B-129873, MAR. 15, 1957

B-129873: Mar 15, 1957

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YOU CLAIMED ORIGINALLY AND WERE PAID CHARGES IN THE AMOUNT OF $419.19. IN THE AUDIT OF THE VOUCHER BY OUR TRANSPORTATION DIVISION IT WAS DETERMINED THAT LAND-GRANT DEDUCTIONS WERE APPLICABLE. AN OVERPAYMENT IN THE AMOUNT OF $199.59 WAS STATED AGAINST BILL OF LADING NO. YOU PROTESTED OUR AUDIT ACTION URGING THAT THE SHIPMENT WAS NOT MILITARY IN NATURE OR CHARACTER AND HAD NOT BEEN MOVING FOR MILITARY USE. YOU WERE ADVISED THAT THERE WAS NO EVIDENCE OF RECORD IN THIS OFFICE TO INDICATE THAT THE DETERMINATION OF THE ADMINISTRATIVE OFFICE AS TO THE MILITARY CHARACTER OF THE SHIPMENT WAS ERRONEOUS. RECOVERY WAS EFFECTED NOVEMBER 1. THE RECORD SHOWS THAT BILL OF LADING J-344755 WAS ISSUED BY THE FEDERAL PRISON INDUSTRIES ON OCTOBER 9.

B-129873, MAR. 15, 1957

TO UNION PACIFIC RAILROAD COMPANY:

CONSIDERATION HAS BEEN GIVEN YOUR REQUEST FOR REVIEW OF THE AUDIT ACTION TAKEN BY THIS OFFICE IN CONNECTION WITH AN OVERPAYMENT STATED AGAINST YOUR BILL NO. TO-89176, PAID IN THE FEBRUARY 1945 ACCOUNTS OF C. F. ALLEN ON VOUCHER 10 155104.

YOU CLAIMED ORIGINALLY AND WERE PAID CHARGES IN THE AMOUNT OF $419.19, BASED ON THE COMMERCIAL RATE. IN THE AUDIT OF THE VOUCHER BY OUR TRANSPORTATION DIVISION IT WAS DETERMINED THAT LAND-GRANT DEDUCTIONS WERE APPLICABLE, AND AN OVERPAYMENT IN THE AMOUNT OF $199.59 WAS STATED AGAINST BILL OF LADING NO. J-344755. THEREAFTER, BY LETTER DATED APRIL 9, 1956, YOU PROTESTED OUR AUDIT ACTION URGING THAT THE SHIPMENT WAS NOT MILITARY IN NATURE OR CHARACTER AND HAD NOT BEEN MOVING FOR MILITARY USE. LETTER DATED APRIL 30, 1956, YOU WERE ADVISED THAT THERE WAS NO EVIDENCE OF RECORD IN THIS OFFICE TO INDICATE THAT THE DETERMINATION OF THE ADMINISTRATIVE OFFICE AS TO THE MILITARY CHARACTER OF THE SHIPMENT WAS ERRONEOUS. THEREAFTER, SINCE YOU FAILED TO MAKE REFUND OF THE OVERPAYMENT, RECOVERY WAS EFFECTED NOVEMBER 1, 1956, BY DEDUCTION OF THE AMOUNT OF $199.59 FROM YOUR BILL NO. W-278403.

THE RECORD SHOWS THAT BILL OF LADING J-344755 WAS ISSUED BY THE FEDERAL PRISON INDUSTRIES ON OCTOBER 9, 1944, TO COVER THE TRANSPORTATION OF A SHIPMENT OF BROOMS FROM THE FEDERAL PRISON INDUSTRIES, INC., LEAVENWORTH, KANSAS, TO THE NAVAL SUPPLY DEPOT, SPOKANE, WASHINGTON. THE BILL OF LADING BEARS THE FOLLOWING STAMPED ANNOTATION:

"FOR TRANSPORTATION OF MILITARY OR NAVAL PROPERTY OF THE UNITED STATES MOVING FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE. BILL FOR TRANSPORTATION CHARGES MUST SHOW LAND GRANT, IF ANY. (TRANSPORTATION ACT OF 1940, APPROVED SEPTEMBER 18, 1940).'

YOUR CONTENTION THAT THE SHIPMENT WAS NOT MILITARY PROPERTY OF THE UNITED STATES MOVING FOR MILITARY USE APPARENTLY IS BASED SOLELY ON THE FACT THAT THE SHIPMENT WAS MADE BY THE FEDERAL PRISON INDUSTRIES AND THE CHARGES WERE PAYABLE FROM A DEPARTMENT OF JUSTICE APPROPRIATION. HOWEVER, THE BROOMS WERE CONSIGNED TO A NAVAL SUPPLY DEPOT AND IT SEEMS REASONABLE TO ASSUME FROM THE NATURE OF THE PROPERTY THAT IT WAS INTENDED TO BE USED IN THE ORDINARY MILITARY FUNCTIONS OF THE NAVY. THE INSERTION OF A NOTATION AS TO THE MILITARY CHARACTER OF THE SHIPMENT ON THE BILL OF LADING EVIDENCES A DETERMINATION BY THE ADMINISTRATIVE OFFICE THAT THE SHIPMENT CONSISTED OF MILITARY PROPERTY, MOVING FOR MILITARY USE, AND THAT IT WAS SUBJECT TO LAND GRANT DEDUCTIONS. IN THIS CONNECTION, IT HAS BEEN HELD THAT IT IS THE RELATION OF THE SHIPMENT TO THE MILITARY OR NAVAL EFFORT THAT IS CONTROLLING UNDER SECTION 321 (A) OF THE TRANSPORTATION ACT OF 1940, AND THAT THE CONTROLLING TEST IS THE USE TO WHICH THE PROPERTY ID DEDICATED OR DEVOTED. ALSO, THE CIVILIAN AGENCIES MAY SERVICE THE ARMED FORCES OR ACT AS ADJUNCTS TO THEM. SEE NORTHERN PACIFIC RAILROAD COMPANY V. UNITED STATES, 330 U.S. 248, 253, 257.

ACCORDINGLY, THE DEDUCTION FOR LAND GRANT FROM THE APPLICABLE COMMERCIAL CHARGES WAS AUTHORIZED AND REQUIRED AND, THEREFORE, THE SETTLEMENT IS SUSTAINED.