Hon. James E. Kilday, Director Opinion No. O-2519 

Motor Transportation Division Re: Validity of lease conRailroad Commission of Texas tract between Oklahoma 

Austin, Texas Transportation Company and 

Dixie Motor Coach CorporaDear 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 E ing 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 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 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 continues on to Oklahoma City over the route served by Oklahoma 

Transportation Company. Likewise when the Oklahoma Transportation Company bus arrives in Ardmore with passengers destined 

for points between Ardmore and Dallas the Oklahoma Transportation 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 company will have the bus plates changed to correspond with the 

plates used by the company over 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 company will furnish its own driver to operate the 

bus thus leased from the other company. The lessee company will 
.- 

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 expense 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 mus E 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 obligation 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 certificate 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 unquestionably and in plain language cover these vehicles. 

APPROVED JUL 15, 1940 

/s/ Grover Sellers 

FIRST ASSISTAET 

ATTORNEY GENERAL 

APPROVED: OPINION COMMITTEE 

BY: BWB, CHAIRMAN 

GRL:AMM:wb 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

By /s/ Glenn R. Lewis 

Glenn R. Lewis, Assistant