B-114616, MAY 14, 1953, 32 COMP. GEN. 524

B-114616: May 14, 1953

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GOVERNMENT CREDIT CARDS - UNAUTHORIZED USE - GOVERNMENT LIABILITY A GASOLINE COMPANY WHICH FURNISHED SERVICES AND SUPPLIES TO A PERSON POSSESSING A STOLEN GOVERNMENT CREDIT CARD AND OPERATING A STOLEN VEHICLE IS NOT ENTITLED TO REIMBURSEMENT ON A CONTRACTUAL BASIS OR ANY OTHER BASIS FOR THE SERVICES AND SUPPLIES FURNISHED. 1953: REFERENCE IS MADE TO YOUR LETTER OF MARCH 30. ALLEGED TO BE DUE FOR SERVICES AND SUPPLIES CLAIMED TO HAVE BEEN FURNISHED THE CORPS OF ENGINEERS. YOU WERE ADVISED BY THE OFFICE OF THE DISTRICT ENGINEER. W7780 WAS STOLEN IN LOUISVILLE. 1951 AND THAT THE ITEMS COVERED BY THE ENCLOSED DELIVERY OR SALES SLIPS WERE APPARENTLY OBTAINED BY THE THIEF FOR HIS USE WHILE HE WAS OPERATING THE GOVERNMENT OWNED VEHICLE DURING THE PERIOD IT WAS MISSING AND FOR HIS USE IN OTHER AUTOMOBILES AFTER THE GOVERNMENT-OWNED VEHICLE WAS RECOVERED.

B-114616, MAY 14, 1953, 32 COMP. GEN. 524

GOVERNMENT CREDIT CARDS - UNAUTHORIZED USE - GOVERNMENT LIABILITY A GASOLINE COMPANY WHICH FURNISHED SERVICES AND SUPPLIES TO A PERSON POSSESSING A STOLEN GOVERNMENT CREDIT CARD AND OPERATING A STOLEN VEHICLE IS NOT ENTITLED TO REIMBURSEMENT ON A CONTRACTUAL BASIS OR ANY OTHER BASIS FOR THE SERVICES AND SUPPLIES FURNISHED.

COMPTROLLER GENERAL WARREN TO THE GULF REFINING COMPANY, MAY 14, 1953:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 30, 1953, REQUESTING REVIEW OF SETTLEMENT DATED NOVEMBER 19, 1952, WHICH DISALLOWED YOUR CLAIM FOR $226.27, ALLEGED TO BE DUE FOR SERVICES AND SUPPLIES CLAIMED TO HAVE BEEN FURNISHED THE CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY, AT LOUISVILLE, KENTUCKY, DURING THE PERIOD FROM DECEMBER 17, 1950 TO FEBRUARY 25, 1951.

THE EVIDENCE OF RECORD INDICATES THAT UNDER DATE OF MARCH 1, 1951, YOU WERE ADVISED BY THE OFFICE OF THE DISTRICT ENGINEER, U.S. CORPS OF ENGINEERS, LOUISVILLE, KENTUCKY, THAT GOVERNMENT-OWNED VEHICLE LICENSE NO. W7780 WAS STOLEN IN LOUISVILLE, KENTUCKY ON DECEMBER 17, 1950 AND RECOVERED IN BALTIMORE, MARYLAND, ON JANUARY 3, 1951 AND THAT THE ITEMS COVERED BY THE ENCLOSED DELIVERY OR SALES SLIPS WERE APPARENTLY OBTAINED BY THE THIEF FOR HIS USE WHILE HE WAS OPERATING THE GOVERNMENT OWNED VEHICLE DURING THE PERIOD IT WAS MISSING AND FOR HIS USE IN OTHER AUTOMOBILES AFTER THE GOVERNMENT-OWNED VEHICLE WAS RECOVERED. IN VIEW THEREOF, IT IS MANIFEST THAT THE SERVICES AND SUPPLIES IN QUESTION WERE OBTAINED BY A THIEF AND THAT THE UNITED STATES DID NOT VOLUNTARILY ASSUME ANY RESPONSIBILITY OR RECEIVE ANY BENEFIT IN CONNECTION WITH THESE TRANSACTIONS.

IT APPEARS THAT THE SUBJECT CLAIM IS BASED UPON SUPPOSED DEALINGS WITH AN AUTHORIZED AGENT OF THE GOVERNMENT AND A RESULTANT CONTRACT REQUIRING PAYMENT FOR THE SERVICES AND SUPPLIES FURNISHED THROUGH SUCH AGENT. IT IS CLEAR THAT NO SUCH AGENCY EXISTED AND THE EVIDENCE OF AUTHORITY EMPLOYED BY THE THIEF HAVING BEEN STOLEN, NO CONTRACT WAS CREATED EITHER EXPRESSLY OR IMPLIEDLY. IN THIS CONNECTION, IT IS AN ELEMENTARY PRINCIPLE OF THE LAW OF AGENCY THAT EVERY PERSON DEALING WITH AN AGENT IS BOUND TO INVESTIGATE AND TO ASSURE HIMSELF THAT AN AGENCY ACTUALLY EXISTS. SEEMS DOUBTFUL THAT THE DILIGENCE REQUIRED TO SATISFY SUCH DUTY WAS EXERCISED IN THE INSTANT MATTER.

THE POSSESSION OF A CREDIT CARD, OR OF THE OFFICIAL CAR IDENTIFIED THEREON, ALONE, DOES NOT JUSTIFY AN EXTENSION OF CREDIT TO THE BEARER AS A REPRESENTATIVE OF THE UNITED STATES. THE SERVICE STATION EMPLOYEES TO WHOM SUCH CARDS ARE PRESENTED SHOULD REQUIRE COMPETENT EVIDENCE AS TO THE IDENTITY AND OFFICIAL STATUS OF THE PERSONS HOLDING THEM. ALL FEDERAL EMPLOYEES AUTHORIZED TO USE OFFICIAL CARS AND TO PURCHASE PETROLEUM AND OTHER SUPPLIES ON THE CREDIT OF THE GOVERNMENT HAVE AVAILABLE MEANS OF READILY ESTABLISHING THESE FACTS.

WHILE CONTRACTS WITH THE GOVERNMENT ARE CONSTRUED GENERALLY IN THE SAME MANNER AS CONTRACTS BETWEEN PRIVATE INDIVIDUALS, THIS DOES NOT MILITATE AGAINST THE RULE APPLICABLE TO PUBLIC CONTRACTS GENERALLY, THAT THOSE WHO DEAL WITH THE AGENTS OF THE PUBLIC MUST AT THEIR OWN PERIL, INQUIRE INTO THE POWER OF SUCH PERSONS TO BIND THE PUBLIC. ROSENBERG, ET AL. V. UNITED STATES, 31 F.2D 838, 840, CERTIORARI DENIED 280 U.S. 571. A DISTINCTION BETWEEN THE LIABILITY OF INDIVIDUALS AND THAT OF THE GOVERNMENT WITH RESPECT TO THEIR AGENTS HAS LONG BEEN RECOGNIZED BY THE COURTS. ALTHOUGH THE FORMER ARE LIABLE TO THE EXTENT OF THE POWER APPARENTLY GIVEN TO THEIR AGENTS, DUE TO THE NECESSITY OF PROTECTING THE PUBLIC INTERESTS THE GOVERNMENT IS LIABLE ONLY TO THE EXTENT OF THE AUTHORITY OR POWER IT HAS ACTUALLY GIVEN TO ITS AGENTS. WHITESIDE V. UNITED STATES, 93 U.S. 247; 16 COMP. GEN. 325.

THE UNITED STATES IS NEITHER BOUND NOR ESTOPPED BY THE ACTS OF OFFICERS OR AGENTS ACTING WITHOUT AUTHORITY, AND LIMITATIONS ON AUTHORITY TO IMPOSE CONTRACT OBLIGATIONS UPON IT ARE AS APPLICABLE TO CONTRACTS BY IMPLICATION AS THEY ARE TO THOSE EXPRESSLY MADE. SEE SUTTON V. UNITED STATES, 256 U.S. 575; PAN AMERICAN COMPANY V. UNITED STATES, 273 U.S. 456; AND PROVIDENCE ENGINEERING CORPORATION V. DOWNEY SHIPBUILDING CORPORATION, 294 F. 641, CERTIORARI DENIED 264 U.S. 586.

SO, EVEN IF THE THE THIEF HAD BEEN A BONA FIDE AGENT OF THE UNITED STATES, HE WOULD STILL BE WITHOUT AUTHORITY TO OBTAIN SERVICES AND SUPPLIES FOR HIS PERSONAL USE, ON THE CREDIT OF THE UNITED STATES AND, UNDER THE STATED RULES, WOULD IMPOSE NO LIABILITY ON THE GOVERNMENT FOR THE SERVICES AND MERCHANDISE THUS PROCURED. THE FACT REMAINS, THAT THE BUYER OF THE ITEMS INVOLVED WAS A THIEF AND NOT A BONA FIDE AGENT OR EMPLOYEE OF THE UNITED STATES AND THE GOVERNMENT CANNOT BE FOUND OR HELD LIABLE FOR THE ACTS OF PERSONS WHO HAVE NEVER BEEN ITS AGENTS. NEWMAN V. UNITED STATES, 28 F.2D 681, CERTIORARI DENIED 279 U.S. 839 AND BEARD V. UNITED STATES, 59 F.2D 940, 941.

ACCORDINGLY, SINCE NO CONTRACTUAL LIABILITY EXISTS ON THE PART OF THE GOVERNMENT TO PAY FOR THE SERVICES AND SUPPLIES FURNISHED, THE SETTLEMENT OF NOVEMBER 19, 1952, DISALLOWING YOUR CLAIM, MUST BE SUSTAINED.