Freuhauf Trailer Co. v. State Corp. Commission

• Decision Date: 04 March 1939
• Docket Number: 34187.
• Citation: 87 P.2d 641,149 Kan. 465
• Parties: FREUHAUF TRAILER CO. v. STATE CORPORATION COMMISSION et al.
• Court: Kansas Supreme Court

87 P.2d 641

149 Kan. 465

FREUHAUF TRAILER CO. v. STATE CORPORATION COMMISSION et al.

No. 34187.

Supreme Court of Kansas

March 4, 1939

Syllabus by the Court.

The lien imposed on personalty owned by licensed motor carrier and on all motor vehicles, to enforce collection of ton-mileage dues and penalties imposed by Motor Vehicle Act has precedence over conditional sales contract lien of seller of motor vehicle delivered to and used by purchaser in business as carrier. Gen.St.1935, 58-314, 66-1,120 et seq.

All personal property owned by a licensed motor carrier and all motor vehicles lawfully used by him in his business as a motor carrier are subject to a statutory lien to enforce collection of the ton-mileage dues and penalties imposed by the motor vehicle act (G.S.1935, 66-1,120 et seq.); and such lien has precedence over the conditional sales contract lien of the vendor of a motor vehicle delivered to and used by the vendee in his licensed business as a motor carrier in this state.

Appeal from District Court, Shawnee County, Division No. 2; Paul H Heinz, Judge.

Suit by the Freuhauf Trailer Company against the State Corporation Commission and others to enjoin the defendants from enforcing the provisions of the Motor Carrier Act which impose gross-ton-mileage taxes on truck and trailer equipment used on the public highways. From a judgment in favor of the plaintiff, the defendants appeal.

Judgment reversed and cause remanded, with instructions to enter judgment for defendants.

Innis D. Harris, Jr., of Wichita, and John F. Jones, of Topeka, for appellants.

Thomas F. Doran, Clayton E. Kline, M. F. Cosgrove, Balfour S Jeffrey, and Robert E. Russell, all of Topeka, for appellee.

DAWSON Chief Justice.

Plaintiff brought this action to enjoin the state corporation commission and other public officials from enforcing the provisions of the motor carrier act which impose gross-ton-mileage taxes on truck and trailer equipment used on the public highways by persons engaged in the business of intra-state trucking subject to statutory regulations. In substance these regulations provide that there shall be assessed against every public, private, and contract carrier a gross-ton-mileage tax to be computed pursuant to a prescribed formula. G.S. 1935, 66-1,120.

Each carrier is required to make a specified deposit of cash with the defendant commission for each vehicle of three tons or less operated by him, and a graduated increase of such deposit for each vehicle of greater capacity. Out of this deposit the ton-mileage tax is taken, and the law contemplates that monthly remittances are to be forwarded to the commission by each carrier in sufficient amounts to meet his monthly ton-mileage dues properly chargeable thereto. G.S. 1935, 66-1,120a. The statute also contemplates that summaries of the truck operator's daily ton-mileage shall be reported to the commission (G.S.1935, 66-1,120b; Id. 66-1,122); and any requisite payments for such ton-mileage taxes (indifferently and occasionally called fees throughout the statute) must be made on or before the 15th day of each month. G.S.1935, 66-1,124. The text of the last cited paragraph, in part, reads:

"On or before the 15th day of each month all motor carriers shall pay to the commission on the amount of the fees due from them for the preceding month. If payment is not made on or before said date there shall be added as a penalty a sum equal to one and one half percent per month of the amount of the original fee. Said fees and penalties not paid on said date shall constitute a lien upon all the personal property of the delinquent carrier, and also upon the vehicles of all persons leased by it in its business, and thereupon said property and vehicles may be held under warrant issued by the commission and may be sold in accordance with the law applicable to personal property taxes. *** The commission shall enforce collection of all fees and penalties provided in this act." Laws 1935, Ch. 242, Sec. 1; G.S.1935, 66-1,124. [Our italics.]

G.S.1935, 66-1,129 further provides:

"The commission shall promulgate and publish in the official state paper, and mail to each holder of a certificate or license hereunder, such regulations as it may deem necessary to properly carry out the provisions and purposes of this act."

The plaintiff predicated its cause of action upon undisputed facts which may be summarized thus:

In 1937, Kenneth Murray of Pawnee county was a contract motor carrier operating various trucks and semi-trailers (four in number) under permits issued by the state corporation commission. On March 17, 1937, he became delinquent in the payment of the requisite ton-mileage charges due from him on account of the operation of his four trucks and semi-trailers in the aggregate amount of $1,013.58. To enforce collection thereof the commission caused a warrant to be issued and directed to the sheriff of Finney county to levy on certain motor vehicles used by Kenneth Murray under his permit to enforce collection.

The sheriff levied on one of the semi-trailers, numbered thus: Model No. O6DF, Serial No. G-39393.

To enjoin the subjection of that property to the payment of the amount due, this action was begun by the plaintiff, Freuhauf Trailer Company, alleging that the semi-trailer seized by the sheriff was one which, on May 28, 1936, it had delivered to Murray on terms of a "conditional sales agreement" (Exhibit A) whereby the title to the property should remain in plaintiff until it had been fully paid for. This agreement also provided that plaintiff should have the right to repossession of the semi-trailer until it was paid for in full. The fifth paragraph of the agreement, in part, read:

"Fifth: It is understood and agreed that in case of default on the part of the second party [Murray] to make any of the payments of principal or interest, when due *** or in the event of the failure of second party to perform any other agreement on the part of said party to be performed, then the first party [Freuhauf Trailer Company] *** may with or without legal process and using such force as may be necessary *** take possession thereof and thereafter hold the same absolutely free from all claim of second party and retain all payments made by second party hereunder as and for the reasonable rental of said property and for the use, wear and tear thereof." [Our italics.]

Plaintiff alleged that Murray still owed it the sum of $2,032 on the semi-trailer in controversy at the time the sheriff seized it on the state corporation commission's tax warrant.

Plaintiff's petition narrated the pertinent details touching similar agreements with Murray whereby three other semi-trailers had been delivered to him, none of which had been fully paid for by Murray; and on each of which plaintiff had and claimed the same rights as on the one seized by the sheriff, and that plaintiff had exercised its right of repossession.

In the same petition plaintiff also alleged that one Charles E. Aziere of Anderson county was engaged in the same sort of business as Murray, and that plaintiff had delivered to Aziere one of its semi-trailers on terms similar to those of its "conditional sales contract" with Murray; that Aziere had not completed his payments of the purchase price, and that he, like Murray, had become delinquent in his monthly ton-mileage dues to the state corporation commission to the extent of $1,865.91; and that the commission was about to seize, attach and dispose of the Aziere semi-trailer to enforce collection of the amount of his delinquency.

Defendants' demurrer to this petition was overruled and they answered, setting up their own version of the facts which did not materially vary from the allegations of plaintiff's petition. To further expedite the hearing, the litigants submitted an agreed statement of facts,--showing that the delinquent ton-mileage dues on the four semi-trailers operated by Murray and on which plaintiff held conditional sales contracts, separately computed, were as follows (omitting penalties):

"Serial No. G"39393 ... $214.39

Serial No. G"38843 ..... 201.57

Serial No. F"36656 ..... 228.51

Serial No. 38845 ..... 203.66." Among other stipulations of fact was the following:

"That plaintiff knew, at the time the contracts, exhibit 'A' and others identical except for description, were executed, that the trailers described therein would be operated on the public highways of the state of Kansas, and was charged with knowledge of the provisions of section 66-1,120, G.S.1935, and section 66-1,124, G.S.1935."

It was also agreed that after the levy by the sheriff, all the other semi-trailers which Murray and Aziere had acquired from plaintiff had been repossessed and removed from the state; that neither Murray nor Aziere had any other property out of which the commission's warrants for overdue and delinquent ton-mileage dues could be collected; and that if any of the semi-trailers operated by Murray or Aziere, and on which ton-mileage dues had been properly charged but not paid, should be brought back into the state, the commission would subject them to the satisfaction of its tax warrants.

Both parties moved for judgment on the pleadings and agreed facts. The trial court made extended findings of fact, upon which it made the following conclusions of law:

"I. The court finds that under the conditional sales contracts, attached as exhibits to the petition, the title to the trailers in question remained in the plaintiff herein, the Freuhauf Trailer Company, and said trailers were not the property of Kenneth Murray and Charles E. Aziere, and that no lien for ton-mileage taxes provided in section 66-1,120a, General Statutes of Kansas, 1935, attached under the

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