B-128563, FEB. 4, 1957

B-128563: Feb 4, 1957

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TO CHESAPEAKE AND OHIO RAILWAY COMPANY: REFERENCE IS MADE TO YOUR LETTER OF JULY 6. WERE PAID BY A GOVERNMENT DISBURSING OFFICER. IT WAS DETERMINED THAT THE CHARGES FOR THIS SERVICE SHOULD BE $1. WHICH WAS DEDUCTED FROM AMOUNTS OTHERWISE DUE YOUR COMPANY. WAS DISALLOWED BY THE CITED SETTLEMENT. THAT THIS WAS A LESS-THAN -CARLOAD SHIPMENT ON WHICH CARLOAD CHARGES ARE INAPPLICABLE BECAUSE PICK- UP SERVICE WAS PERFORMED BY THE ORIGINAL CARRIER. THAT THE ONLY JUSTIFICATION GIVEN YOU FOR THE DISALLOWANCE OF YOUR SUPPLEMENTAL BILL WAS CITATION TO DECISIONS OF THE INTERSTATE COMMERCE COMMISSION HOLDING THAT SIMILAR CHARGES ASSESSED IN SIMILAR INSTANCES WERE APPLICABLE BUT UNREASONABLE. YOU STATE THAT IT IS YOUR UNDERSTANDING THAT EVERY AGENCY OF THE GOVERNMENT DOES NOT HAVE THE RIGHT ARBITRARILY TO DECIDE WHETHER LAWFULLY PUBLISHED CHARGES ARE REASONABLE BUT THAT COMPLAINTS OF UNREASONABLENESS MUST BE FILED WITH THE INTERSTATE COMMERCE COMMISSION.

B-128563, FEB. 4, 1957

TO CHESAPEAKE AND OHIO RAILWAY COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF JULY 6, 1956, FILE 2-74910 6/52, REQUESTING REVIEW OF THE SETTLEMENT DATED JUNE 4, 1956, IN CLAIM NO. TK- 601228, WHICH DISALLOWED YOUR CLAIM FOR $951.32, ADDITIONAL CHARGES ALLEGED TO BE DUE FOR TRANSPORTATION SERVICES COVERED BY GOVERNMENT BILL OF LADING NO. AF-1042105, APRIL 29, 1952.

BILL OF LADING NO. AF-1042105 COVERED A SHIPMENT OF "TANKS, ALUMINUM SET/UP," WEIGHING 9,597 POUNDS, TRANSPORTED FROM THE FLETCHER AVIATION CORPORATION, PASADENA, CALIFORNIA, TO THE NAVAL SUPPLY CENTER, NORFOLK, VIRGINIA. FOR THIS SERVICE YOU CLAIMED ORIGINALLY, AND WERE PAID BY A GOVERNMENT DISBURSING OFFICER, CHARGES OF $2,073.22, BASED ON THE LESS- THAN-CARLOAD RATE OF $20.38 PER 100 POUNDS, PLUS 6 PERCENT INCREASE. THE AUDIT OF THE PAYMENT VOUCHER BY OUR TRANSPORTATION DIVISION, IT WAS DETERMINED THAT THE CHARGES FOR THIS SERVICE SHOULD BE $1,121.90, COMPUTED ON THE BASIS OF A CARLOAD MINIMUM WEIGHT OF 12,000 POUNDS, SUBJECT TO RULE 34 OF THE GOVERNING CLASSIFICATION, AND THE CARLOAD RATE OF $8.82 PER 100 POUNDS, PLUS 6 PERCENT INCREASE, RESULTING IN AN OVERPAYMENT OF $951.32, WHICH WAS DEDUCTED FROM AMOUNTS OTHERWISE DUE YOUR COMPANY. THEREAFTER, YOUR SUPPLEMENTAL BILL, RECLAIMING THE AMOUNT SO DEDUCTED, WAS DISALLOWED BY THE CITED SETTLEMENT.

IN YOUR REQUEST FOR REVIEW YOU URGE, IN EFFECT, THAT THIS WAS A LESS-THAN -CARLOAD SHIPMENT ON WHICH CARLOAD CHARGES ARE INAPPLICABLE BECAUSE PICK- UP SERVICE WAS PERFORMED BY THE ORIGINAL CARRIER, AND THAT THE ONLY JUSTIFICATION GIVEN YOU FOR THE DISALLOWANCE OF YOUR SUPPLEMENTAL BILL WAS CITATION TO DECISIONS OF THE INTERSTATE COMMERCE COMMISSION HOLDING THAT SIMILAR CHARGES ASSESSED IN SIMILAR INSTANCES WERE APPLICABLE BUT UNREASONABLE. YOU STATE THAT IT IS YOUR UNDERSTANDING THAT EVERY AGENCY OF THE GOVERNMENT DOES NOT HAVE THE RIGHT ARBITRARILY TO DECIDE WHETHER LAWFULLY PUBLISHED CHARGES ARE REASONABLE BUT THAT COMPLAINTS OF UNREASONABLENESS MUST BE FILED WITH THE INTERSTATE COMMERCE COMMISSION.

IN THE PRESENT CASE, YOU ARE SEEKING TO COLLECT LESS-THAN-CARLOAD CHARGES THAT ARE APPROXIMATELY 85 PERCENT GREATER THAN THE MINIMUM CARLOAD CHARGES FOR THE TRANSPORTATION OF PROPERTY WEIGHING 20 PERCENT LESS THAN THE MINIMUM CARLOAD WEIGHT. IN CRANE COMPANY V. ALTON RAILROAD COMPANY, 268 I.C.C. 511, IT WAS HELD THAT THE EXCEPTION IN SECTION 1 (B) TO THE GENERAL RULES EXPRESSED IN RULE 15 OF THE CONSOLIDATED FREIGHT CLASSIFICATION IS PATENTLY UNJUST AND UNREASONABLE WHEN ITS APPLICATION RESULTS IN CHARGES WHICH ARE "EXTORTIONATE, UNJUST AND UNREASONABLE.' IN THAT CASE, THE COMMISSION FOUND THAT THE LESS-THAN-CARLOAD CHARGES FOR TRANSPORTING A SHIPMENT WEIGHING 39 PERCENT LESS THAN THE CARLOAD MINIMUM WEIGHT, ALTHOUGH APPLICABLE, WERE "EXTORTIONATE, UNJUST AND UNREASONABLE.' SEE ALSO, CARNATION COMPANY V. SOUTHERN PACIFIC COMPANY, 269 I.C.C. 470, WHEREIN THE COMMISSION FOUND THE EXCEPTION TO RULE 15 TO BE UNJUSTIFIABLE WHERE ITS APPLICATION RESULTED IN LESS-THAN-CARLOAD CHARGES 111 PERCENT HIGHER THAN THE MINIMUM CARLOAD CHARGES FOR A SHIPMENT WEIGHING 1,600 POUNDS LESS THAN THE CARLOAD MINIMUM WEIGHT.

OUR AUTHORITY TO APPLY THE PRINCIPLE ESTABLISHED BY THE COMMISSION AND TO ADJUST CARRIERS' ACCOUNTS TO THE GENERAL BASIS FOUND REASONABLE BY THE COMMISSION RESULTS FROM OUR STATUTORY DUTY TO SETTLE AND ADJUST CLAIMS BY OR AGAINST THE UNITED STATES, UNDER THE BUDGET AND ACCOUNTING ACT OF 1921, 31 U.S.C. 71. WHERE DOUBT EXISTS AS TO THE VALIDITY OF A CLAIM, WE WOULD NOT BE JUSTIFIED IN SANCTIONING ITS PAYMENT, SINCE GENERALLY OUR OFFICE IS THE FINAL ARBITER ON THE QUESTION OF LEGALITY OF EXPENDITURE FROM PUBLIC FUNDS, EXCEPT WHEN RECOURSE IS HAD TO THE COURTS. SEE UNITED STATES EX REL. SKINNER AND EDDY CORP. V. MCCARL, 275 U.S. 1, FOOTNOTE ON PAGES 4 AND 5. DUE PROTECTION OF THE GOVERNMENT'S INTERESTS REQUIRES THAT WE GIVE EFFECT IN THIS CASE TO THE PRINCIPLE ESTABLISHED BY THE COMMISSION IN SIMILAR CASES.

THE DISALLOWANCE OF YOUR CLAIM IN OUR SETTLEMENT WAS CONSISTENT WITH THE FOREGOING AND, THEREFORE, IS SUSTAINED.