A-75395, MAY 18, 1936, 15 COMP. GEN. 1000

A-75395: May 18, 1936

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TRANSPORTATION - DEMURRAGE CHARGES - GOVERNMENT LEASED PRIVATE CAR ON PRIVATE SIDING A CHARGE BY A COMMON CARRIER FOR EXTENDED DETENTION OF A GOVERNMENT LEASED PRIVATE CAR ON A PRIVATE SIDING ON THE MERE TECHNICAL BASIS THAT THERE WAS NO PLACARD OR STENCILING ON THE CAR SHOWING THAT IT HAD BEEN SO LEASED WOULD BE THE EXACTION OF A PENALTY FOR THE PAYMENT OF WHICH APPROPRIATED MONEYS ARE NOT AVAILABLE. AS FOLLOWS: WILL YOU PLEASE BE REFERRED TO SEVERAL COMMUNICATIONS OF THE ASSISTANT AUDITOR OF SOUTHERN RAILWAY COMPANY TO YOU. IT APPEARING THAT THE FAILURE TO PAY THIS CLAIM IS TRACEABLE TO A "NOTICE OF DISALLOWANCE OF CLAIM" ISSUING IN YOUR OFFICE. MY PRESENT UNDERSTANDING IS THAT WE HAVE NOT QUESTIONED THAT WITHIN THE PURVIEW OF THE APPLICABLE DEMURRAGE RULE THE TRACK UPON WHICH THE CAR WAS PLACED AND UPON WHICH IT WAS DURING THE ACCRUAL OF THIS DEMURRAGE.

A-75395, MAY 18, 1936, 15 COMP. GEN. 1000

TRANSPORTATION - DEMURRAGE CHARGES - GOVERNMENT LEASED PRIVATE CAR ON PRIVATE SIDING A CHARGE BY A COMMON CARRIER FOR EXTENDED DETENTION OF A GOVERNMENT LEASED PRIVATE CAR ON A PRIVATE SIDING ON THE MERE TECHNICAL BASIS THAT THERE WAS NO PLACARD OR STENCILING ON THE CAR SHOWING THAT IT HAD BEEN SO LEASED WOULD BE THE EXACTION OF A PENALTY FOR THE PAYMENT OF WHICH APPROPRIATED MONEYS ARE NOT AVAILABLE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SOUTHERN RAILWAY SYSTEM, MAY 18, 1936:

THERE HAS BEEN CONSIDERED YOUR LETTER OF MARCH 16, 1936, AS FOLLOWS:

WILL YOU PLEASE BE REFERRED TO SEVERAL COMMUNICATIONS OF THE ASSISTANT AUDITOR OF SOUTHERN RAILWAY COMPANY TO YOU, HIS FILE U-E 47184, IN CONNECTION WITH OUR DEMURRAGE BILL AGAINST CIVIL WORKS ADMINISTRATION, GREENSBORO, N.C., ACCRUING ON CAR UTLX 61343, IT APPEARING THAT THE FAILURE TO PAY THIS CLAIM IS TRACEABLE TO A "NOTICE OF DISALLOWANCE OF CLAIM" ISSUING IN YOUR OFFICE, CLAIMS DIVISION, FEBRUARY 26, 1935, SUCH NOTICE REQUESTING THAT IN WRITING YOU IN CONNECTION THEREWITH REFERENCE BE MADE TO CLAIM NO. 97284 1/2.

THIS CLAIM, IN THE AMOUNT OF $203.00, HAS BEEN REFERRED TO THIS DEPARTMENT FOR COLLECTION. MY PRESENT UNDERSTANDING IS THAT WE HAVE NOT QUESTIONED THAT WITHIN THE PURVIEW OF THE APPLICABLE DEMURRAGE RULE THE TRACK UPON WHICH THE CAR WAS PLACED AND UPON WHICH IT WAS DURING THE ACCRUAL OF THIS DEMURRAGE, WAS THE TRACK OF THE C.W.A. FURTHER, I DO NOT NOW UNDERSTAND THAT WE HAVE QUESTIONED THAT THE CAR HAD BEEN LEASED TO THE C.W.A. THE FURTHER FACT, HOWEVER, IS THAT THERE WAS NO PLACARDOR STENCILING ON THE CAR SHOWING THAT IT HAD BEEN SO LEASED. UNDER RULE 1, SECTION B, PARAGRAPH 4, OF THE DEMURRAGE TARIFF IT WAS NECESSARY, IN ORDER TO AVOID THE ASSESSMENT OF DEMURRAGE, THAT THE CAR BE MARKED SO AS TO SHOW AS THE LESSEE THEREOF THE C.W.A. THAT IS A MANDATORY AND NON-WAIVABLE PROVISION OF THE RULE. SEE INTERNATIONAL AGRICULTURAL CORPORATION V. A. AND W.P. R.R. CO., 93 I.C.C. 189.

I SHOULD BE OBLIGED IF YOU WOULD ADVISE ME THE STATUS OF YOUR HANDLING OF THIS MATTER, AS I AM ANXIOUS NOT TO INSTITUTE ANY UNNECESSARY PROCEEDING IF VOLUNTARY PAYMENT IS GOING TO BE MADE, AND I AM LIKEWISE ANXIOUS TO CONSIDER THE BASIS UPON WHICH YOU ADHERE TO YOUR DISALLOWANCE IF YOU DO SO ADHERE.

IT APPEARS THAT THE CAR WAS USED FOR THE TRANSPORTATION OF A SHIPMENT OF LIQUID ASPHALT FROM BALTIMORE, MD., TO GREENSBORO, N.C., IN FEBRUARY 1934, THE MATERIAL HAVING BEEN PURCHASED APPARENTLY FROM AMERICAN BITUMULS CO. OF BALTIMORE. IT IS INDICATED THAT THE CAR WAS PLACED FOR UNLOADING AT DESTINATION, FEBRUARY 19, 1934, ON A SIDING LEASED BY THE LOCAL CIVIL WORKS ADMINISTRATION AT GREENSBORO FROM THE NORTH CAROLINA COLLEGE FOR WOMEN, AND WAS RELEASED FROM SAID SIDING FOLLOWING UNLOADING APRIL 14, 1934. IT IS REPORTED THAT FOR THE PERIOD OF THIS DETENTION THE CAR WAS UNDER LEASE TO THE CIVIL WORKS ADMINISTRATION FROM THE AMERICAN BITUMULS CO. ACCORDINGLY THE CLAIM OF THE SOUTHERN RAILWAY FOR $198 AS THE TOTAL AMOUNT OF DEMURRAGE ACCRUING WAS DISALLOWED FOR THE REASON THAT A PRIVATE CAR ON PRIVATE SIDING WAS NOT SUBJECT TO DEMURRAGE. THE REQUEST FOR FURTHER CONSIDERATION INCREASES THE AMOUNT OF THE CLAIM FROM $198 TO $203 AND URGES THAT AS THE CAR WAS NOT PLACARDED OR STENCILED TO SHOW THE FACT OF THE LEASE OF THE CAR, THE EXEMPTION FROM DEMURRAGE AFFORDED BY THE TARIFF FOR PRIVATE CARS UPON PRIVATE SIDINGS IS NOT APPLICABLE, CITING INTERNATIONAL AGRICULTURAL CORPORATION V. A. AND W.P. R.R. CO., 93 I.C.C. 189.

THE PERTINENT TARIFF PROVISION IS FOUND IN RULE 1 OF AMERICAN RAILWAY ASSOCIATION TARIFF BUREAU, FREIGHT TARIFF NO. 4-N, B. T. JONES, AGENT, I.C.C. NO. 2639, AND IS AS FOLLOWS:

SECTION A. CARS OF EITHER RAILROAD OR PRIVATE OWNERSHIP, HELD FOR OR BY CONSIGNORS OR CONSIGNEES FOR LOADING, UNLOADING, FORWARDING DIRECTIONS, OR FOR ANY OTHER PURPOSE (INCLUDING CARS HELD FOR LOADING COMPANY MATERIAL UNLESS THE LOADING IS DONE BY THE RAILROAD FOR WHICH THE MATERIAL IS INTENDED AND ON ITS TRACKS), ARE SUBJECT TO THESE DEMURRAGE RULES, EXCEPT AS PROVIDED IN SECTION B.

SECTION B. THE FOLLOWING CARS ARE NOT SUBJECT TO THESE DEMURRAGE RULES:

4. (A) PRIVATE CARS ON PRIVATE TRACKS WHEN THE OWNERSHIP OF THE CAR AND TRACK IS THE SAME.

NOTE 1.--- FOR THE PURPOSE OF THIS EXEMPTION FROM DEMURRAGE:

A PRIVATE CAR IS A CAR HAVING OTHER THAN RAILROAD OWNERSHIP. A LEASE OF A CAR IS EQUIVALENT TO OWNERSHIP. PRIVATE CARS MUST HAVE THE FULL NAME OF THE OWNER OR LESSEE PAINTED OR STENCILED THEREON OR MUST BE BOARDED WITH WOODEN, METAL, OR CARDBOARDS SHOWING THE FULL NAME OF OWNER OR LESSEE, AND, IF CARDBOARDED THE CARDBOARD MUST ALSO SHOW INITIALS AND NUMBER OF CAR AND DATE OF SHIPMENT. IF THE NAME OF LESSEE IS PAINTED, STENCILED, OR BOARDED ON CAR, THEN THE CAR IS EXEMPT FROM DEMURRAGE FOR THE LESSEE ONLY. IF NAME OF LESSEE IS NOT PAINTED, STENCILED, OR BOARDED ON CAR, THEN THE CAR IS EXEMPT FROM DEMURRAGE FROM THE OWNER ONLY.

FROM THE FOREGOING IT APPEARS THAT THE CLAIM OF APPROXIMATELY $200 IS BASED SOLELY UPON A TECHNICAL FAILURE TO COMPLY WITH A TARIFF PROVISION CONCERNING THE PROCEDURE FOR SHOWING A SUBSTANTIVE FACT THE EXISTENCE OF WHICH ITSELF DOES NOT APPEAR TO BE QUESTIONED. DEMURRAGE CHARGES SERVE A TWO FOLD PURPOSE, VIZ: TO EFFECT COMPENSATION FOR THE USE OF THE CAR AND TO PROMOTE CAR EFFICIENCY BY PROVIDING A DETERRENT AGAINST UNDUE DETENTION. TURNER, DENNIS AND LOWRY LUMBER COMPANY V. C.M. AND ST.P. RY. CO., 271 U.S. 259. SEE ALBERT LEA PACKING CO. V. C.M. AND ST.P. RY. CO., ET AL., 152 I.C.C. 665, WHERE IT WAS STATED THAT:

DEMURRAGE IS PRIMARILY A PENALTY IMPOSED UPON SHIPPERS OR RECEIVERS OF FREIGHT TO PREVENT UNNECESSARY DETENTION OF CARS FOR LOADING OR UNLOADING AND TO INSURE PROMPT RETURN OF THE CARS TO THE PUBLIC SERVICE. IT ALSO SERVES TO COMPENSATE THE CARRIER FOR THE USE OF ITS CARS AND TRACKS. THE CARRIER'S RIGHT TO COMPENSATION IS THE SAME WHETHER THE CARS ARE OWNED BY IT OR ANOTHER CARRIER, SINCE THE CARRIER IN POSSESSION MUST GENERALLY PAY FOR THE USE OF FOREIGN-LINE CARS ON A PER DIEM BASIS. THE ELEMENT OF COMPENSATION TO THE CARRIER CAN NOT ENTER, HOWEVER, WHERE PRIVATE CARS ARE DETAINED ON PRIVATE TRACKS, SINCE THE CARRIERS HAVE NO INVESTMENT IN EITHER CARS OR TRACKS AND PAY FOR THE USE OF SUCH CARS ON A MILEAGE BASIS. AS THE PUBLIC GENERALLY HAS NO RIGHT TO THE USE OF PRIVATE CARS, THE IMPOSITION OF DEMURRAGE ON SUCH CARS CAN NOT BE JUSTIFIED AS A PENALTY TO REQUIRE THEIR PROMPT RETURN TO THE PUBLIC SERVICE. BUT THE CARRIERS CHARGE DEMURRAGE ON PRIVATE CARS UNDER CERTAIN CIRCUMSTANCES IN ORDER TO ENCOURAGE THEIR PROMPT RELEASE FOR THE BENEFIT OF THE OWNERS. OF COURSE, THE OWNERS' INTEREST WOULD BE NO JUSTIFICATION FOR DEMURRAGE WHERE THE CARS ARE ON THE PRIVATE TRACKS OF THE CAR OWNERS, AND UNDER SUCH CIRCUMSTANCES THEY ARE EXEMPTED FROM DEMURRAGE BY RULE 4 (A). * * *

IN THE INSTANT CASE, IT APPEARS THAT THE ELEMENT OF COMPENSATION TO THE CARRIER DOES NOT ENTER FOR THE REASON THAT THIS WAS A PRIVATE CAR ON A PRIVATE SIDING; NOR DOES THERE APPEAR TO BE INVOLVED ANY CIRCUMSTANCE JUSTIFYING THE IMPOSITION OF A PENALTY FOR THE REASON THAT THIS BEING A PRIVATE CAR THE DETENTION DID NOT DEPRIVE THE PUBLIC OF THE RIGHT TO ITS USE SINCE NO SUCH RIGHT APPEARS TO HAVE EXISTED IN ANY EVENT. AS TO THE MATTER OF CHARGING DEMURRAGE ON PRIVATE CARS IN ORDER TO ENCOURAGE THEIR PROMPT RELEASE FOR THE BENEFIT OF THE OWNERS, THE REPRESENTATION IN THE INSTANT MATTER IS THAT THE AMERICAN BITUMULS CO. BENEFITED UNDER THE ARRANGEMENT ADOPTED HERE IN THAT IT WAS ENABLED THEREBY TO EFFECT DELIVERY OF THE MATERIAL UNDER MORE FAVORABLE CIRCUMSTANCES THAN WERE ANTICIPATED IF DELIVERY WERE TO BE DEFERRED UNTIL A LATER DATE TO SUIT THE CONVENIENCE OF THE CIVIL WORKS ADMINISTRATION. IT APPEARS THEREFORE THAT THE COLLECTION OF THE DEMURRAGE UNDER THE CIRCUMSTANCES OBTAINING IN THIS CASE IS NOT REQUIRED IN ORDER TO ACCOMPLISH ANY OF THE PURPOSES WHICH THE COLLECTION OF DEMURRAGE IS SAID TO SERVE.

IN INTERNATIONAL AGRICULTURAL CORPORATION V. ATLANTA AND WEST POINT RAILROAD CO., ET AL. (93 I.C.C. 189), CITED IN THE REQUEST FOR FURTHER CONSIDERATION OF THIS CLAIM, IT APPEARS TO HAVE BEEN URGED BY THE CARRIERS THAT THE REQUIREMENT FOR STENCILING OR PAINTING LEASED CARS WITH THE NAME OF THE LESSEE IN ORDER TO EXEMPT SUCH CARS FROM DEMURRAGE WHILE STANDING ON TRACKS OF THE LESSEE WAS DESIGNED TO PREVENT CONFUSION AND DISCRIMINATION IN THE APPLICATION OF THE GENERAL RULE, REQUIRED BY THE COMMISSION, THAT PRIVATE CARS STANDING ON PRIVATE TRACKS OF OWNERS SHOULD NOT BE SUBJECT TO DEMURRAGE CHARGES. THE COMMISSION APPEARS TO HAVE REGARDED THIS CONDITION OF THE RULE AS TENDING "TO FACILITATE ITS PRACTICAL APPLICATION AND PREVENT ABUSES" AND TO HAVE REQUIRED PAYMENT OF DEMURRAGE CHARGES IN CONFORMITY THEREWITH. AS BETWEEN COMMERCIAL SHIPPERS AND CONSIGNEES THE NECESSITY FOR PRECAUTIONS AGAINST THE LIKELIHOOD OF RESULTING DISCRIMINATIONS MAY HAVE AFFORDED A SUFFICIENT BASIS FOR THIS CONDITION IN THE RULE. WITH RESPECT TO ITS APPLICATION AGAINST THE GOVERNMENT, HOWEVER, THE SUGGESTION IN THE REQUEST FOR FURTHER CONSIDERATION OF THE INSTANT CLAIM THAT THE PROVISION IS "MANDATORY AND NONWAIVABLE" WOULD SEEM TO OVERLOOK THE PROVISIONS OF SECTION 22 OF THE INTERSTATE COMMERCE ACT.

THE RESULT OF THE SITUATION HERE IS THAT THE SOLE BASIS FOR THE CLAIM FOR DEMURRAGE CHARGES APPEARS TO BE A FAILURE TO COMPLY TECHNICALLY WITH A TARIFF PROVISION, WHICH APPARENTLY WAS DESIGNED PRIMARILY TO PREVENT DISCRIMINATION AMONG SHIPPERS. THERE WAS NOT INVOLVED THE USE OF CARRIER PROPERTY FOR WHICH IT COULD BE ENTITLED TO COMPENSATION NOR DOES THE DETENTION APPEAR TO HAVE DEPRIVED THE PUBLIC OF ANY RIGHTS TO CAR SERVICE. THE COLLECTION OF DEMURRAGE CHARGES UNDER SUCH CIRCUMSTANCES WOULD APPEAR TO CONSTITUTE MERELY THE EXACTION OF A PENALTY AND TO BE WITHOUT MERIT. THERE APPEARS NO AUTHORITY FOR THE USE OF APPROPRIATED MONEYS FOR SUCH PURPOSE. ACCORDINGLY THE DISALLOWANCE IS SUSTAINED.