                              January   14,   1975


The Honorable Martin D. Eichelberger
Criminal District Attorney
Waco,   Texas                                        Opinion No.   H-   493

                                                     Re:    Applicability   of Motor
                                                            Carrier Act, V. T. C. S.,
                                                            art. 911b to livestock
                                                            commission     companies
                                                            which furnish transporta-
Dear Mr.   Eichelberge   I:                                 tion services.

    You ask whether livestock    commission   companies  violate the Motor
Carrier Act, V. T. C. S., article 911b. when, without a permit from the
Railroad Commission,     they furnish transportation  service to their customers.

     Livestock  commission     companies are formed to act as sales agents for
ranchers and other owners of livestock.         A prospective   seller will enter into
a consignment     contract with a commission     company under the terms of which
the company will sell his livestock at an auction,       extract its commission
from the proceeds,      and then pay the remainder     to the seller.    Apparently,
some companies      own commercial      vehicles which they use to pick up the
livestock consigned to them for sale; an additional fee is charged the seller
for this service.     Companies which offer transportation        services  will also
agree to deliver any livestock     sold at: one of their auctions to the purchaser
at an additional cost.     Your quest-ion is whether livestock     commission    com-
panies may furnish such services       without first obtaicing a contract carrier
permit from the Railroad Commission.

    Insofar as it is applicable,  the Motor Carrier     Act req-sires any person or
company interding tc operate as a “contract      carrier”   first to obtain a permit
from the Railroad Commission.        V. T. C. S. art. 911b. 5 3. A “contract   carrier”
is defined in the Act as anyone who uses a motor vehicle to transport property
for compensation    or hire over any highway in the State other than as a common
carrier.   V. T, G.S. art. 9i,lb, $1 (h)- Private motor vehicle owners are
expressly  excluded from the definition of “contract      carrier”   contained in the




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The Honorable    Martin   D. Eichelberger.     page 2   (H-493)




Act and need not obtain a permit from the Railroad Commission.      V. T. C. S.
art. 911b § lb. A private motor vehicie owner is defined in section la(b) of
the Act as:

             Any person transporting      farm implements,      livestock,
        livestock feedstuffs,    dairy products,    horticultural   products?
        &al    products,   agricultural   products,   timber in its
        natural state, or wool and mohair of which such person
        is the bona fide owner on a vehicle of which he is the bona
        fide owner to and from the area of production and to and
        from the market or place of storage thereof: provided,
        however,    if such person (other than a transportation         com-
        pany) has in his possession      under a bona fide consignment
        contract livestock,    wool, mohair,     milk and cream,      fresh
        fruits and vegetables,      or timber in its natural state under
        contract,   as an incident to a separate,     fixed, and established
        business   conducted by him the said possession         shall be
        deemed ownership under this Act;

Under this definition,  then, a company which transports    livestock it owns
in its own vehicles from the area of production to the market is a private
motor vehicle owner and is not required to obtain a contract carrier permit
from the Railroad Commission,      For the purposes of this definition one who
as an incident to a separate business is in possession   of livestock which he
is transporting  pursuant to a bona fide consignment   contract is considered
to be the owner of the livestock.

     When the livestock   companies about which you have asked pick up
livestock from a seller in order to t,ransport it to an auction site, they
clearly fit the definition of private motor vehicle carrier   set out in the Act.
They use their own vehicles,     and they are operating pursuant to consignment
contracts which arise out of their sales agency business.      Accordingly,   the
companies may make these pick ups and charge for them wi.thout first obtaining
a contract carrier permit from the Railroad Commission.

     Furthermore,     it is cur opinion that livestock   commission    companies
continue to act as pPiv.ate motor vehicle owners under the Act when they
l~ater deliver livestock to a purchaser     even though by that time the livestock
has been sold and they no longer technically        own the livestock.   A case almost




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The Honorable   Martin   D. Eichelberger,        page 3   (H-493)




directly in point is Whitman v. State, 308 S. W. 2d 884 (Tex. Grim, App. 1958),
In Whitman cattle had been sold to a purchaser       at an auction; as part of the
sales agreement    but for an additional consideration,    the seller agreed to
deliver the cattle to the purchaser,      The cattle were transported   in trucks
belonging to the seller.    While in route, one of the trucks was stopped by
a Railroad Commission      inspector who learned that it was being operated
without a contract carrier permit.       The Court of Criminal Appeals held
that the seller was operat,ing as a private motor vehicle owner and d!~d not
need a contract carrier    perm~it.   It did not matter that the sale had been
completed before the cattle were hauled because delivery of the cattle
was part of the agreement     pursuant to which ownership changed hands.
Whitman indicates that under the Motor Carrier Act one who sells live-
stock and for an additional consideration     agrees to deliver the livestock
to the purchaser   retains his status as a private motor vehicle owner even
though he no longer owns the livestock,       Thus livestock commission     com-
panies may deliver the cattie they sell in their own vehicles without ob-
taining contract arrier    permits from the Railroad Commission;        under the
Motor Carrier    Act they will be treated as private motor vehicle owners.

                           SUMMARY

            Under the Motor Carrier Act a company which transports
       livestock it owns - - or i,s in possession   of pursuant to a
       bona fide consignment    con.tract - - in its own vehicle from
       the area of productTon to the market is considered       a private
       motor vehicle owner and nerd not obtain a contract carrier
       permit from the Railroad Commission.          The status of
       private motor vehic!.e owner is retained when the livestock
       is later del,ivered to a purchaser   as part of a sales agreement.

                                            ry truly yours,
                                      A



                                           OHN L. HILL
                                          Attorney General      of Texas




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The Honorable   Martin   D. Eichelberger,      page 4   (H-493)




APPROVED:




DAVID   M.   KENDALL,     First   Assistant




C. ROBERT HEATH,         Chairman
Opinion Committee




                                         p.   2230
