Tri-State Auto Auction, Inc. v. Ostroot

• Decision Date: 21 September 1956
• Docket Number: TRI-STATE,No. 9573-,9573-
• Citation: 78 N.W.2d 468,76 S.D. 356
• Parties: AUTO AUCTION, Inc., Plaintiff and Appellant, v. Geraldine OSTROOT, as Secretary of State of the State of South Dakota, Defendant and Respondent. a.
• Court: South Dakota Supreme Court

Page 468

78 N.W.2d 468

76 S.D. 356

TRI-STATE AUTO AUCTION, Inc., Plaintiff and Appellant, v. Geraldine OSTROOT, as Secretary of State of the State of

South Dakota, Defendant and Respondent.

No. 9573-a.

Supreme Court of South Dakota.

Sept. 21, 1956.

Roy E. Willy, Sioux Falls, for plaintiff and appellant.

Phil Saunders, Atty. Gen., W. O. Knight, Asst. Atty. Gen., Pierre, for defendant and respondent.

SMITH, Judge.

In this action, brought under SDC 37.01, the complaint of the plaintiff and the answer of the defendant pray for a declaratory judgment interpreting SDC Supp. 44.0211, and SDC Supp. 44.07.

The plaintiff maintains a permanent place of business at Valley Springs, Minnehaha County, where it auctions used motor vehicles, owned by dealers, to other dealers. Such used vehicles as are consigned to plaintiff for sale are the property of dealers located throughout several states, and are sold to other dealers operating businesses in those states. The purchases at such sales are made only by licensed dealers for resale. No sales are made to the public or for use. Plaintiff's literature is circulated among some 1,250 dealers. As a result some 40 to 70 vehicles are consigned to plaintiff each week, and 50 to 70 per cent of such vehicles are sold. Those which are unsold are eventually returned to their owners.

The Secretary of State is of the view that in order to carry on the described business plaintiff must be licensed as a dealer under SDC Supp. 44.0211 and further that the plaintiff or his consignors must comply with the provisions of SDC Supp. 44.07. Because plaintiff had failed to comply with all of the provisions of these statutes, the Secretary of State revoked a dealer's license theretofore issued. Cf. Tri-State Auto Auction, Inc., v. Ostroot, S.D., 72 N.W.2d 427.

The plaintiff has maintained and does steadfastly maintain that the cited statutes were enacted for the purpose of regulating sales at retail to the public, and are without application to the business of conducting an auction of used cars for dealers to dealers.

To resolve this controversy this action was instituted. The facts are not in dispute. Judgment, sustaining the view of the Secretary of State, was entered on the pleadings, and plaintiff had appealed.

The first sentence of SDC Supp. 44.0211 reads as follows: 'No person, co-partnership, or corporation, shall engage in the business, either exclusively or in addition to any other occupation, of selling or manufacturing motor vehicles, new or used, or shall offer to sell, solicit or advertise the sale of motor vehicles, new or used, without first having acquired a license therefor as hereinafter provided.' Plaintiff recognizes that if the legislative intention is conveyed by the literal meaning of this sentence, it must be licensed as a dealer in order to carry on its described business. However, it is plaintiff's contention that when the sentence is placed in context as a part of the chapter dealing with certificates of title of motor vehicles, and is read in the light of the obvious legislative purpose of protecting those who purchase motor vehicles for use, it is reasonable to conclude that no more was intended than to require a license to engage in the business of selling motor vehicles to the public for use, and hence that a license is not required to conduct a business of auctioning used motor vehicles for dealers to dealers.

In argument it is first pointed out that in a statutory sense, SDC Supp. 44.0201(6) as well as according to common usage a 'dealer' is one who buys to sell again, and in fact plaintiff is not such a dealer but an agent who acts between dealers. Our attention is then directed to the fact that SDC Supp. 44.0211 makes two express references to sales at retail. The assumption is then indulged that the legislative purpose in enacting the chapter dealing with certificates of title to motor vehicles, which includes SDC Supp. 44.0211, is to afford protection to those who purchase motor vehicles for use. From this background plaintiff arrives at the conclusion that the statutes fail to reveal an intention to regulate its business.

It is manifest that the chapter and section under consideration comprehend tthe regulation of retail sales of motor vehicles, and the protection of the purchasers of such vehicles for use. It seems equally manifest to us that the legislature had more in mind. By the provisions of a companion act, SDC 44.01, it had required that every motor vehicle used on the highways of our state be registered, and that it display the number under which it is registered. By the act we are considering it has provided for a public record of and a certificate of title for every motor vehicle within our state. Further it has said that the business of selling motor vehicles shall be carried on by licensed dealers, and that such dealers must operate from permanent establishments. By SDC Supp. 44.0211 it has provided also that 'Every dealer or manufacturer licensed under the provisions of this section, shall keep a book or record, in such form as may be prescribed or approved by the Secretary of State, in which he shall keep a record of the purchase, sale or exchange, or receipt for the purpose of sale, of any motor vehicle, a description of such vehicle, together with the name and address of the seller, of the purchaser, and of the alleged owner, or other person from whom such vehicle was purchased or received, or to whom it was sold or delivered, as the case may be.' These measures reveal a purpose, among others, to aid the police in their constant war against those who seek to profit from converting and stealing these mobile units of property by providing officers with a ready means of identifying and tracing such units, and by so regulating the business of selling the same, as...