Gerald C. Mann 

ATX-GRNEY GS.CIvERAI. 

Hon. James E. Eilday, 

Director 

Motor Transportation 

Mvision 

Railroad Commission 

of Texas 

Austin, Texas 

Opinion No. O-4429 

Re: Whether the described motor 

carrier operations are 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 commodity which it has purchased to its wholesale house in Laredo. Subsequently distributor 'BP will 

credit Wholesale Company 'A' with an amount equal to the 

freight rate on the commodity transported from Houston to 

Laredo. 

"2. Oil Company 'A' at Houston, Texas., will enter 

into a written contract with a second party hereinafter 

called 'Bl whereby *Bt agrees 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 'Bl a commission or 

fixed price for making the distribution. 

"Based upon 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 prosecution by this Commission because 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 commonly known as the Private Carrier Act? 
Hon. James E. Kilday~, page 2 (O-4429) 

"(2) In No. 1 above, is distributor IBt guilty of 

violating the,Motor Carrier Act 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 operation in 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 'Bl guilty of violating the 

Motor Carrier Law of Texas, 

Bill 25, supra? 

or~is it exempted by House 

The trucks used by Wholesale Grocery 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's Annotated Civil Statutes under 

the case of New Way Lumber Company vs. 

by the Supreme Court of Texas. In this 

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

said: 

case the,Supreme Court 

"Under the facts stated here 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 exclusively within the incorporated limits of a town or city; nor is it a case 

where the price of the goods delivered is the same as 

those undelivered. 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 traveled and the weight of the 

truck. Since the company receives compensation for the 

delivery of the lumber, it clearly appears that the trucks 

used come under the definition of a 'contract carrier,' 

, and are subject to the provisions of Article 911b." 

House Bill No. 2!59 Acts of the 47th Legislature, provides that the terms "motor carrierv and "contract carrieP as 

defined in the original motor carrier act, should not 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 primarily and 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 processing business, and who, 
Han, James E. Kildays page 3 (O-4429) 

merely incidental to the operation of 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 

the manner described by you, to be within the above exception 

and therefore without the definition of a contract carrier and 

the New Way Lumber Company case, supra, it must, among other 

things, keep merchandise in stock wprimarily,and regularly 

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 company does not 

keep merchandise in stock primarily and regularly bought from 

the public nor does it keep merchandise in stock primarily and 

regularly sold to the public. It is common knowledge that 

wholesale grocery companies sell to retailers and, not to the 

public. 

In consequence, House Bill No. 25 does not exempt 

wholesale grocery company I8 A I1 from the operation of the .motor 

carrier law as decided by the Supreme Court in the New Way Lumber Company case. 

In answer to your second question, it is our opinion 

that the Distributor is not exempt under House Bill No. 25. 

The following provisions of House Bill No. 25 are applicable to the hypothetical fact situation secondly described 

in your letter: 

l'(c) Where merely incidental to a regular, separate, 

fixed9 and established business, other than a transportation business, the transportation of employees, petroleum 

products, and incidental supplies used or sold in connection with the wholesale or retail sale of such petroleum 

products from the refinery or place of production or place 

of storage to the place of storage or 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 transportation business, 

the transportation of petroleum, employees, material, supplies, and equipment for use in the departments of 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 being hereby defined and 

construed, for the purpose of this Act, to mean a person 

under contract with a single principal to distribute 
Hon. James E. Kilday, page 4 (O-4429) 

petroleum products in a limited territory and only for 

such single principal;" 

. 

Assuming, about which you do not state, that Distributor nBlc is under contract with Oil Company "A" only, all 

of the conditions prescribed in this Section of House Bill No. 

25 exist in reference to Oil Company *'A" and Distributor "Bl10 

Your third and fourth questions are therefore answered in the 

affirmative: that is, that 

"B*t are exempt under-House 

Oil Company "A" and Distributor 

Bill No. 25. 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

By /s/ Zollie C. Steakley 

Zollie C. Steakley, Assistant 

APPROVED FEB 24, 1942 

/s/ Grover Sellers 

FIRST ASSISTANT ATTORNEY GENERAL 

APPROVED: C&INIO&~NC;TTEE 

BY: , 

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