B-135655, MAY 9, 1958, 37 COMP. GEN. 741

B-135655: May 9, 1958

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INFORMATION THAT "PORT CHARGES WHICH ARE ASSESSABLE BY TARIFF TO VESSEL AND NOT THE CARGO WILL BE PROTECTED" MAY NOT BE REGARDED AS AN OFFER BY THE GOVERNMENT TO PAY SUCH CHARGES. THE RESPONSIBILITY FOR PORT CHARGES WAS PLACED ON THE VESSEL OWNER AND THERE IS NO LEGAL BASIS FOR REIMBURSING THE CHARTER CARRIERS FOR PORT CHARGES ALREADY PAID OR TO BE PAID TO THE PORT COMMISSION. WHICH PROVIDE THAT PORT CHARGES ARE FOR THE ACCOUNT OF THE CARGO. THE BERTH CARRIERS ARE SPECIFICALLY EXCLUDED FROM LIABILITY FOR PAYMENT OF PORT CHARGES. PORT CHARGES ARE CHARGEABLE TO THE UNITED STATES AND MAY BE PAID EITHER DIRECTLY TO THE PORT COMMISSION OR BY REIMBURSEMENT TO THE CARRIER IN THE EVENT THE CARRIER HAS ALREADY PAID SUCH CHARGE.

B-135655, MAY 9, 1958, 37 COMP. GEN. 741

CONTRACTS - VESSEL CHARTERS - PORT CHARGES - LIABILITY OF UNITED STATES IN REPLY TO A TELEGRAPHIC INQUIRY FROM THE PORTLAND, OREGON, COMMISSION OF PUBLIC WORKS CONCERNING WHETHER DOCKAGE AND SERVICE CHARGES AGAINST VESSELS LOADING AT WEST COAST PORTS WOULD BE CONSIDERED VESSEL CHARTERS FOR COAL SHIPMENTS TO KOREAN PORTS, INFORMATION THAT "PORT CHARGES WHICH ARE ASSESSABLE BY TARIFF TO VESSEL AND NOT THE CARGO WILL BE PROTECTED" MAY NOT BE REGARDED AS AN OFFER BY THE GOVERNMENT TO PAY SUCH CHARGES, AND THE SUBSEQUENT ACTION OF THE COMMISSION IN REFRAINING FROM COLLECTING THE CHARGES FROM VESSELS DID NOT CREATE ANY ACTUAL OR IMPLIED OBLIGATION ON THE UNITED STATES TO PAY SUCH CHARGES. UNDER A CHARTER AGREEMENT BETWEEN THE GOVERNMENT AND A VESSEL OWNER FOR THE SHIPMENT OF COAL TO KOREA BY WHICH THE GOVERNMENT AGREED THAT THE FREIGHT RATE WOULD INCLUDE ALL PORT CHARGES AND THAT ALL CHARGES APPLICABLE TO THE VESSEL WOULD BE CHARGEABLE TO THE OWNER'S ACCOUNT, THE RESPONSIBILITY FOR PORT CHARGES WAS PLACED ON THE VESSEL OWNER AND THERE IS NO LEGAL BASIS FOR REIMBURSING THE CHARTER CARRIERS FOR PORT CHARGES ALREADY PAID OR TO BE PAID TO THE PORT COMMISSION. UNDER AGREEMENTS BETWEEN THE GOVERNMENT AND BERTH CARRIERS FOR SHIPMENT OF COAL FROM PORTLAND, OREGON, TO KOREA AT FREIGHT RATES TO BE DETERMINED IN ACCORDANCE WITH TARIFFS OF THE PACIFIC WESTBOUND CONFERENCE, WHICH PROVIDE THAT PORT CHARGES ARE FOR THE ACCOUNT OF THE CARGO, THE BERTH CARRIERS ARE SPECIFICALLY EXCLUDED FROM LIABILITY FOR PAYMENT OF PORT CHARGES, AND, THEREFORE, PORT CHARGES ARE CHARGEABLE TO THE UNITED STATES AND MAY BE PAID EITHER DIRECTLY TO THE PORT COMMISSION OR BY REIMBURSEMENT TO THE CARRIER IN THE EVENT THE CARRIER HAS ALREADY PAID SUCH CHARGE.

TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, MAY 9, 1958:

YOUR LETTER OF MARCH 26, 1958, REQUESTS OUR ADVICE RELATIVE TO FURTHER HANDLING OF THE CLAIM OF THE COMMISSION OF PUBLIC DOCKS, PORTLAND, OREGON, IN THE AMOUNT OF $35,420.65.

THE FILE ACCOMPANYING YOUR LETTER INDICATES THAT ON DECEMBER 19, 1956, THE COMMISSION OF PUBLIC DOCKS OF THE CITY OF PORTLAND, APPARENTLY WITH KNOWLEDGE OF THE INTENTION OF YOUR ADMINISTRATION TO SHIP COAL IN BULK FOR PORTLAND TO KOREA, TRANSMITTED THE FOLLOWING TELEGRAPHIC INQUIRY TO YOUR NATIONAL BUYING DIVISION:

RE SPECIAL PROVISIONS FOR COAL CONTRACTS DATED DECEMBER 6 PARAGRAPHS 6 AND 7 REQ. NO. PIO/C 89-33-240-5-70006. ARE YOU ACQUAINTED WITH DOCKAGE AND SERVICE CHARGES ASSESSABLE AGAINST ALL VESSELS AT WEST COAST U.S. PORTS OF LOADING? IF SO, MAY WE HAVE YOUR ASSURANCE THESE CHARGES WILL BE TAKEN INTO CONSIDERATION BY GSA WHEN ARRANGING VESSEL CHARTERS TO INSURE PAYMENT DOCKAGE AND SERVICE CHARGES BY VESSELS TO LOADING PORTS. ON PRIOR KOREAN COAL CONTRACTS MSTS ADOPTED POLICY GUARANTEEING THESE CHARGES TO WEST COAST PORTS. BY COLLECT WIRE PLEASE ADVISE YOUR POSITION WITH RESPECT TO THESE SPECIFIC PORT CHARGES.

ON DECEMBER 26, 1956, THE ACTING DIRECTOR OF THE CHARTER AND ROUTING DIVISION, TRANSPORTATION AND PUBLIC UTILITIES SERVICE, GENERAL SERVICES ADMINISTRATION, REPLIED AS FOLLOWS:

XREURTEL DECEMBER 20 (SIC). SPECIFIC PORT CHARGES WHICH ARE ASSESSABLE BY TARIFF TO VESSEL AND NOT THE CARGO WILL BE PROTECTED ON ALL GSA COAL CHARTERS.

BY LETTER DATED JANUARY 8, 1957, THE COMMISSION REPLIED AS FOLLOWS:

THIS WILL ACKNOWLEDGE WITH THANKS YOUR TELETYPE OF DECEMBER 26, 1956, AS PER ATTACHED COPY.

FOR YOUR READY INFORMATION, THERE ARE TWO CHARGES WHICH ARE ASSESSABLE AGAINST VESSEL AND WHICH WILL AFFECT THESE COAL LOADINGS. ONE OF THESE IS THE SERVICE CHARGE, WHICH IS ON THE BASIS OF 16 CENTS PER LONG TON, AND THE OTHER IS DOCKAGE. FOR YOUR SUPPORTING DOCUMENTS, WE ATTACH HERETO PAGES 301, 501, AND 902 OF OUR TERMINAL TARIFF NO. 3-A. PAGE 301 WILL GIVE YOU DOCKAGE RATES. THIS PAGE ALSO WILL SHOW THAT THIS IS A CHARGE ASSESSABLE AGAINST VESSEL. PAGE 501 WILL SHOW THAT THE SERVICE CHARGE IS A CHARGE ASSESSABLE AGAINST VESSEL, AND PAGE 902 UNDER ITEM 300 WILL SHOW THAT THE FACILITIES AT PIER 5 ARE SUBJECT TO NEGOTIATION. A RATE OF 16 CENTS PER LONG TON HAS BEEN THE ONE THAT HAS BEEN APPLIED DURING THE PAST YEAR ON M.S.T.S. VESSELS.

WE TRUST THAT YOU WILL FIND THE FOREGOING IN ORDER. IF THERE IS ANY WAY IN WHICH WE CAN BE OF SERVICE TO YOU, PLEASE DO NOT HESITATE TO CALL UPON US.

NO FURTHER CORRESPONDENCE IN THIS MATTER IS OF RECORD UNTIL MAY 8, 1957. HOWEVER, DURING THE PERIOD BEGINNING JANUARY 26, 1957, AND ENDING AUGUST 12, 1957, THE DIRECTOR, TRANSPORTATION AND PUBLIC UTILITIES SERVICE, GENERAL SERVICES ADMINISTRATION, EXECUTED SIXTEEN CHARTER PARTY AGREEMENTS AND THREE CONTRACTS FOR BERTH MOVEMENTS, UNDER WHICH COAL TO BE SHIPPED TO KOREAN PORTS WAS LOADED ABOARD VESSELS AT PORTLAND, OREGON. WITH RESPECT TO PORT CHARGES, THE BERTH MOVEMENT BOOKINGS SPECIFIED THAT THE FREIGHT RATE WAS TO BE IN ACCORDANCE WITH THE TARIFF PUBLISHED BY THE PACIFIC WESTBOUND CONFERENCE AND THAT PAYMENT SHOULD BE IN ACCORDANCE WITH GSA FORM TPU-1 (COAL CHARTER PARTY), BUT, IN THE EVENT OF CONFLICT, TERMS AND CONDITIONS OF THE BOOKING WERE TO BE GOVERNED BY PACIFIC WESTBOUND CONFERENCE. FORM TCU 1 WAS USED IN EXECUTING ALL OF THE CHARTER PARTIES. PARAGRAPH 1 OF THIS STANDARD FORM PROVIDED THAT THE FREIGHT IS IN FULL OF TRIMMING, AND OF ALL PORT CHARGES" THE FREIGHT PILOTAGES, AGENCY FEES AND CONSULAGES ON THE VESSEL. ALL WHARFAGE DUES ON THE CARGO TO BE PAID BY THE CHARTERER, CREW BONUS AND WAR RISK INSURANCE FOR OWNER'S ACCOUNT.' THIS STANDARD PROVISION THE CONTRACTING OFFICER ADDED A PROVISION THAT "ALL CHARGES APPLICABLE TO VESSEL" WOULD BE FOR THE OWNER'S ACCOUNT.

THERE IS NO INDICATION THAT THE COMMISSION WAS AWARE OF THE TERMS AND CONDITIONS OF EITHER THE CHARTER PARTIES OR THE BERTH MOVEMENTS AND, APPARENTLY IN RELIANCE UPON THE ABOVE-QUOTED TELEGRAM DATED DECEMBER 26, 1956, THE COMMISSION FAILED TO COLLECT SERVICE CHARGES ASSESSABLE AGAINST THE VESSELS PRIOR TO LOADING, IN THE BELIEF THAT PAYMENT OF SUCH CHARGES WOULD BE MADE BY YOUR ADMINISTRATION. UPON RECEIPT OF BILLS FOR CERTAIN OF SUCH SERVICES FROM THE COMMISSION YOUR ADMINISTRATION IN APRIL OF 1957 DECLINED PAYMENT. HOWEVER, THE COMMISSION CONTINUED TO FURNISH SERVICES TO THE VESSELS WITHOUT COLLECTION OF CHARGES UNTIL AUGUST 22. ACCORDINGLY, YOU REQUEST THAT WE ADVISE WHETHER OR NOT YOUR ADMINISTRATION SHOULD AUTHORIZE PAYMENT TO EITHER THE COMMISSION OR TO THE CARRIERS FOR THE PORT SERVICE CHARGES IN CONNECTION WITH EITHER THE CHARGER OR THE BERTH MOVEMENTS.

SINCE THE CARRIERS WERE ACTING AS INDEPENDENT CONTRACTORS, AND NOT AS AGENTS OF THE UNITED STATES, THE CLAIM OF THE COMMISSION IS OBVIOUSLY FOUNDED UPON THE ASSUMPTION THAT A CONTRACTUAL OBLIGATION ON THE PART OF THE UNITED STATES AROSE OUT OF THE INTERCHANGE OF TELEGRAMS ON DECEMBER 19, AND DECEMBER 26, 1956, UNDER WHICH THE UNITED STATES EITHER BECAME PRIMARILY RESPONSIBLE FOR THE PAYMENT OF PORT SERVICE CHARGES, OR SECONDARILY LIABLE IN THE EVENT THE OWNER OF THE VESSEL REFUSED TO PAY SUCH CHARGES.

THE QUESTION OF WHETHER AUTHORITY EXISTS TO PAY A CLAIM FROM APPROPRIATED FUNDS IS PRIMARILY DEPENDENT UPON THE EXISTENCE OF A LEGALLY ENFORCEABLE OBLIGATION ON THE PART OF THE UNITED STATES, AND THE RULE THAT THERE MUST BE BOTH AN OFFER AND AN ACCEPTANCE BEFORE THERE CAN BE AN ENFORCEABLE CLAIM SOUNDING IN CONTRACT IS TOO WELL ESTABLISHED TO REQUIRE THE CITATION OF AUTHORITIES.

IT IS APPARENT FROM EVEN A CURSORY READING THAT THE TELEGRAM DATED DECEMBER 19, 1956, ONLY REQUESTS GRATUITOUS ADVICE AND ASSURANCE FROM YOUR ADMINISTRATION. IT OFFERS NOTHING ON THE PART OF THE COMMISSION WHICH WOULD BE SUBJECT TO AN ACCEPTANCE AND, IN THE ABSENCE OF AN OFFER, IT FOLLOWS THAT THE TELEGRAPHIC REPLY DATED DECEMBER 26, 1956, COULD NOT BE AN ACCEPTANCE.

THERE REMAINS THE QUESTION OF WHETHER THE REPLY DATED DECEMBER 26, 1956, MAY BE CONSTRUED AS AN OFFER WHICH WAS ACCEPTED BY THE ACTION OF THE COMMISSION IN FURNISHING PORT SERVICES TO THE VESSELS WITHOUT DEMANDING IMMEDIATE OR ADVANCE PAYMENT FOR SUCH SERVICES.

THE TELEGRAM DATED DECEMBER 19, 1956, FROM THE COMMISSION TO YOUR ADMINISTRATION REQUESTED ASSURANCE THAT DOCKAGE AND SERVICE CHARGES ASSESSABLE AGAINST ALL VESSELS AT WEST COAST U.S. PORTS WOULD BE TAKEN INTO CONSIDERATION IN VESSEL CHARTERS "TO INSURE PAYMENT DOCKAGE AND SERVICE CHARGES BY VESSELS TO LOADING PORTS.' ( ITALICS SUPPLIED.) WHILE THE NEXT SENTENCE OF THE TELEGRAM CITED THE PREVIOUS MSTS POLICY GUARANTEEING THESE CHARGES TO WEST COAST PORTS, IT IS OUR OPINION THAT THE QUOTED PORTION OF THE TELEGRAM MAY NOT BE CONSTRUED AS A REQUEST THAT SUCH CHARGES BE GUARANTEED BY YOUR ADMINISTRATION, BUT ONLY AS A REQUEST FOR ASSURANCE THAT YOUR ADMINISTRATION, IN DETERMINING THE RATE OF CHARTER HIRE, WOULD CONSIDER AND INCLUDE SUCH CHARGES IN THE RATE OF CHARTER HIRE TO INSURE THEIR PAYMENT BY THE VESSELS TO THE COMMISSION. THUS, THE REPLY FROM YOUR ADMINISTRATION DATED DECEMBER 26, 1956, WHICH ADVISED THAT "SPECIFIC PORT CHARGES WHICH ARE ASSESSABLE BY TARIFF TO VESSEL AND NOT THE CARGO WILL BE PROTECTED ON ALL GSA COAL CHARTERS," MUST NECESSARILY BE CONSTRUED IN THE LIGHT OF THE SPECIFIC QUESTION ASKED BY THE COMMISSION. IN THIS CONNECTION, WE NOTE THAT THE RECORD INDICATES THE POSITION OF MR. DAVIDS, WHO WAS THE SENDER OF THE TELEGRAM DATED DECEMBER 26, 1956, WAS THAT THE WORD "PROTECTED," AS USED IN THE TELEGRAM, WAS INTENDED ONLY TO ASSURE THE COMMISSION THAT HE WOULD SPECIFICALLY PROVIDE IN THE CHARTER PARTIES AS TO WHO WOULD BE RESPONSIBLE FOR SERVICE CHARGES AND THAT SUCH ASSURANCE WAS IMPLEMENTED BY INSERTION OF THE CLAUSE ,ALL CHARGES APPLICABLE TO VESSEL--- (ARE) FOR OWNER'S ACCOUNT" INTO THE CHARTERS. BELIEVE THIS TO BE A LOGICAL AND LEGALLY SUPPORTABLE INTERPRETATION OF THE INTENT OF THE TELEGRAM DATED DECEMBER 26, 1956, AND WE ARE UNABLE TO CONSTRUE THE ADVICE CONTAINED THEREIN AS AN OFFER, OR TO CONSTRUE THE ERRONEOUS INTERPRETATION OF SUCH ADVICE BY THE COMMISSION AND ITS SUBSEQUENT ACTION IN REFRAINING FROM THE COLLECTION OF SERVICE CHARGES FROM THE VESSELS IN ADVANCE OF, OR AT THE TIME OF LOADING, AS CREATING ANY ACTUAL OR IMPLIED OBLIGATION ON THE UNITED STATES TO PAY SUCH CHARGES. IS THEREFORE OUR OPINION THAT YOUR ADMINISTRATION IS WITHOUT AUTHORITY TO MAKE PAYMENT TO THE COMMISSION FOR SERVICE CHARGES ASSESSED AGAINST THE CHARTERED VESSELS.

CONCERNING YOUR QUESTION AS TO WHETHER THE GENERAL SERVICES ADMINISTRATION SHOULD REIMBURSE THE CHARTER CARRIERS FOR PORT SERVICE CHARGES PAID OR TO BE PAID BY THEM TO THE COMMISSION, THE GOVERNMENT'S OBLIGATION FOR SUCH PAYMENTS MUST BE DETERMINED SOLELY UNDER THE CONTRACTS EXECUTED WITH THE CARRIERS. THUS, IN PARAGRAPH 1 OF THE CHARTER PARTIES IT WAS SPECIFICALLY AGREED THAT THE FREIGHT RATE WOULD INCLUDE ALL PORT CHARGES AND THAT ALL CHARGES APPLICABLE TO THE VESSEL WOULD BE CHARGEABLE TO THE OWNER'S ACCOUNT. FULL RESPONSIBILITY FOR PAYMENT OF PORT SERVICE CHARGES ASSESSABLE AGAINST THE CHARTERED VESSELS WAS THEREBY PLACED UPON THE OWNERS OF THE VESSELS AND, IN THE ABSENCE OF A CONTRACT PROVISION UNDER WHICH THE UNITED STATES WOULD BE OBLIGATED TO REIMBURSE THE OWNERS FOR SUCH EXPENDITURES, THERE WOULD APPEAR TO BE NO LEGAL BASIS UPON WHICH PAYMENTS, REPRESENTING PORT SERVICE CHARGES WHICH THE CHARTER CARRIERS HAVE ALREADY PAID OR MAY BE REQUIRED TO PAY TO THE COMMISSION, MAY BE MADE.

HOWEVER, WITH RESPECT TO THE BERTH CARRIERS, THE CONFIRMATION AGREEMENTS ON SUCH MOVEMENTS INDICATE THAT RATE OF FREIGHT WAS TO BE DETERMINED IN ACCORDANCE WITH TARIFFS OF THE PACIFIC WESTBOUND CONFERENCE. ITEM 210 OF LOCAL TARIFF NO. 1-X, PACIFIC WESTBOUND CONFERENCE COVERING " COAL, IN BULK, ACCOUNT U.S. GOVERNMENT AGENCIES-- TO KOREA" PROVIDES THAT TERMINAL SERVICE CHARGES, IF ANY, ARE FOR THE ACCOUNT OF THE CARGO AS PER RULE 17. RULE 17 OF LOCAL TARIFF NO. 1-X READS AS FOLLOWS:

RULE NO. 17.--- RATES INCLUDE THE ON-SHORE OR ON-LIGHTER COST OF HOOKING SLING LOAD TO SHIP'S GEAR, AND THE COST OF LOADING THE CARGO ON BOARD VESSEL, BUT DO NOT INCLUDE STATE TOLL, WHARFAGE, TRUCK TONNAGE CHARGE, HANDLING CHARGE, CAR UNLOADING CHARGES OR ANY OTHER TERMINAL CHARGES.

IT IS THEREFORE APPARENT THAT COMPUTATION OF THE FREIGHT RATES APPLICABLE TO THE BERTH MOVEMENTS DID NOT INCLUDE PROVISION FOR PAYMENT OF PORT SERVICE CHARGES BY THE CARRIERS, AND THAT THE CARRIERS WERE SPECIFICALLY EXCLUDED FROM LIABILITY FOR PAYMENT OF SUCH CHARGES. ACCORDINGLY, PORT SERVICES CHARGES ON THE BERTH MOVEMENTS ARE PROPERLY CHARGEABLE TO THE UNITED STATES AND MAY BE PAID EITHER DIRECTLY TO THE COMMISSION OF PUBLIC DOCKS OR BY REIMBURSEMENT TO THE CARRIER IN THE EVENT THE CARRIER HAS ALREADY PAID SUCH CHARGES.