B-130746, MAR. 20, 1957

B-130746: Mar 20, 1957

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INC.: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 15. THE RUBBER WAS MOVED FROM ITS ORIGINAL LOCATION IN BAY 24 ON THE NORTH SIDE OF PIER 7 TO A NEW LOCATION IN BAY 29 ON THE SOUTH SIDE OF THE PIER. YOUR COMPANY WAS NOTIFIED THAT AN UNDETERMINED NUMBER OF BALES SHOWED EVIDENCE OF WATER DAMAGE AND THAT THE GOVERNMENT INTENDED TO FILE A CLAIM FOR ALL LOSS SUSTAINED AS A RESULT OF SUCH DAMAGE. IT IS ADMINISTRATIVELY REPORTED THAT THE BALES WERE PALLETIZED TWO BALES HIGH. THAT THE TOP BALES WERE AS WET AS THOSE ON THE BOTTOM. THAT UPON OPENING SEVERAL BALES IT WAS FOUND THAT THEY WERE WET ALL THE WAY THROUGH. THAT THERE WAS A WEIGHT GAIN OF APPROXIMATELY TWO POUNDS PER BALE TOGETHER WITH SOME DISCOLORATION.

B-130746, MAR. 20, 1957

TO S. ALEXANDER AND COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 15, 1957, PROTESTING THE ACTION TAKEN IN SETTLEMENT OF DECEMBER 11, 1956, WHICH FOUND YOUR COMPANY INDEBTED TO THE UNITED STATES IN THE AMOUNT OF $1,672.74, REPRESENTING THE BALANCE DUE ON ACCOUNT OF DAMAGE TO 500 BALES OF RUBBER STORED IN YOUR WAREHOUSE UNDER CONTRACT NO. GS-00P-/D/-740, DATED MARCH 19, 1952.

THE RECORD HERE SHOWS THAT ON JANUARY 28, 1952, YOU RECEIVED 500 BALES OF CRUDE RUBBER UNDER THE ABOVE CONTRACT AND ISSUED A RECEIPT THEREFOR WITHOUT ANY EXCEPTION NOTED AS TO THE CONDITION OF THE RUBBER. ON OCTOBER 24, 1952, THE RUBBER WAS MOVED FROM ITS ORIGINAL LOCATION IN BAY 24 ON THE NORTH SIDE OF PIER 7 TO A NEW LOCATION IN BAY 29 ON THE SOUTH SIDE OF THE PIER. ON APRIL 14, 1953, YOUR COMPANY WAS NOTIFIED THAT AN UNDETERMINED NUMBER OF BALES SHOWED EVIDENCE OF WATER DAMAGE AND THAT THE GOVERNMENT INTENDED TO FILE A CLAIM FOR ALL LOSS SUSTAINED AS A RESULT OF SUCH DAMAGE. ON APRIL 24, 1953, AN ANALYSIS INDICATED THAT THE RUBBER HAD BEEN DAMAGED BY SALT WATER. IT IS ADMINISTRATIVELY REPORTED THAT THE BALES WERE PALLETIZED TWO BALES HIGH, EIGHT BALES TO THE PALLET, THAT THE TOP BALES WERE AS WET AS THOSE ON THE BOTTOM, THAT UPON OPENING SEVERAL BALES IT WAS FOUND THAT THEY WERE WET ALL THE WAY THROUGH, AND THAT THERE WAS A WEIGHT GAIN OF APPROXIMATELY TWO POUNDS PER BALE TOGETHER WITH SOME DISCOLORATION. THE RECORD INDICATES THAT THE CAUSE OF THE DAMAGE HAS NEVER BEEN ESTABLISHED. WHEN THE PIER WAS INSPECTED, IT WAS OBSERVED THAT THE SOUTH WALL WAS BROKEN AND CRACKED. IT WAS SUSPECTED THAT THE DAMAGE MAY HAVE BEEN CAUSED BY WATER ENTERING IN THIS AREA DURING STORMY WEATHER BUT THE WAREHOUSE SUPERINTENDENT INFORMED THE GOVERNMENT INSPECTOR THAT THE RUBBER NEVER HAD BEEN STORED IN THE VICINITY OF THE BROKEN WALL. ALSO, IT IS REPORTED THAT ON THE SOUTH SIDE OF THE PIER, LIGHTER SERVICE IS SIDED BY TWO LIFT DOORS AND "RAISE AND FALL" BRIDGES IN EACH OF TWO SECTIONS. IT IS STATED THAT THESE BRIDGES ARE REGULATED WITH THE RISE AND FALL OF THE TIDE FOR LIGHTER SERVICE AND THAT THEY HAVE A CLEARANCE OF ABOUT TWO INCHES ALL AROUND FOUR SIDES, FORMING AN AREA SUFFICIENT TO PERMIT FOG AND MOISTURE TO ENTER THE STORAGE AREA.

AS A RESULT OF THE DAMAGE THE RUBBER WAS SOLD AT A LOSS OF $2,661.01, OF WHICH AMOUNT THERE HAS BEEN PREVIOUSLY COLLECTED FROM YOUR COMPANY BY SET OFF AN AMOUNT TOTALING $988.27 LEAVING AN UNPAID BALANCE OF $1,672.74.

PARAGRAPH 3 (B) OF THE ABOVE CONTRACT REQUIRES THAT THE RUBBER BE STORED IN ACCORDANCE WITH ACCEPTED WAREHOUSE METHODS TO AVOID THE POSSIBILITY OF WATER OR OTHER CONTAMINATING MATERIALS ON THE FLOOR BEING ABSORBED BY THE BALES. PARAGRAPH 6 IMPOSES LIABILITY ON THE CONTRACTOR FOR ANY LOSS OR INJURY OF THE STORED MATERIAL CAUSED BY THE CONTRACTOR'S FAILURE TO EXERCISE SUCH CARE AS A REASONABLY CAREFUL OWNER WOULD EXERCISE. PARAGRAPH 9 OBLIGATES THE CONTRACTOR TO COUNT THE PACKAGES RECEIVED, INSPECT THE MARKS THEREON AND THE CONDITION THEREOF, AND INDICATE SHORTAGES OR OVERAGES, DAMAGES AND ILLEGIBLE MARKINGS OF FORM TS-1796 ON THE RECEIVING REPORT.

IT APPEARS TO BE YOUR CONTENTION THAT THE RUBBER WAS NOT DAMAGED BY SALT WATER WHILE IT WAS IN STORAGE UNDER THE CONTRACT AND THAT THE CONTRACTOR COMPLIED WITH THE REQUIREMENTS OF PARAGRAPH 6 OF THE CONTRACT WITH RESPECT TO CARE OF THE STORED RUBBER. YOU ASSERT THAT THERE WAS NOTHING IN THE APPEARANCE OF THE BALES TO INDICATE DAMAGE TO THE CONTENTS. ALSO, YOU ASSERT THAT AT THE TIME IN QUESTION, MR. BRYAN OF THE RUBBER INSPECTION DIVISION, GENERAL SERVICES ADMINISTRATION STATED BEFORE WITNESSES THAT HE WAS UNABLE TO DETERMINE WHETHER THE RUBBER WAS DAMAGED AND THAT THERE WERE NO MARKINGS ON THE BALES TO INDICATE THAT THEY HAD BECOME WET BY FLOOD. FINALLY, YOU STATE THAT THERE IS NOTHING IN THE CONTRACT OBLIGATING THE CONTRACTOR TO PRODUCE AFFIRMATIVE EVIDENCE SHOWING WHEN AND HOW THE DAMAGE OCCURRED.

IT HAS BEEN HELD THAT IN THE ABSENCE OF A SPECIAL AGREEMENT A WAREHOUSEMAN IS BOUND TO USE ORDINARY CARE IN THE KEEPING OF GOODS COMMITTED TO HIS CUSTODY AND TO COMPLY WITH ANY ADDITIONAL DUTY THAT MAY BE IMPOSED ON HIM BY SPECIAL PROVISIONS IN THE CONTRACT. 93 C.J.S., WAREHOUSEMAN AND SAFE DEPOSITARIES, SECS. 13 AND 30 (C). WHILE HE IS NOT RESPONSIBLE FOR INJURY TO GOODS OCCURRING WITHOUT NEGLIGENCE ON HIS PART, A PRIMA FACIE CASE OF NEGLIGENCE IS ESTABLISHED WHEN GOODS ARE DELIVERED TO HIM IN GOOD CONDITION AND REDELIVERED BY HIM IN BAD CONDITION AND, IN THE ABSENCE OF SOME EXPLANATION OR SHOWING THAT THE LOSS OCCURRED FROM A CAUSE WHICH EXONERATES HIM FROM LIABILITY, HE IS LIABLE FOR SUCH INJURY. 67 C.J. 495, 568; 93 C.J.S., WAREHOUSEMAN AND SAFE DEPOSITARIES, SECS. 30 (A). THE OTTO GERDAU V. DOWNE-MORTON STORES, 151 N.Y.S. 2D 831; MCCRORY STORES CORP. V. WEST SIDE WAREHOUSE CO., 171 N.Y.S. 35.

WHILE YOU INSIST THAT NO NEGLIGENCE ON YOUR PART HAS BEEN ESTABLISHED, IT HAS BEEN HELD THAT NEGLIGENCE MAY BE INFERRED FROM THE CIRCUMSTANCES OF THE CASE. VEREINIGTE ALUMINIUM-WORKS AKTIENGESELLSCHAFT V. ATLANTIC TIDEWATER TERMINALS, 241 N.Y.S. 597. UNDER THE EXPRESS TERMS OF PARAGRAPH 9 OF THE CONTRACT, YOUR COMPANY AT THE TIME OF RECEIVING THE RUBBER FOR STORAGE WAS OBLIGATED TO INSPECT THE CONDITION OF THE RUBBER AND NOTE ANY DAMAGE THERETO ON THE RECEIVING REPORT. SINCE NO DAMAGE WAS INDICATED OR ANY EXCEPTION NOTED ON THE RECEIVING REPORT AND, SINCE IT IS ADMINISTRATIVELY REPORTED THAT NO WATER DAMAGE WAS PRESENT WHEN THE RUBBER WAS INSPECTED AT THAT TIME, IT MUST BE PRESUMED THAT THE DAMAGE OCCURRED DURING STORAGE. CONCERNING YOUR STATEMENT TO THE EFFECT THAT MR. BRYAN WAS UNABLE TO DETERMINE WHETHER THE RUBBER HAD BEEN DAMAGED, THE ADMINISTRATIVE OFFICE HAS REPORTED, AS FOLLOWS:

"THE CLAIMEE IS MOST INACCURATE IN ALLEGING THAT MR. BRYAN STATED THAT FROM APPEARANCE HE WAS UNABLE TO DETERMINE WHETHER OR NOT THE RUBBER WAS DAMAGED. THE ONLY QUESTION AT THE TIME CONCERNED THE TYPE OF WATER THAT HAD CAUSED THE DAMAGE. CONSEQUENTLY, A SAMPLE WAS TAKEN FOR ANALYSIS.

IT IS TRUE THAT THERE WERE NO MARKINGS ON THE BALES TO INDICATE ANY FLOOD CONDITION, SUCH AS HIGH-WATER MARKS, BUT ONLY BECAUSE THE TOPS OF THE BALES WERE AS WET AS THE BOTTOMS. ALTHOUGH PALLETIZED, TWO BALES HIGH, EIGHT BALES TO A PALLET, THE TOP BALES WERE AS WET AS THOSE ON THE BOTTOM. THE BALES VISIBLE HAD THE APPEARANCE OF HAVING BEEN SUBMERGED IN WATER.'

SINCE THERE HAS BEEN NO SHOWING THAT THE DAMAGE OCCURRED FROM AN EXCUSABLE CAUSE OR A CAUSE BEYOND YOUR CONTROL, IT MUST BE CONCLUDED THAT YOUR COMPANY IS LIABLE FOR THE DAMAGES SUSTAINED BY THE GOVERNMENT.

ACCORDINGLY, THE SETTLEMENT OF DECEMBER 11, 1956, IS SUSTAINED. UNLESS A CHECK FOR $1,672.74 PAYABLE TO THE "U.S. GENERAL ACCOUNTING OFFICE" IS RECEIVED WITHIN THIRTY DAYS, THE MATTER WILL BE REFERRED TO THE ATTORNEY GENERAL FOR APPROPRIATE ACTION.