A-90487, JULY 19, 1938, 18 COMP. GEN. 60

A-90487, JULY 19, 1938, 18 COMP. GEN. 60

CONTRACTS - EXCHANGES - OLD FOR NEW - TRADE-IN VALUE INCLUSION FOR DISCOUNT PURPOSES WHERE AUTOMOBILES ARE PAID FOR PARTLY IN CASH AND PARTLY BY DELIVERY OF OLD VEHICLES, AND THE PURCHASE CONTRACT PROVIDES FOR DISCOUNT FOR PAYMENT WITHIN A SPECIFIED TIME, THE DISCOUNT IS FOR COMPUTATION ON THE ENTIRE PURCHASE PRICE, INCLUDING THE TRADE-IN ALLOWANCE FOR THE OLD VEHICLES, AND NOT ON THE BASIS OF THE PRICE LESS TRADE-IN VALUE, NOTWITHSTANDING THE CLAIMED INTENTION OF THE BIDDER AND ALLEGED TRADE CUSTOM OTHERWISE. COMP. GEN. 580, AFFIRMED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE INTERIOR, JULY 19, 1938:

THERE WAS RECEIVED YOUR LETTER OF APRIL 18, 1938, WITH INCLOSURES, AS FOLLOWS:

REFERENCE IS MADE TO YOUR DECISION TO THIS DEPARTMENT JANUARY 20, 1938 (A -90487), REGARDING CONTRACT NO. I-29-IND-2755, JUNE 29, 1936, WITH MURPHY MOTORS INC., MISSOULA, MONTANA.

UPON THE FACTS PRESENTED BY THE RECORD, YOU ADVISED THAT CREDIT WOULD BE WITHHELD IN THE ACCOUNTS OF THE DISBURSING OFFICER FOR THE EXCESS PAYMENT MADE TO THE CONTRACTOR BY REASON OF THE ERRONEOUS METHOD OF COMPUTING ALLOWABLE DISCOUNT AND ALSO THAT CREDIT WOULD BE WITHHELD IN THE AMOUNT OF $40.00, THE EXCESS OF THE PURCHASE PRICE OF ONE OF THE AUTOMOBILES INVOLVED IN THIS CONTRACT OVER THE MAXIMUM STATUTORY PRICE LIMIT OF $750.00.

ON THE BASIS OF A CAREFUL STUDY OF THE RECORD AND THE ENCLOSED LETTERS OF MARCH 19, MARCH 26, AND APRIL 5, FROM THE SUPERINTENDENT OF THE FLATHEAD AGENCY TO THE PURCHASING OFFICER, THE DEPARTMENT FEELS JUSTIFIED IN REQUESTING YOUR RECONSIDERATION OF THE CASE WITH A VIEW TO ALLOWING CREDIT NOW BEING WITHHELD IN THE ACCOUNTS OF THE DISBURSING OFFICER.

THE METHOD OF COMPUTING DISCOUNT, WHICH YOU SAID WAS "OBVIOUSLY INCORRECT," WAS BASED ON THE DISBURSING OFFICER'S INTERPRETATION OF CUSTOMARY COMMERCIAL PRACTICE, AS EVIDENCED BY THE RECORD AND THE REPORTS, SUPPORTED BY STATEMENTS OF THE CONTRACTOR AND HIS SOURCE OF SUPPLY. SEEMS CLEARLY ESTABLISHED THAT THE DISBURSING OFFICER COMPUTED THE DISCOUNT EXACTLY AS WAS INTENDED BY THE CONTRACTOR WHO OFFERED THE DISCOUNT, AND, IN SO DOING, THE DISBURSING OFFICER ACTED IN GOOD FAITH IN ACCORDANCE WITH HIS UNDERSTANDING OF THE PROPER METHOD FOR TAKING DISCOUNTS. THE DEPARTMENT IS NOT AWARE OF ANY STATEMENT OR RULING OF YOUR OFFICE EFFECTIVE AT THAT TIME ESTABLISHING THE PRINCIPLE ENUNCIATED IN YOUR DECISION A-90487, OF JANUARY 20, 1938, IN REGARD TO COMPUTING DISCOUNTS, AND ACCORDINGLY BELIEVES THE DISBURSING OFFICER'S PROCEDURE WAS NOT ,OBVIOUSLY INCORRECT" TO THE EXTENT OF WARRANTING A DISALLOWANCE IN HIS ACCOUNTS. IF THERE WAS SUCH A RULING IN EFFECT, THE DEPARTMENT WOULD APPRECIATE A REFERENCE THERETO, AND IN THAT EVENT, THIS REQUEST FOR RECONSIDERATION MAY BE WITHOUT MERIT INSOFAR AS THE DISALLOWANCES ON DISCOUNTS ARE INVOLVED.

IN REGARD TO THE DISALLOWANCE OF $40.00 STATED TO BE IN EXCESS OF THE STATUTORY LIMITATION OF $750.00, THE RECORD SHOWS THAT THE AMOUNT INVOLVED FOR TRANSPORTATION, AS STATED BY THE CONTRACTOR IN HIS BID, WAS $115.00, AND THAT THIS WAS CHECKED AND FOUND REASONABLE BY COMPARISON WITH AN ESTIMATE OF $95.96 FOR FREIGHT ON THIS SEDAN FROM DETROIT TO DIXON, MONTANA, AT GOVERNMENT RATES. IN YOUR DECISION YOU ASSUMED THAT THIS AMOUNT COVERED TRANSPORTATION ON TWO AUTOMOBILES, WHEREAS IT IS APPARENT THAT THE AMOUNT STATED WAS FOR ONE AUTOMOBILE ONLY. IN THE CONTRACT, IN THE PARAGRAPH PRECEDING THE BIDDER'S STATEMENT OF TRANSPORTATION CHARGES, IT IS STATED THAT THE PRICE OF A NEW AUTOMOBILE SHALL NOT EXCEED $750.00 AT POINT OF ORIGIN EXCLUSIVE OF TRANSPORTATION CHARGES, AND THAT IF PRICE AT DESTINATION ONLY IS QUOTED, THE BIDDER WILL SHOW THE AMOUNT OF TRANSPORTATION COST THAT IS INCLUDED IN HIS DESTINATION PRICE, IF THAT PRICE EXCEEDS $750.00. THIS STATEMENT, CLEARLY APPLICABLE TO THE PRICE OF A SINGLE UNIT, LEAVES LITTLE ROOM FOR DOUBT THAT THE AMOUNT, $115.00, SHOWN BY THE BIDDER AS TRANSPORTATION CHARGES WAS FOR ONE CAR, THAT IS, FOR EITHER ITEM 1 OR ITEM 2 AND NOT FOR BOTH. FINALLY, IN FURTHER SUPPORT OF THIS INTERPRETATION, THERE IS ENCLOSED THE ORIGINAL LETTER OF MARCH 23 FROM THE CONTRACTOR TO THE SUPERINTENDENT OF THE FLATHEAD AGENCY STATING DEFINITELY THAT THE FREIGHT ON EACH AUTOMOBILE INVOLVED IN THIS CONTRACT WAS $115.00.

IF THE AMOUNT $115.00 IS THUS SATISFACTORILY SHOWN TO BE DEDUCTIBLE FOR TRANSPORTATION CHARGES ON EACH CAR, THE PRICE OF THE SEDAN EXCLUSIVE OF TAX AND TRANSPORTATION WAS $732.50, AND DID NOT EXCEED THE STATUTORY LIMITATION. ACCORDINGLY, IT IS REQUESTED THAT THE DISALLOWANCE OF $40.00 BE CANCELLED.

IT WILL BE APPRECIATED IN THE ENCLOSED ORIGINAL LETTERS ARE RETURNED WITH YOUR DECISION.

THE BID OF MURPHY MOTORS, INC., WAS FOR DESTINATION DELIVERY OF TWO AUTOMOBILES, ONE COUPE AND ONE SEDAN, ADVERTISED IN THE SAME INVITATION FOR BIDS. THE INVITATION INFORMED BIDDERS THAT BY STATUTORY LIMITATION THE PRICE OF THE NEW AUTOMOBILE TO BE PURCHASED UNDER THE ADVERTISEMENT COULD NOT EXCEED $750 AT POINT OF ORIGIN, EXCLUSIVE OF TRANSPORTATION CHARGES; THAT EACH BID TO RECEIVE CONSIDERATION MUST BE LESS THAN $750 FOR THE VEHICLE IF PRICE AT POINT OF ORIGIN WAS QUOTED; AND THAT IF PRICE AT DESTINATION ONLY WAS QUOTED THE BIDDER SHOULD SHOW THE AMOUNT OF TRANSPORTATION COST INCLUDED IN ITS DESTINATION PRICE, IF THAT PRICE EXCEEDED $750. THIS STATEMENT, OF COURSE, APPLIED EQUALLY TO BOTH VEHICLES. MURPHY MOTORS, INC., STATED THAT THE AMOUNT OF TRANSPORTATION CHARGE INCLUDED WAS $115, AND IT WAS ASSUMED THAT THAT AMOUNT REPRESENTED THE WHOLE AMOUNT INCLUDED IN THE BID FOR TRANSPORTATION ON BOTH VEHICLES, AS NO REFERENCE TO TRANSPORTATION COST ON THE VEHICLE SEPARATELY APPEARED. THE AMOUNT STIPULATED FOR TRANSPORTATION COST WAS ALLOCATED EQUALLY TO THE TWO VEHICLES INVOLVED, OR $57.50 TO EACH. THIS BROUGHT THE BID PRICE ON THE COUPE WITHIN THE STATUTORY PRICE LIMIT BUT LEFT THE FACTORY BID PRICE ON THE SEDAN--- EXCLUSIVE OF EXCISE TAX--- $790 OR $40 IN EXCESS OF THE STATUTORY LIMIT.

IT NOW APPEARS FROM INCLOSURES WITH YOUR LETTER THAT FREIGHT ON THE TWO VEHICLES FROM THE FACTORY TO MISSOULA, MONT., AT COMMERCIAL RATES WAS $115 EACH, AND IT IS STATED THAT IT WAS THE INTENTION OF MURPHY MOTORS, INC., TO SUBMIT ITS BID SO THAT FREIGHT FROM THE FACTORY WOULD SHOW $115 ON EACH CAR. HOWEVER, THERE WAS NO SHOWING UPON THE FACE OF THE BID OR CONTRACT TO SUGGEST THAT INTENTION, AND THE DECISION OF JANUARY 20, 1938, WAS BASED UPON THE FACTS APPEARING ON THE RECORD.

THERE IS NOTED IN YOUR STATEMENT THAT THE AMOUNT OF $115 TRANSPORTATION COST STATED BY THE CONTRACTOR IN ITS BID "WAS CHECKED AND FOUND REASONABLE BY COMPARISON WITH AN ESTIMATE OF $95.96 FOR FREIGHT ON THIS SEDAN FROM DETROIT TO DIXON, MONT., AT GOVERNMENT RATES.' IF $95.96 WAS THE ACTUAL AMOUNT IT WOULD HAVE COST FOR TRANSPORTATION OF THE SEDAN AT GOVERNMENT RATES, THE PROPER BASIS FOR EVALUATING THE BID FOR THE PURPOSE OF DETERMINING WHETHER THE VEHICLE PRICE OF THE SEDAN WAS WITHIN THE STATUTORY LIMIT WOULD HAVE BEEN AS FOLLOWS:

CHART

DESTINATION DELIVERY PRICE QUOTED -------------------------- $870.00

LESS FEDERAL EXCISE TAX ---------------------------- $22.50

TRANSPORTATION, GOVERNMENT RATES ------------------- 95.96

-------- 118.46

FACTORY VEHICLE PRICE -------------------------------- 751.54

THUS EVALUATED THE VEHICLE BID PRICE OF MURPHY MOTORS, INC., ON THE SEDAN STILL WOULD BE IN EXCESS OF THE STATUTORY PRICE LIMIT AND HENCE NOT PROPERLY FOR CONSIDERATION. IT HAS BEEN POINTED OUT IN SEVERAL DECISIONS OF THIS OFFICE THAT THE TRANSPORTATION COST FOR CONSIDERATION IN DETERMINING WHETHER THE VEHICLE PRICE IS WITHIN THE STATUTORY LIMIT, IS THE LOWEST TRANSPORTATION COST AVAILABLE TO THE GOVERNMENT FROM FACTORY TO DESTINATION, AND NOT THE COMMERCIAL RATE. SEE 17 COMP. GEN. 854, AND DECISIONS CITED. SINCE YOU STATE THE AMOUNT OF $95.96 WAS AN ESTIMATE, THERE IS THE POSSIBILITY THAT EXACT COMPUTATION OF TRANSPORTATION COST WOULD HAVE RESULTED OR WOULD RESULT IN FIGURES SLIGHTLY LESS OR MORE THAN THAT AMOUNT, IN WHICH CASE THE BID WOULD BE CORRESPONDINGLY MORE OR LESS IN EXCESS OF THE STATUTORY PRICE LIMIT, OR POSSIBLE WITHIN SAID LIMIT.

THEREFORE, UPON THE BASIS OF YOUR PRESENT SHOWING, AND SUBJECT TO CORRECTION, CREDIT IN THE ACCOUNTS OF THE DISBURSING OFFICER WILL BE ALLOWED ACCORDINGLY. THAT IS TO SAY, IF EXACT COMPUTATION OF TRANSPORTATION COST ON THE SEDAN AT LOWEST AVAILABLE GOVERNMENT RATES SHOULD SHOW AN AMOUNT SUFFICIENT TO BRING THE VEHICLE PRICE WITHIN THE STATUTORY PRICE LIMIT, CREDIT WILL BE ALLOWED FOR THE FULL AMOUNT OF THE $40 EXCESS, WHILE, IF THE TRANSPORTATION COSTS SO COMPUTED ARE NOT SUFFICIENT TO BRING THE VEHICLE PRICE WITHIN THE STATUTORY LIMIT, CREDIT WILL BE WITHHELD IN THE EXACT AMOUNT OF THE EXCESS. 17 COMP. GEN. 7; ID. 215.

IN CONNECTION WITH YOUR REQUEST FOR RECONSIDERATION OF THE DECISION OF JANUARY 20, 1938, WITH REFERENCE TO THE METHOD OF COMPUTING DISCOUNT FOR THE PURPOSE OF PAYMENTS UNDER THE CONTRACT, YOU STATE THAT YOUR DEPARTMENT "IS NOT AWARE OF ANY STATEMENT OR RULING OF YOUR OFFICE EFFECTIVE AT THAT TIME ESTABLISHING THE PRINCIPLE ENUNCIATED IN YOUR DECISION A-90487 OF JANUARY 20, 1938, IN REGARD TO COMPUTING DISCOUNTS AND ACCORDINGLY BELIEVES THAT THE DISBURSING OFFICER'S PROCEDURE WAS NOT OBVIOUSLY INCORRECT TO THE EXTENT OF WARRANTING A DISALLOWANCE IN HIS ACCOUNTS.' YOU FURTHER STATE: "IF THERE WAS SUCH A RULING IN EFFECT, THE DEPARTMENT WOULD APPRECIATE A REFERENCE THERETO, AND IN THAT EVENT, THIS REQUEST FOR RECONSIDERATION MAY BE WITHOUT MERIT INSOFAR AS THE DISALLOWANCES ON DISCOUNTS ARE INVOLVED.' ALSO, YOU STATE THAT THE METHOD OF COMPUTING DISCOUNTS ,WAS BASED ON THE DISBURSING OFFICER'S INTERPRETATION OF CUSTOMARY COMMERCIAL PRACTICE, AS EVIDENCED BY THE RECORD AND THE REPORTS, SUPPORTED BY STATEMENTS OF THE CONTRACTOR AND HIS SOURCE OF SUPPLY.'

IT DOES NOT APPEAR FROM THE RECORDS OF THIS OFFICE THAT ANY EARLIER DECISION HAD BEEN RENDERED STATING, IN SO MANY WORDS, THE RULE THAT IN THE PURCHASE OF NEW AUTOMOBILES FOR GOVERNMENT USE, DISCOUNTS SHOULD BE COMPUTED UPON THE FULL PURCHASE PRICE INCLUSIVE OF TRADE-IN ALLOWANCES ON USED VEHICLES. THAT FACT, IN ITSELF, WOULD SUGGEST THAT THE PRACTICE OF COMPUTING DISCOUNTS ON THE FULL PURCHASE PRICE HAS BEEN SO UNIVERSAL THROUGHOUT THE PURCHASING AGENCIES OF THE GOVERNMENT THAT THE QUESTION HAS NOT HERETOFORE BEEN PRESENTED FOR CONSIDERATION. THERE HAS NOT BEEN BROUGHT TO MY ATTENTION ANY PREVIOUS INSTANCE IN WHICH THE TRADE-IN VALUES ON USED AUTOMOBILES WERE DEDUCTED FROM THE BID PRICE BEFORE COMPUTING THE DISCOUNT. ON THE OTHER HAND, THERE ARE OF RECORD IN THIS OFFICE INSTANCES IN WHICH BIDDERS IN SUBMITTING BIDS INCLUSIVE OF TRADE-IN ALLOWANCES HAVE STATED ON THE BIDS THAT THE DISCOUNT OFFERED FOR PROMPT PAYMENT WAS FOR COMPUTATION BEFORE TRADE-IN VALUES WERE DEDUCTED, WHILE VOUCHERS COVERING PAYMENTS ON SIMILAR CONTRACTS SHOW THAT PRACTICE.

ALTHOUGH THE RECORDS SHOW NO DECISIONS SPECIFICALLY STATING THE PROPER RULE, THERE HAVE BEEN DECISIONS WHICH, BY ANALOGY AT LEAST, WOULD APPEAR SUFFICIENT TO PUT A DISBURSING OFFICER ON NOTICE AS TO THE PROPER METHOD OF COMPUTING DISCOUNT IN SUCH A CASE, FOR IT HAS BEEN HELD THAT WHERE THE CONTRACT PRICE IS INCLUSIVE OF FREIGHT TO DESTINATION, DISCOUNT SHOULD BE COMPUTED ON THE FULL CONTRACT PRICE, NOTWITHSTANDING THE AMOUNT EXPENDED BY THE CONTRACTOR FOR FREIGHT IS NOT PART OF THE ACTUAL PRICE TO THE CONTRACTOR OF THE ARTICLES PURCHASED BY THE GOVERNMENT; THAT THE CIRCUMSTANCE THAT THE PRICE OF NEW AUTOMOBILES MAY BE PAID FOR PARTLY IN CASH AND PARTLY BY CREDIT FOR THE AMOUNT OFFERED AS TRADE-IN ALLOWANCE FOR OLD VEHICLES DOES NOT CHANGE THE AMOUNT OF THE TOTAL CONTRACT CONSIDERATION FOR WHICH THE GOVERNMENT IS OBLIGATED, 16 COMP. GEN. 605, AND THAT THE TOTAL PRICE NAMED IN THE CONTRACT IS, IN EVERY INSTANCE, THE CONTRACT PRICE, IRRESPECTIVE OF TRADE-IN ALLOWANCES.

IN THE INSTANT CASE, MURPHY MOTORS, INC., OFFERED THE GOVERNMENT A COUPE AT DELIVERED PRICE OF $765, AND A SEDAN AT A DELIVERED PRICE OF $870, INCLUDING FEDERAL EXCISE TAX AGGREGATING $45 ON THE TWO VEHICLES, WHICH AMOUNT THE CONTRACTOR CONSENTED TO HAVE DEDUCTED AND TO ACCEPT TAX EXEMPTION CERTIFICATES IN LIEU THEREOF. THEREFORE, THE CONTRACT PRICES FOR THE TWO NEW VEHICLES--- THE AMOUNTS WHICH THE GOVERNMENT WAS OBLIGATED TO PAY--- WERE $742.50 AND $847.50, RESPECTIVELY, AN AGGREGATE OF $1,590, AND THE CIRCUMSTANCE THAT THE PRICE OF THE NEW AUTOMOBILES WAS TO BE PAID PARTLY IN CASH AND PARTLY BY A CREDIT FOR THE AMOUNT OFFERED AS TRADE-IN ALLOWANCE FOR THE OLD VEHICLES DID NOT CHANGE THE AMOUNT OF THE TOTAL CONTRACT CONSIDERATION FOR WHICH THE GOVERNMENT WAS OBLIGATED.

THE FACE OF THE BID INCLUDED THE FOLLOWING PROVISION AS FILLED IN BY MURPHY MOTORS, INC.:

IN COMPLIANCE WITH THE ABOVE INVITATION FOR BIDS, AND SUBJECT TO ALL THE CONDITIONS THEREOF, THE UNDERSIGNED OFFERS, AND AGREES, IF THIS BID BE ACCEPTED WITHIN 10 DAYS FROM THE DATE OF THE OPENING, TO FURNISH ANY OR ALL OF THE ITEMS UPON WHICH PRICES ARE QUOTED, AT THE PRICE SET OPPOSITE EACH ITEM, F.O.B. MISSOULA AND, UNLESS OTHERWISE SPECIFIED WITHIN 5 DAYS AFTER RECEIPT OF ORDER. DISCOUNTS WILL BE ALLOWED FOR PAYMENT AS FOLLOWS: 10 CALENDAR DAYS, 5 PERCENT; 20 CALENDAR DAYS,--- PERCENT; 30 CALENDAR DAYS,--- PERCENT.

THE "PLAIN, OBVIOUS AND RATIONAL MEANING" OF THE LANGUAGE USED WAS THAT THE DISCOUNT FOR PROMPT PAYMENT WAS TO BE ALLOWED FROM THE "PRICE SET OPPOSITE EACH ITEM," WHICH, OF COURSE, WAS THE PRICE AT WHICH THE NEW VEHICLES WERE OFFERED. WHILE THE PROVISION IN BLANK WAS PRINTED THE INSERTIONS WERE THOSE OF THE BIDDER, AND ITS FAILURE TO STIPULATE OTHERWISE COULD ONLY BE INTERPRETED AS AGREEMENT TO THE PLAIN MEANING OF THE LANGUAGE USED IN THE FORM.

AS TO YOUR STATEMENT THAT THE METHOD OF COMPUTING THE DISCOUNT WAS BASED ON THE DISBURSING OFFICER'S INTERPRETATION OF CUSTOMARY COMMERCIAL PRACTICE, IT HAS BEEN POINTED OUT HERETOFORE THAT NOTHING IN THE NATURE OF A TRADE CUSTOM, PRACTICE, OR USAGE MAY BE ACCEPTED IN THE INTERPRETATION OF CONTRACTS WITH THE UNITED STATES. A-41746, APRIL 14, 1932; A-72347, MARCH 25, 1936; A-68849, AUGUST 29, 1936. MOREOVER THE COURTS HAVE HELD CONSISTENTLY THAT WHILE USAGE MAY BE RESORTED TO IN ORDER TO MAKE DEFINITE WHAT IS UNCERTAIN, CLEAR UP WHAT IS DOUBTFUL, OR ANNEX INCIDENTS, IT MAY NOT BE INVOKED TO VARY OR CONTRADICT THE TERMS OF A CONTRACT. MOORE V. UNITED STATES, 196 U.S. 157. AS SAID IN NATIONAL BANK V. BURKHARDT, 100 U.S. 686, 692.

A GENERAL USAGE MAY BE PROVED IN PROPER CASES, TO REMOVE AMBIGUITIES AND UNCERTAINTIES IN A CONTRACT, OR TO ANNEX INCIDENTS, BUT IT CANNOT DESTROY, CONTRADICT, OR MODIFY WHAT IS OTHERWISE MANIFEST. WHERE THE INTENT AND MEANING OF THE PARTIES ARE CLEAR, EVIDENCE OF A USAGE TO THE CONTRARY IS IRRELEVANT AND UNAVAILING.

THERE IS WITH YOUR SUBMISSION WHAT PURPORTS TO BE A COPY OF A LETTER OF MARCH 28, 1938, FROM CHRYSLER CORPORATION, FARGO DIVISION, TO MURPHY MOTORS, INC., AS FOLLOWS:

REPLYING TO YOUR LETTER OF MARCH 23RD REGARDING METHOD OF FIGURING DISCOUNT.

IN BILLING FLEET ACCOUNTS WHEREBY A FLEET DISCOUNT WAS SHOWN ON THE INVOICE, IT WAS TRADE PRACTICE TO COMPUTE THE DISCOUNT ON THE DIFFERENCE BETWEEN THE F.O.B. DETROIT LIST PRICE AND THE VALUE OF THE TRADE-IN.

THIS PLAN WAS IN EFFECT PARTICULARLY ON TRUCKS UP UNTIL THE DISCONTINUANCE OF THE FLEET AGREEMENT.

WHILE THE TERM "USAGE" HAS BEEN VARIOUSLY THOUGH SIMILARLY IF NOT UNIFORMLY DEFINED, IT HAS BEEN SAID THAT A USAGE MUST CONSTITUTE THE GENERAL, RECOGNIZED, AND PREVAILING PRACTICE OF CONDUCTING BUSINESS IN A GIVEN LOCALITY OR IN THE TRADE OR BUSINESS TO WHICH IT IS APPLICABLE; THAT THE TRUEST TEST OF A COMMERCIAL USAGE IS ITS HAVING EXISTED A SUFFICIENT LENGTH OF TIME TO HAVE BECOME GENERALLY KNOWN, AND TO WARRANT A PRESUMPTION THAT CONTRACTS ARE MADE IN REFERENCE TO IT, SMITH V. WRIGHT (N.Y.), 1 CAINES 43, 2 AM.DEC. 162; THAT CUSTOM OR USAGE IS THE RESULT OF A LONG CONTINUED AND SUBSTANTIALLY UNIFORM PRACTICE, B. AND O. RAILROAD CO. V. DOTY, 133 FED. 866, 872; AND THAT A USAGE OF SO DOUBTFUL AN AUTHORITY AS TO BE KNOWN ONLY TO A FEW, AND WHERE MERCHANTS ENGAGED IN THE TRADE DIFFER AS TO THE EXISTENCE OF IT, CAN NEVER BE REGARDED. COLLINGS V. HOPE, 6 FED. CASES, 111.

APPLYING THE RULES THUS STATED, IT WOULD APPEAR TO BE MANIFEST THAT THERE WAS NO "CUSTOMARY COMMERCIAL PRACTICE," CUSTOM, OR USAGE THAT DISCOUNTS ON GOVERNMENT PURCHASES OF AUTOMOBILES INVOLVING TRADE-IN ALLOWANCES WERE OR ARE FOR COMPUTATION ON THE NET BALANCE OF CASH PAYMENT AFTER DEDUCTION OF TRADE-IN ALLOWANCES. ON THE CONTRARY, IT IS TO BE GATHERED FROM THE ABOVE -QUOTED LETTER THAT WHATEVER WAS THE PRACTICE AS TO COMPUTATION OF DISCOUNT BY THE CHRYSLER MOTORS CORP., AND MURPHY MOTORS, INC., WAS THE OUTGROWTH OR RESULT OF A PRIVATE BUSINESS AGREEMENT OR CONTRACT BETWEEN THE CHRYSLER MOTORS CORP., FARGO DIVISION, AND ITS SALES REPRESENTATIVES OR AGENTS, DESIGNATED AS THE "FLEET AGREEMENT," THAT THE DISCOUNT PLAN OUTLINED WAS APPLICABLE PARTICULARLY TO TRUCKS, AND THAT THIS PRIVATE FLEET AGREEMENT WAS DISCONTINUED AT SOME UNDISCLOSED DATE, THE EXACT CHARACTER AND TERMS OF THE FLEET AGREEMENT NOT BEING SHOWN. TO THIS PRIVATE AGREEMENT THE GOVERNMENT WAS NOT A PARTY, AND WITH IT HAD NO CONCERN, AND THE PROVISIONS OF SAID AGREEMENT, WHATEVER THEY WERE, COULD NOT BE READ INTO MURPHY MOTORS, INC.'S CONTRACT WITH THE GOVERNMENT. THE PREVAILING PRACTICE AMONG PURCHASING AGENTS OF THE GOVERNMENT OF COMPUTING DISCOUNT ON THE FULL CONTRACT PRICE IN MAKING PAYMENT FOR GOVERNMENT PURCHASES OF AUTOMOBILES INVOLVING TRADE-IN ALLOWANCES FURTHER NEGATIVES THE EXISTENCE OF ANY CUSTOMARY COMMERCIAL PRACTICE OR USAGE TO THE CONTRARY, CERTAINLY WHERE SALES TO THE UNITED STATES ARE CONCERNED.

IN VIEW OF THE PLAIN AND UNAMBIGUOUS LANGUAGE OF THE BID AND CONTRACT, THE SUBSEQUENT STATEMENT OF MR. MURPHY "THAT IT WAS HIS INTENTION THAT THE DISCOUNT WOULD BE TAKEN ON THE NET AMOUNT AFTER THE FEDERAL TAX HAD BEEN DEDUCTED AND THE TRADE-IN ALLOWANCE FOR THE OLD CARS HAD BEEN DEDUCTED AND THAT HE WAS OFFERING 5 PERCENT FOR PROMPT PAYMENT IN 10 DAYS ON THE REMAINING BALANCE" IS NOT FOR CONSIDERATION. IF SUCH WAS THE INTENTION OF THE CONTRACTOR IN THE FIRST INSTANCE, IT SHOULD HAVE BEEN SO STATED ON THE BID. FURTHERMORE, IT IS OBVIOUS THAT IF THE GOVERNMENT DID NOT TAKE THE DISCOUNT ON THE FULL PURCHASE PRICE OF NEW VEHICLES SUCH PROCEDURE WOULD OPERATE AS A CORRESPONDING 5 PERCENT REDUCTION IN THE TRADE-IN ALLOWANCES ON THE OLD CARS.

FOR THE FOREGOING REASONS THE DECISION OF JANUARY 20, 1938, MUST BE AND IS AFFIRMED, INSOFAR AS THE METHOD OF COMPUTATION AND DEDUCTION OF DISCOUNT WAS INVOLVED.

THE ALLOWANCE ON THE USED VEHICLE TRADED IN ON THE PURCHASE PRICE OF THE NEW COUPE WAS $195 AND THE ALLOWANCE ON THE TWO USED VEHICLES TRADED IN ON THE PURCHASE PRICE OF THE NEW SEDAN WAS $500. FIVE PERCENT ON THESE AMOUNTS IS $9.75 AND $25, RESPECTIVELY, AN AGGREGATE OF $34.75. THE STATEMENT OF OVERPAYMENTS TABULATED IN THE LETTER OF MARCH 19, 1938,FROM THE SUPERINTENDENT OF THE FLATHEAD INDIAN AGENCY TO THE DEPARTMENT, IS CORRECT. THE AGGREGATE AMOUNT OF $34.75 COVERING SAID DISCOUNT SHOULD BE DEPOSITED AND THIS OFFICE NOTIFIED.