B-132059, JUL. 12, 1957

B-132059: Jul 12, 1957

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PACIFIC INTERMOUNTAIN EXPRESS: REFERENCE IS MADE TO YOUR LETTER OF MARCH 29. A COPY OF WHICH WAS FURNISHED SENATOR WARREN G. WAS DISALLOWED AND YOU WERE REQUESTED TO REFUND $165.56 OF THE $818.22 ORIGINALLY PAID. YOU WERE ADVISED THAT DEDUCTION ACTION WOULD BE TAKEN TO COLLECT THE $165.56 OVERPAID. WAS IN RESPONSE TO OUR NOTICE THAT COLLECTION WOULD BE EFFECTED BY DEDUCTION. ALTHOUGH NO CHARGES WERE PAID TO THAT CARRIER. THE MONEYS THAT CARRIER EARNED FOR ITS SHARE OF THE SERVICE PERFORMED WERE RECEIVED FROM THE DESTINATION CARRIER. THE OBJECTIONS RAISED BY YOU SEEM TO REFLECT YOUR UNDERSTANDING THAT OUR REASON FOR SEEKING RECOVERY OF THE OVERPAYMENT OF $165.56 FROM YOUR LINE IS ON THE BASIS OF LIABILITY ALONE.

B-132059, JUL. 12, 1957

TO MR. I. W. SHEPHERD, DIRECTOR OF TRAFFIC, PACIFIC INTERMOUNTAIN EXPRESS:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 29, 1957, A COPY OF WHICH WAS FURNISHED SENATOR WARREN G. MAGNUSON WITH YOUR LETTER DATED APRIL 17, 1957, REQUESTING REVIEW OF OUR SETTLEMENT CERTIFICATE IN CLAIM NO. TK 632744, DATED OCTOBER 31, 1956. YOUR BILL NO. 24805-A, FOR $129.82 ADDITIONAL FREIGHT CHARGES IN CONNECTION WITH A SHIPMENT MOVING FROM LAREDO AIR FORCE BASE, TEXAS, TO NELLIS AIR FORCE BASE, NEVADA, UNDER BILL OF LADING AF 4361461, DATED JUNE 14, 1955, WAS DISALLOWED AND YOU WERE REQUESTED TO REFUND $165.56 OF THE $818.22 ORIGINALLY PAID. ON MARCH 20, 1957, YOU WERE ADVISED THAT DEDUCTION ACTION WOULD BE TAKEN TO COLLECT THE $165.56 OVERPAID, AND YOUR LETTER OF MARCH 29, 1957, WAS IN RESPONSE TO OUR NOTICE THAT COLLECTION WOULD BE EFFECTED BY DEDUCTION.

THE QUESTION HERE CONCERNS THE PROPRIETY OF DEDUCTIONS, AUTHORIZED BY SECTION 322 OF THE TRANSPORTATION ACT OF 1940, 49 U.S.C. 66, FROM AMOUNTS DUE THE DESTINATION CARRIER ACCOUNT OF MISROUTING BY THE INITIAL CARRIER. YOU URGE THAT RECOVERY SHOULD BE HAD DIRECTLY FROM THE MISROUTING CARRIER, ALTHOUGH NO CHARGES WERE PAID TO THAT CARRIER, AND THE MONEYS THAT CARRIER EARNED FOR ITS SHARE OF THE SERVICE PERFORMED WERE RECEIVED FROM THE DESTINATION CARRIER.

THE OBJECTIONS RAISED BY YOU SEEM TO REFLECT YOUR UNDERSTANDING THAT OUR REASON FOR SEEKING RECOVERY OF THE OVERPAYMENT OF $165.56 FROM YOUR LINE IS ON THE BASIS OF LIABILITY ALONE. IN YOUR LETTER OF JANUARY 28, 1957, YOU REQUESTED THAT THE CLAIM BE WITHDRAWN AND FILED AGAINST BROWN EXPRESS, WHICH MISROUTED THE SHIPMENT. IN OTHER WORDS, IT IS APPARENTLY YOUR VIEW THAT SINCE THE INITIAL CARRIER HAS THE DUTY OF FORWARDING UNROUTED SHIPMENTS--- AS IN THE INSTANT CASE--- OVER THE LOWEST-RATED ROUTE, THE GOVERNMENT, AS SHIPPER, SHOULD ALLOW YOUR COMPANY THE CHARGES APPLICABLE VIA THE ACTUAL ROUTE OF MOVEMENT AND COLLECT THE EXCESS FROM THE CARRIER RESPONSIBLE FOR MISROUTING THE SHIPMENT. IT DOES NOT APPEAR THAT THE GOVERNMENT SHOULD BE REQUIRED TO RESORT TO SUCH CIRCUITY OF ACTION.

IN THIS CONNECTION REFERENCE IS MADE TO THE CASE OF GALVESTON H. AND S.A. RY. CO. V. LYKES OS., 294 F. 968, INVOLVING A SITUATION IN WHICH THE INITIAL CARRIER 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 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 PERTINENT CASE IS LANCASTER V. SCHREINER, 212 S.W. 19, 21. IN THAT CASE THE INITIAL CARRIER MISROUTED THE SHIPMENT AND ON ARRIVAL AT THE BILLED DESTINATION THE DELIVERING 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 THE GOVERNMENT DOES NOT APPEAR TO BE LIABLE 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 SINCE THERE IS 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 DISALLOWING YOUR CLAIM FOR $129.82 IS SUSTAINED. THE AMOUNT OF $165.56 DETERMINED TO HAVE BEEN OVERPAID SHOULD BE REFUNDED PROMPTLY.