Railroad Commission of Texae 

Gentlemen I 

Opinion No. O-3611' 

Rer Validlty'of "grand-father" 

Provision in-H. B. 351, 47th 

Leg., and aonstruotlon to be 

placed thereon, 

In your letter of recent date you direot attention to House'Bi.11 NO. 351, Forty-seventh Legislature, 

and advise us of the following facts: 

" . heretofore the Railroad Commission 

of Texis'ln the issuanoe of special oommodlty permite 

has not only not required pleadinga and proof that 

the pub110 oonvenisnoe and necessity required the 

operations aontemplated by said permits but haa not 

permitted such pleadings and proof;, and said permits-- 

some 1200 in number--are now outsijanditig without there 

ever having been any pleadings or proof that the 

putaio convenle~noe and neoeasity required the 

operations or that the existing faaillties were 

inadequate.' 

the holdera thereof authority to transport all of the 

Moreover, many of theas pennits give 

oommodlties named in the spooLa oommodity statute 

but In a great number of oases the holders have 

transported only a portion of the named oommodltiea.n 

The 'Act referred to provides for the issuanoe - 

of ltspeolalized motor oarrler'1 certificates for authority 

to conduct certain motor oarrler operations. Special oommodlty carriers, as they have been heretofore called, holding permits Issued under Secti& f3(d) of Article Qllb, 

Vernonla ¬ated CZvil Statutes, would be replaced by 

carriers holding speo,ializad motor carrier certlfloktes. 

The new statute contains'ths following provision? 

"j(b).. . W provided further that any pereon 

to'rhom a "Spsoial Commodity" permit for tha 

transportation of any or all-of eald oommoditiss had bean issued under the provFslons of 

Seotfon 6, paragraph (d), Artiole- 911b, Title 
- . 

Railroad Commission of Texas, Page 2, O-3611 

25, Revised Civil Statute8 of the State of 

Texas, 1925, as amended, if such "Special Commodity" permit shall have bean in force and 

effect on January 1, 1941, and if such person 

or lredcessor in interest may desire to continua in the businsss of a motor carrier of 

suchcommodity orcommodities shall file an application for a certificate of conveneince and 

necessity under the terms of this Act within 

sixty (60) days after the affective date hersof, it shall be the duty of the Commission to 

issue without further proof a certificate authorizing the operation as a "Specialized Motor 

Carrier" for the transportation of such commodity or commoditisa oovdred by the ttSpecial Commodity" permit held by the applicant, which 

%pecialized Motor Carrier" certificate shall 

bs issued to the applicant-and include all the 

rights and privilegsa granted under said "Special Commodity" permit." 

You request our opinion in response to twenty-one 

que.stiona, reading as follows: 

"First 

"In view of such decisions a8 

Cincinnati Tra&tion' Company vs. P.U.C. of Ohio, 

150 N. E. 308, 

Gollsn Gats Ferry Company vs Railroad Commission 

of California, 268 Pacific 355, 

State 8x rel Hanson vs. Brown, 31 S. W. (2) 208 

mo.1, 

In rs Stanley, 174 Atlantic 93 (Maine), and 

Gruber v8 Common wealth, 125 S.E. 427.(Virginie) 

is House Bill 351, wherein it directs, if it does 

direot, this Commission, without notice or hearing, 

to issue grandfather certificates of publio convenience and necssaity to holders of preexisting 

special commodity permits 'in force and effect 

on January 1, 1941', valid and constitutional 

insofar as such grandfather certificates might 

be granted with respect to commodities named 

in the preexisting special commodity permits 

but which commodities wers not being actually 

transported on January 1, 1941, and prior thereto? 

Second 
. . 

Railroad Commi8sion of Texas, Page 3 

"Or is said House Bill 351 valid and constitutional only, whenadministered end applied 

in such fashion as to bring about an issuance by 

this Commission of grandfather certificate8 to the 

holder8 of preexisting special commodity permit8 

with respeht ONLY to named commodities which such 

holders were actually transporting for hire on 

January 1, 19411 

Second-A 

"la it mandatory upon this Commission to 

hold hearings upon eaoh of the grandfather applications contemplated by H. B. 351 for the 

purpose 

"(a) of determining whether each special 

commodity permit was 'in force and effect on 

January 1; 1941' as to each commodity named 

therein'or should the Commiaaion,f~rom a mere 

study of its own record8 issue a grandfather 

certifioate to each applying special commodity 

permittee, where the Commisslon*a record8,ahow 

such an-outstanding permit,--writing the grandfather certifioate in suchfashion as to give the 

holder thereof authority to transport the very 

same commodities named in the special commodity 

permit whether SUGh special commodity permittee 

was actually transporting all of said commodities 

on January 1, 1941, or not? 

'l(b) Or is it mandatory upon this @ommission 

to set forhearing each of said grandfather epplications and on the basis of such hearing issue to 

such applicant a grandfather certificate limited, 

not to all of the commodities named inhis preexisting special commodity,permit, but only to the 

commodities named in said permkt and which were being 

actually transported by the permittee on January 1, 1941, 

and prior thereto,-- this, on the theory that such 

preexisting~permit was not in force and effect on 

January 1, 1941, as to named commodities not being 

actually transported on that date and prior thereto? 

Third 

"In view of the fact that House Bill 351 is an 

amendment to,,the existing Motor Carrier Law of Texas, 

should this Commission, in the application and adminis- 
. . 

Railroad Commission of Texas, Page 4, O-3611 

tration of the Motor Carrier Law as amended by House 

fill 35., take the position that said Rouse Bill351, 

insofar a8 itauthorized the grant of grandfather 

certifioetes covering a commodities named in the preexisting special commodity permits but which were not 

being actually transported for hire on January 1, 1941, 

and prior thereto, is unconstitutional as thus 

construed; and, for that reason, in view of the rule 

that the Comuiasion should go in the direction of 

constitutionality, if pOSSibl8, set for hearing all 

applications for grandfather certificates and grant 

such certificates only if and when there shell be 

pleading8 and proof of just which commodities named 

in the preexisting special commodity permits were 

being actually transported on January 1, 1941, and 

then, upon such pleadings and proof, reduce the grant 

of right8 in such grandfather certificates down to the 

right to transport only those COmmOd%tieS shown to have 

been actually transported on January 1, 1941, and 

prior thereto, --taking the position that such preexisting special commodity permlta were fin force and 

effect on January 1, 1941' only with respect to those 

commodities named therein which were actually being 

transported on January 1, 1941, end prior thereto, 

and that there had been an abandonment by the holders 

of said special commodity permits of the right to 

transport commodities named in their speoial commodity 

permits but whiah were not being aotually transported 

on January 1, 1941, end prior thereto? 

Fourth 

"Assuming that there are a large number of 

outstanding special commodity permits which, 

on their face, give the right to transport all 

or nearly all of the commodities named in the special 

commodity statute but under whioh there was a failure 

actually to transport some of such commodities on 

January 1, 1941, and prior thereto, has the right to 

transport said commodities not so actually transported 

been abandoned in such fashion as not to have been 'in 

force and effect on January 1, 1941,' insofar as 

commodities not actually transported on that date and 

prior thereto are ~concerned, notwithstanding the fact 

that the Commission never, et any time, took any 

statutory steps to cancel for abandonment said permits 

after notice and hearing insofar as the commodities 

not so actually transported are concerned. 

Fifth 

wAa8uming that we should reduce the grand- 
. . 

Railroad Commisstor,of Texas, Page 5, O-3611 

father rights down to the, right to %xnnspont 

commodities actually transported on January 1, 

1941, and prior thereto, then and in that event, 

in view of the wording of House Bill 351, doss 

this Commission have the power to give tiotices 

and hold hearings and make findings; and, thsreon, issue ,grandfather certlfic,ates covering only 

commodities actually tranepor~ted on January 1, 1941, 

and prior thereto,--conducting ‘sucb.hearings and 

giving such notioes making such fandings under the 

Motor Carrier Law of Texas as it stands as amended by 

House Bill 351 or doing so independently of House 

Bill 351P \ 

Sixth -- 

“Assuming, that House Bill 35& i&unconstitutional as to oommoditites note ~actu@llg being 

transported eon January 3, 1941, and prior thereto, 

even when ,.considered, in connection w,ith the pre- - 

existing provisions of the ,MQto.r.~ Carrier hot, does 

the Railroad Commission of Texas, under its rulemaking power, have authority,, independently of the 

unconstitutional protions of’Hotise Bill 351, to 

adopt a plan by general order. or’ rula of hearing the 

special commodity permittees and allowing them to 

prove the public convenience and necessity and 

inadequacy of existing facilities and, ‘upon such 

pleadings and proof, grant to them grandfather 

certificates givtng the authdrity to transport for 

hire such commodities as thcpubllc convenience and 

necessity requires to be transported and with respect 

to which the existing transportation fac.ilitFes are 

inadequate? 

Seventh 

“Assuming that House Bill 351 ,is invalid as 

to:~cotiodities not actually transported on January 

1941, and prior thereto, and assuming ,that we have 

no’power to val’idate outstanding special commodity 

permits in the method’ indicated bye the preceding 

question, then and in that event 

(a) is the remainder of House Bill 351 valid? 

1, 

(b) If valid, does the Railroad Commission of Texas 

have any alternative other than to require the holders 

of outstanding special ,commodity permits to come in 
. . 

Railroad Commission of Texas, Page 6, O-3611 

under such valid portions and prove the public 

convenience and ;lecessity and the inadequacy of 

existing facilities just as though they had never 

held any special commodity permits? 

(c) If said remainder of House Bill 351 

is invalid, is it mandatory upon the Railroad 

Commission of Texas to cancel out all outstanding 

special commodity permits? 

Eighth 1 

May a certificate of public convenience and 

necessity or a contract carrier permit or a 

special commodity permit be abandoned, in whole 

or inpart, with no operations thereunder, and still 

remain 'in force and efrectr even where the 

Railroad Commission of Texas fails, after notice and 

hearing, to cancel the same on the grounds of abandonment of service under the cancellation provisions 

of the Motor Carrier Act?, 

Ninth 

"In detail, just what steps should this 

Commission take under House Bill 351 in order to 

carry out and administer said bill in accordance 

with its intent and purpose? 

?Che passage of House Bill 351 was passed as 

a result of the decision of the Austin Court of 

Civil Appeals in The T and P Railway Cob vs. 

Railroad Commission of Texas(and Thomas G. Runter). 

Tenth 

"If the Supreme Court of Texas upholds the 

Austin Court of Civil Appeals in the Hunter Case, 

(a) will all of such special commodity permittees 

be in exactly the same position they were in prior 

to the passage of House Bill 351 if said grandfather 

clause of said Bill is invalid, (b) or, if not in 

said same position, how shall they proceed and how 

shall this Commission proceed to cure the vices and 

defects pointed out in said Hunter case? 

Eleventh 

"In connection with those questions listed above 

having to do with the words 'in force and effectt: 
Railroad Commission of Texas, Page 7, O-3611 

were any of our some 1200 special commodity permits 

in force and effect in view of the decision in the 

Hunter case? 

Twelfth 

YOUr attention is called to the words of Rouse 

Bill 351 reading: 'if such person or predecessor in 

interest may desire to continue in the business of 

a motor carrier of such commodity or commoditiest, 

and, in connection therewith, we ask this question: 

“HOW shall the Commission proceed to determine 

what business any holder of a preexisting special 

commodity permit was engaged in at any given time 

and how shall the Commission proceed~to authorize 

him to continue in such business? 

Thirteenth 

"Some special commodity permittees not only 

do not exercise all of the rights shown on the face 

of their permits, so far as commodities are concerned, 

but they also do not exercise all of their named 

rights, SO FAR AS AREA IS CONCERNED, and we now request you to give us your opinion with respect to 

AREA in all instances indicated above where we have 

asked your opinion with respect to COMMODITIES? 

Fourteenth 

"The grandfather clause seems to authorize the 

Commission to issue a certificate to a holder of a 

special commodity permit authorizing such holder 'to 

continue in the business of a motor carrier of such 

commodities' as he was engaged in on January 1, 1941. 

In order for the Commission to issue such certificate 

to carrier so that he can continue in the business of 

a motor carrier as he was engaged in on January 1, 

1941, how is the Commission to determine what business 

the carrier was engaged in, both with respect to 

commodities and area, on such date; and what procedure 

should be followed to ascertain the extent of the 

authority that should be embraced in the certificate 

issued and enable such carrier to continue in such 

business? 

Fifteenth 

fl~n determining whether each special commodity 
Railroad Commission of Texas, Page 8, O-3611 

permit was tin force and effect on January 1, 

1941' would the fact that a particular permit was 

under suspension on January 1, 1941, or since that 

date, disqualify said applicant for a certificate 

of convenience and necessity under the so called 

'grandfather' clause of said Act? 

"In conneotion with the above and foregoing 

question, your attention is directed to the fact, 

and the same is now stated to you as a fact, that 

from time to time holders of special commodity permits 

apply to this Commission for authority to suspend 

service for a certain pe,riod of time under their 

particular permit. The length of time of suspension 

varies, but it is usually for a period of six months. 

These suspensions are granted by the Commission 

without hearing and all that is done by the Commission 

is to onter an order approving the suspension for a 

spgat;fc& period of time. 

Sixteenth 

"If, end in the event , your answer to the above 

and foregoing question is in the negative, than 

please advise us in connection with the followingr 

"(a) Would the holder of the special commodity 

permit, which was under suspension, be required to 

reinstate said permit by filing proper insurance and 

fees before the Commission could consider, or issue, 

to the applicant a certificate under the so called 

'grandfather' clause of said aat? 

(b) Would such acts have to bedone before 

the applicant aould legally file a 'grandfather' 

application? 

“(C-l In the event that a partZau1ar. special 

commodity 

same, and 

permit was under suspension, by order authorizing 

said order, for example, authorized the permit 

to remain in suspension until September 1, 1941, would 

said perml .t holder be required toreinstate said permit before this Commission oould consider, or grant 

to him a certlfioate under the so called rgrandfatherr 

clause of said act? 

“la) Or would 'the 

and authorized under sa II 

ermit holder be allowed, 

d Act, to obtain a csrtifloate under the -rgrandfatharr clause of the Aot, 

and said grandfather certificate than remain under 

suspension until September 1, 19414 
. - 

Railroad Commission.of.Taxas, Page 9; O-3611 

Seventeenth 

"Is determining whether,or not a s,pecial 

commodity permit is in 'force and effect on January 1, 1941, r as to both commodities and territory, is thims Commission to take in,to, consideration any amendment, that may have~,been.granted, 

to the permit subsequent ,to January 1, 1941, 

and prior to ,the effective date on the act, pr 

shall we only consider, the permit as being in, 

'force and effect' as to those c~onunodities,, and 

the territory covered and named, in then. permit as 

of January 1, 19411 In other words would the 

gran~dfathsr certificate, as a maximum,,aoier,only 

such commoditi,e,s, and territory as.was,authorized 

in the permit as of:January 1, ~1941, or should,ws 

consider any amendment granted to the,permit subsequent to January l., 1941, and prior to the 

effective date of the act? 

Eighteenth 

"By the express terms of the Act a person is 

prohibited from holding both a oommon carrier 

certificate and .a specialized motor carrier cert~ificate. In your opinion, having special reference 

to your prior opinions on ths subject, and the 

present Motor Carrier Law, may one and the same 

person hold both a contract carriers permit and 

a specialized motor carrier certificate? 

"In connection with tht 'abays and foregoing 

question it is now stated to you as a fact that 

there are a number of operators within the state 

that hold both a special c.omtnodity psrmit and 

contract carriers permit., 

Nineteenth 

%Ouss Bill 351 provides for a filing fee 

of $25.00, and specificially states that this 

CommFssion shall not consider, etc., any application unless it is accompanied by a filing fee of 

$25.00. But in this connection you'r attention is 

~directed to the following factsl We now have on 

hand a,number of special commodity permit applications which have (1) either be&heard and not 

yet ac'ted upon,~ (2) or not set for hearing, butt on 

file, (3) or set for hearing but not yet heard or 

actad ,on. Each of these applications were accompanied by a filing fee of $lO.bO as, required by. the 
Railroad Copunisslon of Texas, Page 10, O-3611 

present law. With these fasts in mind please 

advise us in connection with the followingI 

"(a) Are we authorized to apply the $10.00 

filing fee whloh has been paid on those speolal 

commodity applications which have been filed, and 

heard, but not acted upon, on the $25.00 filing 

fee required under House Bill 351 for all 

applications for certificates to operate as a 

specialized motor carrier? 

"(b) Are we authorfzed to apply the $10.00 

filing fee which has been paid on those,special 

commodity applioations whioh have been filed, and 

set for hearing, but not yet heard or acted upon, 

on tha $25.00 filing fee required under House 

Bill 3519 

"(c) Are we authorized to apply the $10.00 

filing fee whioh has been paid on those speoial 

oommodity applications which have been filed, but 

neither set for hearing, nor heard, nor act&d 

upon, on the $25.00 filing fee required under 

House Bill 3511 

Twentieth 

"Assuming that an applicant is not eligible 

for a-spedialized motor carrier certificate under 

the so called 'grandfather* clause of House Bill 

351, and he, therefore, files his appllcatlon and 

seeks to prove publia convenienae and necessity, - 

in proving, or attempting to prove that present and 

existing service is inadequate, wLl1 such applicant have 

to take into consideration and prove that all services 

(including regular route common carriers) are 

inadequate, or will he only have to prove that the 

present servioe of existing speoialized motor carriers 

is inadequate?" 

We think it well, first to consider the status of 

the special commodity permits granted by the RaFlroad Commission and outstanding on January 1, 1941, and which had 

been issued without the h~earing of any .evldence on the question of pub110 aonvenience and necessity. In the case of 

Texas'& Pacific Ry. Co. v. Railroad Commission, 138 S.W.r 

(2d) 927, the Austin Court of Civil Appeals set aside a 

speaial'commodity permit, holding that public neaessity had 

to be alleged, proven and found, as in the aaae of common 

carriers. In effeot, the Court of Civil Appeals s,aid that 
., .- 

Railroad Commission of Texas, Page 11, O-3611 

if the Statute should be construed so as to permit the 

grantFng of such permits without suoh allegation, proof 

and finding, it would be diacrimlnatory and unconstitutional. 

This department, disagreeing with the opinion of the Court 

Of civil AppeELb, filed an application'for'writ of error to 

the Supreme Court. The writ was granted and the case was 

submitted on briefs and oral argument several weeks ago, but 

the Supreme Court has not yet announced its decision In the 

0898. The Supreme COUPt has r8qUest8d aounael for the 

parties in the T. & P. case to s,ubmit to the Court their 

views ooncerning the possible effect of this B. B. 351 upon 

the permit involved in that case. We think the Commission 

should accept and file all applic'ations to convert special 

commodity permits into specfalized motor carrier ce.rtificates, 

but that such applications should not be heard and determined 

until the Supreme Court disposes of the T. & P. Casey. If 

there is Unexpected delay,in the disposition of that cas8 

and the n88d to determine these applications becomes pressing 

we shall then be glad to give gou'our opinion as to the proper course to pursue. 

In the light of what we have said above, we'beg 

not to answer at this time your questions Ros. 1, 2, 2a, 3, 

4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17,,18 and 

the questions contained in your letter of June 20, 1941. 

In Seotion 58(c) .the Commission is prohibited 

from hearing or determining any application for a specialiZ8d motor carrier certificate (except the grandfather), 

unless the application shall oontain certain allegations, 

among them being: 

It'3. It shall be aocompanied by a map, showing 

the territory within which, or the points to or from 

or between whioh, the a pliCant desires to operate, 

and shall COnthin a lia E 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 servioe are required 

and would be s8cUr8d by the granting of said 

application. 

"r(d) . . . The Commission shall have no 

authority to grant any application for a certificate 

of convenienoe and necessity authorizing operation 

as a "Specialized Motor Carrier" or any other common 

carrier unless it is established by substantial 

8Vid8nCe (1) that the services and facilities of the 

existing carriers serving the territory or any pert 
* . 

Railroad Commission of Texas, Page 12, O-3611 

thereof are inadequate; (2) that there exists 

a public necessity for such service, and (3) the 

public convenience will be promoted by granting 

said applioation. The order of the Commission 

granting said application and the oertificate 

issued thereunder shall be void unless the 

Commission shall set forth in its order full and 

complete findings of fact pointing out in detail 

then inadequacies of the se~rvioes and facilities of 

the existing carriers, and the public need for the 

proposed service. Likewise, the Commission shall 

have no authority to grant any contract carrier 

application for the transportation of any commodities in any territory or between any points where 

the existing carriers are rendering, or are capable 

of rendering, a reasonably adequate servioe in the 

transportation of such commodities. 

"r(e) Except where otherwise provided, applications for and holders of certificates of 

public convenience and necessity, as provided for 

in this Section, shall be subject to all of the 

provisions of the Act relating to common carriers 

by motor vehicle." 

Based on the above, we answer your twentieth 

question by saying that in our opinion the character of 

services being rendered by existing common carriers as 

well as specialized ,oarriers must be considered. If 

viewing all the existing services of the different 

carriers, there is no need for the operation applied for 

then the application should be denied. On the other hand, 

if all the existing facilities fail to properly serve the 

territory as to the commodities sought to be transported 

then the certificate may be granted. 

Special commodity applications now pending, as 

we understand, do not contain allegations meeting the 

quoted requirements of an application under this Act. 

Hence, new applications or amended applications satisfying 

such requirements will have to be filed before the 

tipecialized certificate may issue. Section 5a(f), 

H'. B. 351, requires every application under such~Section 

to be accompanied by a filing fee of $25.00. I;t is our 

opinion that $10.00 fees deposited with the pending 

special commodity carrier applications may be allowed as 

a credit on suoh $25.00 filing fee and we answer each 
Railroad Commission of Texas, Page 13, O-3611 

subdivision of your nineteenth question in the 

affirmative. 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

BY 

APPROVED JULY 1, 1941 

s/ Grover Sellers 

FIRST ASSISTANT 

Ai'TORNEX GENERAL 

GRL;LM/cg 

Qlenn R. Lewis 

Assistant 

APPROVED OPINION COMMITTEE 

By EWB, Chairman