B-155610, DEC. 7, 1964

B-155610, DEC. 7, 1964

TO CAPTAIN A. F. BARWICK, JR., F.C., FINANCE AND ACCOUNTING OFFICER, DEPARTMENT OF THE ARMY:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 7, 1964, REQUESTING DECISION AS TO THE PROPRIETY OF PAYMENT OF A VOUCHER IN THE AMOUNT OF $5,031.41 IN FAVOR OF THE HERTZ CORPORATION FOR MAJOR AND MINOR REPAIRS TO TRUCKS LEASED TO THE U.S. ARMY UNDER CONTRACT NO. DA-04-013-AVI 349, EFFECTIVE APRIL 7, 1964.

THE CLAIM PRESENTED FOR PAYMENT ON JUNE 30, 1964, CONSISTED OF TWO INVOICES, AS FOLLOWS:

TABLE

A. CLAIM FOR MAJOR DAMAGES $4,391.06

B. CLAIM FOR MINOR DAMAGES 640.35

TOTAL $5,031.41

IN THE CONTRACTOR'S LETTER OF TRANSMITTAL THE CONTRACTOR CONTENDED THAT THE VEHICLES WERE NOT PROPERLY OPERATED AND CONSEQUENTLY SUFFERED EXTENSIVE DAMAGES, AS FOLLOWS:

TABLE

HERTZ NO. DAMAGE AMOUNT

29254 REFRIGERATION AND BODY DAMAGE $1,164.00

31970 ENGINE RUN WITHOUT OIL 479.36

25721 ENGINE RUN WITHOUT WATER 762.39

AAA 3067 BODY DAMAGE--- ENGINE RUN 120.00

WITHOUT FAN BELT 307.00

35325 ENGINE RUN WITHOUT WATER 755.38

25789 BODY DAMAGE 370.00

25783 ENGINE 432.93

TOTAL MAJOR CLAIM $4,391.06

THE BALANCE OF THE CLAIM, $640.35, REPRESENTS MINOR DAMAGES ON 42 TRUCKS USED AS SUBSTITUTE VEHICLES WHILE THE CONTRACT VEHICLES WERE UNDERGOING REPAIRS. IN THE CONTRACTOR'S LETTER OF TRANSMITTAL WITH RESPECT TO THE $640.35 ITEM IT IS STATED THAT ALL OF THE DAMAGES IN THAT ITEM WERE VIEWED BY ARMY SPECIALISTS WHO MADE NO AGREEMENT TO PAY FOR SAME BUT DID AGREE THAT THE AMOUNTS CHARGED FOR THE REPAIRS WERE FAIR.

PARAGRAPH 10 OF THE SPECIAL PROVISIONS OF THE CONTRACT OBLIGATED THE CONTRACTOR TO MAINTAIN AND REPAIR THE VEHICLES AS REQUIRED TO ASSURE THEIR FIRST-CLASS OPERATING CONDITION AT ALL TIMES. PROVISION WAS MADE FOR THE USE OF SUBSTITUTE VEHICLES TO PERMIT THE CONTRACTOR TO MAINTAIN AND REPAIR THE CONTRACT VEHICLES AND THE GOVERNMENT WAS AUTHORIZED TO PROCURE ROAD- SIDE REPAIRS SUBJECT TO AGREEMENT BY THE CONTRACTOR. ALSO, THE GOVERNMENT WAS REQUIRED TO PROCURE PERIODIC PREVENTIVE AND CORRECTIVE MAINTENANCE AS REQUIRED AND AGREED TO BY THE CONTRACTOR AND TO PROVIDE GASOLINE AND OIL (EXCEPT CHANGE OF OIL) AS REQUIRED FOR THE OPERATION OF THE VEHICLES.

THE RENTAL OR LEASING OF PERSONAL PROPERTY SUCH AS TRUCKS CREATES A BAILOR-BAILEE RELATIONSHIP BETWEEN THE OWNER OF THE TRUCKS AND THE LESSEE. A BAILEE UNDER A BAILMENT FOR MUTUAL BENEFIT, SUCH AS HERE INVOLVED, IS OBLIGATED TO EXERCISE ONLY ORDINARY CARE AND PRUDENCE IN HANDLING AND OPERATION OF THE BAILED PROPERTY AND IS LIABLE ONLY FOR DAMAGES THERETO CAUSED BY HIS FAILURE TO EXERCISE SUCH ORDINARY CARE AND PRUDENCE, IN THE ABSENCE OF A CONTRACTUAL PROVISION ENLARGING HIS RESPONSIBILITY. AS APPLIED TO BAILMENTS, ORDINARY CARE MEANS SUCH CARE AS ORDINARILY PRUDENT MEN, AS A CLASS, WOULD EXERCISE IN CARING FOR THEIR OWN PROPERTY UNDER LIKE CIRCUMSTANCES. RICE OIL COMPANY, ET AL. V. ATLAS ASSURANCE COMPANY, LTD., 102 F.2D, 561, 574.

UNDER THE FOREGOING RULES, WHICH ARE FOR APPLICATION WITH RESPECT TO BAILMENTS SUCH AS HERE INVOLVED, THE PRESENT RECORD MAY NOT BE ACCEPTED AS ESTABLISHING THE GOVERNMENT'S LIABILITY FOR ANY PART OF THE AMOUNT CLAIMED FOR REASONS HEREINAFTER STATED.

OTHER THAN THE CONTRACTOR'S STATEMENTS THERE IS NO ADMINISTRATIVE CONFIRMATION THAT THE DAMAGES CLAIMED WERE CAUSED BY THAT DEGREE OF NEGLIGENCE WHICH WOULD SUBJECT THE GOVERNMENT TO LIABILITY FOR THE DAMAGES SUSTAINED BY THE TRUCKS. WHILE RUNNING THE TRUCKS WITHOUT OIL, WATER OR FAN BELTS ARE PRIMA FACIE INDICATIONS OF NEGLIGENCE ON THE PART OF THE GOVERNMENT, THERE IS NO ADMINISTRATIVE CONFIRMATION WITH RESPECT TO THE CONTRACTOR'S CLAIM THAT THE DAMAGES WERE THUS CAUSED. NEITHER IS THERE ANY ADMINISTRATIVE CONFIRMATION THAT THE CLAIMS FOR REFRIGERATION AND BODY DAMAGE ($1,164, NO. 29254), BODY DAMAGE ($370, NO. 25789) AND ENGINE ($432.93, NO. 25783) RESULTED FROM THAT DEGREE OF NEGLIGENCE ON THE PART OF THE GOVERNMENT WHICH WOULD SUBJECT IT TO LIABILITY FOR SUCH DAMAGES. THE SAME OBSERVATION MAY BE MADE WITH RESPECT TO THE DAMAGES TO 42 TRUCKS AGGREGATING $640.35.