B-135240, JULY 8, 1958, 38 COMP. GEN. 14

B-135240: Jul 8, 1958

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TRANSPORTATION - RATES - SHIPMENTS MOVING AFTER DETERMINATION OF UNREASONABLENESS - SELF-HELP RECOVERY RIGHT IN THE COMPUTATION OF FREIGHT CHARGES ON A GOVERNMENT SHIPMENT WHICH WAS MADE AFTER A DETERMINATION BY THE INTERSTATE COMMERCE COMMISSION THAT A PENALTY PROVISION IN A FREIGHT FORWARDER'S TARIFF WAS UNREASONABLE BUT BEFORE THE TARIFF COMPILERS REMOVED THE PENALTY PROVISION. 1958: WE HAVE CONSIDERED YOUR LETTERS OF FEBRUARY 11. WAS ISSUED TO COVER THE TRANSPORTATION OF A SHIPMENT THEREON DESCRIBED AS 15 BOXES OF " SOUNDING MACHINES. THAT IT WAS IN FACT ACOUSTIC DEVICES CLASSIFIABLE AS " MACHINERY. OF WHICH YOU WERE GIVEN NOTICE. FOUND THAT THE PROPER CHARGES WERE $707.30. THE BALANCE OF $186.94 WAS LATER COLLECTED BY DEDUCTION FROM AMOUNTS OTHERWISE DUE ON A SUBSEQUENT BILL AND YOUR CLAIM TO RECOVER IT WAS DISALLOWED IN THE CITED SETTLEMENT.

B-135240, JULY 8, 1958, 38 COMP. GEN. 14

TRANSPORTATION - RATES - SHIPMENTS MOVING AFTER DETERMINATION OF UNREASONABLENESS - SELF-HELP RECOVERY RIGHT IN THE COMPUTATION OF FREIGHT CHARGES ON A GOVERNMENT SHIPMENT WHICH WAS MADE AFTER A DETERMINATION BY THE INTERSTATE COMMERCE COMMISSION THAT A PENALTY PROVISION IN A FREIGHT FORWARDER'S TARIFF WAS UNREASONABLE BUT BEFORE THE TARIFF COMPILERS REMOVED THE PENALTY PROVISION, THE FAILURE TO REMOVE THE TARIFF PROVISION DOES NOT NULLIFY OR AFFECT THE GOVERNMENT'S RIGHT TO TAKE ADVANTAGE OF THE RULING AND THE GOVERNMENT BY LAW HAS BEEN RELIEVED FROM THE NECESSITY OF FILING AN ANTICIPATORY SUIT TO TAKE ADVANTAGE OF THE RULING BY THE EXPRESS AUTHORITY VESTED IN THE GENERAL ACCOUNTING OFFICE TO DEDUCT OVERPAYMENTS FROM SUBSEQUENT BILLS OF THE CARRIER.

TO THE INTERNATIONAL FORWARDING COMPANY, JULY 8, 1958:

WE HAVE CONSIDERED YOUR LETTERS OF FEBRUARY 11, 1958, AND JUNE 6, 1958, YOUR FILE O/C 6567, SEEKING REVIEW OF THE SETTLEMENT DATED JANUARY 6, 1958, WHICH DISALLOWED YOUR CLAIM FOR $186.94, AS PART OF THE TRANSPORTATION CHARGES INCURRED ON BILL OF LADING N-9719511.

BILL OF LADING N-9719511, DATED APRIL 13, 1953, WAS ISSUED TO COVER THE TRANSPORTATION OF A SHIPMENT THEREON DESCRIBED AS 15 BOXES OF " SOUNDING MACHINES, VESSEL NAVIGATION, OTHER THAN DAR," WEIGHING 9,720 POUNDS, FROM THE INSPECTOR OF NAVAL MATERIAL, C/O ACE WELDING SERVICE, INC., SAUGUS, MASSACHUSETTS, TO THE SUPERVISOR OF SHIP BUILDING, USN, AND THE NAVAL INSPECTOR OF ORDNANCE, C/O BELLINGHAM SHIPYARD COMPANY, BELLINGHAM, WASHINGTON. FOR THE SERVICE FURNISHED, YOU BILLED AND COLLECTED CHARGES OF $1,012.75. THE INSPECTOR OF NAVAL MATERIAL AT BOSTON, MASSACHUSETTS, SUBSEQUENTLY DETERMINED THAT THE MATERIAL SHIPPED HAD BEEN IMPROPERLY DESCRIBED AND CLASSIFIED; THAT IT WAS IN FACT ACOUSTIC DEVICES CLASSIFIABLE AS " MACHINERY, NOIBN, SU, IN BOXES.' IN THE AUDIT OF YOUR BILL OUR TRANSPORTATION DIVISION, ON THE BASIS OF THE CORRECTED DESCRIPTION, OF WHICH YOU WERE GIVEN NOTICE, FOUND THAT THE PROPER CHARGES WERE $707.30, AND REQUESTED YOU TO REFUND THE AMOUNT OVERPAID, $305.45. YOU CORRECTED THE CHARGES ORIGINALLY ASSESSED ON THE BILL OF LADING DESCRIPTION TO THE BASIS PROVIDED BY A SECTION 22 QUOTATION (ALL-RAIL RATES AS MAXIMA) AND REFUNDED $118.51. THE BALANCE, $186.94, YOU REFUSED TO REFUND, ASSERTING THAT USE OF THE CORRECTED DESCRIPTION WOULD REQUIRE APPLICATION OF THE PENALTY PROVISION IN ITEM 5-G, PARAGRAPHS (C) AND (D), OF SUPPLEMENT 111 TO FREIGHT FORWARDERS TARIFF BUREAU TARIFF NO. 3, I.C.C. NO. FF 3, AND WOULD RESULT IN CHARGES HIGHER THAN THOSE ORIGINALLY COLLECTED. THE BALANCE OF $186.94 WAS LATER COLLECTED BY DEDUCTION FROM AMOUNTS OTHERWISE DUE ON A SUBSEQUENT BILL AND YOUR CLAIM TO RECOVER IT WAS DISALLOWED IN THE CITED SETTLEMENT.

IN CIRCUMSTANCES SUCH AS THOSE PREVAILING IN CONNECTION WITH THIS SHIPMENT, WHERE A CORRECTED COMMODITY DESCRIPTION, FURNISHED AFTER LOADING OF THE GOODS, RESULTED IN A CHANGE TO ANOTHER TARIFF COMMODITY GROUP NUMBER, ITEM 5-G, PARAGRAPHS (C) AND (D), OF SUPPLEMENT 111, EFFECTIVE OCTOBER 1, 1951, TO TARIFF NO. 3, PROVIDED THAT THE RATE ASSESSED SHOULD BE 125 PERCENT OF THE RATE APPLICABLE TO THE CORRECTLY DESCRIBED GOODS. PENALTY RULE IDENTICAL IN ITS EFFECT, PUBLISHED IN ANOTHER WESTBOUND FREIGHT FORWARDERS TARIFF BUREAU TARIFF, WAS SUBJECTED TO THE SCRUTINY OF THE INTERSTATE COMMERCE COMMISSION IN EMBASSY DISTRIBUTING COMPANY, INC. V. WESTERN CARLOADING COMPANY, 280 I.C.C. 229, DECIDED FEBRUARY 14, 1951. THE COMMISSION SAID, AT PAGE 234, THAT "WE FIND THAT * * * THE TARIFF PROVISIONS WHICH AUTHORIZE THE DEFENDANT TO ADD 25 PERCENT TO THE "RATE OR CHARGE PPLICABLE" ARE, AND FOR THE FUTURE WILL BE, UNJUST AND UNREASONABLE. AN ORDER WILL BE ENTERED REQUIRING THE CANCELLATION OF SUCH PROVISIONS IN THE CURRENT TARIFF OF THE DEFENDANT.' THE PENALTY PROVISIONS IN TARIFF NO. 3 WERE CANCELED BY SUPPLEMENT 146 THERETO, EFFECTIVE JULY 6, 1953, PRESUMABLY AS A CONSEQUENCE OF THE CONCLUSION AND ORDER IN THIS CASE.

THE GROUNDS ON WHICH YOU URGE REVIEW AND REVERSAL OF OUR SETTLEMENT ACTION ARE THESE:(1) THE INTERSTATE COMMERCE COMMISSION'S FINDING OF UNREASONABLENESS OF THE FREIGHT FORWARDERS 25 PERCENT PENALTY RULE IN THE EMBASSY DISTRIBUTING COMPANY CASE IS INOPERATIVE AS TO THIS SHIPMENT WHICH, ALTHOUGH IT MOVED AFTER THE COMMISSION MADE ITS FINDING, MOVED BEFORE THE PENALTY RULE WAS CANCELLED FROM TARIFF NO. 3; AND (2) THE GOVERNMENT CAN TAKE ADVANTAGE OF THE COMMISSION'S HOLDING, IF AT ALL, ONLY BY WAY OF A COURT ACTION SEEKING REPARATION.

THE INTERSTATE COMMERCE COMMISSION'S FINDING OF UNREASONABLENESS IN THE EMBASSY DISTRIBUTING COMPANY CASE IS AVAILABLE TO ALL SHIPPERS, INCLUDING THE GOVERNMENT, SINCE, SO FAR AS IT IS ADMINISTRATIVE, IT IS CONCLUSIVE; IN EFFECT IT FIXES THE LAW RELATIVE TO THE MATTER FOUND UNREASONABLE. ALL PARTIES AFFECTED BY THE UNREASONABLE CHARGE MAY TAKE ADVANTAGE OF THE COMMISSION'S RULING, AND THE COURTS MUST APPLY IT, GIVING IT GENERAL AND UNIFORM OPERATION. MITCHELL COAL COMPANY V. PENNSYLVANIA RAILROAD COMPANY, 230 U.S. 247, 257. SEE ALSO PHILLIPS V. GRAND TRUNK WESTERN RAILWAY COMPANY, 236 U.S. 662, AND GRAND TRUNK WESTERN RAILWAY COMPANY V. UNITED STATES, 252 U.S. 112, 120-121. THE FAILURE OF THE TARIFF COMPILERS TO TIMELY AMEND THEIR TARIFFS SO AS TO REMOVE THE PROVISION FOR THE UNREASONABLE CHARGE IN COMPLIANCE WITH THE COMMISSION'S FINDING DOES NOT OPERATE TO DEFEAT OR NULLIFY THE LAW AS FIXED BY THAT FINDING. THE GOVERNMENT, AS A PARTY AFFECTED BY THE UNREASONABLE CHARGE, IS ENTITLED TO TAKE ADVANTAGE OF THE RULING. UNLIKE PRIVATE SHIPPERS, HOWEVER, THE GOVERNMENT IS RELIEVED OF THE NECESSITY FOR PROCEEDING IN COURT TO DO SO. THE GENERAL ACCOUNTING OFFICE IS CHARGED BY STATUTE WITH THE SETTLEMENT AND ADJUSTMENT OF CLAIMS BY AND AGAINST THE UNITED STATES. 31 U.S.C. 71. FROM THIS STATUTORY DUTY DERIVES OUR WARRANT FOR APPLYING THE FINDINGS OF THE INTERSTATE COMMERCE COMMISSION IN OUR SETTLEMENT AND ADJUSTMENT OF CARRIERS' ACCOUNTS. THIS IS SO BECAUSE WE ARE GENERALLY THE FINAL ARBITER ON THE QUESTION OF THE LEGALITY OF EXPENDITURES FROM PUBLIC FUNDS, EXCEPT WHEN RECOURSE IS HAD TO THE COURTS. UNITED STATES EX REL. SKINNER AND EDDY CORP. V. MCCARL, 275 U.S. 1, FOOTNOTE, PAGES 4 AND 5. CO-RELATIVE WITH OUR STATUTORY DUTY TO SETTLE AND ADJUST CARRIERS' ACCOUNTS IS OUR STATUTORY RIGHT TO SELF-HELP IN THE RECOVERY OF OVERPAYMENTS. 49 U.S.C. 66. SEE, ALSO, IN THIS CONNECTION, WESTERN PACIFIC RAILROAD COMPANY V. UNITED STATES, 352 U.S. 59, 73-74, WHERE THE SUPREME COURT HELD THAT THE UNITED STATES NEED NOT FILE WITH THE INTERSTATE COMMERCE COMMISSION AN ORIGINAL PROCEEDING ALLEGING UNREASONABLENESS, SINCE "* * * CONGRESS HAS RELIEVED THE GOVERNMENT FROM FILING SUCH ANTICIPATORY SUITS BY EXPRESSLY AUTHORIZING THE GENERAL ACCOUNTING OFFICE TO DEDUCT OVERPAYMENTS FORM SUBSEQUENT BILLS OF THE CARRIER, IF, ON POST-AUDIT, IT FINDS THAT THE UNITED STATES HAS BEEN OVERCHARGED.'

IN THE CIRCUMSTANCES, THE SETTLEMENT OF JANUARY 6, 1958, WAS CORRECT, AND IT IS SUSTAINED.