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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