B-13088, FEBRUARY 17, 1941, 20 COMP. GEN. 456

B-13088: Feb 17, 1941

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THE GOVERNMENT'S RESPONSIBILITY WITH RESPECT TO THE EMPTY CYLINDERS IS THAT OF A BAILEE FOR HIRE. SO THAT WHERE THE CYLINDERS WERE DESTROYED BY FIRE AND NOT AS A RESULT OF ANY NEGLIGENCE CHARGEABLE TO THE GOVERNMENT. THE CONTRACTOR IS NOT ENTITLED TO REIMBURSEMENT FOR THE EMPTY CYLINDERS. WHICH CYLINDERS ARE REPORTED TO HAVE BEEN DAMAGED BY A FIRE ON JUNE 28. WAS REPORTED THAT THE CYLINDERS WHICH ARE THE SUBJECT OF THE PRESENT CLAIM WERE DAMAGED BEYOND REPAIR IN A FIRE WHICH DESTROYED THE WAREHOUSE AND SHOPS AT PARKER DAM ON JUNE 28. WHICH WAS WELL WITHIN THE PERIOD ALLOWED UNDER THE CONTRACT FOR THE RETURN OF THE CYLINDERS WITHOUT BEING LIABLE FOR THE STATED PRICES THEREFOR. YOUR CLAIM WAS DISALLOWED IN THE SETTLEMENT OF NOVEMBER 14.

B-13088, FEBRUARY 17, 1941, 20 COMP. GEN. 456

PROPERTY - PRIVATE - LOST OR DESTROYED - EMPTY CONTAINERS UNDER A CONTRACT FOR ACETYLENE AND OXYGEN GAS WHICH PROVIDED FOR PAYMENT OF A STATED AMOUNT FOR EACH EMPTY CYLINDER NOT RETURNED TO THE CONTRACTOR WITHIN THE SPECIFIED PERIOD OF FREE USE AND RENTAL, THE GOVERNMENT'S RESPONSIBILITY WITH RESPECT TO THE EMPTY CYLINDERS IS THAT OF A BAILEE FOR HIRE, AND AN ALLEGED TRADE CUSTOM COULD NOT ENLARGE IT TO THAT OF AN INSURER, SO THAT WHERE THE CYLINDERS WERE DESTROYED BY FIRE AND NOT AS A RESULT OF ANY NEGLIGENCE CHARGEABLE TO THE GOVERNMENT, THE CONTRACTOR IS NOT ENTITLED TO REIMBURSEMENT FOR THE EMPTY CYLINDERS.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE HOME OXYGEN CO., INC., FEBRUARY 17, 1941:

THERE HAS BEEN CONSIDERED YOUR LETTER OF NOVEMBER 26, 1940, REQUESTING REVIEW OF SETTLEMENT OF THIS OFFICE DATED NOVEMBER 14, 1940, WHICH DISALLOWED YOUR CLAIM FOR $900 AS THE ALLEGED VALUE OF 31 CYLINDERS IN WHICH YOU FURNISHED ACETYLENE AND OXYGEN GAS TO THE BUREAU OF RECLAMATION, DEPARTMENT OF THE INTERIOR, DURING MAY AND JUNE 1940 FOR USE AT PARKER DAM, CALIF., UNDER CONTRACT NO, I-2R-10172, JUNE 28, 1939, WHICH CYLINDERS ARE REPORTED TO HAVE BEEN DAMAGED BY A FIRE ON JUNE 28, 1940, WHILE IN THE POSSESSION OF THE GOVERNMENT.

THE CONTRACT PROVIDED THAT YOU FURNISH THE BUREAU OF RECLAMATION CERTAIN QUANTITIES OF ACETYLENE AND OXYGEN GAS IN CYLINDERS FOR DELIVERY TO VARIOUS POINTS IN CERTAIN STATES DESIGNATED IN THE CONTRACT AND AT THE PRICES THEREIN NAMED. ALSO, IT PROVIDED, AMONG OTHER THINGS, THAT THE CYLINDERS MIGHT BE RETAINED BY THE GOVERNMENT FOR A FREE PERIOD OF 30 DAYS WITH A RENTAL CHARGE OF 2 CENTS PER DAY FOR EACH DAY RETAINED THEREAFTER NOT TO EXCEED 12 WEEKS AND THAT ALL CONTAINERS NOT RETURNED TO THE CONTRACTOR WITHIN THE PERIODS OF FREE USE AND RENTAL WOULD BE PAID FOR AT THE RATE OF $40 FOR ACETYLENE CYLINDERS AND $20 FOR OXYGEN CYLINDERS. WAS REPORTED THAT THE CYLINDERS WHICH ARE THE SUBJECT OF THE PRESENT CLAIM WERE DAMAGED BEYOND REPAIR IN A FIRE WHICH DESTROYED THE WAREHOUSE AND SHOPS AT PARKER DAM ON JUNE 28, 1940, WHICH WAS WELL WITHIN THE PERIOD ALLOWED UNDER THE CONTRACT FOR THE RETURN OF THE CYLINDERS WITHOUT BEING LIABLE FOR THE STATED PRICES THEREFOR.

YOUR CLAIM WAS DISALLOWED IN THE SETTLEMENT OF NOVEMBER 14, 1940, ON THE GROUND THAT UNDER THE CONTRACT THE GOVERNMENT WAS NOT AN INSURER OF THE CYLINDERS BUT WAS A BAILEE FOR HIRE AND AS SUCH WAS REQUIRED TO EXERCISE ONLY ORDINARY CARE WITH RESPECT TO THE BAILED PROPERTY AND THAT THE RECORD INDICATED THAT THE LOSS OF THE CYLINDERS WAS NOT CAUSED BY ANY NEGLIGENCE CHARGEABLE TO THE GOVERNMENT.

IN YOUR REQUEST FOR REVIEW YOU DO NOT CONTEND THAT THE LOSS WAS DUE TO NEGLIGENCE BUT YOU APPEAR TO TAKE THE POSITION THAT UNDER THE CONTRACT, AND BY CUSTOM AND USAGE, THE RESPONSIBILITY OF THE GOVERNMENT WITH RESPECT TO THE CYLINDERS WAS THAT OF AN INSURER, YOUR LETTER STATING IN PART THAT-

WE DO NOT BELIEVE THAT THE DISALLOWANCE OF THIS CLAIM IS JUSTIFIED UNDER THIS CONTRACT AND PRIOR CONTRACTS ENTERED INTO BETWEEN OURSELVES AND THE GOVERNMENT. WHEN THESE CYLINDERS ARE SHIPPED TO ANY CUSTOMER IT IS WITH THE UNDERSTANDING THAT THE CUSTOMER IS FULLY RESPONSIBLE FOR THEM WHILE IN HIS POSSESSION, AND THAT ALL CYLINDERS LOST OR DESTROYED WHILE IN THE POSSESSION OF THE CUSTOMER WILL BE PAID FOR AT THE AGREED PRICE, IN THIS INSTANCE $20.00 FOR OXYGEN CYLINDERS AND $40.00 FOR ACETYLENE CYLINDERS. IT WAS THE INTENTION OF THE PARTIES THAT THE CYLINDERS BE RETURNED IN GOOD CONDITION OR PAYMENT MADE FOR SAME. IN ADDITION, CUSTOM AND USAGE, WHICH THE LAW ALWAYS IMPLIES IN A CONTRACT, FURTHER SUBSTANTIATES OUR POSITION, TO WIT, THAT UNLESS THE CYLINDERS ARE RETURNED IN GOOD CONDITION, COMPENSATION IS TO BE MADE THEREFOR.

THE RELATIONSHIP BETWEEN YOU AND THE GOVERNMENT WITH REFERENCE TO THE CYLINDERS WAS THAT OF BAILOR AND BAILEE UNDER A BAILMENT FOR HIRE, UNDER WHICH THE GOVERNMENT WAS REQUIRED TO EXERCISE ONLY ORDINARY CARE WITH RESPECT TO THE BAILED PROPERTY. SEE 6 CORPUS JURIS 1140. IT IS WELL SETTLED THAT IN THE ABSENCE OF A SPECIAL CONTRACT, A BAILEE IS NOT AN INSURER OF THE THING BAILED AND IS NOT RESPONSIBLE FOR DAMAGES FOR LOSSES ARISING FROM AN INEVITABLE ACCIDENT OR UNDER CIRCUMSTANCES WHICH MIGHT NOT BE REASONABLY FORESEEN AND PROVIDED AGAINST. BOYDEN V. UNITED STATES, 13 WALL. 17, 22; UNITED STATES V. THOMAS, 15 WALL. 337; SMADBECK V. HELING CONTRACTING RP., 50 F. (2D) 100; MULVANEY V. KING PAINT CO., 256 FED. REP. 612, 614; 11 COMP. DEC. 767; 18 ID. 252; 19 ID. 131; 26 ID. 70; 5 COMP. GEN. 253; ID. 984. THE RECORD FAILS TO SHOW OR INDICATE THAT THE LOSS WAS DUE TO NEGLIGENCE AND, THEREFORE, UNLESS THE GOVERNMENT WAS IN THE POSITION OF AN INSURER WITH RESPECT TO THE CARE OF THE CYLINDERS, IT WOULD FOLLOW THAT THERE CAN BE NO LIABILITY FOR THEIR LOSS.

YOUR CONTENTION THAT THE CONTRACT PLACED UPON THE GOVERNMENT THE RESPONSIBILITY OF AN INSURER WITH RESPECT TO THE CYLINDERS APPEARS TO BE BASED ON THE CONTRACT PROVISION, REFERRED TO ABOVE, THAT CONTAINERS NOT RETURNED WITHIN THE PERIODS OF FREE USE AND RENTAL WOULD BE PAID FOR--- SAID CONTRACT PROVISION BEING AS FOLLOWS:

ALL CONTAINERS NOT RETURNED TO THE CONTRACTOR WITHIN THE PERIODS OF FREE USE AND RENTAL WILL BE PAID FOR AT THE RATE OF $40.00 FOR ACETYLENE CYLINDERS AND $20.00 FOR OXYGEN CYLINDERS, AND ALL RENTAL CHARGES IN SUCH CASES TO BE APPLIED AS PART OF SAID PRICE AND THE GOVERNMENT TO OWN THE CONTAINERS OUTRIGHT.

THE PROVISION ABOVE QUOTED DOES NOT, HOWEVER, SUPPORT YOUR CONTENTION. IT CONTAINS NO EXPRESS UNDERTAKING TO RETURN THE CYLINDERS IN ANY EVENT, NOR DOES IT IMPLY AN ABSOLUTE LIABILITY TO RETURN THEM REGARDLESS OF THE CAUSE OF FAILURE TO DO SO. SUCH A LIABILITY COULD BE IMPOSED UPON A BAILEE ONLY BY A VALID CONTRACT CLEARLY EXPRESSING THE ASSUMPTION OF RISK OF DESTRUCTION OR LIABILITY FOR LOSS OF A BAILED ARTICLE. SEE STURM V. BOKER, 150 U.S. 312; ROPER LUMBER CO. V. PORTSMOUTH FISHERIES CO., 260 FED.REP. 1008, 1013; 6 CORPUS JURIS 1112. THE PROVISION CONTAINS NO SUCH ASSUMPTION OF ABSOLUTE LIABILITY AND, AS INDICATED ABOVE, DOES NOT ENLARGE THE GOVERNMENT'S RESPONSIBILITY TO THAT OF AN INSURER WITH RESPECT TO THE CYLINDERS.

NOR IS THERE ANY BASIS TO SUPPORT YOUR CONTENTION THAT USAGE AND CUSTOM IMPLY AN OBLIGATION TO PAY FOR THE CYLINDERS UNLESS RETURNED IN GOOD CONDITION. IN THE FIRST PLACE, THERE IS NO SHOWING OF SUCH A CUSTOM AND, IN THE SECOND PLACE, EVEN IF IT WERE SHOWN TO EXIST, IT COULD NOT BE REGARDED AS ENLARGING THE BAILMENT RESPONSIBILITY OF A BAILEE FOR HIRE UNDER THE CONTRACT TO THAT OF AN INSURER. SEE STURM V. BOKER, ET ALIA, SUPRA.

ACCORDINGLY, UPON REVIEW, THE SETTLEMENT DISALLOWING YOUR CLAIM MUST BE AND IS SUSTAINED.