Untitled Texas Attorney General Opinion

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