Hon. James E. Kilday, Director Opinion No. O-2519
Motor Transportation Division Re: Validity of lease con-
Railroad Commission of Texas tract between Oklahoma
Austin, Texas Transportation Company and
Dixie Motor Coach Corpora-
Dear Sir: tion.
In your letter of July 3, 1940, you advise that the
Oklahoma Transportation Company operates passenger buses from
Oklahoma City to Ardmore, Oklahoma, and return, and that Dixie
Motor Coach Corporation operates passenger buses from Dallas,
Texas to Arcbnore, Oklahoma and return. Both companies are
opera Eing under valid certi&cates of public convenience and
necessity issued by the respective regulatory bodies of the
states in which they operate as well as under certificates duly
issued by the Interstate Commrce Commission. The two companies
have a joint terminal in Ardmore, where they meet, exchange
passengers, and then return over their respective routes. There
are many passengers traveling these routes from Oklahoma City
to Dallas and vice versa, and they desire through passage with-
out having to go through the inconvenience of changing buses at
Ardmors, Oklahoma. The contract in question is proposed in en
effort to meet the desires of these passengers. Under its pro-
visions when the Dixie Motor Coach Corporation bus arrives in
Ardmore with passengers destined for points between Ardmore
and Oklahoma City the Dixie bus is thereupon automatically
leased to the Oklahoma Transportation Company and the ,bus con-
tinues on to Oklahoma City over the route served by Oklahoma
Transportation Company. Likewise when the Oklahoma Transporta-
tion Company bus arrives in Ardmore with passengers destined
for points between Ardmore and Dallas the Oklahoma Transporta-
tion Company bus is thereupon automatically leased to the Dixie
Motor Coach Corporation end continues on to Dallas over the
route served by Dixie Motor Coach Corporation. Each bus before
commencing the journey over the route served by the other com-
pany will have the bus plates changed to correspond with the
plates used by the company over these routes the bus is travel-
ing, that is, the bus will carry the plates of the lessee com-
pany issued for such particular bus in accordance with law. Each
bus will be insured against public liability by the lessee end
the lessee company will furnish its own driver to operate the
bus thus leased from the other company. The lessee company will
.-
Hon. James E. KildaY, page 2 (O-2519)
receive all the revenue from the bus thus leased from the
other company, each party must pay all of the operating ex-
pense for its own route, and each. company while it is the
lessee of a bus assumes full responsibility for such bus and
its operation as provided by law. Compensation to the lessor
for such buses will be at a stipulated rental charge per mile.
In case of accidents to a leased bus if the repair will cost
more than twenty-five dollars it musE be done by lessee, but
if the cost is less than twenty-five dollars the owner of the
bus meets the expense or makes the repair, it being the obli-
gation of the owner to keep the bus in good repair except as
to major accident. Neither party surrenders any interest in
its own certificate nor acquires any interest in the certifi-
cate of the other. So far as the submitted instrument shows
a complete lease is made and we must assume that such contract
is bona fide.
Article 911a, Vernon’s Civil Statutes,. regulates the
operation of motor buses in Texas. Nothing therein attempts
to require a motor bus carrier to own all of the buses which
it may operate under its certificate. Nothing prevents the
operation of a leased vehicle, nor is there any restriction as
to the nature or residence of the person, firm or corporation
from whom any such vehicle may be acquired or leased. If the
lease contract in ‘question represents the real agreement of
the parties and is carried out according to its terms and
spirit, it is not violative of the Texas Motor Bus Act.
Referring to your second question we would advise
that it is unnecessary for the Railroad Commission to take any
action approving or disapproving the contract and operations
thereunder. However, the Railroad Commission should carefully
ascertain that the public liability insurance policies unques-
tionably and in plain language cover these vehicles.
APPROVED JUL 15, 1940 Yours very truly
/s/ Grover Sellers ATTORNEY GENERALOF TEXAS
FIRST ASSISTAET By /s/ Glenn R. Lewis
ATTORNEY GENERAL Glenn R. Lewis, Assistant
APPROVED:OPINIONCOMMITTEE
BY: BWB, CHAIRMAN
GRL:AMM:wb
Untitled Texas Attorney General Opinion
Combined Opinion