Joyner v. Centre Motor Co., 3810
| Decision Date | 05 September 1951 |
| Docket Number | No. 3810,3810 |
| Citation | 66 S.E.2d 469,192 Va. 627 |
| Parties | C. F. JOYNER, JR., COMMISSIONER, ETC. v. CENTRE MOTOR COMPANY, INC. Record |
| Court | Virginia Supreme Court |
J. Lindsay Almond, Jr., Attorney General, D. Gardiner Tyler, Jr., Assistant Attorney General, and Edward L. Breeden, Jr., for the plaintiff in error.
M. B. Wagenheim and George H. Gray, for the defendant in error.
W. R. Ashburn, amicus curiae.
This litigation arose out of the refusal of the Commissioner of the Division of Motor Vehicles of Virginia to issue to the Centre Motor Company, Incorporated, hereinafter referred to as the Company, a license that would permit it to sell new motor vehicles.
For several years the Company has been engaged in the purchase and sale of motor vehicles in the city of Norfolk, Virginia, where it maintains its office and place of business. It holds no contract or franchise with any manufacturer, distributor, or dealer authorizing it to sell new motor vehicles of any make. However, on July 18, 1950, it applied to the Commissioner for a license which would authorize it to sell new and used vehicles. The application was refused because of certain provisions of an act of the General Assembly of 1944, ch. 406, p. 637, which, as amended, now appears as sections 46-502 to 46-540, inclusive, of the Code of Virginia, 1950. These sections of the Code define what is a new or used motor vehicle and a new or used motor vehicle dealer, provide for the issuance of licenses to deal in new and used vehicles, and make it unlawful for any dealer to sell new motor vehicles unless he is authorized to do so by a written contract with the manufacturer, distributor or dealer of a particular make of vehicle.
The pertinent parts of Code sections 46-503, 46-522, and 46-535, upon which the Commissioner based his right to refuse the application follow:
Section 46-503 -- '1. (1)(a) 'New motor vehicle' means a motor vehicle which has been titled thirty (30) days or less in other than its manufacturer's or licensed new motor vehicle dealer's name or has not been driven more than five hundred (500) miles.
'(b). 'Used motor vehicle' means a motor vehicle other than described in paragraph (1)(a) above.
'(3) 'New motor vehicle dealer' means a motor vehicle dealer who buys, sells or exchanges or offers or attempts to negotiate a sale or exchange of an interest in, or who is engaged, wholly or in part, in the business of selling, new and used motor vehicles.
'(4) 'Used motor vehicle dealer' means a motor vehicle dealer who buys, sells or exchanges, or offers or attempts to negotiate a sale or exchange of an interest in, or who is engaged, wholly or in part, in the business of selling, used motor vehicles only.'
'46-522. Grounds for denying, suspending or revoking licenses. A license may be denied, suspended or revoked on any one or more of the following grounds. * * *
'(4) Being a new motor vehicle dealer, engaging in the business of selling at retail any new motor vehicle without having authority of a written contract or franchise with the manufacturer or authorized distributior of that particular make of new motor vehicle. * * *'
The Company deemed itself aggrieved by the refusal of the Commissioner to issue the license applied for and appealed to the circuit court as provided for in the Act.
The evidence before the trial court disclosed that the Company has been engaged in selling motor vehicles for about five years. It maintains a well-equipped establishment, sales room and repair shop, and its plant and facilities meet all statutory requirements for such an undertaking. They are more adequate and better than those of the average enfranchised dealer in this State.
Of the motor vehicles that have been sold by the Company in the past, about eighty per cent of them measure up to and meet the definition of a new vehicle as defined in section 46-503. When there is no shortage of automobiles, the Company usually acquires those cars from defranchised dealers in other localities who are overstocked. When this condition obtains in the market, most of its cars are brought from enfranchised dealers in small towns who have been assigned more cars by their manufacturers than they can readily dispose of in their localities. Rather than sell these cars in the localities at less than the list prices established by the manufacturers, or to different purchasers at different prices or lose their franchises with the manufacturers for failure to sell the quota of vehicles assigned to them, they will dispose of cars to the Company for something less than the list prices, but sufficient to recover the capital invested in the vehicles and to realize a small profit. When the supply of motor vehicles is not plentiful and the demand great the Company purchases new cars from dealers in larger cities, including the city of Norfolk, at list prices or greater and then disposes of them at still higher prices. However, this does not necessarily mean that an individual purchaser pays more for an automobile acquired from the Company than if bought from an enfranchised dealer for the evidence shows that if he purchases from the latter he is usually required to trade in a used car for such sum as the enfranchised dealer is willing to allow him, which is often less than its value. If the individual does not consent to purchase on that basis, he is usually told that no new car is available.
In the past the Company has not advertised the cars that it sells as being new cars. The advertisements have described the automobiles as 'driven less than so many miles' or 'like new' or 'sold with a 'new car guarantee"', and there is no evidence that any of its advertisements misled anyone into believing that the Company held a franchise with an automobile manufacturer or distributor.
Two dealers in Norfolk are enfranchised to sell Chevrolet automobiles and two to sell Ford cars. Only one dealer is enfranchised to sell Chrysler, DeSoto or Dodge cars, respectively, but each of these three dealers is also authorized to sell Plymouth automobiles.
There was evidence from one witness offered by the Commissioner to the effect that prior to the passage of this Act in 1944, many unlicensed, undesirable and unscrupulous persons were dealing in used cars. It is said that they perpetrated frauds upon members of the public who undertook to deal with them and that prior to the passage of the 1950 Amendment of the Act which defines new and used cars, there was a practice of purchasing cars that had been driven 500 miles or more, repainting them and turning back the speedometer and then advertising them for sale as new. He said that the provisions of this Act were intended to prevent those practices.
After hearing the evidence, the court was of opinion and found that no question of public safety, morals, health or general welfare was involved and thus the questioned parts of the Act exceeded and were beyond the State's police power and unconstitutional. It concluded that the assailed provisions of the statute, which are enumerated in the court's finding below, violated Sections 1 and 2 of Article I, and section 63, clauses 12 and 18, of Article IV of the Constitution of Virginia. The specific holding was that 'the said Clause (4) of sec. 46-522 and the said section 46-535 of the Code of Virginia of 1950 constitute special legislation for a special class of people and the effect of the same is to create a monopoly in Virginia on the sale of all new automobiles, and the subject matter thereof is not a matter in which the public as individuals are concerned.' The Commissioner was directed to issue to the Company a license which would authorize it to sell new as well as used motor vehicles. From that order, this appeal was awarded and the constitutionality of these two sections of the Code is now before us for determination.
Though the trial court held the provisions unconstitutional and violative of several provisions of our Constitution, we need concern ourselves only with section 63, clause 18 of Article IV of the Virginia Constitution which reads as follows:
'The General Assembly shall not enact any local, special or private law in the following cases:
* * *
If the legislature may provide for the issuance of two classes of licenses, one of which permits the sale of new and used cars and the other, only the sale of used cars and then classify and define a new car as it is defined in section 46-503, then there is no prohibition against its defining a new car as one driven no greater distance than 4000 miles or titled no longer than ninety days, and thus further limit the field of activity of the unenfranchised dealer...
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