Boyes v. State
| Decision Date | 10 October 1968 |
| Docket Number | CA-CIV,No. 1,1 |
| Parties | Roy BOYES, Appellant, v. The STATE of Arizona et al., Appellees. 435. |
| Court | Arizona Court of Appeals |
Stevenson, Warden & Smith, by William W. Stevenson and Jerry L. Smith, Flagstaff, for appellant.
Gary K. Nelson, Atty. Gen., Walter O. Holm, Sp. Asst. Atty. Gen., Phoenix, for appellee State of Arizona.
Minne & Sorenson, by Richard Minne, Phoenix, for appellees Arizona Corporation Commission et al.
Roy Boyes was charged with violation of A.R.S. § 40--660, for failure to comply with motor carrier licensing and taxing statutes, a misdemeanor, and in addition, was assessed a tax, as a 'contract motor carrier of property,' under A.R.S. § 40--641. 1 Maintaining that he is in fact a 'private motor carrier, and therefore exempt from the tax,' Boyes paid the tax under protest and sued for return of the monies paid and for a declaratory judgment that he was a private carrier. The trial court ruled against Boyes, affirming the order of the Corporation Commission, and he has appealed.
The tax assessed against Boyes involves his use of the public highways to transport pulpwood under two contracts with Southwest Forest Industries, Inc. (Southwest), one for 1962--1963 entitled 'PULPWOOD CONTRACT, CUTTING AND HAULING' and the other for 1963--1964 entitled 'PULPWOOD HARVESTING CONTRACT.' The provisions of the contracts are essentially the same. The title of the contract was changed after the aforementioned criminal action was instituted. The apparent reason for the change will become evident in the course of this opinion, but, simply stated, it was part of an effort on the part of Boyes and Southwest to qualify Boyes' performance under the contracts as private rather than contract carriage.
Under the 1962--1963 contract, Boyes represented himself as being 'engaged in the business of cutting and hauling pulpwood.' The operation involved felling trees which had been premarked by the Forest Service, delimbing them and cutting them into lengths specified by Southwest, collecting and piling the brush, building and closing roads and trails, fighting any fires caused by himself or his crew, collecting the cut lengths and placing them in pallets and carrying them to a stand by means of a diesel-powered 'Iron Mule,' loading the pallets of logs on a two-ton truck, and hauling them approximately twelve miles to Williams, Arizona, where they were further transported to Southwest's mill at Snowflake, Arizona. The entire operation was carried on by five or six men in addition to Boyes. The only part of the work which Boyes conducted himself was the winching of the pallets onto the truck and the haul to Williams. Boyes' son operated the 'Iron Mule' without compensation and the entire cutting operation was subcontracted to the other men in the crew.
At the trial the State alleged that Boyes was a 'contract motor carrier' because all of his income was derived from hauling the wood and his entire work day was spent in doing so and, therefore, he was actually engaged in the business of hauling rather than in a business enterprise to which hauling was merely incidental.
The trial court's 'findings of fact' included the following:
* * * * * *
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(Emphasis added.)
Among the conclusions of law, the trial judge ruled:
'The transportation engaged in by Plaintiff was not for the purpose of bailment, and Plaintiff was not engaged in the bailment business.'
The court further concluded that the tax was legally assessed because Boyes was a 'contract motor carrier.'
If Boyes' hauling activities are taxable, they are taxable under the theory that he was using the public highways for an 'inordinate' purpose for his own gain and should therefore be required to pay a special fee for their maintenance, as our Supreme Court stated:
'* * * business arrangements which look directly into the inordinate use of public highways to realize pecuniary benefits (unless this use is merely incidental to other business activities).' Campbell v. Commonwealth Plan, Inc., 101 Ariz. 554, 557, 422 P.2d 118, 121 (1966).
The cases in this jurisdiction make it clear that a person liable for the tax must actually be In the business of hauling rather than merely hauling as a part of his business. The question in this case then becomes: Is Boyes in the business of harvesting pulpwood, to which the hauling of the pulpwood is merely incidental (as Boyes maintains) or is he in the business of hauling pulpwood (as the State maintains)? Boyes was paid $11 per cord of wood delivered at Williams. He paid $4.50 per cord to the subcontractors for felling, cutting, delimbing, brush-cleanup, etc. His son was not paid for operating the 'Iron Mule.' The trial court concluded that the entire profit of $6.50 was realized from the trucking operation. This conclusion ignores the undisputed facts. Boyes testified that he drove the truck so that he could oversee the entire operation. Because he subcontracted the major portion of the work does not preclude his entitlement to a profit for that work. If, for example, a general contractor subcontracts an Entire operation it does not follow that he is no longer the contractor nor does it follow that he is not entitled to a profit on the contract. 2 Also to be considered are the services of Boyes' son in operating the 'Iron Mule.' Boyes testified that these services would, otherwise, have cost him $2.25 per hour. Consideration should also be given Boyes' contingent liability in the amount of $3,000, in case his men started a fire, and the duty to employ his men in the fighting of any such fire.
We must view the entire operation, rather than the isolated truck-driving portion personally conducted by Boyes. Four or five men worked to prepare the pulpwood. One man operated the 'Iron Mule' gathering it and stacking it for loading on the truck. Boyes loaded the truck and made the short drive to Williams. We conclude that the hauling activity was incidental to the primary business enterprise of harvesting pulpwood, and hold that Boyes is a 'private motor carrier of property' and not subject to the tax assessed and paid.
All of the cases in point which we have found or which have been called to our attention by counsel support this conclusion. Our statute is essentially the same as the federal Interstate Commerce Act, 49 U.S.C.A. § 303(a), et seq. 3 Visco v. State ex rel. Pickrell, 95 Ariz. 154, 388 P.2d 155 (1964). We will look first to federal cases.
The leading case appears to be L. A. Woitishek Common Carrier Application, 42 M.C.C. 193 (1943), involving carriage of construction materials in interstate commerce. The delivery price was determined by adding ten per cent profit plus a fee for transportation to the purchase price. Woitishek claimed that selling building maerial was his primary business and the transportation of those materials was incidental. He further claimed that the transportation charge was only meant to cover transportation expenses. The Interstate Commerce Commission held that he was a 'private carrier' and not subject to Interstate Commerce Commission regulation. The Commission stated that the receipt of compensation identifiable for transportation was not conclusive and neither was the existence of a noncarrier business to which transportation may have appeared to be incidental. The Commission left future determinations to the 'particular facts' of each case, but determined that Woitishek's transportation activities were performed incidentally to his 'direct sales' business, 'without any purpose to profit from the transportation as such,' and that at least 60 per cent of his income was from noncarrier operations.
The Woitishek decision applied what has become to be known as the 'primary business test.' This test has been described in Brooks Transportation Co. v. United States, 93 F.Supp. 517 (1950), affirmed without opinion, 340 U.S. 925, 71 S.Ct. 501, 95 L.Ed. 668 (1951), as follows:
'In other words, if it is established that the primary business of a concern is the manufacture or sale of goods which the owner transports in furtherance of that business and the transportation is merely incidental thereto, the carriage of such goods from the factory or other place of business to the customer is private carriage even though a charge for transportation is included in the selling price or is added thereto as a separate item.' 93 F.Supp. at 522.
Subsequent federal decisions have made application of the 'primary business test' in a similar manner. Red Ball Motor Freight Inc. v. Shannon, 377 U.S. 311, 84 S.Ct. 1260, 12 L.Ed.2d 341 (1964); Shippers Cooperative, Inc. v. Interstate Commerce Commission, 308 F.2d 888 (...
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