Hon. JamesE. Kilday, Director Opinion No. O-2519

Motor Transportation Division Re: Validity of lease conRailroad Commission of Texas tract between Oklahoma Austin, Texas Transportation Companyand Dixie Motor Coach CorporaDearSir: tion.

In your letter of July 

### 3, 1940, you advise that the OklahomaTransportation Companyoperates passenger buses from OklahomaCity to Ardmore, Oklahoma, and return, andthat Dixie Motor Coach Corporation operates passenger buses from Dallas, Texas to Arcbnore, Oklahoma and return. Both companies are operaE ing under valid certi&cates of public convenience and necessity issued by the respective regulatory bodies of the states inwhich they operate as well as under certificates duly issued by the Interstate CommrceCommission. The two companies have ajoint terminal in Ardmore, where they meet, exchange passengers, andthen return over their respective routes. There

are manypassengers traveling these routes from OklahomaCity to Dallas andvice versa, and they desire through passage without 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 provisions whenthe Dixie Motor Coach Corporation bus arrives in Ardmorewith passengers destined for points between Ardmore andOklahomaCity the Dixie bus is thereupon automatically leased to the OklahomaTransportation Companyandthe ,bus continues onto OklahomaCity over the route served by Oklahoma Transportation Company. Likewise whenthe OklahomaTransportation Companybus arrives in Ardmorewith passengers destined for points between Ardmore andDallas the OklahomaTransportation Companybus is thereupon automatically leased to the Dixie Motor Coach Corporation end continues on to Dallas over the route served byDixie Motor Coach Corporation. Each bus before commencingthe journey over the route served by the other companywill have the bus plates changed to correspond with the plates used by the companyover these routes the bus is traveling, that is, the bus will carry the plates of the lessee company issued for such particular bus in accordance with law. Each bus will be insured against public liability by the lessee end the lessee companywill furnish its owndriver to operate the bus thus leased from the other company. The lessee companywill.-

Hon. JamesE. 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 expense for its ownroute, andeach. companywhile 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 mus Ebe done by lessee, but if the cost is less than twenty-five dollars the owner of the bus meets the expense or makesthe repair, it being the obligation of the owner to keep the bus in good repair except as to major accident. Neither party surrenders any interest in its owncertificate nor acquires any interest in the certificate of the other. Sofar as the submitted instrument shows

a complete lease is madeandwemust assumethat such contract is bona fide.

Article 911a, Vernon’s Civil Statutes,. regulates the operation of motor buses in Texas. Nothing therein attempts to require amotor bus carrier to ownall of the buses which it mayoperate 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 whomany such vehicle maybe acquired or leased. If the lease contract in ‘question represents the real agreement of the parties andis carried out according to its terms and spirit, it is not violative of the Texas Motor Bus Act.

Referring to your second question wewould 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 unquestionably and in plain language cover these vehicles.

APPROVED

JUL15, 1940 /s/ Grover Sellers FIRSTASSISTAET ATTORNEY

GENERAL

APPROVED:

OPINIONCOMMITTEE BY: BWB,CHAIRMAN

GRL:AMM:wb Yours very truly ATTORNEY

GENERAL

OFTEXAS By/s/ Glenn R. Lewis Glenn R. Lewis, Assistant