B-127219, SEPT. 19, 1956

B-127219: Sep 19, 1956

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YOU QUESTION THE CORRECTNESS OF THE AUDIT IN WHICH THE OVERPAYMENTS WERE DETERMINED ON TWO GROUNDS: (1) THE ENGINES TRANSPORTED WERE IN FACT SHIPPED LOOSE. (2) THE MINIMUM WEIGHT PRESCRIBED FOR APPLICATION WITH THE RATES USED WAS A TRUCKLOAD. BECAUSE YOU WERE CERTIFICATED AS A CONTRACT CARRIER TO PERFORM THESE SERVICES. YOU URGE THAT THEY WERE SHIPPED UNCRATED TO PERMIT LOADING IN THE C-54 TRANSPORT PLANES IN WHICH THEY WERE FLOWN HERE FROM THE BERLIN AIRLIFT. THAT THEY WERE OFF-LOADED AT THE MATS TERMINAL. WE HAVE BEEN ADVISED BY THE COMMANDING OFFICER. THAT THE ENGINES SHIPPED ON EACH OF THESE BILLS OF LADING WERE IN CRATES. WHETHER THESE ENGINES WERE OR WERE NOT SHIPPED IN BOXES OR CRATES IS A QUESTION OF FACT UPON WHICH THE DETERMINATION OF THE ADMINISTRATIVE OFFICE IS CONTROLLING IN THE ABSENCE.

B-127219, SEPT. 19, 1956

TO MR. JOSEPH P. NUZZI:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTERS CONCERNING THE GOVERNMENT'S CLAIM AGAINST YOU IN THE PRINCIPAL SUM OF $2,854.78, REPRESENTING OVERPAYMENTS MADE FOR THE TRANSPORTATION OF REPARABLE AIRPLANE ENGINES DURING 1949.

YOU QUESTION THE CORRECTNESS OF THE AUDIT IN WHICH THE OVERPAYMENTS WERE DETERMINED ON TWO GROUNDS: (1) THE ENGINES TRANSPORTED WERE IN FACT SHIPPED LOOSE; AND (2) THE MINIMUM WEIGHT PRESCRIBED FOR APPLICATION WITH THE RATES USED WAS A TRUCKLOAD, RATHER THAN A VOLUME, MINIMUM WEIGHT. BECAUSE YOU WERE CERTIFICATED AS A CONTRACT CARRIER TO PERFORM THESE SERVICES, YOU ALSO QUESTION THE PROPRIETY OF THE REFERENCE ON THE CERTIFICATE OF INDEBTEDNESS DATED JANUARY 7, 1955, TO SECTION 322 OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 955, WHICH PROVIDES W STATUTORY RESERVATION TO THE UNITED STATES OF A RIGHT OF SETOFF AGAINST COMMON CARRIERS.

BILLS OF LADING WX 8384239, WX 8384326, WX 8386244, WX 8386224, AND WX 8386336, ALL COVERED SHIPMENTS OF REPARABLE AIRPLANE ENGINES, WHICH ORIGINATED AT WESTOVER AIR BASE, CHICOPEE, MASSACHUSETTS. ALTHOUGH THE BILLS OF LADING DESCRIBE THE ENGINES AS BEING IN BOXES OR IN CRATES, YOU URGE THAT THEY WERE SHIPPED UNCRATED TO PERMIT LOADING IN THE C-54 TRANSPORT PLANES IN WHICH THEY WERE FLOWN HERE FROM THE BERLIN AIRLIFT, AND THAT THEY WERE OFF-LOADED AT THE MATS TERMINAL, WESTOVER, DIRECT TO YOUR TRUCKS WITHOUT CRATING. HOWEVER, WE HAVE BEEN ADVISED BY THE COMMANDING OFFICER, 1600TH AIR TRANSPORT WING, MILITARY AIR TRANSPORT SERVICE, WESTOVER AIR BASE, THAT THE ENGINES SHIPPED ON EACH OF THESE BILLS OF LADING WERE IN CRATES. WHETHER THESE ENGINES WERE OR WERE NOT SHIPPED IN BOXES OR CRATES IS A QUESTION OF FACT UPON WHICH THE DETERMINATION OF THE ADMINISTRATIVE OFFICE IS CONTROLLING IN THE ABSENCE, AS HERE, OF COMPETENT EVIDENCE TO THE CONTRARY. SEE, IN THIS CONNECTION, 14 COMP. GEN. 927; 16 ID. 325.

BILL OF LADING WX 8382189, APRIL 30, 1949, COVERED 18 BOXES OF AIRPLANE ENGINES, WEIGHING 35,515 POUNDS, LOADED ON THREE SEPARATE TRUCKS. FOR THE SERVICE FURNISHED, YOU COLLECTED CHARGES OF $2,520, BASED UPON A MINIMUM WEIGHT OF 16,000 POUNDS PER TRUCK AT $5.25 PER SHOULD NOT HAVE EXCEEDED $1,864.54, COMPUTED AT THE ACTUAL WEIGHT AND THE RATE OF $5.25 PER 100 POUNDS, AND REQUESTED REFUND OF THE RESULTING OVERPAYMENT, $655.46. BILL OF LADING WX 8384426, JUNE 23, 1949, COVERED A SHIPMENT OF 14 ENGINES, WEIGHING 27,670 POUNDS. ALTHOUGH THE RECORD HERE IS SILENT AS TO THE NUMBER OF TRUCKS USED TO TRANSPORT THESE ENGINES, YOU COLLECTED CHARGES OF $1,680, BASED UPON THE USE OF TWO TRUCKS, AT A MINIMUM WEIGHT OF 16,000 POUNDS EACH. OUR TRANSPORTATION DIVISION REQUESTED REFUND OF $227.32, THE DIFFERENCE BETWEEN THE CHARGES PAID AND $1,452.68, THE CHARGES BASED UPON THE ACTUAL WEIGHT.

YOU PUBLISHED AND FILED WITH THE INTERSTATE COMMERCE COMMISSION YOUR CONTRACT CARRIER SCHEDULE OF MINIMUM RATES AND CHARGES, HF-I.C.C. NO. 5, EFFECTIVE APRIL 11, 1949, TO APPLY ON THIS TRAFFIC. THE SCHEDULE ESTABLISHED THE RATE OF $5.25 PER 100 POUNDS BETWEEN THE ORIGIN AND DESTINATION OF THESE SHIPMENTS, AND PROVIDED, IN RULE 1, "MINIMUM WEIGHT PER SHIPMENT: RATES NAMED HEREIN ARE SUBJECT TO A MINIMUM WEIGHT OF 16,000 POUNDS PER SHIPMENT.' ALSO AVAILABLE FOR APPLICATION ON THESE SHIPMENTS WAS YOUR "U.S. GOVERNMENT QUOTATION NO. 2," EFFECTIVE DECEMBER 23, 1948, EXPIRED JUNE 23, 1949. THIS QUOTATION ALSO OFFERED THE $5.25 RATE, AND PROVIDED "MINIMUM WEIGHT 16,000 NO., " YOU NOW URGE THAT THESE WERE TRUCKLOAD MINIMA APPLICABLE TO EACH OF A NUMBER OF TRUCKS NEEDED TO TRANSPORT A SINGLE SHIPMENT, RATHER THAN VOLUME MINIMA AS APPLIED IN OUR AUDIT.

A VOLUME MINIMUM WEIGHT IS DISTINGUISHED FROM A TRUCKLOAD MINIMUM WEIGHT IN THIS RESPECT: IT IS THE MINIMUM APPLICABLE WHEN A SHIPPER TENDERS TO A CARRIER FOR TRANSPORTATION, AT ONE TIME, A SINGLE SHIPMENT OR VOLUME, OF A COMMODITY, EVEN THOUGH THE AMOUNT TENDERED MAY EXCEED THE CARRYING CAPACITY OF THE LARGEST AVAILABLE VEHICLE, AND MAY REQUIRE THE USE OF TWO OR MORE VEHICLES; THE TRUCKLOAD MINIMUM WEIGHT IS THE QUANTITY THE CARRIER CAN TRANSPORT IN A SINGLE VEHICLE. SEE STOVES FROM ALABAMA AND TENNESSEE TO INTERSTATE POINTS, 4 M.C.C. 641 (FOOTNOTE); COMMODITY RATES FROM GULF PORTS TO ALABAMA, GEORGIA AND TENNESSEE, 10 M.C.C. 106 (FOOTNOTE). THE PROVISION IN RULE 1 OF YOUR CONTRACT CARRIER SCHEDULE, MF-I.C.C. NO. 5, FOR A MINIMUM WEIGHT OF 16,000 POUNDS PER SHIPMENT, IS CLEARLY A VOLUME MINIMUM, ACCORDING TO THE ABOVE DEFINITION. SINCE THE BASIS PROVIDED IN SCHEDULE MF I.C.C. NO. 5 PRODUCES THE CHARGES DETERMINED TO BE PROPER BY OUR TRANSPORTATION DIVISION, IT IS UNNECESSARY TO CONSTRUE THE MINIMUM WEIGHT PROVISION IN YOUR ,U.S. GOVERNMENT QUOTATION NO. 2.' IT MAY BE POINTED OUT, HOWEVER, THAT THIS QUOTATION WAS AN OFFER FROM YOU TO TRANSPORT GOVERNMENT PROPERTY ACCORDING TO THE TERMS AND CONDITIONS SPECIFIED; THAT IF ACCEPTED AND ACTED UPON BY THE UNITED STATES, THE OFFER RIPENED INTO A CONTRACT; AND THAT IN ACCORDANCE WITH THE BASIC RULE OF CONSTRUING AMBIGUOUS INSTRUMENTS AGAINST THE MAKER, THE GOVERNMENT WOULD BE ENTITLED TO THE MORE FAVORABLE INTERPRETATION THAT A 16,000 POUND VOLUME MINIMUM WEIGHT WAS INTENDED.

SECTION 322 OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 955, PROVIDES FOR THE PAYMENT OF COMMON CARRIERS' BILLS FOR TRANSPORTATION PROMPTLY UPON PRESENTATION, WITHOUT PRIOR AUDIT HERE, AND MAKES SPECIFIC STATUTORY RESERVATION TO THE UNITED STATES OF THE RIGHT TO SET OFF SUBSEQUENTLY DISCOVERED OVERPAYMENTS FROM AMOUNTS OTHERWISE DUE THOSE CARRIERS. ALTHOUGH YOU OPERATED AS A CONTRACT CARRIER IN RELATION TO THESE SHIPMENTS, YOU WERE ACCORDED THE BENEFITS OF THIS STATUTE--- PROMPT PAYMENT OF YOUR BILLS WITHOUT PRIOR AUDIT HERE--- AND YOU SHOULD NOT NOW COMPLAIN AT THE IMPOSITION OF ITS BURDEN. ASIDE FROM THIS STATUTE, HOWEVER, THE UNITED STATES POSSESSES THE COMMON-LAW RIGHT OF SETOFF. LIKE ANY OTHER CREDITOR, THE GOVERNMENT IS ENTITLED TO APPLY AMOUNTS DUE FROM IT TO A CLAIMANT TOWARD THE EXTINGUISHMENT OF THAT CLAIMANT'S INDEBTEDNESS TO THE UNITED STATES. SEE MCKNIGHT V. UNITED STATES, 13 C.CLS. 292, AFFIRMED 98 U.S. 179; UNITED STATES V. MUNSEY TRUST CO., 332 U.S. 234.

THE AUDIT ACTION TAKEN IN OUR TRANSPORTATION DIVISION WAS CONSISTENT WITH THE FOREGOING PRINCIPLES AND IS SUSTAINED. THE PRINCIPAL AMOUNT OF THE DEBT, $2,854.78, SHOULD BE REFUNDED PROMPTLY; OTHERWISE THE MATTER WILL BE REFERRED TO THE ATTORNEY GENERAL OF THE UNITED STATES FOR ACTION.