COMPTROLLER v. RHEEM MFG. CO., 216 Md. 259 (1958)

140 A.2d 301

[No. 127, September Term, 1957.]Court of Appeals of Maryland.
Decided March 31, 1958. Certiorari denied, 358 U.S. 822.

TAXATION — Sales and Use Taxes — Facilities Held Purchased for Resale and Not Subject to, under Controlling Decision in Companion Case — Resale Certificates. Where a manufacturer, pursuant to a facilities contract entered into with the United States Government, made certain purchases of facilities from November, 1952, through April, 1955, in order to produce shell cases for the Government, these purchases were held to be for resale, and not subject to sales and use taxes under the controlling decision of the Court in Comptroller of the Treasury v. The Glenn L. Martin Company, 216 Md. 235, 140 A.2d 288, a companion case. Although the two cases differed in that the manufacturer here did not furnish resale certificates to its vendors, as called for by the Comptroller’s Rule 40, no point was made of this difference in the trial court, and a stipulation to the effect that the decision in the other case would be binding in the instant case seemed to have eliminated the difference from consideration. Since the point did not appear to have been passed upon by the trial judge, who did not refer to it in his opinion, it was not properly before this Court on appeal. The Court found no basis for distinguishing between the two cases as they were presented to it. pp. 260-261

J.E.B.

Page 260

Decided March 31, 1958.

Appeal from the Circuit Court for Baltimore County (RAINE, J.).

Petition by the Rheem Manufacturing Company for appeal from the decision of the Comptroller of the Treasury denying petitioner’s claimed refund of Maryland sales and use taxes paid on certain purchases of facilities made by petitioner from November, 1952, through April, 1955. From an order reversing the action of the Comptroller and entering judgment for petitioner for the amount of the refunds claimed, the Comptroller appeals.

Affirmed, with costs.[1]

The cause was argued before BRUNE, C.J., and HENDERSON, HAMMOND, PRESCOTT and HORNEY, JJ.

Charles B. Reeves, Jr., Assistant Attorney General, an Edward F. Engelbert, Staff Attorney, Retail Sales Tax Division,
with whom was C. Ferdinand Sybert, Attorney General, on the brief, for the appellant.

William L. Marbury, with whom were Charles C.G. Evans, Frederic S. Cross, John Martin Jones, Jr., and Piper Marbury
on the brief, for the appellee.

BRUNE, C.J., delivered the opinion of the Court.

This is a companion case to Comptroller of the Treasury v. The Glenn L. Martin Company, 216 Md. 235, 140 A.2d 288. The two cases were submitted together in the Circuit Court for Baltimore County under an agreement between counsel for both parties that the decision in the Martin case would be binding in this case. The Circuit Court, in accordance with that stipulation and basing its order upon its opinion in the Martin case reversed the action of the Comptroller, which had denied a refund of sales and use taxes to the appellee, Rheem Manufacturing Company (“Rheem”); and the court ordered that Rheem “have judgment for $4,306.60, the amount of its claim for refund.” The Comptroller appeals.

Page 261

There are no essential differences between this case and th Martin case. Rheem has a plant at Sparrows Point, Maryland, at which it is engaged generally in the manufacture of steel containers, drums, pails, water heaters, tanks and boilers. The Army wanted Rheem to produce a particular type of shell case for use in the Korean War. Since Rheem did not have the facilities for the production of such shell cases, it entered into a facilities contract with the United States Government, acting through the Department of Defense, which was of the same general type as the facilities contracts involved in the Martin case. Purchases of facilities thereunder, in respect of which the Comptroller held sales and use taxes were payable (the two being segregated in this case), extended from November, 1952, through April, 1955. Rheem, unlike Martin, did not furnish resale certificates to its vendors, as called for by Rule 40 of the Rules and Regulations of the Comptroller.

No point was made of this difference in the trial court, and the stipulation above referred to would seem to have eliminated it from consideration. It does not appear to have been passed upon by the trial court and it is not referred to in Judge Raine’s opinion. Consequently, it stands no better than did the same point in Comptroller v. Aerial Products, Inc., 210 Md. 627, 124 A.2d 805, and it is not properly before us.

There is no basis for distinguishing between the Martin case and this case as the two appeals have been presented to us, and the decision in the Martin case, which we shall not restate or summarize here, is controlling.

Order affirmed, with costs.

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