Untitled Texas Attorney General Opinion ( 1942 )

Gerald C. Mann
ATX-GRNEY GS.CIvERAI.
Hon. James E. Eilday, Opinion No. O-4429
Director Re: Whether the described motor
Motor Transportation carrier operations are within House
Mvision Bill No. 25p Chapter 290, Acts of
Railroad Commission the 47th Legislature, page 463..
of Texas
Austin, Texas
Dear Sir:
Your request letter of February 12, 1942, reads as
follows:
"1. Wholesale Grocery Company 'A' has its place of
business in Laredo Texas. It buys a particular commod-
ity from distributgr 'B' of this commodity in Houston,
Texas. This commodity is always sold at a fixed price
f.o.b. destination which in this case is Laredo Texas.
Wholesale Company IAl sends its own private trucks of
which it is the bona fide owner to Houston and trans-
ports the commodity which it has purchased to its whole-
sale house in Laredo. Subsequently distributor 'BP will
credit Wholesale Company 'A' with an amount equal to the
freight rate on the commodity transported from Houston to
Laredo.
"2. Oil Company 'A' at Houston, Texas.,will enter
into a written contract with a second party hereinafter
called 'Bl whereby *Bt agrees to distribute the petroleum
products of oil company 'A' in a limited territory. 'B'
is the bona fide owner of the motor vehicle used for dis-
tribution. Oil Company 'A' pays 'Bl a commission or
fixed price for making the distribution.
"Based upon the foregoing facts please give us your
opinion on the following:
"(1) In No. 1 above, is Wholesale Company 'A' oper-
ating for hire, and if so, is it exempted from regulation
and/or prosecution by this Commission because of the terms
and provisions of House Bill No. 25, Acts of the 47th Leg-
islature, 1941, which amends Section 1 of Article qllb,
which is commonly known as the Private Carrier Act?
Hon. James E. Kilday~,page 2 (O-4429)
"(2) In No. 1 above, is distributor IBt guilty of
violating the,Motor Carrier Act in the way of aiding and
abetting, or is it exempt because of House Bill No. 25,
supra.
"(3) In No. 2 above, is Oil Company 'A' conducting
a for hire motor vehicle operation in violation of the
Motor Carrier Law of Texas or is such operation exempted
by House Bill No. 25, supra?
“(4) In No. 2 above, is 'Bl guilty of violating the
Motor Carrier Law of Texas, or~is it exempted by House
Bill 25, supra?
The trucks used by Wholesale Grocery Company llAwas
described in your first hypothetical fact situation, are, in
our opinion, within the definition of a contract carrier con-
tained in the motor carrier law and are subject to the provi-
sions of Article ollb, Vernon's Annotated Civil Statutes under
the case of New Way Lumber Company vs. Smith, 96 S.W.(2dg 282,
by the Supreme Court of Texas. In this case the,Supreme Court
said:
"Under the facts stated here the carrying of lumber
owned by the company in its own trucks does not exempt
it from the provisions of this law. This is not a case
where the trucks are operated exclusively within the in-
corporated limits of a town or city; nor is it a case
where the price of the goods delivered is the same as
those undelivered. On the contrary, it is clearly a case
where the price of the lumber includes a direct charge
for the delivery thereof. The carrying charge is based
directly on the distance traveled and the weight of the
truck. Since the company receives compensation for the
delivery of the lumber, it clearly appears that the trucks
used come under the definition of a 'contract carrier,'
, and are subject to the provisions of Article 911b."
House Bill No. 2!59Acts of the 47th Legislature, pro-
vides that the terms "motor carrierv and "contract carrieP as
defined in the original motor carrier act, should not include
the following:
"(a) Any person having a regular, separate, fixed,
and established place of business, other than a transpor-
tation business, where goods, wares9 and merchandise are
kept in stock and are primarily and regularly bought from
the public or sold to the public or manufactured or pro-
cessed by such person in the ordinary course of the mer-
cantile, manufacturing, or processing business, and who,
Han, James E. Kildays page 3 (O-4429)
merely incidental to the operation of such business,
transports over the highways of this State such goods
of which such person is the bona fide owner by means of a
motor vehicle of which such person is the bona fide owner;"
For Wholesale Company "A9w and the trucks it uses in
the manner described by you, to be within the above exception
and therefore without the definition of a contract carrier and
the New Way Lumber Company case, supra, it must, among other
things, keep merchandise in stock wprimarily,and regularly
bought from the public or sold to the public," From your state-
ment it would appear that Wholesale Grocery Company "A" does
not meet this condition. A wholesale grocery company does not
keep merchandise in stock primarily and regularly bought from
the public nor does it keep merchandise in stock primarily and
regularly sold to the public. It is common knowledge that
wholesale grocery companies sell to retailers and,not to the
public.
In consequence, House Bill No. 25 does not exempt
wholesale grocery company I8
A I1from the operation of the .motor
carrier law as decided by the Supreme Court in the New Way Lum-
ber Company case.
In answer to your second question, it is our opinion
that the Distributor is not exempt under House Bill No. 25.
The following provisions of House Bill No. 25 are ap-
plicable to the hypothetical fact situation secondly described
in your letter:
l'(c) Where merely incidental to a regular, separate,
fixed9 and established business, other than a transporta-
tion business, the transportation of employees, petroleum
products, and incidental supplies used or sold in connec-
tion with the wholesale or retail sale of such petroleum
products from the refinery or place of production or place
of storage to the place of storage or place of sale and
distribution to the ultimate consumers in a motor vehicle
owned and used exclusi````y,;by-,the
.bona!tfide,';consignee
or
agent or such single &rketer or refiner;'a~s'wellas where
merely incidental to a regular, separate, fixed and estab-
lished business, other than a transportation business,
the transportation of petroleum, employees, material, sup-
plies, and equipment for use in the departments of the
petroleum business by the bona fide owner thereof in a
vehicle of which he~is the bona fide owner; bona fide con-
signee or agent as used herein being hereby defined and
construed, for the purpose of this Act, to mean a person
under contract with a single principal to distribute
Hon. James E. Kilday, page 4 (O-4429)
petroleum products in a limited territory and only for
such single principal;"
.
Assuming, about which you do not state, that Distri-
butor nBlcis under contract with Oil Company "A" only, all
of the conditions prescribed in this Section of House Bill No.
25 exist in reference to Oil Company *'A"and Distributor "Bl10
Your third and fourth questions are therefore answered in the
affirmative: that is, that Oil Company "A" and Distributor
"B*tare exempt under-House Bill No. 25.
Yours very truly
ATTORNEY GENERAL OF TEXAS
By /s/ Zollie C. Steakley
Zollie C. Steakley, Assistant
APPROVED FEB 24, 1942
/s/ Grover Sellers
FIRST ASSISTANT ATTORNEY GENERAL
APPROVED: C&INIO&~NC;TTEE
BY: ,
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