B-143013, FEB. 27, 1961

B-143013: Feb 27, 1961

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO EAST TEXAS MOTOR FREIGHT: REFERENCE IS MADE TO YOUR LETTER OF MAY 24. THE SHIPMENT WAS DESCRIBED ON THE BILL OF LADING AS "ORDNANCE STORES. NOIBN" AND YOU ORIGINALLY CLAIMED AND WERE PAID CHARGES BASED UPON THE THIRD-CLASS RATE APPLICABLE ON ORDNANCE STORES. IT WAS REPORTED BY THE DEPARTMENT OF THE ARMY THAT THE PROPERTY SHIPPED HAD BEEN PROCURED UNDER CONTRACT NO. IT WAS DETERMINED THAT THE FREIGHT CHARGES SHOULD BE COMPUTED ON THE BASIS OF THE FOURTH-CLASS RATE APPLICABLE ON EMPTY HAND GRENADES WITHOUT A CHARGE FOR EXCLUSIVE USE OF VEHICLE. THE APPLICATION OF THIS BASIS RESULTED IN AN OVERCHARGE OF $295.67 WHICH AMOUNT WAS COLLECTED BY DEDUCTION FROM AN AMOUNT OTHERWISE DUE YOU. YOU SUBMITTED SUPPLEMENTAL BILL NO. 5319-A TO RECOVER THE AMOUNT SO DEDUCTED AND YOUR CLAIM WAS DISALLOWED REFERENCE BE MADE TO THE RULING OF THE INTERSTATE COMMERCE COMMISSION IN CURTIS LIGHTING.

B-143013, FEB. 27, 1961

TO EAST TEXAS MOTOR FREIGHT:

REFERENCE IS MADE TO YOUR LETTER OF MAY 24, 1960, ACKNOWLEDGED MAY 31, 1960, REQUESTING REVIEW OF THE DISALLOWANCE OF YOUR CLAIM TD 58 1641, FOR $295.67, ON SUPPLEMENTAL BILL NO. 5319-A, FOR ADDITIONAL FREIGHT CHARGES FOR THE TRANSPORTATION OF GOVERNMENT PROPERTY WHICH MOVED FROM BATTLE CREEK, MICHIGAN, TO DEFENSE, TEXAS, UNDER GOVERNMENT BILL OF LADING WY- 1254545, DATED NOVEMBER 26, 1952.

THE SHIPMENT WAS DESCRIBED ON THE BILL OF LADING AS "ORDNANCE STORES, NOIBN" AND YOU ORIGINALLY CLAIMED AND WERE PAID CHARGES BASED UPON THE THIRD-CLASS RATE APPLICABLE ON ORDNANCE STORES, PLUS AN EXCLUSIVE-USE SERVICE CHARGE OF 25 PERCENT. IT WAS REPORTED BY THE DEPARTMENT OF THE ARMY THAT THE PROPERTY SHIPPED HAD BEEN PROCURED UNDER CONTRACT NO. DA-20- 018-ORD-12399 AND CONSISTED OF EMPTY HAND GRENADES. ACCORDINGLY, IN THE AUDIT OF THE PAYMENT VOUCHER, IT WAS DETERMINED THAT THE FREIGHT CHARGES SHOULD BE COMPUTED ON THE BASIS OF THE FOURTH-CLASS RATE APPLICABLE ON EMPTY HAND GRENADES WITHOUT A CHARGE FOR EXCLUSIVE USE OF VEHICLE. THE APPLICATION OF THIS BASIS RESULTED IN AN OVERCHARGE OF $295.67 WHICH AMOUNT WAS COLLECTED BY DEDUCTION FROM AN AMOUNT OTHERWISE DUE YOU. YOU SUBMITTED SUPPLEMENTAL BILL NO. 5319-A TO RECOVER THE AMOUNT SO DEDUCTED AND YOUR CLAIM WAS DISALLOWED REFERENCE BE MADE TO THE RULING OF THE INTERSTATE COMMERCE COMMISSION IN CURTIS LIGHTING, INC. V. MID-STATES FREIGHT LINES, INC., 303 I.C.C. 576, HOLDING THAT EXCLUSIVE-USE CHARGES ARE APPLICABLE ONLY TO LESS-THAN-TRUCKLOAD SHIPMENTS AND THAT A SHIPPER DERIVED NO BENEFIT FROM EXCLUSIVE-USE SERVICE WHEN THE VEHICLE IS LOADED TO FULL CAPACITY.

YOUR SUPPLEMENTAL BILL IS APPARENTLY ALSO BASED UPON THE THIRD-CLASS RATE PROVIDED FOR ORDNANCE STORES. UNDER SECTION 217 (B) OF THE MOTOR CARRIER'S ACT, 49 U.S.C. 317 (B), CARRIERS BY MOTOR VEHICLE ARE PROHIBITED FROM DEMANDING, COLLECTING, OR RECEIVING COMPENSATION AT RATES OTHER THAN THE RATES CONTAINED IN THEIR TARIFFS ON THE ARTICLE ACTUALLY SHIPPED. NEITHER MISUNDERSTANDINGS, NOR AGREEMENTS AMONG SHIPPERS OR RECEIVERS AND CARRIERS CAN AFFECT THESE STATUTORY PROVISIONS WHICH OBLIGATE THE CARRIERS TO COLLECT AND THE SHIPPERS OR RECEIVERS TO PAY AMOUNTS NO DIFFERENT--- NEITHER MORE NOR LESS THAN THE APPLICABLE RATES. FEDDERS-QUIGAN CORP. V. LONG TRANSP. CO., 64 M.C.C. 581, 587. IT IS WELL ESTABLISHED THAT THE PRESUMPTION OF CORRECTNESS OF THE BILL OF LADING DESCRIPTION IS NOT CONCLUSIVE. BELL CO. V. ANN ARBOR R.CO., 174 I.C.C. 300, 301. AND, REGARDLESS OF THE RECITAL IN THE BILL OF LADING RECEIPT AND THE FAILURE OF THE CARRIER TO EXERCISE ITS RIGHT TO INSPECTION THE IMPORTANT FACT IS WHAT ACTUALLY DID MOVE--- NOT WHAT WAS BILLED. EMBASSY DISTRIBUTING CO. V. WESTERN CARLOADING CO., 280 I.C.C. 229, 233; UNITED WELDING CO. V. BALTIMORE AND OHIO R., 196 I.C.C. 79; PENN FACING MILLS V. ANN ARBOR R.CO., 182 I.C.C. 614, 615; HARRIS BROS. CO. V. DIR.GEN. 60 I.C.C. 428, 430; HUBLEY MFG.CO. V. YORK MOTOR EXP., 69 M.C.C. 432.

THE QUESTION OF THE PROPER DESCRIPTION AND CLASSIFICATION OF THE COMMODITIES SHIPPED IS ONE TO BE DETERMINED ON A CONSIDERATION OF THE CHARACTERISTICS OF THE ITEMS ACTUALLY SHIPPED. THESE ITEMS WERE MANUFACTURED FOR THE ADMINISTRATIVE OFFICE ACCORDING TO SPECIFICATIONS DRAWN BY THAT OFFICE. IT WOULD APPEAR THAT THE ADMINISTRATIVE OFFICE WOULD BE BEST QUALIFIED TO MAKE THE DETERMINATION AS TO WHAT WAS SHIPPED AND IT HAS LONG BEEN THE PRACTICE OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT UPON DISPUTED QUESTIONS OF FACT TO ACCEPT THE ADMINISTRATIVE REPORT AS TRUE IN THE ABSENCE OF CONCLUSIVE EVIDENCE TO THE CONTRARY. COMP. GEN. 1105, 1106; 16 ID. 325, 329; 14 ID. 927, 929; AND 11 ID. 473, 476. ACCORDINGLY, AND IN VIEW OF THE ADMINISTRATIVE REPORT THAT THE SUBJECT SHIPMENT CONSISTED OF EMPTY HAND GRENADES, WE HAVE NO ALTERNATIVE BUT TO SUSTAIN THE ACTION TAKEN IN ALLOWING ONLY THE RATES APPLICABLE THERETO.

HOWEVER, UPON RECONSIDERATION WE NOW FIND THAT THE CHARGE FOR EXCLUSIVE- USE SERVICE IS PROPERLY FOR APPLICATION. ACCORDINGLY, WE ARE AUTHORIZING OUR TRANSPORTATION DIVISION TO RECOMPUTE THE CHARGES FOR THE INVOLVED SHIPMENT ON THE BASIS OF THE RATE APPLICABLE ON EMPTY HAND GRENADES PLUS THE APPLICABLE EXCLUSIVE-USE CHARGE. YOU WILL RECEIVE NOTICE OF SETTLEMENT MAKING AN APPROPRIATE ALLOWANCE IN DUE COURSE.