B-139779, JUL. 24, 1959

B-139779: Jul 24, 1959

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: REFERENCE IS MADE TO YOUR LETTERS OF DECEMBER 23. 061.56 WAS DEDUCTED IN MAY 1955. 170.66 WAS COMPUTED ON THE BASIS OF AN ALLOWANCE TO THE PURCHASER. YOU CONTEND THAT THE GOVERNMENT HAS FAILED TO PROVE THAT THE BALTIMORE AND OHIO RAILROAD WAS NEGLIGENT IN ITS PERFORMANCE OF DUTIES AS A WAREHOUSEMAN. THE AMOUNT ALLOWED AS DAMAGES WAS EXCESSIVE. - THE CONTRACTOR ADVISES THERE ARE PRESENTLY STORED IN THIS PIER WAREHOUSE APPROXIMATELY 300 TONS (3000 BALES) OF CRUDE RUBBER. THIS MATERIAL IS ALL GOVERNMENT-OWNED STRATEGIC AND CRITICAL MATERIAL. ALL OF THE RUBBER IS ON SMALL BOARDS USED FOR DUNNAGE AND AT DIFFERENT LOCATIONS. LARGE PUDDLES OF WATER WERE EVIDENT. WHILE THESE PRESENT PUDDLES OF WATER WERE NOT IN DIRECT CONTRACT WITH THE RUBBER.

B-139779, JUL. 24, 1959

JOHN L. ROGERS, JR.,:

REFERENCE IS MADE TO YOUR LETTERS OF DECEMBER 23, 1958, AND MAY 11, 1959, FILE S-9316, CONCERNING A CLAIM OF THE UNITED STATES AGAINST YOUR COMPANY IN THE AMOUNT OF $6,170.66 FOR DAMAGES TO RUBBER STORED AT B AND O PIER 6, ST. GEORGE LIGHTERAGE, STATEN ISLAND, NEW YORK. OF THIS AMOUNT $6,061.56 WAS DEDUCTED IN MAY 1955, FROM BALTIMORE AND OHIO RAILROAD BILL NO. 0502416, AND $109.10 FROM OTHER BILLS DUE YOUR COMPANY. THE SUM OF $6,170.66 WAS COMPUTED ON THE BASIS OF AN ALLOWANCE TO THE PURCHASER, LITTLEJOHN AND COMPANY, INC., OF TWO CENTS PER POUND ON 308,533 POUNDS OF CRUDE RUBBER DUE TO THE DETERIORATED CONDITION OF THE RUBBER AS A RESULT OF STORAGE IN YOUR CUSTODY. IN YOUR LETTER OF DECEMBER 23, 1958, YOU CONTEND THAT THE GOVERNMENT HAS FAILED TO PROVE THAT THE BALTIMORE AND OHIO RAILROAD WAS NEGLIGENT IN ITS PERFORMANCE OF DUTIES AS A WAREHOUSEMAN, AND THAT APART FROM THE QUESTION OF LIABILITY, THE AMOUNT ALLOWED AS DAMAGES WAS EXCESSIVE, UNREASONABLE AND DOES NOT REPRESENT A PROPER MEASURE OF DAMAGES TO THE RUBBER.

THE GENERAL SERVICES ADMINISTRATION ON FEBRUARY 1, 1952, UNDER THE PROVISIONS OF TRUNK LINE TARIFF NO. 116-E, I.C.C. NO. A-931, STORED 1,380 BALES OF LIBERIAN CREPE RUBBER WEIGHING 308,426 POUNDS AT THE BALTIMORE AND OHIO FACILITY KNOWN AS ST. GEORGE LIGHTERAGE, PIER NO. 6, STATEN ISLAND, NEW YORK, RULE NO. S-1, ITEM 8000, OF THIS TARIFF, MAKES THE BALTIMORE AND OHIO RAILROAD COMPANY LIABLE AS A WAREHOUSEMAN FOR THE STORAGE OF THIS RUBBER.

THE GENERAL SERVICES ADMINISTRATION HAS REPORTED THAT A SURVEY TEAM ASSIGNED TO INSPECT THE STORED MATERIAL ON OCTOBER 29, 1953, MADE THE FOLLOWING REPORT, IN PART:

"STORAGE FEATURES--- THE CONTRACTOR ADVISES THERE ARE PRESENTLY STORED IN THIS PIER WAREHOUSE APPROXIMATELY 300 TONS (3000 BALES) OF CRUDE RUBBER. THIS MATERIAL IS ALL GOVERNMENT-OWNED STRATEGIC AND CRITICAL MATERIAL. ALL OF THE RUBBER IS ON SMALL BOARDS USED FOR DUNNAGE AND AT DIFFERENT LOCATIONS, LARGE PUDDLES OF WATER WERE EVIDENT. WHILE THESE PRESENT PUDDLES OF WATER WERE NOT IN DIRECT CONTRACT WITH THE RUBBER, THERE WAS STRONG EVIDENCE OF PREVIOUS WATER HAVING BEEN IN CONTACT WITH THE RUBBER AND ON MANY PILES. A WATER MARK WAS EVIDENT ABOUT THREE INCHES ON THE FLOOR OR BOTTOM TIER BALES. THIS DAMAGE IS SERIOUS AND DEFINITELY ALL CLAIMS FOR THIS DAMAGE SHOULD BE FOR THE ACCOUNT OF THE BALTIMORE AND OHIO RAILROAD CO. THE PILES ARE ALL SEPARATED AND NO PILE EXCEEDS SIX FEET IN HEIGHT. AT ANOTHER LOCATION, HEAT WAS DETECTED ON A LOT OF RUBBER WHICH WAS LOCATED NEAR AN OPEN DOOR USED FOR LOADING FREIGHT TO RAIL CARS FROM THE PIER. IT IS EVIDENT THAT THIS DOOR IS ALWAYS OPEN THROUGHOUT THE WORK DAY AND DIRECT SUNLIGHT HAS CAUSED THIS DAMAGE.'

SUBSEQUENTLY IT WAS LEARNED THAT ON OCTOBER 1, 1953, THERE WAS A FIRE AT PIER 6, BALTIMORE AND OHIO RAILROAD, STATEN ISLAND, NEW YORK. THE NEW YORK CITY FIRE DEPARTMENT REPORTS THAT THE ALARM WAS RECEIVED AT 11:31 A.M. THERE WERE PRESENT SIX COMPANIES, TOGETHER WITH A FIREBOAT AND RESERVE COMPANY. THERE WAS ALSO PRESENT ONE BALTIMORE AND OHIO R.R.CO. TUGBOAT, AND B AND O EMPLOYEES ALSO OPERATED A HOSE LINE. WHILE THE FIRE WAS CONFINED TO THE OUTER OR WATER END OF THE PIER, IT IS REPORTED THAT QUANTITIES OF WATER WERE PLAYED ON THE PIER STRUCTURE AND ON THE RUBBER ITSELF.

THE NEW YORK CONSOLIDATED LAW SERVICE, VOLUME 4, GENERAL BUSINESS LAW,SECTION 107 PROVIDES:

"LIABILITY FOR CARE OF GOODS.--- A WAREHOUSEMAN SHALL BE LIABLE FOR ANY LOSS OR INJURY TO THE GOODS CAUSED BY HIS FAILURE TO EXERCISE SUCH CARE IN REGARD TO THEM AS A REASONABLY CAREFUL OWNER OF SIMILAR GOODS WOULD EXERCISE, BUT HE SHALL NOT BE LIABLE, IN THE ABSENCE OF AN AGREEMENT TO THE CONTRARY, FOR ANY LOSS OR INJURY TO THE GOODS WHICH COULD NOT HAVE BEEN AVOIDED BY THE EXERCISE OF SUCH CARE.'

WHILE A WAREHOUSEMAN IS NOT RESPONSIBLE FOR INJURY TO GOODS OCCURRING WITHOUT NEGLIGENCE ON HIS PART, HE IS LIABLE, IN THE ABSENCE OF AFFIRMATIVE PROOF THAT IT IS NOT NEGLIGENCE, WHERE GOODS ARE DELIVERED TO HIM IN GOOD CONDITION AND REDELIVERED BY HIM IN BAD CONDITION. 93 C.J.S., WAREHOUSEMAN AND SAFE DEPOSITARIES SEC. 30 (A). BULLINGTON V. NEW YORK TERMINAL WAREHOUSE CO., 110 F.SUPP. 728, REVERSED ON OTHER GROUNDS 213 F.2D 340. IN THE CASE OF GENERAL FOODS CORPORATION V. BEARD'S ERIE BASIN, INC., 32 N.Y.S.2D 682, A CONSIGNMENT OF COCOA BEANS WHICH HAD BEEN DELIVERED TO A WAREHOUSE IN GOOD CONDITION WAS FOUND TO HAVE BEEN DAMAGED BY WATER. THE COURT HELD THAT SUCH A SHOWING ESTABLISHES A PRIMA FACIE CASE AGAINST THE WAREHOUSEMAN AND THE BURDEN OF REBUTTING THE PRESUMPTION OF NEGLIGENCE SO CREATED WAS UPON THE WAREHOUSEMAN.

SINCE THERE HAS BEEN NO SHOWING THAT THE DAMAGES OCCURRED FROM AN EXCUSABLE CAUSE OR A CAUSE BEYOND YOUR CONTROL, IT MUST BE CONCLUDED THAT YOUR COMPANY IS LIABLE FOR THE DAMAGES SUSTAINED BY THE GOVERNMENT.

AS TO THE QUESTION OF DAMAGES, THE COURTS HAVE HELD THAT IN FIXING THE MEASURE OF DAMAGES THE AIM IS TO PROVIDE REIMBURSEMENT FOR THE ACTUAL LOSS, WHICH IS USUALLY ASCERTAINED BY FINDING THE DIFFERENCE BETWEEN REASONABLE MARKET VALUE IMMEDIATELY BEFORE AND AFTER THE INJURY. HOWEVER, THERE IS NO FIXED INFLEXIBLE RULE FOR DETERMINING THE MEASURE OF DAMAGES FOR INJURY TO PROPERTY, AND WHATEVER FORMULA IS MOST APPROPRIATE TO COMPENSATE THE INJURED PARTY FOR THE LOSS SUSTAINED IN THE PARTICULAR CASE WILL BE ADOPTED. SEE WERT V. GEESLIN, 69 SO.2D 718, CERT.DEN. 69 SO.2D 724; BASIN OIL CO. OF CALIFORNIA V. BAASH-ROSSTOOL CO., 271 P.2D 122. THIS INSTANCE THE SALE PRICE OF THE RUBBER WAS NEGOTIATED WITH LITTLEJOHN AND COMPANY BY ENTIRE LOT. AT THE TIME OF THE SALE IT WAS KNOWN THAT ALL OF THE BALES WERE NOT DAMAGED AND APPARENTLY THIS FACT WAS TAKEN INTO CONSIDERATION IN ARRIVING AT THE ALLOWANCE OF 2 CENTS PER POUND ON THE ENTIRE CONSIGNMENT. IN THE ABSENCE OF ANY CLEAR SHOWING AS TO WHAT EXTENT THE DAMAGES ARE EXCESSIVE OR UNREASONABLE, WE HAVE NO ALTERNATIVE BUT TO ACCEPT THE REPORT OF THE ADMINISTRATIVE AGENCY AS TO THE TOTAL DAMAGES SUSTAINED.

IN YOUR LETTER OF DECEMBER 23, 1958, YOU EXPRESS A DESIRE TO DISCUSS THIS CLAIM IN DETAIL IN AN EFFORT TO WORK OUT A SATISFACTORY SETTLEMENT. THIS CONNECTION IT SHOULD BE STATED THAT THE DECISIONS OF OUR OFFICE ARE BASED UPON THE WRITTEN RECORD, AND IF YOU HAVE SOME NEW EVIDENCE AVAILABLE WHICH HAS NOT BEEN HERETOFORE CONSIDERED, IT SHOULD BE REDUCED TO WRITING AND FORWARDED TO US FOR OUR CONSIDERATION. HOWEVER, REPRESENTATIVES OF OUR OFFICE ARE AVAILABLE DURING ANY WORKING DAY, FROM 9 A.M. TO 4 P.M., MONDAY THROUGH FRIDAY, IF A CONFERENCE IS STILL DESIRED.