Lord v. Henderson

The primary question for decision, in all four of the above-entitled appeals which were consolidated for trial in the court below, is whether the Caravan Act of 1937 is constitutional under the state and federal Constitutions. The constitutionality of the act under the federal Constitution has heretofore been challenged in the Supreme Court of the United States, but its constitutionality sustained in Clark v. Paul Gray, 306 U.S. 583 [ 59 S.Ct. 744 , 83 L.Ed. 1001 ], in an opinion by Chief Justice Stone, at that time Mr. Justice Stone. The endeavor here made to distinguish that decision which held that the Caravan Act did not violate the federal Constitution is predicated upon the theory that it was based on certain facts which in the instant cases, it is alleged, were proved not to be true. It should perhaps be stated at this point that the earlier 1935 Caravan Act was held unconstitutional in Ingels v. Morf, 300 U.S. 290 [ 57 S.Ct. 439 , 81 L.Ed. 653 ], solely on the ground that a license fee of $15 per vehicle merely for administering the Caravan Act and policing caravan traffic was excessive and hence imposed an unconstitutional burden on interstate commerce.

The Caravan Act of 1937 which materially differs from the 1935 Act [shortly stated] imposes a flat tax of $15 ($7.50 for the privilege of using the public highways and $7.50 as a license fee for administration and policing the act—(a license good for a six-month period) on every motor vehicle (whether it has or has not been registered, if it be subject to registration in California) operated on its own wheels singly, in tow, or in a “caravan” or fleet, on the highways of this state, for the purpose of sale to, or purchase by, any person within or without the state, unless the operation is confined wholly within one of the two statutory zones of the state. Accord

The act is assailed as being unconstitutional, or at least as being unconstitutional as applied to the individual respondents, on the ground (1) that it violates the commerce clause of the federal Constitution (art. I, §8); (2) that it infringes the due process and equal protection clauses of the Fourteenth Amendment; (3) that it violates (a) the uniformity and the privileges and immunities clauses (art. I, §§11 and 21), and (b) the exemption and classification clauses of the state Constitution (art. IV, §25, subds. 20 and 33).

Plaintiff Lord, as indicated by the above captions, instituted two actions, one in 1937 and another in 1943. Both actions challenged the validity of the Caravan Act of 1937. Lord caravans passenger motor vehicles, generally in pairs, i.e., a lead ear and a car in tow—tandem style. The tandem is propelled by the lead car in which the driver sits. Usually the caravan or fleet of these tandem-hookups aggregates 10 or so tandems (20 cars) plus a single pilot car for the manager of the fleet and a single follow-up car driven by a mechanic. The cars for the most part are gathered at Detroit, Chicago, and Kansas City and are then driven overland to the principal coast cities of California. The drivers are recruited through want ads in newspapers at the point from which the trek originates. These want ads offer free motor transportation to California with meals and lodging en route together with $25 to $50 to the drivers for the services rendered.

The plaintiff Dial is a used ear dealer with his principal place of business at Long Beach. As a part of his business operations he buys passenger-type automobiles in Chicago and causes them to be driven on their own wheels, with their foreign license plates, to Long Beach by drivers who are procured through ads in Chicago newspapers. Except in rare instances the automobiles are not driven in caravans or convoys. The drivers receive no pay and, what is more, are required to pay for their own lodging and meals together with the gasoline and oil used by the particular vehicles driven by them. There was evidence that such drivers took the minimum time for sleep en route.

The three plaintiff corporations Utility Trailer Sales Com

The earlier Caravan Act of 1935 was intended to apply primarily to motor vehicles driven in caravans into the state for sale or exchange, hence the name given to the statute. The Caravan Act of 1937 applies not only to such vehicles, but to vehicles driven intrastate as well, unless restricted to a single zone within the state, and regardless of whether the vehicle is or is not a part of a caravan. Accordingly, the title of the present act, i.e., “Caravan Act of 1937” is something of a misnomer.

The primary object of the 1935 Act was to tax interstate caravaning, as such, into the State of California; that is, motor vehicles driven on our highways as a part of a caravan or fleet where the objective of the owner was a sale or exchange in this state of a vehicle unregistered in California, on the theory that such a commercial use of thé highways discriminated against the owners of California registered vehicles and created an undue and unnecessary congestion and hazard to traffic on the highways, and particularly to drivers of California tax registered vehicles.

In seeking to impose a tax upon motor vehicles transported upon our highways for gain the Legislature is possessed of the constitutional power to place all such vehicles in one class and to place all vehicles not operated for gain in another class and to impose a greater tax upon the former than the latter (Dixie Ohio Express Co. v. State Revenue Com., 306 U.S. 72 [ 59 S.Ct. 435 , 83 L.Ed. 495 ]; Clark v. Poor, 274 U.S. 554 [ 47 S.Ct. 702 , 71 L.Ed. 1199 ]; Morf v. Bingaman, 298 U.S. 407 [ 56 S.Ct. 756 , 80 L.Ed. 1245 ]). It is not necessary for the Legislature, to achieve such a classification, to find

The initial question which we are called upon to determine, in the individual cases before us, is whether any one of them is distinguishable from the holding in Clark v. Paid Gray by reason of the findings of the trial judge below. For reasons presently to be stated, we think that upon the material and essential facts none of the cases can be distinguished from the Clark case and consequently each is controlled by it, so far as the attack against the Caravan Act of 1937 is rested on federal constitutional grounds.

In the Clark case the court said: “It is true that the district court found that the practice of earavaning creates no additional traffic hazard, nor any undue wear and tear on the highways. But in this we think that its determination was not only contrary to the evidence, but went beyond the judicial province.” (Italics supplied.) Likewise, it is true in the cases before us that the trial court found, as did the trial court in the ‘Clark case that earavaning created no additional traffic hazard, nor any undue wear and tear on the highways. Indeed, in the instant eases the trial court went much further in its finding of facts which, in many instances, we regard as being contrary either to the evidence or to the physical facts, and, in every instance, beyond the judicial province. The facts as found by the trial court, as stated in its “Memo of Decision,” reads as follows:

“I do not find anything in the evidence taken here to support the conclusion of the trial court, as related on page 411 of the opinion in the case of Morf v. Bingaman, 298 U.S. 407 [ 56 S.Ct. 756 , 80 L.Ed. 1245 ], and reiterated in the case of Clark v. Gray, 306 U.S. 583 [ 59 S.Ct. 744 , 83 L.Ed. 1001 ] .... with all due respect to the justices of that court.

“I cannot find from the evidence here that the drivers of

caravan cars had little interest in the vehicles they drive, nor any less regard than those of state licensed cars for the safety and convenience of others using the highway. They were certainly interested in protecting the3nselves from injury. Nor can I find that cars thus coupled and controlled frequently or otherwise, skid, either on curves or elsewhere, or that they cause any more wear and tear on the roads than any other single ear, and no more when they are driven in doubles; nor that there were any increased difficulties in the operation of the coupled cars; nor that the length of the caravans to any appreciable degree increased the hazard and inconvenience to passing traffic; nor can I find from the evidence here that such traffic involved a special type of use of the highways which enhanced the wear and tear on the roads, nor that it augmented the hazards to other traffic; nor that they imposed on the state a heavier financial burden for highway maintenance and policing than do other types of motor traffic. There is no evidence of this at all in my opinion.”

In the usual and ordinary case instituted by or against the state, its various departments or officers, it is the duty of the trial court in nonjury cases, such as these cases are, to weigh the testimony upon the material issuable facts and make its findings thereon. But when the question at issue is that of the constitutionality of a statute, the duty which devolves upon the trial court is vastly different. In the latter case, the province of the court is not to weigh the evideiiee before it, but to ascertain whether there are any facts in the record or outside of it, of which it may take judicial notice, which would sustain the Legislature in enacting the statute (Clark v. Paul Gray, 306 U.S. 583 [ 59 S.Ct. 744 , 83 L.Ed. 1001 ]). In the instant eases there was an abundance of testimony, which the trial court was not privileged to disbelieve, which would have warranted the Legislature in finding the facts directly contrary to the facts as found by the court.. The fact that the trial court found that plaintiff Lord did approximately 10 to 20 per cent of the business of caravaning in this state; that he exercised eo3isiderable care in selecting the drivers who responded to ads he placed in midwest papers where the caravaning originated; that his drivers, with one exception, had never been involved in an accident; that the tow-bar he used in case of “hookups” was the safest known; that he instructed his drivers to exercise the greatest of care, are all factors to the credit of Mr. Lord,

Most of the drivers engaged by many caravan operators to caravan vehicles have never been in California and are wholly unfamiliar with mountain driving encountered on their route in this state. In many instances they are under age and often below the age required for an operator’s license in California. The drivers generally do not have California operator’s licenses and quite often no licenses from any other state. By proceeding in a caravan or as a fleet, the manager and mechanic can keep a cheek that would not otherwise be possible. If one ear becomes disabled the whole fleet stops on or alongside the road so that the mechanic can repair the ear or attach it to some other car in the fleet. The necessity of driving the cars in a fleet tends to keep one tandem after another rather closely together. On a two-lane highway, and there are several at the boundaries of the state, cars behind the fleet necessarily encounter difficulty in getting ahead of the fleet as a whole or in between the various tandems. It seems quite probable that the recruit drivers of the tandems oftentimes are not inclined to be very courteous to other cars on the highway, as for instance to aid them in passing or enable them to get into the line when necessary to avoid oncoming cars. When the tandem cars are compelled to stop suddenly, there is often a tendency to skid, to sway out of line or to “jack-knife,” because the brakes on the forward car must alone serve for both ears. The front part of the towed ear, including the windshield, is usually covered up so as to avoid mud and rains thrown back and upon it by the lead-car. This procedure naturally obscures the vision of a driver behind such a tandem as he can only see ears ahead of the tandem by looking out of his own left window.

In the individual case of Lord the facts just recited must be modified by saying that Lord’s caravans do not take any mountain routes in California; that his drivers are over the

Unquestionably, the operation of a single passenger-type vehicle or of two such cars driven tandem is not as hazardous, as when driven as a part of a large caravan, fleet or convoy or as is the case of two large trucks or vans driven tandem. Nevertheless, the operation by Dial differs only from that of Lord in that his passenger motor vehicles are not operated in tandem or as a part of a caravan. However, Dial’s drivers receive no pay whatever for their services nor do they receive lodging and food, and, what is more, must furnish such costs out of their own pockets, all of which is not true in the case of Lord. Accordingly, drivers of the type employed by Dial may be regarded as being inclined to be less careful than the type employed by Lord, as they are not supervised at all in the course of their cross-country trip and do not receive the financial return which Lord’s drivers do.

But quite apart from these differences of fact it is obvious that the state may impose the caravan tax on these types of operation, unless it can be said that placing them within the purview of the statute here involved is otherwise improper.

Respondent Dial contends that there is nothing to distinguish his operations from that of a person who drives a passenger motor vehicle on a highway not for gain, or of a “dealer” or “transporter” who is permitted to drive such a vehicle for gain within a single zone, using dealers’ or transporters’ license plates which cost at most $5.00 a set. We think the contention overlooks fundamental distinctions. (Cf., Dixie Ohio Express Co. v. State Revenue Com., 306 U.S. 72 [ 59 S.Ct. 435 , 83 L.Ed. 495 ] ; Matter of Application of Schuler, 167 Cal. 282 [ 139 P. 685 , Ann.Cas. 1915C 706].) As was said in Hayes v. Missouri, 120 U.S. 68 [ 7 S.Ct. 350 , 30 L.Ed. 578 ]: “The Fourteenth Amendment to the

First, and foremost in considering the cases before us, it needs to be recalled that the state owns its highways and consequently may impose reasonable fees for their use by vehicles moving interstate or intrastate. It may classify the traffic, among other things, according to the character of the traffic, or the purpose for which the highways are used, as for instance whether it be for private gain or not. (Dixie Ohio Express Co. v. State Revenue Com., 306 U.S. 72 [ 59 S.Ct. 435 , 83 L.Ed. 495 ] ; Aero Mayflower T. Co. v. Georgia Pub. Serv. Com., 295 U.S. 285 [ 55 S.Ct. 709 , 79 L.Ed. 1439 ].) The tax imposed as to vehicles in one class need have no resemblance in character or amount with that of vehicles in another class, so long as the imposition itself is reasonable with respect to the class. (Capitol Greyhound Lines v. Brice, 339 U.S. 542 [ 70 S.Ct. 806 , 94 L.Ed. 1053 ].)

Consequently to point out, as respondents do, that motor vehicles driven by the general public, not for gain, pay only a license fee of $6.00 a year as against a fee of $15 for six months by respondents who operate their vehicles for gain, makes use of an entirely false analogy. Likewise, to point out that the average cost of administering and policing such general public traffic involves only a cost of $2.90 per vehicle is equally beside the point. If the state instead of requiring the payment of a license fee of $6.00 by the general public for policing and administrative purposes required no fee at all the respondents would have no standing under constitutional law—state or federal—to complain. As the state may prohibit all traffic for gain on its highways—intrastate or

In Packard v. Banton, 264 U.S. 140 [ 44 S.Ct. 257 , 68 L.Ed. 596 ], the court said: “The contention most pressed is that the act unreasonably and arbitrarily discriminates against those engaged in operating motor vehicles for hire in favor of persons operating such vehicles for their private ends, and in favor of street cars and motor omnibuses. If the state determines that the use of streets for private purposes in the usual and ordinary manner shall be preferred over their use by common carriers for hire there is nothing in the 14th Amendment to prevent. The streets belong to the public, and are primarily for the use of the public in the ordinary way. Their use for the purposes of gain is special and extraordinary, and generally, at least, may be prohibited or conditioned as the legislature deems proper. Neither is there substance in the complaint that street cars and omnibuses are not included in the requirements of the statute. The reason, appearing in the statute itself, for excluding them, is that they are regulated by the Public Service Commission Laws; and this circumstance, if there were nothing more, would preclude us from saying that their noninclusion renders the classification so arbitrary as to cause it to be obnoxious to the equal protection clause.”

We pass then to consider whether the tax levied against the class falling within the Caravan Act is excessive or discriminatory with respect to the levy made to “dealers” or “transporters” for caravaning within a single zone. We start with the observation that the state is under no obligation to provide license plates to either “dealers” or “transporters” to enable them to use its highways for private gain. If it chooses to grant the privilege to operate wholly within a single limited zone and extends that privilege equally to all who are engaged in caravaning therein there is no discrimination, as between zones, or states, or as to persons so engaged. To be sure there is a discrimination, of a sort, as between persons in one zone or state who wish to transport vehicles to another zone or state—and particularly where they are at or near a boundary line and do a large part of their business in another zone or state, but this is not a type of discrimination recognized as an illegal discrimination under the Constitu

The mere fact, if it be a fact, that zoning the state into two zones, may seemingly have been somewhat arbitrary and unnecessary, as respondents contend, is of no moment, so long as operators in each zone are accorded the same privileges and where, as here, it cannot be said that the legislative determination was without any substantial basis (Clark v. Paul Gray, 306 U.S. 583 [ 59 S.Ct. 744 , 83 L.Ed. 1001 ]). The notion that a person engaged in caravaning within the borders of a state must be permitted to operate in all zones within a state without the payment of a tax is a fallacy long since exploded (Hayes v. Missouri, 120 U.S. 68 [ 7 S.Ct. 350 , 30 L.Ed. 578 ]; Packard v. Banton, 264 U.S. 140 [ 44 S.Ct. 257 , 68 L.Ed. 596 ]).

Accordingly, as neither ‘ ‘ dealers ’ ’ nor ‘ ‘ transporters ’ ’ located or operating within a single zone can transport their vehicles for the purpose of selling, buying or exchanging them beyond the limits of their own zone without paying the caravan tax, even though they are possessed of dealers’ or transporters’ license plates, it follows they have privileges equal only to those who are not so situated, including interstate transporters without such license plates. That being true it follows that there is no inequality as to them in the “protection of the law” or any discrimination as between them. [10] The difficulty with the position taken by respondents is their assumption, that just because the law at one time accorded to “dealers” and “transporters” possessing special plates the right to transport their cars anywhere in the state, the right could not be cut down by subsequent legislation. Naturally there is no merit in the contention.

The reason for exempting dealers or transporters from the operation of the caravan tax so long as they restrict their operations within a single zone is obvious. (Matter of Application of Schuler, 167 Cal. 282 [ 139 P. 685 , Ann.Cas. 1915C 706].) Dealers, as is well known, tend to confine their activities of selling and demonstrating their vehicles to very limited areas, because of competitive and other conditions. In the case of heavier equipment such as large trucks, vans, and the like, an even lesser use is made of the highways due to the

The respondents next contend that the license fee of $7.50 levied for the purpose of reimbursing the state for expenses incurred in the collection of such fees and in the administration and enforcement of the act and the expense of policing the highways with respect to caravaning is excessive.

The burden of showing the fee is excessive is upon respondents and riot on appellants as respondents contend. (Clark v. Paul Gray, 306 U.S. 583 [ 59 S.Ct. 744 , 83 L.Ed. 1001 ].) The cases cited by respondents such as D. E. Foote & Co. v. Stanley, 232 U.S. 494 [ 34 S.Ct. 377 , 58 L.Ed. 698 ], Great Northern R. Co. v. Washington, 300 U.S. 154 [ 57 S.Ct. 397 , 81 L.Ed. 573 ], Brimmer v. Rebman, 138 U.S. 78 [ 11 S.Ct. 213 , 34 L.Ed. 862 ], involved in whole or in part “inspection fees” where the rule as to the burden of proof is otherwise. This is due to the fact that article I, section 10, of the federal Constitution expressly provides that “No state shall, without the consent of the Congress, lay any imposts or duties on im

The court seems to have arrived at this figure in large part, if not wholly, by using as a yardstick the average cost of policing all registered motor vehicles operated within the state arid the cost of administering the Motor Vehicle Act and the Caravan Act which the court found amounted to $2.90 per vehicle. Not only was this not a proper criterion, but it ignored various highly important factors. For instance, the cost of ferreting out those who sought to evade the caravan tax—who, driving on the highway, could not be distinguished from the general motoring public; the saving involved in having a single well-established over-all police force and administrative unit, instead of a separate one set up to police or administer the Caravan Act; and, other factors which need not here be detailed. It is enough to say, as the Supreme Court of the United States has said, that “the States are not hobbled in exercising rough judgment in devising tax formulas, giving to . . . [the] . . . relevant factors such respect as is fairly within the restraints of decency.” (Capitol Greyhound Lines v. Brice, 339 U.S. 542 [ 70 S.Ct. 806 , 94 L.Ed. 1053 ]—the language is of the dissent, but not contrary to language of the majority.) In the cases before us we take judicial notice of the fact that the rail freight transportation charge of a single passenger motor vehicle from Detroit to Los Angeles costs between $250 and $350, whereas operated on its own wheels over the highways between Detroit and Los Angeles it is much less than $100. Accordingly, a charge of $15 per vehicle (1) for policing and administration of the act and (2) for the privilege of using the highways of this state for a period of six months is not economic discrimination, much less illegal discrimination and in no event excessive. In that connection it needs to be observed that the Caravan Act tax is in lieu of all other taxes policing or otherwise so long as the vehicle taxed is not sold or exchanged during the six-month period and entirely regardless of the mileage covered by the vehicle over the state highways or any other factor. To illustrate how this can redound in favor of a

The record before us does not disclose the initial cost expended by the state for the highways used by the respondents or the maintenance thereof, nor the separate cost of policing the caravaning thereon or of administering the Caravan Act, with respect to these highways separate and apart from the Motor Vehicle Act. What is plainly shown is that the economic saving of the use of highways by the respondents over the use of other modes of transportation exceeds many times over the cost of either the policing license fee or the use

If we correctly understand the position of respondents, they contend that, quite apart from any question of the constitutionality of the Caravan Act of 1937 they never were and are not now under a duty to pay the tax levied by that act upon their activities even if they fall within the scope of the act. In support of this contention they argue that as they are either “dealers” or “transporters” they are exempt from the operation of the act by virtue of the provisions of the earlier enacted sections 205, 206 and 207 of the Vehicle Code as these sections, so they contend, were not repealed by the act which repealed the Caravan Act of 1935 nor are they repealed by the provisions of the Caravan Act of 1937. The sections of the Vehicle Code referred to permit a “dealer” (with an established place of business in California) or a “transporter” (as defined in Veh. Code, § 73.3) to move upon the highways of this state motor vehicles of a character which must be registered in California, before such registration, provided such dealers or transporters have been granted “dealers’ plates” and the same are displayed on the vehicle or without such plates where the movement is “from a vessel, railroad depot or warehouse over the highways to a warehouse or salesroom upon first having obtained a written permit authorizing such operation from the department. ’ ’

We think it plain that the language of the later Caravan Act of 1937 which expressly refers to and includes dealers and transporters as being subject to the act, of necessity, must be construed as modifying the provisions of sections 205, 206 and 207. Respondents cite no authority holding to the contrary and in fact do not cite any authority in support of their argument. The net effect of the two acts (the Vehicle Code and the Caravan Act) is to divide or classify the business of dealers and transporters into two categories, i.e., the sale or transportation or both of motor vehicles (1) wholly within a single zone and (2) from or to another zone or state. The basis for this classification rests on numerous and diverse factors which while somewhat narrow we regard as being adequately distinctive. If then the classification is proper and is not discriminatory as we have already stated it is not, the act is constitutional.

As far back as 1914 the Supreme Court of this state in Matter of Application of Schuler, 167 Cal. 282 [ 139 P. 685 ,

“Nor is the exemption of nonresidents from paying the tax for a period of three months an unlawful one. Similar exemptions have been sustained upon the principle that the nonresidents are presumed to have paid all necessary licenses in their respective places of abode, and that their use of the roads in the territory subject to the provision of the act is usually but temporary.”

The case of Franchise Motor Freight Assn. v. Seavey, 196 Cal. 77 [ 235 P. 1000 ], upon which respondents so heavily rely is not in point. In that case a statute required common carriers by motor truck desiring to operate between fixed termini or over regular routes to obtain from the Railroad Commission, as a condition of operating, certificates of public convenience and necessity. However, the statute exempted common carriers engaged exclusively in hauling the products or implements of husbandry. It was held that there was no reasonable distinction or substantial difference justifying the inclusion of the one and the exclusion of the others. We have no such case here.

Before concluding our opinion we wish to interpolate, by stating that the briefs in this case, as in many other recent cases presented to us, fail to set forth a Summary of the Facts as required by rule 13 of the Rules on Appeal. Instead, the opening brief presents a summary of the testimony of the

The judgments in each of the above-entitled cases along with the special order in cause No. 17237 are hereby reversed with instructions to the trial court to enter judgments for the defendants therein and to enter an order directing that the moneys (apparently in the sum of $86,177.50) now held in a special fund by the Department of Motor Vehicles be paid into the state treasury.

White, P. J., and Doran, J., concurred.

The opinion was modified to read as above printed and a petition for a rehearing was denied August 15, 1951.

Respondents’ petition for a hearing by the Supreme Court was denied September 13, 1951. Carter, J., and Schauer, J., voted for a hearing.