. . 

THEA~~OICNEY GENERAL 

OF TEAXAS 

Gerald C. Mann 

ATrORNEY GWNs!xaAx. 

Hon. James E. Kilday Opinion No. O-1310 

Director, Motor Trans- Re: Whether Railroad Commission may 

portation Division issue certificate of convenience and 

Railroad Commission of necessity to operate as a common carTexas rier motor carrier to a subsidiary of 

Austin, Texas Missouri Pacific Railroad to operate 

parallel with and supplementary to the 

railroad, serving no new points or 

lines, without alleging and showing 

inadequacy of existing facilities and 

need of additional transportation 

Dear Sir: facilities. 

We received your letter of August 22, 1939, wherein 

you outline to us the following facts: 

Missouri Pacific Freight Transport Company is a Texas 

Corporation, the capital stock of which is wholly owned by the 

Trustee in Bankruptcy for the Missouri Pacific Lines. It has 

been recognized by the Railroad Commission of Texas as an express company and has on file with the Commission tariffs respecting its service. The Missouri Pacific Lines operate a 

line of railroad serving, among others, the towns of Taylor, 

Thrall, Thorndale, Rockdale, Milano, Gause, Hearne, Franklin, 

New F&den, Easterly, Marquez, Jewett, Buffalo, Oakwood, Palestine, Neches, Jacksonville, Henderson, Overton, Troup, Arp, 

Tyler, Lindale, Mineola, Kilgore ,and Longview. These towns 

are situated on United States Highways 79 and 69 and State 

Highways 43, 379 110, 64, 135 and 26. Missouri Pacific Freight 

Transport Company, as a rail transport company, already extends 

service to each of these towns to , from, and between points on 

the rail lines of the Missouri Pacific Lines, and principally 

Houston, Dallas, Fort Worth, San Antonio, Austin, Longview, 

Memphis, Tennessee and St. Louis, Missouri. As a rail transport company, Missouri Pacific Freight Transport Company already competes with the highway truck lines serving the named 

points to, from, and between the various points on the Missouri 

Pacific Lines, including the towns last named. 

Missouri Pacific Freight Transport Company has filed 

an application with the Railroad Commission of Texas for a 

certificate of convenience and necessity, authorizing it to 

serve the towns first listed by using the highways mentioned. 

As stated before, it already serves those towns as a rail transport company. 
. . 

Hon. James E. Kilday, page 2 (O-1310) 

It is stated in the application that the extent and 

design thereof is to improve the service of the applicant to, 

from and between the towns it serves by using highway trucks 

in coordination with and auxiliary to the rail service of it 

and its parent. No new service will otherwise be inaugurated. 

Ko towns except towns already served by it as a rail +remqport company will be served. No towns off the line of the railroad will be served. The further purpose of the application is 

stated to be the rendition of highway and joint rail and highway service in addition to the service by rail exclusively 

which the transport'company now renders and proposes to continue. 

The application is to operate trucks over the highways only from 

Taylor to Longview via Milan0 Junction and Palestine; from 

Troup to Mineola via Tyler and from Henderson to Troup. 

You further advise that the application contains allegations that the certificate is sought for the purpose of 

making possible a larger and more flexible service from points 

on the routes over which the actual truck operation will be 

conducted to all other points and routes served by the Missouri 

Pacific Rail System and its rail connections and to expedite 

the handling of L.C.L. shipments between all points located on 

the Missouri Pacific Rail System and the points located on 

the routes over which the actual truck operations will be 

performed; that the principal shipping centers such as Dallas, 

Fort Worth, Waco, Austin, San Antonio, Corpus Christ1 Houston, 

Beaumont and Galveston will originate the principal t&nnage 

which will be expedited so far as movement by the applicant 

is concerned. That the plan of operation is to move that tonnage by rail to a junction point on the route over which the 

trucks will actually operate, thereby relieving the highways 

of their burdens and affording a facility for transportation 

which will have for its general purpose the transportation of 

freight the longest by rail and the shortest distance by truck 

necessary to render adequate and speedy service between all 

points in Texas on the one hand and points on the route above 

described on which trucks will actually be operated on the 

other hand. The application further states that from some of 

the principal distributing points to the points located on the 

route over which the truck operation proposed will be conducted the common carrier truck lines operate direct over night 

next day delivery service but that in some instances the services are effected by inter-change between two or more common 

carrier truck lines and that such lines do not have adequate 

terminal and freight depot facilities for receiving and discharging freight; and further that the movement of freight 

from points between Taylor and Milan0 on the one hand and 

points between Hearne and Tyler and Hearne and Longview on the 

other hand by the present common carrier truck lines .is a 
Han, James E, Kilday, page 3 (O-1310) 

circuitous, indirect, irregular and independable servi.ce now 

being performed by the common carrier motor carrier truck 

lines and that the proposed service will operate a dl.rect oneline haul between all of such points. 

The application contains allegations to the effect 

that transportation of property for hire by existing common 

carrier truck lines from points between Houston and Brownsville; 

from points between San Antonio and Laredo; from poi.nts between San Antonio and Del Rio, fnvolves t.wo or three interchanges and that the service is slow, indirect, irregular and 

not dependable; that the proposed operation will set up a 

service wherein the shipments will move upon the billing of 

the Missouri Pacific Freight Transport Company by rail to some 

junction point on the truck route between Taylor and Longview 

and will then be transported by truck to consignee at final 

destination on said truck route without dfvfded responsibilityO 

Said applicatfon contains allegations to the effect 

that the only way the existing common carrier truck lines can 

render the service from such great shipping centers as Dallas, 

Fort Worth, Austin, Waco, San Antonio, Corpus Christi, Houston, 

Beaumont and Galveston and from points between Houston and 

Brownsville; San Antonio and Laredo; San Antonio and Corpus; 

San Antonio and Del Rio is by operating trucks over great distances and interchanging such freight, which said operation of 

trucks is an unnecessary use of the highways resulting in 

interference wft~h the use of such highways by the public generally and that for that reason the said existing common carrier truck service is inadequate and that there exists a public need and requirement by the public for a transportation 

facility and service whfch will. afford to the shippers and 

receivers of freight a service by rail over the greater drstances with expedited delivery by truck from the rail cars at 

some pofnt along the route over which trucks are proposed to 

be operated; that the proposed operation will provi,de for the 

public such a system of transportation as will permit them to 

procure adequate, expeditious service with a mir.imum arno-&?t 

of use of their highways and will afford the great shfpping 

centers of this state an opportunity and a plan of common earriage service which will be conducted by a carrier without any 

divided responsibilfty with any other carrier and will satisfy 

the public convenience in the use of the highways in that it 

wfll allow expeditious service to be rendered in the movement 

of L.C,L, shipments to all of the points located on the route 

between Taylor and Longview from any point in the State of 

Texas at such times and in such manner as to meet the demand 

of the public for rapid and expeditious movement of such L.COLO 

shfpments from any and all points in Texas to all of ,the 

points on said route without the use of any of the highly 
. . 

Hon. James E. Kilday, page 4 (o-1310) 

traveled or highly congested highways of this state. That 

the existing common carrier truck lines in rendering the service between all points in the State of Texas, on the one hand, 

and the points located on the route over which applicant proposes to operate trucks are now operating many trucks over 

highly traveled highways in this state and have no facilities 

whereby they can move such shipments between the points involved without operating their large line haul trucks over 

such principal highways in such manner as to unreasonably 

interfere with theuse of the highways by the public and in 

that respect such facilities and services of the existing common 

carrier truck lines are wholly inadequate to meet the requirements and the public convenience of the people of this state 

in the use of their highways and in the transportation of their 

property between such points. 

The application contains allegations to show the 

kind and character of facilities devoted to the public service 

and use by all of the Missouri Pacific rail lines on the one 

hand and the facilities of the I. & G. N. line, a part of the 

Missouri Pacific rail system located on the route over which 

the applicant proposes to actually operate trucks. Further, 

the application contains allegations to show that said facilities are not being used to their capacity and that by the use 

of such facilities the public convenience requiring that the 

highly traveled and principal highways of this state be relieved of the trucks for hire will be met and that the pro- ' 

posed operation will be a convenience to the public in that by 

the use of such facilities already devoted to the rendition 

of a common carrier service will be used in such manner as to 

afford for the public a much improved service whereby special 

handling of L.C.L. shipments between points located on the 

route involved in the application and between those points 

and all other points in Texas on the Missouri Pacific rail 

lines and those to be reached by their connections. 

You submit to us a large number of questions and 

advise that the application is on file in your office subject 

to our inspection. However, we have not inspected the appli - 

cation, believing that our answers to your specific questions 

and the discussions which we shall make in connection with 

such questions will be sufficient to meet your needs. Slightly rearranged, your questions are substantially as follows: 

1. Is the allegation that the existing common carrier truck lines do not have facilities and cannot render a 

service without operating trucks over the principal highways of 

this State in the transportation of property from points in 

this State to points along the route on which trucks are 
Hon. James E. Kilday, page 5 (O-1310) 

proposed to be operated an allegation of inadequacy of existing common carrier truck service? 

2. Is the allegation to the effect that the proposed 

operation will relieve the highways of the transportation of 

property over said highways by trucks an allegation which relates to the question of public convenience and necessity7 

3. Does the allegation mentioned in question No. 2 

in any sense meet the requirements of Section 10 of Article 

911b, Revised Civil Statutes, with respect to the form and sufficiency of the application? 

4. If said application contains the foregoing allegations and none other with respect to public convenience and 

necessity and proof is submitted to support such allegations 

would the Railroad Commission be justified in making a finding 

that public convenience and necessity requires such operation? 

5. Will proof that the proposed operation will afford 

adequ+te service to the public with the minimum use of the highways when the existing common carrier truck lines between many 

of the principal shipping points in Texas and the points locatedjon the route are already rendering reasonably adequate 

service satisfy the requirement that the applicant prove that 

public convenience and necessity requires such operation? 

6. Would a showing to the effect that the proposed 

truck operation will afford a facility for transportation of 

property which will result fin said property moving the longest 

distance by rail and the shortest distance by truck to provide adequate and economical service to the public; that the 

proposed operation will result in the use of freight depots 

and other facilities in small towns to such an extent as to 

make possible their continued maintenance and continued employment of agents at such small places to serve the public; and, 

that the proposed operation will provide a transportation facility which if used by the public will greatly relieve the 

most highly traveled highways of the State of a portion of the 

burden of traffic they are now carrying constitute proof that 

public convenience and necessity requires such operation? 

7. You call our attention to the fact that in hearings upon applications filed by motor carriers engaged only in 

interstate commerce the Railroad Commission is without authority 

torequire showings of public convenience and necessity and inquire if there is any parallel between such cases as that and 

the one at hand. 
Hon. James E. Kilday, page 6 (O-1310) 

8. Should the Railroad Commission consider proof of 

the improvement of the applicants and the Missouri Pacific rail 

line service in the foregoing manner as proof that public necessity and convenience requires such operation? 

9. Can the Commission consider as proof of convenience 

and necessity the fact that Missouri Pacific Freight Transport 

Company is already serving the towns involved, service being as 

a rail transport company moving many millions of pounds of 

freight to, from and between the towns involved? 

Ey Article qllb, Revised Civil Statutes, motor carriers are placed under the regulation of the Railroad Commission 

of Texas. In Section 3 thereof it is provided that "no motor 

carrier shall after'this act goes into effect operate as a common carrier without first having obtained from the Commission 

under the provisions of this act a certificate of public convenience and necessity pursuant to a finding to the effect that 

the public convenience and necessity require such operation." 

Section 10 of said Article prescribes the contents 

which an application for a certificate must necessarily contain. 

The first paragraph of subdivision 4 thereof reads as follows: 

"It shall be accompanied by a plat or map showing the 

route or routes over which the applicant desires to operate, on which plat or map shall be delineated the line or 

lines of any existing transportation company or companies 

serving such territory, and shall point out the inadequacy of existing transportation facilities or service, 

and shall specify wherein additional facilities or service are required and would be secured by the granting of 

said application.V1 

The first paragraph in Section 9 of said Article 9llb 

reads as follows: 

"The Commission shall ascertain and determine if a 

particular highway or highways designated in an application for a certificate of public convenience and necessity are of such type of construction or in such state of 

repair, or subject to such use as to permit of the use 

sought to be made by the applicant, without unreasonable 

," interference with the use of such highways by the general 

public for highway purposes. And if the Commission shall 

determine, after hearing, that the service rendered by 

existing transportation facilities or agencies is reasonably adequate, or that public convenience would not be 

promoted by granting of said application, and the operation of motor vehicles on the public highways therein 
. 

Hon. James E. Kilday, page 7 (O-1310) 

designated, or that such highway or highways are not in 

such state of repair, or are already subject to such use 

as would not permit of the use sought to be made by the 

applicant without unreasonable interference with the use 

of such highways by the general public for highway purposes, then in either or any of such events said appl,ication may be denied and said certificate refused, otherwise 

the application shall be granted and the certificate issued 

upon such terms and conditions as said Commission may impose and subject to such rules and regulations as it has 

or may thereafter prescrfbe." 

From a reading of the Motor Carrier Act as a whole 

and in particular the parts which we have quoted above, it 

becomes clearly apparent tha,t considerations of highway condi- . 

tions and of public convenience and necessity form two distinct and separate issues to be determined upon an application 

for a certificate to operate as a common carrier motor carrier. 

In Section 9 we find that the Railroad Commission may deny a 

certificate if it be found that the public convenience and necessity would not be served, although the particular highway 

to be traversed should be entirely sufficient to bear the 

added traffic. On the other hand the Commission is authorized 

to deny such a certificate where the highway will not stand the 

added traffic although public convenience and necessity would be 

promoted by the granting of the certificate. By this we do 

not mean to say that highway conditions might not in some instances enter into the question of public convenience and necessity. We a.re not called upon to determine that question in 

this case. We do mean to say, however, that a new common carrier motor carrier service cannot be inaugurated upon allegations and proof showing nothing more than that such service 

would be beneficial to the highways and to the traveling public upon the highways, with no showing of Inadequacy of prior 

existing facilities and the need of other facilities to serve 

the territory affected. The motor carrier act repeatedly requires the showing of public convenience and necessity as a 

requisite to the granting of a certificate to operate as such 

a carrier and in Section 10 thereof it is expressly provided 

that no application shall be ccnsidered by theCommission unless it be in writing and set forth among other things the inadequacy of existing common carrier services and shall specify 

wherein additional facilities are required and would be secured 

by the granting of the application. The case of Railroad Commission vs. Red Arrow Freight Lines, 96 S.V.(2d) 735, before 

the Austin Court of Civil Appeals is conclusive of this point, 

The facts involved in that case were briefly these: H. H. 

Lawler became the owner by purchase of two certificates of 

convenience and necessity, one to operate from Houston to San 
. 

Hon. James E. Kilday, page 8 (O-1310) 

Antonio and intermediate points and the other from San Antonio 

to the Rio Grande Valley via Edinburg and serving intermediate 

points. He filed an application before the Railroad Commission 

for a so-called re-routing to permit him to go directly from 

Houston to Edinburg without serving intermediate points on that 

route. His theory was that he could already haul freight from 

Houston to Edinburg and points beyond and vice versa going by 

San Antonio and that no new service was therefore involved. It 

appeared, however, that the new route was about 120 miles 

shorter than the one by way of San Antonio and that his service 

between Houston and Edinburg would be shorten& by thirty hours. 

Over the protest of competing carriers the Railroad Commission 

limited the hearing and its findings to the adequacy of the 

highways over which the re-routing was sought. The trial court 

set aside the order of the Commission granting such re-routing 

and an appeal was taken. The Court of Civil Appeals affirmed 

the action of the trial court in an opinion written by Chief 

Justice McClendon and from which we quote as follows: 

"The two certificates were granted at different times 

to different Individuals. They were granted to serve 

separate and distinct transportation requirements: The 

one served the territory from Houston to San Antonio and 

intermediate points; the other, that from San Antonio to 

the Valley and intermediate points. In considering the 

question of convenience and necessity as to each certificate, only the need-s, requirements, etc., of the two termini and intermediate points were involved. Neither certificate had any relation to the other. The fact that common 

ownership was finally united in Iawler in no way modified 

their effect. They were manifestly not designed originally, nor through common ownership thereafter, to provide 

a direct through service between Houston and Valley points. 

The order in suit manifestly conferred upon Lawler a 

right to render a service which was substantially different from that authorized in his two certificates, enabling 

him to compete directly with appellees in a manner in 

which he could not compete with them before, if in fact he 

could effectively compete with them at all before. It is 

elementary that advantage in service is one of the most 

important factors in competition, and that time is a prime 

element in transportation service. We are clear in the 

view that the application could not be granted as a mere 

rerouting under the two certificates, but that it. required 

a showing and commission finding of convenience and necessity." 

The applied for motor carrier operation would offer 

many elements of competition to carriers already serving the 
t 

Hon. James E. Kilday, page 9 (o-1310) 

territory in question which the railroad does not offer. Trucks 

can be operated upon schedules which it would be impossible as 

a practical matter for a railroad to duplicate and in particular with reference to small shipments. Motor carriers can render certain services which a railroad,cannot, just as on the 

other hand the railroad enjoys certain advantages over motor 

trucks with reference to certain kinds of shipments. That the 

motor carrier service apolied for would be a different one from 

the railroad service rendered by the Missouri Pacific is so obvious we think as to neeed no support in argument. The application in question is for a new service and it must comply with 

the statute is to showing inadequacy of present facilities and 

the need of the new service. We will now answer the above questions with such additional discussion under each of them as we 

deem expedient. 

Our answer to your first question is a negative one. 

The question as to whether existing truck lines can render service without operating over certain principal highways of the 

State in the transportation of property from remote points in 

the State to points along the route on which trucks are proposed 

to be operated is not one which goes to the adequacy or inadequacy of existing services but simply bears upon the matter of 

congestion of such highways. Such existing lines might very 

well operate over such principal highways and be rendering a 

perfectly satisfactory service. 

In the light that we think your second question is 

asked we also answer it in the negative. In this connection, 

however, we would again observe that we do not here express an 

opinion as to whether or not under some circumstances the fact 

that a proposed operation might relieve certain highways of an 

over-burdensome traffic would be'considered in connection with 

other evidence relating to public convenience and necessity and 

as evidence on that issue. 

For reasons given above, we also answer your third 

question in the negative. 

Your fourth question is given a like answer. 

We are forced also to the same answer to the fifth 

question above. Under the direct holding of the court in the 

Red Arrow case, supra, a certificate cannot be granted alone 

upon proof that the highways will stand the burden where existing carriers are rendering satisfactory service and no need 

for such added operation is shown. The same answer follows to 

the sixth question. 
Hon. James E. Kilday, page 10 (O-1310) 

. 

The reason that the Railroad Commission hears no evidence upon the issue of convenience and necessity upon applications for certificates filed by carriers engaged in interstate 

commerce only is that Congress has given to the Interstate Commerce Commission the exclusive power and authority to determine 

that issue as to such interstate carriers. Such, however, is 

not true in the case submitted to us and no analogy is therefore presented. Your seventh question, therefore, calls for a 

negative 

not take 

dered by 

that the 

no proof 

ing such - _ 

answer. 

Your eighth question draws a similar answer. It does 

into consideration the character of service being renother carriers to the territory in question. The fact 

Missouri Pacific railroad service can be improved is 

that the services being rendered by the carriers servterritory are not>reasonably adequate to meet the pub- -. . . . . . - 11~ convenience ana necessity. Tne nlntn question 1s also answered in the negative. If the fact that Missouri Pacific 

Freight Transport Company is rendering a rail service to the 

towns involved bears at all upon the issue of convenience and 

necessity it is evidence that the public convenience and necessity is already being served rather than that it is not being 

sufficiently served. 

The service applied for is a new one. The fact is 

not altered by the fact that the parent company already serves 

the same towns with a rail service. Proof that the traffic on 

certain heavily burdened highways would be lessened will not 

substitute entirely for proof that the public convenience and 

necessity requires the additional facility. Inadequacy of existing lines must be alleged and shown a.$ong with the need of 

additional service. We believe that the above will be sufficient to meet your needs with respect to this application, If 

not you will greatly oblige us by advising us to that effect 

and requesting hour further opinion. 

Yours very truly 

APPROVEB SEP 9, 1939 

/s/ Gerald C. Mann ATTORNEY GENEPAL OF TEXAS 

ATTORNEY GENERAL OF TEXAS By /s/ Glenn II. Lewis 

APPROVED: OPINION COMMITTEE Glenn R. Lewis, Assistant 

BY: BWB, CRAIRMAN 

GRL:N:wb