State Highway Department v. Texas Automotive Dealers Ass'n

239 S.W.2d 662, 1951 Tex. App. LEXIS 2031
CourtCourt of Appeals of Texas
DecidedApril 25, 1951
DocketNo. 12261
StatusPublished
Cited by1 cases

This text of 239 S.W.2d 662 (State Highway Department v. Texas Automotive Dealers Ass'n) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Highway Department v. Texas Automotive Dealers Ass'n, 239 S.W.2d 662, 1951 Tex. App. LEXIS 2031 (Tex. Ct. App. 1951).

Opinion

POPE, Justice.

This is an appeal from a declaratory judgment construing various sections of the Certificate of Title Act, Article 1436-1, Vernon’s Penal Code, insofar as they relate to the registration requirements for vehicles imported into Texas for sale.

The Texas Automotive Dealers Association, the Corpus Christi Automobile Dealers Association, and seventeen franchised dealers located in Corpus Christi commenced this suit against the State Highway Department of Texas, the State Highway Commission and. its members, and Joe L. Stevens, Tax Assessor and Collector of Nueces County. The Texas Used Car Dealers Association intervened in the suit and urged that the defendants’ present construction of the statute is proper. The plaintiffs will be here designated for convenience as Dealers and the defendants and intervener, as the Department. The trial court sustained the views of the Dealers in a declaratory judgment, after they abandoned their prayer for injunctive relief. The trial court held that the Department was improperly construing Article 1436-1 in registering motor vehicles imported into Texas for sale, on the presentation of an importer’s certificate rather than a manufacturer’s certificate.

The parties stipulated that each plaintiff, except the Texas Automotive Dealers Association, has sustained losses in excess of $500, resulting from the purchase of automobiles with undisclosed liens.

Under the Certificate of Title Act, the presentation of a manufacturer’s certificate is required for the registration of a vehicle which is a “new car.” As to a vehicle originally shipped and sold to a Texas dealer, despite additional transfers to other dealers, the Department requires registration upon presentation of a manufacturer’s certificate. ' This practice and construction is not under attack. But as to a vehicle originally shipped and sold to a person outside of Texas and then, before registration, imported into Texas for sale, even to a dealer, the Department permits registration upon presentation of an importer’s certificate only. The Department does not require a manufacturer’s certificate for such imported vehicle. This construction is under attack and the trial court held that the practice was contrary to the meaning of the Certificate of Title Act, and that a manufacturer’s certificate is required in that instance also. This result was reached by the trial court’s conclusion that the total of all transfers of a motor vehicle prior to registration and the inception of an “owner” constituted a single “first sale.” After such single first sale, but not before, the vehicle becomes a “used car” according to the judgment of the trial court.

This appeal turns upon the statutory meaning of “first sale” insofar as that term relates to the “used” nature of cars imported for sale into Texas. Since the Certificate of Title Act has expressly defined its own terms, we are governed by those definitions. To determine this matter it becomes necessary to incorporate the Act’s intricate definitions into its various pertinent sections.

Section 29 of the act authorizes registration by means of an importer’s certificate. It provides: “No such designated agent shall issue a receipt for a certificate of title to any used motor vehicle imported into this State for the purpose of sale within this State without delivery to him by the applicant of an importer’s certificate properly assigned by the importer upon [a] form to be prescribed by the Department.”

The word used is the key to this authority and it is defined in Section 10 as follows: “The term ‘Used Car’ means a motor vehicle that has been the subject of a first sale whether within this State or else where.”

The words first sale are in turn defined in Section 7 to mean: “The term ‘First Sale’- means the bargain, sale, transfer, or delivery within this State with intent to pass an interest therein, other than a lien of a motor vehicle which has not been previously registered or licensed in this State.”

It is seen that a vehicle Which has been the subject of a first sale ⅛ Texas or elsewhere becomes a used car, and that a used car may be registered upon presentation of an importer’s certificate when imported into Texas for sale. The term “first sale” has been the subject of construction by the Texas Supreme Court in Motor Inv. Co. [664]*664v. Knox City, 141 Tex. 530, 174 S.W.Zd 482, 485. Mr. Justice Alexander there construes the term, insofar as it applies,to an exclusively Texas transaction, both by the words of the term’s definition and the meaning as drawn from the act as a whole. He construes Section 7, defining “first sale” standing in juxtaposition to Section 8, defining “subsequent sale.” From his analysis he concludes: “The term ‘first sale’ means a transfer of a vehicle which has not previously been registered (Sec. 7), as distinguished from a ‘subsequent sale,’ meaning a transfer after a vehicle has been registered or should, in law, have been registered (Sec. 8).”

But the court goes further in its analysis to hold that there may be more than one sale before registration, as the case states: “Reading the Act as a whole, we think it clear that every transfer of a motor vehicle, regardless of the number thereof, from manufacturer to dealer, dealer to dealer, and from dealer to- ‘owner,’ as defined in-the Act, constitutes a ‘first sale,’ and that it is not necessary that the vehicle be registered and a certificate of title thereto obtained as a condition precedent to the validity of such ‘first sale.’ ”

This is a precise .holding that there may be a first sale in Texas which will compel neither registration nor require an “owner” as defined by the Act, Section 4. Stated another way, this holding is that the final “first sale” compels registration and an “owner,” but there may be “first sales” not compelling either registration or an “owner.” The Court recognizes that there may be successive “first sales.” Construed in this manner, the Supreme Court has stated, in effect, that “first sale” is a sale in Texas “prior” to registration in Texas. Thereafter the sale is a “subsequent” sale. Motor Inv. Co. v. City of Hamlin, 142 Tex. 486, 489, 179 S.W.2d 278, 280.

In short, the statutory definition means a transfer of a vehicle in Texas before registration in Texas-. When we fuse this meaning into the statutory definition given by Section 10, we get a definition like this: The term “used car” means a motor vehicle that has been transferred within this state before registration in this state, whether within this state or elsewhere.

Although Section 7 defines and limits “first sale” to a purely and exclusively Texas transaction, the concluding clause in Section 10 shows that the Legislature intended to recognize that there could be a first sale o-utside of Texas also. Unless we ignore the clause or treat it as meaningless,, it can mean only that there can be a first sale outside of Texas.

The incorporation of the meaning of first sale into Section 10 results in a redundant definition of “used car,” but it can have no meaning except that a used car, as defined, is a vehicle that has been the subject of a transfer in Texas or elsewhere before registration. This means that any time an interest in an unregistered vehicle passes, anywhere, the vehicle becomes a “used car” in contemplation of Section 10. To reach any other result we must ignore the broadening terms of Section 10, defining “used car.”

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Bluebook (online)
239 S.W.2d 662, 1951 Tex. App. LEXIS 2031, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-highway-department-v-texas-automotive-dealers-assn-texapp-1951.