B-132758, NOVEMBER 27, 1957, 37 COMP. GEN. 371

B-132758: Nov 27, 1957

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IS SUBJECT TO SUCH DOUBT THAT PAYMENT TO THE STEAMSHIP COMPANY MAY NOT BE AUTHORIZED IN THE ABSENCE OF A COUNTERVAILING COURT DECISION WHICH INTERPRETS THE EFFECT OF THE FOREIGN LAW. 1957: REFERENCE IS MADE TO YOUR LETTERS OF JULY 29 AND OCTOBER 1. WAS NO LONGER BOUND BY THE "FREE TRANSIT" PROVISIONS OF THE CONVENTIONS OF THE POSTAL UNION OF THE AMERICAS AND SPAIN. SIMILAR "FREE TRANSIT" PROVISIONS WERE INCORPORATED IN LATER CONVENTIONS OF THE UNION. WAS BELIEVED BY THE POST OFFICE DEPARTMENT TO BE RESPONSIBLE UNDER THE "FREE TRANSIT" PROVISIONS OF THE POSTAL CONVENTIONS TO PAY FOR SUCH SERVICE. PAYMENTS WERE SUSPENDED. THE SUSPENSION OF PAYMENTS AND THE COLLECTION OF THE AMOUNT PREVIOUSLY PAID WERE OCCASIONED BY THE DISCOVERY OF THE EXISTENCE OF PERUVIAN LAW NO. 6207.

B-132758, NOVEMBER 27, 1957, 37 COMP. GEN. 371

POST OFFICE DEPARTMENT - MAIL - TRANSPORTATION - FOREIGN - UNITED STATES FLAG VESSEL REIMBURSEMENT THE LIABILITY OF THE UNITED STATES TO PAY FOR THE FREE TRANSIT OF MAIL ON VESSELS OF UNITED STATES REGISTRY FROM PERU UNDER THE PROVISIONS OF THE POSTAL CONVENTIONS, IN VIEW OF A LAW ENACTED BY THE PERUVIAN LEGISLATURE IN 1928 WHICH REQUIRES FOREIGN SHIPPING COMPANIES USING PORTS OF PERU TO TRANSPORT MAIL WITHOUT CHARGE, IS SUBJECT TO SUCH DOUBT THAT PAYMENT TO THE STEAMSHIP COMPANY MAY NOT BE AUTHORIZED IN THE ABSENCE OF A COUNTERVAILING COURT DECISION WHICH INTERPRETS THE EFFECT OF THE FOREIGN LAW.

TO THE POSTMASTER GENERAL, NOVEMBER 27, 1957:

REFERENCE IS MADE TO YOUR LETTERS OF JULY 29 AND OCTOBER 1, 1957, RELATIVE TO A DISPUTE WHICH EXISTS BETWEEN YOUR DEPARTMENT AND GRACE LINE, INC., CONCERNING PAYMENTS PREVIOUSLY MADE AND ADDITIONAL CLAIMS OF THE COMPANY FOR THE TRANSPORTATION OF MAIL FROM PERU TO THE UNITED STATES DURING THE PERIODS JULY 1, 1937, TO JUNE 30, 1942, AND FROM JULY 1, 1946, UNTIL THE UNITED STATES, BY RESERVATION TO ARTICLE 42 OF THE CONVENTION, BOGOTA, 1955, WAS NO LONGER BOUND BY THE "FREE TRANSIT" PROVISIONS OF THE CONVENTIONS OF THE POSTAL UNION OF THE AMERICAS AND SPAIN.

IN 1926, THE UNITED STATES AND PERU BECAME SIGNATORIES TO THE CONVENTION OF THE PAN-AMERICAN POSTAL UNION, MEXICO CITY, 45 STAT. 2409. THIS UNION HAS SINCE BECOME KNOWN AS THE POSTAL UNION OF THE AMERICAS AND SPAIN. THE FIRST PARAGRAPH OF ARTICLE 2 OF THE 1926 CONVENTION, THE CONTRACTING COUNTRIES AGREED TO TRANSPORT, FREELY AND GRATUITOUSLY, THE MAIL THEY MIGHT RECEIVE FROM OTHER SIGNATORIES WITH DESTINATION TO ANY OF THE SIGNATORIES OR TO THE UNIVERSAL POSTAL UNION. WITH CHANGES IN PHRASEOLOGY, SIMILAR "FREE TRANSIT" PROVISIONS WERE INCORPORATED IN LATER CONVENTIONS OF THE UNION. APPARENTLY, PERU HAS NOT AT ANY TIME ENTERED A RESERVATION TO SUCH "FREE TRANSIT" PROVISIONS.

IN CONNECTION WITH THE TRANSPORTATION OF MAIL FROM PERU ON VESSELS OF THE GRACE LINE THE UNITED STATES, AS THE FLAG COUNTRY OF THE VESSELS OWNED BY THE COMPANY, WAS BELIEVED BY THE POST OFFICE DEPARTMENT TO BE RESPONSIBLE UNDER THE "FREE TRANSIT" PROVISIONS OF THE POSTAL CONVENTIONS TO PAY FOR SUCH SERVICE. PAYMENTS WERE SUSPENDED, HOWEVER, ON SEPTEMBER 3, 1954, AND THE DEPARTMENT THEREAFTER RECOVERED BY OFFSETS AGAINST AMOUNTS OTHERWISE DUE THE COMPANY THE SUM OF $460,763.69, REPRESENTING THE ENTIRE AMOUNT PREVIOUSLY PAID TO THE COMPANY, FOR THE TRANSPORTATION OF CONVENTION MAIL RECEIVED AT PERUVIAN PORTS. THE SUSPENSION OF PAYMENTS AND THE COLLECTION OF THE AMOUNT PREVIOUSLY PAID WERE OCCASIONED BY THE DISCOVERY OF THE EXISTENCE OF PERUVIAN LAW NO. 6207, ENACTED BY THE PERUVIAN LEGISLATURE IN 1928. ARTICLE 6 OF THAT LAW PROVIDES THAT BOTH NATIONAL ( PERUVIAN) AS WELL AS FOREIGN SHIPPING COMPANIES ARE REQUIRED TO TRANSPORT THE MAIL FROM PERU BETWEEN PERUVIAN PORTS, AND THAT BOUND FOR ABROAD, WITHOUT ANY CHARGE THEREFOR.

THE GRACE LINE PROTESTED THE OFFSETS AND THE FAILURE TO MAKE ADDITIONAL PAYMENTS FOR SERVICE RENDERED UP TO THE TIME THE UNITED STATES ENTERED ITS RESERVATION TO ARTICLE 42 OF THE PRESENT CONVENTION. AT A CONFERENCE IT WAS AGREED THAT THE COMPANY SHOULD BE PERMITTED TO SUBMIT EVIDENCE FROM THE HIGHEST PERUVIAN SOURCE AVAILABLE AS TO THE MEANING OF LAW 6207. THE DEPARTMENT ENGAGED THE SERVICES OF DR. AURELIO GARCIA SAYAN OF LIMA, PERU, AS AN EXPERT ON PERUVIAN LAW TO ASSIST IT IN THIS MATTER. DR. SAYAN AND CERTAIN PERUVIAN OFFICIALS HAVE EXPRESSED THE OPINION THAT LAW 6207 WAS ENACTED TO REQUIRE VESSELS OF NATIONS NOT SIGNATORY TO THE CONVENTION TO TRANSPORT PERUVIAN MAILS FREE OF CHARGE. A COPY OF SUPREME RESOLUTION DATED APRIL 30, 1957, NOTED AS HAVING BEEN INITIALED OR SIGNED BY THE PRESIDENT OF THE REPUBLIC OF PERU, HAS BEEN FURNISHED IN SUPPORT OF THIS OPINION. THE SUPREME RESOLUTION, WHICH IS SAID TO REPRESENT THE HIGHEST AVAILABLE EXECUTIVE INTERPRETATION OF LAW 6207, PURPORTS TO SHOW THAT THE LAW WAS OF LIMITED SCOPE AND DID NOT APPLY WITH RESPECT TO CONVENTION MAIL. IT IS APPARENT, HOWEVER, AS SUGGESTED IN YOUR LETTER OF JULY 29, 1957, THAT PERU HAS MADE NO DISTINCTION BETWEEN CONVENTION MAIL AND NONCONVENTION MAIL SO FAR AS THERE MAY BE CONCERNED ANY OBLIGATION TO PAY STEAMSHIP COMPANIES FOR THE TRANSPORTATION OF MAIL FROM PERU.

THE ATTORNEY FOR GRACE LINE CONTENDS THAT THE POST OFFICE DEPARTMENT SHOULD BE REQUIRED TO RECOGNIZE AND GIVE EFFECT TO THE SUPREME RESOLUTION SINCE IT REPRESENTS THE HIGHEST PERUVIAN SOURCE AVAILABLE AT THIS TIME AS TO THE MEANING OF LAW 6207. IN THIS CONNECTION, HOWEVER, IT APPEARS FROM ONE OF THE REPORTS SUBMITTED BY DR. SAYAN, THAT UNDER THE CONSTITUTION OF PERU AUTHORITATIVE INTERPRETATIONS OF PERUVIAN LAWS CAN ONLY BE MADE THROUGH LEGISLATIVE ACTION AND THAT THE PERUVIAN CONGRESS HAS NOT UNDERTAKEN TO INTERPRET LAW 6207.

IT WAS POINTED OUT IN YOUR LETTER OF JULY 29, 1957, THAT THE COURT OF CLAIMS IN THE CASE OF MOORE-MCCORMACK LINES, INC., V. UNITED STATES, 119 C.1CLS. 473, FELT FREE TO MAKE AN INDEPENDENT INTERPRETATION OF THE MEANING OF THE BRAZILIAN DECREE THEREIN INVOLVED. IT APPEARS TO HAVE BEEN CONSIDERED BY THE COURT THAT, WHILE THE UNITED STATES, AS THE FLAG COUNTRY, NORMALLY WOULD HAVE BEEN OBLIGATED TO PAY FOR THE SERVICE, THE STEAMSHIP COMPANY HAD ALREADY BEEN PAID BY VIRTUE OF THE BRAZILIAN DECREE WHICH OBLIGATED SHIPS TO CARRY BRAZILIAN MAILS GRATUITOUSLY AND GRANTED CERTAIN PACKET PRIVILEGES.

FOUR ADDITIONAL COURT OF CLAIMS CASES, INVOLVING INTERPRETATIONS OF THE POSTAL CONVENTIONS AND CARRIAGE OF CONVENTION MAIL FORWARDED BY THE UNITED STATES ON SHIPS OF FOREIGN REGISTRY, WERE CITED IN YOUR LETTER OF JULY 29, 1957. ARGUMENTS HAVE BEEN PRESENTED IN BOTH OF YOUR LETTERS AND IN A LETTER DATED SEPTEMBER 9, 1957, FROM THE ATTORNEY FOR GRACE LINE, WITH RESPECT TO THE QUESTION OF PRIMARY LIABILITY TO PAY FOR THE TRANSPORTATION OF CONVENTION MAIL.

THE POST OFFICE DEPARTMENT CONTENDS THAT PERU WAS PRIMARILY LIABLE IN THE INSTANT CASE BECAUSE IT REQUESTED THE SERVICES. THE ATTORNEY FOR THE COMPANY CONTENDS, ON THE OTHER HAND, THAT THE UNITED STATES WAS PRIMARILY LIABLE, SINCE THE "FREE TRANSIT" PROVISIONS OF THE POSTAL CONVENTIONS BOUND THE UNITED STATES TO TRANSPORT FREELY AND GRATUITOUSLY THE MAIL WHICH ANY OTHER SIGNATORY COUNTRY TENDERED TO A UNITED STATES FLAG VESSEL. SUPPORT FOR EACH OF THOSE CONTENTIONS MAY BE FOUND FROM STATEMENTS MADE IN ONE OR MORE OF THE FIVE CITED DECISIONS OF THE COURT OF CLAIMS. IN ANY EVENT, IT WOULD SEEM FROM AN ANALYSIS OF THREE OF THE FIVE CASES DECIDED BY THE COURT OF CLAIMS THAT YOUR DEPARTMENT HAD VALID REASONS FOR CONSIDERING THAT THE LAWS OF PERU WOULD NECESSARILY BE FOR CONSIDERATION IN DETERMINING WHETHER ANY PAYMENT WAS DUE THE COMPANY.

AS NOTED ABOVE, IN THE CASE OF MOORE-MCCORMACK LINES, INC., V. UNITED STATES, A BRAZILIAN DECREE WAS FOUND SUFFICIENT TO WARRANT THE CONCLUSION THAT PLAINTIFF WAS NOT ENTITLED TO RECOVER.

IN THE CASE OF STANDARD FRUIT AND STEAMSHIP COMPANY V. UNITED STATES, 103 C.1CLS. 659, THE COURT DENIED RECOVERY BOTH ON PLAINTIFF'S CLAIM AND ON A COUNTERCLAIM OF THE GOVERNMENT BASED UPON A CONTRACT BETWEEN THE STEAMSHIP COMPANY AND THE REPUBLIC OF HONDURAS. IT WAS CONSIDERED BY THE COURT THAT THE UNITED STATES COULD NOT RECOVER PAYMENTS PREVIOUSLY MADE TO THE STEAMSHIP COMPANY BECAUSE IT WAS NOT A PARTY TO THE CONTRACT AND THE CONTRACT WAS NOT MADE FOR THE BENEFIT OF THE UNITED STATES.

IN THE CASE OF UNITED FRUIT COMPANY V. UNITED STATES, 134 C.1CLS. 315, IT WAS HELD THAT HONDURAS, THE FLAG COUNTRY, WAS PRIMARILY LIABLE UNDER THE POSTAL CONVENTIONS AND THAT HONDURAS HAD PAID PLAINTIFF BY EXEMPTING IT FROM CERTAIN BEACON, WHARFAGE AND TONNAGE CHARGES AND THE GRANTING OF SUBSIDIES. IN ARRIVING AT THAT CONCLUSION, THE COURT CONSIDERED ITS RULING ON THE GOVERNMENT'S COUNTERCLAIM ON THE STANDARD FRUIT AND STEAMSHIP COMPANY CASE AND STATED OTHER REASONS THAN THOSE ORIGINALLY SET FORTH FOR THE DENIAL OF SUCH COUNTERCLAIM.

APPARENTLY, THE COURT OF CLAIMS, AT LEAST IN ITS MOST RECENT DECISIONS INVOLVING INTERPRETATIONS OF THE POSTAL CONVENTIONS, HAS DETERMINED THAT THE LAWS OF FOREIGN COUNTRIES, THEIR OFFICIAL DECREES AND CONTRACTS WITH STEAMSHIP COMPANIES, ALL SHOULD HAVE A BEARING UPON ANY DETERMINATION AS TO WHETHER THERE IS ANY OBLIGATION ON THE PART OF THE UNITED STATES TO PAY FOR THE TRANSPORTATION OF CONVENTION MAIL.

PERUVIAN LAW 6207 DOES NOT GRANT ANY SPECIAL PACKET PRIVILEGES TO VESSELS WHICH USE ITS PORTS BUT THIS WOULD NOT SEEM MATERIAL TO THE QUESTION HERE INVOLVED. AS STATED IN YOUR LETTER OF OCTOBER 1, 1957, A SOVEREIGN STATE AS AN INCIDENT TO ITS SOVEREIGNTY APPEARS TO HAVE AUTHORITY TO IMPOSE UPON ANY FOREIGN FLAG VESSEL WHICH USES ITS PORTS, AS A CONDITION OF ENTRY, AN OBLIGATION TO PERFORM CERTAIN SERVICES FOR IT GRATUITOUSLY.

IN THE CIRCUMSTANCES, IT IS OUR CONCLUSION THAT THE CLAIM OF GRACE LINE, INC., FOR THE TRANSPORTATION OF MAIL FROM PERU UP TO THE TIME THE UNITED STATES ENTERED ITS RESERVATION TO ARTICLE 42 OF THE PRESENT CONVENTION IS OF SUCH DOUBTFUL VALIDITY THAT OUR OFFICE WOULD NOT BE JUSTIFIED IN AUTHORIZING ITS PAYMENT.