B-140206, FEB. 16, 1965

B-140206, FEB. 16, 1965

TO WESTERN MARYLAND RAILWAY COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 8, 1964, FILE WM GOVTS. X 8029, 8030, IN EFFECT REQUESTING RECONSIDERATION OF OUR DECISION OF APRIL 25, 1960, B-140206, SUSTAINING OUR CERTIFICATES OF SETTLEMENT DATED JUNE 11, 1959, WHICH DISALLOWED YOUR SUPPLEMENTAL BILLS 4769-A-58 AND 4770 -A-58 FOR ADDITIONAL TRANSPORTATION CHARGES OF $1,106.44 AND $553.22. SUCH ADDITIONAL CHARGES ARE SOUGHT IN CONNECTION WITH SIX SHIPMENTS DESCRIBED ON THE BILLS OF LADING AS CONSISTING OF M56, SELF PROPELLED 90 MM GUNS, WHICH MOVED IN NOVEMBER 1958, FROM CLEVELAND, OHIO, TO CULBERTSON, PENNSYLVANIA, FOR STORAGE IN TRANSIT.

ON DECEMBER 15, 1958, SUBSEQUENT TO DELIVERY OF THE SHIPMENTS AT CULBERTSON, THE LETTERKENNY ORDNANCE DEPOT ISSUED CORRECTION NOTICES TO YOU CHANGING THE BILL OF LADING DESCRIPTION TO SHOW THAT THE ARTICLES SHIPPED SHOULD BE PROPERLY DESCRIBED AS ARMY TRACTOR TANKS WITH GUNS. THE ADDITIONAL CHARGES CLAIMED AND DISALLOWED REPRESENTED THE DIFFERENCE BETWEEN THE CHARGES COMPUTED UNDER TRAFFIC EXECUTIVE ASSOCIATION, EASTERN RAILROADS, SECTION 22 QUOTATION NO. A-2275--- NAMING AN $0.87 RATE FOR CARLOAD SHIPMENTS OF 90 MM GUNS BETWEEN CLEVELAND AND CULBERTSON--- AND THE CHARGES COMPUTED AT A $1.30 CLASS RATE ON THE BASIS OF THE CLASSIFICATION RATING NAMED FOR ARMY TRACTOR TANKS WITH GUNS.

WE DISALLOWED YOUR CLAIMS BECAUSE THE BILLS OF LADING INDICATED THAT THE SHIPMENTS IN QUESTION WERE TO BE ACCORDED A TRANSIT PRIVILEGE; AND YOU WERE ADVISED TO COMPLY WITH THE PROVISIONS OF THE ASSOCIATION OF AMERICAN RAILROADS' CIRCULAR LETTER OF INSTRUCTIONS ADDRESSED TO CHIEF AND FREIGHT ACCOUNTING OFFICERS, DATED DECEMBER 1, 1949, FILE 215-17, BY PROVIDING A STATEMENT TO THE EFFECT THAT THE SUBJECT SHIPMENTS WERE STILL ON HAND AT THE TRANSIT STATION. IN COMPLIANCE THEREWITH YOU FURNISHED A STATEMENT BY YOUR AGENT AT CULBERTSON THAT AS OF JULY 6, 1959, THE SHIPMENTS WERE AT HAND AT THE TRANSIT STATION, CULBERTSON,PENNSYLVANIA. YOU, THEREFORE, REQUESTED RECONSIDERATION OF THE DISALLOWANCE OF YOUR SUPPLEMENTAL BILLS ON THEIR MERITS.

SINCE IT APPEARED THAT A TRANSIT PRIVILEGE HAD BEEN ACCORDED THESE SHIPMENTS, WE INVESTIGATED FURTHER, AND THE ADMINISTRATIVE OFFICE FURNISHED US TRANSIT CERTIFICATES INDICATING THAT THE SHIPMENTS WHICH MOVED INBOUND TO CULBERTSON HAD MOVED OUTBOUND IN JULY AND DECEMBER, 1959, TO NEW YORK, NEW YORK, AND NORFOLK, VIRGINIA. IN VIEW OF THE ESTABLISHED FACT THAT THE SHIPMENTS IN QUESTION WERE ACCORDED A TRANSIT PRIVILEGE, THE PROCEDURES SET OUT IN PARAGRAPHS 20 AND 21 OF THE CIRCULAR LETTER OF DECEMBER 1, 1949, FILE 215-17, WERE FOLLOWED. YOU WERE ADVISED THAT ANY ACTION SEEKING ADJUSTMENT OF THE CHARGES PAID SHOULD BE INITIATED BY THE FINAL DESTINATION CARRIER AND WE WOULD THEN BE IN A POSITION TO EXAMINE THE PERTINENT ACCOUNTS ON THE BASIS OF THE COMPLETE RECORD AND TO DISPOSE OF THE MATTER CONSISTENT WITH THE UNDERSTANDING OF ALL INTERESTED PARTIES AS TO THE PROCEDURE TO BE FOLLOWED. IN OUR DECISION OF APRIL 25, 1960, SUSTAINING THE SETTLEMENTS DISALLOWING YOUR SUPPLEMENTAL BILLS, WE FURNISHED YOU COMPLETE OUTBOUND BILLING REFERENCES.

APPARENTLY ACTING UPON YOUR REQUEST FOR ADJUSTMENT OF THE INBOUND FREIGHT CHARGES, THE DESTINATION CARRIERS FILED CLAIMS WITH US FOR THE RECOVERY OF UNDERCHARGES ON THE SUBJECT TRANSIT SHIPMENTS. THOSE CLAIMS WERE RECEIVED BY OUR OFFICE IN NOVEMBER AND DECEMBER 1963, OR MORE THAN 3 YEARS AFTER PAYMENT OF CHARGES FOR THE TRANSPORTATION INVOLVED, AND MORE THAN 3 YEARS AFTER WE FURNISHED YOU THE OUTBOUND BILLING REFERENCES ON APRIL 25, 1960. ACCORDINGLY, THE CLAIMS WERE RETURNED TO THE DESTINATION CARRIERS WITH THE EXPLANATION THAT THEY WERE BARRED BY THE 3-YEAR STATUTE OF LIMITATIONS PROVIDED IN SECTION 322 OF THE TRANSPORTATION ACT OF 1940, AS AMENDED, 49 U.S.C. 66.

IN YOUR PRESENT LETTER YOU SEEK RECOVERY OF $950.44 AND $553.22 BY YOUR "CORRECTED" SUPPLEMENTAL BILLS GA 4769-A AND 4770-A; YOUR THEORY APPARENTLY IS THAT SINCE THESE SUPPLEMENTAL BILLS WERE RECEIVED BY OUR OFFICE WITHIN THE 3-YEAR PERIOD OF LIMITATIONS THEY MAY STILL BE CONSIDERED ON THEIR MERITS. YOUR INITIAL SUPPLEMENTAL BILLS, RECEIVED HERE IN FEBRUARY 1959, WERE STATED FOR THE DIFFERENCE BETWEEN INBOUND CHARGES COMPUTED AT A $1.30 AND $0.87 RATE, AND WERE PREDICATED ON A CHANGE OF BILL OF LADING COMMODITY DESCRIPTION MADE AFTER THE SHIPMENTS REACHED THE TRANSIT POINT. HOWEVER, IN ACCORDANCE WITH PARAGRAPH 9 (C) OF THE CIRCULAR LETTER OF DECEMBER 1, 1949, YOUR SUPPLEMENTAL BILLS WERE DISPOSED OF CONSISTENT WITH THE FACTS OF RECORD IN OUR TRANSPORTATION DIVISION AT THE TIME OF SETTLEMENT, THAT IS, THAT THE SHIPMENTS HAD MOVED OUTBOUND AND, CONSEQUENTLY, ANY NECESSARY ADJUSTMENTS WERE TO BE MADE WITH THE OUTBOUND CARRIERS. UNDER THE PROVISIONS OF PARAGRAPH 9 (A) OF THE CIRCULAR LETTER, UPON RECEIPT OF THIS ADVICE FROM US IN APRIL 1960, IN THE ORDINARY COURSE OF EVENTS ACTION SHOULD HAVE BEEN TAKEN TO ISSUE TO THE AUDITOR OF THE DESTINATION CARRIER A CORRECTION NOTICE ON THE OUTBOUND WAYBILL TO SHOW THE RATE ACTUALLY PAID BY THE GOVERNMENT ON THE INBOUND MOVEMENT.

GENERALLY, A CLAIM FOR FREIGHT CHARGES ACCRUES UPON DELIVERY OR TENDER OF DELIVERY OF THE GOODS SHIPPED, AND THE STATUTE OF LIMITATIONS BEGINS TO RUN FROM THAT DATE. SEE HUGHES TRANSPORTATION, INC. V. UNITED STATES, 109 F.SUPP. 373 (1953). THE RULE IS NECESSARILY OTHERWISE IN A TRANSIT SITUATION, WHERE THERE ARE TWO DELIVERIES, ONE AT THE TRANSIT POINT AND A LATER ONE AT THE FINAL DESTINATION. UPON RESHIPMENT OUTBOUND, THE INBOUND LEG OF THE TRANSPORTATION IS LOST IN THE FICTION OF TRANSIT, AND THE CONTINUITY OF THE THROUGH MOVEMENT IS MAINTAINED. SEE, IN THIS CONNECTION, BOARD OF TRADE OF KANSAS CITY V. UNITED STATES, 314 U.S. 534 (1942), REHEARING DENIED, 315 U.S. 826; BALTIMORE AND OHIO R.CO. V. UNITED STATES, 24 F.SUPP. 734 (1938); GREAT NORTHERN RY. CO. V. COMMODITY CREDIT CORPORATION, 77 F.SUPP. 780 (1948), MODIFIED 81 F.SUPP. 852; AND GREAT NORTHERN RY. CO. V. UNITED STATES, 81 F.SUPP. 921 (1948), AFFIRMED 336 U.S. 933. AND THE AVAILABILITY OF THE TRANSIT PRIVILEGE DOES NOT SERVE TO TOLL APPLICABLE STATUTES OF LIMITATION FOR THE DURATION OF THE PRIVILEGE REGARDLESS WHEN RESHIPMENT MAY HAVE TAKEN PLACE. SEABOARD AIR LINE R.CO. V. RED DIAMOND MILLS, INC., 128 F.SUPP. 606 (1955).

A CLAIM FOR TRANSPORTATION CHARGES ACCRUES UPON THE HAPPENING OF THE EVENT WHICH FIXES THE RESPECTIVE RIGHTS OF THE PARTIES TO THE TRANSACTION, AND THE STATUTE OF LIMITATIONS BEGINS TO RUN FROM THAT TIME. ARKANSAS OAK FLOORING COMPANY V. LOUISIANA AND ARKANSAS RY. CO., 166 F.2D 98 (1948), CERT.DEN. 334 U.S. 828; CHICAGO AND N.W. R.CO. V. CONNOR LUMBER AND LAND CO., 212 F.2D 712 (1954). ON GOVERNMENT SHIPMENT SINCE AUGUST 26, 1958, HOWEVER, THE STATUTE OF LIMITATIONS BEGINS TO RUN ON CARRIER CLAIMS FROM "THE DATE OF (1) ACCRUAL OF THE CAUSE OF ACTION THEREON, OR (2) PAYMENT OF CHARGES FOR THE TRANSPORTATION INVOLVED, OR (3) SUBSEQUENT REFUND FOR OVERPAYMENT OF SUCH CHARGES, OR (4) DEDUCTION MADE PURSUANT TO THIS SECTION, WHICHEVER IS LATER.' PUB.L. 85-762, SECTION 2, 72 STAT. 860, 49 U.S.C. 66.

YOUR ORIGINAL SUPPLEMENTAL BILLS WERE ISSUED TO RECOVER ALLEGED UNDERCHARGES ON THE INBOUND MOVEMENTS. BUT, THE INBOUND SHIPMENTS WHEN REBILLED OUTBOUND LOST THEIR IDENTITY IN THE MAINTENANCE OF THE THROUGH MOVEMENTS, SO YOUR CLAIMS AS INBOUND CARRIER, BASED ON THE INBOUND BILLINGS, WERE ALSO LOST IN THE FICTION OF TRANSIT AND MERGED WITH ANY POSSIBLE CLAIMS ACCRUING TO THE OUTBOUND CARRIERS. YOUR "CORRECTED" SUPPLEMENTAL BILLS CORROBORATE THIS THEORY SINCE THEY ARE COMPUTED--- AND NECESSARILY SO--- ON THE BASIS OF THE APPLICABLE THROUGH RATE, PLUS TRANSIT AND PORT TERMINAL CHARGES, MINUS THE ACTUAL AMOUNT PAID ON THE INBOUND MOVEMENTS.

ACCORDINGLY, YOUR PRESENT CLAIMS ON "CORRECTED" BILLS MUST BE CONSIDERED AS NEW CLAIMS, AND SINCE THEY WERE RECEIVED HERE ON JUNE 15,1964, MORE THAN 3 YEARS AFTER PAYMENT OF CHARGES FOR THE TRANSPORTATION INVOLVED ON SEPTEMBER 1959 AND FEBRUARY 1960--- THE LATEST EVENT--- THEY WERE NOT TIMELY FILED AND MUST, THEREFORE, BE DISALLOWED.