B-139728, JUL. 8, 1959

B-139728, JUL. 8, 1959

TO THE UNION PACIFIC RAILROAD COMPANY:

REFERENCE IS MADE TO THE REQUEST IN YOUR LETTER OF MAY 22, 1959, FILE GTA 50234, FOR REVIEW OF THE SETTLEMENT WHICH DISALLOWED YOUR CLAIM (OUR FILE TK-661-611) FOR $253.89 ADDITIONAL FREIGHT CHARGES ON A SHIPMENT OF DRY EDIBLE BEANS COVERED BY BILL OF LADING A-3364852, NOVEMBER 8, 1943.

THE PAYMENT RECORD SHOWS THAT THE SHIPMENT MOVED IN CAR CNW 73104 FROM THE TRINIDAD BEAN AND ELEVATOR COMPANY AT BRUSH, COLORADO, TO THE WAR SHIPPING ADMINISTRATION, COMMERCIAL DISPATCH CORPORATION, AT PORTLAND, OREGON, FOR EXPORTATION TO THE UNION OF SOVIET SOCIALIST REPUBLICS. THE COMMERCIAL BILL OF LADING UNDER WHICH THE SHIPMENT WAS TENDERED TO THE CARRIER AT BRUSH, COLORADO, IS ANNOTATED TO SHOW THE PURCHASE ORDER AND CONTRACT PROCUREMENT NUMBERS, THE EXPORT ODT PERMIT NUMBER, AND THE LEND- LEASE REQUISITION NUMBER AND BEARS A NOTATION THAT THE BILL OF LADING WAS TO BE EXCHANGED AT DESTINATION FOR A GOVERNMENT BILL OF LADING.

FOR THE SERVICES PERFORMED, YOUR COMPANY ORIGINALLY CLAIMED CHARGES OF $848.78, WHICH INCLUDED A RECONSIGNING CHARGE OF $2.48. THE FINANCE OFFICE ELIMINATED THE RECONSIGNING CHARGE FROM YOUR BILL AND PAID YOU $846.30 ($848.78 LESS $2.48), COMPUTED BY THE APPLICATION OF A GROSS RATE OF $1.05 PER HUNDRED POUNDS ON THE 80,600 POUNDS CONTAINED IN THE SHIPMENT. THE AMOUNT OF $846.30 SO PAID WAS LATER REDUCED TO $822.12 BY A REFUND OF $24.18 TO COVER THE PORT ALLOWANCE. THE LOWER CHARGES OF $592.41 COMPUTED IN THE AUDIT HERE WERE BASED ON A NET RATE OF 73 1/2 CENTS PER HUNDRED POUNDS, WHICH WAS THE REMAINDER OF THE GROSS RATE OF $1.05 PER HUNDRED POUNDS NAMED IN TRANS-CONTINENTAL FREIGHT BUREAU TARIFF 4-U, I.C.C. 1499, AFTER THE DEDUCTION OF THE APPLICABLE LAND-GRANT. THE PORT ALLOWANCE WAS NOT CONSIDERED SPECIFICALLY IN OUR AUDIT HERE. OUR RECOVERY BY DEDUCTION OF $253.89 FROM YOUR BILL NO. W-281127 REDUCED THE PAYMENT TO YOU TO $568.23. THIS CHARGE APPEARS PROPER, BEING BASED ON THE LAND-GRANT-REDUCED RATE OF 73 1/2 CENTS, LESS THE PORT ALLOWANCE.

WHILE THE SPECIFIC REASON FOR YOUR ASSERTION THAT YOUR SUPPLEMENTAL BILL DID NOT RECEIVE DUE CONSIDERATION IS NOT DISCLOSED IN YOUR LETTER, IT APPEARS FROM THE INFORMATION OF RECORD TO BE PREMISED UPON A CONTENTION THAT THE USE OF LAND GRANT IN OUR SETTLEMENT BASIS WAS IMPROPER BECAUSE THE PROPERTY WAS NOT MILITARY OR NAVAL PROPERTY OF THE UNITED STATES MOVING FOR MILITARY OR NAVAL USE. LEND-LEASE REQUISITION R-6556 SHOWS THAT THIS SHIPMENT COMPRISED PART OF 30,000 NET TONS OF DRIED BEANS REQUISITIONED FOR SHIPMENT OVERSEAS FOR THE USE OF THE RUSSIAN MILITARY FORCES.

IN THIS CONNECTION, ATTENTION IS INVITED TO THE NINTH CIRCUIT COURT OF APPEALS DECISION IN UNITED STATES V. SPOKANE, PORTLAND AND SEATTLE RAILWAY COMPANY, 261 F.2D 681, WHEREIN THE COURT, AFTER REITERATING THE GENERAL PRINCIPLE OF TRANSPORTATION LAW THAT TARIFF RATES ARE DETERMINABLE AT THE TIME THE SHIPMENT IS MADE, FOUND THAT WITHIN THE MEANING OF SECTION 321 (A) OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 896, 954, 49 U.S.C.A. 65, THE PROPERTY THERE INVOLVED MOVED FOR MILITARY OR NAVAL USE BECAUSE IT WAS SO INTENDED AT THE TIME THE SHIPMENT WAS MADE FROM THE POINT OF ORIGIN. MILITARY USE HAS BEEN DEFINED AS COVERING MUCH MORE THAN PROPERTY CONSUMED BY THE ARMED FORCES OF THE UNITED STATES OR BY THEIR ADJUSTMENTS. NORTHERN PACIFIC RAILWAY V. UNITED STATES, 330 U.S. 248, 254. IN FACT, THE MILITARY USE NEED NOT BE BY TROOPS OF THE UNITED STATES. SEE SOUTHERN PACIFIC COMPANY V. THE UNITED STATES, 107 C.CLS. 167, WHEREIN IT WAS HELD THAT LAND-GRANT DEDUCTIONS WERE APPLICABLE IN COMPUTING THE CHARGES ON SHIPMENTS OF TRUCKS DESTINED FOR ULTIMATE USE BY THE CHINESE ARMY.

ACCORDINGLY, THE REDUCTION MADE FOR LAND GRANT FROM THE APPLICABLE COMMERCIAL CHARGES APPEARS PROPER IN COMPUTING THE CHARGES APPLICABLE ON THIS SHIPMENT. THEREFORE, THE SETTLEMENT IS SUSTAINED.