Consolidated Freightways, Inc. v. Flagg

BOSSMAN, C. J. † This is an appeal by the plaintiff from a decree of the circuit court which holds that moneys paid to the plaintiff for transportation services rendered by it to the United States Army in the fall of 1943 were a part of its “gross earnings”, as that term is defined in § 115-517, O. C. L. A., and that they were subject to the tax imposed by other provisions of § 115-517. This proceeding was instituted under §§ 6-601 to 6-616, O. C. L. A. (Uniform Declaratory Judgments Act) for the purpose of securing a judicial declaration as to whether or not the sums above mentioned were a part of the plaintiff’s gross earnings and were taxable as such. The defendant is the Public Utilities Commissioner, who is the official charged with the collection of the tax. The first assignment of error says: “The Court erred in finding as a fact ‘that the waiting time is a part of the pick-up and delivery service * †* *’ because such finding is contrary to the evidence and effects a result not intended by the Legislature.” — 444 — The second assignment of error is: “The Court erred in construing the facts and the statute in a manner which brings about the taxation of revenues not clearly and specifically mentioned by the Legislature and in failing to construe the facts and the statute strictly according to the clear import of the language used.” The appellant is a motor freight common carrier within the purview of our Motor Transportation Act, §§ 115-501 to 115-537, O. C. L. A. Section 115-517 says: “In addition to the license fees or taxes otherwise imposed by law upon common carriers and contract carriers there shall be assessed against and collected from every such carrier a tax of one (1) mill per combined weight ton mile on the public highways, * * * for the use of said highways, to apply on the cost of the administration of this act, and for the maintenance, repair and reconstruction of public highways. * * * provided further, that contract and common carriers may, at their option, in lieu of the tax or charge provided for in section 115-517, be assessed and pay on all operations of such carrier over the public highways of the state, monthly, on or before the twentieth day of the month following the month for which the tax is incurred, to the commissioner, a privilege tax for the use of the public highways in a sum or amount equal to 6 per cent of the gross earnings from the operation of such motor carrier and each thereof within this state, * * *. The term‘gross earnings’ shall include all sums earned for the transportation of persons and/or property over the public highways of the state and also such sums earned for loading and unloading in connection therewith, and including also pick-up and delivery charges.” The appellant chose to have its tax computed under the optional method, that is, upon its gross earnings. — 445 — In September, October and November of 1943 the United States Army, while conducting war training maneuvers in Central Oregon, engaged the services of the appellant to transport daily 100 tons of supplies from Terminal No. 4, in Portland, through Bend to some flexible points in Central Oregon which were deemed truck heads. The appellant’s part was to furnish the necessary trucks and drivers. For its services it charged a flat rate per hour under tariff provisions compiled by it which we shall shortly quote. The charge began when the truck reached Terminal No. 4 and continued until it returned from Central Oregon to that terminal, except for periods when the vehicle was disabled or the driver was off duty. In reporting to the commissioner the amount of its gross earnings, the appellant did not include the amount paid for periods in which the trucks stood idle in Portland awaiting loading, nor while they remained in Bend and other Central Oregon places awaiting orders to proceed to truck heads. The appellant’s charges were made under its freight tariff, which reads, in part: “The hourly rates named in item 35 include the transportation, waiting time, loading, unloading, stopping in transit, and all other accessorial services in connection with the loaded movement.” Item 35 reads as follows: “Hourly Rates — Rates and charges for the transportation of commodities as described in Item 10 shall be as follows * * The circuit court held that the sums paid to the appellant for the waiting periods constituted a part of its gross earnings, as that term is employed in the parts of § 115-517 which we quoted. The sole issue presented by this appeal is whether or not the court erred in so construing and applying the statute. — 446 — The evidence is free from dispute. Mr. J. A. Babic, the appellant’s operation manager, explained in the testimony which we shall now quote how it happened that the trucks were kept waiting in Portland for extended periods of time: “The army called for trucks as they required them. They loaded the vehicles under our supervision. The job was so large that it was impossible to load all the vehicles going to the same point at the same time, so they required us to have as many trucks as they felt were needed to go to any one point at the same time, even though they couldn’t load them for 5 or 6 or 7 or 8 hours. The first week of the operation they required us to convoy movement from Portland, Oregon, to Bend, Oregon. They required us to assemble each of the groups of vehicles in Portland and proceed in convoy to Bend. It was later discontinued because it wasn’t practical. At Bend, Oregon, the vehicles arrived at a central check station, Central dispatch station, and were assembled at that point and were convoyed to the various group units or truck head units as they were called by army personnel. * & % SX; “Q. What was the average waiting time of the truck at Warehouse 4, or army terminal 4? “A. It was approximately 4 to 6 hours. “Q. What was the occasion of that length of time ? “A. The waiting was occasioned by the insistence of the army to have vehicles available for loading, even though they couldn’t load the vehicles when they were there. They wanted to have the trucks in the yard and they wanted to see them there so that they would be certain they had the trucks, and also to organize the loading so that the subsistence items for one camp would be loaded within a space of 4, 5, 6 or 7 hours, so as to keep the vehicles more or less loaded together. — 447 — “Q. Now, this time of 4 to 6 hours, how much of that time was consumed by loading? “A. Well, the 4 to 6 hours approximately one and half to two hours was consumed in loading.” Mr. Babie explained that the waiting time at Bend “was incurred because vehicles would move to a designated truck head, which truck head very often was not known but an hour or two before departure of the trucks from Bend, and very often the trucks arrived at the truck head before the troops got there who were to unload the vehicles.” Mr. W. S. Myrin, who, in 1943, was superintendent of the Eastern and Central Oregon division of the plaintiff, explained in the following testimony why the trucks stood idle in Bend at times for extended periods: “ Q. I want to know how long a time those trucks stood idle at Bend before you were able to dispatch them to the truck heads. ‘ ‘ A. Oh, I would say the average time was about 6 hours. “Q. Were these trucks dispatched to the truck heads in the order in which they came into Bend? “A. Not necessarily. “Q. By what method were they dispatched? “A. They were dispatched in a group. In other words, there would be two or three, or maybe four, trucks and trailers, or semis, loaded for a particular division or group who would be located at a truck head, and those vehicles would move in a convoy to the truck head. “Q. You spoke about them being assembled there some place in Bend. “A. Yes, there was a place set aside. “ Q. Provided for them ? “A. Provided for them. “Q. Where was that place? I don’t mean the street number or anything of that kind, but was it — 448 — in the street or was it in the field, or where was it? The warehouse or where? “A. Well, some of it was in the street. Occasionally some of them were down in our own terminal yard, and again others of them were — the street ended down there in that particular spot, and they were kind of off in the dirt and up on the side where the street would have been.” After the trucks left Bend, waiting periods were sometimes incurred due to impassable roads, lack of army personnel available for convoy duty and the Army’s request that trucks should not reach the truck heads until darkness. The above is a sufficient statement of the facts. The tax with which we are concerned, as appears from the words of the statute previously quoted, is a “privilege tax” and is imposed upon “gross earnings” derived from services rendered in loading, unloading, transporting, picking up and delivering freight. Since the appellant reported to the commissioner every dollar received from the Army, except sums paid for periods when its trucks were awaiting loading or instructions, the sole question before us is whether or not the withheld sums were earned in transporting, loading, unloading, picking up or delivering cargo. The appellant argues that a truck which is standing idle awaiting the time when it will be loaded or will be given instructions for its future movement, is not engaged in the transportation, loading or unloading of freight. It claims that such a situation is similar to the demurrage of a vessel or a railway car. The record does not indicate whether or not the appellant’s tariffs make provision for demurrage. Such charges, according to our understanding, are separate and apart from those made for loading, unloading and transpor — 449 — tation. We have already mentioned the provision in the appellant’s tariff under which it collected the money which the respondent seeks to tax, and which says: “The hourly rates * * * include * * * waiting time * * * stopping in transit, and all other accessorial services in connection with the loaded movement.” Seemingly that provision repels any suggestion that the appellant could have charged the Army separately for the waiting periods. The waiting periods described by the evidence apparently were not of the demurrage type, but were due to the peculiar nature of the service which the Army wished rendered. It wanted to have trucks loaded in special formations and also wanted the vehicles to proceed from Bend in patterns which would conform with the troop movements. A railway car, subject to demurrage charges, is in the custody of the shipper while it stands upon his siding; but the appellant’s vehicles were at all of the times with which we are concerned in the immediate custody of the appellant’s drivers. In fact, for the periods in which the driver was absent no charge was made to the Army, according to Mr. Babie, whose exact words were: “The charge included all the time the vehicle was in the service of the Army except for the time that the vehicle might have been broken down or the operator of the vehicle was off duty taking, a. rest.” It is not always practical in the drafting of tax statutes to detail with' precision every item which it is proposed to tax or exempt. Business methods, mercantile terminology and accounting practices vary in dif — 450 — ferent establishments, and, therefore, no single term or phrase may suffice to name an item which the legislator has in mind. Then, too, business methods are generally in a state of flux, and accordingly precise language adapted to today’s methods may enable those whom it is sought to tax to escape the levy by slightly changing their methods, practices or tariff schedules. The packaging of ideas, whether in the writing of a statute or of a book, involves the selection of words. If those who later encounter the words know what is intended, the writing has served its purpose. Today it often happens that legislation which concerns businesses subject to the control of administrative agencies is drafted in consultation with agency officials who, through the course of the years, have gained familiarity with the usages and practices of the businesses under their supervision. In instances of that kind, the language of a statute, say that of a tax statute, is that of men who have become acquainted with the business’s idioms. It is obvious from the appellant’s tariff that those who are engaged in the transportation business do not employ the word “transportation” in its literal sense, but in a practical signification wherein it includes within its meaning “waiting time, loading, unloading, stopping in transit, and all other accessorial services in connection with the loaded movement.” We are satisfied that the word “transportation”, as it appears in the definition given by § 115-517 to the term “gross earnings”, is used in the practical sense in which transportation men employ it. In placing upon that word the same practical meaning which the appellant itself uses, we do no violence to the rule which construes taxation statutes strictly. It is true, as the appellant’s first assignment of — 451 — error indicates, that the memorandum opinion of the circuit court judge expressed a belief that the “waiting time is a part of the pick-up and delivery service.” We believe that that detail of the opinion was unnecessary. The waiting periods, we think, were a part of the transportation service which the appellant rendered to the Army. They were no different in nature than time spent awaiting a change in color of a traffic light. The decree of the circuit court is affirmed. Footnotes [†] Chief Justice when this opinion was rendered.