B-128022, OCTOBER 1, 1956, 36 COMP. GEN. 263

B-128022, OCTOBER 1, 1956, 36 COMP. GEN. 263

TRANSPORTATION - RATES - PUBLISHED TARIFFS - EXEMPTION FOR COMMERCIAL ZONE A TRANSPORTATION COMPANY WHICH OFFERED TO TRANSPORT GOVERNMENT SHIPMENTS AT RATES IN PUBLISHED TARIFFS IS PRECLUDED ON THE ACCEPTANCE OF A SHIPMENT, WHICH ORIGINATED AT A POINT WITHIN THE COMMERCIAL ZONE OF PHILADELPHIA FOR TRANSSHIPMENT BY WATER FROM ANOTHER POINT IN PHILADELPHIA, FROM RECEIVING PAYMENT AT A RATE IN EXCESS OF THE PUBLISHED TARIFFS, NOTWITHSTANDING THAT CARRIERS OPERATING IN THE COMMERCIAL ZONE OF PHILADELPHIA ARE EXEMPT FROM INTERSTATE COMMERCE COMMISSION REGULATIONS AND PUBLISHED TARIFF RATES.

TO SAMUEL MAZESS, OCTOBER 1, 1956:

WE HAVE CONSIDERED YOUR LETTERS PROTESTING, ON BEHALF OF YOUR CLIENT, THE PRATT TRANSPORTATION COMPANY, OVERPAYMENTS DETERMINED ON BILLS OF LADING N -32301453 AND N-30010934 IN THE AUDIT BY OUR TRANSPORTATION DIVISION. THE GROUNDS ADVANCED FOR THE PROTEST ARE (1) THE RATE TENDERS ON WHICH THE OVERPAYMENTS ARE BASED WERE NEVER ACCEPTED BY THE DEPARTMENT OF THE NAVY; (2) ALTHOUGH THE SHIPMENTS WERE INTERSTATE IN CHARACTER, THE TRANSPORTATION TOOK PLACE WITHIN THE EXEMPT COMMERCIAL ZONE OF PHILADELPHIA, TO WHICH NO INTERSTATE TARIFFS, FILED WITH THE INTERSTATE COMMERCE COMMISSION, APPLY; AND (3) COLLECTION OF THE OVERPAYMENTS BY DEDUCTION FROM UNPAID BILLS IS PRECLUDED BY THE INTERSTATE COMMERCE ACT.

SOMETIME PRIOR TO AUGUST 1, 1952, THE PRATT TRANSPORTATION COMPANY TENDERED TO THE UNITED STATES NAVY ITS " SECTION 22 BID," THE RECEIPT OF WHICH WAS ACKNOWLEDGED AUGUST 8, 1952. THE CARRIER WAS INFORMED THAT S AND A CONTROL NUMBER 3056 HAD BEEN ASSIGNED TO ITS BID, AND WAS REQUESTED TO AMEND THE BID BY GIVING TO IT A TENDER NUMBER AND INCLUDING IN IT A CLAUSE RELATING TO ACCEPTANCE BY THE GOVERNMENT. QUOTATION TENDER NO. A, EFFECTIVE AUGUST 1, 1952, INCORPORATING THE LANGUAGE REQUESTED, WAS ACKNOWLEDGED BY THE NAVY ON AUGUST 26, 1952. IT WAS ASSIGNED S AND A CONTROL NUMBER 3092 AND ACCEPTED AS A CANCELLATION OF THE EARLIER " SECTION 22 BID.' TENDER NO. B, EFFECTIVE JANUARY 2, 1953, CANCELING TENDER NO. A, WAS LATER SUBMITTED TO THE DEPARTMENT OF THE NAVY. IT WAS TENDER NO. B WHICH WAS MENTIONED AS NOT HAVING BEEN ACCEPTED IN A LETTER TO YOU, DATED FEBRUARY 20, 1953, FROM THE DIRECTOR, FREIGHT RATE AND CLASSIFICATION DIVISION, DEPARTMENT OF THE NAVY. TENDER NO. A, HOWEVER, WAS EFFECTIVE AT THE TIME THE SHIPMENTS IN QUESTION WERE TRANSPORTED, DURING OCTOBER AND NOVEMBER 1952, HAD BEEN ACCEPTED BY THE NAVY, AND WAS AVAILABLE FOR THE DETERMINATION OF THE PROPER CHARGES TO BE ASSESSED. THE PROPER CHARGES ACCRUED ON BILL OF LADING N-32301453 WERE DETERMINED IN OUR TRANSPORTATION DIVISION BY USE OF THE SCALE OF RATES PROVIDED IN TENDER NO. A TO APPLY TO INTERSTATE SHIPMENTS ORIGINATING IN THE CITY OR COUNTY OF PHILADELPHIA, ACCORDING TO THEIR WEIGHTS, PLUS AN UNLOADING CHARGE OF 10-1/2 CENTS PER 100 POUNDS.

YOUR SECOND CONTENTION APPARENTLY IS DIRECTED TO THE OVERPAYMENT STATED ON BILL OF LADING N-30010934, SINCE THE GENERAL ACCOUNTING OFFICE FORM 1003, NOTICE OF OVERPAYMENT, SHOWED, IN ADDITION TO THE RATE TENDER, MIDDLE ATLANTIC STATES MOTOR CARRIER CONFERENCE TARIFF 9 I, MF-I.C.C.A- 445, AS AUTHORITY FOR THE RATE USED TO ASCERTAIN THE PROPER CHARGES. THE SHIPMENT TRANSPORTED ON THIS BILL OF LADING WAS INTERSTATE IN CHARACTER, SINCE, LIKE THE SHIPMENT ON BILL OF LADING N 32301453, IT WAS DESTINED FOR TRANSSHIPMENT BY WATER FROM PHILADELPHIA. THE ORIGIN WAS PLYMOUTH MEETING, PENNSYLVANIA, A POINT WITHIN THE COMMERCIAL ZONE OF PHILADELPHIA BUT WITHOUT THE CITY AND COUNTY OF PHILADELPHIA. ACCORDINGLY, THE TRANSPORTATION DIVISION AUDITED ON THE BASIS PROVIDED IN THE RATE TENDER FOR SUCH SHIPMENTS--- " TARIFF RATES AT THE TIME OF SHIPMENT AS MAY BE PROVIDED IN MIDDLE ATLANTIC CONFERENCE, WASHINGTON, D.C., TARIFF NO. 9-H, SUPPLEMENTS THERETO, AND SUBSEQUENT REISSUES THEREOF, LESS FIVE (5) PERCENT.' THE RATE USED WAS PUBLISHED IN TARIFF 9-I, A REISSUE OF TARIFF 9-H.

THE INTERSTATE COMMERCE COMMISSION, IN CONSTRUING SECTION 203 OF THE MOTOR CARRIER ACT, HAS EXEMPTED FROM ITS REGULATION TRANSPORTATION IN A CERTAIN AREA IN AND ABOUT PHILADELPHIA WHICH IS IN INTERSTATE OR FOREIGN COMMERCE BUT WHICH IS NOT UNDER A COMMON CONTROL, MANAGEMENT, OR ARRANGEMENT FOR A CONTINUOUS CARRIAGE TO OR FROM A POINT BEYOND THIS AREA. SEE PHILADELPHIA, PENNSYLVANIA COMMERCIAL ZONE, 17 M.C.C. 533. WHILE INTERSTATE CARRIERS OPERATING WITHIN THIS ZONE ARE NOT REQUIRED TO FILE THEIR RATES WITH THE COMMISSION, THE EXEMPTION DOES NOT OPERATE TO PRECLUDE ANY CARRIER FROM OFFERING TO PROTECT, ON SHIPMENTS IT TRANSPORTS FOR THE UNITED STATES, DESIGNATED RATES PUBLISHED IN INTERSTATE TARIFFS OF OTHER CARRIERS. THIS THE PRATT TRANSPORTATION COMPANY OFFERED TO DO IN ITS TENDER NO. A. THE TENDER WAS ACCEPTED AND ACKNOWLEDGED BY THE NAVY AND THERE IS NO APPARENT REASON WHY THE GOVERNMENT SHOULD PAY FOR THESE SERVICES ANY GREATER CHARGES THAN THOSE THE PRATT TRANSPORTATION COMPANY HELD ITSELF OUT, IN TENDER NO. A, AS WILLING TO ACCEPT.

THE TRANSPORTATION ACT OF 1940, AN ACT SUPPLEMENTARY TO THE INTERSTATE COMMERCE ACT, PROVIDED IN SECTION 322 (49 U.S.C. 66), FOR PROMPT PAYMENT UPON PRESENTATION, WITHOUT PRIOR AUDIT HERE, OF BILLS FOR TRANSPORTATION FURNISHED BY COMMON CARRIERS SUBJECT OT THE INTERSTATE COMMERCE ACT, AND SPECIFICALLY RESERVED TO THE UNITED STATES THE RIGHT TO SET OFF SUBSEQUENTLY DISCOVERED OVERPAYMENTS FROM AMOUNTS OTHERWISE DUE THOSE CARRIERS. ALTHOUGH THE PRATT TRANSPORTATION COMPANY APPARENTLY WAS NOT CERTIFICATED BY THE INTERSTATE COMMERCE COMMISSION, BUT ONLY BY THE STATE OF PENNSYLVANIA, IT WAS ACCORDED THE BENEFITS OF THIS STATUTE--- PROMPT PAYMENT OF ITS BILLS WITHOUT PRIOR AUDIT HERE--- AND 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.1CLS. 292, AFFIRMED 98 U.S.C. 179; UNITED STATES V. MUNSEY TRUST CO., 332 U.S. 234.

IN THE CIRCUMSTANCES, THE AUDIT PERFORMED IN OUR TRANSPORTATION DIVISION WAS MADE ON THE CORRECT BASIS. THE OVERPAYMENTS STATED ON BILLS OF LADING N-32301453 AND N-30010934, $92.72 AND $239.79, OR AN AGGREGATE OF $332.51, SHOULD BE REFUNDED PROMPTLY, TO OBVIATE FURTHER COLLECTION PROCEEDINGS.