B-137542, APR 2, 1959

B-137542: Apr 2, 1959

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AUDITOR-CLAIMS: FURTHER REFERENCE IS MADE TO YOUR REQUEST. FOR REVIEW OF THE DETERMINATION BY OUR OFFICE THAT $59.64 WAS OVERPAID FOR THE TRANSPORTATION FROM SILVER LAKE. THE RECORD SHOWS THAT FOR THIS SERVICE YOU ORIGINALLY CLAIMED AND WERE PAID TOTAL CHARGES IN THE AMOUNT OF $396.48. AN OVERPAYMENT OF $158.76 WAS ASSESSED FOR THE DIFFERENCE BETWEEN THE CHARGES PAID AND CHARGES ACCRUING ON THE BASIS OF A CLASS 60 LESS-THAN -TRUCKLOAD RATE OF $2.83 PER HUNDRED POUNDS PROVIDED IN ITEMS 33750 AND 33760 OF NATIONAL MOTOR FREIGHT CLASSIFICATION NO. IN WHICH YOU STATED THAT THERE WAS NOTHING TO INDICATE THAT THE SHIPMENT COMPLIED WITH THE LIMITATIONS IN ITEMS 33750 AND 33760. THAT IT WAS YOUR OPINION THAT EITHER ITEM 33950 OR ITEM 33960 APPLIED.

B-137542, APR 2, 1959

PRECIS-UNAVAILABLE

FELIX E. MENDEL, JR., AUDITOR-CLAIMS:

FURTHER REFERENCE IS MADE TO YOUR REQUEST, CLAIM NO. 058-81, PRO. NO. 318226, FOR REVIEW OF THE DETERMINATION BY OUR OFFICE THAT $59.64 WAS OVERPAID FOR THE TRANSPORTATION FROM SILVER LAKE, NEW JERSEY, TO MIAMI BEACH, FLORIDA, OF ITEMS DESCRIBED ON GOVERNMENT BILL OF LADING NO. CG 047643, DATED MAY 9, 1956, AS "BATTERIES, NOIRN 240 CARTONS - BATTERY SETS IN BATTERY BOXES" WEIGHING 8,400 POUNDS.

THE RECORD SHOWS THAT FOR THIS SERVICE YOU ORIGINALLY CLAIMED AND WERE PAID TOTAL CHARGES IN THE AMOUNT OF $396.48, COMPUTED ON THE BASIS OF A FIRST CLASS LESS-THAN-TRUCKLOAD RATE OF $4.72 PER HUNDRED POUNDS AT THE ACTUAL WEIGHT OF THE SHIPMENT. ON AUDIT OF THE PAYMENT VOUCHER HERE, HOWEVER, AN OVERPAYMENT OF $158.76 WAS ASSESSED FOR THE DIFFERENCE BETWEEN THE CHARGES PAID AND CHARGES ACCRUING ON THE BASIS OF A CLASS 60 LESS-THAN -TRUCKLOAD RATE OF $2.83 PER HUNDRED POUNDS PROVIDED IN ITEMS 33750 AND 33760 OF NATIONAL MOTOR FREIGHT CLASSIFICATION NO. A-2, MF-I.C.C.NO. 6.

ON RECONSIDERATION, IN RESPONSE TO YOUR PROTEST OF FEBRUARY 5, 1958, IN WHICH YOU STATED THAT THERE WAS NOTHING TO INDICATE THAT THE SHIPMENT COMPLIED WITH THE LIMITATIONS IN ITEMS 33750 AND 33760, AND THAT IT WAS YOUR OPINION THAT EITHER ITEM 33950 OR ITEM 33960 APPLIED, THE OVERPAYMENT WAS REDUCED TO $59.64. THE REDUCTION RESULTED FROM THE COMPUTATION OF CHARGES ON THE BASIS OF A CLASS 85 LESS-THAN-TRUCKLOAD RATE OF $4.01 PER HUNDRED POUNDS AT THE ACTUAL WEIGHT OF THE SHIPMENT AS PROVIDED IN ITEM 33960 OF THE CLASSIFICATION FOR APPLICATION ON "BATTERY SETS IN BATTERY BOXES CONSISTING OF BATTERY ZINCS, CARBON ELECTRODES AND CAUSTIC SODA, WITHOUT LIQUIDS, LTL, IN BARRELS OR BOXES; VOL., IN PACKAGES, OR LOOSE BRACED IN TRUCK." SUCH AUDIT ACTION WAS BASED UPON INFORMATION FURNISHED BY THE ADMINISTRATIVE OFFICE IN A LETTER OF MAY 12, 1958 (A COPY OF WHICH WAS SENT TO YOU), THAT THE ITEM SHIPPED WAS "BATTERY, CARBONAIRE, EDISON TYPE 3-5-J-1 (PACKED ONE BATTERY PER CARTON), CONSISTING OF BATTERY ZINC, CARBON ELECTRODES AND CAUSTIC SODA, WITHOUT LIQUID."

IN YOUR REQUEST FOR REVIEW YOU STATE THAT SECTION 1, RULE 2 OF THE CLASSIFICATION PLACES UPON THE SHIPPER THE OBLIGATION TO DESCRIBE SHIPMENTS CORRECTLY ON THE BILL OF LADING. YOU PRESENT THE QUESTION WHETHER SECTION 7 OF THE COMMERCIAL BILL OF LADING (INCORPORATED BY REFERENCE INTO THE CONTRACT), WHICH YOU QUOTE AS FOLLOWS:

"IF UPON INSPECTION IT IS ASCERTAINED THAT THE ARTICLES SHIPPED ARE NOT THOSE DESCRIBED IN THIS BILL OF LADING, THE FREIGHT CHARGES MUST BE PAID UPON THE ARTICLES ACTUALLY SHIPPED." AND SECTION 2, RULE 2 OF THE CLASSIFICATION, WHICH IN PERTINENT PART, PROVIDES:

"WHEN CARRIER'S AGENT BELIEVES IT NECESSARY THAT THE CONTENTS OF PACKAGES BE INSPECTED, HE WILL MAKE OR CAUSE SUCH INSPECTION TO BE MADE, OR REQUIRE OTHER SUFFICIENT EVIDENCE TO DETERMINE ACTUAL CHARACTER OF THE PROPERTY. WHEN FOUND TO BE INCORRECTLY DESCRIBED, FREIGHT CHARGES MUST BE COLLECTED ACCORDING TO PROPER DESCRIPTION." DO NOT OBLIGATE THE CARRIER TO INSPECT ANY SHIPMENT BEFORE ALTERING FREIGHT CHARGES OR BILL OF LADING DESCRIPTION.

SECTION 217(B) OF THE INTERSTATE COMMERCE ACT, 49 U.S.C. 317(B), PROHIBITS CARRIERS BY MOTOR VEHICLE FROM DEMANDING, COLLECTING, OR RECEIVING COMPENSATION AT RATES OTHER THAN THE RATES CONTAINED IN THEIR TARIFFS ON THE ARTICLE ACTUALLY SHIPPED. THE INTERSTATE COMMERCE COMMISSION HAS REPEATEDLY HELD THAT THE IMPORTANT FACT IS NOT THE BILL OF LADING DESCRIPTION, BUT THE IDENTITY OF THE ITEM ACTUALLY SHIPPED. NEW YORK CENTRAL R. CO. V. GOLDBERG, 250 U.S. 85; EMBASSY DISTRIBUTING CO. V. WESTERN CARLOADING CO., 280 I.C.C. 229, 233; PENN FACING MILLS COMPANY V. ANN ARBOR R. CO., 182 I.C.C. 614, 615; BELL COMPANY V. ANN ARBOR R. CO., 174 I.C.C. 300, 301; HARRIS BROS. CO. V. DIR. GEN., 60 I.C.C. 428, 430; HUBLEY MFG. CO. V. YORK MOTOR EXP., 69 M.C.C. 432; FEDDERS-QUIGAN CORP. V. LONG TRANSP. CO., 64 M.C.C. 581, 586; FREIGHT TRANSPORTATION ENGINEERS V. SOUTHERN TIES TRUCKING CO., 48 M.C.C. 372, 373.

THE PROVISIONS REFERRED TO BY YOU ARE DESIGNED TO IMPLEMENT CONTRACTUALLY THIS STATUTORY PROVISION AND THE DECISIONS OF THE COMMISSION BY PERMITTING THE CARRIER TO INSPECT A SHIPMENT FOR THE PURPOSE OF DETERMINING THE ACTUAL NATURE OF THE COMMODITY SHIPPED FOR PURPOSES OF PROPER CLASSIFICATION NOTWITHSTANDING BILL OF LADING DESCRIPTION. HOWEVER, THE LANGUAGE OF THE PROVISIONS DOES NOT APPEAR TO REQUIRE INSPECTION IN ALL INSTANCES, OR TO PROVIDE THAT INSPECTION SHALL BE THE EXCLUSIVE MEANS OF DETERMINING THE ACTUAL ARTICLE SHIPPED, NOR COULD IT SO PROVIDE, SINCE NEITHER MISUNDERSTANDINGS, NOR AGREEMENTS AMONG SHIPPERS OR RECEIVERS AND CARRIERS CAN AFFECT THE STATUTORY PROVISIONS WHICH OBLIGATE THE CARRIERS TO COLLECT AND THE SHIPPERS OR RECEIVERS TO PAY AMOUNTS NO DIFFERENT - NEITHER MORE NOR LESS - THAN THE RATES APPLICABLE ON THE BASIS OF THE ACTUAL IDENTITY OF THE ITEM SHIPPED. FEDDERS-QUIGAN CORP. V. LONG TRANSP. CO., 64 M.C.C. 581, 587.

YOU ALSO INQUIRE WHETHER FAILURE ON YOUR PART TO DEMAND INSPECTION WOULD NOT VIOLATE THE STATUTORY PROHIBITION AGAINST UNDUE PREFERENCE AND UNJUST DISCRIMINATION. HOWEVER, IT IS NOT EVERY PREFERENCE OR DISADVANTAGE WHICH IS PROHIBITED BY SECTION 216(D) OF THE ACT, BUT ONLY SUCH AS ARE UNJUST OR UNREASONABLE, AND UNDUE OR UNREASONABLE PREFERENCE AND PREJUDICE MAY BE FOUND TO TO EXIST ONLY IN CASES WHERE A PARTICULAR PERSON, PORT, GATEWAY, LOCALITY, OR DESCRIPTION OF TRAFFIC IS UNDULY OR UNREASONABLY PREFERRED TO THE DISADVANTAGE OF ANOTHER. INTERSTATE COMMERCE COMMISSION V. BALTIMORE & O. R., 145 U.S. 263, 276; FLEETLINE, INC. V. NORTHERN TRANSP. CO., 54 M.C.C. 575, 580; ARRANGEMENTS AND AGREEMENTS BETWEEN ARROW CARRIER CORP. AND DUPLAN SILK CORP., 4 M.C.C. 657, 677.

COMPLIANCE WITH THE POSITIVE REQUIREMENTS OF THE ACT AND WITH THE DECISIONS OF THE COMMISSION WOULD NOT APPEAR TO RESULT IN UNDUE PREFERENCE TO ONE PARTY TO THE UNREASONABLE DISADVANTAGE OF ANOTHER. IN FACT THE ASSESSMENT AND PAYMENT OF THE CHARGES PROPERLY APPLICABLE ON THE BASIS OF THE COMMODITY ACTUALLY SHIPPED IN WHATEVER MANNER DETERMINED AVOIDS THE VERY PREFERENCE AND DISCRIMINATION PROHIBITED BY SECTION 216(D).

IN VIEW OF WHAT HAS BEEN SAID ABOVE IT APPEARS THAT NEITHER SECTION 7 OF THE BILL OF LADING NOR SECTION 2, RULE 2 OF THE CLASSIFICATION OBLIGATE THE CARRIER TO INSPECT BEFORE ASSESSING CHARGES ON THE BASIS OF THE ACTUAL NATURE OF THE COMMODITY SHIPPED, EITHER BY VIRTUE OF THEIR OWN LANGUAGE OR BY OPERATION OF LAW, BUT THAT THE LAW IN FACT REQUIRES COLLECTION ONLY OF THE CHARGES DUE ON THE BASIS OF THE ACTUAL CONSIGNMENT WITH OR WITHOUT INSPECTION. ACCORDINGLY, OUR AUDIT SECTION IN DETERMINING THAT YOU WERE OVERPAID $59.64 APPEARS PROPER AND SUCH AMOUNT SHOULD PROMPTLY BE REFUNDED TO AVOID THE NECESSITY FOR FURTHER COLLECTION SECTION HERE.