B-129646, APR. 16, 1957

B-129646: Apr 16, 1957

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INC.: REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 24. YOUR CLAIM WAS FOR THE REPAYMENT OF AN AMOUNT WHICH THE GOVERNMENT DEDUCTED FROM ONE OF YOUR SUBSEQUENT BILLS TO RECOVER THE AMOUNT OVERPAID FOR THE TRANSPORTATION OF 77 CRATES OF "UNSERVICEABLE AUTOMOTIVE TRANSFER CASE AND TRANSMISSION ASSEMBLIES HAVING VALUE FOR RECONDITIONING" FROM AUSTIN. A RECOVERY OF A FURTHER OVERPAYMENT OF $88.58 ON THE SHIPMENT COVERED BY BILL OF LADING WV-4552983 WAS EFFECTED THEREAFTER BY DEDUCTION FROM AMOUNTS OTHERWISE DUE YOU. THE RECORD SHOWS THAT YOUR ORIGINALLY CLAIMED AND WERE PAID ON YOUR BILL NO. 1652 THE AMOUNT OF $753 FOR THE SERVICE PERFORMED UNDER BILL OF LADING NO. THIS CHARGE WAS COMPUTED ON THE BASIS OF A RATE OF $1.29 PER 100 POUNDS TO NASHVILLE.

B-129646, APR. 16, 1957

TO THE MASON AND DIXON LINES, INC.:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 24, 1956, FILE CARRIER BILL 1652, IN WHICH YOU REQUEST REVIEW OF OUR SETTLEMENT CERTIFICATE OF FEBRUARY 10, 1956, WHICH DISALLOWED YOUR CLAIM, PER YOUR BILL NO. 1652-A- CLAIMS, FOR $109.42. YOUR CLAIM WAS FOR THE REPAYMENT OF AN AMOUNT WHICH THE GOVERNMENT DEDUCTED FROM ONE OF YOUR SUBSEQUENT BILLS TO RECOVER THE AMOUNT OVERPAID FOR THE TRANSPORTATION OF 77 CRATES OF "UNSERVICEABLE AUTOMOTIVE TRANSFER CASE AND TRANSMISSION ASSEMBLIES HAVING VALUE FOR RECONDITIONING" FROM AUSTIN, TEXAS, TO RICHMOND, VIRGINIA, UNDER GOVERNMENT BILL OF LADING NO. WV-4552983 IN DECEMBER 1944. A RECOVERY OF A FURTHER OVERPAYMENT OF $88.58 ON THE SHIPMENT COVERED BY BILL OF LADING WV-4552983 WAS EFFECTED THEREAFTER BY DEDUCTION FROM AMOUNTS OTHERWISE DUE YOU.

THE RECORD SHOWS THAT YOUR ORIGINALLY CLAIMED AND WERE PAID ON YOUR BILL NO. 1652 THE AMOUNT OF $753 FOR THE SERVICE PERFORMED UNDER BILL OF LADING NO. WV-4552983. THIS CHARGE WAS COMPUTED ON THE BASIS OF A RATE OF $1.29 PER 100 POUNDS TO NASHVILLE, TENNESSEE--- THE POINT WHERE YOU PICKED UP THE SHIPMENT--- AND $1.22 PER 100 POUNDS BEYOND. IN THE AUDIT OF YOUR BILL BY OUR TRANSPORTATION DIVISION, IT WAS DETERMINED THAT THERE WAS AVAILABLE A JOINT THROUGH RATE OF $2.22 PER 100 POUNDS, NAMED IN EASTERN- CENTRAL MOTOR CARRIERS ASSOCIATION TARIFF NO. 20, MF-I.C.C. NO. 45. THE JOINT THROUGH RATE WAS APPLIED HERE BECAUSE THE SHIPMENT WAS ROUTED "WILLINGHAM MOTOR LINES AND CONNECTIONS," AND IT WAS THE DUTY OF THE INITIAL CARRIER TO ROUTE THE SHIPMENT BEYOND ITS LINE VIA THE ROUTE PROVIDING THE LOWEST CHARGE. MURRAY COMPANY OF TEXAS V. MORROW, INC., 54 M.C.C. 442, 444; GREAT ATLANTIC AND PACIFIC TEA CO. V. ONTARIO FREIGHT LINES, 46 M.C.C. 237, 239. AFTER THE RECOVERY BY THE GOVERNMENT OF THE RESULTING OVERPAYMENT OF $109.42, YOU RECLAIMED THE AMOUNT OF THE RECOVERY ON YOUR BILL NO. 1652-A-CLAIMS, AND IN THE CONSIDERATION OF THAT BILL OUR TRANSPORTATION DIVISION DETERMINED THAT A STILL LOWER GROSSRATE OF $1.85 PER HUNDRED POUNDS, MINIMUM WEIGHT 30,000 POUNDS, WAS AVAILABLE AND COMPUTED THE FREIGHT CHARGES ON THE BASIS OF A COMBINATION OF RATES OVER MEMPHIS, TENNESSEE. THE CHARGES SO DETERMINED WERE $88.58 LESS THAN THE CHARGES ALREADY PAID, AND AN APPROPRIATE REQUEST FOR REFUND, FORM 1003, WAS ISSUED ON FEBRUARY 14, 1956. THE AMOUNT OF $88.58 WAS SUBSEQUENTLY DEDUCTED FROM YOUR BILL NO. 9457 IN OCTOBER 1956.

IN YOUR REQUEST FOR REVIEW YOU DO NOT CONTEND THAT THE THROUGH RATE IS NOT APPLICABLE, BUT YOU ARE OF THE OPINION THAT THE OVERCHARGE SHOULD BE COLLECTED FROM THE MISROUTING CARRIER, CITING ADLEY EXPRESS V. UNITED STATES, 128 C.CLS. 776. WITH RESPECT TO THE ADDITIONAL AMOUNT DETERMINED BY OUR OFFICE TO HAVE BEEN OVERPAID ON THIS SHIPMENT, WHICH AMOUNT WAS BASED ON THE USE OF A COMBINATION OF RATES OVER MEMPHIS, TENNESSEE, YOU "AGREE THAT A THROUGH RATE WHICH EXCEEDS THE AGGREGATE OF INTERMEDIATE RATES IS PRIMA FACIE UNREASONABLE IN VIEW OF PAST I.C.C. AND COURT RULINGS," BUT QUESTION THE AUTHORITY OF OUR OFFICE TO APPLY THESE PRECEDENTS TO THIS SHIPMENT.

THE INTERSTATE COMMERCE ACT DOES NOT SPECIFICALLY AUTHORIZE A SHIPPER TO SPECIFY THE ROUTINGS OF HIS SHIPMENTS OVER THE LINES OF COMMON CARRIERS BY MOTOR VEHICLE, BUT IT DOES MAKE IT THE DUTY OF SUCH CARRIERS TO ESTABLISH, OBSERVE, AND ENFORCE JUST AND REASONABLE RATES, CHARGES, AND CLASSIFICATION, AND REASONABLE REGULATIONS AND PRACTICES THERETO. THOSE INSTANCES WHERE NO ROUTING INSTRUCTIONS ARE GIVEN, THE INTERSTATE COMMERCE COMMISSION HAS STATED THAT THE INITIAL CARRIER SHOULD SELECT THE ROUTE WHICH IS LEAST EXPENSIVE TO THE SHIPPER. THE ACT DOES NOT REQUIRE COMMON CARRIERS BY MOTOR VEHICLE TO ESTABLISH JOINT RATES OR ROUTES, BUT WHERE THE CARRIERS HAVE ESTABLISHED AND MAINTAIN THROUGH ROUTES AND RATES WITH OTHER CARRIERS IT IS THE DUTY OF THE INITIAL CARRIER TO FORWARD A SHIPMENT OVER THE LOWEST-RATED ROUTE. HAUSMAN STEEL COMPANY V. SEABOARD FREIGHT LINES, INC., 32 M.C.C. 31, 34; METZNER STOVE REPAIR COMPANY V. RANFT, 47 M.C.C. 151; MURRAY COMPANY OF TEXAS, INC., V. MORROW, INC., 54 M.C.C. 442; GREAT A. AND P. TEA COMPANY V. ONTARIO FREIGHT LINES, 46 M.C.C. 237.

UNDER THE BUDGET AND ACCOUNTING ACT OF 1921, 42 STAT. 24, AS AMENDED, 31 U.S.C. 71, THE GENERAL ACCOUNTING OFFICE IS CHARGED BY LAW WITH THE DUTY OF SETTLING AND ADJUSTING ALL CLAIMS AND ACCOUNTS IN WHICH THE GOVERNMENT OF THE UNITED STATES IS CONCERNED. IN THE PERFORMANCE OF THIS DUTY THE ACCOUNTING OFFICERS OF THE GOVERNMENT ARE BOUND TO SCRUTINIZE CLAIMS AND ACCOUNTS WITH GREAT CARE, AND IT IS THE RIGHT AND DUTY OF ACCOUNTING OFFICERS TO REJECT, IN WHOLE OR IN PART, AS THEIR JUDGMENT DICTATES, ALL THOSE CLAIMS AS TO THE VALIDITY OF WHICH THERE EXISTS DOUBT. SEE CHARLES V. UNITED STATES, 19 C.CLS. 316, 319; LONGWILL V. UNITED STATES, 17 C.CLS. 288, 291. THE INTERSTATE COMMERCE COMMISSION HAS HELD IN MOTOR CARRIER CASES THAT A THROUGH JOINT RATE WHICH EXCEEDS THE AGGREGATE OF INTERMEDIATE RATES IS PRIMA FACIE UNREASONABLE AND, THEREFORE, UNLAWFUL UNDER SECTION 216 OF THE INTERSTATE COMMERCE ACT, 49 U.S.C. 316. SEE RITEFIT MFG. CORP. V. HOLLAND MOTOR EXP., 67 M.C.C. 48; STOKLEY FOODS, INC. V. FOSTER FREIGHT LINES, 62 M.C.C. 179; VICTORY GRANITE CO. V. CENTRAL TRUCK LINES, INC., 44 M.C.C. 320; KINGAN AND CO. V. OLSON TRANSP. CO., 32 M.C.C. 10. IN THE LIGHT OF THESE DECISIONS, WHICH RAISE, NOT ONLY A DOUBT AS TO THE LAWFULNESS OF THE CHARGES, BUT A PRIMA FACIE CASE FOR THEIR UNLAWFULNESS, THE ACCOUNTING OFFICERS OF THE GOVERNMENT WOULD NOT BE JUSTIFIED IN PERMITTING PAYMENT WITH PUBLIC FUNDS. SEE 32 COMP. GEN. 1.

THE GENERAL ACCOUNTING OFFICE DOES NOT DETERMINE THE REASONABLENESS OF RATES. IT DOES, HOWEVER, DETERMINE WHETHER THE FACTS AND CIRCUMSTANCES IN CONNECTION WITH A GIVEN CLAIM SHOW THAT THE CLAIM IS BASED ON A RATE APPLIED IN SITUATIONS WHERE SIMILAR RATES IN SIMILAR CIRCUMSTANCES HAVE BEEN DETERMINED BY THE COMMISSION TO BE PRIMA FACIE UNREASONABLE AND, WHERE JUSTIFIED, IT ASSERTS AND RECOVERS OVERPAYMENTS FROM MONEY OTHERWISE DUE THE CARRIER. IN THIS CONNECTION, SEE THE CASE OF UNITED STATES V. THE WESTERN PACIFIC RAILROAD COMPANY, ET AL, 352 U.S. 59, 74.

THE ADLEY CASE, TO WHICH YOU MAKE REFERENCE, DID NOT RESULT IN A DETERMINATION EITHER FOR OR AGAINST THE GOVERNMENT'S RIGHT TO COLLECT FROM THE DESTINATION CARRIER EXCESS TRANSPORTATION CHARGES ARISING FROM MISROUTING OF A SHIPMENT BY THE ORIGIN OR INTERMEDIATE CARRIERS, AS H. P. WELCH COMPANY, THE ORIGINATING CARRIER, ADMITTED LIABILITY FOR THE MISROUTING AND CONSENTED TO THE FILING OF A JUDGMENT AGAINST IT FOR THE AMOUNT OVERPAID. THE COURT OF CLAIMS, ON THE BASIS OF MOTIONS FILED BY THE DEPARTMENT OF JUSTICE, ORDERED JUDGMENTS ENTERED AGAINST THE WELCH COMPANY IN FAVOR OF THE UNITED STATES, AND AGAINST THE UNITED STATES IN FAVOR OF ADLEY EXPRESS.

IN CONTENDING THAT THE OVERPAYMENT IN THIS CASE SHOULD HAVE BEEN COLLECTED FROM THE MISROUTING CARRIER, YOU SEEM TO IMPLY THAT THE GOVERNMENT SHOULD PAY YOUR CLAIM AND THEN FILE A CLAIM FOR THE SAME AMOUNT AGAINST THE CARRIER GUILTY OF THE MISROUTING. HOWEVER, NEITHER THE GOVERNMENT NOR ANY OTHER SHIPPER SEEMS TO BE REQUIRED TO BECOME A PARTY TO SUCH CIRCUITY OF ACTION.

THE CASE OF GALVESTON, HOUSTON AND SAN ANTONIO RAILWAY COMPANY V. LYKES BROS., 294 F. 968, INVOLVED A SITUATION IN WHICH THE INITIAL CARRIED ISSUED AN UNROUTED BILL OF LADING AND THEN MISROUTED THE SHIPMENT. THE DESTINATION CARRIER COLLECTED CHARGES FROM THE CONSIGNEE WHICH WERE BASED ON AN ERRONEOUS RATE AND THEN SOUGHT TO RECOVER BY COURT ACTION THE RATE APPLICABLE VIA THE ACTUAL ROUTE OF MOVEMENT. THE COURT REFUSED TO ALLOW THE DESTINATION CARRIER TO COLLECT ANY CHARGES IN EXCESS OF THOSE APPLICABLE VIA THE LOWEST-RATED ROUTE--- THE ROUTE OVER WHICH THE INITIAL CARRIER SHOULD HAVE FORWARDED THE SHIPMENT. ANOTHER CASE THAT SEEMS TO BE VERY MUCH IN POINT IS LANCASTER V. SCHREINER, 212 S.W. 19. IN THAT CASE THE INITIAL CARRIER MISROUTED THE SHIPMENT AND ON ARRIVAL AT THE BILLED DESTINATION THE DELIVERYING CARRIER COLLECTED FROM THE CONSIGNEE THE CHARGES THAT WOULD HAVE BEEN PROPER OVER THE ROUTE OF MOVEMENT HAD THE SHIPMENT NOT BEEN MISROUTED. SUBSEQUENTLY, THE DESTINATION CARRIER SUED THE SHIPPER FOR THE DIFFERENCE BETWEEN THE CHARGES COLLECTED AND THE CHARGES APPLICABLE VIA THE ACTUAL ROUTE OF MOVEMENT. THE COURT SAID:

"THE PLAINTIFF HERE CONCEDES THAT IF DEFENDANT IS COMPELLED TO PAY THE EXCESS SUED FOR IN THIS CASE HE CAN RECOVER THE SAME AGAINST THE CARRIER OR CARRIERS GUILTY OF MISROUTING THIS SHIPMENT. ITS CONTENTION IS THAT, ON ACCOUNT OF THE RIGID CONDITIONS OF THE INTERSTATE COMMERCE ACT, THE PLAINTIFF MUST SUE FOR AND DEFENDANT MUST PAY THE AMOUNT OF THE COMBINED LOCAL RATES OF THE ROUTE OVER WHICH THE SHIPMENT WAS ACTUALLY SENT, THOUGH BY NO FAULT OF THE SHIPPER, AND THE SHIPPER MUST THEN IN TURN SUE FOR AND RECOVER THE EXCESS WHICH HE IS THUS FORCED TO PAY FROM THE OFFENDING CARRIER. WE SEE NO REASON, HOWEVER, WHY THE PLAINTIFF, IF IT HAS NOT RETAINED ITS OWN CHARGES IN FULL, AS TO WHICH WE ARE NOT ADVISED, SHOULD NOT ITSELF SUE SUCH OFFENDING CARRIER TO ADJUST SUCH DIFFERENCE. * * * WHY SHOULD PLAINTIFF BE ALLOWED TO RECOVER FROM DEFENDANT FOR THE BENEFIT OF THE OFFENDING CARRIER THE VERY AMOUNT WHICH SUCH OFFENDING CARRIER MUST REFUND TO DEFENDANT? WE SEE NO REASON FOR TWO SUITS WHERE ONLY ONE, IF ANY, IS NEEDED. THE CASE IS THE SAME AS IF THE SHIPPER ON ASCERTAINING THE THROUGH RATE AND DESIGNATING THE PROPER ROUTE HAD PAID THE INITIAL CARRIER THE CORRECT AMOUNT OF CHARGES FOR THE THROUGH SHIPMENT. THE INITIAL CARRIER WOULD THEN BE RESPONSIBLE FOR THE THROUGH SHIPMENT, THOUGH PART OF THE ROUTE WAS OVER A CONNECTING CARRIER. THE CONNECTING CARRIER BECOMES IN A MEASURE AT LEAST THE AGENT OF THE INITIAL CARRIER TO COMPLETE THE SHIPMENT * * * AND THERE IS SUCH CONTRACTUAL RELATION BETWEEN THE TWO CARRIERS THAT THE CONNECTING CARRIER COULD HOLD THE INITIAL CARRIER FOR ITS LAWFUL SHARE OF FREIGHT CHARGES. * * * WE SEE NO REASON, THEREFORE, WHY PLAINTIFF, IF ANYTHING IS YET DUE, SHOULD NOT LOOK TO THE INITIAL OR PRECEDING CARRIER FOR ANY REDRESS DUE IT RATHER THAN TO SEEK TO COLLECT FROM DEFENDANT FOR THE BENEFIT OF THE OFFENDING CARRIER MONEY WHICH MUST BE AGAIN RETURNED TO THE DEFENDANT.'

ACCORDINGLY, SINCE THERE APPEARS TO BE NO LIABILITY RESTING UPON THE GOVERNMENT FOR THE PAYMENT OF ANY EXCESS CHARGES RESULTING FROM THE MISROUTING OF THE SHIPMENT BY ONE OF THE CARRIERS IN THE ROUTE OF MOVEMENT, AND NO DUTY ON THE PART OF THE GOVERNMENT TO PAY ADDITIONAL CHARGES TO ONE CARRIER AND THEN SEEK TO RECOVER THE SAME CHARGES FROM ANOTHER CARRIER, THE SETTLEMENT IS SUSTAINED.