Park McLain, Inc. v. Hoey

• Decision Date: 19 July 1937
• Citation: 19 F. Supp. 990
• Court: U.S. District Court — Eastern District of North Carolina
• Parties: PARK McLAIN, Inc., et al. v. HOEY, Governor of North Carolina, et al.

19 F. Supp. 990

PARK McLAIN, Inc., et al. v. HOEY, Governor of North Carolina, et al.

District Court, E. D. North Carolina.

July 19, 1937.

Thomas Turner, Jr., of High Point, N. C., and F. A. McCleneghan, of Charlotte, N. C., for complainants.

A. A. F. Seawell, Atty. Gen. of North Carolina, Harry McMullan and T. W. Bruton, Asst. Attys. Gen., of North Carolina, Walter D. Siler and Daniel L. Bell, both of Pittsboro, N.C., and W. B. Rodman, Jr., of Washington, N. C., for defendants.

Before PARKER, Circuit Judge, and MEEKINS and HAYES, District Judges.

PARKER, Circuit Judge.

This is a suit to enjoin the Governor, the Attorney General, and the Commissioner of Revenue of the State of North Carolina from enforcing against complainants certain provisions of an act of the General Assembly of North Carolina, ratified February 24, 1937,¹ entitled "An Act to Regulate the Business of Selling Used Motor Vehicles Brought into the State of North Carolina from Other States," on the ground that the provisions are violative of the commerce clause of the Federal Constitution (article 1, § 8, cl. 3) and the due process clause of the Fourteenth Amendment thereto. The complainants are either citizens and residents of the State of North Carolina or corporations created and existing under the laws of that state, and all have fixed and established places of business within the state and are engaged in the sale of used motor vehicles brought into North Carolina from without the state. It is admitted that as to each of them the suit involves exceeding $3,000 exclusive of interest and costs. As interlocutory injunction was originally asked, a court of three judges was constituted pursuant to section 266 of the Judicial Code, as amended, 28 U.S.C.A. § 380, to pass upon the application for same; but, upon the hearing, the case was submitted for final decree upon the pleadings and affidavits filed.

The pertinent sections of the statute in question are sections 1 and 3, which are as follows:

"Section 1. Every dealer in used, or second hand, motor vehicles who is a nonresident of the State of North Carolina or who does not have a permanent place of business in this State, and every person, firm or corporation who bring any used, or second hand, motor vehicles into the State of North Carolina for the purpose of sale or re-sale, except as a trade-in on a new motor vehicle or another used car, shall before offering the same for sale within ten days from the date of entry of said motor vehicle into the limits of the State of North Carolina, register such motor vehicle with the Department of Revenue on a form to be provided by said department and under such rules and regulations as may be promulgated by said department from time to time, and shall before said used or second hand car is offered for sale, or sold, execute a bond with two good sufficient sureties, or with a surety company duly authorized to do business in the State of North Carolina as a surety or sureties thereon, payable to the State of North Carolina, for the use and benefit of the purchaser and his vendees, conditioned to pay all loss, damages and expenses that may be sustained by the purchaser and/or vendees, that may be occasioned by reason of the failure of the title of such vendor or by reason of any fraudulent misrepresentations or breaches of warranty as to freedom from liens, quality, condition, use or value of the motor vehicle being sold. Said bond shall be in the full amount of the sale price of each of such motor vehicles but in no event to exceed the sum of one thousand ($1,000.00) dollars for any one motor vehicle, and shall be filed with the Department of Revenue of the State of North Carolina by the vendor and be approved by it as to amount, form and as to the solvency of the surety or sureties, and for which service by said department, in registering said vehicle, the vendor shall pay the regular registration fee charged for the registration of motor vehicles and in addition thereto a fee of ten ($10.00) dollars for each bond so filed and approved, which sums shall be paid into the State Treasury to the credit of the General Fund and expended as provided by law."

"Section 3. No action, nor right of action to recover any such motor vehicle, nor any part of the selling price thereof, shall be maintained in the courts of this State by any such dealer or vendor, his successors or assigns, in any case wherein such vendor or dealer shall have failed to comply with the terms and provisions of this Act, and, in addition thereto, such vendor or dealer, upon conviction for violation of any of the provisions of this Act, shall be deemed guilty of a misdemeanor and shall be punished by a fine of not less than one hundred ($100.00) dollars and not more than five hundred ($500.00) dollars, or by imprisonment for not less than thirty days, or more than six months, or by both such fine and imprisonment."

Complaint is made of the provision of the statute requiring bond as a condition of offering for sale any used car brought from without the state and of the requirement that a fee of $10 be paid for each bond so filed. No question is raised as to the validity of the provision requiring registration with the Commissioner of Revenue, nor as to another provision, not quoted, requiring that certificate of title issued by the Commissioner of Revenue be delivered to the purchaser upon sale of such...