Opinion
No. 28721
Decided July 1, 1942.
Motor vehicles — Transfer of ownership — New registration and payment of license tax necessary, when — Constituent corporations consolidated — Transfer provisions of General Corporation Act inapplicable, when — Sections 6294, 6294-1, 6294-2 and 8623-68, General Code.
1. Where constituent corporations are consolidated under the provisions of the General Corporation Act into a consolidated corporation so that the motor vehicles formerly owned by the constituent corporations become the motor vehicles of the consolidated corporation, there is a "transfer of ownership" within the meaning of Section 6294-1, General Code, and new registration of the motor vehicles in the name of the consolidated corporation and the payment of the motor vehicle license taxes in accordance with the provisions of Sections 6294 and 6294-2 are required.
2. The general provisions of Section 8623-68, General Code, providing, inter alia, for the transfer of privileges from the constituent corporations to the consolidated corporation, do not prevail over the explicit provisions of Section 6294-1, General Code, and do not have the effect of relieving the consolidated corporation from registering in its own name motor vehicles previously registered in the name of the constituent companies and from paying the motor vehicle license taxes thereon.
APPEAL from the Court of Appeals of Franklin county.
This action originated in the Common Pleas Court of Franklin county, upon the petition of the plaintiff, Columbus Southern Ohio Electric Company, seeking a mandatory injunction to require Frank M. West, the state registrar of motor vehicles to issue license plates for the operation of plaintiff's motor vehicles on the public highways during the year from April 1, 1938, to March 31, 1939. Summarized, the petition alleges that, prior to May 13, 1937, The Southern Ohio Electric Company and The Adams County Power Light Company, wholly owned subsidiary corporations of the Columbus Railway, Power Light Company, were the owners of certain motor vehicles for which they had obtained licenses to operate on the public highways in compliance with the statutory provisions applicable thereto; that on May 13, 1937, The Southern Ohio Electric Company and The Adams County Power Light Company were consolidated under the new name of Columbus Southern Ohio Electric Company, in accordance with the Ohio General Corporation Act; that by the terms of the consolidation agreement and Section 8623-68, General Code, all the property, rights, privileges, and franchises of The Southern Ohio Electric Company and The Adams County Power Light Company, including such motor vehicles, and the privilege of operating them upon the public highways, were transferred to the plaintiff, Columbus Southern Ohio Electric Company; that such consolidated corporation did not obtain license plates for these motor vehicles for the period commencing May 13, 1937, and ending April 1, 1938; that, by reason of plaintiff's failure to secure license plates and to pay the fees therefor on the motor vehicles thus acquired, for the period from May 13, 1937, to March 31, 1938, the registrar of motor vehicles refused to issue licenses for the year April 1, 1938, to March 31, 1939, as to those vehicles upon application therefor; and that plaintiff tendered the statutory fees for the year April 1, 1938, to March 31, 1939. Plaintiff prayed for a mandatory injunction to compel the issuance of license plates and the acceptance from plaintiff of license fees therefor.
Defendant filed a general demurrer to plaintiff's petition which was overruled by the Court of Common Pleas and, defendant not desiring to plead further, a mandatory injunction as prayed for was issued. Upon appeal to the Court of Appeals this judgment was reversed and the cause dismissed. Plaintiff filed in this court an appeal as of right claiming the existence of a constitutional question. This appeal was dismissed. The case is here following the allowance of plaintiff's motion to certify the record of the Court of Appeals.
Messrs. Burr, Porter, Stanley Treffinger, for appellant.
Mr. Thomas J. Herbert, attorney general, Mr. Perry L. Graham and Mr. Maurice L. Schellinger, for appellee.
The single question presented here is whether, when there has been a consolidation under the Ohio General Corporation Act of constituent corporations, which have during a given year registered their motor vehicles and paid the motor vehicle license fees thereon, the consolidated corporation must again register the motor vehicles and pay new license fees.
The applicable statute, Section 6294-1, General Code (116 Ohio Laws, 291), is in part as follows:
"Upon the transfer of ownership of a motor vehicle the registration of such motor vehicle shall expire, and it shall be the duty of the original owner to immediately remove such number plates from such motor vehicle * * *."
The effect of the consolidation of The Southern Ohio Electric Company and The Adams County Power Light Company into a new corporation, Columbus Southern Ohio Electric Company, appellant here, clearly has the effect of making the motor vehicles which had theretofore been owned by the constituent companies now owned by the consolidated company. Indisputably, there has been a "transfer of ownership." Clearly, then, the single contingency provided by the governing statute upon which the existing registration expired, to wit, "the transfer of ownership" has occurred. It would follow that the consolidated company, if it desired to operate the motor vehicles theretofore owned by the constituent companies, would under the provisions of Section 6294, General Code (116 Ohio Laws, 295), have to make application for new registration and secure new number plates paying license fees accordingly. This was the holding of the Court of Appeals in the instant case. It has been the consistent administrative practice under the Ohio motor vehicle registration and license laws. Vol. 2, Opinions of Attorney General (1928), 1135, No. 2066; Vol. 1, Opinions of Attorney General (1929), 557, No. 354; Vol. 1, Opinions of Attorney General (1934), 363, No. 2425; Vol. 1, Opinions of Attorney General (1935), 522, No. 4220.
Appellant in this court does not deny that there has been a "transfer of ownership," and with candor admits that "automobile registration, under Section 6294-1, is a personal privilege, which is not transferable." Appellant however urges that by force of the provisions of Section 8623-68, General Code, the consolidated corporation takes over the license provileges of the constituent corporations and need not make application for new registration or secure new motor vehicle number plates. Appellant in support of this contention, points to the following portion of Section 8623-68 (113 Ohio Laws, 445):
"Such consolidated corporation shall be subject to all the liabilities and duties of each of such corporations so consolidated; and all property, real, personal and mixed, and all debts and liabilities due to any of said constituent corporations on whatever account, as well for subscriptions for shares as all other things in action of or belonging to each of such corporations, shall be vested in the consolidated corporation and all property, rights, privileges, powers, franchises and immunities and all and every other interest shall thereafter be as fully and effectually the property of the consolidated corporations as they were the property of the several and respective constituent corporations * * *."
The above-quoted provisions are part of the General Corporation Act of Ohio. True, they do provide generally for the succession by the consolidated company to the "privileges" theretofore enjoyed by the constituent companies. But it would, we hold, be a forced construction to interpret these general provisions as controlling the sharp and explicit clauses of Section 6294-1, providing that where there is a "transfer of ownership" the "registration * * * shall expire" and further providing that "it shall be the duty of the original owner to immediately remove such number plates from such motor vehicle." Before these explicit statutory provisions of Section 6294-1, the general statutory provisions of Section 8623-68 must give way. 37 Ohio Jurisprudence, 413, Section 152; Leach v. Collins, 123 Ohio St. 530, 533, 176 N.E. 77.
Appellant futher complains of the inequity of the consolidated company being required again to pay the license fees. This however is purely a matter of policy for legislative determination. It should be observed that by the provisions of Section 6294-1, the Legislature has provided that where the original owner desires to exercise his driving privilege with respect to a different motor vehicle than the one originally registered by him, he has merely a small transfer fee to pay. And it is further provided by Section 6294-2, General Code (116 Ohio Laws, 297), that where applications for registration are made subsequent to the beginning of the motor vehicle license tax year, a ratable reduction in the fee is allowed. True, the statutes provide for transfers of the privilege where owners get other motor vehicles (Section 6294-1, General Code) but do not provide for corresponding transfers where motor vehicles get other owners. But in a field so carefully covered by the Legislature, and assuredly in a field where factors of police regulations and public revenues are involved, it would be a usurpation for this court to attempt relief for appellant from expenses flowing under existing laws by reason of the "transfer of ownership" of motor vehicles incidental to corporate consolidations.
Accordingly, the judgment of the Court of Appeals is affirmed.
Judgment affirmed.
WEYGANDT, C.J., WILLIAMS, HART and ZIMMERMAN, JJ., concur.
TURNER and MATTHIAS, JJ., dissent.
The petition alleged and the demurrer admitted that The Southern Ohio Electric Company and The Adams County Power Light Company, Ohio corporations, were wholly owned subsidiaries of The Columbus Railway, Power Light Company, also an Ohio corporation. On May 13, 1937, these wholly owned subsidiaries were merged into the parent company, The Columbus Railway, Power Light Company, under the name of Columbus Southern Ohio Electric Company. In other words, The Columbus Railway, Power Light Company had changed its name and absorbed its wholly owned subsidiaries.
The interests of the stockholders of The Columbus Railway, Power Light Company under its changed name were not altered in any manner.
As was said by the trial court in the instant case:
"By consolidation in this case, there has been no change in the identity of the ownership. The three companies which were consolidated were under the same ownership and operated by the same interests. The state received full payment for the year's license, and to require that another full year's payment be made would be to require plaintiff to pay double for the same privilege which others receive for one annual payment.
Under what seems to me to be the clear language of Section 8623-68, General Code, there was no "transfer of ownership" involved in the instant case.
The Attorney General's Opinion for 1928, No. 2066, cited in the majority opinion, is not inconsistent with anything here said.
I regret the necessity of registering a dissent from the judgment of the majority.
The subsidiary companies and all they possessed were wholly owned by the parent corporation. Through the consolidation there was in fact no change in ownership of the property in question, and double pay for single privilege should not be exacted unless required by clear and unequivocal statutory provision.