B-125427, NOV. 1, 1955

B-125427, NOV. 1, 1955

TO MR. W. E. FAITHORN, JR., WASHINGTON MANAGER, STEWART-WARNER CORPORATION:

REFERENCE IS MADE TO YOUR LETTERS OF AUGUST 24 AND OCTOBER 5, 1955, RELATIVE TO THE REPORTED INDEBTEDNESS TO THE UNITED STATES OF STEWART WARNER CORPORATION ARISING IN CONNECTION WITH THE SHIPMENT OF MATERIALS UNDER CONTRACT NO. DA-11-022-ORD-1221.

THE CONTRACT PROVIDED FOR INSPECTION AND ACCEPTANCE AT THE CORPORATION'S PLANT, CHICAGO, ILLINOIS, AND FOR DELIVERY F.O.B. COMMON CARRIER AT THAT POINT. THE RECORD SHOWS THAT THE MATERIALS WERE INSPECTED AND ACCEPTED BY A GOVERNMENT INSPECTOR; THAT THEY WERE PACKED IN 1,815 FIBERBOARD CARTONS; AND THAT THEY WERE SHIPPED ON GOVERNMENT BILL OF LADING NO. WY-3311239. UPON RECEIPT AT DESTINATION, THE CAR SEAL WAS INTACT BUT 69 CARTONS WERE FOUND TO BE DAMAGED BY SHIFTING OF THE LOAD IN THE FREIGHT CAR. THE VALUES OF 164 OGIVES AND 25 BOTTOM CLOSING SCREWS DAMAGED WERE $9.68 AND $8, RESPECTIVELY, AND THE COST OF INSPECTING AND REPACKING THE MATERIALS WAS REPORTED AS $147.14 (CORRECT COMPUTATION $145.64), A TOTAL OF $163.32. THE DEMAND IN LETTERS OF JUNE 18, AND JULY 25, 1955, FROM THE CLAIMS DIVISION, GENERAL ACCOUNTING OFFICE, TO THE CORPORATION ERRONEOUSLY WAS STATED AS $163.20.

IN THE CORPORATION'S LETTER OF JANUARY 19, 1954, TO THE CHICAGO ORDNANCE DISTRICT OFFICE, IT IS URGED THAT NORMAL PRACTICE WAS FOLLOWED IN LOADING THE CAR; THAT NO DAMAGE HAD RESULTED IN PRIOR SHIPMENTS SIMILARLY LOADED; AND, THEREFORE, THAT THE DAMAGE WAS THE RESULT OF ROUGH HANDLING OF THE CAR WHILE IN TRANSIT. IT IS STATED FURTHER THAT THE SHIPMENT WAS FORWARDED ONLY AFTER INSPECTION BY THE GOVERNMENT INSPECTOR AND THAT IN THE CIRCUMSTANCES THE GOVERNMENT SHOULD LOOK TO THE CARRIER FOR RECOVERY OF THE DAMAGES. YOU REFER TO THE STATEMENTS IN THIS LETTER AS THE BASIS FOR REQUESTING REVIEW OF THE MATTER. ALSO YOU URGE THAT, SINCE THE TIME WITHIN WHICH THE CORPORATION MIGHT HAVE ASSERTED A CLAIM AGAINST THE CARRIER HAD EXPIRED BEFORE THE DEPARTMENT OF THE ARMY FIXED THE RESPONSIBILITY FOR THE DAMAGES, THE CORPORATION SHOULD NOT BE HELD LIABLE FOR THE DAMAGES.

UPON REQUEST, THE CORPORATION FURNISHED A SKETCH OF THE BLOCKING AND BRACING, AND A SAMPLE OF THE METAL TIES USED IN EFFECTING THE SAME, WHICH SHOWS THAT THREE TIES 1 1/4 IN. BY .038 IN. WERE USED, AT REGULARLY SPACED INTERVALS. ALSO, THE CORPORATION STATED IN A LETTER OF JUNE 28, 1954, THAT THE TIES HAD A TENSILE STRENGTH OF 5,000 POUNDS AND THAT NO SPREADERS WERE USED IN SECURING THE MATERIALS. THE ADMINISTRATIVE REPORT IS TO THE EFFECT THAT 39,000 POUNDS OF THE WEIGHT OF THE MATERIALS (65,496 POUNDS) WERE DISTRIBUTED IN ONE UNIT AND THE BALANCE IN ANOTHER UNIT; AND THAT THE BLOCKING AND BRACING WERE THEREFORE, INADEQUATE.

IN RESPONSE TO A REQUEST FOR INFORMATION AS TO PROPER BLOCKING AND BRACING OF A LOAD OF THE CHARACTER INVOLVED, EVENLY DISTRIBUTED IN EACH END OF THE CAR, THE CHIEF ENGINEER, ASSOCIATION OF AMERICAN RAILROADS, STATED THAT ITS CIRCULAR COVERING LOADING OF CARLOAD SHIPMENTS OF COMMODITIES IN CLOSED CARS SPECIFIES "THAT THE SEALED STRAP EFFICIENCY MUST RESULT IN A TIE WHEREBY THE TOTAL STRENGTH WILL BE 85 PERCENT OF THE LOAD STRENGTH OF THE UNSEALED STRAP.' ALSO, HE STATED THAT PLACING THE TIES SPACED CLOSER TOGETHER IN THE UPPER PORTION OF THE LOAD CONSTITUTES MORE EFFECTIVE RESISTANCE OF THE LOAD PRESSURE AND THAT FROM FOUR TO SIX TIES HAVE BEEN EMPLOYED ON LOADS SIMILAR TO THAT INVOLVED IN THE CAR HERE IN QUESTION.

WITH REGARD TO THE CONTENTION THAT THE SHIPMENT WAS MADE ONLY AFTER INSPECTION BY THE GOVERNMENT INSPECTOR AT THE CONTRACTOR'S PLANT, THERE IS NO SHOWING THAT HE DID IN FACT DETERMINE THAT THE CONTAINERS HERE INVOLVED WERE STOWED AND BRACED IN ACCORDANCE WITH THE APPLICABLE RULES OF THE ASSOCIATION OF AMERICAN RAILROADS. FURTHERMORE, IN THE LETTER OF MARCH 14, 1955, FROM THE TRANSPORTATION DIVISION, U.S. ARMY, AT INDIANAPOLIS, THE CONTRACTOR WAS INFORMED THAT THE SECRETARY OF THE ARMY HAD DELEGATED TO THAT OFFICE THE AUTHORITY FOR TAKING FINAL ACTION IN REGARD TO SHIPMENTS ON GOVERNMENT BILLS OF LADING. THE REASONS AS TO WHY IT WAS CONSIDERED THAT THE SHIPMENT WAS NOT PROPERLY LOADED AND BRACED WERE SET FORTH IN DETAIL IN THAT LETTER.

IN VIEW OF THE FOREGOING AND OF THE FACT THAT ROUGH HANDLING BY THE CARRIER HAS NOT BEEN ESTABLISHED, IT MUST BE CONCLUDED THAT THE CORPORATION FAILED TO COMPLY WITH THE REQUIREMENTS OF THE CONTRACT. SUCH FAILURE CONSTITUTED A BREACH OF THE CONTRACT WHICH RENDERED THE CORPORATION LIABLE FOR THE DAMAGES SUFFERED BY THE GOVERNMENT AS THE RESULT OF THE BREACH. THE FACT THAT THERE MAY HAVE BEEN A DELAY IN NOTIFYING THE CONTRACTOR OF THE DAMAGES ALLEGEDLY DUE TO IMPROPER LOADING DOES NOT RELIEVE IT OF SUCH DAMAGES.

ACCORDINGLY, THE AMOUNT OF $163.32 SHOULD BE REMITTED BY THE CORPORATION, AS DIRECTED IN THE LETTERS OF JUNE 18 AND JULY 25, 1955, WITHOUT FURTHER DELAY.