Pacific Intermountain Express Co. v. State Tax Commission

WADE, Justice. Appellant, Pacific Intermountain Express Company, brings this action to obtain a declaratory judgment declaring it to be immune from payment of the registration fee for the use of certain truck-tractors and semitrailers which it has leased from the Defense Corporation of the United States. The District Court sustained respondent's demurrer to the complaint on the grounds that it failed to state facts sufficient to constitute a cause for action. Upon appellant electing to stand on his complaint, judgment of dismissal was entered and this appeal is taken therefrom. The complaint alleges among other things that on April 19, 1945, the Defense Corporation, by a written lease, a copy of which is attached to the complaint, leased to appellant certain truck-tractors and semitrailers for use by appellant on the highway subject to certain control of the Defense Corporation and mainly for the transportation of military supplies for ultimate use by the government. The lease provides that title to the equipment is vested in the Defense Corporation; that upon the expiration or termination of the lease appellant has an option to purchase all but not part of this equipment at a price basis therein specified or all or any part thereof upon such terms as the *480 parties thereto shall agree upon; that the Defense Corporation reserves the right to cancel the contract and thereby defeat the appellant’s option upon the happening of any one of many contingencies therein specified, one of which was that the Office of Defense Transportation shall request the Defense Corporation to sell or lease the equipment or any number of items thereof to another operator whose use of equipment is more essential to the successful prosecution of the war than the use by the lessee. Appellant urges that under this lease these truck-tractors and semitrailers are owned by the United States Government and therefore under Section 57-3a-138, U. C. A. 1943, appellant is immune from paying the registration fee. The part of that section which has a bearing on our problem provides: “(a) No fees shall be charged for the registration of * * * trucks owned by the United States government, * * * but all such vehicles shall be registered and given a number, * *• Respondent does not seriously claim that ownership by thé Defense Corporation is not ownership by the United States Government under the above statute nor that these truck-tractors and semitrailers are not “trucks” under the meaning of that term as used in the above statute. Much is said in the briefs to the effect that this is an excise tax for the right to use vehicles on the highway and not a property tax against the trucks, but it is not apparent what bearing that question has on the interpretation of this statute. The statute does not limit the immunity to cases where the fee will be paid nor where the vehicles are being used by the United States Government. So the question here to be determined is: Are these trucks “owned” by the United States Government under the meaning of this term as used in this statute? If the term “owned” is to be given its ordinary meaning, then these trucks are clearly owned by the United States Government. The Defense Corporation has the legal title, the right to control the use thereof, and may cancel the *481 lease and take possession and lease or sell to another, without any failure on the part of appellant to perform the terms and conditions of the lease agreement. Thus the United States is the real owner of both the legal and equitable title and unless the term “owned” as used in this statute signifies something different than its ordinary meaning the appellant is immune from paying the registration fee. Respondent contends that the appellant is the owner of these vehicles as that term is defined in Section 57-3a-l, U. C. A. 1943, and therefore these vehicles are not owned by the United States Government. The material parts of that definition are as follows: “ (u) ‘Owner.’ A person who holds the legal title of a vehicle or in the event a vehicle is the subject of an agreement for the conditional sale or lease thereof with the right of purchase upon performance of the conditions stated in the agreement and with an immediate right of possession vested in the conditional vendee or lessee * * * then such conditional vendee or lessee * * * shall be deemed the owner for the purpose of this act. (The italicized words deal directly with our problem. To avoid confusion they should be read separately.) Under the express terms of this statute the United States Government is the owner of these trucks. It is the holder of the legal title and the appellant does not come within the exception therein stated. It is true that the trucks are subject to an -agreement for the lease thereof with an immediate right of possession in the lessee, but the lessee does not have the right of purchase upon its performance of the conditions stated in the agreement. Under this lease re-regardless of whether or not appellant was performing the conditions to be performed by it as stated in the lease, if the Office of Defense Transportation decided that a sale or lease of this property to another operator would be more beneficial to the prosecution of the war, the Defense Corporation could cancel the lease and recover possession of the trucks and thereby defeat appellant’s option to purchase. Under such conditions, appellant did not have a lease with the right of purchase upon the performance of the condi *482 tions stated in the agreement, hut merely has a possibility that some time he might have such right. In view of the foregoing conclusions it is not necessary for us to determine many other questions which were argued in the briefs because their determination cannot alter this decision. Among such questions are: Whether the definition of the term “owner” as defined in section 57-3a-l ,U. C. A. 1943, was intended to cover the term “owned” as used in Section 57-3a-138, U. C. A. 1943; whether the definition of the term “owner” .as defined in section 57-3a-l, U. C. A. 1943, was intended to cover the term “owned” as used in Section 57-3a-138, U. C. A. 1943; whether the definition of “owner” as defined in Section 57-3a-l is limited to a lease which is in effect a conditional sale; whether this state has the power under the Federal constitution and statutes to collect this fee had the legislature expressly provided therefor. We therefore do not express any opinion on these and many other questions argued. The case is reversed and remanded to the District Court with directions to proceed in accordance with the views herein expressed. LARSON, C. J., and McDONOUGH and TURNER, JJ., concur.