Untitled Texas Attorney General Opinion

The Attorney General of Texas
JIM MATTOX March 15, 1984
Attorney General
Supreme Court Building Honorable Bob Bush Opinion No. JM-136
P. 0. BOX 12546 Chairman
Austin, TX. 76711. 2546 Committee on Judiciary RS: Whether article 6686(a)(7),
51214752501
Texas House of Representatives V.T.C.S.. as amended by House
Telex 9101674.1367
Telecopier 512/475-0266
P. 0. Box 2910 Bill No. 1778, applies to persons
Austin, Texas 78769 who sell boat trailers but not
self-propelled vehicles
714’Jackson. S”iW 700 Honorable Oscar H. Mauzy
Dallas. TX. 75202.4506
2141742-6944
Chairman
Committee on Jurisprudence
Texas State Senate
4824 Alberta Ave.. Suite 160 P. 0. Box 12068, Capitol Station
El Paso, TX. 799052793 Austin, Texas 78711
9151533-3464
Gentlemen:
f’701 Texas. Suite 700
,ouston, TX. 77002.3111 This opinion addresses inquiries directed to this office
7131223.5666 concerning the effect of House Bill No. 1778 (amending article
6686(a)(7), V.T.C.S.) and the applicability of its bond requirement to
certain dealers otherwise subject to the act. Because both of you ask
606 Broadway, Suite 312
Lubbock, TX. 79401-3479
related questions dealing with the same subject matter, we have
60617476236 consolidated your requests in this opinion. Representative Bush asks
whether amended article 6686(a)(7) applies to persons who sell boat
trailers but do not sell self-propelled vehicles. Senator Mauzy asks
4309 N. Tenth, Suite Et
McAllen. TX. 76501-1665
whether the bond requirement added by House Bill No. 1778 is
5121662.4547 applicable to dealers who do not deal in motor vehicles. For reasons
which shall appear below, we conclude that section (a)(7) of article
6686 remains applicable to dealers of boat trailers who do not sell
200 Main Plaza, Suite 400
self-propelled vehicles; we do not, however, believe that the bond
San Antonio, TX. 76205.2797
5121225-4191
requirement contained therein was intended to apply to such dealers.
Section (a) of article 6686 details the procedures to be followed
An Equal Opportunity/ by applicants for an original dealer's and manufacturer's general
Affirmative Action Employer distinguishing number or master dealer's license plate. The statute
affects any dealer or manufacturer of "motor vehicles, motor cycles,
house trailers, trailers, or semitrailers" doing business or
manufacturing such vehicles in this state as those terms are defined
in article 6675a-1, and article 6686, sections (a)(l), (a)(2), (a)(8),
.d.T.C.S. Article 6675a-1 provides the following definitions:
p. 577
Honorable Bob Bush
Honorable Oscar H. Mauzy
Page 2 (JM-136)
(a) 'Vehicle' means every device in, or by
which any person or property is or may be
transported or drawn upon a public highway, except
devices moved only by human power or used
exclusively upon stationary rails or tracks.
(b) 'Motor Vehicle' means every vehicle, as
herein defined, that is self-propelled.
(c) ‘Motor Cycle' means every motor vehicle
designed to propel itself on not more than three
wheels in contact with the ground . . .
. . . .
(g) 'Trailer' means every vehicle designed or
used to carry its load wholly on its own structure
and to be drawn by a motor vehicle.
(h) 'Semi-trailer' means vehicles of the
trailer type so designed or used in conjunction
with a motor vehicle that some part of its own
weight and that of its load rests upon or is
carried by another vehicle. (Emphasis added).
House Bill No. 1778, enacted during the last legislative session
and effective January 1, 1984, significantly amended section (a)(7) of
article 6686. Acts 1983, 68th Leg., ch. 941, at 5174. Section (a) (7)
prescribes the fees and forms required of all applicants for dealer's
and manufacturer's license plates and tags. House Bill No. 1778
raised the fee for these items to two hundred and fifty dollars. Jn
addition, the bill amended section (a)(7) to require "each applicant"
to file a bond in the amount of 25,000 dollars with the Department of
Highways and Public Transportation. The salient features of the bond
are
1. it is required of 'each applicant,'
2. it is conditioned on
(a) payment of valid bank drafts drawn for
the purchase of motor vehicles in dealer-to-
dealer transactions and
(b) transfer of good title to each motor
vehicle the applicant sells, and
p. 578
Honorable Bob Bush
Honorable Oscar H. Mauzy
Page 3 (JM-136)
3. the bond is waived for applicants possessing
dealer licenses issued by the Texas Motor Vehicle
Commission.
Acts 1983, 68th Leg., ch. 941, at 5175.
The inquiries directed to this office in reference to this
amendment of article 6686 describe the predicament of certain dealers
who, as an adjunct to the sale of another item, sell trailers on which
to transport the object of the primary transaction -- s, retail
boat dealers who provide their customers with trailers as part of the
sale of a boat. By virtue of the fact that these dealers are
"regularly and actively engaged in the business of buying, selling, or
exchanging . . . trailers," they must comply with the provisions of
article 6686, section (a)(l). That they do not sell motor vehicles
is, for the purposes of the act, inconsequential. Moreover, as
section (a)(7) by its terms applies to “[elach applicant for an
original dealer's or manufacturer's general distinguishing number and
master dealer's license plate," these dealers are similarly bound by
its conditions. Acts 1983, supra at 5174. Accordingly, it is our
opinion that, notwithstanding House Bill No. 1778, article 6686
remains applicable to persons who sell boat trailers but do not sell
self-propelled vehicles. However, to answer the question of whether
these dealers must post the bond required by section (a)(7), we must
resort to settled rules of statutory construction.
In construing statutes, courts adhere to the following rules:
No inflexible rule can be announced for the
construction of statues. However, the dominant
rule to be observed is to give effect to the
intention of the Legislature. Generally the
intent and meaning is obtained primarily from the
language of the statute. In arriving at the
intent and purpose of the law, it is proper to
consider the history of the subject-matter
involved, the end to be attained, the mischief to
be remedied, and the purposes to be accomplished.
'Where, however, the language of the statute is of
doubtful meaning, or where an adherence to the
strict letter would lead to injustice, to
absurdity, or to contradictory provisions, the
duty devolves upon the court of ascertaining the
true meaning. If the intentions of the
Legislature cannot be discovered, it is the duty
of the court to give the statute a reasonable
construction consistent with general principles of
law.'
p. 579
Honorable Bob Bush
Honorable Oscar H. Mauzy
Page 4 (JM-136)
City of Sherman V. Public Utility Commission of Texas, 643 S.W.2d 681,
684 (Tex. 1983). With respect to the legislative intent behind House
Bill No. 1778, we find the following passage instructive:
[M]any persons are improperly taking financial
advantage of being designated a Texas auto dealer.
The designation, obtained for a $100 fee, allows a
person to purchase autos from other dealers
substantially below retail prices, and the person
also would be exempt from the Texas sales tax on
motor vehicles.
Although to be designated a Texas auto dealer
requires other procedures than the $100 fee, these
procedures are not adequately enforced. The
result is many 'non-dealers' seeking to gain the
dealers designation for the financial benefits.
Currently approximately 10 to 12 thousand persons
are awaiting action on their applications to
become Texas auto dealers.
In addition, many transactions between
independent auto dealers and between auto dealers
and consumers are not adequately protected from
certain practices, including a failure to issue
certificate of title.
Bill Analysis to House Bill No. 1778, prepared for House Committee on
Transportation, filed in Bill File to House Bill No. 1778, Legislative
Reference Library. The purpose of House Bill No. 1778, therefore,
appears two-fold. First, the bill was intended to discourage persons
from unscrupulously acquiring automobile dealers status. Second, the
bill sought to provide security to consumers and auto dealers by
requiring a bond to ensure both the payment of bank drafts drawn by
applicants for the purchase of motor vehicles from another dealer and
the transfer of good title for each motor vehicle sold by applicants.
Thus, while the remainder of article 6686 is applicable to dealers who
sell trailers, it is our opinion that the bond requirement of section
(a)(7) was intended to apply only to dealers who purport to sell motor
vehicles.
The conclusion we reach rests upon the historical distinction
between "trailers" and "motor vehicles" as objects of regulation.
Though drawn primarily from statutory language, this distinction finds
support in the courts as well:
[Al 'motor vehicle' is a common term, recognized
to be a self-propelled vehicle, in other words, a
vehicle which is pulled or pushed by a motor
p. 580
+
Honorable Bob Bush
Honorable Oscar H. Mauzy
Page 5 (JM-136)
within or on itself. There is no doubt but thst
the above statutes [articles 6675a-1; 6701h,
section 1; and 6687-l] indicate, that a trailer
pulled by a motor vehicle may become a part of
said motor vehicle, but none of the statutes
provide that a trailer is a motor vehicle. A
trailer has been defined by some of the courts as
follows: 'It is only so much freight, even though
it does run on its own wheels'. . . . Where a
person lends a trailer or semi-trailer to an owner
of a truck and while the same is being so operated
on the public highway and connected with said
truck, it has been held that the owner of the
trailer is not responsible in damages to a third
party, because the same is not considered a 'motor
vehicle.' [citations omitted].
Prudential Insurance Co. of Great Britain v. Associated Employers
Lloyd, 250 S.W.2d 477, 480 (Tex. Civ. App. - Fort Worth 1952, no
writ). Consequently, although the amendment to section (a)(7)
requires each applicant to file a bond "[a]~ a condition for the
issuance of a license or licenses described in this subsection," Acts
1983, m, at 5175, the specific use of the words "motor vehicle" in
the amendment evinces the clear legislative intent to limit the
operation of the bond requirement to motor vehicle dealers.
Furthermore, the bond required by article 6686, section (a)(7) is
expressly conditioned upon payment of bank drafts drawn for "the
purchase of motor vehicles from another dealer and the applicant's
transfer of good title to each motor vehicle that the applicant
purports to sell." Id. The dealers described in your requests (1)
sell trailers and not motor vehicles, (2) engage solely in retail
sales, not in dealer-to-dealer transactions, and (3) do not issue
certificates of title to the trailers they sell. See V.T.C.S. art.
6687-1, §2b (certificate of Title Acts "trailer" means every vehicle
having weight in excess of 4000 pounds drawn by a motor vehicle). We
do not presume that the legislature, in enacting House Bill No. 1778,
intended to impose an impossible requirement on dealers who do not
sell motor vehicles. See Texas and Pacific Rai.lwayCo. v. Perkins, 48
S.W.2d 249, 251 (Tex.?%&m'n App. 1932, holding approved). Nor do we
presume that the legislature intended adherence to the strict letter
of section (a)(7) to create an unjust, absurd, or contradictory
result. City of Sherman v. Public Utility Commission of Texas, supra.
Accordingly, we conclude that the bond requirement of amended article
6686, section (a)(7) does not apply to dealers who do not sell motor
vehicles as detailed in the foregoing discussion.
p. 581
Honorable Bob Bush
Honorable Oscar H. Mauzy
Page 6 (JM-136)
SUMMARY
Article 6686, section (a)(7) remains
applicable to persons who sell boat trailers but
do not sell self-propelled vehicles; the bond
required by that subsection, however, is
inapplicable to such persons.
JIM MATTOX
Attorney General of Texas
TOM GREEN
First Assistant Attorney General
DAVID R. RICHARDS
Executive Assistant Attorney General
Prepared by Rick Gilpin
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Rick Gilpin, Chairman
Jon Bible
David Brooks
Colin Carl
Susan Garrison
Jim Moellinger
Nancy Sutton
p. 582