B-118494, MAY 26, 1955, 34 COMP. GEN. 634

B-118494: May 26, 1955

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TRANSPORTATION - AIR CARRIERS - TARIFFS PROVISIONS INSERTED IN AN AIR TARIFF WHICH PRESCRIBE A CLAIMS PROCEDURE AND ESTABLISH A TWO-YEAR LIMITATION ON CLAIMS ARE NOT AUTHORIZED UNDER THE CIVIL AERONAUTICS BOARD REGULATIONS WHICH PROVIDE THAT AIR TARIFFS INCLUDE ONLY MATTERS AFFECTING RATES OR SERVICES UNDER THE RATES. THE GOVERNMENT AND THE PUBLIC ARE NOT CHARGEABLE WITH NOTICE OF ANY PROVISIONS NOT REQUIRED. 955: REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 23. 079.47 WAS RECOVERED FROM THE CAPITAL AIRLINES. THE SHIPMENT WAS DAMAGED IN TRANSIT AND LIABILITY WAS DENIED BY THE CARRIER ON DECEMBER 8. OUR OFFICE HELD THAT THE UNSUPPORTED STATEMENT FAILED TO MEET THE REQUIREMENT OF PROOF THAT THE DAMAGE WAS CAUSED BY AN ACT OF GOD.

B-118494, MAY 26, 1955, 34 COMP. GEN. 634

TRANSPORTATION - AIR CARRIERS - TARIFFS PROVISIONS INSERTED IN AN AIR TARIFF WHICH PRESCRIBE A CLAIMS PROCEDURE AND ESTABLISH A TWO-YEAR LIMITATION ON CLAIMS ARE NOT AUTHORIZED UNDER THE CIVIL AERONAUTICS BOARD REGULATIONS WHICH PROVIDE THAT AIR TARIFFS INCLUDE ONLY MATTERS AFFECTING RATES OR SERVICES UNDER THE RATES, AND, THEREFORE, THE GOVERNMENT AND THE PUBLIC ARE NOT CHARGEABLE WITH NOTICE OF ANY PROVISIONS NOT REQUIRED.

ASSISTANT COMPTROLLER GENERAL WEITZEL TO THE LIBERTY MUTUAL FIRE INSURANCE COMPANY, MAY 26, 955:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 23, 1954, AND FEBRUARY 17, 1955, RELATIVE TO THE SETOFF ACTION BY WHICH $1,079.47 WAS RECOVERED FROM THE CAPITAL AIRLINES, INCORPORATED, TO REIMBURSE THE GOVERNMENT FOR DAMAGE TO THREE CARTONS OF ELECTRONIC EQUIPMENT, WEIGHING 212 POUNDS, SHIPPED FROM MUSKEGON, MICHIGAN, TO THE CIVIL AERONAUTICS ADMINISTRATION, WASHINGTON, D.C., ON AIR BILL NO. 13 MKG 1031727D, DATED NOVEMBER 24, 1950.

THE SHIPMENT WAS DAMAGED IN TRANSIT AND LIABILITY WAS DENIED BY THE CARRIER ON DECEMBER 8, 1950, UNDER THE SO-CALLED " ACT OF GOD" PROVISION OF THE AIR FREIGHT RULES TARIFF. BY LETTER DATED MARCH 3, 1954, OUR OFFICE HELD THAT THE UNSUPPORTED STATEMENT FAILED TO MEET THE REQUIREMENT OF PROOF THAT THE DAMAGE WAS CAUSED BY AN ACT OF GOD. YOU PRESENTLY SET UP THE DEFENSE ON BEHALF OF YOUR INSURED OF THE " STATUTE OF LIMITATIONS, AS OUTLINED IN OFFICIAL AIR FREIGHT RULES TARIFF NO. 1," REFERRING SPECIFICALLY TO RULES NOS. 5.1 AND 5.2 OF THAT TARIFF. YOU HAVE ASKED "IF THE UNITED STATES GOVERNMENT IS REQUIRED TO ABIDE BY THESE TARIFF REGULATIONS WHEN THEY VOLUNTARILY CHOSE TO FORWARD THIS SHIPMENT UNDER A COMMERCIAL AIR FREIGHT BILLING.'

AT THE TIME THE SHIPMENT WAS DELIVERED TO THE CARRIER, RULE NO. 3.1 ON 12TH REVISED PAGE 10 OF OFFICIAL AIR FREIGHT RULES TARIFF NO. L, C.A.B. NO. 1, REQUIRED THAT A "NON-NEGOTIABLE AIR BILL OR OTHER SIMILAR DOCUMENT" BE PREPARED FOR EACH SHIPMENT, AND THE RULE CONTAINED NO PROVISION, FOR ACCOUNT OF CAPITAL AIRLINES, THAT GOVERNMENT SHIPMENTS MUST BE ACCOMPANIED BY A GOVERNMENT BILL OF LADING. THE RECORD IS SILENT AS TO WHY THIS SHIPMENT WAS NOT TENDERED TO THE CARRIER ON A GOVERNMENT BILL OF LADING. AS TO THE APPLICABILITY OF THE TARIFF REGULATIONS, IT IS ASSUMED THAT THOSE REGULATIONS WHICH ARE VALID AND ARE LEGALLY APPLICABLE TO GOVERNMENT SHIPMENTS GENERALLY IN SIMILAR SITUATIONS ARE APPLICABLE IN CONNECTION WITH THIS SHIPMENT.

CONCERNING THE ALLEGED VIOLATION OF RULE 5.1, RELATING TO " CLAIM PROCEDURE," THE RECORD SHOWS THAT ON DECEMBER 4, 1950, MR. E. F. CRITCHLOW, OF THE CIVIL AERONAUTICS ADMINISTRATION, SIGNED A SHIPMENT INSPECTION REPORT SHOWING THE EXTENT OF THE DAMAGE INVOLVED. ON DECEMBER 8, 1950, THE CAPITAL AIRLINES, BY LETTER TO MR. E. F. CRITCHLOW, STATED THAT THE CLAIM WAS DENIED. ALSO, SEE YOUR LETTER OF JANUARY 13, 1953, TO OUR TRANSPORTATION DIVISION, IN WHICH YOU REFER TO THE CARRIER'S LETTER OF DECEMBER 8, 1950, AND SPEAK OF "OUR POLICYHOLDER'S POSITION ON THIS CLAIM," AND OF THE FACT THAT "PAYMENT WAS DECLINED.' ON THE BASIS OF THAT RECORD, THE PROVISIONS OF ITEM 5.1 DO NOT APPEAR TO HAVE BEEN VIOLATED, SINCE THE LETTER OF DECEMBER 8, 1950, INDICATES THAT THE CAPITAL AIRLINES TREATED THE SIGNED INSPECTION REPORT ON DECEMBER 4, 1950, AND SUBSEQUENT HANDLING AND INFORMAL DISCUSSION AS BEING ENDOWED WITH ALL THE FORMALITIES OF A CLAIM.

RULE 5.2 OF THE AIR FREIGHT RULES TARIFF PROVIDES THAT NO CARRIER SHALL BE LIABLE IN ANY ACTION BROUGHT TO ENFORCE A CLAIM UNLESS THE APPLICABLE PROVISIONS OF RULE 5.1 HAVE BEEN COMPLIED WITH, AND UNLESS SUCH ACTION IS BROUGHT WITHIN TWO YEARS AFTER THE DATE WRITTEN NOTICE IS GIVEN TO THE CLAIMANT THAT THE CLAIM HAS BEEN DISALLOWED. APPARENTLY IT IS YOUR CONTENTION THAT AS MORE THAN TWO YEARS HAD ELAPSED BETWEEN THE TIME THE CLAIM WAS DECLINED ON DECEMBER 8, 1950, AND THE TIME RECOVERY WAS EFFECTED BY SETOFF ( OCTOBER 1954), THE RIGHT TO ADJUST THE CLAIM BY SETOFF NO LONGER EXISTED AND THE SETOFF ACTION WAS ERRONEOUS.

AIR TARIFFS OF CARRIERS SUBJECT TO REGULATION BY THE CIVIL AERONAUTICS BOARD ARE FILED PURSUANT TO THE PROVISIONS SET FORTH IN SECTIONS 403 AND 404 OF THE CIVIL AERONAUTICS ACT, 52 STAT. 973, 992, 993 (49 U.S.C. 483, 484). SECTION 403 PROVIDES THAT TARIFFS SHALL CONTAIN ALL RATES, FARES AND CHARGES FOR AIR TRANSPORTATION BETWEEN POINTS SERVED BY IT, AND SHOW, TO THE EXTENT REQUIRED BY REGULATIONS OF THE BOARD, ALL CLASSIFICATIONS, RULES, REGULATIONS, PRACTICES, AND SERVICES IN CONNECTION WITH SUCH TRANSPORTATION. SECTION 404 REQUIRES THAT SUCH CLASSIFICATIONS, RULES, AND REGULATIONS SHALL BE JUST AND REASONABLE. CIVIL AERONAUTICS BOARD REGULATIONS, SERIAL NO. E. R.-146 OF JUNE 29, 1949, 14 F.R. 3529, 14 C.F.R. PART 221, PREPARATION OF TARIFFS OF AIR CARRIERS, SHOW IN SECTION 221.4 THE FOLLOWING:

CONTENTS. TARIFFS SHALL CONTAIN IN THE ORDER NAMED:

(G) GENERAL RULES WHICH GOVERN THE TARIFF, I.E., STATE CONDITIONS WHICH IN ANY WAY AFFECT THE RATES NAMED IN THE TARIFF, OR THE SERVICE UNDER SUCH RATES * * *. SECTION 221.7 PROVIDES:

(A) RULES RELATING TO OR AFFECTING THE APPLICATION OF RATES MAY BE PUBLISHED IN A TARIFF OTHER THAN THE TARIFF NAMING THE RATES.

IT SHOULD BE OBSERVED THAT THE " REGULATIONS" PROVIDE ONLY FOR THE INCLUSION IN TARIFFS OF SUCH RULES AS AFFECT THE APPLICATION OF THE RATES, OR THE SERVICE UNDER THE RATES, AND IT IS CLEAR THAT THE TARIFF RULES 5.1 AND 5.2 INVOLVED IN THIS CASE IN NO WAY RELATE TO RATES, OR STATE CONDITIONS RELATING TO THE SERVICE PERFORMED UNDER SUCH RATES. IT SEEMS CLEAR, THEREFORE, THAT THE TARIFF PROVISIONS RELIED UPON BY YOU IN THIS CASE ARE UNAUTHORIZED BY THE REGULATIONS, AND THE PUBLIC IS NOT CHARGEABLE WITH NOTICE OF ANY RULE OR REGULATION NOT REQUIRED TO BE INCLUDED IN TARIFFS BY LAW. SEE PACIFIC S.S. CO. V. CACKETTE, 8 F.2D 259; SHORTLEY V. NORTHWESTERN AIRLINES, 104 F.1SUPP. 152; BERNARD V. U.S. AIR COACH ET AL., 117 F.1SUPP. 134.

ACCORDINGLY, FOR THE REASONS GIVEN ABOVE, THE DEDUCTION ACTION TAKEN IN THIS CASE WAS PROPER, AND IS SUSTAINED.