Untitled Texas Attorney General Opinion ( 1939 )

380
OFFICE OF THE ATTORNEY GENERALOFTEXAS
AUSTIN
Honorable James E. Kllday
i i Dire&or
Motor TranaportatlonDivlmi~n
Railroad Commissionof Texar
Au8t in, Texae
Dear Sir:
r of JbSy 6, 1989,
fromDal.l~throughllort
apd (8) 80. 8088 irrorCal-
on, Rlring Star, cab bmk
ri08t08by purahaao rra
44 888~4under the t8rsm of
e of the Mator Clrrler Rot. Bsithar
prtlon:~:~ of ~lther, ha8 evttr been m-
ltered by the Railroad ConrLodm.
8%of the kro ~lia.8,a&+~arentlythorn
te operation of the two oertilieeto~,611
and DaU.am, but Johttson'etruoks hey.
been foithorirred
to operate lmd.erboth 00tiiricfitt38.
Jobni4on ha8 aede applioationto 8ever mtiri&t~
Ho. 6089 at Bert Worth, and to @olJ.end arelga to gouth-
tfawl that Tmuupcwtat2on
fAoutlam8tarn Cempon~ &&da oar-
Honorable Jamue 2. Kllday, Page 2
tltlcatesto operate out of Dallae in an ea&isrly dlrea-
tion, but at the present tlim has no authority to operate
between Dallas end Fort Worth.
The applloatlon to 80 sell and assign suoh part
of CertificateNO. 2023 oompliee~with Seotion 5 of krtiole
Sllb, BevIsed Clg41 Statutea, relating to the 8ale and M-
signment ot oertifioateaof oonvenienoe end neoesrrlty, but
it goee no further. Speaifioally,It doea not meet the mm-
quirementsor Seotlon 10 of Artlole Qllb, *oh met8 forth
the raots vhleh en appllaatlonbdr a osrtirloatsor ~on~en-
ienoe and neoeesity natstooutain. Tm ar&umeuta are ad-
venoed by oontestantsin support or their oontentlonthat
the Commissionoannot legally autharlze the asolgmaent:
(1) That when both osrtirioatse.oamointo the hands of a
common owner they beoam meaged or aonaolidatedover the
route cmumnlytraversed bythela, to-wit: Dallas to Fort
Worth; and (2) under the statute, a o&rtifioateoaunot be
broken into pleoes and a part only of a route aold and as-
sigaed.
You request our opiuion In response to the fol-
lowing two queatlonsr
"(1) When Johnson beoaw the owner
of both
oartlffoates 2028 and 2226. did
there owe about amerger of the rlghta
thereunder,aa far aa the line between.
Dalla8 and Fort Worth are oonoerned,ot
suoh nature aa to preolude his late;c,sale
0r hie rights under one or theee so rar-
60 the dietame between Ft. Worth iml
Dallae is oonoelneb?
*(2).tJnder all ot the Zaots present-
ed by the enalosure8,does the COsde6iOn
have the dlsoretionarypoker, upon prOOf
or proper statutory iaat8 to approve thls
particulartranerer ,emlsale, taking into
oonalderatlon,&Long with other iaots,
the prcnioua oplniou of the Attorney Uen-
eral referred to by ChrlctopherTw
In the oaee or aailmad Comalsslon YB. Red Amow
PMlght Lines, 96 S.W. (2d) V&6, b+or(a the Austin Court
of Civil Appemllr, the faots introly~dwere, brfefly, theaet
ii. H. Ladler bee* @A& wnar kq two ae&.fleafe~
or oonvsnismoe and neoeiaMi~, one to ogsrate rr0ppIiou~tott
lioaorableJarma E. Kil.by, Page S
to San Antonio and lnt8mmdlate points, aab the other iram
San Antonio to the Valley via Edlnburg, and inte~diate
pointa. He.flied an applioatlonbefore the Railroad com-
mlsslon for a eo-calledrbroutlng to permit him to go 61-
reotly ima Rouston to JMlnburg,wlthout serving latermeqi-
ate points on thrt mute. .Wlthoutrequlw him to show
the neosseltyof this throw (lervlae, on the theory that
he already had authorityto serve shipment8 fmm Houston
to Sdinburg and thencerorthinto the Valley, and vioe ver-
sa, the Commlsdou entered 8n order grantingmob re-rout-
ing. The trial court etitereda jud&m8nt annullingmob arc
der, and the Railroad Conaieslon appealed. owe quote rrom
the oplnlon of Judge MaClendon, as f0110wer
me twu oertl.fioates were granted
at dlrierent tlm8e to different indivld-
U&8. They were granted to serve twpa-
rate and dlatinot transportationm-
quliwneute:The ou8 served the territory
rmm Houston to San Antonio and into*
nbmllatepointa; the other, that rms San
Antonio to the Vallq and lnteaasdiate
potte3. In oonelderingthe queatLon oi
oomenlenoe and neoesaltr M to aaoh
oertirioate,only the needa, require-
ments, e.to.,of 'thetwo tominS aud in-
terasdlatepolnt8 were fnvolved.Neither.
oertifloat8had any relation to the
other. The iaOt that a&non ~wuerahlp
wem finally united in Lawler in no way
modifted their er$eot. They were man+.
testilynot dealgned origlmlly, nor
through oommon own8rahlp thereafter,to
provide a dlreot thmugh eenloe between
Houston end Valley pointa.-
so it Is in the oa8e berom us. Certifioateo
Nos; 2225 and 2025 were eauted for th8 purpose of aeeting
separate sad dlstiuot transportationrequlmments. No.
2235 was grented for the purpose Of BW8tfIIgth8 Me@ Of
the public ror a aervloe tmm Dallas through Wrt Worth to
San Angelo via Abilene,while Ho. 2029 was grautedto meet
the neede or the pubbio ior a eerviae from Dallas to Fort
Worth,Bro~od,~on,RieingS~,and beakto DeLeon.
The nature of the oertirioate~granted rrednot affeoted by
the fact that subsequentlyto the.tlm.8they w8po @mute4
theybsoams ownedbyone pereon. One per6Qn owniagbath
oertlfioateaoould rendem both~serrfuesthe ssme a? lf the
aertlrloateswere dlfferantlyowned.' Subneotion (b) of
Honorable Jams l%.gilday, PaS8 4
Section 12. Article Ollb,‘reads as hollows:
MPhe Co~ssion at any time after
hsaring had, upon notiae to the holder
Or ~]r OeI%ifiOateOr pert& and tift8r
opportunitygiveu suoh holder to be
heard, nay by its order revoke, suspend
or emend any 08~iriOate or penalt ls-
sued under the provirrions of this fiat,
where In suoh &taring the Commission
shall find that suoh oerttiioateor pee
mlt holder has dlssontinuedoperationor
has violated,refused or uegl8OtOdto
observe ths Commlss~on*sIawfuL Ord8r8,
rules, rates or regulatlousor has YIO-
lat8d the term3 or said oertxrioate or
per&t; provided that fhs holder of suoh
oertlrloateor penait shall have the
right of appeal as provided in this Asst.*
The raatthet the Bailroad CommlssIonhasnemr
prooeeded to revoke or oaend either of these oertIfioates,
under the authority above pruvided.um think Is 8uffloIent
lri4enoe or the fast t&at the present owner of the ser$IfI-
oaks has aalutainsdthe 88171008 required under eaoh or
thoas oertlfioat8s. %%I8raots submitted to us do not show
a6 a matter or law that the oorttifioateshave -booacemerged
or oonsolldatedover the mute from Dallas to Fort Xorth.
The qusstlonwItb Moh viaa18 now soufronted%s
whether CertifloateNo. 8053 oau be severed at port Worth
andthe route,orauthority to op8rateirornFortWorthto
Dallas, sold and MSi&n8d. Section 5 of Artikle Qllb
reads, In pert, aa follows:
*Auy oertlflcateheld, outed or
obtained by any rotor oarrier operating
as.a aommn aarrler UUder the pFOYb3fOM'
of this Aot may be sold, assigned,
leased. trassrsrredor InherIted; pro-
tided, however, that suy pmposed salo,
lease, asslguns@ior transfer shall bs
rirst presented In urltiug to the -comils-
slon for Its apgrovslor dlsapgroval aud
the Comin@slonmay disapproyesuoh pm-
posed aale, essim8nt. lease or traus-
rer if it be foul&and determl.usd.by the
Cowiss%on %h,& suah proposed sale; as-
signment,lease or treesret Ps sot in
Bodorable James 73.Kilday, Page 5
goad ralth or that the proposed pur-
ohaasr, assignee,lessee or trataHtW88
Is not able or oqmble 0s oontlnulng
the opTrationoilthe.equlpsamtpmposed
to be sold. assigned, leased or frem+
fermd in suoh manner as t0 render the .
sarvlaes dapasdedby the public neoes-
sity and oonvtilenoeonvlnd along the
deslgmted mute, or that said ~mposenl
sale, 3ssigment,.lease or trans(er la
not best for the pub110 intereat; ?ihe
ColrmaLsslon ln approvlsg or dlmapprovfng
any sale, assignment,leaae or tranrier
or any oertlfloatemay t&e Into oon-
siderationail of the requiramentsand
quslfficatlons0r a regular applioant
reqtired in this Aot,and apply same as
neoessaryquallfIoetions0s any pmposeb
purohamer, asdepee, lessee.ortrans-
isme: . . .*
Ordin%rlly.y,of aourfm, the greater lgoludes the
leasor, and authorityto convey thb whole would oontatltute
authority to Oontey any part th8r00r. We have sot over-
looked the faot that the 8ervloes oontemplatedln the graat-
lzigof CertifloateNo. 2023 inaludea nOt only seniaes from
Dallas to tort Xorth, and rrom ibrt Worth to the mxt alt7,
and theme to the next; but lt'also probably Intludelta dI-
rest servioe bbtWkB8nDallas and DeLeon, and Dsllas asd oth-
er statlcin&~onJibe route. We have reaohed the oonolusion,
however, th&,~&e of a pert osu be medo, although an Inter-.
ohange senioi~ may be substitutedror a dltiat one. Sufti-
olent proteotion is given to the pub110 in this regard by
that part of Seation S ot Artlo Qllb giVi~& the ColllniBSiOn
autJ30rityto dlsappmve any proposed ssle or eesl8nmetit, ii
it be found and det~ermined by the CO~isslOn that s(ullb 18,
not best for the publla interest.
Slnoe SouthwesternTrfmsport~tionCompany already
holds~onrtifloatesof oonvenienoeand neoesslty authorising
operet4ons rrem Dallas Into Bast Texas, the possibll.ity
18
present&d that ii this transfer la consumglakdth& south-
western Trampor=ation Company araytie 'it8 osrtirloatosto-
gether at Dallas and orsets a through aen&* from Fart
Wokth into ?art Textts,tithout h%rln& plsa46~ and proven
the nfaoessIty 0s such tMough 8ervIoe. Similar situatione
may be presented'upgnthe uale ox assi@memt of a aertl$i-
aate In wh?la. The tsot that 8outhwesternTraMportation
Company already ,oms ceirtif'ioates
authorisiagtha operation
of aoommon oerrlerservicteeatStwardfromDaUsssh~di'&ot
Donorable James E..Ki..lday,
Page 6
necessarily remove SouthwesternTransportationCompany from
the list or eligible purchasersof the.certfSicsteiraBI
Johnson Motor Lines. W0r should the right or Johnson Xotor
Lines to sell the certificateheaessarilybe curtailedby s
removal from the eligible list of all persons holding oer-
tiflcates suthorlzlngoperationout or Dallas. We a&n
refer to Seation 5 of hrtlole Qllb. and express the opin-
ion that the public is given sufficientprotectionin the
powers therein conferredupon the Commlsslonulth refer-
ence to the appruvalor disapprovalof proposed sales and
asslgnments. A8 reepeota competingoarriero, I$ mey be
thet the kind of semioe uhlch SouthwesternTrsnsporta-
tlon Company ultimately lnsu@rstes from Fort Worth into
East Texas may present a questionwlth which vc)tue not
now comerned.
we understandthat on a number of occasions here-
t&ore oertlfloateshave been severed horizontally,and
parts thereof sold and aeslgnedunder orders of the Rail-
mad Commls~ion. We also underetand that on a few oooa-
slons parallel aertlfloateewhich beocme owned by a single
person were permItted to be severed,one from the other,
and one of them sold and conveyed In suoh s m th& Fhe$
were thereafteroperated by dlflerant carrier&
tical constructionthus placed upon the statute with re-
spaot to theme matters by the Ecallmml Commlsslon is en-
titled to oonsldsrstlon.
In the ease of Thompson vs. Foster, 105 S.W. (S)
S4S. a lessee applied for approvalof 'oertslncontracts be-
tween h5.mand Pslnter Bus Lines, Inc., for the operation
oraroundtrlp dailymotorbuo sahedule fromSanAntoni0
$cDel 810 under a certificateonned by Painter Bus Lines,
Painter Bus Lines* oertifioate euthoriz.edseveral
bus*operatlonsbetween several cities and towns, includ-
ing one round trip daily operation from San Antonio to
Del Rio. Palnter.BusLines entered Into a contract with
Poster forthe right or pritilege of operating the SOhed-
ule iron San Antonio to Del Rio, as authorized by the Qer-
tliioate under the supervisionend regulationof the Rail-
mad Commission. .Forthe right or privilege of operating
suoh schedule, Foster uss to pay Painter Bus Lines the 681
of $S%.OO per month, and a oertain percentage of locsl
fares for tlakets sold by him. The oon$raot was f'ora
period of-ten years. The Commissionxel'urred to approve
the contrsots,end threatened to arrest Foster for oper-
ating the schedules without written approval of the OOn-
tract. Foster obtained a temporsry injunction,end the
trial court overruled a motion to dlesolve the temgseary
Honorable James Z.Sl.l4ay,Pa&e7
injunotion. We quote from the 0ourt.s opinion, a8 r0110rr8i
*Nor do we sustain the seoond prop-
osition that the law does not authorlee
a laase or a contract for the operation
of a motorbus schedule by the owaer of
the oertlfloateof oomenlenae and ne-
ceeslty. Such s lease or oontrsct Is
not a treneter, lease, or an aaeign-
,mnt of a part of the oertifloste,but
is merely a lease or contract0s s right
or privilege under the certifloate,
whleh certificatestill remains the
property of the oeuer. The lease or
contract ror the operation or a bus
aoheduls under a cert1fioat.e la suthor-
ized by the.iportlon of seotlon 8 of Ar-
ticle Olla, Vernon*a Ann. Cir. St.,
khlch reads aa follows: 'Aw right,
privilege, permlf, or cnrfifleate held.
ovmed or obtained by any xaotorbuecm-
pany under the prwlelons of this Xot
(Art; Blla; P.C. art. 16906) may be
sold, assigned, leased or transferred,
or 'Inherited;provided,however, that
any proposed sdle, esslgument,lease or
transfer shall be flzst presented In
writing to the Commi8slon for Its sp-
pxwel OF disapprovaland the Commle-
slon.any dlsapprore such proposed sale,
aaslgnment,laase, or trsnsfer If It be
found and determined by the Commission
that suoh proposed sale, astQzucent,
lease or tramfer is not made In good
faith or that the proposed purchaser,
assignee, leeaee or transferee Is not
able or ospsble of oontlnulngthe oper-
ation of the equlpaent proposed to be
sold, assigned, leased or transfermad,
in such manner as to render the service
demanded by the public necessity and
oonvenienoeon and along the designated
route.vm
.~ In the above 0880 it is mted that the court
drew a distinctionbetween the fsotriin that case and the
leeee 0s a part 0s a certlrioate. liowever,the contract
between Painter BUS L&es and Pbater came 80 alose to be-
ing an assigsment0s a past 0s the oertlfloata for a period
Honorable.JaassX. Kilday, Pa&e S
of ten years .ora lease thereof that we do not believe a
different holdingWould be warranted upon e eala or lease
0s a pert or e oertlfloate. Your seoond question is aa-
swered in the errlrmative.
Yours very truly
ATTOhNEY CEhTR& OP TEX.&
ncn
QA.2
Olein FL Lewis
hmsiatant
OlU:lG