Gerald C. Mann

ATX-GRNEY **GS.CIvERAI.**

Hon. James E. Eilday, Director Motor Transportation Mvision Railroad Commission of Texas Austin, Texas OpinionNo. O-4429 Re: Whether the describedmotor carrier operationsare within House Bill No. 25p Chapter 290, Acts of the 47th Legislature,page 463..

Dear Sir:

Your request letter of follows: February 12, 1942, reads as

"1. Wholesale Grocery Company 'A'has its place of business in Laredo Texas. ity from distributgr 'B'of It buys a particular commodTexas. this commodity in Houston,

This commodity is always sold at a fixed price f.o.b. destination which in this case is Laredo Texas. Wholesale Company IAl sends its own private trucks of which it is the bona fide owner to Houston and transports the commoditywhich it has purchased to its wholesalehouse in Laredo. Subsequentlydistributor 'BPwill creditWholesale Company 'A'with an amount equal to the freight rate on the commodity transportedfrom Houston to Laredo.

"2. Oil Company 'A'at Houston, Texas., will enter into a written contractwith a secondparty hereinafter called 'Blwhereby *Btagrees to distribute the petroleum products of oil company 'A'in a limited territory. 'B' is the bona fide owner of the motor vehicle used for distribution. Oil Company 'A'pays 'Bla commission or fixed price for making the distribution.

"Basedupon the foregoing facts please give us your opinion on the following:
"(1) In No. 1 above, is Wholesale Company 'A'operating for hire, and if so, is it exempted from regulation and/or prosecutionby this Commissionbecause of the terms and provisions of House Bill No. 25, Acts of the 47th Legislature, 1941, which amends Section 1 of Article qllb, which is commonlyknown as the Private CarrierAct?Hon. James E. Kilday~, page 2 

### (O-4429)

"(2) In No. 1 above, is distributor IBtguilty of violating the,Motor CarrierAct in the way of aiding and abetting, or is it exempt because of House Bill No. 25, supra.
"(3) In No. 2 above, is Oil Company 'A'conducting
a for hire motor vehicle operationin violation of the Motor Carrier Law of Texas or is such operation exempted by House Bill No. 25, supra?


### “(4) In No. 2 above, is 'Blguilty of violating the Motor Carrier Law of Texas, Bill 25, supra? or~is it exempted by House

The trucks used by WholesaleGrocery Company llAw as described in your first hypothetical fact situation,are, in
our opinion,within the definition of a contract carrier contained in the motor carrier law and are subject to the provisions of Article ollb,Vernon'sAnnotated Civil Statutes under the case of New Way Lumber Companyvs. by the Supreme Court of Texas. In this Smith, 

### 96 S.W.(2dg 282,

said: case the,SupremeCourt

"Under the facts statedhere the carrying of lumber owned by the company in its own trucks does not exempt it from the provisions of this law. This is not a case where the trucks are operated exclusivelywithin the incorporated limits of a town or city;nor is it a case where the price of the goods delivered is the same as thoseundelivered. On the contrary,it is clearly a case where the price of the lumber includes a direct charge for the delivery thereof. The carrying charge is based directly on the distance traveledand the weight of the truck. Since the company receives compensationfor the delivery of the lumber, it clearlyappears that the trucks used come under the definition of a 'contractcarrier,'

, and are subject to the provisionsof Article 911b."

House Bill No. 2!59 Acts of the 47th Legislature,provides that the terms "motor carriervand "contract carrieP as defined in the originalmotor carrieract, shouldnot include the following:

"(a) Any person having a regular, separate, fixed, and established place of business, other than a transportation business,where goods,wares9 and merchandise are kept in stock and are primarilyand regularly bought from the public or sold to the public or manufactured or processed by such person in the ordinary course of the mercantile,manufacturing, or processingbusiness, and who,Han, James E. Kildays page 

### 3 (O-4429)

merely incidental to the operationof such business, transports over the highways of this State such goods of which such person is the bona fide owner by means of a motor vehicle of which such person is the bona fide owner;"

For Wholesale Company "A9 w and the trucks it uses in themanner described by you, to be within the above exception and thereforewithout the definitionof a contract carrier and the New Way Lumber Company case, supra, it must, among other things,keep merchandise in stock wprimarily,andregularly bought from the public or sold to the public," From your statement it would appear that Wholesale Grocery Company "A" does not meet this condition. A wholesale grocery companydoes not keep merchandise in stock primarilyand regularlybought from the publicnor does it keep merchandise in stockprimarilyand regularly sold to the public. It is commonknowledge that wholesale grocery companies sell to retailersand, not to the public.

In consequence,House BillNo. 25 does not exempt I8 wholesale grocery company AI1 from the operation of the .motor carrier law as decided by the SupremeCourt in the New Way Lumber Company case.

In answer to your secondquestion, it is our opinion that the Distributor is not exemptunder House Bill No. 25.

The following provisions of House BillNo. 25 are applicable to the hypothetical fact situation secondlydescribed in your letter:

l'(c) Where merely incidental to a regular, separate, fixed9 and establishedbusiness, other than a transportation business, the transportationof employees,petroleum products, and incidental suppliesused or sold in connectionwith thewholesale or retail sale of such petroleum products from the refinery or place of production or place of storage to the place of storageor place of sale and distribution to the ultimate consumers in a motor vehicle owned and used exclusi~~~~y,;by-,the .bona!tfide,';consignee or agent or such single &rketer or refiner;'a~s'well as where merely incidental to a regular, separate,fixed and established business, other than a transportationbusiness, the transportationof petroleum, employees,material, supplies, and equipment for use in the departmentsof the petroleum business by the bona fide owner thereof in a vehicle of which he~is the bona fide owner; bona fide consignee or agent as used herein beinghereby defined and construed, for the purpose of thisAct, to mean a person under contractwith a single principal to distributeHon. James E. Kilday, page 4 (O-4429)

petroleum products in a limited territoryand only for such single principal;"

. Assuming, aboutwhich you do not state, that Distributor nBlc

is under contractwith Oil Company "A" only, all of the conditionsprescribed in this Sectionof House Bill No. 25 exist in reference to Oil Company *'A" and Distributor "Bl10 Your third and fourth questionsare thereforeanswered in the affirmative: that is, that "B*t are exempt under-House Oil Company "A" and Distributor Bill No. 

### 25.

Yoursvery truly

ATTORNEY GENERAL OF TEXAS

By /s/ Zollie C. Steakley

Zollie C. Steakley,Assistant

APPROVEDFEB 24, 1942 /s/ Grover Sellers FIRST ASSISTANTATTORNEY GENERAL

APPROVED: C&INIO&~NC;TTEE BY:

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