International Harvester Credit Corporation v. Goodrich

PETITIONER: International Harvester Credit Corporation

DECIDED BY: Warren Court (1955-1956)

ARGUED: Jan 17, 1956 / Jan 18, 1956
DECIDED: Apr 09, 1956

Facts of the case


Media for International Harvester Credit Corporation v. Goodrich

Audio Transcription for Oral Argument - January 17, 1956 in International Harvester Credit Corporation v. Goodrich

Audio Transcription for Oral Argument - January 18, 1956 in International Harvester Credit Corporation v. Goodrich

Earl Warren:

Mr. Solicitor General you may --


If the Court please.

At the time the Court adjourned last night, I was -- had averted to the paradox of this case, which I mentioned in the opening and that we are here because we passed a tax, the highway use tax, which was apportioned, fairly apportioned to the use of the highways.

Now, as an illustration it was open to the New York legislature to measure this tax by a number of ways.

They could have had a flat fee imposed for the use of the highways, a yearly flat fee.

They could have a gross receipts tax measured by the gross receipts of the carrier.

All of these taxes are recognized as much easier to administer.

Now, if the New York legislature had adopted this type of legislation.

It's certainly the teaching of the (Inaudible) case and the Railroad Reorganization cases I cited yesterday, that a lien, such as the lien in question, would be perfectly valid and constitutional.

And I think that that is impliedly admitted in the appellants brief because they state that there are taxes where apportionment is not practicable.

And it seems to be the rationale here, that because we have passed a tax, imposed the tax in a fair way and apportioned it to the use of the highways that we have now lost our sovereign right to effectively collect it.

And I don't --

Felix Frankfurter:

If I may just say, I don't understand the equations you're making --


Well, let me see the --

Felix Frankfurter:

-- before the flat tax, no matter how high would be with reference to the vehicle that uses the highway.

I don't suppose that flat tax anywhere, the tax flat on one car or one vehicle for the use of the highway by other vehicles.


Well, I think --

Felix Frankfurter:

Was there such a tax?


Let me use this illustration, Your Honor.

The California gross receipts tax is a tax based on the gross receipts of the carrier.

Now, there is no relation between that tax and the individual use of the highway by a particular truck.

Felix Frankfurter:

Well, that's a very -- all taxes are taxes people.

We may speak of them as taxes on things but ultimately a person is taxed for something and a gross tax on a carrier is the most conventional and obvious kind of a tax, they tax this on gross, subject to the common cause, a problem which we haven't got or is the next (Inaudible) I don't see what they (Inaudible) in fairness to this.


Well, the analogy I'm trying to make, Your Honor, is that if we'd had this gross receipts tax and we had asserted our lien against these vehicles, which were in the possession of the carrier, then they couldn't come in and say, “Now, you must apportion this lien and assert your lien only for that part of the tax that our vehicles were instrumental in building up," which is just what they are doing here.

Felix Frankfurter:

We have some different problem to get it, maybe that if -- if a conditional vendor will walk into your -- put property in the possession of a lessee or a vendee or a mortgagee and the things is -- the thing is so intermingled with the -- make a separation that that's that, a status in the crime upon imposing a tax that it could impose a valid tax because intermingling of ownership bars separation.

But here, it is exquisitely -- to exquisitely put a tax on vehicles, the use of the highway by something which a vehicle had no relation to the user.


If Your Honor please, I -- I would characterized the tax mainly if a law does as a tax on the carrier measured by the use of the vehicles, I think, there is some distinction.

It is not on the trucks themselves and the only point I try to make on this and I'll -- I'll leave it with this, is that -- it seems to me that -- that to argue that a constitutional question arises because of the possibility of apportioning the enforcement of the tax when one does not exist, when the tax can't be enforced is not supported by the precedence, it's not supported by logic and I don't believe it's supported by reason because the consequences would be that if -- if effective enforcement means are open only if you have a tax which is not measured accurately like our is that the states would be driven to this other form of taxation.

Felix Frankfurter:

Does New York has any legislation which surrounds upon conditional sales?

Is that unequal and can we say or infer that this expresses a policy by New York adverse to conditional sales?