Document: 350 U.S. 537 76 S.Ct. 621 100 L.Ed. 681 INTERNATIONAL HARVESTER CREDIT CORPORATION et al., Appellants,v.Allen J. GOODRICH, Edward H. Best and F. Roberts Blair, Constituting the StateTax Commission of State New York. No. 82. Argued Jan. 17, 18, 1956. Decided April 9, Mr. John Lord O'Brian, Washington, D.C., for appellants. James O. Moore, Jr., Buffalo, N.Y., appellees. Justice BURTON delivered opinion Court. 1 The York imposes a highway use tax upon motor carriers operating heavy vehicles on its public highways. Many such are purchased operated under conditional sales agreements, certain vendors here question extent to which may subordinate vendors' security interests State's lien taxes owed by carrier. constitutionality any grant priority lien, over their rights in particular trucks, insofar as is made applicable based carrier's operation other trucks within State, whether before, or during, time that carrier has State. object, likewise, applied assessed against after have repossessed even though operations highways before repossession.1 For reeasons hereafter stated, we sustain each instance. 2 International Harvester Credit Corporation, Delaware corporation, Brockway Motor Company, Inc., plaintiffs (now appellants), with members Tax defendants appellees), submitted this controversy Supreme Court York, Appellate Division, Third Department, stipulated facts, pursuant § 546 Civil Practice Act Appellants sought declaratory judgment liens asserted were not superior Article 21 Law was unconstitutional, it prescribed priorities they objected.2 also asked bonds filed them secure payment be canceled returned. 3 With one judge voting, Division decided favor appellees, sustaining generally priorities.3 284 App.Div. 604, 132 N.Y.S.2d 511. On appeal, taken matter right, affirmed Appeals dissenting. 308 N.Y. 731, 124 N.E.2d 339. appeal Court, 28 U.S.C. 1257(2), U.S.C.A. §§ noted probable jurisdiction. 813, 50. 4 facts summarized follows: From January 1, 1952, through February 1954, Eastern Cartage Leasing Co., called 'carrier,' domestic corporation owning at least 15 vehicles. As these subject imposed Law, supra. That 'carrier' 'owner,' those terms did include vendor carrier.4 It payable monthly returns.5 5 In recognition administrative difficulties involved enforcing collecting tax, contrast flat rate measured gross receipts, statute extensive remedies, well penalties, civil criminal (see 512 Law), protect interest State.6 provisions covering points issue 6 's 506. Payment 7 'The fees, taxes, penalties accruing article shall constitute all vehicular units attach vehicle unit state remain effective until paid, sold thereof. Such paramount prior encumbrances character holder legal title unit.' McKinney's N.Y.Laws, Law. 8 incurred, failed pay, $3,158.77, plus $539.27 21, 1954. carried 1% per month. While neither appellant knew anything delinquencies true had inquired possible existence.7 9 March 1953, while Highway Use Act, foreign doing business two tractors $8,253 each.8 transaction, executed agreement $6,541. agreements assigned appellants herein, properly office Clerk Town Rotterdam, Schenectady County, Each truck remained possession control 26, then delinquent $4,578.79 truck, bought sale. resold purchaser Massachusetts. 10 Comparable relate Company. Its price $7,257; $6,757. repossession took place when $5,625 vendor. record shows no disposal truck. 11 entire amount carrier, totaling $3,698.04.9 12 There dispute due nor claim sum from carrier.10 validity respective part 13 issue, accordingly, been narrowed parties subordination exceeds determined To excess, statutory deprives property without process law violation Fourteenth Amendment Federal Constitution. 14 Separate factual considerations presented (1) than three question, (2) first question. principle supports is, however, same both instances. dating This holds good assessment vendors. line depends, instance, constitutional right enforce collection latter's giving ample notice collection. doubt impose privilege using highways, where applies owned free clear encumbrances. enforced regardless accrued acquisition subjected lien. Likewise, unquestionably could See United States v. Alabama, 313 274, 280—282, 61 1011, 1013—1014, 85 1327. simple illustrations exercise prerogative taxpayer's property. Marshall People 254 380, 382—384, 41 143, 144—145, 65 315. A entitled wide discretion matters. 16 arises because, present purposes, treats now us manner does unencumbered trucks. vendors, relying deny right. agreements. rather absolute interests. emphasizes action yielding thus enabling operate burden placed precisely held 17 Looking situation another point view, an unquestionable regulate regarded, therefore, nature supplement Uniform Conditional Sales Act. Consol. c. 41, Personal Property Art. 4. 18 subjects reasonably computed and, order collect places beneficial owner operator during them. provided purchase long kept up payments, effect paid full.11 19 enforcement rests principles known connections. landlord's unpaid rent enforceable personal found premises tenant, third party who allowed tenant it. Spencer M'Gowen, Wend., 256.12 20 vendor's such. York's asserts liability either limited set forth more year condition obvious carriers, derive substantial benefits costly construction maintenance traffic. reasonableness thereby emphasized. Cases condemning attempts compute person's reference income activities persuasive here. own destroy efficacy financing. Practically, suggests assurance carrier-customers latters' arrears. would not, common law, asserted, far saying statute, arbitrary unreasonable lacking process. 22 Cardozo said Burnet Wells, 289 670, 677—678, 53 761, 763—764, 77 1439: 23 boundaries legislative power. must dealt large way, questions always are, narrowly pedantically, slavery forms phrases. 'Taxation so much concerned refinements actual command taxed—the benefit paid.' Corliss Bowers, supra (281 376), page 378, 50 336 (74 916). Cf. Guggenheim, (288 280), 283, 369 (77 748). Refinements times supplied rule nothing more, meaning taxing act read taxpayer. controlling force unmistakable meaning, assailed taxpayer overpassing bounds reason, lawmakers circumstances longer concept ownership reflected squared embodied, less vaguely, common-law traditions. enlightened legislator might affront justice. Even convenience, practical necessities efficient system taxation, will heed reasonable limits.' (Emphasis supplied.) 24 little if required rate, receipts fleet (although sales) valid means unallocable tax. prescribe where, here, allocable because close proportion case, need necessary cannot readily collected advance. 25 affirmed. 26 Affirmed. 27 BLACK concurs result. HARLAN consideration decision case. 29 FRANKFURTER, whom DOUGLAS concurs, 30 So Constitution limits them, amplest scope imposing devising relevant Within vast range discretionary power, provide creditor adds corpus equipment used his debtor heard complain equity subordinated only specific equipment, but also, legislation, incurred debtor's period enabled added road. matter, adequate protecting himself regarding incidence default whole helped enhance totality 31 We therefore agree Eastern's service road way total tractors. immaterial credit arrangement whereby reserved price. 32 very different out antedating sale Eastern. 33 included triad protected Due Process Clause Amendment—'nor deprive person life, liberty, property, law.' When man's given or, satisfy debts another, justifying purpose meet requirements Clause. Thompson Consolidated Gas Utilities Corp., 300 55, 79—80, 57 364, 375—376, 81 510. 34 thing creditor, hold having dominion control, suffer persons. quite saddle creditor's satisfaction obligation whatever safeguarding third-party indebtedness. Nor 35 us, itself put into hands. admitted tractors, possibly losses except avoiding sales. ascertained liabilities vendee informed examining returns vendee. misdemeanor official divulge information. N.Y.Tax 514. Thus, there connection between undoubted foreclose considers important role played our economy sales, hardly do deem transactions extrahazardous creditors insurer's risks. 36 remand case courts restrict enforcible appellant's service. attempted abandoned October 1951, weight 18,000 pounds each. Consol.N.Y.Laws, 60, 501, subd. 2, 503. graduated scale beginning six mills mile 18,001 20,000 pounds. rose weighing 74,001 76,000 pounds, additional ton fraction thereof above weight. multiplying number miles appropriate group. Id., upheld 'Such unit, joint several both.' And see following interpretation sentence Attorney General accept: 'In my opinion, intend inclusion 'a vendor' word 'owner.' designed cover lawfully hands others arrangements look divestiture proprietary vendor, hand, retains special interest, vehicle. transaction looks defeasance completed accordance terms. 'I conclude 'owner' such.' Rep.Atty.Gen.N.Y., Op., 219, 220 (1954). "Carrier' lawful vehicle.' 5. 505, Legislature adopted weight-distance taxation substitute former fuel license fees. rejected proposals fees measuring receipts. N.Y.Leg.Doc. 67 (1951) 65—80. legislature hereby finds declares greatly increases wear damage highways; direct relationship done them; usefulness shortened use; create augment hazards pedestrians traffic heavier financial construction, policing smaller vehicles; enacted distribute equitably compensate granted cost administering regulations.' Laws 74, Historical Note. During material 514 forbade disclosure information concerning returns. Those restrictions relaxed. 1955, 165. 'tractors' 21. They constituted automotive portion tractor-trailers referred sustained $3,409.78, $2,884.61 month $3,698.04, like $3,158.77 date. released bond. Massachusetts, proceeds resale. distinguished collection, contested. Mid-States Freight Lines, Bates, 279 451, 111 578, 304 700, 107 603, certiorari denied 345 908, 73 648, 97 1344. Capitol Greyhound Lines Brice, 339 542, 70 806, 94 1053. divided goods. buyer owner, attributes possession, redemption sedulously guarded law. seller, reserves goods solely performance buyer. Essentially device. plain money chattel mortgage despite technical theoretical differences security.' Schnitzer Fruehauf Trailer 283 421, 431, 128 242, 253, 307 876, 122 754; Williston (rev. ed. 1948) 330 seq. innkeeper's Waters & Co. Gerard, 189 302, 82 N.E. L.R.A.,N.S., 958, agister's Corning Ashley, 51 Hun 483, N.Y.S. 255, 121 1100. Hersee Porter, 403, 338.

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