B-151028, OCT. 1, 1963

B-151028: Oct 1, 1963

Additional Materials:

Contact:

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

 

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

FOR THE SERVICE PERFORMED YOU ORIGINALLY CLAIMED AND WERE PAID $756. WHICH IS THE FIFTH- CLASS RATE PUBLISHED IN SOUTHWESTERN MOTOR TARIFF BUREAU QUOTATION NO. 1- B. THIS MINIMUM CHARGE IS PROVIDED IN ITEM 140 OF QUOTATION NO. 1-B. THE OVERCHARGE ON THIS SHIPMENT WAS FOUND TO BE $306.60 AND BY FORM 1003. YOU WERE REQUESTED TO REFUND THAT AMOUNT. SINCE THE REFUND WAS NOT MADE. COLLECTION WAS EFFECTED BY DEDUCTION ON SEPTEMBER 22. YOUR CLAIM WAS DISALLOWED IN FULL BY OUR SETTLEMENT OF FEBRUARY 7. IN YOUR REQUEST FOR REVIEW YOU CONTEND THAT THE NOTATION ON THE GOVERNMENT BILL OF LADING INCORPORATES BY REFERENCE AND MAKES AN INTEGRAL PART OF THE BILL OF LADING CONTRACT OF CARRIAGE THE RATES TO WHICH REFERENCE IS MADE.

B-151028, OCT. 1, 1963

TO A. B. JAMES FREIGHT LINES:

IN YOUR LETTER OF MARCH 4, 1963, FILE NO. N-342/58, UC-165, 321207, TK- 733530, YOU REQUEST REVIEW OF OUR DISALLOWANCE OF YOUR CLAIM--- PER BILL NO. N-432, UC-165, 321207--- FOR ADDITIONAL FREIGHT CHARGES OF $321 ALLEGED TO BE DUE FOR THE TRANSPORTATION OF A SHIPMENT DESCRIBED AS MILITARY IMPEDIMENTA (MISCELLANEOUS GROUND HANDLING GEAR) SHIPPED FROM MOFFETT FIELD, CALIFORNIA, TO SEELEY, CALIFORNIA, ON JANUARY 3, 1958, UNDER BILL OF LADING NO. N-8587634. THIS SHIPMENT, WHICH WEIGHED 29,010 POUNDS, MOVED IN TWO TRUCKS AND THE BILL OF LADING BEARS THE NOTATION: ,EXCLUSIVE USE OF 2 VEHICLES AUTHORIZED UNDER ABOVE R/O. RATE 90 CENTS PLUS 7 PERCENT PER CWT. MIN.WT. 40,000 PER T/L. SWTB LB.'

FOR THE SERVICE PERFORMED YOU ORIGINALLY CLAIMED AND WERE PAID $756, COMPUTED ON A MINIMUM WEIGHT OF 40,000 POUNDS FOR EACH TRUCK AT A RATE OF 90 CENTS PER 100 POUNDS, PLUS FIVE PERCENT SURCHARGE, WHICH IS THE FIFTH- CLASS RATE PUBLISHED IN SOUTHWESTERN MOTOR TARIFF BUREAU QUOTATION NO. 1- B. ON AUDIT OF THE PAYMENT VOUCHER IN OUR OFFICE, WE DETERMINED THAT THE CHARGES SHOULD BE $449.40, THE MINIMUM CHARGE BASED ON 20,000 POUNDS FOR EACH TRUCK AT THE FOURTH-CLASS RATE OF $1.05 PER 100 POUNDS, PLUS A SURCHARGE OF SEVEN PERCENT. THIS MINIMUM CHARGE IS PROVIDED IN ITEM 140 OF QUOTATION NO. 1-B, WHICH PROVIDES:

"PART I VEHICLE UTILIZATION MINIMUM CHARGE

(A) WHEN A SINGLE SHIPMENT REQUIRES FULL UTILIZATION ITEM NO. OF ONE OR MORE UNITS OF CARRIER'S EQUIPMENT, APPLICABLE 140 RATES AND CHARGES SHALL APPLY ON THE ENTIRE SHIPMENT, SUBJECT TO MINIMUM CHARGES FOR 20,000 POUNDS AT THE CLASS 4 RATE APPLICABLE TO THAT WEIGHT FOR EACH UNIT REQUIRING FULL UTILIZATION * * *.'

THE OVERCHARGE ON THIS SHIPMENT WAS FOUND TO BE $306.60 AND BY FORM 1003, DATED JUNE 5, 1959, YOU WERE REQUESTED TO REFUND THAT AMOUNT. SINCE THE REFUND WAS NOT MADE, COLLECTION WAS EFFECTED BY DEDUCTION ON SEPTEMBER 22, 1960, FROM AN AMOUNT DUE FOR UNRELATED SERVICES. SUBSEQUENTLY, BY YOUR LETTER DATED FEBRUARY 12, 1962, YOU SUBMITTED YOUR SUPPLEMENTAL BILL NO. N -432, UC-165, 321207, CLAIMING $321 ADDITIONAL CHARGES. YOUR CLAIM WAS DISALLOWED IN FULL BY OUR SETTLEMENT OF FEBRUARY 7, 1963.

IN YOUR REQUEST FOR REVIEW YOU CONTEND THAT THE NOTATION ON THE GOVERNMENT BILL OF LADING INCORPORATES BY REFERENCE AND MAKES AN INTEGRAL PART OF THE BILL OF LADING CONTRACT OF CARRIAGE THE RATES TO WHICH REFERENCE IS MADE. THE REFERENCE IN THE PRESENT INSTANCE IS TO THE 90- CENT RATE PROVIDED IN SWMTB QUOTATION NO. 1-B WHICH, IN YOUR LETTER OF DECEMBER 16, 1958, FILE NO. N-342/58, TO THE NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, YOU INDICATE IS PROVIDED IN ITEM NO. 275 ON ORIGINAL PAGE 36 OF SWMTB QUOTATION NO. 1-B. THE MINIMUM WEIGHT OF 40,000 POUNDS PROVIDED IN THAT ITEM APPLIES, BY CIRCLE REFERENCE NO. 2,"PER UNIT OR UNITS IN TRAIN OF CARRIER'S IPMENT.' NO DEFINITION OF THE TERM "IN TRAIN OF CARRIER'S EQUIPMENT" HAS BEEN FOUND IN QUOTATION NO. 1-B.

SINCE THE MINIMUM WEIGHT APPLIES ON A NUMBER OF UNITS AS WELL AS PER UNIT, IT APPEARS TO BE THE SAME AS A VOLUME MINIMUM WEIGHT, RATHER THAN A TRUCKLOAD MINIMUM WEIGHT AS INDICATED IN THE NOTATION ON THE BILL OF LADING. VOLUME AND TRUCKLOAD MINIMUM WEIGHTS ARE DISTINGUISHED BY THE INTERSTATE COMMERCE COMMISSION IN STOVES, ALABAMA AND TENNESSEE TO INTERSTATE POINTS, 4 M.C.C. 641, IN NOTE 3 OF PAGE 643, AS FOLLOWS:

"A VOLUME MINIMUM IS DISTINGUISHED FROM A TRUCKLOAD MINIMUM IN THAT THE VOLUME RATE APPLIES WHEN A SHIPPER TENDERS THE VOLUME MINIMUM WEIGHT OF A COMMODITY FOR TRANSPORTATION AT ONE TIME, EVEN THOUGH IT MAY EXCEED THE CARRYING CAPACITY OF THE LARGEST VEHICLE AVAILABLE AND MUST BE TRANSPORTED IN TWO OR MORE VEHICLES, WHEREAS A TRUCKLOAD MINIMUM IS GENERALLY UNDERSTOOD TO BE THE QUANTITY WHICH A CARRIER CAN TRANSPORT IN A SINGLE VEHICLE.'

CONSEQUENTLY, THE NOTATION ON THE GOVERNMENT BILL OF LADING APPARENTLY WAS INTENDED TO MAKE REFERENCE TO A VOLUME MINIMUM RATHER THAN A TRUCKLOAD MINIMUM, SINCE THE LATTER WOULD BE INCONSISTENT WITH THE APPARENT INTENTION OF THE QUOTATION.

COMPUTATION OF THE CHARGES ON THE BASIS OF THE FIFTH-CLASS RATE OF 90 CENTS PER 100 POUNDS ON A VOLUME MINIMUM WEIGHT OF 40,000 POUNDS RESULTS IN CHARGES OF $385.20. HOWEVER, ITEM NO. 415 OF QUOTATION NO. 1-B, WHICH NAMES THE FIFTH-CLASS RATE, IS MADE SUBJECT THEREIN TO THE MINIMUM CHARGE PROVISIONS OF ITEM NO. 140, PREVIOUSLY DESCRIBED, INASMUCH AS EXCLUSIVE USE OF TWO VEHICLES WAS REQUIRED FOR THIS SHIPMENT AND, ACCORDINGLY, CHARGES ARE PROPERLY COMPUTED ON A MINIMUM WEIGHT OF 20,000 POUNDS FOR EACH VEHICLE AT THE FOURTH-CLASS RATE OF $1.05 PER 100 POUNDS, PLUS A SURCHARGE OF SEVEN PERCENT. THIS BASIS PRODUCES CHARGES IN THE AMOUNT OF $224.70 PER VEHICLE, OR $449.40 FOR THE SHIPMENT.

FURTHERMORE, SINCE AN APPLICABLE RATE IS PROVIDED IN SOUTHWESTERN MOTOR TARIFF BUREAU QUOTATION NO. 1-B FOR THE SERVICE PERFORMED, THE GOVERNMENT AGENT APPARENTLY WOULD HAVE NO AUTHORITY TO CONTRACT FOR A HIGHER CHARGE SINCE, AS TO THE EXCESS, IT WOULD BE A GIFT OF PUBLIC MONEY, AND ASSUREDLY NO OFFICER HAS A RIGHT TO GIVE AWAY PUBLIC REVENUES.

IN YOUR REQUEST FOR REVIEW YOU QUOTE FROM THE DECISION IN UNITED STATES V. SEABOARD AIRLINE Y., 22 F.2D. 113, AT PAGE 115, AS FOLLOWS:

"THE REAL QUESTION IN THE CASE, THEN, IS * * * WHETHER THE GOVERNMENT IS BOUND BY THIS PROVISION OF THE CONTRACT OF SHIPMENT INTO WHICH IT HAS ENTERED WITH THE RAILWAY COMPANY, AND WE SEE NO REASON WHY IT IS NOT BOUND BY THIS, AS IT IS BY ANY OTHER PROVISION OF A CONTRACT WHICH IT HAS MADE.'

THAT CASE, HOWEVER, INVOLVED A CONTRACTUAL PERIOD OF LIMITATIONS IN THE CARRIER'S REGULAR FORM OF BILL OF LADING INCORPORATED INTO THE GOVERNMENT BILL OF LADING CONTRACT BY THE PROVISIONS OF PARAGRAPH NO. 2 UNDER "CONDITIONS" ON THE REVERSE OF THE GOVERNMENT BILL OF LADING, WHICH STATED THAT---

"* * * THIS BILL OF LADING IS SUBJECT TO THE SAME RULES AND CONDITIONS AS GOVERN COMMERCIAL SHIPMENTS MADE ON THE USUAL FORMS PROVIDED THEREFOR BY THE CARRIER.'

THE SEABOARD CASE DID NOT INVOLVE AN ATTEMPT TO MAKE AN AGREEMENT FOR A HIGHER RATE WHILE THERE WAS A CONTINUING OFFER IN EXISTENCE TO PERFORM THE SAME SERVICE AT A LOWER RATE, BUT SUCH A SITUATION IS INVOLVED IN THE PRESENT INSTANCE.

THE CASE OF JOHNSON MOTOR TRANSPORT V. UNITED STATES, 149 F.SUPP. 175, TO WHICH YOU ALSO MAKE REFERENCE, AND WHICH WAS CITED IN OUR DECISION TO YOU OF OCTOBER 1, 1962, B-146633, INVOLVED SPOILAGE OF A SHIPMENT OF PERISHABLES TENDERED BY THE GOVERNMENT ON A GOVERNMENT BILL OF LADING WHICH BORE AN ANNOTATION REQUESTING PROTECTIVE SERVICE, AND THE COURT OF CLAIMS STATED THAT THE CARRIER AGREED TO THIS PROVISION BY ACCEPTANCE OF THE GOVERNMENT BILL OF LADING SO ANNOTATED, AND COULD NOT AVOID THIS UNDERTAKING ON THE GROUNDS THAT, SINCE ITS TARIFF DID NOT PROVIDE FOR PROTECTIVE SERVICE, PERFORMANCE OF SUCH SERVICE WOULD CONSTITUTE AN UNLAWFUL DISCRIMINATION. IN THIS CONNECTION, HOWEVER, IT MUST BE REMEMBERED THAT BY VIRTUE OF THE PROVISIONS OF SECTIONS 22 AND 217 (B) OF THE INTERSTATE COMMERCE ACT, 49 U.S.C. 22 AND 317 (B), COMMON CARRIERS ARE NOT PROHIBITED FROM DISCRIMINATING IN THE GOVERNMENT'S FAVOR. THE DECISION OF THE COURT WAS NOT, HOWEVER, GROUNDED UPON BREACH OF THIS CONTRACTUAL PROVISION, BUT UPON BREACH OF THE CARRIER'S COMMON-LAW DUTY TO EXERCISE DUE CARE. CONSEQUENTLY, NEITHER JUDICIAL DECISION REFERRED TO BY YOU HAS ANY BEARING UNDER THE FACTS OF THE PRESENT CASE.

IN DEALING WITH THE GOVERNMENT A CONTRACTING PARTY IS CHARGED WITH KNOWLEDGE OF THE EXTENT OF AUTHORITY OF THE GOVERNMENT AGENT, OR WITH THE RESPONSIBILITY OF ASCERTAINING THE EXTENT OF SUCH AUTHORITY, SINCE, UNLIKE A PRIVATE PARTY, THE GOVERNMENT ORDINARILY IS NOT BOUND BY THE UNAUTHORIZED ACTS OF ITS AGENTS. SEE FEDERAL CROP INSURANCE CORPORATION V. MERRILL, 332 U.S. 380, 384 (1947); UNITED STATES V. ZENITH-GODLEY COMPANY, INC., 180 F.SUPP. 611, AFFIRMED 295, F.2D. 634 (1961); AND NEWMAN V. UNITED STATES, 133 CT.CL. 420.

ACCORDINGLY, ON THE BASIS OF THE ABOVE, IT APPEARS THAT OUR SETTLEMENT WAS CORRECT, AND THE DISALLOWANCE OF YOUR CLAIM IS SUSTAINED.