Sea-Land Service, Inc. v. Secretary of the Treasury

91 P.R. 390
CourtSupreme Court of Puerto Rico
DecidedNovember 17, 1964
DocketNo. R-63-287
StatusPublished

This text of 91 P.R. 390 (Sea-Land Service, Inc. v. Secretary of the Treasury) is published on Counsel Stack Legal Research, covering Supreme Court of Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sea-Land Service, Inc. v. Secretary of the Treasury, 91 P.R. 390 (prsupreme 1964).

Opinion

Mr. Justice Blanco Lugo

delivered the opinion of the Court.

Clause (n) of § 291 of the Political Code, 13 L.P.R.A. § 551, provides an exemption from property taxes for “motor vehicles subject to payment of license fees (number plates) provided by the Automobile and Traffic Act, except those had in stock by natural or artificial persons who are dealers in motor vehicles.”1 Section 9 of Act No. 279 of April 5, 1946, 9 L.P.R.A. § 179,2 included for the fiscal years 1961-62 and 1962-63, among those motor vehicles subject to the payment of fees, “trailer and trailer car designed to carry freight on its structure and be drawn by another motor vehicle.”3

At the end of 1954 a new system for importing goods in non-self-propelled vans was begun in Puerto Rico using vans which, upon their arrival in Puerto Rico, were removed from the ships as a unit and drawn by self-propelled trucks, along with their cargo, to their destination or the consignee’s place of business. The taxpayer, Sea-Land Service, Inc., was one of the companies engaged in this sea-freight transportation business. In its business the taxpayer used huge metal boxes known as “cargo containers” and “cargo vans” which were placed on the decks of the ships. Upon their arrival in Puerto Rico, the containers were unloaded and placed alongside the ship on metal platforms or chassis. Once this operation was done, the chassis were hauled by trucks which did not belong [392]*392to appellant and were transported to the different addressees. After the imported goods were delivered and unloaded, the containers were reloaded for further shipment abroad.

The Secretary of the Treasury issued the taxpayer a personal property tax receipt for the fiscal year 1961-62 in the amount of $17,631.93. The taxpayer paid $583.29, the part of the tax with which the taxpayer was agreeable. For the next fiscal year 1962-63 the tax levied was $19,505.87, of which the taxpayer paid $626.55. The difference represented the tax on the assessed value of the metal containers in Puerto Rico on January first of each taxable year. The containers were valued at about $798,000.

Availing himself of the procedure provided in § 2A (3) (a) of Act No. 235 of May 10, 1949, 13 L.P.R.A. § 282, the taxpayer appealed to the Superior Court objecting to the tax levied on the containers. The main contention, now at issue, states that “the containers are not subject to property tax in Puerto Rico ... (c) because the vans on which the personal-property tax is levied are, and constitute, integrated parts of, and form together with the chassis, a whole complete unit known as Trailers,’ and trailers are not subject to personal-property taxes.” In his answer the Secretary contended that the tax was levied on the “cargo containers,” and that the containers “do not become part of the chassis thus forming a trailer. On the contrary, the Secretary contends that the trailers4 do not belong to the taxpayer. However, the ‘cargo containers’ which are separately owned items belong to the taxpayer.”

The trial court determined that the metal chassis as well as the containers belong to the taxpayer, but that the trucks [393]*393did not, and that the container is in no way adhered to, integrated with, or made a permanent part of, the chassis or the trucks. The trial court immediately stated, referring to an earlier decision, that “in Pan Atlantic Steamship Co. v. Secretary of the Treasury, case No. 60-2907, we decided that trailers were not subject to property tax because they were subject to license fees. It cannot be sustained that the cargo container is part of the trailer. The truck and the chassis are independent from the container.” The complaints were dismissed. We decided to review the judgment.

As mentioned, the license fees prescribed by § 9 of the Automobile and Traffic Act,5 until 1955, were as follows:

“For tractors and trailer cars using the public highways of Puerto Rico, for each ton of gross weight, a year $ 6.00
“For license for heavy motor vehicles, trailers, and commercial vehicles used in private service, having a load capacity of one (1) ton or less, a year 36.00
“For license for heavy motor vehicles, trailers, and commercial vehicles used in private service, having a load capacity of more than one (1) ton but not exceeding two (2) tons, a year 60.00
“For license for heavy motor vehicles, trailers, and commercial vehicles used in private service, having a capacity of more than two (2) tons, but not exceeding six (6) tons, a year 96.00
“For license for heavy motor vehicles, trailers, and commercial vehicles used in public service, having a load capacity of one (1) ton or less, a year 55.00
“For license for heavy motor vehicles, trailers, and commercial vehicles used in public service, having a load capacity of more than one (1) ton but not exceeding two (2) tons a year 77.00
[394]*394“For license for heavy motor vehicles, trailers, and commercial vehicles used in public service, having a load capacity of more than two (2) tons but not exceeding six (6) tons, a year 110.00
“For each ton or fraction of a ton in excess of six (6) tons of the load capacity of heavy motor vehicles, trailers and commercial vehicles used in both private and public service, a year 36.00”

Act No. 65 of June 10, 1955 (Sess. Laws, p. 232) provided a nominal one dollar fee “For a trailer and trailer car designed to carry freight on its structure and be drawn by another motor vehicle,” and eliminated references to fees for trailers used in public or private service, which fees had varied according to their freight capacity.

Does this one dollar fee refer exclusively to chassis? Are chassis included when cargo-containers are attached, thus forming a trailer? The legislative intent is our best source of information for the solution of this problem.

The legislative history of H.B. 1404, later Act No. 65 of 1955, supra, is closely allied to H.B. 1389, later Act No. 59 of same date (Sess. Laws, p. 216). The report of the Treasury Commission of the House6 on H.B. 1404 states in its pertinent part:

“This is a bill- complementing H.B. No. 1389.
“The bill amends Art. 9 of the Automobile and Traffic Act to reduce to one dollar the annual fee in force for trailers. On the other hand, fees for truck tractors are increased by a graduated schedule.
“The intent of the bill is to place the weight of the license fees on self-propelled vehicles and to facilitate, for the benefit of consumers or industrialists in general, the use of trailers operating between the mainland and the Island.”

[395]*395And in connection with H.B. 1389, the same Committee indicated that:7

“The bill amends subsections 8 and 8A of section 16 of the Internal Revenue Act of Puerto Rico as follows:
“No. 1 — Increases from 10% to 17% the tax on the ‘sales price in Puerto Rico’ on truck tractors designed to pull trailers or semi-trailers.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Safeguard Insurance Company v. Justice
128 S.E.2d 286 (Supreme Court of Virginia, 1962)
Jones v. Beiber
103 N.W.2d 364 (Supreme Court of Iowa, 1960)
Haden v. Lee's Mobile Homes, Inc.
136 So. 2d 912 (Alabama Court of Appeals, 1961)

Cite This Page — Counsel Stack

Bluebook (online)
91 P.R. 390, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sea-land-service-inc-v-secretary-of-the-treasury-prsupreme-1964.