PENALTIES: ENFORCEMENT: WHERE OFFICIAL FORM BEARS INCORRECT STATEMENT OF LAW, INDICATING MORE TIME FOR COMPLIANCE THAN STATUTE ACTUALLY ALLOWS: POWER OF DIRECTOR OF LICENSES TO WAIVE PENALTY
1. Where official form bears statement of lawful period allowed for compliance, correct at the time of issue, and law is subsequently amended to provide shorter period, reliance in good faith upon terms stated upon form does not relieve citizen from duty to comply within shorter period; penalty for failure so to comply is enforceable.
2. Where such form bears statement of law, incorrect at time of issue, leading holder to believe more time is available for compliance than law actually allows, penalty must still be enforced for late compliance.
3. Director of Licenses has no authority to waive or remit penalty provided by section 2, chapter 252, Laws of 1953.
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September 10, 1953
Honorable Della Urquhart
Washington State License Department
Olympia, Washington Cite as: AGO 53-55 No. 133
By letter dated 31 August, 1953, as previously acknowledged, you have requested the opinion of this office on questions arising from the following facts: Before March 20th, 1953, RCW 46.12.110 provided that the purchaser or transferee of a motor vehicle must apply to the Director of Licenses or his agent for reissue of the certificate of ownership within thirty days after the sale or transfer. The statute required collection of a one dollar penalty from late applicants. As a convenience to vehicle owners this information was set out upon the title certificate form. On March 20th, 1953, RCW 46.12.110 was amended by section 2, [[Orig. Op. Page 2]] chapter 252, Laws of 1953, which shortened the period for application to fifteen days, and increased the penalty to five dollars on the sixteenth day, plus an additional dollar for each additional day not to exceed a total of fifteen dollars. Chapter 252 took effect immediately upon signature by the Governor. Before the transition to new title certificate forms was accomplished, but after March 20th, a number of certificates which still carried the former provisions of RCW 46.12.110 were issued.
You ask whether or not the new penalty should be enforced
(a) against persons holding certificates issued before March 20th, 1953, who apply for reissue on or after the sixteenth day; and
(b) against persons holding certificates bearing former provisions but issued after 20 March, who apply on or after the sixteenth day.
We conclude that you are required to enforce the penalty against both classes of persons. The only possibility for their relief is that it may be granted by the legislature.
1. Your first inquiry concerns persons holding certificates issued before March 20th, 1953, who apply for reissue sixteen or more days after a sale or transfer made after March 20th. The certificate bears a statement that the application may be made within thirty days after the sale, upon which the new owner relies.
It is clear that no vested right arises in this respect under the former provisions of RCW 46.12.110. Nothing forbids amendment of the statute, as has been done. The word of caution upon the certificate is a matter of courtesy and convenience, intended to promote compliance with the law; it does not fix the law.
Those administering the laws quite properly utilize various means to aid and inform the citizen in following them, including publications and notice upon official forms. The possibility of change can be no deterrent to the service. When change occurs, the same courtesy suggests that notice be given insofar as practicable. The License Department gave such notice both by press and by radio after the enactment of chapter 252.
[[Orig. Op. Page 3]]
Over a million certificates now outstanding carry the 30-day information. If reliance upon those forms could forestall enforcement of subsequent legislation many beneficial public functions would be disrupted. In the present case we would have to say that the License Department, by informing vehicle owners correctly as to the then existing law, had nullified in advance an otherwise perfectly valid subsequent act of the legislature. It needs no citation of authority to state that the Department could not by inadvertence or intention prevent enforcement of a law in this manner.
We conclude that the provisions of chapter 252 must be enforced against those who hold certificates issued before March 20th, 1953.
2. Your second question involves those applicants whose certificates, still bearing the 30-day provision although it was no longer a correct statement of the law, were issued after March 20th.
No question has been raised as to the validity of chapter 252. We have only to determine if some act of the state has rendered it unenforceable against persons holding such misleading certificates. For this purpose it is necessary to consider briefly the situation of the License Department. It had previously, in the public interest, issued a great number of certificates bearing the 30-day provision. It assisted in the formulation of the bill which was introduced to the legislature. Its suggestions in fact differed as to time and penalty from those finally adopted. As an emergency measure, chapter 252 became effective immediately after the Governor's signature. Otherwise, the Department would have had 90 days in which to accomplish the transition to new forms. The Department did give what notice it could. Possibly other steps might have been taken.
However, a number of certificates were issued after March 20th with the 30-day provision. Undoubtedly some vehicle owners have been misled as a result. Can the penalty provisions of chapter 252 now be enforced against them?
The answer is to be found in the law of estoppel. InU.S. v. Standard Oil Co. of California, 20 F. Supp. 427, 452, the court states the doctrine thus:
"While acquiescence, delay, * * * or nonaction do not estop the government, the doctrine of estoppel may be asserted successfully against it when it or its agents, [[Orig. Op. Page 4]] acting within the scope of their authority, have been guilty of acts which amount to fraud and which were acted on in good faith by others to their detriment. * * *"
It has been applied by the courts to actions by the State of Washington on several occasions. InState ex rel. Washington Paving Co. v. Clausen, 90 Wash. 450, 156 Pac. 554, the court held that the state could not actively direct performance of a paving contract, retain the benefits, and then refuse payment to the contractor on the ground that the contract was invalid, since it had notice of fraud in the bidding before the work was done. The court said:
"We have repeatedly held that, in its business relations with individuals, the state must not expect more favorable treatment than is fair between men. (citing several cases) The state, in its dealings with individuals, should be held to 'resolute good faith.' State v. Milk, 11 Fed. 389.
"We have * * * to do here with * * * estoppelin pais; and even where the government may not be barred by mere laches, it may be estoppedin pais by such actions with individuals as make it a 'question of honest dealing.' Gilbert, Circuit Judge, inUnited States v. Willamette Valley etc. Co., 54 Fed. 807, 811." (90 Wash. 452)
InState v. Carlyon, 166 Wash. 498, 7 P. (2d) 572, the state sought a preference over private creditors of an insolvent, for which there was no legal basis. The court denied the preference, and said:
"* * * the trend of our decisions has been to hold a public corporation * * * to the same principles of common honesty and natural justice as would obtain between private concerns * * * and that the state itself is bound by principles of equitable estoppel, * * *" (166 Wash. 500)
InGreat Northern Ry. Co. v. Washington Electric Co., 197 Wash. 627, 86 P. (2d) 208, the court held that where a contract with the state had been under performance for seven years, with benefit to the state, the state could not be [[Orig. Op. Page 5]] heard to deny the right of occupation in the right of way merely because it had never granted legal title. InStrand v. State, 16 Wn. (2d) 107, 132 P. (2d) 1011, the court held the state estopped to deny the title of a purchaser of certain lands from the state, where the deed was executed by authorized state officers and the buyer improved the land and paid taxes for several years in reliance. The court said, quotingState v. Horr, 165 Minn. 1, 205 N.W. 444, that
"'We ordinarily look to the action of the state to be characterized by a more scrupulous regard to justice than belongs to the ordinary person. The state is formed for the purpose of securing for its citizens impartial justice, and it must not be heard to repudiate its solemn agreement, relied on by another to his detriment, nor to perpetrate upon its citizens wrongs which it would promptly condemn if practiced by one of them upon another.'" (16 Wn. (2d) 118)
A large number of cases from other jurisdictions may be cited in support of the general principle, as well as additional Washington decisions.
But it is important to notice that in all these cases the action by an officer of the state was taken within the scope of his authority. The citizen in dealing with the officer is entitled to rely upon such acts. The principle of estoppel, however, does not apply to unauthorized or ultra vires acts of state officers. Strand v. State,supra; and cases cited therein; U.S. v. Standard Oil Co. of California, supra; 19 Am. Jur. 818, Estoppel, section 166; 31 C.J.S. 417, Estoppel, section 142. The License Department is of course authorized to issue title certificate forms. RCW 46.12.030; RCW 46.12.110, as amended by section 2, chapter 252, Laws of 1953. But we do not think the Department is authorized to permit distribution of incorrect information as to the law, by whatever means. It is clear from the cases that the state cannot be bound by incorrect opinions or statements upon the law made by administrative officers. InState ex rel. Tanner v. Northwestern Investment Co., 70 Wash. 381, 126 Pac. 895, a corporation had been organized in reliance upon the advice of the Attorney General and the State Auditor. Its operation pursuant to that advice was held clearly illegal; and the court forfeited its franchise, stating that the state could not thus be estopped. InState ex rel. Fishback v. Globe Casket Co., 82 Wash. 124, 143 Pac. 878, the court likewise forfeited a corporate franchise, although upon organization the Insurance Commissioner had been consulted [[Orig. Op. Page 6]] and stated that the activity to be carried on would violate no law. InState v. Northwest Magnesite Co., 28 Wn. (2d) 1, 182 P. (2d) 643, it was held that reliance upon an erroneous statement of the law by the Commissioner of Public Lands did not preclude the state from asserting the true effect of the statutes, nor relieve that officer of his duty to comply with them.
The fact that the incorrect advice is written or contained in a document makes no difference. InUnited States ex rel. Lapides v. Watkins, 165 F. (2d) 1017, the Court of Appeals for the Second Circuit faced the question in a case concerning a naturalized citizen who was threatened with loss of citizenship because he might have resided abroad too long. He had been issued a certificate of identity by a U.S. Consul, of which the court said:
"We shall * * * assume that he justifiably believed that it did extend the statutory period of his permitted absence abroad without loss of citizenship. Even so, it was wholly ineffective under the law for that purpose, since no United States consul has any power to waive the provisions of the immigration laws. (citing cases) The issuance of the certificate or any statements made by the consul in connection therewith could not create an estoppel against the government. (further citations)" (165 F. (2d) 1019)
To the same effect seeBowles v. Indianapolis, 150 F. (2d) 597, andUnited States Lines Co. v. Shaughnessy, 195 F. (2d) 385.
The rule may at first seem harsh. But it springs from a fundamental premise: that the law can be altered only by the legislature, by the people acting in legislative capacity by referendum or initiative, or by the courts. Were it otherwise, any administrative official might change the law, wilfully or by mistake or negligence. Express public policy, as enacted by the legislature, could be thwarted. The situation is entirely different from that in which the state acts simply as another businessman or corporation in the buying or selling of commodities or services. The distinction is plainly stated in Farnsworth v. Minnesota and Pacific Ry. Co., 92 U.S. 49, 68:
"But it is said that provisions for forfeiture are regarded with disfavor and construed with strictness, and that courts of equity will lean against their enforcement. This, as a general rule, is true when applied to cases of contract, * * * but there can be no [[Orig. Op. Page 7]] leaning of the court against a forfeiture which is intended to secure the construction of a work, in which the public is interested, where compensation cannot be made for the default of the party,nor where the forfeiture is imposed by positive law. 'Where any penalty or forfeiture,' says Mr. Justice Story,'is imposed by statute upon the doing or omission of a certain act, there courts of equity will not interfere to mitigate the penalty or forfeiture, if incurred; for it would be in contravention of the direct expression of the legislative will.' Story's Eq. Jur., sec. 1326. The same doctrine is asserted in the case of Peachy v. The Duke of Somerset, reported in 1st Strange, and in that ofKeating v. Sparrow, reported in 1st Ball & Beatty. In the first case, Lord Macclesfield said that 'cases of agreement and conditions of the party and of the laws are certainly to be distinguished. You can never say that the law has determined hardly; but you may that the party has made a hard bargain.' In the second case, Lord Manners, referring to this language and taking the principle from it, said that 'it is manifest, that, in cases of mere contract between parties, this court will relieve when compensation can be given; but against provisions of a statute no relief can be given.'"
Put in another way, the distinction is between acts on behalf of the state in its governmental capacity and such acts done in a proprietary capacity. Thus it is said in 31 C.J.S. 412, Estoppel, section 140 (b):
"The doctrine of estoppel will not be applied to deprive the government of the due exercise of its police power, * * * or to frustrate the purpose of its laws or thwart its public policy.
"On the other hand, when functioning in a proprietary, as distinguished from a governmental, capacity, the doctrine of estoppel may be applied to the United States or a state."
[[Orig. Op. Page 8]]
See also 19 Am.Jur. 818, Estoppel, section 166. The distinction is explained inState v. Register of State Land Office, 193 La. 883, 192 So. 519, 521:
"The state has two classes of powers: the one legislative, public, governmental, in the exercise of which it is a sovereignty and governs its people; the other, proprietary quasi-private, conferred upon it not for the purpose of governing its people but for the private advantage of the inhabitants of the state itself as a legal personality. Wykes v. City Water Company, CC., 184 F. 752, affirmed 9 Cir., 202 F. 357, and cases cited therein."
InStrand v. State, supra, the distinction is set out in this way:
"The state acts in two capacities: governmental and proprietary. The distinction between the two is best stated in Cincinnati v. Cameron, 33 Ohio St. 336, approved by this court inSeattle v. Stirrat, 55 Wash. 560, 104 Pac. 834, 30 L.R.A. (N.S.) 1275:
"'In its governmental or public character, it represents the state, while in the other it is a mere private corporation. * * * But because these two characters are united in the same legal entity, it does not follow that the shield which covers the political equally protects the private corporation.'" (16 Wn. (2d) 116; deletion in sub‑quotation ours)
A clear example isState ex rel. Washington Paving Co. v. Clausen, supra, where the court held the state to be estopped by its actions in its business relations with individuals. See also: State v. Northwest Magnesite Co., supra;State v. Carlyon, supra; Bennett v. Grays Harbor County, 15 Wn. (2d) 331, 130 P. (2d) 1041. The rule in no way sanctions unfair dealing by the state, in its governmental capacity or otherwise. It is merely a statement that illegal acts, contravening express provisions of law, can be sanctioned by no person or officer.
InN.L.R.B. v. Baltimore Transit Co., 140 F. (2d) 51, at 51, the court declares:
"Nor can the principles of equitable estoppel be applied to deprive the public of the protection of a statute because of mistaken action or lack of action on the part [[Orig. Op. Page 9]] of public officials. U.S. v. San Francisco, 310 U.S. 16, Utah Power & Light Co. v. U.S., 243 U.S. 389, U.S. v. City of Greenville, 4 Cir., 118 F. (2d) 963."
Among the great number of cases which state and follow this rule, the following may be cited as representative: U.S. ex rel. Sage v. District Director of Immigration, 82 F. (2d) 630; McKay v. Public Utilities Commission, 104 Colo. 402, 91 P. (2d) 965;Lawrence, State Treasurer, v. American Surety Co., 264 Mich. 516, 250 N.W. 295;Henderson v. Gill, 229 N.C. 313, 49 S.E. (2d) 754;Godbold v. Manibog, 36 Hawaii 235; Campo Corp. v. Feinberg, 279 App. Div. 302, 110 N.Y.S. (2d) 250; State ex rel. Stephan, Attorney General v. Taylor, 44 Ida. 353, 256 Pac. 953; Rhode v. State Industrial Accident Commission, 108 Ore. 426, 217 Pac. 627; andWestern Surgical Supply Co. v. Affleck, et al., Members of California State Board of Pharmacy, 110 Cal. App. (2d) 388, 242 P. (2d) 929, in which the court said, quoting Caminetti v. State Mut. Life Ins. Co., 52 Cal. App. (2d) 321, 126 P. (2d) 165:
"To state the contention is to state its impossibility. To govern themselves, the people act through their instrumentality which we call the State of California. The State of California functions through persons who are for the time being its officers. The failure of any of these persons to enforce any law may never estop the people to enforce that law either then or at any future time. It would be as logical to argue that the people may not proceed to convict a defendant of burglary because the sheriff perhaps saw him and failed to stop him or arrest him for another burglary committed the night before. (citing cases)."
Section 2, chapter 252, Laws of 1953, provides in relevant part as follows:
"If the purchaser or transferee fails or neglects to transfer such certificate of ownership and license registration within fifteen days after date of delivery of the vehicle to himhe shall be guilty of a misdemeanor and in addition thereto he shall on making application for transfer be assessed a five dollar penalty on the sixteenth day and one dollar additional for each day thereafter, but not to exceed fifteen dollars." (Italics supplied)
[[Orig. Op. Page 10]]
There can be no doubt as to the intent of the legislature. It considered compliance so important as to attach a comparatively stern penalty, in mandatory terms. In too many cases, the former provision had failed to produce that prompt compliance which is necessary to the essential purpose of the law. Accurate title registration affords direct protection to the rights of vehicle owners. It prevents assertion of liabilities against them by reason of supposed ownership after transfer. Dilatory registration is a major impediment to law enforcement officers, and causes much confusion in the administration of safety and financial responsibility laws. Various benefits in mere convenience accrue incidentally to all involved. Chapter 252 is quite plainly an exercise of the police power. It is an Act of the State in its basic governmental capacity. As we have indicated, the state cannot be estopped to deny its application.
We have examined carefully the statutory grants of authority to the Director and to the Department. We have found no provision under which the penalty of chapter 252 may be waived, nor can such a power be implied from any provision.
We conclude that you are required to enforce the penalty provisions of chapter 252 against those who hold certificates issued after March 20th, 1953, even though the certificates bear an incorrect and misleading statement of law.
It has been suggested that relief from the penalty might be granted, in proper cases, by the legislature. That this could be done seems very likely: See State ex rel. Crutcher v. Koeln, 332 Mo. 1229, 61 S.W. (2d) 750;State ex rel. Outcalt v. Guckenberger, 143 Ohio St. 457, 17 N.E. (2d) 743;Steinacher v. Swanson, 131 Neb. 439, 268 N.W. 317;Tukey v. Douglas County, 133 Neb. 732, 277 N.W. 57;Read v. Jerauld County, 70 S.D. 298, 17 N.W. (2d) 269; City of McAlester v. Jones, 181 Okla. 77, 72 P. (2d) 371;State ex rel. Sparling v. Hitsman, 99 Mont. 521, 44 P. (2d) 747;Biles v. Robey, 43 Ariz. 276, 30 P. (2d) 841; Smith v. Hall, 251 Ala. 44, 36 So. (2d) 357. On the other hand, it is highly doubtful that the Governor could do so: seeHolliman v. Cole, 168 Okla. 473, 34 P. (2d) 597 andHutton v. McClesky, 132 Ark. 391, 200 S.W. 1032. Since it has not been requested, we express no opinion as to the existence of such powers under the Washington Constitution. If the proposal of such relief is contemplated, we would advise that appropriate records be kept as to the class of vehicle owners last considered above.
Very truly yours,
A. J. HUTTON, JR.
Assistant Attorney General