Hon. James E. Kilday, Director       Opinion No. O-2519
Motor Transportation  Division       Re: Validity   of lease con-
Railroad Commission of Texas         tract between Oklahoma
Austin, Texas                        Transportation  Company and
                                     Dixie Motor Coach Corpora-
Dear Sir:                            tion.
            In your letter   of July 3, 1940, you advise that the
Oklahoma Transportation     Company operates passenger buses from
Oklahoma City to Ardmore, Oklahoma, and return, and that Dixie
Motor Coach Corporation operates passenger buses from Dallas,
Texas to Arcbnore, Oklahoma and return.         Both companies are
opera Eing under valid certi&cates      of public convenience and
necessity   issued by the respective    regulatory    bodies of the
states in which they operate as well as under certificates          duly
issued by the Interstate     Commrce Commission.      The two companies
have a joint terminal in Ardmore, where they meet, exchange
passengers,    and then return over their respective       routes. There
are many passengers traveling     these routes from Oklahoma City
to Dallas and vice versa, and they desire through passage with-
out having to go through the inconvenience        of changing buses at
Ardmors, Oklahoma. The contract in question is proposed in en
effort   to meet the desires of these passengers.        Under its pro-
visions when the Dixie Motor Coach Corporation bus arrives in
Ardmore with passengers destined for points between Ardmore
and Oklahoma City the Dixie bus is thereupon automatically
leased to the Oklahoma Transportation      Company and the ,bus con-
tinues on to Oklahoma City over the route served by Oklahoma
Transportation    Company. Likewise when the Oklahoma Transporta-
tion Company bus arrives in Ardmore with passengers destined
for points between Ardmore and Dallas the Oklahoma Transporta-
tion Company bus is thereupon automatically        leased to the Dixie
Motor Coach Corporation end continues on to Dallas over the
route served by Dixie Motor Coach Corporation.          Each bus before
commencing the journey over the route served by the other com-
pany will have the bus plates changed to correspond with the
plates used by the company over these routes the bus is travel-
ing, that is, the bus will carry the plates of the lessee com-
pany issued for such particular      bus in accordance with law. Each
bus will be insured against public liability         by the lessee end
the lessee company will furnish its own driver to operate the
bus thus leased from the other company. The lessee company will
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Hon. James E. KildaY,   page 2   (O-2519)


receive all the revenue from the bus thus leased from the
other company, each party must pay all of the operating ex-
pense for its own route, and each. company while it is the
lessee of a bus assumes full responsibility     for such bus and
its operation as provided by law.    Compensation to the lessor
for such buses will be at a stipulated    rental charge per mile.
In case of accidents to a leased bus if the repair will cost
more than twenty-five   dollars  it musE be done by lessee,     but
if the cost is less than twenty-five    dollars the owner of the
bus meets the expense or makes the repair,     it being the obli-
gation of the owner to keep the bus in good repair except as
to major accident.    Neither party surrenders any interest       in
its own certificate   nor acquires any interest    in the certifi-
cate of the other.    So far as the submitted instrument shows
a complete lease is made and we must assume that such contract
is bona fide.
           Article 911a, Vernon’s Civil Statutes,. regulates the
operation of motor buses in Texas.     Nothing therein attempts
to require a motor bus carrier to own all of the buses which
it may operate under its certificate.     Nothing prevents the
operation of a leased vehicle,    nor is there any restriction    as
to the nature or residence   of the person, firm or corporation
from whom any such vehicle may be acquired or leased.        If the
lease contract in ‘question represents   the real agreement of
the parties and is carried out according to its terms and
spirit,  it is not violative   of the Texas Motor Bus Act.
            Referring to your second question we would advise
that it is unnecessary for the Railroad Commission to take any
action approving or disapproving      the contract and operations
thereunder.    However, the Railroad Commission should carefully
ascertain   that the public liability    insurance policies  unques-
tionably  and in plain language cover these vehicles.
APPROVED JUL 15, 1940                 Yours very truly
/s/ Grover Sellers                    ATTORNEY  GENERALOF TEXAS
FIRST ASSISTAET                       By /s/ Glenn R. Lewis
ATTORNEY GENERAL                      Glenn R. Lewis, Assistant

APPROVED:OPINIONCOMMITTEE
BY:     BWB, CHAIRMAN
GRL:AMM:wb
