refuse to do so from year to year, and that, as tax assessor, he would disallow them insofar as concerned these improvements that were made in 1947. Exemption as to the main plant of appellee expires in 1948.

The prayer for declaratory judgment was (1) whether the addition is exempt from state, county or municipal taxes for any period of time, (2) whether it is exempt for a period of ten years from the begining of construction of the main plant, and (3) whether it is exempt for ten years from the beginning of construction of the addition.

Appellant's demurrer raised the objection that the proceeding was an action against the State, in violation of the Constitution; that an action for declaratory judgment would not lie; that the exemption claimed was not constitutional and that the statutes did not exempt said improvements.

The trial court overruled the demurrer and, on final hearing, decreed tht the addition constructed within the twelve-month period next succeeding October 22, 1946 to the manufacturing plant is 'exempt from State, County and municipal ad valorem taxation for a period of ten years from October 22, 1946, but said exemption shall not apply to the land on which said addition is located.'

The proviso to Section 6, Title 51 of the Code is as follows: 'Provided, however, that if after September 13, 1939 any existing factory, mill, or plant, or the owner thereof, shall erect or construct any addition, extension or betterment, or shall complete the construction of any addition, extension or betterment whensoever begun, or shall erect or construct another or additional unit, or units, whensoever begun, to such existing factory or plant, involving an expenditure, of an amount not less than fifty thousand dollars within any twelve months period, in constructing and equipping such extension, betterment, unit or addition within the State of Alabama, including the works, machinery and all other equipment constituting a part of, or used in connection with, such extension, unit betterment, or addition, the exemption and remittance provided for in this chapter shall apply to so much of said extension, addition or betterment, and additional units erected, constructed or completed, after

September 13, 1939, including the works, machinery and other equipment constituting a part of or used in connection with the same.'

Section 10, Title 51 of the Code reads: 'All factories and manufacturing plants manufacturing calcium cyanamide (lime nitrogen) aluminum or aluminum products shall be exempted from state, county and municipal taxation for ten years after the beginning of the construction of such plant or factory. The exemption provided herein shall apply solely to the factory or plant and to the personal property used therein or connected therewith in the manufacturing of said articles; but shall not apply to the land upon which such factory or plant is located.'

GARDNER Chief Justice.

The American Cyanamid Company filed the bill in this cause against the Tax Assessor of Mobile County seeking a declaratory judgment to the effect that the extensions, additions and betterments of its plant, exceeding in cost $50,000.00, within a period of one year, were exempt from taxation by virtue of the provisions of section 6 in connection with section 10, Title 51, Code of 1940, and that such exemption is to continue for ten years.

Upon pleadings and proof for final decree, the chancellor granted a declaratory decree in accordance with the prayer for relief, declaring such additions exempt from state, county and municipal taxation for ten years from October 1946. From this decree, the tax assessor prosecutes this appeal.

Concerning the preliminary question as to whether or not the declaratory judgment proceeding was justified in view of our constitutional inhibition relating to suits against the State, we think the citation of Curry v. Woodstock Slag Corporation, 242 Ala. 379, 6 So.2d 479, 480, suffices for an answer. Here, as there, a controversy existed between an individual and the office holder, and no injunctive or other relief is sought save a declaratory judgment or decree to settle the controversy. As observed in the Curry case, supra, 'When it is only sought to construe the law and direct the parties, whether individual or State officers, what is required of them under a given state of of facts, to that extent it does not violate section 14, Constitution.' Applying this rule to the instant case, we think the appropriate remedy was pursued.

Coming to the merits of this appeal, we feel impelled to the conclusion the chancellor fell into error in holding these additions exempt for the ten year period.

As we understand the record, appellee has enjoyed an exemption for practically a ten year period under what is now section 10, Title 51, Code of 1940. It seeks this exemption for additions and betterments for an additional ten year period under the provisions of section 6, construed in connection with said section 10, all of which is rested upon the word 'Chapter,' as found in a proviso of said section 6.

We are not unmindful of the authorities cited by counsel for appellee as to the duty of the Court in construing statutes. We cite a few of these cases: State v. Praetorians, 226 Ala. 259, 146 So. 411; Kruetner v. State, 202 Ala. 287, 80 So. 125; Tucker v. McLendon, 210 Ala. 562, 98 So. 797; Birmingham Paper Co. v. Curry, 238 Ala. 138, 190 So. 86; Street v. Cloe, 207 Ala. 631, 93 So. 591; Holt v. Long, 234 Ala. 369, 174 So. 759; Southern Industrial Institute v. Lee, 234 Ala. 404, 175 So. 365; Brooks v. Mobile School Com'rs, 31 Ala. 227.

Nevertheless, it must be kept in mind that we are here dealing with a proviso in section 6, supra, the appropriate office of which is to restrain or modify the enacting clause, or preceding matter, and should be so confined, unless it is apparent it should apply to some other matter. Wartensleben v. Haithcock, 80 Ala. 565, 1 So. 38; Hawkins v. Peoples Finance & Thrift Co., 219 Ala. 558, 122 So. 650.

We are persuaded this proviso in section 6 is limited in its application to matters previously set forth in this section. Both sections 3 and 6 of Title 51, Code of 1940, originated in section 3 of the General Revenue Act of 1935. General Acts 1935, page 256. This original section 3 required the consent of the county or municipal authorities for such exemption, and the approval of the proper State authority as to State taxes. What is now section 10, Title 51, Code of 1940, was the original section 4 of the 1935 Act, supra.

Counsel for appellant argue the unconstitutionality of said section 10. But bearing in mind the wide latitude of discretion vested in the lawmaking body in the selection of the type of industrial plants that should enjoy tax exemptions, we are unwilling to hold the provisions of section 10, exempting for a ten year period plants...