B-109202, MAY 16, 1952, 31 COMP. GEN. 605

B-109202: May 16, 1952

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OF THE INTERSTATE COMMERCE COMMISSION ACT IT IS THE DUTY OF A MOTOR COMMON CARRIER TO FORWARD VIA A REASONABLE AND PRACTICABLE ROUTE. WHERE A GOVERNMENT SHIPMENT WAS MISROUTED AND THE PROPER CHARGES WERE PAID THE TERMINAL CARRIER. THE GOVERNMENT WILL NOT PAY THE EXCESS CHARGES TO THE TERMINAL CARRIER AND THEN COLLECT SUCH EXCESS CHARGES FROM THE INITIAL CARRIER. - THE TERMINAL CARRIER IS REQUIRED TO ADJUST ALL DIFFERENCES AS TO INDIVIDUAL LIABILITY WITH THE OTHER CARRIERS. 1952: REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 12. PERTAINING TO THE AUDIT ACTION OF THIS OFFICE BY WHICH IT WAS DETERMINED THAT MERCHANTVILLE EXPRESS COMPANY WAS OVERPAID $18.52 FOR THE TRANSPORTATION DURING MAY 1948 OF A SHIPMENT OF EIGHT BOXES OF ELECTRICAL INSTRUMENTS.

B-109202, MAY 16, 1952, 31 COMP. GEN. 605

TRANSPORTATION - ROUTES - MISROUTED SHIPMENTS UNDER SECTION 216 (B), PART II, OF THE INTERSTATE COMMERCE COMMISSION ACT IT IS THE DUTY OF A MOTOR COMMON CARRIER TO FORWARD VIA A REASONABLE AND PRACTICABLE ROUTE, OVER WHICH THE LOWEST TRANSPORTATION CHARGES APPLY, A SHIPMENT RECEIVED WITHOUT SPECIFIC ROUTING INSTRUCTIONS, AND THEREFORE, WHERE A CARRIER RECEIVED GOODS FOR SHIPMENT WITHOUT SPECIFIC SHIPPING INSTRUCTIONS AND SHIPPED THE GOODS VIA OTHER THAN A REASONABLE AND PRACTICAL ROUTE, OVER WHICH THE LOWEST TRANSPORTATION CHARGES APPLY--- THERE BEING AVAILABLE A JOINT THROUGH RATE WITH CONNECTING CARRIERS--- THE CARRIER OR CARRIERS, WHETHER INITIAL OR CONNECTING, GUILTY OF THE MISROUTING MUST STAND THE LOSS. WHERE A GOVERNMENT SHIPMENT WAS MISROUTED AND THE PROPER CHARGES WERE PAID THE TERMINAL CARRIER, THE GOVERNMENT WILL NOT PAY THE EXCESS CHARGES TO THE TERMINAL CARRIER AND THEN COLLECT SUCH EXCESS CHARGES FROM THE INITIAL CARRIER--- THE TERMINAL CARRIER IS REQUIRED TO ADJUST ALL DIFFERENCES AS TO INDIVIDUAL LIABILITY WITH THE OTHER CARRIERS.

COMPTROLLER GENERAL WARREN TO EDGAR WATKINS, MAY 16, 1952:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 12, 1951, FILE T-GAO VOU- 21270 7/48 BIGNELL, PERTAINING TO THE AUDIT ACTION OF THIS OFFICE BY WHICH IT WAS DETERMINED THAT MERCHANTVILLE EXPRESS COMPANY WAS OVERPAID $18.52 FOR THE TRANSPORTATION DURING MAY 1948 OF A SHIPMENT OF EIGHT BOXES OF ELECTRICAL INSTRUMENTS, NOIBN, WEIGHTING 2,105 POUNDS, FROM SYRACUSE, NEW YORK, TO EATONTOWN, NEW JERSEY, UNDER GOVERNMENT BILL OF LADING NO. WX- 8117741.

THE BILL OF LADING INDICATES THAT THE SHIPMENT WAS DELIVERED TO POCONO FREIGHT LINES, INC., AT SYRACUSE, NEW YORK, WITH INSTRUCTIONS TO FORWARD TO EATONTOWN, NEW JERSEY, VIA " POCONO FREIGHT LINES, INC. AND NECESSARY CONNECTIONS.' IT APPEARS THAT THE POCONO FREIGHT LINES HAULED THE SHIPMENT TO PHILADELPHIA, PENNSYLVANIA, WHERE IT WAS TRANSFERRED TO MERCHANTVILLE EXPRESS COMPANY, WHICH CARRIER ACCOMPLISHED DELIVERY AT EATONTOWN.

FOR THIS SERVICE THE MERCHANTVILLE EXPRESS COMPANY CLAIMED AND WAS PAID $48.20, PER ITS BILL NO. 1941, BASED ON A RATE OF 229 CENTS PER 100 POUNDS, WHICH WAS A COMBINATION OF RATES OF 141 CENTS PER 100 POUNDS, AND 88 CENTS PER 100 POUNDS TO AND BEYOND PHILADELPHIA. THE MERCHANTVILLE EXPRESS COMPANY, APPARENTLY, WAS NOT A PARTICIPANT IN TARIFFS NAMING THROUGH RATES FROM SYRACUSE, NEW YORK, TO EATONTOWN, NEW JERSEY.

CONTEMPORANEOUSLY, THERE WAS PUBLISHED IN MIDDLE ATLANTIC STATES MOTOR CARRIER CONFERENCE, INC., TARIFFS NOS. 12-C AND 30-B, AGENT R. R. RICE'S MF-I. C.C. NOS. A-230, AND A-225, RESPECTIVELY, A THROUGH RATE OF 141 CENTS PER 100 POUNDS FROM SYRACUSE, NEW YORK, TO EATONTOWN, NEW JERSEY, APPLICABLE VIA POCONO FREIGHT LINES, INC., TO PHILADELPHIA, THENCE VIA EITHER WOOLEYHAN TRANSPORT COMPANY OR PYRAMID MOTOR FREIGHT CORPORATION TO DESTINATION. ACCORDINGLY, HAD THE POCONO FREIGHT LINES, INC., TRANSFERRED THE SUBJECT SHIPMENT AT PHILADELPHIA TO EITHER OF THE NAMED CARRIERS, THE UNITED STATES WOULD HAVE BEEN ENTITLED TO THE LOWER 141-CENT RATE, IN WHICH EVEN THE CHARGES WOULD HAVE BEEN $29.68.

THE FAILURE OF A MOTOR COMMON CARRIER TO FORWARD, VIA A REASONABLE AND PRACTICAL ROUTE OVER WHICH THE LOWEST TRANSPORTATION CHARGE APPLIES, A SHIPMENT IT HAS RECEIVED WITHOUT SPECIFIC ROUTING INSTRUCTIONS, RESULTS IN A VIOLATION OF ITS DUTY "TO ESTABLISH, OBSERVE, AND ENFORCE JUST AND REASONABLE RATES, CHARGES AND CLASSIFICATION, AND JUST AND REASONABLE REGULATIONS AND PRACTICES," AS IMPOSED BY SECTION 216 (B), PART II OF THE INTERSTATE COMMERCE ACT, 54 STAT. 929. HAUSMAN STEEL COMPANY V. SEABOARD FREIGHT LINES, 32 M.C.C. 31, 36; MINIMUM CLASS RATE RESTRICTIONS, CENTRAL AND EASTERN STATES, 44 M.C.C. 367, 383; COMMODITIES FROM AND TO THE SOUTHWEST, 47 M.C.C. 155, 166.

IN THE AUDIT OF THE PAYMENT VOUCHER BY THIS OFFICE, A DIFFERENCE OF $18.52 WAS ESTABLISHED BETWEEN THE CHARGES COMPUTED AT THE APPLICABLE RATE OVER THE ACTUAL ROUTE OF MOVEMENT AND THE CHARGES COMPUTED ON THE BASIS OF THE LAWFULLY PUBLISHED THROUGH RATE OF 141 CENTS PER 100 POUNDS (THE REASONABLENESS OF WHICH IS NOT QUESTIONED), APPLYING OVER THE ROUTE VIA WHICH THE SHIPMENT SHOULD HAVE MOVED. BY GENERAL ACCOUNTING OFFICE FORM 1003, DATED JUNE 15, 1951, THE MERCHANTVILLE EXPRESS COMPANY WAS NOTIFIED OF THIS DIFFERENCE AND REQUESTED TO MAKE REFUND THEREOF. THE STATED DIFFERENCE WAS REFUNDED UNDER PROTEST, AND IT IS ASSERTED IN YOUR LETTER OF SEPTEMBER 12, 1951, AMONG OTHER THINGS, THAT " THE PURPOSE OF THIS LETTER IS TO MAKE A CLAIM * * * FOR REPAYMENT.'

CONCERNING YOUR CONTENTIONS GENERALLY, YOU ARE ADVISED THAT THE RIGHT AND THE DUTY OF THIS OFFICE TO RECAPTURE EXCESSIVE AMOUNTS COLLECTED FROM THE UNITED STATES FOR TRANSPORTATION SERVICES ARE NOT LODGED SOLELY IN SECTION 322 OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 898, 955. THE PURPOSE OF SECTION 322 IS TO REQUIRE PROMPT PAYMENT BY THE ADMINISTRATIVE OFFICES OF BILLS PRESENTED BY CARRIERS FOR TRANSPORTATION SERVICES, AND NOTHING IN THE SAID SECTION, EITHER EXPRESSLY OR BY NECESSARY IMPLICATION, LIMITS OR AFFECTS THE GOVERNMENT'S COMMON-LAW RIGHT OF SET-OFF, OR THE AUTHORITY OR RESPONSIBILITY OF THIS OFFICER UNDER SECTION 236, REVISED STATUTES, AS AMENDED, 42 STAT. 24, WHICH CONTEMPLATES, GENERALLY, THAT CLAIMS AND DEMANDS OF THE UNITED STATES AGAINST ITS DEBTORS SHALL, IN THE FIRST INSTANCE, BE SETTLED AND ADJUSTED BY THE GENERAL ACCOUNTING OFFICE.

APPARENTLY, THE RATES ASSESSED ORIGINALLY FOR THE TRANSPORTATION SERVICE PERFORMED ARE APPLICABLE OVER THE ROUTE VIA WHICH THE SHIPMENT MOVED, BUT SUCH MOVEMENT CONSTITUTED A MISROUTING OF THE GOODS. IT WOULD SEEM THAT THE POCONO FREIGHT LINES ERRED IN TRANSFERRING THE SHIPMENT TO THE MERCHANTVILLE EXPRESS COMPANY, A NONPARTICIPANT IN TARIFFS NAMING JOINT THROUGH RATES BETWEEN THE POINTS INVOLVED, AND BY SO DOING WAS ENABLED TO RETAIN FOR ITSELF ALL THE EARNINGS DERIVED FROM THE 141-CENT RATE, INSTEAD OF DIVIDING THE REVENUE WITH ANOTHER CARRIER WHICH COULD HAVE PROTECTED THAT RATE TO DESTINATION. HOWEVER, IT APPEARS THAT MERCHANTVILLE EXPRESS COMPANY IS NOT WITHOUT FAULT IN THIS MATTER, SINCE IT MUST OR COULD HAVE KNOWN WHEN IT AGREED TO THE INTERCHANGE OF THE SHIPMENT TO ITS LINE AT PHILADELPHIA THAT IT COULD NOT LAWFULLY PROTECT THE THROUGH RATE AVAILABLE VIA OTHER ROUTES, AS PUBLISHED IN THE TARIFFS OPEN TO PUBLIC INSPECTION AND LAWFULLY ON FILE WITH THE INTERSTATE COMMERCE COMMISSION. IN THIS RESPECT, IT HAD CONSTRUCTIVE NOTICE OF THE LOWER-RATED ROUTES, AND TO THIS EXTENT WAS CHARGEABLE WITH KNOWLEDGE THAT ITS ACCEPTANCE OF THE SHIPMENT AT PHILADELPHIA WOULD CONSTITUTE THE BEGINNING OF A MISROUTE. THUS IT APPEARS THAT THERE IS A SUFFICIENT BASIS TO SUPPORT THE CONCLUSION THAT POCONO FREIGHT LINES, INC., AND MERCHANTVILLE EXPRESS COMPANY ARE JOINTLY AND SEVERALLY LIABLE FOR THE MISROUTING IN THIS CASE. IN ANY EVENT, WHETHER THE ORIGIN CARRIER, THE DESTINATION CARRIER, OR BOTH, ARE RESPONSIBLE FOR THE MISROUTE, THE CARRIER OR CARRIERS, WHETHER INITIAL OR CONNECTING, WHICH ARE GUILTY OF THE MISROUTING MUST STAND THE LOSS, AND CANNOT COLLECT THE EXCESS CHARGES CAUSED BY THE MISROUTING, AND, IF SUCH EXCESS CHARGES HAVE BEEN PAID BY THE SHIPPER OR CONSIGNEE, THE OVERCHARGE MUST BE REFUNDED. LANCASTER ET AL. V. SCHREINER, 212 S.W. 19. FURTHERMORE, IT WAS HELD IN THE LAST-CITED CASE (QUOTING FROM THE SYLLABUS), THAT:

"THE SPIRIT OF THE INTERSTATE COMMERCE ACT WITH THE CARMACK AMENDMENT ( U.S. COMP. ST. SECTIONS 8604A, 8604AA) IS TO TREAT CONNECTING LINES OF TRANSPORTATION AS ONE LINE SO FAR AS THE SHIPPER IS CONCERNED, AND TO COMPEL THE DIFFERENT COMPANIES FORMING A THROUGH ROUTE TO DEAL AS A UNIT WITH THE SHIPPER, AND TO THEN ADJUST ALL DIFFERENCES AS TO INDIVIDUAL LIABILITY AMONG THEMSELVES, AND THUS, WHERE A SHIPMENT WAS MISROUTED AND THE PROPER CHARGES WERE PAID TO THE TERMINAL CARRIER, SUCH TERMINAL CARRIER SHOULD NOT BE ALLOWED TO SUE THE SHIPPER FOR THE LOCAL ESTABLISHED CHARGES OVER THE ACTUAL ROUTE OF THE SHIPMENT, BUT SHOULD BE REQUIRED TO SETTLE THE MATTER WITH THE OTHER CARRIERS, BECAUSE TO COLLECT THE MONEY FROM THE SHIPPER WOULD BE TO COLLECT MONEY FOR THE BENEFIT OF AN OFFENDING CARRIER, MONEY WHICH MUST AGAIN BE RETURNED TO THE SHIPPER BY THE OFFENDING CARRIER.'

SECTION 319 OF THE ACT, 49 U.S.C. 319, PROVIDES FOR THE APPLICATION OF THE " CARMACK AMENDMENT" OF THE ACT TO COMMON CARRIERS BY MOTOR VEHICLE.

IN VIEW OF THE FOREGOING, AND SINCE THE ADJUSTMENT OF THE DEFICIENCY OF $18.52 IS A MATTER SUSCEPTIBLE TO SETTLEMENT BETWEEN THE CARRIERS INVOLVED, AND THE EXCESS OF $18.52 IS NOT PAYABLE BY THE UNITED STATES, REGARDLESS OF THE BASIS OF SETTLEMENT EFFECTED BY THE CARRIERS AMONG THEMSELVES, IT APPEARS THAT REPAYMENT OF SUCH AMOUNT TO YOUR CLIENT BY THIS OFFICE WOULD SERVE NO USEFUL PURPOSE.