A-72215, APRIL 23, 1936, 15 COMP. GEN. 929

A-72215: Apr 23, 1936

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PRIVATE PROPERTY - RENTED TO THE UNITED STATES - LIABILITY FOR LOSS VETERANS' ADMINISTRATION APPROPRIATIONS OR FUNDS ARE NOT AVAILABLE FOR PAYMENT OF THE COST OF REPLACING STOLEN PARTS OF A SOUND REPRODUCING MACHINE INSTALLED IN A VETERANS' ADMINISTRATION FACILITY ON A BAILEE FOR HIRE BASIS WHERE THERE IS NO EVIDENCE OF NEGLIGENCE ON THE PART OF THE GOVERNMENT. THIS EQUIPMENT UNDER THE TERMS OF THE CONTRACT IS LEASED TO THE VETERANS' ADMINISTRATION AND THE CONTRACT PROVIDES THAT THE CONTRACTOR SHALL MAINTAIN THE EQUIPMENT IN SATISFACTORY OPERATING CONDITION DURING THE PERIOD OF THE LEASE. WERE STOLEN BY A PERSON OR PERSONS UNKNOWN AND A BOARD OF SURVEY APPOINTED BY THE MANAGER TO INVESTIGATE THE THEFT HAS SUBMITTED THE FOLLOWING FINDINGS: "THE BOARD FINDS THAT ON OR ABOUT SEPTEMBER 17.

A-72215, APRIL 23, 1936, 15 COMP. GEN. 929

PRIVATE PROPERTY - RENTED TO THE UNITED STATES - LIABILITY FOR LOSS VETERANS' ADMINISTRATION APPROPRIATIONS OR FUNDS ARE NOT AVAILABLE FOR PAYMENT OF THE COST OF REPLACING STOLEN PARTS OF A SOUND REPRODUCING MACHINE INSTALLED IN A VETERANS' ADMINISTRATION FACILITY ON A BAILEE FOR HIRE BASIS WHERE THERE IS NO EVIDENCE OF NEGLIGENCE ON THE PART OF THE GOVERNMENT, AND THE CONTRACT REQUIRES SUCH REPLACEMENTS AS NECESSARY TO CONTINUED OPERATION OF THE EQUIPMENT.

COMPTROLLER GENERAL MCCARL TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, APRIL 23, 1936:

THERE HAS BEEN RECEIVED YOUR LETTER OF MARCH 10, 1936, AS FOLLOWS:

UNDER THE PROVISIONS OF CONTRACT VAP-6237, DATED APRIL 28, 1931, THE ELECTRICAL RESEARCH PRODUCTS, INC., NEW YORK CITY, N.Y., INSTALLED CERTAIN SOUND PICTURE EQUIPMENT IN THE VETERANS' ADMINISTRATION FACILITY, MILWAUKEE, WISCONSIN. THIS EQUIPMENT UNDER THE TERMS OF THE CONTRACT IS LEASED TO THE VETERANS' ADMINISTRATION AND THE CONTRACT PROVIDES THAT THE CONTRACTOR SHALL MAINTAIN THE EQUIPMENT IN SATISFACTORY OPERATING CONDITION DURING THE PERIOD OF THE LEASE, INCLUDING SUPPLYING OF REPLACEMENT PARTS SO THAT THERE SHALL BE NO FAILURE OF THE EQUIPMENT TO PERFORM IN EXCESS OF 5 PERCENT OF THE ACTUAL PERFORMANCE DEMANDED OF IT.

THE MANAGER, VETERANS' ADMINISTRATION FACILITY, MILWAUKEE, WISCONSIN, REPORTS THAT SOME TIME BETWEEN SEPTEMBER 13 AND SEPTEMBER 17, 1935, TWO RECEIVER (LOUD SPEAKER) UNITS, A PART OF THE EQUIPMENT BELONGING TO THE ELECTRICAL RESEARCH PRODUCTS, INC., WERE STOLEN BY A PERSON OR PERSONS UNKNOWN AND A BOARD OF SURVEY APPOINTED BY THE MANAGER TO INVESTIGATE THE THEFT HAS SUBMITTED THE FOLLOWING FINDINGS:

"THE BOARD FINDS THAT ON OR ABOUT SEPTEMBER 17, 1935, TWO LOUD SPEAKER UNITS (SERIAL NUMBERS UNKNOWN), WERE REMOVED FROM THE MOTION PICTURE SOUND EQUIPMENT LOCATED IN THE GENERAL HOSPITAL THEATER, VETERANS' ADMINISTRATION FACILITY, MILWAUKEE, WISCONSIN. INVESTIGATION OF THE FACTS AND CIRCUMSTANCES HAS BEEN MADE; THE PREMISES HAVE BEEN INSPECTED; AND VARIOUS WITNESSES HAVE BEEN INTERROGATED. THE BOARD HAS BEEN UNABLE TO ASCERTAIN THE PERSON OR PERSONS RESPONSIBLE FOR THIS THEFT, AND IT HAS NOT BEEN POSSIBLE TO SECURE THE RETURN OF THE LOUD SPEAKER UNITS OR TO OBTAIN FINANCIAL REIMBURSEMENT FOR THEIR LOSS.

"IT IS THE BELIEF OF THE BOARD THAT CAPTAIN D. S. SLADE SHOULD BE RELIEVED OF RESPONSIBILITY FOR THE LOSS OF THE PROPERTY SPECIFIED, INASMUCH AS THERE IS NO EVIDENCE OR TESTIMONY OF NEGLIGENCE ON HIS PART OR THE PART OF ANY PERSON EMPLOYED UNDER HIS DIRECTION AND SUPERVISION. THE ROOM IN WHICH THE LOUD SPEAKER UNITS ARE LOCATED IS USED AS A MOTION PICTURE THEATER AND LIBRARY. ALTHOUGH THE ENTRANCES ARE CLOSED AND LOCKED WHEN THE ROOM IS NOT IN USE, AS SHOWN BY THE TESTIMONY HEREIN, NEVERTHELESS THIS PARTICULAR PART OF THE HOSPITAL BUILDING IS MADE ACCESSIBLE TO ALL PATIENTS WHO ARE ABLE TO ENJOY THE PRIVILEGES OF THE THEATER AND LIBRARY. IT IS THIS CIRCUMSTANCE WHICH IS BELIEVED TO BE RESPONSIBLE FOR THE LOSS OF THE EQUIPMENT, AND NOT THE NEGLIGENCE OF ANY EMPLOYEE OR EMPLOYEES.'

THE ELECTRICAL RESEARCH PRODUCTS, INC., HAS REPLACED THE STOLEN RECEIVER UNITS AND IS NOW SEEKING REIMBURSEMENT FOR THE LOSS OF THE UNITS ORIGINALLY INSTALLED, AND IT WILL BE APPRECIATED IF YOU WILL ADVISE AT YOUR EARLIEST CONVENIENCE WHETHER FUNDS APPROPRIATED TO THE VETERANS' ADMINISTRATION MAY LEGALLY BE USED FOR THIS PURPOSE.

UNDER THE CONTRACT IN QUESTION, NO. VBP-6237, ACCEPTANCE DATED APRIL 28, 1931, THE ELECTRICAL RESEARCH PRODUCTS, INC., AGREED FOR THE RENTALS STIPULATED THEREIN TO---

* * * FURNISH ALL THE EQUIPMENT LISTED UNDER AND IN ACCORDANCE WITH THE DETAILED SPECIFICATIONS ATTACHED HERETO, TO DELIVER TO AND INSTALL SAME IN THE AUDITORIUM OF THE SEVERAL NATIONAL HOMES HEREIN DESIGNATED, AND TO GUARANTEE THE SATISFACTORY OPERATION OF THE SAME FOR A PERIOD OF ONE YEAR FROM THE DATE OF ACCEPTANCE OF EACH INSTALLATION AND TO CONTINUE SUCH LEASE AND GUARANTEE THROUGHOUT A PERIOD OF TEN YEARS RENEWABLE AT THE END OF EACH YEAR THE CONTRACT IS IN FORCE. THE CONTRACTOR FURTHER AGREED TO--

* * * FURNISH COMPETENT ENGINEER AT EACH PERFORMANCE DURING THE FIRST SIXTY CALENDAR DAYS AFTER ACCEPTANCE TO INSTRUCT THE OPERATOR IN THE PROPER USE OF THE EQUIPMENT, TO FURNISH PERIODICAL INSPECTION AND SERVICE OF ABOVE EQUIPMENT THEREAFTER DURING THE LIFE OF THE CONTRACT, TOGETHER WITH ALL REPLACEMENT PARTS THAT MAY BECOME NECESSARY, WITH THE EXCEPTION OF VACUUM TUBES, PROJECTOR LAMPS, PHOTO-ELECTRIC CELLS AND EXCITER LAMPS. SUCH SERVICE AND MAINTENANCE TO BE PERFORMED IN SUCH MANNER THAT THERE SHALL NOT BE FAILURE OF THE EQUIPMENT TO OPERATE SATISFACTORILY IN EXCESS OF 5 PERCENT OF THE ACTUAL PERFORMANCE DEMANDED OF IT.

IT APPEARS THAT PURSUANT TO THESE TERMS THERE WAS REQUIRED TO BE INSTALLED AND MAINTAINED IN THE HOSPITAL AUDITORIUM AT MILWAUKEE, WIS., COMPLETE SYNCHRONIZED SOUND-REPRODUCING MECHANISMS UNDER SUBCLASS B OF THE SPECIFICATIONS FOR A RENTAL OF $1,920 THE FIRST YEAR, $1,770 THE SECOND YEAR, $1,700 THE THIRD YEAR, AND $400 A YEAR THEREAFTER UP TO AND INCLUDING A TOTAL OF 10 YEARS AT THE OPTION OF THE VETERANS' ADMINISTRATION.

UNDER THESE CONDITIONS THE GOVERNMENT WAS NOT AN INSURER OF THE PROPERTY, BUT WAS MERELY A BAILEE FOR HIRE AND AS SUCH WAS RESPONSIBLE ONLY FOR ORDINARY CARE OF THE EQUIPMENT. (SEE 6 CORPUS JURIS 1121, ET SEQ.) IT DOES NOT APPEAR FROM THE CIRCUMSTANCES STATED IN YOUR LETTER THAT THE GOVERNMENT WAS REMISS IN ITS OBLIGATIONS IN THIS RESPECT, AND AS THE CONTRACTOR WAS BOUND UNDER THE EXPRESS TERMS OF THE CONTRACT TO FURNISH WITHOUT ADDITIONAL CHARGE ANY REPLACEMENTS NEEDED TO MAINTAIN THE EQUIPMENT SO THAT THERE SHOULD BE NO FAILURE THEREOF TO OPERATE SATISFACTORILY, THERE APPEARS NO LEGAL OBLIGATION ON THE PART OF THE UNITED STATES TO PAY THE CONTRACTOR ANY AMOUNT FOR THE REPLACEMENT OF THE TWO STOLEN LOUD SPEAKERS NEEDED TO MAINTAIN SATISFACTORY OPERATION OF THE EQUIPMENT.

ACCORDINGLY YOU ARE ADVISED THAT THERE APPEARS NO APPROPRIATION OR FUND UNDER THE ADMINISTRATIVE CONTROL OF THE VETERANS' ADMINISTRATION LEGALLY AVAILABLE TO PAY THE CONTRACTOR FOR REPLACING THE MISSING PARTS OF THE LEASED MACHINES.