Untitled Texas Attorney General Opinion ( 1944 )


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  •   Grover Sellers
    A’lTOHSKY           OLENLcllAL.
    Hpm;;        ColMllssion   C$lnion No. O-5851
    : Whether specified   transportation    of
    Lustin,     Texas          petroleum products is exempt from regula-
    tions under the Motor Carrier     4ct by rea-
    son of Section la (1) (c) of Article    glib,
    Gentlement          .      Vernon’s innotated Civil Statutes.
    You have inquired whether the transportation    of one
    Mtinskl for the Magnolia Petroleum Company is subject to regula-
    tions under the Texas Motor Carrier Act or whether he is exempt
    by reason of Section la(l)(c)   of Article 911b, Vernon’s Anno-
    tated Civil Statutes,   acts of the 47th Legislature,   page 463,
    H.B. 25.
    Your Chief Law Enforcement Officer   for the Motor Car-
    rier Division,   Mr. Hughes, h,‘s :!greed to the following   Jmended
    stA.ement of fclcts as more truly representing    the situation  con-
    fronting  the Commission than th..t contained in your opinion re-
    quest:
    FACTS
    The &gnolia  Petroleum Company owns bulk          storage     facl-
    lities     at McGregor, Gatesvi!.le, Belton and Waco.
    The Company has z, contract with one Manski of McGregor,
    McLennaa County.      In this contract,   termed 9holes~ale      Comrnlsslon
    Agents Contract ,‘I he is c:tlled the Company’s lCommisslon &gent
    at McGregor and points deslgn&ed        as tributaries     thereto   which
    are subject     to change by Compiny on thirty     days’.notice    40 &gent,
    ~1s follows,”    naming eleven small towns situated       on radii out of
    M.?Gre;or &z. varying distances    up to some twenty miles, and situa-
    ted in two or three counties.
    An amended paragraph    adds the following:
    “la.    Also, In addition,  Agent is appointed for the
    distribution     of Company’s petroleum products as its Agent
    and for and with Company as the single principal      in the
    following    limited territory:
    “From Ft. Worth to >Jaco, to McGregor,        to Belton     and to
    Gatesvllle;  and from Waco to McGregor.
    “For the purposes   of the paragraph    next    above,     while
    --   1
    Railroad     Commission,   page 2   (O-5851)
    Company shall be the single principal   of. Ogent, nothing
    herein shall constitute  Agent the single,_excluslve   nor
    sole Agent of Company in-the performance of said dls-
    tribution.”
    The duties of the Asen& consist of the care of stock
    ?ment , soliciting
    and e %;u*                     and carrying on business under direc-
    tion of the district      manager, making deliveries,  collecting    ac-
    counts,~ making reports;     unloading cars and perfcrmlng     such other
    services   as may be required of him.
    The Agent must see that all receptacles   ;re correctly
    gauged and free from Jeaks, as the Company will not be responsl-
    ble for any loss from leakages or incorrectness   of measurements.
    The t:gent assumes all liability  for loss and damage
    sustained by the ‘Company or third persons resulting   from acts of
    the Agent or his employees who are exclusive   servants of the
    Agent.
    The Agent must remit all funds collected    to the Com-
    pany; he must sell at prices fixed by the Company; he may sell
    on credit only when expressly authorized;  he may not cash person-
    al checks and is liable  to the Company if loss, results  therefrom.
    By “rider” to the contract the Agent assumes all lia-
    bility      for loss of cash, checks, etc., resulting from theft,  ac-
    cident      or loss for any cause.
    No fre:ght allowance will be made the Agent on replen-
    ishment of stock unless he can show that the depletion    of stock
    -,~;rsnot due to the Agent Is failure to make reports and place
    orders for ro~lenlshmznts.
    The contract   cf agency cannot be assigned.
    The Company has the option      to purchase   any service
    stations     that the Agent may acquire.
    Looking beyond the printed contract,         we find that the
    Company has an employee at WZV:Oand storage facilities           there to
    handle Its distribution       for that territory.    Other employees of
    the Compa.uyhave the duty of securing orders for large quantl-
    ties of gasoline     for the krmy bases near Waco. When Manski
    transports   gasoline   from the company refinery       at Fort Worth to
    Its storage facilities      at Waco, or to the Army bases under these
    conditions   he performs a service that is limited to transporta-
    tion.   He does not solicit        the sale, make the sale, nor collect
    for said sale.     His   duty   is  confined to receiving   the fuel into
    his tank trucks at Fort Worth and delivering          it to the destina-
    tion.    This will be referred to as his nWaco-Army Bases Service.”
    Railroad   Commission,     page 3   (O-5851)
    In such cases he Is        compensated at a different    rate per gallon
    from that obtaining       where he stores the fuel at McGregor and
    tistributes   it out     from there by obtaining orders from lndepend-
    ently owned filling        stations    making dellverles  and collecting
    the purchase price.         Thj.s.wl~l be refe,rred to as the “Commission
    Agent Servlce.it                             .
    Xanski owns and operates several tank trucks,      paying
    the drivers himself- and being under contract to the Company to
    pay for all damages wh:ch he or the public may sustain by reason
    of. any accidant for which he or !iis emljloyees are respbnsible.
    The Company pays. social  security  i~nsurance on ~Manski, c,&lllng him
    an employee.
    $&?JiTZL’ICN‘GF THE QUESTION
    .~
    This ?$inicc    xi11 i)e limited to ‘a consideration    of
    -‘lether the ~trans?ortstlon   by the Agent, M&n&i, and his driv-
    ers where he performs :I purely tr~ansportation      service     is aub-
    ject to ragzlation     3y the Railroad Com;lilssion under the Motor
    Carrier Act.
    ORIGINAL STATUTSS
    i:s ~origintiily written the Texas Motor Carrier       Act,
    -zticle   911.1, m&de mctor carri,ars subject to ths regulation          of
    the Com2is;ion.        Sect!.on l(g). of that Act ‘def:~nas a “Motor Car-
    rIeral~ asp on:: operating     1 motor vehicle used i;l ?,r?nsporting
    property fcr     cr2;:ensat:on    or >;Lrri irhere in the course of such
    transport&ic~~       . highway ‘~ie?wzan two or more incorporated     cit-
    ies is travers-d.
    &e:-,t?on l(h) defines a Vontract    Ctisri;rl’ as being a
    motor c ~.r..5.r ;ransi>orting’ property for hire -btl:fr :than as a
    comon crrier.                   .
    NEWWAY‘LUMBERCOMPANY
    v.        SMITH,
    In 1.936, in the case of New %!av Lumber Comaanv v. Smith,
    96 S.W.(Zd.j. 282;. thk Texas Supreme Court held that a lumber com-
    pany was act Sng c.3 ; mtor carrier    and was transporting    for hire
    where it del,ivered. it:: lumber to hits customers itr different
    toktls, then Company having one. prsce’where    the. customer called or
    came to the lumber yard to get the lumber and another based on
    distance from the yard, where~ th ‘. ,Lumber Company made the de-
    livery.                       . .  ‘I~
    AN3NIbMENT‘OF ‘iS’t1     -.
    In 1941    Acts of the 47th Legislature,  page 463, H.B.
    No. 25, the Legisiature’amended   the Motor ‘Carrier Act as follows:
    Railroad   Commission,   page 4    (O-58511)
    n+ * *
    %3e~ticin la(l) Provided, however that .the term
    ‘Motor Carrler’~ .and the ‘term ‘Contrac 4 Carrier’ as de-
    fined la the .precedlng section shall not be~held to
    include I
    “(a)  Any person having a regular,    separate, fixed,
    and established    place of business,  other than a trans-
    portation   business, where goods, wares and merchandise
    are kept in stock and are primarily     an4 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, merely incidental     to the operation of such busi-
    ness, 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; or
    “(b)  Any person transporting    farm implements, live-
    stock, *** or wool and mohair-of which such person is the
    bona fide owner to and from the area of production and to
    and~from the market or place of storage thereof;      pro-
    vided, however, if such person (other than a transporta-
    tion company) has in his possession      under a bona fide
    consignment contract livestock,     + + * under contract as
    an Incident to a separate,   fixed,   and established   busi-
    ness conducted by him the said possession      shall be deemed
    ownership under this Act.
    “(c)   Where merely incidental       to a regular,   separate,
    fixed,    and established    business,    other than a transporta-
    tion business,     the transportation      of employees~, petroleum
    products,    and incidental     supplies used or sold in connec-
    tion 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 consumer, in a motor vehicle
    owned and used exclusively        by the marketer, or refiner        or
    owned in whole or In part and used exclusively            by the iona
    fide consignee or agent of such single marketer or refin-
    er; as well as where merely incidental          to a regular,    sep-
    arate, fixed and established        business,   other than a trans-
    portation    business,    the ~transportatlon   of petroleum, em-
    ployees,   material,   supplies,    and equipment for use in the
    departments of the petroleum business by the bona fide
    owner; bona fide consignee or agent as used herein being
    hereby defined and construed,          for the purpose of this Act,
    Rsllroad   Commission,   page 5   (O-5851)
    to mean a person under contract with a single        principal
    to distribute  petroleum products in a llmlted       territory
    and only for such single principal;
    “(2)    The term ‘person’ as used in this Act shall
    include per sons, firms, corporations        companies, co-part-
    nerships,    or associations    or joint   stock associations
    (and their receivers      or trustees    appointed by any Court
    whatsoever).
    “Section     lb.   4ny person who transports    goods, wares,
    or serchacdise        under the circumstances   set forth in the
    foregoing     Section 13 so as to be excluded by the terms of
    said Section from the definition          of ‘motor carrier’  or
    * contract carrier’       shall be deemed to be a private motor
    vehicle    Owner  j   bnd such use of the highways by such priv-
    ate motor vehicle        owners, as herein defined,    shall be con-
    strued as use of the highways for the general public and
    not for the use of such highways for the carrying on the
    business of transporting         property for compensation or hire.’
    ”MARKETER”
    Ze R~+J tracsR0rti.n;   Is exempt from classification
    : : P:-;tr-r Carrier i? hz meets, :?ong other criteria,     the test
    ?rhtit hr: be a refiner   or marketer transporting  in his own trucks;
    since the petroleum co.ms:,ny does not own the trucks under con-
    si?.er&isn,     oe must look elsewhere in the statutes for an exemp-
    tlon.
    Manskl Is not a raf“.ner so th&t portion ‘of the statute
    is inapplicable.    Is he a marketer?   If he is, since he owns his
    own trucks, he will be exempt.
    Webster defines “Marketer” as cne who attends           a market
    to buy or sell;  one who carries goods to market.
    We do not feel that we would be justified       in acceding
    to the view that “marketer” as here used is synonymous with
    “carrier .‘I First,   because the Legislature     throughout this 4ct
    repeatedly   says tldt the transportation     must be incidental    to a
    business other than a transportation      business.     And in the sec-
    ond place %arketing”      in ordinary usage connotesmore      than trans-
    portation.    For example, in Its latest     catalogue the School of
    Business Administration     of the University    of Texas divides   Its
    subjects under thirteen     major heads, including     vMarketingv ‘and
    Railroad   Commission, page 6    (o-5851)
    eTransportatlon    and Industry; a under 9Iarketlnge It lists     a doz-
    en courses dealing with consumer purchasing,        salesmanship, re-
    tailing,   wholesaling,   chain’store   systems, cooperative   chains
    but not with transportation.        Under Yransportatlon    and Industry”
    are listed   transportation    courses in-air,  motor and water trans-
    portation.    From the’Columbla Encyclopedia’s      compendium on mar-
    keting we quote the following:
    “Marketing is promoted by salesmanship and by adver-
    tiSlng . Mall-order houses sell by catalogue at retail,
    especially  the rural buyers.    Some products are marketed
    by house to house canvassing.     Chain- stores eliminate
    some of the expense of marketing by combining retail      sales
    with wholesale purchases or with manufacturing.       Coopera-
    tive organizations   of consumers and of producers as farm-
    ers, seek also to diminish the spread in marketing.”
    The term %arketinge   assumes the existence  of trade so
    buying and selling are necessary incidents  to 9narketing.e    38
    C.J. 1258, 1259.
    II’To market’ has been defined judicially and by lexi-
    cographers as ‘to buy or sell* * * * to sell in a market. 111
    &&j.nrr v. San Saba National Bank, 13 S.W. (2d) 121, 122.
    Insofar as Manski’s activities     consist solely in trans-
    porting from the Company’s refinery     at Fort Worth and delivering
    into its storage facilities   at Waco where an employee of the
    Company takes charge and wherever he delivers       from the refinery
    to a purchaser who has dealt directly     with the Company and not
    with or through Manski, the’ sale not having been solicited       nor
    procured by Manskl and he not collecting      therefor,  his sole duty
    is that of a carrier.
    Such transportation    business is regular and substantial
    and is not .occasional,  casual,  desultory and incidental.   Ann 
    123 A.L.R. 229
    .   We conclude that as to the activities    above outlined
    he does not come within such Section (c) of the amendatory Act.
    Counsel for the petroleum company urges that Manski may
    still   come within subsection   (c) as a “person under contract with
    a single principal   to distribute   petroleum products in a limited
    territory.”
    We shall determine
    (1)  Whether the requirement that transportation    must
    be incidental   to a business other than a transportation    business
    applies to a bona fide agent or consignee;
    (2)  Whether Manski as to his Waco and Army bases oper-
    ation is a distributor.
    Railroad   Commission of Texas,   page 7
    I.
    \UgrrSINlQSS
    GTRBRTHAR A TRANSPORTATION BUSINESS”APPLICABLl$
    -.         ._.             SO TO AGENT. _. .__a _.__-. _. -
    . . .-.. :.
    The answer to the -first:question  Is made difficult    by
    the fact that subsection    (c) is fragmentary within lt~self and
    does not fit in with the leading clause of Section la(l)        as do
    subsections   (a) and (b).   Thus:                         - _
    eSection la(l)  Provided, however, the’term *motor
    carrier’ and the term ‘contract   carrier’ as defined in
    the preceding section   shall not be held-to include:
    e(a)  Any person having * * * a l * * business,    other
    than a transportation   business, *** and who, merely incl-
    dental to the operation   of such business,
    ***
    e(b)   Any person transporting    farm implements,   ***
    ‘l(c) Where merely incidental    to a ***business;other
    than a transportation   business,   the transportation    of ***
    petroleum products *** In a motor vehicle owned and used
    exclusively  by the marketer or refiner or owned in whole
    or in Tart and used exclusively     by the bona fide consignee
    or agent of such a single marketer or refiner***”
    This clause does not contain an object tb~nlncludee
    in the first  part of Section (1).    Structurally it presents no
    ground for saying that the requirement that transportation     must
    be incidental  to a business other than a transportation    business
    applies only to refiners   and marketers end not to one under con-
    tract as ;Ln agent or consignee.
    II.
    BISTR~~E
    To be exempt from regulation     as a motor carrier  the
    agent or consignee must be, among other things, one who is under
    contract   to distribute    petroleum products in a limited territory
    for a single principal.       Will transportation    alone amount to dis-
    tribution?     Standing alone the word    edlstrlbutlonll  may have ref-
    erence to .the physical     conveyance of -commodities to the consumer
    or it may refer to llmarketinge as defined in this opinion.          Ref-
    erence to the title      of the Act shows what the Legislature    had in
    mind.    It reads in part:
    e&4 ACT amending Chapter 277, Acts of the Regular
    Session of the 42nd Legislature,      as heretofore  amended
    Railroad    Commission of Texas,   page 8
    by adding Section. la and lb thereto~***exempting      certain
    persons, firms and corporations    transporting   under cer-
    tain circumstances   their own employeei and property,       pi
    &troDe~         C        hav e an interest   as cons1snee 0~
    &g&***‘J
    This shows-that the purpose of the statute ls to exempt under
    certain   conditions  persons transporting    property ‘I&-I hi h
    they have an Interest.**     A carrier would have an intetesi      be-
    cause he would have a lien for his charge but carriers          are ex-
    cluded so that cannot be the source of the interest.          If Man&l
    were selling    on a commission basis as he does out of McGregor,
    he would have an interest     in his commission     but here he has no
    Interest   in the commodity which he transpo&        to Waco and the
    Army bases other than whatever interest       such transportation     alone
    may give him. If the Legislature       had intended that his interest
    should be whatever interest he might have as one transporting
    and no more, the words “in which they have an interest          as conslg-
    nee or agent” would have been mere surplusage,         adding nothing.
    We ought not to adopt a construction       which nullifies   the lan-
    guage of the Legislature     when another construction     which gives
    effect   to every word is equally plausible.
    In Pa ,n     Sil er Rod Stores,  (N.J.1 18 At1.(2d)   576
    the court said zLatvwhilevthe     Act under consideration   did not d&
    fine “distribute”    it might be taken as granted that a wholesaler
    handles and distributes     the products to retailers   and that his
    act in so doing is couple? with an interest.
    We conclude that as used in the statute      a contract   to
    transport    is not a contract to distribute.
    Counsel for the petroleum company Is of the opinion
    that at the time of the passage of the iimendatory Act it was
    customary for consignees and agents of the petroleum companies to
    regularly   engage In transactions     of the Manski to Waco type where
    their activity   was purely that of a carrier      and nothlng more;
    that they devoted a substantial     part of their efforts     to this
    work, that it was considered a part of the duties of an agent or
    consignee,   just the same as where the transportation       was a part
    of and incidental    to marketing transaction    carried on by the agent.
    If this be true, we do not feel that we would be warranted in
    looking to such a definition     when the Legislature     has defined the
    term as it does here.     Repeatedly, ‘in the amendment the Legisla-
    ture specified    that the transportation   must be merely incidental
    to a business other than a transportation       business,   and we find
    such a requirement in subsection      (c) pertaining   to the transpor-
    tation of petroleum products by bona fide agents or consignees.
    Railroad   Commission of Texas,    page 9
    Such an interpretation     of the legislative    intent
    places subsection   (c) in a better position       to withstand an
    a,ttack based upon an-alleged     insufficiency    of its title   or of
    the alleged unreasonableness      of the classification.
    You are informed that in our opinion Manskl~s Waco
    operations  do not come within the exemption of Axticle qllb,
    sict1oiA I& (1) (c), Vernon's Annotated Civil Statutes.
    Yours very   truly
    GENERAL
    A!CTCFNJZY     OF TEXiS
    By is/ David W. Heath
    Dav1.d W. Heath, kssistant
    .iPPROVEDAPR 29, 1944
    /s/ Grover Sellers
    A!CTORNEYGENWALOF   TEXAS
    APPROVED:C@$IONC&%TTEE
    BY:         ,  s
    DWH:EP:wb
    

Document Info

Docket Number: O-5851

Judges: Grover Sellers

Filed Date: 7/2/1944

Precedential Status: Precedential

Modified Date: 2/18/2017