B-133947, MAY 14, 1958, 37 COMP. GEN. 753

B-133947: May 14, 1958

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WHICH OFFERED THE GOVERNMENT CHEAPER RATES THAN NORMALLY APPLICABLE UNDER SPECIFIC TARIFFS AND WHICH WAS SILENT AS TO THE APPLICATION OF CLASSIFICATION. TO BE CONSTRUED AS AN OPERATIVE TENDER REQUIRES THE CONCLUSION THAT THE OMISSION OF APPLICABLE TARIFF PROVISIONS WAS BY DELIBERATE INTENT OF THE OFFEROR WHO DID NOT INTEND THE TENDER TO BE SUBJECT TO TARIFF RULES. IT WAS DETERMINED THAT THE CHARGES SHOULD HAVE BEEN COMPUTED IN ACCORDANCE WITH YOUR TENDER NO. 5. YOU WERE ASKED TO REFUND AN OVERPAYMENT OF $416.95. COLLECTION WAS EFFECTED BY DEDUCTION FROM AN UNPAID BILL. YOU NOW URGE THE INAPPLICABILITY OF TENDER NO. 5 BECAUSE THE RATINGS CONTAINED THEREIN WERE NOT SUBJECTED TO A GOVERNING CLASSIFICATION OR EXCEPTIONS TARIFF BY NAME.

B-133947, MAY 14, 1958, 37 COMP. GEN. 753

TRANSPORTATION - MOTOR CARRIER SHIPMENTS - TENDER OF LOWER RATE THAN IN TARIFF - TARIFF EXCEPTION APPLICATION A MOTOR CARRIER'S TENDER, PURSUANT TO SECTION 22 OF THE INTERSTATE COMMERCE ACT, WHICH OFFERED THE GOVERNMENT CHEAPER RATES THAN NORMALLY APPLICABLE UNDER SPECIFIC TARIFFS AND WHICH WAS SILENT AS TO THE APPLICATION OF CLASSIFICATION, EXCEPTIONS AND RATE TARIFFS, EXCEPT AS SPECIFICALLY PROVIDED FOR CERTAIN PACKING REQUIREMENTS AND ACCESSORIAL SERVICES, TO BE CONSTRUED AS AN OPERATIVE TENDER REQUIRES THE CONCLUSION THAT THE OMISSION OF APPLICABLE TARIFF PROVISIONS WAS BY DELIBERATE INTENT OF THE OFFEROR WHO DID NOT INTEND THE TENDER TO BE SUBJECT TO TARIFF RULES, AND, THEREFORE, UPON ACCEPTANCE BY THE GOVERNMENT BY MAKING A SHIPMENT, THE GOVERNMENT BECAME ENTITLED TO THE CHEAPER RATES OFFERED IN THE TENDER.

TO EASTERN FREIGHT WAYS, INC., MAY 14, 1958:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF SEPTEMBER 26, 1957, FILE O -2328, WHICH, IN EFFECT, REQUESTED REVIEW OF THE SETTLEMENT IN CLAIM TK 560047, DATED SEPTEMBER 6, 1957, WHICH DISALLOWED YOUR CLAIM FOR $416.95 ALLEGED TO BE DUE FOR TRANSPORTATION FURNISHED ON BILL OF LADING WY- 2876039, DATED SEPTEMBER 29, 1953.

BILL OF LADING WY-2876039 COVERED THE TRANSPORTATION FROM ELIZABETH, NEW JERSEY, TO OLEAN, NEW YORK, OF 12 BOXES OF " GUNS NOI BORE UNDER 6 BUT NOT LESS THAN 3/4 INCH MOUNTED ON MOUNTS (76 M/M T91E3)," WEIGHING 23,424 POUNDS. ITEM 73470 OF THE GOVERNING CLASSIFICATION, NATIONAL MOTOR FREIGHT CLASSIFICATION NO. A-1, EAST, MF-I.C.C. NO. 3, PROVIDED FOR THIS COMMODITY A LESS-THAN-TRUCKLOAD RATING OF CLASS 150, TOGETHER WITH VOLUME RATINGS DEPENDENT UPON VARIED VOLUME MINIMUM WEIGHTS. RULE 3 OF THE GOVERNING EXCEPTIONS TARIFF, MIDDLE ATLANTIC CONFERENCE, AGENT'S TARIFF NO. 10-J, MF-I.C.C. NO. A-500, PROVIDED IN SECTION (B) THAT ARTICLES RATED HIGHER THAN CLASS 1 OR 100, LTL, IN THE CLASSIFICATION, ACCOMPANIED ONLY BY VOLUME RATINGS, WOULD BE INAPPLICABLE. SINCE SECTION 1 OF TARIFF NO. 10-J CONTAINED NO EXCEPTIONS RATING ON THE ARTICLE TRANSPORTED, YOU BILLED AND COLLECTED CHARGES AT THE LTL RATE, AS PROVIDED IN RULE 3 (B).

WHEN OUR TRANSPORTATION DIVISION AUDITED YOUR PAID BILL, IT WAS DETERMINED THAT THE CHARGES SHOULD HAVE BEEN COMPUTED IN ACCORDANCE WITH YOUR TENDER NO. 5, WITHOUT REGARD TO RULE 3 (B) OF TARIFF NO. 10 J, AND YOU WERE ASKED TO REFUND AN OVERPAYMENT OF $416.95. UPON YOUR FAILURE TO DO SO, COLLECTION WAS EFFECTED BY DEDUCTION FROM AN UNPAID BILL. GROUNDS FOR REVIEW, YOU NOW URGE THE INAPPLICABILITY OF TENDER NO. 5 BECAUSE THE RATINGS CONTAINED THEREIN WERE NOT SUBJECTED TO A GOVERNING CLASSIFICATION OR EXCEPTIONS TARIFF BY NAME.

EASTERN FREIGHT WAYS TENDER NO. 5, EFFECTIVE AUGUST 19, 1953, FOLLOWS THE FORMAT PRESCRIBED FOR MOTOR CARRIER RATE TENDERS IN DEPARTMENT OF DEFENSE DD FORM 663, AND IS ENTITLED " UNIFORM TENDER OF MOTOR CARRIERS RATES OR CHARGES PER FORM DD 663.' THERE IS NOTHING IN THE FORM TO PRECLUDE ITS USE, AS HERE, IN QUOTING REDUCED CLASS RATES OR RATINGS, AND MOTOR CARRIERS FREQUENTLY USE IT FOR THIS PURPOSE. PARAGRAPH 3D OF THE FORM IS ENTITLED " RATE/S); " PARAGRAPH 3D OF THE TENDER REFERS TO APPENDIX "A," WHICH, WITHOUT REFERRING GENERALLY OR PARTICULARLY TO ANY CLASSIFICATION OR EXCEPTIONS TARIFF, PROVIDES THAT WHERE THE CLASSIFICATION OR EXCEPTIONS VOLUME OR TRUCKLOAD RATING IS ONE OF CERTAIN CLASSES NAMED IN SECTION A, OR FALLS BETWEEN THOSE CLASSES, THE VOLUME OR TRUCKLOAD RATE TO APPLY IS A PERCENTAGE, SHOWN IN SECTION B, OF THE FIRST CLASS VOLUME RATE IN THE APPLICABLE TARIFF, SUBJECT TO MINIMUM WEIGHTS SHOWN IN SECTION C. PARAGRAPH 5 OF DD FORM 663, ENTITLED "1PACKING SPECIFICATIONS," PROVIDES SPACE IN WHICH TO NAME THE TARIFF OR TARIFFS TO WHICH THE RATES IN THE TENDER ARE SUBJECT FOR PACKING REQUIREMENTS, AND PARAGRAPH 5 OF TENDER NO. 5 REFERS TO ALL MIDDLE ATLANTIC CONFERENCE INTERSTATE TARIFFS AND ALL NEW YORK MOTOR CARRIERS CONFERENCE INTRASTATE TARIFFS TO WHICH EASTERN FREIGHT WAYS IS PARTY. PARAGRAPH 6 OF DD FORM 663 IS ENTITLED " ACCESSORIAL SERVICES AND RATE OR CHARGE THEREFORE EFFECTIVE WITH THIS TENDER," AND PARAGRAPH 6 OF TENDER NO. 5 SUBJECTS THIS PHASE OF THE OFFER TO THE GOVERNING CLASSIFICATION, TO MIDDLE ATLANTIC CONFERENCE EXCEPTIONS TARIFF NO. 10 I (SIC), MF-I.C.C. NO. A-500, AND TO NEW YORK MOTOR CARRIERS CONFERENCE TARIFF NO. 1-G, PSC-NY-MT NO. 70.

THIS TENDER, WHICH WAS VOLUNTARILY MADE TO THE GOVERNMENT PURSUANT TO SECTION 22 OF THE INTERSTATE COMMERCE ACT, 49 U.S.C. 314, IS A CONTINUING UNILATERAL OFFER WHICH, AS PROVIDED IN ITEM 10 THEREOF, RIPENS INTO AN AGREEMENT OR CONTRACT WHEN ACCEPTED BY THE GOVERNMENT "BY MAKING ANY SHIPMENT OR SETTLEMENT" UNDER ITS TERMS. AS SUCH, IT IS SUBJECT TO INTERPRETATION ACCORDING TO ESTABLISHED PRINCIPLES OF CONTRACT LAW. SINCE THE FUNDAMENTAL PURPOSE OF CONSTRUING A CONTRACT IS TO ACCOMPLISH THE INTENTION OF THE PARTIES ( THE BINGHAMTON BRIDGE, 70 U.S. 51,74), EFFECT MUST BE GIVEN NOT ONLY TO SPECIFIC LANGUAGE BUT ALSO TO NECESSARY IMPLICATIONS OF THE CONTRACT TERMS. IT SHOULD NOT BE SO NARROWLY OR TECHNICALLY INTERPRETED AS TO FRUSTRATE ITS OBVIOUS DESIGN ( NEVADA HALF MOON MINING COMPANY V. COMBINED METALS REDUCTION COMPANY, 176 F.2D 73, CERTIORARI DENIED, 338 U.S. 943), BUT SHOULD BE GIVEN A MEANING IN THE LIGHT OF THE CONDITIONS UNDER WHICH IT WAS SUBMITTED AND IN THE LIGHT OF THE PRINCIPAL APPARENT PURPOSE THAT IT WAS INTENDED TO SERVE. THOMPSON V. BALTIMORE AND OHIO RAILROAD COMPANY, 59 F.1SUPP. 21, 35; MODIFIED 155 F.2D 767, CERTIORARI DENIED, 329 U.S.C 762.

APPLYING THESE PRINCIPLES TO TENDER NO. 5, IT IS APPARENT THAT EASTERN FREIGHT WAYS, INC., BY ITS OFFER, INTENDED TO AFFORD A CHEAPER BASIS FOR TRANSPORTATION CHARGES BETWEEN THE POINTS WHICH IT WAS CERTIFIED TO SERVE, AS AN INDUCEMENT TO THE GOVERNMENT TO SHIP BETWEEN THOSE POINTS VIA ITS LINE. IN SO DOING, THE CARRIER ELECTED NOT TO QUOTE SPECIFIC RATES ON SPECIFIC COMMODITIES BETWEEN SPECIFIC POINTS. INSTEAD, A SIMPLIFIED SCHEME WAS DEVISED TO PRODUCE CHEAPER RATES BETWEEN THE POINTS SHOWN IN APPENDIX "B" BY MEANS OF THE FORMULA PRESCRIBED IN APPENDIX "A.' THIS FORMULA RESULTED IN REDUCTION OF THE FIRST CLASS VOLUME RATES IN THE "APPLICABLE CLASS TARIFF" TO GRADUATED PERCENTAGES THEREOF, DETERMINED BY MEANS OF THE "CLASSIFICATION AND EXCEPTIONS TARIFFS FROM WHICH TO OBTAIN THE RATINGS, NOR THE APPLICABLE CLASS TARIFFS CONTAINING THE FIRST CLASS VOLUME RATES, ARE DESIGNATED BY NAME IN APPENDIX "A.' A REASONABLE CONSTRUCTION OF THE TENDER, HOWEVER, GIVING EFFECT TO THE OBVIOUS INTENT OF THE OFFEROR AND MAKING THE TENDER OPERATIVE RATHER THAN NUGATORY, IS THAT THE CLASSIFICATION AND/OR EXCEPTIONS TARIFFS SERVING AS SOURCES FOR THE VOLUME OR TRUCKLOAD RATINGS IN SECTION A AND THE APPLICABLE CLASS TARIFF FROM WHICH TO OBTAIN THE FIRST CLASS VOLUME RATE IN SECTION B, APPENDIX "A," BY NECESSARY IMPLICATION ARE READILY IDENTIFIABLE AS THOSE NORMALLY APPLICABLE TO TRANSPORTATION VIA EASTERN FREIGHT WAYS, INC., BETWEEN POINTS SHOWN IN APPENDIX "B.'

THE TENDER IS SILENT ALSO AS TO THE APPLICATION, IN CONNECTION THEREWITH, OF RULES AND REGULATIONS IN THE CLASSIFICATION, THE EXCEPTIONS TARIFFS, AND THE RATE TARIFFS, EXCEPT WHERE THEY RELATE TO PACKING REQUIREMENTS AND ACCESSORIAL SERVICES IN ITEMS 5 AND 6. EASTERN FREIGHT WAYS, INC., COULD, AT ITS ELECTION, HAVE PROVIDED THAT THE TENDER BE GOVERNED BY THE APPLICABLE CLASSIFICATION, EXCEPTIONS TARIFFS, AND RATE TARIFFS, THUS MAKING OPERATIVE ALL OF THE RULES AND REGULATIONS OF THOSE TARIFFS. THE CARRIER DID NOT SO ELECT. RATHER, THE TARIFF RULES AND REGULATIONS WERE MADE SPECIFICALLY APPLICABLE ONLY AS TO PACKING REQUIREMENTS AND ACCESSORIAL SERVICES; AS TO THE FORMULA IN APPENDIX "A" FOR DETERMINING THE ASSESSABLE RATES, THE TARIFFS WERE NOT STATED TO "GOVERN; " AND THEY SERVE AND ARE REQUIRED ONLY AS A SOURCE OF THE VOLUME OR TRUCKLOAD RATINGS AND THE FIRST CLASS VOLUME RATES. IN THESE CIRCUMSTANCES, THE EXPRESS SUBJECTION OF THE TENDER TO TARIFF RULES AND REGULATIONS ONLY AS TO CERTAIN PHASES OF THE TRANSPORTATION SERVICES REQUIRES THE CONCLUSION THAT THE OMISSION WAS BY DELIBERATE INTENT AND THAT THE OFFEROR DID NOT DESIRE THOSE TARIFF RULES AND REGULATIONS TO BE OTHERWISE OPERATIVE.

THE SETTLEMENT MADE IN OUR TRANSPORTATION DIVISION WAS CONSISTENT WITH THE FOREGOING AND IS, THEREFORE, SUSTAINED.