B-109190, JULY 1, 1952, 32 COMP. GEN. 1

B-109190: Jul 1, 1952

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TRANSPORTATION - RATES - DETERMINATION OF UNREASONABLENESS AND WITHHOLDING OF PAYMENTS GENERAL ACCOUNTING OFFICE ACTION IN COLLECTING FROM CARRIER AN OVERPAYMENT WHERE TRANSPORTATION RATE WAS PRIMA FACIE UNREASONABLE. IS NOT AN USURPATION OF THE FUNCTION OF THE INTERSTATE COMMERCE COMMISSION TO DETERMINE REASONABLENESS OF RATES BUT FOLLOWS PRINCIPLES SET DOWN BY THE COMMISSION AND FALLS WITHIN THE CLEARLY PRESCRIBED DUTY OF THE ACCOUNTING OFFICERS TO CONSIDER SUBSTANTIVE DEFENSES BEFORE PAYING OUT PUBLIC FUNDS. THE CARRIER CLAIMED AND WAS PAID CHARGES COMPUTED ON THE BASIS OF A CLASS RATE OF 128 CENTS PER 100 POUNDS. IT WAS DETERMINED THAT THE ALLOWABLE CHARGES WERE THOSE COMPUTED AT A COMMODITY RATE OF 108 CENTS PER 100 POUNDS.

B-109190, JULY 1, 1952, 32 COMP. GEN. 1

TRANSPORTATION - RATES - DETERMINATION OF UNREASONABLENESS AND WITHHOLDING OF PAYMENTS GENERAL ACCOUNTING OFFICE ACTION IN COLLECTING FROM CARRIER AN OVERPAYMENT WHERE TRANSPORTATION RATE WAS PRIMA FACIE UNREASONABLE, IN THAT IT EXCEEDED PUBLISHED RATE APPLICABLE ON THE SAME COMMODITY FROM A POINT MORE DISTANT FROM THE DESTINATION THAN THE POINT OF ORIGIN VIA A ROUTE THROUGH THE POINT OF ORIGIN TO THE DESTINATION OF THE SHIPMENT, IS NOT AN USURPATION OF THE FUNCTION OF THE INTERSTATE COMMERCE COMMISSION TO DETERMINE REASONABLENESS OF RATES BUT FOLLOWS PRINCIPLES SET DOWN BY THE COMMISSION AND FALLS WITHIN THE CLEARLY PRESCRIBED DUTY OF THE ACCOUNTING OFFICERS TO CONSIDER SUBSTANTIVE DEFENSES BEFORE PAYING OUT PUBLIC FUNDS.

ASSISTANT COMPTROLLER GENERAL YATES TO EDGAR WAIKINS, JULY 1, 1952:

CONSIDERATION HAS BEEN GIVEN YOUR LETTER OF SEPTEMBER 18, 1951, FILES B/L WW-6084718 6/25/48 OUR BILL 67 T-GAO-A-28246-BIGNELL, ADDRESSED TO THE CHIEF OF THE TRANSPORTATION DIVISION, CLAIMING ON BEHALF OF THE NEW YORK AND NEW BRUNSWICK AUTO EXPRESS COMPANY THE SUM OF $81.87, REPRESENTING AN AMOUNT REFUNDED UNDER PROTEST TO THE UNITED STATES PURSUANT TO A REQUEST FOR SUCH REFUND CONTAINED IN FORMS 1003 ISSUED BY THIS OFFICE.

THE RECORD SHOWS THAT THE SERVICES PERFORMED BY YOUR CLIENT CONSISTED OF THE TRANSPORTATION OF TWO SHIPMENTS OF WOOL CLOTH FROM GUILD, NEW HAMPSHIRE, TO PHILADELPHIA, PENNSYLVANIA, UNDER BILLS OF LADING NOS. WW- 6084718 AND WW-6084719, IN JUNE AND JULY, 1948. FOR THESE SERVICES, THE CARRIER CLAIMED AND WAS PAID CHARGES COMPUTED ON THE BASIS OF A CLASS RATE OF 128 CENTS PER 100 POUNDS, APPLICABLE ON WOOL CLOTH TRANSPORTED FROM GUILD TO PHILADELPHIA. IN THE AUDIT HERE OF THE PAYMENT VOUCHER, IT WAS DETERMINED THAT THE ALLOWABLE CHARGES WERE THOSE COMPUTED AT A COMMODITY RATE OF 108 CENTS PER 100 POUNDS, PUBLISHED IN MIDDLE ATLANTIC STATES MOTOR CARRIER CONFERENCE TARIFF NO. 14-E, MF-I. C. C. NO. A-250, APPLICABLE FROM A MORE DISTANT POINT VIA A ROUTE THROUGH GUILD TO PHILADELPHIA. FORMS 1003 WERE ISSUED HERE REQUESTING REIMBURSEMENT OF THE DIFFERENCE BETWEEN THE AMOUNT PAID TO THE CARRIER AND THE AMOUNT DETERMINED AS PROPERLY PAYABLE FROM PUBLIC FUNDS AND APPROPRIATE REFUND WAS MADE BY YOU.

IN YOUR CLAIM FOR RECOVERY OF THE AMOUNT FORWARDED HERE UNDER PROTEST, YOU URGE, IN SUBSTANCE, THAT THE INTERSTATE COMMERCE COMMISSION HAS EXCLUSIVE JURISDICTION WITH REGARD TO THE DETERMINATION OF THE REASONABLENESS OF INTERSTATE RATES, AND THAT THE ACTION OF THIS OFFICE IN ASSERTING **AND COLLECTING AN OVERPAYMENT IN THIS INSTANCE, WITHOUT FILING COMPLAINT BEFORE THE INTERSTATE COMMERCE COMMISSION, AMOUNTS TO A DETERMINATION BY THE GENERAL ACCOUNTING OFFICE OF THE REASONABLENESS OF THE RATES INVOLVED.

THE GENERAL ACCOUNTING OFFICE, IN THE DISCHARGE OF THE DUTY IMPOSED UPON IT BY THE BUDGET AND ACCOUNTING ACT, 42 STAT. 20, 31 U.S.C. 71, PROVIDING THAT "ALL CLAIMS AND DEMANDS WHATEVER BY THE GOVERNMENT OF THE UNITED STATES IS CONCERNED, EITHER AS DEBTOR OR CREDITOR SHALL BE SETTLED AND ADJUSTED IN THE GENERAL ACCOUNTING OFFICE," IS GOVERNED IN THE AUDIT OF TRANSPORTATION ACCOUNTS BY THE DULY FILED AND PUBLISHED TARIFF RATES, WHERE APPLICABLE, EXCEPT IN SUCH INSTANCES AS THOSE IN WHICH THE INTERSTATE COMMERCE COMMISSION MAY HAVE MADE A DETERMINATION ESTABLISHING THE UNREASONABLENESS OF SUCH APPLICABLE TARIFF RATES, OR WHERE SUCH APPLICABLE TARIFF RATES ARE PRIMA FACIE UNREASONABLE IN THE LIGHT OF ESTABLISHED PRINCIPLES ENUNCIATED BY THE COMMISSION. THE GENERAL ACCOUNTING OFFICE DOES NOT MAKE DETERMINATIONS AS TO THE REASONABLENESS OR UNREASONABLENESS OF TARIFF RATES. IT DOES, HOWEVER, DETERMINE WHETHER THE FACTS AND CIRCUMSTANCES IN CONNECTION WITH A GIVEN CLAIM SHOW THAT THE CLAIM IS BASED ON A RATE APPLIED UNDER CIRCUMSTANCES WHERE SIMILAR RATES IN SIMILAR CIRCUMSTANCES HAVE BEEN DECLARED BY THE COMMISSION TO BE PRIMA FACIE UNREASONABLE. TO SANCTION THE AVAILABILITY OF PUBLIC FUNDS FOR PAYMENT OF CHARGES CLAIMED IN SUCH SITUATIONS WOULD APPEAR TO VIOLATE THE DUTY IMPOSED BY LAW UPON THIS OFFICE TO CONSIDER, IN THE SETTLEMENT OF CLAIMS, SUBSTANTIVE DEFENSES IN LAW.

CONCERNING THE CLAIM HERE INVOLVED, THE RECORD SHOWS THAT ON THE DATE OF SERVICE THERE WAS IN EFFECT FROM A POINT MORE DISTANT FROM THE DESTINATION OF THE SHIPMENT THAN THE POINT OF ORIGIN A LESSER RATE THAN THAT PUBLISHED TO APPLY BETWEEN THE ORIGIN AND THE DESTINATION. WITH RESPECT TO CARRIERS BY RAIL SUBJECT TO THE INTERSTATE COMMERCE ACT, IT IS PROVIDED EXPRESSLY IN SECTION 4 OF SAID ACT, AS AMENDED, 49 U.S.C. 4, THAT IT SHALL BE UNLAWFUL FOR ANY SUCH CARRIER TO CHARGE ANY GREATER COMPENSATION IN THE AGGREGATE FOR THE TRANSPORTATION OF PASSENGERS, OR OF LIKE KIND OF PROPERTY, FOR A SHORTER THAN FOR A LONGER DISTANCE OVER THE SAME LINE OR ROUTE IN THE SAME DIRECTION, THE SHORTER BEING INCLUDED WITHIN THE LONGER DISTANCE, OR TO CHARGE ANY GREATER COMPENSATION AS A THROUGH RATE THAN THE AGGREGATE OF INTERMEDIATE RATES SUBJECT TO THE PROVISIONS OF SAID ACT, EXCEPT UNDER CERTAIN CONDITIONS NOT HERE PERTINENT. UNDER THE PROVISIONS OF THAT SECTION, THE ACCOUNTING OFFICERS OF THE GOVERNMENT, OVER A PERIOD OF MANY YEARS, HAVE DECLINED TO RECOGNIZE AS PROPER THE USE OF APPROPRIATED FUNDS FOR THE PAYMENT OF CHARGES SO DECLARED TO BE UNLAWFUL*WFUL.

THE FACT THAT THE EXPLICIT PROVISIONS OF SECTION 4, AS ABOVE INDICATED, MAY NOT BE APPLICABLE TO COMMON CARRIERS BY MOTOR VEHICLE, DOES NOT APPEAR TO BE DETERMINATIVE OF THE QUESTION HERE PRESENTED FOR THE REASON THAT INDEPENDENTLY OF THE PROVISIONS OF SAID SECTION IT HAS BEEN DECLARED IN SECTION 216, PARAGRAPH (D), OF PART II OF THE INTERSTATE COMMERCE ACT, AS AMENDED, 54 STAT. 899, 56 STAT. 284, 63 STAT. 485, THAT EVERY UNJUST AND UNREASONABLE CHARGE FOR SERVICE RENDERED BY ANY COMMON CARRIER BY MOTOR VEHICLE ENGAGED IN INTERSTATE COMMERCE IS UNLAWFUL AND IT HAS BEEN SAID, IN THE CASE OF RAIL CARRIERS, THAT---

* * * APART FROM STATUTORY ENACTMENT, IT IS PRIMA FACIE UNREASONABLE TO CHARGE MORE FOR A SHORTER THAN FOR A LONGER HAUL. * * *

PATTERSON V. LOUISVILLE AND NASHVILLE RAILROAD COMPANY, 269 U.S. 1. MOREOVER, IN THE CASE OF KINGAN AND COMPANY V. OLSON TRANSPORTATION COMPANY, ET AL., 32 M.C.C. 10, INVOLVING A COMMON CARRIER BY MOTOR VEHICLE, THE INTERSTATE COMMERCE COMMISSION SAID:

COMPLAINANT SUBMITTED NO EVIDENCE CONCERNING THE REASONABLENESS OF THE ASSAILED RATES EXCEPT THE FACT THAT THEY EXCEEDED THE CORRESPONDING AGGREGATE OF INTERMEDIATE RATES. PART II DOES NOT CONTAIN AN AGGREGATE-OF -INTERMEDIATE-RATES PROVISION AS DOES PART I (SECTION 4). BUT PRIOR TO THE ENACTMENT OF THAT PROVISION IN 1910 ( MANN-ELKINS ACT), THE COMMISSION HELD THAT THE BURDEN OF PROOF WAS UPON RAIL CARRIERS TO DEFEND THE REASONABLENESS OF A JOINT THROUGH RATE THAT EXCEEDED THE AGGREGATE OF INTERMEDIATE RATES BETWEEN THE SAME POINTS OVER THE PARTICULAR ROUTE. SEE PATTERSON V. LOUISVILLE AND N.R. CO., 269 U.S. 1. THE SAME PRINCIPLES THAT GOVERNED RAIL RATES UNDER SUCH CIRCUMSTANCES PRIOR TO THE 1910 AMENDMENT ARE APPLICABLE TO SIMILAR CONDITIONS INVOLVING MOTOR-CARRIER RATES. THEREFORE, THE ASSAILED JOINT RATES ARE PRESUMED TO HAVE BEEN UNREASONABLE TO THE EXTENT THAT THEY EXCEEDED THE CORRESPONDING AGGREGATE OF INTERMEDIATE RATES. DEFENDANTS SUBMITTED NO EVIDENCE TO REBUT THIS PRESUMPTION.

LIKEWISE, IN SOUTHERN SPRING BED COMPANY V. BASSETT FURNITURE TRUCKING COMPANY, INCORPORATED, 42 M.C.C. 99, THE COMMISSION HELD TO BE UNREASONABLE A CLASS RATE ON FURNITURE THAT EXCEEDED A COMMODITY RATE ESTABLISHED ON THE SAME COMMODITY TO A MORE DISTANT POINT, AGAIN RELYING APPARENTLY UPON THE PRESUMPTION OF UNREASONABLENESS NOT REBUTTED BY DEFENDANT. SEE ALSO HAUSMAN STEEL COMPANY V. SEABORAD FREIGHT LINES, INCORPORATED, ET AL., 32 M.C.C. 31, 39; AND FIFTH CLASS RATES BETWEEN BOSTON AND PROVIDENCE, 2 M.C.C. 530, 546.

THE PRESENT CASE, THEREFORE, INVOLVES A SITUATION IN WHICH THERE IS FOR CONSIDERATION WHETHER APPROPRIATED FUNDS MAY BE VIEWED AS PROPERLY AVAILABLE FOR THE PAYMENT OF CHARGES ON THE BASIS OF A THROUGH RATE THAT IS PRESUMPTIVELY UNREASONABLE TO THE EXTENT THAT IT EXCEEDS THE PUBLISHED RATE APPLICABLE ON THE SAME COMMODITY FROM A POINT MORE DISTANT FROM THE DESTINATION THAN THE POINT OF ORIGIN VIA A ROUTE THROUGH THE POINT OF ORIGIN TO THE *DESTINATION THAN THE POINT OF ORIGIN VIA A ROUTE THROUGH THE POINT OF ORIGIN TO THE DESTINATION OF THE SHIPMENT. IT DOES NOT APPEAR, PARTICULARLY IN VIEW OF THE ESTABLISHED PRACTICE OF THE ACCOUNTING OFFICERS IN LIKE SITUATIONS WHERE RAIL CARRIERS ARE INVOLVED, THAT THE ACCOUNTING OFFICERS WOULD BE JUSTIFIED IN HOLDING SAID FUNDS SO AVAILABLE. IN LONGWILL AND JOHNSON'S CASES, 17 C.1CLS. 288, 291, THE COURT SAID:

THE ACCOUNTING OFFICERS OF THE TREASURY ARE IN DUTY BOUND TO SCRUTINIZE CLAIMS AND ACCOUNTS WITH GREAT CARE, AS IS THEIR CUSTOM; AND IT IS THE UNDOUBTED RIGHT AND DUTY OF THE COMPTROLLERS * * * WHO ALONE OF THE ACCOUNTING OFFICERS HAVE AUTHORITY TO DECIDE THEREON, TO ***** REJECT, IN WHOLE OR IN PART, AS THEIR JUDGMENT DICTATES, ALL THOSE MS WHICH THEY HAVE REASONABLE CAUSE TO SUSPECT TO BE TAINTED WITH FRAUD, OR TO WHICH THEY BELIEVE THERE MAY BE SUBSTANTIAL DEFENSES IN LAW, OR AS TO THE VALIDITY OF WHICH THEY ARE IN DOUBT.

AND IN CHARLES V. UNITED STATES, 19 C.1CLS. 316, 319:

WHEN, IN THE COURSE OF THE EXAMINATION OF ACCOUNTS IN THE DEPARTMENTS, SUSPICIONS ARE AROUSED OR DOUBTS ARE ENTERTAINED AS TO THE VALIDITY OF THE DEMANDS OF CLAIMANTS, THE PARTIES MAY BE SENT TO THIS COURT TO PROVE THEIR CASES UNDER THE RULES AND FORMS OF LAW, UPON LEGAL AND COMPETENT EVIDENCE, OR THEIR DEMANDS MAY BE REJECTED ALTOGETHER, LEAVING THE CLAIMANTS TO PROSECUTE THEM HERE UPON THEIR VOLUNTARY PETITIONS,IF THEY SO DESIRE. THAT IS THE MAIN PROTECTION WHICH THE ACCOUNTING OFFICERS CAN SECURE FOR THEMSELVES AND FOR THE GOVERNMENT IN THE CASE OF CLAIMS OF DOUBTFUL VALIDITY IN FAVOR IN LAW * * *.

IN THE INSTANT MATTER THERE APPEARS NOT MERELY A DOUBT AS TO THE VALIDITY OF THE CHARGES CLAIMED, BUT RATHER A PRESUMPTION OF PARTIAL INVALIDITY ARISING FROM THE PRIMA FACIE UNREASONABLENESS OF THE RATE EMPLOYED AS A BASIS FOR THE CLAIM. AS TO THE FACT THAT A CONCLUSIVE DETERMINATION OF THE QUESTION OF REASONABLENESS MAY REQUIRE A FINDING WITH RESPECT THERETO IN THE FIRST INSTANCE BY THE INTERSTATE COMMERCE COMMISSION, AND WITH REFERENCE TO YOUR SUGGESTION THAT THE ACTION OF THE ACCOUNTING OFFICERS IN HOLDING APPROPRIATED FUNDS TO BE UNAVAILABLE FOR THE PAYMENT OF THE FULL CHARGES HERE CLAIMED WOULD DENY THE CARRIER ACCESS TO A FORUM FOR DECISION OF THE QUESTION OF REASONABLENESS, IT IS NOT APPARENT WHY, IN EVENT OF THE CARRIER SHOULD ELECT TO SEEK, THROUGH COURT PROCEEDINGS, COLLECTION OF THE ADDITIONAL CHARGES CLAIMED, REFERENCE QUESTION OF REASONABLENESS TO THE INTERSTATE COMMERCE COMMISSION IN IN CONNECTION WITH SUCH PROCEEDINGS WOULD NOT BE AUTHORIZED. IN THE CASE OF THE BELL POTATO CHIP COMPANY V. ABERDEEN TRUCK LINE, ET ., 337, IT WAS SAID:

* * * IN THIS CONNECTION, IT MAY BE NOTED THAT IT IS A RECOGNIZED PRACTICE TO HOLD IN ABEYANCE COURT PROCEEDINGS PENDING THE DETERMINATION BY THE COMMISSION OF ADMINISTRATIVE QUESTIONS. EASTERN CENTRAL MOTOR CARRIERS ASSN. V. UNITED STATES, 321 U.S. 194; GENERAL AMERICAN TANK CAR CORP. V. EL DORADO TERM. CO., 308 U.S. 422; MITCHELL COAL AND COKE CO. V. PENNSYLVANIA R. CO., SUPRA; MORRISDALE COAL CO. V. PENNSYLVANIA R. CO., 230 U.S. 304, 314; SOUTHERN RY. CO. V. TIFT, 206 U.S. 428, 434.

SEE ALSO ARIZONA SAND AND ROCK CO. V. SOUTHERN PACIFIC CO., 280 I.C.C. 285.

ACCORDINGLY, ON THE BASIS OF THE PRESENT RECORD, THE ADJUSTMENT EFFECTED BY YOUR REFUND OF $81.87 APPEARS TO HAVE BEEN PROPER AND, THEREFORE, PAYMENT OF YOUR CLAIM IS DECLINED.