B-133492, OCT. 8, 1957

B-133492, OCT. 8, 1957

TO WHEELABRATOR CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF JULY 31, 1957, IN WHICH YOU REQUEST CANCELLATION OF THE DEBT ASSESSED AGAINST YOU BY THE UNITED STATES IN THE AMOUNT OF $135.64, REPRESENTING THE AMOUNT DUE FOR DAMAGE TO SHIPMENT MOVING ON GOVERNMENT BILL OF LADING NO. AF 451668 FROM YOUR PLANT AT MISHAWAKA, INDIANA, TO CURTISS-WRIGHT CORPORATION AT BUFFALO, NEW YORK.

THE RECORD SHOWS THAT THE LADING CONSISTED OF ONE CARLOAD (19 PIECES) CONTAINING ONE BAG TYPE DUST ARRESTER AND, GENERALLY, HEAVY STEEL CHANNELING, STEEL PLATES, STEEL LADDERS AND MISCELLANEOUS SMALL ARTICLES, INCLUDING GALLON CONTAINERS OF PAINT AND SEALING COMPOUND; THAT THE PROPERTY WAS SOLD BY YOU ON AN F.O.B. POINT OF SHIPMENT BASIS; THAT THE SHIPMENT WAS LADED INTO CAR NO. NYC-197849 AND SEALED BY YOU; AND THAT, UPON ARRIVAL AND INSPECTION AT DESTINATION, IT WAS DISCOVERED THAT CONTAINERS OF PAINT AND SEALING COMPOUND HAD BROKEN AND THAT THE CONTENTS OF SUCH CONTAINERS WERE SPREAD OVER CERTAIN SMALL PARTS. AN INVESTIGATION OF THE PROXIMATE CAUSE OF SUCH DAMAGE TO THE PARTS WAS CONDUCTED BY THE DEPARTMENT OF THE AIR FORCE AND THE REPORT OF SURVEY INDICATES THAT THE SHIPMENT WAS DAMAGED AS A RESULT OF INADEQUATE BLOCKING TO PREVENT FORE AND AFT MOVEMENT WITHIN THE MAIN CRATE IN WHICH THE SMALL PARTS WERE PACKED. SINCE THE SHIPMENT WAS LOADED AND BRACED BY YOU AND SINCE THE EVIDENCE INDICATED THAT THE LOADING AND BRACING WAS NOT IN ACCORDANCE WITH ASSOCIATION OF AMERICAN RAILROADS RULES FOR LOADING OF FREIGHT WITHIN CLOSED CARS, IT WAS CONCLUDED BY THE DEPARTMENT OF THE AIR FORCE THAT YOU SHOULD BE CHARGED WITH THE AMOUNT OF THE DAMAGE, $135.64, AND DEMAND WAS MADE UPON YOU FOR PAYMENT OF SUCH SUM. AFTER AN EXCHANGE OF CORRESPONDENCE BETWEEN YOU AND THE DEPARTMENT OF THE AIR FORCE, IN WHICH YOU WERE REQUESTED TO REMIT THE SUM OF $135.64, AND IN WHICH YOU DENIED ANY LIABILITY FOR THE DAMAGE TO THE SMALL PARTS, THE MATTER OF YOUR INDEBTEDNESS IN THE AMOUNT OF $135.64 WAS REPORTED TO OUR OFFICE BY THE DEPARTMENT OF THE AIR FORCE AND THE AMOUNT OF SUCH INDEBTEDNESS WAS COLLECTED BY SETOFF OF AMOUNTS OTHERWISE DUE YOU UNDER ANOTHER CONTRACT.

IN YOUR LETTER OF FEBRUARY 13, 1957, TO OUR OFFICE, YOU STATED:

"2. THE MATTER COVERED BY YOUR LETTER WAS FIRST BROUGHT TO OUR ATTENTION IN A LETTER DATED 17 NOVEMBER 1955 FROM CHIEF, CONTRACT FINANCING DIVISION, DEPARTMENT OF THE AIR FORCE, HEADQUARTERS U.S.A.F., WASHINGTON, REFERENCE AFARN-4D. ANNEXED IS A COPY OF THIS LETTER SUBMITTED AS ENCLOSURE NO. 1.

"3. OUR REPLY TO ENCLOSURE NO. 1 IS DATED 2 DECEMBER 1955. ANNEXED IS A COPY SUBMITTED AS ENCLOSURE NO. 2. WE INVITE YOUR ATTENTION TO THE SECOND AND THIRD PARAGRAPHS. DUE TO THE FACT WE FEEL THESE PARAGRAPHS TO BEAR VERY STRONGLY ON THIS CLAIM, WE ARE QUOTING THESE AS FOLLOWS:

"YOUR LETTER, OF COURSE, CAME AS A COMPLETE SURPRISE ADVISING US AFTER OVER 2 1/2 YEARS THAT THE SHIPMENT HAD BEEN DAMAGED IN TRANSIT AND AFTER CAREFULLY INVESTIGATING OUR PAPERS COVERING THIS PARTICULAR SHIPMENT WE FIND THAT WE HAVE NEVER BEEN NOTIFIED OF ANY EXISTING DAMAGE.

"INVESTIGATION ALSO REVEALS THAT THIS SHIPMENT WAS SOLD F.O.B. MISHAWAKA, INDIANA AND THAT IT WAS LOADED ON CAR NYC 197849 AND SIGNED FOR BY THE NEW YORK CENTRAL RAILWAY AS IN GOOD ORDER BEFORE IT LEFT OUR PLANT AND SEALED. AS TO WHAT HAPPENED AFTER IT LEFT OUR PLANT IS THE RESPONSIBILITY OF THE RAILROAD AND CONSIGNEE, AS WE PACKAGED THIS SHIPMENT IN ACCORDANCE WITH PACKAGING SPECIFICATIONS THAT WE USE ON ALL SHIPMENTS OF THIS NATURE. SHIPMENTS MADE PRIOR TO AND AFTER THIS SHIPMENT HAVE BEEN PACKAGED IN THIS SAME MANNER AND THIS IS THE FIRST DAMAGE OF THIS NATURE. THE RAILROAD INSPECTOR HAS BEEN THIS METHOD OF PACKAGING AND HAS APPROVED IT. WE, THEREFORE, CAN COME TO ONLY ONE CONCLUSION AND THAT IS THAT THE RAILROAD MISHANDLED THIS CAR AND AS A RESULT SHIPMENT WAS DAMAGED IN TRANSIT FOR WHICH ACTION WE CANNOT ASSUME LIABILITY. ANY ACTION, THEREFORE, FOR SETTLEMENT OF THIS CLAIM SHOULD BE AGAINST THE CARRIER, THE NEW YORK CENTRAL SYSTEMS.'"

SECTION 21 OF THE FEDERAL BILLS OF LADING ACT OF AUGUST 29, 1916, 39 STAT. 541 (49 U.S.C.A. 101) PROVIDES, AMONG OTHER THINGS:

"* * * THE CARRIER MAY ALSO BY INSERTING IN THE BILL OF LADING THE WORDS "SHIPPER'S WEIGHT, LOAD, AND COUNT," OR OTHER WORDS OF LIKE PURPORT INDICATE THAT THE GOODS WERE LOADED BY THE SHIPPER AND THE DESCRIPTION OF THEM MADE BY HIM; AND IF SUCH STATEMENTS BE TRUE, THE CARRIER SHALL NOT BE LIABLE FOR DAMAGES CAUSED BY IMPROPER LOADING OR BY THE NONRECEIPT OR BY THE MISDESCRIPTION OF THE GOODS DESCRIBED IN THE BILL OF LADING * * *.'

SECTION 21 OF THE FEDERAL BILLS OF LADING ACT OF AUGUST 29, 1916, 39 STAT. 541 (49 U.S.C.A. 101) PROVIDES, AMONG OTHER THINGS:

"* * * THE CARRIER MAY ALSO BY INSERTING IN THE BILL OF LADING THE WORDS "SHIPPER'S WEIGHT, LOAD, AND COUNT," OR OTHER WORDS OF LIKE PURPORT INDICATE THAT THE GOODS WERE LOADED BY THE SHIPPER AND THE DESCRIPTION OF THEM MADE BY HIM; AND IF SUCH STATEMENTS BE TRUE, THE CARRIER SHALL NOT BE LIABLE FOR DAMAGES CAUSED BY IMPROPER LOADING OR BY THE NONRECEIPT OR BY THE MISDESCRIPTION OF THE GOODS DESCRIBED IN THE BILL OF LADING * * *.'

UNDER THE PROVISIONS OF THE QUOTED STATUTE WHEN THE SHIPPER VOLUNTARILY ASSUMES THE RESPONSIBILITY OF LOADING THE CAR FOR FREIGHT SHIPMENT, THE CARRIER WHO RECEIVES THE CAR AS LOADED IS ORDINARILY ABSOLVED FROM RESPONSIBILITY THEREFOR, AND WILL NOT BE LIABLE FOR DAMAGES WHICH ARISE FROM DEFECTS IN THE LOADING. SEE PROCTOR V. HENWOOD, 23 SO. 2D 628; AMERICAN COTTON OIL CO. V. DAVIS, 224 P. 23; WILSON AND CO. V. HINES, 213 P. 5. IN THE ABSENCE OF EVIDENCE SHOWING CONCLUSIVELY THAT THE CAR (NO. NYC-197849) WAS PROPERLY LOADED TO WITHSTAND THE USUAL INCIDENTS ATTENDANT ON SUCH SHIPMENT BY FREIGHT, OUR OFFICE HAS NO ALTERNATIVE OTHER THAN TO ACCEPT THE ADMINISTRATIVE REPORT TO THE EFFECT THAT YOU WERE RESPONSIBLE FOR THE DAMAGE TO THE SMALL STEEL PARTS BECAUSE YOU HAD FAILED TO PROVIDE ADEQUATE BLOCKING WITHIN THE MAIN CRATE IN WHICH THE PARTS WERE PACKED.

IN REGARD TO YOUR STATEMENT THAT THE GOVERNMENT UNDULY DELAYED IN NOTIFYING YOU OF THE DAMAGE TO THE SHIPMENT, THAT FACT OBVIOUSLY COULD HAVE NO EFFECT ON YOUR OBLIGATION TO THE GOVERNMENT AND COULD AFFORD NO LEGAL BASIS FOR RELIEVING YOU OF YOUR LIABILITY FOR THE AMOUNT OF THE DAMAGES. THE RULE IS WELL SETTLED THAT NEITHER LACHES NOR PERIODS OF LIMITATION APPLY AGAINST THE GOVERNMENT IN THE ABSENCE OF A CLEAR EXPRESSION OF CONGRESSIONAL INTENT TO THE CONTRARY. SEE UNITED STATES V. WHITED AND WHELESE, 246 U.S. 552; STANLEY V. SCHWALBY, 147 U.S. 508, 514 ET SEQ. ; MISSOURI-KANSAS-TEXAS RAILROAD CO. OF TEXAS V. UNITED STATES, 62 C.CLS. 373.

ACCORDINGLY, THE ACTION OF THE DEPARTMENT OF THE AIR FORCE IN NOTIFYING YOU TO BE INDEBTED TO THE UNITED STATES IN THE AMOUNT OF $135.64, AND THE ACTION IN COLLECTING THE SAME BY SETOFF, ARE SUSTAINED.