January 14, 1975
The Honorable Martin D. Eichelberger Criminal District Attorney Waco, Texas Opinion No. H- 493

Dear Mr. Eichelberge I: Re: Applicability ofMotor Carrier Act, V. T. C.S., art. 911b tolivestock commission companies which furnish transportation services. You ask whether livestock commission companies violate the Motor Carrier Act, V.T.C.S., article 911b. when, without apermit from the Railroad Commission, they furnish transportation service to their customers. Livestock commission companies are formed to act as sales agents for ranchers and other owners oflivestock. A prospective seller will enter into aconsignment contract with acommission company under the terms ofwhich the company will sell his livestock at anauction, extract its commission from the proceeds, and then pay the remainder to the seller. Apparently, some companies own commercial vehicles which they use to pick up the livestock consigned to them for sale; anadditional fee is charged the seller for this service. Companies which offer transportation services will also agree to deliver any livestock sold at:one of their auctions to the purchaser at an additional cost. Your quest-ion is whether livestock commission companies may furnish such services without first obtaicing acontract carrier permit from the Railroad Commission. Insofar as itis applicable, the Motor Carrier Act req-sires any person or company interding tc operate as a “contract carrier” first to obtain apermit from the Railroad Commission. V. T. C.S. art. 911b.53. A “contract carrier” is defined inthe Act as anyone who uses amotor vehicle to transport property for compensation or hire over any highway inthe State other than as a common carrier. V. T, G.S. art. 9i,lb, $1(h)- Private motor vehicle owners are expressly excluded from the definition of “contract carrier” contained inthe

p0 2227The Honorable Martin D. Eichelberger. page 2 (H-493)

Act and need not obtain apermit from the Railroad Commission. V. T. C.S. art. 911b§lb. A private motor vehicie owner is defined in section la(b) of the Act as: Any person transporting farm implements, livestock,

livestock feedstuffs, dairy products, horticultural products? &al products, agricultural products, timber in its natural state, orwool andmohair ofwhich such person is the bona fide owner ona vehicle ofwhich he is the bona fide owner to and from the area ofproduction and toand from the market or place ofstorage thereof: provided, however, if such person (other than atransportation company) has inhis possession under abona fide consignment contract livestock, wool, mohair, milk and cream, fresh fruits and vegetables, or timber in its natural state under contract, as an incident to a separate, fixed, and established business conducted byhim the said possession shall be deemed ownership under this Act; Under this definition, then, a company which transports livestock it owns in its ownvehicles from the area ofproduction to the market is aprivate motor vehicle owner and is not required to obtain a contract carrier permit from the Railroad Commission, For the purposes of this definition one who as anincident toa separate business is inpossession oflivestock which he is transporting pursuant to abona fide consignment contract is considered to be the owner ofthe livestock. When the livestock companies about which you have asked pick up livestock from a seller in order to t,ransport it to anauction site, they clearly fit the definition ofprivate motor vehicle carrier set out inthe Act. They use their own vehicles, and they are operating pursuant to consignment contracts which arise out oftheir sales agency business. Accordingly, the companies may make these pick ups and charge for them wi.thout first obtaining a contract carrier permit from the Railroad Commission. Furthermore, it is cur opinion that livestock commission companies continue to act as pPiv.ate motor vehicle owners under theAct when they l~aterdeliver livestock to apurchaser even though by that time the livestock has been sold and they nolonger technically ownthe livestock. A case almost

pe 2228The Honorable Martin D. Eichelberger, page 3 (H-493)

directly inpoint is Whitman v. State, 308 S.W. 2d 884 (Tex. Grim, App. 1958), InWhitman cattle had been sold toapurchaser at anauction; as part ofthe sales agreement but for anadditional consideration, the seller agreed to deliver the cattle to the purchaser, The cattle were transported intrucks belonging to the seller. While in route, one of the trucks was stopped by a Railroad Commission inspector who learned that itwas being operated without acontract carrier permit. The Court ofCriminal Appeals held that the seller was operat,ing as aprivate motor vehicle owner and d!~dnot need a contract carrier perm~it. Itdid not matter that the sale had been completed before the cattle were hauled because delivery ofthe cattle was part ofthe agreement pursuant towhich ownership changed hands. Whitman indicates that under the Motor Carrier Act onewho sells livestock and for anadditional consideration agrees to deliver the livestock to the purchaser retains his status as aprivate motor vehicle owner even though he nolonger owns the livestock, Thus livestock commission companies may deliver the cattie they sell in their own vehicles without obtaining contract arrier permits from the Railroad Commission; under the Motor Carrier Act they will be treated as private motor vehicle owners. SUMMARY Under the Motor Carrier Act a company which transports livestock it owns - - or i,sinpossession of pursuant to a bona fide consignment con.tract - - inits own vehicle from the area ofproductTon to the market is considered aprivate motor vehicle owner and nerd not obtain a contract carrier permit from the Railroad Commission. The status of private motor vehic!.e owner is retained when the livestock is later del,ivered to apurchaser as part ofa sales agreement.
A ry truly yours,

OHN L. HILL Attorney General of Texas

p. 2229The Honorable Martin D. Eichelberger, page 4 (H-493)

APPROVED:

DAVID M. KENDALL, First Assistant

C. ROBERT HEATH, Chairman Opinion Committee

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