A-2481, AUGUST 5, 1924, 4 COMP. GEN. 152

A-2481: Aug 5, 1924

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TELEPHONE SERVICE - INCREASED RATES WHERE A CONTRACT FOR TELEPHONE SERVICE IS "FOR THE TERM BEGINNING WITH ESTABLISHMENT OF THE SERVICE AND ENDING ONE MONTH FROM THE FIRST DAY OF THE MONTH FOLLOWING ITS ESTABLISHMENT. " PUBLICATION IN NEWSPAPERS IN THE CITY WHERE THE SERVICE IS RENDERED OF AN INCREASE OF RATES AUTHORIZED BY THE STATE COMMISSION DOES NOT OPERATE TO TERMINATE THE CONTRACT WITH THE UNITED STATES. INCLUDED IN THE TOTAL CHARGE FOR SERVICES FOR THE FIRST-NAMED PERIOD WAS A CHARGE OF $13.75 PER MONTH FOR EXCHANGE SERVICE "AS PER CONTRACT. IN SETTLEMENT 013135-J THERE WAS ALLOWED $85.65. IN SETTLEMENT 016041-J THERE WAS ALLOWED $61.40. WAS ENTERED INTO BETWEEN THE SOUTHERN BELL TELEPHONE AND TELEGRAPH CO.

A-2481, AUGUST 5, 1924, 4 COMP. GEN. 152

TELEPHONE SERVICE - INCREASED RATES WHERE A CONTRACT FOR TELEPHONE SERVICE IS "FOR THE TERM BEGINNING WITH ESTABLISHMENT OF THE SERVICE AND ENDING ONE MONTH FROM THE FIRST DAY OF THE MONTH FOLLOWING ITS ESTABLISHMENT, AND THEREAFTER UNTIL TERMINATED BY 10 DAYS' NOTICE IN WRITING BY EITHER PARTY TO THE OTHER," PUBLICATION IN NEWSPAPERS IN THE CITY WHERE THE SERVICE IS RENDERED OF AN INCREASE OF RATES AUTHORIZED BY THE STATE COMMISSION DOES NOT OPERATE TO TERMINATE THE CONTRACT WITH THE UNITED STATES, OR TO MAKE IT LIABLE FOR THE INCREASE IN RATES, IN THE ABSENCE OF ANY CONTRACT PROVISION FOR AN INCREASE IN RATES. WHERE A CONTRACT FOR TELEPHONE SERVICE PROVIDES FOR CERTAIN SPECIFIED FACILITIES, WITHOUT MAKING ANY PROVISION FOR ADDITIONAL FACILITIES, THE LATTER WHEN ORDERED AND FURNISHED SUBSEQUENT TO THE DATE OF THE CONTRACT AND APPARENTLY WITHOUT REFERENCE TO THE CONTRACT MAY BE PAID FOR AT THE INCREASED RATE AS ESTABLISHED BY THE STATE COMMISSION.

DECISION BY COMPTROLLER GENERAL MCCARL, AUGUST 5, 1924:

THE ATTORNEY GENERAL, BY LETTER DATED APRIL 26, 1924, REQUESTED A REVIEW OF SETTLEMENTS PER CERTIFICATES NO. 013135-J, DATED MARCH 3, 1924, AND NO. 016041-J, DATED MARCH 13, 1924, OF CLAIMS (NO. 04375) OF THE SOUTHERN BELL TELEPHONE AND TELEGRAPH CO., ATLANTA, GA., FOR $120.65 AND $74.90, RESPECTIVELY, FOR TELEPHONE SERVICE RENDERED THE BUREAU OF INVESTIGATION, DEPARTMENT OF JUSTICE, AT ATLANTA, GA., COVERING PERIODS, RESPECTIVELY, FROM SEPTEMBER, 1922, TO MARCH, 1923, BOTH MONTHS INCLUSIVE, AND FROM AUGUST 1 TO OCTOBER 31, 1923. INCLUDED IN THE TOTAL CHARGE FOR SERVICES FOR THE FIRST-NAMED PERIOD WAS A CHARGE OF $13.75 PER MONTH FOR EXCHANGE SERVICE "AS PER CONTRACT," AMOUNTING TO $96.25, AND IN THAT FOR THE LATTER PERIOD $13.25 PER MONTH ("RATE ON MAIN EXCHANGE BEING DECREASED FROM $13.75 TO $13.25 PER MONTH, EFFECTIVE MAY 1, 1923, PER AUTHORITY OF GEORGIA RAILWAY COMMISSION, NO COPY OF CONTRACT AVAILABLE"), AMOUNTING TO $39.75.

IN SETTLEMENT 013135-J THERE WAS ALLOWED $85.65, REPRESENTING $120.65 LESS $35 DEDUCTED AS AMOUNT CLAIMED IN EXCESS OF EXCHANGE RATE CONTRACTED FOR, THE CONTRACT OF JANUARY 8, 1920, CALLING FOR A TOTAL MONTHLY RATE OF $8.75 INSTEAD OF $13.75, AS CLAIMED; AND IN SETTLEMENT 016041-J THERE WAS ALLOWED $61.40, REPRESENTING $74.90 LESS $13.50 DEDUCTED AS AMOUNT CLAIMED IN EXCESS OF CONTRACT RATE.

CONTRACT DATED JANUARY 8, 1920, FOR TELEPHONE SERVICE, WAS ENTERED INTO BETWEEN THE SOUTHERN BELL TELEPHONE AND TELEGRAPH CO. AND UNITED STATES BUREAU OF INVESTIGATION, DEPARTMENT OF JUSTICE, BY LEWIS J. BAILEY, SUPERINTENDENT. SAID CONTRACT (COMPANY'S FORM S-1301, OCTOBER, 1919) READS IN PART:

THE SUBSCRIBER HEREBY REQUESTS THE SOUTHERN BELL TELEPHONE AND TELEGRAPH COMPANY (HEREIN STYLED THE COMPANY) TO FURNISH, FOR THE USE OF SUBSCRIBER, SUBSCRIBER'S AGENTS AND REPRESENTATIVES ONLY, TELEPHONE SERVICE AS FOLLOWS:

CLASS OF SERVICE (BUSINESS, FLAT RATE, SPECIAL LINE) * * * AT (STREET OR OFFICE ADDRESS) 309 POST OFFICE BUILDING IN THE CITY OF ATLANTA, GA., FOR THE TERM BEGINNING WITH ESTABLISHMENT OF THE SERVICE AND ENDING ONE MONTH FROM THE FIRST DAY OF THE MONTH FOLLOWING ITS ESTABLISHMENT, AND THEREAFTER UNTIL TERMINATED BY TEN DAYS' NOTICE IN WRITING BY EITHER PARTY TO THE OTHER, AND AGREES TO PAY AT THE OFFICE OF THE COMPANY, MONTHLY, IN ADVANCE, FOR THE TELEPHONE FACILITIES FURNISHED HEREUNDER AND FOR LOCAL MESSAGES FROM THE STATION OR STATIONS COVERED BY THIS CONTRACT THE RATES SPECIFIED UNDER "RATE MEMORANDUM," ON THE BACK HEREOF; * * * ALL FACILITIES AND SERVICE FURNISHED HEREUNDER TO BE IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE COMPANY'S SCHEDULES OF RATES AND REGULATIONS, AND SUBJECT TO THE TERMS AND CONDITIONS HEREINAFTER EXPRESSED, AND TO THE RULES AND REGULATIONS FROM TIME TO TIME ADOPTED BY THE COMPANY.

THE "RATE MEMORANDUM" PROVIDES FOR PAYMENT OF A TOTAL MONTHLY RATE OF $8.75 ($7.50 FOR INITIAL STATION, $1 FOR ONE EXTENSION STATION, AND 25 CENTS FOR ONE EXTRA LISTING). "MONTHLY RATE ON ANNUAL BASIS.'

PARAGRAPH 12 OF THE "TERMS AND CONDITIONS" READS IN PART:

THIS REQUEST BECOMES A BINDING CONTRACT WHEN ACCEPTED BY THE COMPANY'S MANAGER, BY HIS SIGNATURE HERETO, OR BY ESTABLISHING THE SAID SERVICE.

THE PROVISION FOR PAYMENT "MONTHLY, IN ADVANCE," IS VOID AS AGAINST THE UNITED STATES IN VIEW OF THE PROVISION OF SECTION 3648, REVISED STATUTES, THAT "IN ALL CASES OF CONTRACTS FOR THE PERFORMANCE OF ANY SERVICE, * * * FOR THE USE OF THE UNITED STATES, PAYMENT SHALL NOT EXCEED THE VALUE OF THE SERVICE RENDERED * * * PREVIOUSLY TO SUCH PAYMENT.'

THE RAILROAD COMMISSION OF GEORGIA, BY ORDER DATED FEBRUARY 4, 1921, AUTHORIZED MAXIMUM RATES EFFECTIVE MARCH 1, 1921, TO BE CHARGED BY THE CLAIMANT COMPANY, THE BUSINESS FLAT-RATE SERVICES FOR ATLANTA BEING FIXED AT $10.50 PER MONTH FOR ONE PARTY LINE AND AT $1.50 PER MONTH FOR AN EXTENSION, WALL, OR DESK.

AFFIDAVITS HAVE BEEN SUBMITTED SHOWING THAT THE INCREASE OF RATES GRANTED AND AUTHORIZED BY THE SAID RAILROAD COMMISSION, EFFECTIVE MARCH 1, 1921, WERE PUBLISHED FEBRUARY 6, 1921, IN TWO NEWSPAPERS IN ATLANTA, GA.

IT IS STATED THAT THE GOVERNMENT WAS GIVEN THE SAME NOTICE, UNDER THE SAME FORM OF CONTRACT, AS THE GENERAL PUBLIC, AND THAT IT WOULD APPEAR THAT THIS NOTICE, GIVEN MORE THAN 10 DAYS PRIOR TO THE DATE THE NEW RATES WERE TO BECOME EFFECTIVE, BY PUBLICATION RATHER THAN BY PERSONAL SERVICE, COMPLIES WITH THE TERMS OF THE CONTRACT.

IT IS STATED ALSO THAT JULY 1, 1921, THE DEPARTMENT ENDEAVORED TO SECURE A NEW CONTRACT COVERING THE INCREASED RATES, BUT THE COMPANY REFUSED TO SIGN ONE, AND NO FORMAL CONTRACT HAS BEEN ENTERED INTO SINCE THE ONE DATED JANUARY 8, 1920.

THE GENERAL RULE UNDER A CONTRACT FOR THE FURNISHING OF SERVICE TO THE UNITED STATES BY A PUBLIC UTILITY IS THAT AN INCREASE IN MAXIMUM RATES GRANTED TO THE UTILITY DOES NOT OPERATE TO INCREASE THE LIABILITY FOR THE RATES SPECIFIED IN THE CONTRACT. 24 COMP. DEC. 280. AN EXCEPTION TO THE GENERAL RULE EXISTS WHERE THE CONTRACT, AS TO RATES, IS ON A MONTH TO MONTH BASIS, SUBJECT TO CHANGE WITHOUT NOTICE BY A DULY AUTHORIZED BODY. DECISION OF SEPTEMBER 28, 1923, 25 MS. COMP. GEN. 991.

THE CONTRACT OF JANUARY 8, 1920, IS "FOR THE TERM BEGINNING WITH ESTABLISHMENT OF THE SERVICE AND ENDING ONE MONTH FROM THE FIRST DAY OF THE MONTH FOLLOWING ITS ESTABLISHMENT, AND THEREAFTER UNTIL TERMINATED BY 10 DAYS' NOTICE IN WRITING BY EITHER PARTY TO THE OTHER.' IN OTHER WORDS, THE CONTRACT TERM IS FIRST FOR A PERIOD OF LESS THAN OR NOT TO EXCEED TWO MONTHS, AND THEN IT BECOMES CONTINUOUS AND INDEFINITE, TERMINABLE UPON NOTICE AS STATED. THE CONTRACT IS NOT A MONTHLY AGREEMENT AS TO RATES, NOR DOES IT CONTAIN ANY PROVISION FOR INCREASE OF RATES FOR EXCHANGE SERVICE. THE PUBLICATION IN THE ATLANTA NEWSPAPERS OF THE INCREASE OF RATES GRANTED AND AUTHORIZED BY THE STATE COMMISSION OF GEORGIA, THOUGH MADE MORE THAN 10 DAYS PRIOR TO THE DATE THE INCREASE BECAME EFFECTIVE, DID NOT OPERATE TO TERMINATE THE CONTRACT WITH THE UNITED STATES NOR TO MAKE IT LIABLE FOR THE INCREASED RATES. SAID CONTRACT NOT HAVING BEEN TERMINATED IN ACCORDANCE WITH ITS PROVISIONS, IT CONTINUES IN FORCE AND EFFECT WHILE THERE IS AN APPROPRIATION AVAILABLE FOR PAYMENT OF THE SERVICE CONTRACTED FOR, AND PAYMENT FOR THE EXCHANGE SERVICE SPECIFIED MAY BE MADE ONLY AT THE RATE PROVIDED THEREIN.

IT APPEARS, HOWEVER, THAT INCLUDED IN THE MONTHLY RATE OF $13.75 FOR EXCHANGE SERVICE FOR THE PERIOD SEPTEMBER, 1922, TO MARCH, 1923, AND OF $13.25 FOR PERIOD AUGUST 1 TO OCTOBER 31, 1923, THERE IS INCLUDED A CHARGE OF $1.50 FOR A SECOND EXTENSION THAT WAS INSTALLED ON MARCH 1, 1921, BY ORDER OF THE BUREAU OF INVESTIGATION, AND THAT THE CHANGE IN THE MONTHLY RATE FROM $13.75 TO $13.25 WAS DUE TO A REDUCTION FROM $10.50 TO $10 FOR ONE-PARTY LINE.

AS THE CONTRACT OF JANUARY 8, 1920, PROVIDES FOR ONLY ONE EXTENSION, WITHOUT MAKING PROVISION FOR ADDITIONAL FACILITIES, CHARGE FOR THE SECOND EXTENSION MAY BE ALLOWED FOR AS OUTSIDE THE CONTRACT AND AT THE RATE OF $1.50.

UPON REVIEW DIFFERENCES ARE CERTIFIED DUE THE COMPANY AS FOLLOWS:

IN SETTLEMENT PER CERTIFICATE NO. 013135-J, $10.50, COVERING SECOND EXTENSION AT $1.50 PER MONTH FOR SEVEN MONTHS, SEPTEMBER, 1922, TO MARCH, 1923, INCLUSIVE.

IN SETTLEMENT PER CERTIFICATE NO. 016041-J, $4.50, COVERING SECOND EXTENSION AT $1.50 PER MONTH FOR THREE MONTHS, AUGUST 1 TO OCTOBER 31, 1923.