B-140847, MAR. 16, 1961

B-140847: Mar 16, 1961

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INC.: REFERENCE IS MADE TO YOUR LETTERS OF MARCH 4 AND OCTOBER 24. AMONG WHICH WAS THE RIGHT TO HAVE LAYTIME COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF CHARTER-PARTY. IT IS STATED THAT THE COMMODITY STABILIZATION SERVICE "HAD NOT AUTHORIZED THE FREIGHT FORWARDER TO MAKE ANY AGREEMENT WITH THE SHIP'S AGENTS TO WORK THE SHIP PRIOR TO THE BEGINNING OF LAYTIME AND. THAT SUCH COMMODITY STABILIZATION SERVICE "WAS OF THE OPINION THAT THE PROVISIONS OF THE CHARTER PARTY WERE SPECIFIC WITH RESPECT TO THE COMMENCEMENT OF LAY TIME.'. LEAVITT AND COMPANY WAS AUTHORIZED TO ALTER OR MODIFY THE CONTRACT ENTERED INTO BETWEEN YOU AND THE UNITED STATES. THE SUPREME COURT HELD THERE WAS NO OBLIGATION ON THE GOVERNMENT TO REPAY THE EXPENSE OF TRANSPORTING CERTAIN COTTON UPON THE PROMISE OF AGREEMENT OF AN ASSISTANT SPECIAL AGENT OF THE TREASURY DEPARTMENT WHO HAD NO AUTHORITY TO BIND THE UNITED STATES BY CONTRACT.

B-140847, MAR. 16, 1961

TO BOYD, WEIR AND SEWELL, INC.:

REFERENCE IS MADE TO YOUR LETTERS OF MARCH 4 AND OCTOBER 24, 1960, RELATIVE TO THE DISALLOWANCE OF YOUR CLAIM FOR $1,850 ADDITIONAL TO THE AMOUNT PREVIOUSLY ALLOWED FOR THE TRANSPORTATION FURNISHED THE DEPARTMENT OF AGRICULTURE UNDER CHARTER-PARTY DATED JANUARY 2, 1957. YOUR CLAIM CONCERNS THE COMPUTATION OF LAYTIME AT PORTLAND, MAINE. YOU NOW REQUEST ADVICE AS TO WHETHER CHASE, LEAVITT AND COMPANY HAD THE AUTHORITY TO MAKE AN AGREEMENT ALTERING THE TERMS OF THE CHARTER-PARTY ENTERED INTO BETWEEN YOU, AS AGENT FOR THE OWNERS OF THE S.S. ADAMAS, AND THE UNITED STATES.

THE CHARTER-PARTY IN QUESTION SPECIFICALLY PROVIDED FOR THE RATES OF FREIGHT AND FOR THE COMPUTATION OF THE CHARGES FOR DEMURRAGE OR LAYTIME, WHERE PROPER. UNDER THIS CHARTER THE GOVERNMENT RECEIVED CERTAIN VESTED RIGHTS, AMONG WHICH WAS THE RIGHT TO HAVE LAYTIME COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF CHARTER-PARTY. IN A REPORT DATED MARCH 13, 1959, OF THE DEPARTMENT OF AGRICULTURE TO OUR OFFICE ON THIS MATTER, IT IS STATED THAT THE COMMODITY STABILIZATION SERVICE "HAD NOT AUTHORIZED THE FREIGHT FORWARDER TO MAKE ANY AGREEMENT WITH THE SHIP'S AGENTS TO WORK THE SHIP PRIOR TO THE BEGINNING OF LAYTIME AND, THEREFORE, THE FREIGHT FORWARDER HAD EXCEEDED HIS AUTHORITY BY SUCH AUTHORIZATION.' FURTHER, THAT SUCH COMMODITY STABILIZATION SERVICE "WAS OF THE OPINION THAT THE PROVISIONS OF THE CHARTER PARTY WERE SPECIFIC WITH RESPECT TO THE COMMENCEMENT OF LAY TIME.' MOREOVER, A CAREFUL EXAMINATION OF THE CHARTER -PARTY AND OF THE RECORD SURROUNDING THE TRANSPORTATION FURNISHED FAILS TO DISCLOSE ANY EVIDENCE THAT CHASE, LEAVITT AND COMPANY WAS AUTHORIZED TO ALTER OR MODIFY THE CONTRACT ENTERED INTO BETWEEN YOU AND THE UNITED STATES.

IN WHITESIDE ET AL. V. UNITED STATES, 93 U.S. 247, THE SUPREME COURT HELD THERE WAS NO OBLIGATION ON THE GOVERNMENT TO REPAY THE EXPENSE OF TRANSPORTING CERTAIN COTTON UPON THE PROMISE OF AGREEMENT OF AN ASSISTANT SPECIAL AGENT OF THE TREASURY DEPARTMENT WHO HAD NO AUTHORITY TO BIND THE UNITED STATES BY CONTRACT. THE COURT SAID, AT PAGE 257:

"ALTHOUGH A PRIVATE AGENT, ACTING IN VIOLATION OF SPECIFIC INSTRUCTIONS, YET WITHIN THE SCOPE OF HIS GENERAL AUTHORITY, MAY BIND HIS PRINCIPAL, THE RULE AS TO THE EFFECT OF THE LIKE ACT OF A PUBLIC AGENT IS OTHERWISE, FOR THE REASON THAT IT IS BETTER THAT AN INDIVIDUAL SHOULD OCCASIONALLY SUFFER FROM THE MISTAKES OF PUBLIC OFFICERS OR AGENTS, THAN TO ADOPT A RULE WHICH, THROUGH IMPROPER COMBINATIONS OR COLLUSION, MIGHT BE TURNED TO THE DETRIMENT AND INJURY OF THE PUBLIC.'

FURTHER, IN THE CASE OF FEDERAL CROP INS. CORP. V. MERRILL, 332 U.S. 380, THE SUPREME COURT STATED, AT PAGE 384:

"* * * ANY ONE ENTERING INTO AN ARRANGEMENT WITH THE GOVERNMENT TAKES THE RISK OF HAVING ACCURATELY ASCERTAINED THAT HE WHO PURPORTS TO ACT FOR THE GOVERNMENT STAYS WITHIN THE BOUNDS OF HS AUTHORITY. THE SCOPE OF HIS AUTHORITY MAY BE EXPLICITLY DEFINED BY CONGRESS OR BE LIMITED BY DELEGATED LEGISLATION, PROPERLY EXERCISED THROUGH THE RULE MAKING POWER. AND THIS IS SO EVEN THOUGH, AS HERE, THE AGENT HIMSELF MAY HAVE BEEN UNAWARE OF THE LIMITATIONS UPON HIS AUTHORITY. SEE E.G. UTAH POWER AND LIGHT CO. V. UNITED STATES, 243 U.S. 389, 409; UNITED STATES V. STEWART, 311 U.S. 60-70 AND SEE, GENERALLY, THE FLOYD ACCEPTANCES, 5 WALL. 666.'

SEE ALSO, CONTINENTAL CASUALTY COMPANY V. UNITED STATES, 113 F.2D 284, CERTIORARI DENIED, 311 U.S. 696. FURTHERMORE, IT HAS BEEN REPEATEDLY STATED THAT CONTRACTING OFFICERS MAY NOT LEGALLY MODIFY EXISTING GOVERNMENT CONTRACTS, EXCEPT IN THE INTEREST OF THE UNITED STATES. CHRISTIE V. UNITED STATES, 237 U.S. 234; PACIFIC HARDWARE CO. V. UNITED STAES, 49 CT.CL. 327, 335, 337; PREIS AND CO. V. UNITED STATES, 58 CT.CL. 81; BAUSCH AND LOMB OPTICAL CO. V. UNITED STATES, 78 CT.CL. 584, 607; AMERICAN SALES CORPORATION V. UNITED STATES, 27 F.2D 389, AFFIRMED 32 F.2D 141, CERTIORARI DENIED 280 U.S. 574.

THEREFORE, UPON THE PRESENT RECORD WE MUST HOLD THAT CHASE, LEAVITT AND COMPANY HAD NO AUTHORITY TO MODIFY THE TERMS OF THE PROVISIONS OF THIS CHARTER-PARTY ENTERED INTO BETWEEN YOU AS AGENT OF THE OWNER OF THE VESSEL AND THE UNITED STATES.