Summary
recognizing discretion in board to determine "new industry" status
Summary of this case from Libby v. City of DillinghamOpinion
No. 33779.
October 2, 1939.
1. TAXATION.
The act for the balancing of agriculture with industry providing for exemption from ad valorem taxes of new factories and new enterprises was designed to relieve unemployment within the state by encouraging and promoting the establishment of new industries (Laws 1936, 1st Ex. Sess., chap. 1, sec. 19, as amended by Laws 1936, 2d Ex. Sess., chap. 18, sec. 1).
2. TAXATION.
Under statute providing for exemption from ad valorem taxes of property of new factories and new enterprises including structures already built, board of supervisors was vested with jurisdiction and authority to judicially determine whether or not proposed factory and enterprise was to be new in truth and in fact (Laws 1936, 1st Ex. Sess., chap. 1, sec. 19, as amended by Laws 1936, 2d. Ex. Sess., chap. 18, sec. 1).
3. TAXATION.
Where individual purchaser of idle cotton thread spinning factory site obtained from county board of supervisors finding of fact that purchase was for purpose of establishing a new factory and new enterprise of public utility within tax exemption statute, exemption from ad valorem taxes became effective and thereafter inured to benefit of corporation formed by purchaser to carry on business (Laws 1936, 1st Ex. Sess., chap. 1, sec. 19, as amended by Laws 1936, 2d Ex. Sess., chap. 18, sec. 1).
4. TAXATION.
Where county board of supervisors on affidavit and petition finds that proposed factory and enterprise is a new factory and enterprise within tax exemption statute, property itself is exempt from burden of taxation without regard to its ownership (Laws 1936, 1st Ex. Sess., chap. 1, sec. 19, as amended by Laws 1936, 2d Ex. Sess., chap. 18, sec. 1).
5. TAXATION.
A shirt factory established on the idle thread spinning factory site after purchase of idle site on December 15, 1936, by individual who subsequently formed corporation to operate factory which employed 550 persons, was a "new factory" and a "new enterprise" within statute so as to be entitled to exemption from ad valorem taxes for five-year period beginning December 15, 1936 (Laws 1936, 1st Ex. Sess., chap. 1, sec. 19, as amended by Laws 1936, 2d Ex. Sess., chap. 18, sec. 1).
6. TAXATION.
The statute providing for exemption from ad valorem taxes for five-year period of property of new factories and new enterprises including structures already built when found by board of supervisors to be a new factory and enterprise in fact is not unconstitutional for failure to prescribe mode and manner in which exemption is to be determined, since statute itself grants exemption without further affirmative action after prescribed finding of fact is made (Laws 1936, 1st Ex. Sess., chap. 1, sec. 19, as amended by Laws 1936, 2d Ex. Sess., chap. 18, sec. 1; Const. 1890, sec. 182).
7. TAXATION.
The statute providing new enterprises of public utility for exemption of property of new factory or enterprise from ad valorem taxes for period of five years, the time of such exemption to commence from purchase of land or structure already built, was not unconstitutional for failure to prescribe mode and manner in which right to exemption should be determined as applied to shirt factory established on idle thread spinning factory site after purchase thereof by individual who subsequently formed corporation to operate factory (Laws 1936, 1st Ex. Sess., chap. 1, sec. 19, as amended by Laws 1936, 2d Ex. Sess., chap. 18, sec. 1; Const. 1890, sec. 182).
8. TAXATION.
Where a shirt factory was established on idle thread spinning factory site after purchase thereof by individual, fact that exemption from ad valorem taxes granted thread spinning company authorized such company to operate factory for making cotton goods did not affect right of shirt factory to exemption from ad valorem taxes for five-year period from time of purchase as a "new factory" and a "new enterprise" (Laws 1936, 1st Ex. Sess., chap. 1, sec. 19, as amended by Laws 1936, 2d Ex. Sess., chap. 18, sec. 1).
9. TAXATION.
The test whether factory operated on old factory site is entitled to exemption from ad valorem taxes as a "new factory" and a "new enterprise" within statute is whether factory is a "new factory" and a "new enterprise" as compared with that which was actually operated by the former owner, rather than whether the former owner could have operated the same sort of factory or enterprise under exemption theretofore granted to the former owner (Laws 1936, 1st Ex. Sess., chap. 1, sec. 19, as amended by Laws 1936, 2d Ex. Sess., chap. 18, sec. 1).
10. TAXATION.
The statute providing for exemption from ad valorem taxes of property of new factories and new enterprises, and enumerating as entitled to exemption all factories making cotton goods, woolen mills, knitting factories, factories for making hosiery, garment factories, and factories for making silk goods or silk products, manifests legislative intent to classify garment factories as a separate and distinct factory or enterprise from factories for making cotton goods, woolen mills, etc (Laws 1936, 1936, 1st Ex. Sess., chap. 1, sec. 19, as amended by Laws 1936, 2d Ex. Sess., chap. 18. sec. 1).
11. TAXATION.
Under statute providing for exemption of new factories and new enterprises from ad valorem taxes on property including structures already built from time of purchasing land or structure already built, fact that real estate assessments for years 1936 and 1937 on idle factory site had been approved and had become final prior to purchase of property for shirt factory in 1936 did not affect right of shirt factory to exemption where levy of taxes for the year 1937 and for the remainder of the period of exemption had not been made when exemption was granted and obligation to pay taxes for such years had not accrued at that time (Laws 1936, 1st Ex. Sess., chap. 1, sec. 19, as amended by Laws 1936, 2d Ex. Sess., chap. 18, sec. 1).
APPEAL from the chancery court of Harrison county; HON. D.M. RUSSELL, Chancellor.
Mize, Thompson Mize, of Gulfport, for appellant.
Exemption cannot be tacked upon exemption by changing ownership of the property.
Morris v. Riley, 135, Miss. 1, 99 So. 466; Robertson, State Revenue Agent, v. Mississippi Packing Co., 134 Miss. 837, 98 So. 539; Pineland Bag Corporation v. Riley, 142 Miss. 574, 107 So. 554; Adams County v. National Box Co., 125 Miss. 598, 88 So. 168.
It is our understanding of the law governing exemptions that the exemptions must clearly show his right to the exemption so that there can be no reasonable doubt. The moment a reasonable doubt arises as to whether a given statute grants exemption, that doubt under the rulings of this court must be resolved in favor of the taxing authority and statutes exempting from taxes must be strictly construed in favor of the taxing authority and not in favor of exemption.
Adams County v. Catholic Diocese of Natchez, 110 Miss. 890, 71 So. 17; New Standard Club v. McRaven, 111 Miss. 92, 71 So. 289, Ann. Cas. 1918E, 274; Currie Finch Brick Lumber Co. v. Miller, 123 Miss. 850, 86 So. 579; Adams County v. National Box Co., 125 Miss. 598, 88 So. 168; Gulfport Building Loan Association v. City of Gulfport, 155 Miss. 498, 124 So. 658; Leaf Hotel Corporation v. City of Hattiesburg, 168 Miss. 304, 150 So. 779; Hollandale Ice Co. v. Board of Supervisors of Washington County, 171 Miss. 515, 157 So. 689; Chapman v. State, 178 Miss. 507, 176 So. 39; Jackson Fertilizer Co. v. Stone, 173 Miss. 183, 162 So. 170.
The question comes down to the point for consideration by the court, may a new corporation taking over the business and property of a former corporation engaged in the same type of business secure the five year exemption from taxes granted to certain enterprises of public utility where the same property and business had already been exempt for five years? In other words, can there be successive exemptions of the same property by tacking one upon the other upon a change of ownership. It is our contention from the above cited cases that exemption cannot be tacked upon exemption. The exemption conferred in a case of this sort is an exemption of the specific property described in the petition for exemption and it is not a personal exemption. The petition of the Wolcott Campbell Spinning Co. and the petition of Max Harris were both petitions for exemption and the property described in both petitions was identical. Also the purpose of the new corporation set out in the application of Max Harris was contained in the purposes of the corporation in the petition of the Wolcott Campbell Spinning Co. The exemption when conferred, as we understand the law, attaches to the property and follows it for a five year period, notwithstanding the change in ownership, and when the five years has expired, the said property is not eligible for further exemption. If it were eligible to further exemptions, no enterprises need ever pay taxes because at the end of each exemption period, a new corporation could be formed to take over the property and renew exemption forever.
The property in question had been duly and legally assessed in the manner and form provided by law. While it is true that Max Harris filed a petition for exemption for the property, still the order for exemption made by the Board of Supervisors did not exempt the property from ad valorem taxes.
Sections 3161, 3162, 3164, 3166, and 3179, Mississippi Code of 1930.
In this case the assessments were legally and lawfully made, notice to taxpayers given and everything done by the Board of Supervisors as was required by law, but the complainant in the court below did not file any objections to the assessments although legal notice was given and thereby the assessments became final as no appeal was taken within the ten days after the board adjourned, and the law is well settled in this state that a taxpayer failing to appeal from an order from the Board of Supervisors approving an assessment is concluded thereby.
Yazoo Investment Co. v. Suddoth, 70 Miss. 416, 12 So. 246; Yazoo Delta Lumber Co. v. Eastland, 104 Miss. 553, 61 So. 597.
We do not think that new enterprises established under the provision of Chapter I of the Extraordinary Session of 1936 are exempt from state ad valorem taxes. (We do not mean to concede that the making of cotton garments by the Mac-Smith Garment Co. was a new enterprise.)
The general tax law levies ad valorem taxes on all property in the State of Mississippi both real and personal. Chapter I of the First Extraordinary Session of 1936 undertakes to grant exemption to certain new factories and new enterprises. Section 19 of the act is amended by Chapter 18 of the laws of the Second Extraordinary Session of 1936 which undertakes to grant exemption to all ad valorem taxes to all new enterprises, but the act does not "prescribe the mode and manner in which the right to such exemption shall be determined", as is made mandatory by Section 182 of the Mississippi Constitution.
McCool v. State, 149 Miss. 82, 104; State v. Henry, 87 Miss. 125, 40 So. 152, 5 L.R.A. (N.S.) 340.
The Mac-Smith Garment Company did not establish a new enterprise of public utility.
Natchez Investment Co. v. City of Natchez, 124 So. 654.
There was no new enterprise but the continuation by the Mac-Smith Garment Co. of the enterprise that was new when the Wolcott Campbell Spinning Co. applied for its exemption.
Eaton Eaton, of Gulfport, for appellee.
Appellant argues that appellee is precluded from ad valorem tax exemption because Wolcott and Campbell Spinning Company in 1930 secured a five year exemption on this same property and that Wolcott and Campbell Company was engaged in the same type of business as appellee. The principal error in that argument is the statement that the business conducted by appellee is the same as, or a continuation of, the business that was formerly conducted by Wolcott and Campbell Spinning Company.
The order of the Board of Supervisors, from which no appeal was taken and which, in the absence of fraud (and none is charged), is not subject to collateral attack.
Hinton v. Board of Supervisors, 84 Miss. 536, 36 So. 565; Wright v. Edwards Hotel and City Ry. Co., 101 Miss. 470, 38 So. 332, 15 C.J., Sec. 472.
But, if, as a finding of fact, this order of the Board is subject to judicial review in a collateral attack, the oral evidence clearly shows that appellee's proposed business was in no respect related to the business of Wolcott and Campbell Spinning Company.
It was proved and not disputed that none of the machinery used by Wolcott and Campbell Spinning Company was used or could have been used by appellee in its operations, that John Bright Lord retained and sold all the Wolcott Campbell machinery; that appellee bought and installed entirely new and different machinery for the making of shirts from that used by Wolcott and Campbell in manufacturing cotton into thread; that the cotton thread so manufactured was for hosiery mills; that it was not even suitable for the manufacture of cotton materials out of which shirts could have been made.
Even the Act to Balance Agriculture with Industry, as amended, classifies the business of garment making as distinct from that of manufacturing cotton or wool into a finished or semi-finished product.
Much legislation is directed in Senate Bill No. 1 to the promulgation of a plan under which municipalities and counties or portions of counties might issue bonds for the building of structures to house new industries. This plan was sustained as constitutional in Albritton v. Winona, 178 So. 779. But such aid was not considered by the legislature as alone sufficient to induce industry to locate in this state. There was therefore a revision of the tax exemption law.
Section 19, Chapter 18 of the First Extraordinary Session of 1936; Section 3109, Code of 1930.
A comparison of the lists of industries that are exempted discloses numerous kinds in Section 19 that do not appear in Code Section 3109, and one of them is "garment factories".
Thus the legislature considered that the manufacture of garments was, in and of itself, an industry that would not have been exempt under Section 3109 but that it was a distinct and separate industry of such importance as to justify only tax exemption but public financing, if necessary, to secure its location.
The legislature at the Second Extraordinary Session of 1936 amended Section 19 of Senate Bill No. 1 enacted at the First Extraordinary Session by providing in specific language that old structures, when devoted to the use of a new enterprise, would be exempt.
This statute was strictly complied with by appellee, and the Board made its findings and entered its order on its minutes. When that was done, the law itself automatically granted the exemption. The function of the Supervisors was not to enter an order granting the exemption. It was to make a finding of fact, and the exemption followed from operation of law if the finding was that the enterprise was a new one.
It would seem that the Act to Balance Agriculture with Industry as amended by Chapter 18, Second Extraordinary Session of 1936, was intended to grant an exemption if the purchaser of an idle building resumed the identical business that had previously been conducted. The purpose of this act was to create employment. When Chapter 18 amending Section 19 was enacted and specifically exempted structures already built "which are used in or necessary to the operation of the service or industry hereinafter named," and then named them, it seems clearly to indicate that in legislative contemplation a "new industry" is one that is newly put into operation and is offering employment to the citizens of the state regardless of what business had previously been conducted in those structures.
Pineland Bag Corporation v. Riley, 142 Miss. 574, 107 So. 554; Adams County v. National Bag Co., 125 Miss. 598, 88 So. 168.
The state has received all the benefits it offered the exemption to secure, and a binding contract is in existence to furnish the exemption. To violate this contract is to violate both the state and federal constitution prohibiting the impairment of contract obligations.
Interstate Natural Gas Co. v. Gulley, 4 F. Supp. 697; Memphis Nat. Gas Co. v. Gulley, 8 F. Supp. 169; The Home of the Friendless v. Rouse, 8 Wall. 430, 19 L.Ed. 495.
Appellant contends that Chapter 18 is unconstitutional because Section 182 of the State Constitution requires the legislature to "prescribe the mode and manner in which the right to such exemptions shall be determined." This section also requires that exemptions be granted by general laws. It is not contended that the Act to Balance Agriculture with Industry as amended by Chapter 18 is not a general law. The point made is that the mode and manner by which the right to such exemption is to be determined is not prescribed. No argument is presented as to why the mode and manner are not prescribed. In fact none can be presented, for Chapter 18 very plainly set them forth. A petition reciting the facts must be filed with the Board of Supervisors, and the Board shall make a finding of the facts and enter that finding on the minutes. The Constitution does not, itself, prescribe the mode and manner. It simply provides that the legislature shall prescribe them, and when, as here, the legislature has done this, it has complied with all constitutional requirements.
Argued orally by B.E. Eaton, for the appellee.
The appellee, claiming a five-year exemption from all ad valorem taxation on a certain garment factory site, building, machinery and equipment in Harrison County, on the ground that the same was being used in the operation of a new factory and new enterprise of public utility within the meaning of certain statutes hereinafter mentioned, brought this suit and enjoined the appellant, as Sheriff and Tax Collector of said county, from selling or attempting to sell said property for the collection of ad valorem taxes thereon for the year 1937, and also enjoined him from collecting or attempting to collect such taxes for the four succeeding years thereafter. There was a final hearing of the case on bill of complaint, answer, oral and documentary evidence; and whereupon the chancellor rendered a decree making the temporary injunction final and perpetuating the same to the full extent prayed for.
The specific question for decision on this appeal is whether under Chapter 1 of the Laws of Mississippi of the First Extraordinary Session of the Legislature of 1936, as amended by Chapter 18 of the Laws of the Second Extraordinary Session of the Legislature of 1936, the appellee was entitled to an exemption from all ad valorem taxes for a period of five years, from and after December 15, 1936, on the property here involved, as a new factory and new enterprise under the provisions of said statutes extending the exemptions, theretofore provided, to include structures already built and wherein a new factory or new enterprise is operated; and especially where the same structure and ground had theretofore, on February 13, 1929, been granted and had thereafter enjoyed such a period of exemption (including an exemption on the machinery and equipment then being used in connection therewith) while a factory or enterprise of public utility was being operated by a former owner.
At the threshold of such an inquiry there arises, as the primary consideration, the question of whether the industry owned by the appellee constitutes a new factory and new enterprise. Therefore, a statement of the facts upon which the exemptions is claimed is necessary.
On February 13, 1929, the Walcott-Campbell Spinning Company was granted such an exemption on this same factory site and building, including the permanent fixtures and appliances used in connection therewith, for a period of five years from that date; and also on the machinery and equipment then used in the operation of its factory "for making cotton and woolen goods, and especially to engage in the manufacture of cotton and woolen goods, cloths, threads, hosiery, rope and other textile fabrics into the manufacture of which cotton or wool enter." After that factory was operated for some time, and during which period it was devoted exclusively to the work of converting raw cotton into thread for the making of hosiery, the venture proved unsuccessful, and with the result that the factory site, building, fixtures and appliances, machinery and equipment were foreclosed under a mortgage and purchased by one John Bright Lord, thereafter, the factory remained idle for some two or three years and until December 15, 1936. On that date, one Max Harris entered into a written contract with Lord for the purchase of the factory site, building, and also certain permanent fixtures and appliances attached thereto, but by which said contract all of the machinery, furniture, equipment, chattels and other personal property theretofore used or usable in connection with the manufacturing business theretofore conducted in or upon the premises were reserved unto the said Lord with the right to remove the same from the building on or before December 31, 1936. Possession of the factory site, building, etc., so purchased from Lord was to pass immediately to the purchaser Max Harris, subject to the right on the part of Lord to remove the machinery and other personal property reserved as aforesaid within the time stated. The sale price to be paid by Harris was $65,000, a part of which was paid in cash and the remainder in deferred payments. The contract of sale contemplated that the purchaser represented himself and certain associates in the transaction, and that the deed was to be made to whomsoever Max Harris might designate as the purchaser; and that the corporation to be designated was to assume liability for the deferred payments. Thereupon, Lord removed all of the personal property, including the machinery theretofore used by the Walcott-Campbell Spinning Company in spinning the raw cotton material into thread for making hosiery, and sold the same to some firm in New Orleans, Louisiana. Upon the execution of said contract of sale, the purchaser, Max Harris, began the organization of a new corporation under the name of Mac-Smith Garment Company (the appellee herein), the charter of which was finally approved on February 1, 1937, under the laws of this State, which new corporation was in the process of organization from and after December 15, 1936. He also began the work of making preparation immediately for installing the new machinery in the building for the operation of a garment factory to be devoted exclusively to the making of mens shirts out of cloth purchased in Virginia and the Carolinas. The new machinery cost approximately $75,000, and the proof discloses that none of it could have been used in the operation of the enterprise formerly conducted in that building by the Walcott-Campbell Spinning Company, since the new machinery consisted of cutting, sewing and pressing machines for making shirts, instead of machines for spinning thread for hosiery. Moreover, the proof further disclosed that none of the machinery which had been used in the spinning mill for making thread was at all suitable for use in any manner in the manufacture of shirts by the new corporation.
Section 1 of Chapter 18 of the 2nd Extraordinary Session of the Legislature, 1936, amending Section 19 of Chapter 1 of the Laws of the 1st Extraordinary Session of 1936, provides that all new factories and new enterprises of public utility shall be exempt from all ad valorem taxes for a period of five years on tangible property used in or necessary to the operation of the service or industries enumerated in the Act, including structures already built, the time of such exemption to commence from the time of purchasing the land or structure already built; and then this statute enumerates among the new factories and new enterprises of public utility entitled to the exemption: "All factories making cotton goods; all woolen mills; all knitting factories; all factories for making hosiery; . . . garment factories . . . all factories for making silk goods or silk products; . . .".
The term "garment factories" used in the enumeration, as distinguished from all factories making cotton goods, factories for making silk goods or silk products, and woolen mills, etc., does not appear in Section 3109 of the Code of 1930, nor in any preceding statute relating to the exemption of new factories and new enterprises of public utility from ad valorem taxation, but appears for the first time in Chapter 1 of the Laws of the 1st Extraordinary Session of the Legislature of 1936, in Section 19 thereof, known as the Act for Balancing Agriculture with Industry. This Act, as shown by the preamble thereof, was designed to relieve unemployment in this State by encouraging and promoting the establishment of new industries within our borders. In the enactment of this statute, the Legislature omitted to extend the exemption to structures which had already been built, where the site and buildings were to be used for the operation of any new factory or new enterprise, notwithstanding that various political subdivisions of the State were thereby authorized and empowered to acquire industrial enterprises, and to issue bonds or other obligations for the purchase thereof. Therefore, the statute was amended at the 2nd Extraordinary Session of the Legislature of 1936, by Chapter 18 of the laws thereof so as to extend the exemption to include structures already built, when used for a new factory and new enterprise designed to relieve unemployment. In the case at bar, the proof discloses that Max Harris purchased the idle factory site, building, and all permanent fixtures and appliances here in question within a few days after the enactment of the statute extending the tax exemption to cover structures already built, and proceeded to establish a new enterprise which is now furnishing employment to approximately 550 persons in full compliance with the spirit and purpose of the legislation in that behalf.
Section 1 of said Chapter 18 of the laws of the 2nd Extraordinary Session of the Legislature of 1936, supra, provides that: "In the event of the purchase of a structure already built for new enterprises of public utility hereafter enumerated, the executive officer or agent of said new enterprise shall make an affidavit showing that said enterprise is in fact a bona fide new enterprise, and shall petition the board of supervisors, . . . setting forth the purposes for which said structures are to be used, and the said board of supervisors . . . shall enter a finding of fact as to whether or not the enterprise represented by the petitioner is in fact a new enterprise of public utility, and said finding shall be entered on the minutes thereof".
It will thus be seen that the Legislature vested the jurisdiction and authority in the board of supervisors to judicially determine whether or not the proposed factory and enterprise was to be such in truth and in fact, instead of an old factory and enterprise merely operating under a new name.
On January 5, 1937, Max Harris caused to be filed through his agent the affidavit and petition provided for by the statute, and obtained from the board of supervisors of Harrison County a finding of fact duly entered on its minutes to the effect that there was then being installed in the structure already built, which is involved in this suit, the machinery for the manufacture of garments; that the property had not been theretofore utilized for such purposes, but had been used at irregular intervals in spinning thread from cotton, thereafter to be woven into cloth; but that for a period of approximately three years prior to December 5, 1936, the said property had not been used for any purposes; and that the purchase thereof was for the purpose of establishing a new factory and a new enterprise of public utility. The exemption became effective while the property was under the control of Max Harris, who petitioned the board for its finding of fact, and it thereafter inured to the benefit of the Mac-Smith Garment Company, since the statute renders the property itself free of the burden of ad valorem taxation under the circumstances disclosed by this record, without regard to its ownership. It is only required that it be devoted to the purposes enumerated by the statute in order to be exempt.
The finding by the board of supervisors was not appealed from, and the truth of the averments therein contained are challenged for the first time in this proceeding. Wherefore, the appellee contends that the correctness of such finding cannot be here inquired into. But, aside from the question thus presented, we are of the opinion that the proof offered before the chancellor on the hearing amply sustains the contention of the appellee that the factory and enterprise for which the exemption is here claimed for a five-year period beginning December 15, 1936, is in fact a new factory and a new enterprise within the meaning of the statute.
It is contended however that if the exemption from taxation be allowed, it will be in violation of Section 182 of the State Constitution in that the statute fails to prescribe the mode and manner in which the right to such exemption shall be determined, but we are of the opinion that Section 1 of the said Chapter 18 of the Laws of 1936, supra, clearly prescribes the mode and manner in which the exemption is to be determined, and that the statute itself grants the exemption without any further affirmative action by the board when a finding of fact is made by the board of supervisors to the effect that the factory to be operated is in fact a new enterprise of public utility. Nor does the date of the commencement of the exemption in the present case violate the said Section 182 of the Constitution, since the work commenced with the preparations for the installation of the new machinery upon the purchase of the old factory site and structure by Max Harris on December 15, 1936, as provided for in Section 1, Chapter 18 of the Laws of 1936, supra. The application of the provisions of this statute in the case at bar so as to sustain the exemption, is, in our opinion, in keeping with the spirit and purpose of this constitutional provision.
It is also insisted by the appellant that since the five-year exemption granted on February 13, 1929, to the Walcott-Campbell Spinning Company authorized and empowered the said company to operate a factory for making cotton goods, the exemption was to a factory or enterprise of the same kind and character as that now operated by the appellee for making shirts, even though the proof offered in the court below showed that the former factory was as a matter of fact engaged only during the period of its operation in spinning raw cotton material into thread for making hosiery, and notwithstanding that such thread could not have been used in the manufacture of shirts. We think that the test is whether the factory now being operated by the present exemptionist is a new factory and new enterprise as compared with that which was actually operated by the former owner, rather than whether the former owner could have operated this same sort of factory or enterprise under the five-year exemption theretofore granted. Moreover, we are of the opinion that the Legislature intended to classify garment factories as a separate and distinct factory or enterprise from factories for making cotton goods, woolen mills, etc. The garment factory does not make cloth, but purchases cloth from distant markets and then manufactures it into shirts by the use of entirely different machinery from that used by the Walcott-Campbell Spinning Company.
Finally, it is insisted that the appellee was not entitled to the exemption because the real estate assessments for the year 1936 and 1937 had been approved and had become final prior to the purchase of the property by the appellee on December 15, 1936. We think that this contention is also without merit, under the facts and circumstances of this case, since the levy of the taxes for the year 1937 and for the remainder of the period of exemption claimed, had not been made by the taxing authorities at the time the exemption was granted, and the obligation to pay the taxes for said years had not accrued on the part of the owner of the property at that time.
We are therefore of the opinion that the appellee was entitled to the relief granted by the decree appealed from.
Affirmed.