Honorable W. E. Coats, Jr.                    Opinion   NO. (C-432)
Criminal District Attorney
Smith County                                  Re:   Situs of U-Haul trailers
Tyler, Texaa                                        for the purpose of ad
                                                    valorem taxation,  under
Dear Mr. Coats:                                      the stated facts.
     In your letter you have requested an opinion from this
office on the above mbject.   We quote pertinent  paragraphs
of your letter.
              “Rental   trailers  owned by the Arcoa Inc.
         of Port land,  Oregon, commonly known as U-Haul
         Trailers   are available  for hire in most all
         counties of this state as well as other states.
         The prlncipA1 place of business In Texas Is
         Grand Prairie,   Dallas County, Texas.   In the
         course of business of renting these trailers,
         the trailers   are rented In one county and may
         or may not be returned to the renting establish-
         ment In that county.     The U-Haul Company Is not
         involved in the dispute.     They will pay their
         taxes.    We he trying to determine to whom.
               “Dallas County authorities,     Mr. Jerry D.
         Brownlow, City Attorney for Grand Prairie,      Texas,
         relying on the enclosed opinion written by the
         Dallas County District    Attorney’s   office, seeks
         to tat all U-Haul‘ trailers    located In the State
         .of Texafind  have the U-Haul Company pay all Its
         ad valorem taxes to Dallas County.
               “This office    and Smith County authorltl&
         seek to tax only the number of U-Haul trailers
         within Smith County, as of January 1, 1965,       for
         the following    reasons:




                                     -2041-
     Honorable   W. E.     Coats,   Jr.,   Page 2    Opinion HO. (c-432)


          “(1)    The latter‘part   of Article 7153 of
     Vernon’s Texas Civil Statutes     does not cover
     the situation   in dispute because the trailers
     are not ‘temporarily     removed’ from the Dallas
     Counv     Many of the trailers    or most of them
     in Texas will never be in Dallas County and,
     even if the trailers     were in Dallas County,
     but are removed, they are not temporarily
     remo~v&dfrom Dallas County‘r;Eiut are removed
     with no prearranged plan for their return.
           “(2)  The number of U-Haul Trailers
     located in Smith County Is almo$t constant.
     Due to the nature of this business there murt
     slwayr be present In Smith County a required
     number of trailers  to meet the business de-
     mand. So, even if one specific   trailer  does,
     not remain In Smith County so as to obtain a
     ‘permanent statue’,  a certain number of trailers.,
     do remain here all the time.   City of Dallar v.
     Overton, 363 S.W.2d 821 (error ref. n.r.e.    lgb?).”
      The Constitutional      provision  provldlng for the taxation
of property is Article       VIII, Section 11 of the Texas Conetl-
tution.   It states:
           “All property,   whether owned by p&sons,
     or corporations   @all   be assessed for taxation,
     ax&the taxes paid In the county where eltuated,
     . . .” (Emph&rls supplied throughout.)
     The phrase “where situated” has been interpreted  by, the
Texas Supreme Court to mean “where situated” under the common
law rule of “mobllle sequuntur personam” and not to mean
“where situated” physically  or technically.  The court stated,
in Great SouthebnLlfe Insurance Company v. City of Austin,
112 Tex. 1.m     S.W. 77U (1922) :

            “The Conrtltutlop was framed with refer-
      ence to the common law, and In judging what the
      Constitution  means weghould keep In mind that
      It Is not the beginning of the law of the state,
      but that it a8sumes the existence  of a well-under-
      stood system, which was still  to remain In force and
      be demonstrated, and that the constitutional   deflnl-
      tions are ln general drawn from the common law.


                                       -2042-
    .      .
.



        Honorable W. E. Coats, Jr.,     Page 3        Opinion No. (C-432)


               Hewitt v. State,  25 Tex. 722, 727; Gordon v. State,
               43 Tex. 330, 340; Henderson v. Beaton, 52 Tex 29,
               60; Ex parte King,’ 35 Tex. 658.
               II. . .

                    “Our Constitution,  therefore, in declaring
               that property shall be taxed where situated,    has
               done no more than declare the common-law rule.


                     “It did not define z what was meant by the
               words where situated.    Since It had reference  to
               the taxing power, It evidently meant property
               where situated for the purposes of taxation
               under the general principles   of law as then under-
               stood. ”
             The court then reviewed the common law rule        of “aobllia
        sequuntur personam” and stated:
                      “Under the common law, mobilla sequuntur
               peraonam was a we,ll-established     maxim, and personal
               property of every description      was taxable only
               at the domicile of Its owner, regardless       of Its
               actual   location.   This is still   the basic prin-
               ciple upon which the taxation of personal property
               rests.     26 R.C.L. Section 241, pp. 273,274.”

             However, there are certain exceptions   to the “mobilla
        sequuntur pc:rs.onRm” rule and the Texas Courts have approved
        these exceptions.   The Texas Su reme Court also stated In
        the Great Southern case, ( suprap that:
                     “But even prior to the Revolution the principle
               ‘mobllla   sequuntur personam’ had been abrogated to
               the,extept    that, as between different      towns and
               taxing districts,       certain classes of tangible per-
               sonal property had a taxable situs where employed
               in business,      regardless   of the domicile of its
               owner.”    p. 781.




                                           -2043-
Honorable   W. E. Coats,   Jr.,   Page 4    OPlnlon No. (CA32)


      A more recent decision    reaffirming  this exception Is
State v. Crown Central Petroleum Corporation,      242 S.W.2d 457
(Tex.Civ.App.   1951, err. ref.),    wherein the Court ruled:
           “One exception to the rule that tangible per-
     sonal property Is on& taxable In the county of the
     residence of the o-r      is that tangible personal
     property,  which by It6 character and concrete Porm
     Is capable of having a value and an actual physical
     sltus, may be taxed In the county where permanently
                State v. Fidelity   & Deposit Co. of
     iE$t%,     35 Tex.Clv.App.   214, 80 S.W. 5d.”
     Also, in the case of the City of Dallas     vs. Overton,
363 S.W.2d.821 (Tex.Civ.App. 1962, err. ref.     n.r.e.),  the
Court wrote:
           “Tangible persona1 property acquires tax t3itU6
     In a jurisdiction   apart from its owner if It is kept
     there with sufficient    permanency that It may fairly
     be regarded as being a part of the general mass of
     property within the jurisdiction.”
      These exceptions  have been recognized and propounded In
the following   cases and authorities:   Galveston v. Haden, 214
S.W. 766 (Tex.Clv.App.   1919, no writ h?
283 S.W. 548 (Tex.Clv.App.   1926, no-writ hi&T
Life Insurance v. City of Austin 108 T. 209, 19
Cooley on Taxation, Vol. 2 4th Edition,     p. 975
General’s Opinion Noa. V-3+3, O-5632, O-3702 a
      Thus, we see that there is much Texas authority for the
proposition  that tangible personal property which ha$ acquired
an actual sltus of its own Is to be taxed at the place of Its
situs and not at the domicile of its owner.
      In your opinion request, you state that a certain number
of trailers  remain in Smith County at all times; which la tan-
tamount to a certain  number b eing lralgned,to aith-.COpnOJi~
and that when the trailers   are rented, they “may or may not”
be returned to Smith County.




                                   -2044-
Honorable W. E. Coats,      Jr.,   Page 5     Opinion No. (C- 432)


      If all trailers   which were rented in Smith County were
returned to Smith County when the lessee had finished,    then,
unquestionably,    all would be taxable in Smith County.  Certainly,
those trailers   which are assigned to Smith County for business
purposes~, rented there and returned there, would be taxable
there under the exception to the "mobilia secuuntur personam"
rule as recognized by the Texas Courts.
       The fact that all of the specific       trailers    do not re-
turn to Smith County does not. preclude taxation by Smith
County.    That certain number which has been permanently
assigned to Smith County by the corporation           for business
usage there, can and has attained a degree of permanency
after that number has first       been delivered     to Smith County
and after that number Is shown to remain in Smith County for
legitimate    business purposes.     Although trailers      are large
enough to be specifically      identified,   it should not be
forgotten    that they are also so similar as to be susceptible
to treatment as funglble units, which Is exactly how the
corporation    actually   does treat them. Therefore,         It is
possible ~for taxatlnn purposes, that even though certain
specific   trailers    do not remain in or return to Smith
County, that that certain number of trailers            which have
been permanently assigned to Smith County for legitimate
business purposes and which have actually          physically    been
in Smith County, have acquired an rctmal situs there.               Thus,
the U-Haul trailers      are within the exception to the "mobllla
sequuntur personam" rule and are taxable in Smith County.
     A necessary element of this opinion Is the determination
that the trailers   have acquired 3 degree of permanency in
Smith County, thereby establishing   their taxable situ8 there.
In theCity of Dallas v. Overton case, supra, the Court elsbo-
rated on the definition   of "permanency";
             "It Is clear that 'permanency' as used in this
      connection does not convey the idea of the character-
      istics    of the permanency of real estate.      It merely
      involved the concept of being associated        with the
      general mass of property in the state, as contrasted
      with the transient    status--viz.,  likelihood     of being
      In one.state    today and in another tomorrow. . . .




                                     -2045-
Honorable   W.   E.   Coats,   Jr.,   Page 6    Opinion No. (C-432)


           “Obviously the Courts do not construe the term
     ‘permanent’ to mean absolutely   permanent, since
     movable property is seldom absolutely   permanent.
     The question of whether or not the property in
     question is 'more  or less permanent’ as the term
     is often utilized,  depends on the factual situation
     In each case as illustrated.   . . .’ (.
      The facts,   as you have given, reflect       that a certain
number of trailers     are located within Smith County at all
times by the corporation      for business usage.      That certain
number which have actually,       physically  been located in Smith
County must now be regarded as being a part of the general
mass of the property within that jurisdiction,          and in
accordance with the previously       cited authorities,    must have
consequently acquired a taxable sltus in Smith County. There
is no question but that some specific        trailers   are in a
transient   status at all times in that they are likely to be
in Smith County today and in another county tomorrow.            How-
ever,.when the facts are considered as a whole, it must be
remembered that those trailers       which are removed from Smith
County and are not returned have been or will be replaced
by the company.       Another factor for the determination        that
a certain number of trailers       have become a general mass of
the property within Smith County is the fact that that
certain number of trailers       will remain in Smith County when
not in use.      Smith County is their home base.
       The fact that the Court, In the case of Fort Worth ‘v.
Southland~Greyhound Lines, Inc.,    123 Tex. 13, b7 S.W.2d 354
(Tex.Civ.App.   1931, opinion approved by Tex.Com. of App. On
Certified   Guestions) refuted the average number theory does not
conflict   with our present determination,  insofar as we are
not advocating an average number rule but are averring that
that certain number which has attained the necessary degree
of “permanency” are taxable In Smith County.
     The finding that items of personal property can acquire
a tax situs away from the domicile of the owner, even though
no specific  items can be shown to have acquired a permanent




                                       -2046-
  .




Honorable   W. E. Coats,   Jr.,   Page 7         Opinion No. (C-432)


relation  to the tax situ8     is not ulthout authority.          The
United Stats Supreme__.  Court - held,
                                     _   in  the  cnse  of  Braniff
                    Neoraska noara of Equalization          ?%nses-
          7 U S 5gC (lm          that’regulariy      bcneduled f’n-
           esl’thounh   not necessarilv       the same individual
planes; were~sufficlent     to establish      a taxable nexus for
the airplanes    to acquire a tax situs in Nebraska.           The
principle  was cited In Attorney General’s,Oplnion            No. w-818
and was also Implied from the fact situation            as given In
Attorney General’s Oplnion V-373.           In V-373, the facts a-c
given were that Halliburton       Oil Well Cementing Company
assigned two railroad     cars to Hawkins, Texas, and thet the
number of’cars    there at any given time would fluctuate           ac-
cording to business needs.        Our office     ruled that the LO
hopper cars were taxable in the city to which they had been
assigned because they had acquired a business situ8 there
for taxation purposes.
       At first glance,   several Texas cases, Chemical Express v.
Roscoe    310 S.W. 691 (Tex.Clv.App.   1958, err. ref )   d Ft
&.          Southland Greyhound, supra, might appear’to?e   e
conflict    with this opinion but careful study reveals other-
wise.
        In the former case, the Court held that the trucks and
 trailers    of the corporation   were not taxable In Hoscoe even
 though they were physically      ln that city on the taxable d:ite:;.
 The Court’s opinion Is predicated       upon the fact that no parti-
 cular    number of ,vehlcles were assigned to any particular
 terminal and the location      of vehicles   away from the home
 domicile depended exclusively      upon business.     In contrast,
 the facts of the present situation        are that a certain number
,of trallers,ls    assigned to Smith County at all timea and
 would remain there,even      when they were not ln use.
      The Court concluded,    In the Roscoe case, that the facts
fell squarely within the holdings of the ca6es of Fort Worth
v. Southland Greyhound Lines, Inc.,        supra, and Guln      XiX-3.F.
kailway Co. v. Dallas b S.W.2d 292 (Tex.Com.Apg-            9291
                                                              _ and
the terms of Article     7151. Vernon’; ‘Civil Statutes.     a& that
the properties     were only temporarily    removed from the city of the
principal   office   or place of domicile.     Our trailers   are not
temporarily    removed from Dallas County, but as the facts indicate
are permanently assigned to Smith County.




                                    -2047-
Honorable W. E. Coats,    Jr.,    Page 8            Opinion No. (C-432)


     As the Court 'very ably     stated     In the Overton case,   supra:
            "A careful examination,      of these authorities
     clearly   reveals'distlnguishing      features.   . . . In
     the Southland Greyhound and Chemical Express cases,
     the City was attempting to tax motor ~vehicles that
     were only temporarily       being kept wlthln its limits.
     The courts correctly       held that such property having
     failed to acquire 'permanent' location          apart from
     its owner, had its tax situs at the owner's domicile."
      A final exception to the common law rule of "mobllla
sequuntur personam" which must be considered Is the establlsh-
ment of a sltus for taxation purposes by leg'lslatlve        enactment.
There Is no specific    legislation   determining the taxable situs
of trailers   as there Is for the rolling     stock of a railroad
comoanv. Article   7168. Vernon's Civil Statutes.        In fact.
the holding of the case of Gulf, C and S.F. Railroad v. Dallas,-
supra, Is diatlngulshable      because there is specific    legislation
establishing   the tax situs of all rolling      stock of a railroad
at Its home-office    in Texas or place of domicile.
     Article  7153, Vernon's Civil Statutes,         is also relevant
to the taxable situs of per6olal   property.         It states that:
            "All property; real and personal,       except such
     as Is required to be listed and assessed otherwise,
     shall be listed and assessed In the county where,lt
     Is situated;   and all personal     property,   subject to
     taxation   and temporarlly'removed      from the state or
     county, shall be listed and assessed In the county
     of the residence of the owner thereof,         or in the
     county where the principal     office     of such owner
     1s situated.    Acts 1897, p. 2031 G.L. Vol. 10,
     p. 125 7."
      The Texas Courts have held~that the meaning of "where
it 1s situated"    is the same as "where situated"   In Article
VIII, Section 11, of the Texas Constitution.       Fort Worth v.
Southland Greyhound, supra; Gulf C. & S.F. Railway Co. v.
Dallas, supra; Great Southern Life Ins. Co. v. Austin, supra;
andlveston       v. Haden, supra.  This statute does not provide
for anv excentlon to the "mobilla sesuuntur personam" rule or
its exieptio;ls.




                                   -2048-
  .




Honorable    W. E. Coats,   Jr.,   Page 9         Opinion No. (c-432)


       As there is a taxable nexus between a certain number of
trailers   assigned to Smith County and that certain number is
actually   sent to Smith County for legltlmate   business purposes,
then that number of trailers    have attained an actual business
situs in Smith County and, therefore,     under the recognized
exceptions    to the "mobllia sequuntur personam" rule,   are
taxable In Smith County.
                             SUMMARY
                             ---e-m-
            Under the stated facts,    the situs of a certain
      number of U-Haul trailers,    for the purpose of ad
      valorem taxation,   is Smith County, Texas, the actual
      business situs of the trailers.
                                              Yours very truly,
                                              WAGGONER CARR
                                              Attorney Generelof   Texas




HG,Jr.:sjl
APPROVED:
OPINION COMMITTEE:
W. V. Geppert, Chairman
Paul Phy
W. 0. Shultz
Hen Harrison
Stanton Stone
APPROVED
       FOR THE ATTORNEY
                      GENERAL
BY: HAWTHORNEPHILLIPS




                                     -2049-
