January 14, 1975
The Honorable Martin D. Eichelberger
Criminal District Attorney
Waco, Texas Opinion No. H- 493
Re: Applicability of Motor
Carrier Act, V. T. C. S.,
art. 911b to livestock
commission companies
which furnish transporta-
Dear Mr. Eichelberge I: tion services.
You ask whether livestock commission companies violate the Motor
Carrier Act, V. T. C. S., article 911b. when, without a permit 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 of livestock. A prospective seller will enter into
a consignment contract with a commission company under the terms of which
the company will sell his livestock at an auction, 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; an additional 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 com-
panies may furnish such services without first obtaicing a contract carrier
permit from the Railroad Commission.
Insofar as it is applicable, the Motor Carrier Act req-sires any person or
company interding tc operate as a “contract carrier” first to obtain a permit
from the Railroad Commission. V. T. C. S. art. 911b. 5 3. A “contract carrier”
is defined in the Act as anyone who uses a motor vehicle to transport property
for compensation or hire over any highway in the 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 in the
p0 2227
The Honorable Martin D. Eichelberger. page 2 (H-493)
Act and need not obtain a permit 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, or wool and mohair of which such person
is the bona fide owner on a vehicle of which he is the bona
fide owner to and from the area of production and to and
from the market or place of storage thereof: provided,
however, if such person (other than a transportation com-
pany) has in his possession under a bona 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 by him the said possession shall be
deemed ownership under this Act;
Under this definition, then, a company which transports livestock it owns
in its own vehicles from the area of production to the market is a private
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 an incident to a separate business is in possession of livestock which he
is transporting pursuant to a bona fide consignment contract is considered
to be the owner of the livestock.
When the livestock companies about which you have asked pick up
livestock from a seller in order to t,ransport it to an auction site, they
clearly fit the definition of private motor vehicle carrier set out in the Act.
They use their own vehicles, and they are operating pursuant to consignment
contracts which arise out of their 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 the Act when they
l~ater deliver livestock to a purchaser even though by that time the livestock
has been sold and they no longer technically own the livestock. A case almost
pe 2228
The Honorable Martin D. Eichelberger, page 3 (H-493)
directly in point is Whitman v. State, 308 S. W. 2d 884 (Tex. Grim, App. 1958),
In Whitman cattle had been sold to a purchaser at an auction; as part of the
sales agreement but for an additional consideration, the seller agreed to
deliver the cattle to the purchaser, The cattle were transported in trucks
belonging to the seller. While in route, one of the trucks was stopped by
a Railroad Commission inspector who learned that it was being operated
without a contract carrier permit. The Court of Criminal Appeals held
that the seller was operat,ing as a private motor vehicle owner and d!~d not
need a contract carrier perm~it. It did not matter that the sale had been
completed before the cattle were hauled because delivery of the cattle
was part of the agreement pursuant to which ownership changed hands.
Whitman indicates that under the Motor Carrier Act one who sells live-
stock and for an additional consideration agrees to deliver the livestock
to the purchaser retains his status as a private motor vehicle owner even
though he no longer owns the livestock, Thus livestock commission com-
panies may deliver the cattie they sell in their own vehicles without ob-
taining 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,s in possession of pursuant to a
bona fide consignment con.tract - - in its own vehicle from
the area of productTon to the market is considered a private
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 a purchaser as part of a sales agreement.
ry truly yours,
A
OHN L. HILL
Attorney General of Texas
p. 2229
The Honorable Martin D. Eichelberger, page 4 (H-493)
APPROVED:
DAVID M. KENDALL, First Assistant
C. ROBERT HEATH, Chairman
Opinion Committee
p. 2230