B-151205, AUG. 1, 1963

B-151205: Aug 1, 1963

Additional Materials:

Contact:

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

 

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

INC.: REFERENCE IS MADE TO YOUR LETTER OF MARCH 28. WE HAVE RECEIVED INFORMAL ADVICE FROM THE INTERSTATE COMMERCE COMMISSION TO THE EFFECT THAT ON OCTOBER 20. WAS GRANTED. THAT AN ORDER WAS ENTERED MARCH 26. EXTENDING SUCH TEMPORARY AUTHORITY UNTIL A FINAL DETERMINATION IS MADE OF THE PERMIT APPLICATION. YOUR INTEREST IN THE MATTER IS NOT UNDERSTOOD. IF YOU ARE CLAIMING AS SUCCESSOR IN INTEREST TO THE RIGHTS OF CONSTRUCTORS TRANSPORT CO. WAS ANNOTATED AS FOLLOWS: "EXPLOSIVES CLASS "A" EXPLOSIVE PLACARDS APPLIED 1-35" FLAT. EXCLUSIVE USE OF THE VEHICLE REQUESTED BY THE GOVERNMENT "I CERTIFY THAT EXCLUSIVE VEHICLE SERVICE WAS FURNISHED FROM FAIRFIELD A.F.B. THE CARRIER ORIGINALLY CLAIMED AND WAS PAID $399 COMPUTED AT THE FIRST CLASS RATE OF $1.33 PER 100 POUNDS ON A MINIMUM WEIGHT OF 30.

B-151205, AUG. 1, 1963

TO T.I.M.E. FREIGHT, INC.:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 28, 1963, FILE TGAO 33136 7-59- A-5891 CTC 5891, WITH ENCLOSURES, REQUESTING REVIEW OF OUR SETTLEMENT DATED DECEMBER 17, 1962, WHICH DISALLOWED THE CLAIM OF CONSTRUCTORS TRANSPORT CO. FOR $187 ADDITIONAL FREIGHT CHARGES ALLEGED TO BE DUE FOR THE TRANSPORTATION OF FOUR CANS OF HIGH EXPLOSIVES, NOIBN, WEIGHING 6,710 POUNDS, FROM TRAVIS AIR FORCE BASE, TO FORT MACARTHUR, CALIFORNIA, UNDER BILL OF LADING NO. AF-139742 DATED JUNE 17, 1959. WE HAVE RECEIVED INFORMAL ADVICE FROM THE INTERSTATE COMMERCE COMMISSION TO THE EFFECT THAT ON OCTOBER 20, 1962, T.I.M.E. FREIGHT, INC. WAS GRANTED, UNDER SECTION 210A OF THE INTERSTATE COMMERCE ACT, 49 U.S.C. 310A, TEMPORARY AUTHORITY TO LEASE THE PROPERTY OF CONSTRUCTORS TRANSPORT CO. FOR 180 DAYS FROM OCTOBER 26, 1962, PENDING ACQUISITION THEREOF, AND THAT AN ORDER WAS ENTERED MARCH 26, 1963, EXTENDING SUCH TEMPORARY AUTHORITY UNTIL A FINAL DETERMINATION IS MADE OF THE PERMIT APPLICATION. HOWEVER, SUCH LEASING AUTHORITY WOULD NOT APPEAR TO GIVE YOUR CORPORATION ANY RIGHT OR INTEREST IN A CLAIM FOR REFUND OF AN AMOUNT DEDUCTED IN APRIL 1960--- SEVERAL YEARS BEFORE THE LEASE BECAME EFFECTIVE--- FROM AN AMOUNT OTHERWISE PAYABLE TO CONSTRUCTORS TRANSPORT CO. ACCORDINGLY, YOUR INTEREST IN THE MATTER IS NOT UNDERSTOOD. IF YOUR CORPORATION PURPORTS TO ACT AS ATTORNEY FOR CONSTRUCTORS TRANSPORT CO., A DULY EXECUTED POWER OF ATTORNEY AUTHORIZING YOU TO SO ACT WOULD APPEAR TO BE PREREQUISITE TO OUR CONSIDERING ANY FURTHER COMMUNICATION FROM YOU IN THE MATTER. ALSO, IF YOU ARE CLAIMING AS SUCCESSOR IN INTEREST TO THE RIGHTS OF CONSTRUCTORS TRANSPORT CO., CERTIFIED COPIES OF THE DOCUMENTS RELIED UPON AS YOUR AUTHORITY TO SO ACT SHOULD BE FURNISHED BEFORE ANY FURTHER COMMUNICATION FROM YOU IN THE MATTER MAY BE CONSIDERED.

BILL OF LADING NO. AF-139742, HOWEVER, WAS ANNOTATED AS FOLLOWS:

"EXPLOSIVES CLASS "A"

EXPLOSIVE PLACARDS APPLIED

1-35" FLAT; ORDERED AND FURNISHED.

SPECIAL PERMIT NR. ICC 2136 APPLIES.

EXCLUSIVE USE OF THE VEHICLE REQUESTED BY THE GOVERNMENT

"I CERTIFY THAT EXCLUSIVE VEHICLE SERVICE WAS FURNISHED

FROM FAIRFIELD A.F.B. TO FT. MACARTHUR, CALIF

6/18/59

(DESTINATION) (CARRIER'S AGENT) (DATE)" "

FOR THE TRANSPORTATION SERVICE INVOLVED, THE CARRIER ORIGINALLY CLAIMED AND WAS PAID $399 COMPUTED AT THE FIRST CLASS RATE OF $1.33 PER 100 POUNDS ON A MINIMUM WEIGHT OF 30,000 POUNDS AS PROVIDED IN CONSTRUCTORS TRANSPORT CO. U.S. GOVERNMENT TENDER NO. S-292, DATED JANUARY 15, 1959, FOR SHIPMENTS REQUIRING "SPECIAL MILITARY SERVICE.' IN OUR AUDIT OF THE PAYMENT VOUCHER PURSUANT TO 49 U.S.C. 66, WE DETERMINED THE APPLICABLE CHARGES TO BE $212, COMPUTED AT THE THIRD CLASS RATE OF $1.06 PER 100 POUNDS ON A MINIMUM WEIGHT OF 20,000 POUNDS AS SET FORTH IN PACIFIC COAST TARIFF BUREAU'S QUOTATION NO. 2 AND EXCEPTION SHEET NO. 1. SINCE CHARGES COMPUTED ON THIS BASIS EXCEED THE MINIMUM CHARGES (20,000 POUNDS AT FOURTH CLASS RATE OF 93 CENTS PER 100 POUNDS) PROVIDED FOR THE EXCLUSIVE USE OF VEHICLE SERVICE, THEY ARE APPLICABLE FOR THE SERVICE AUTHORIZED BY THE BILL OF LADING. WHEN THE CARRIER FAILED TO REFUND THE RESULTING OVERCHARGE OF $187 SO DETERMINED, THAT AMOUNT WAS COLLECTED BY DEDUCTIONS FROM AMOUNTS OTHERWISE DUE. THEREAFTER, THE CARRIER SUBMITTED ITS SUPPLEMENTAL BILL TO RECOVER THE AMOUNT DEDUCTED ON THE BASIS THAT SPECIAL MILITARY SERVICE HAD BEEN PERFORMED AND THE PREMIUM CHARGES FOR SUCH SERVICE AUTHORIZED UNDER ITS TENDER NO. S-292 WERE APPLICABLE. THAT CLAIM WAS DISALLOWED BY OUR SETTLEMENT OF DECEMBER 17, 1962, BECAUSE THE NOTATIONS ON BILL OF LADING NO. AF-139742 DID NOT COMPLY WITH THE REQUIREMENTS OF TENDER NO. S-292 TO WARRANT PAYMENT OF THE PREMIUM CHARGES FOR SPECIAL MILITARY SERVICE.

THE TENDER REQUIRES, AS SET OUT ON PAGE 2 OF CONSTRUCTOR'S TENDER NO. S- 292, THAT BILLS OF LADING FOR SUCH SERVICE BE ANNOTATED, AS FOLLOWS:

"ANNOTATION OF REQUIRED SERVICE

BILLS OF LADING ISSUED FOR "SPECIAL MILITARY SERVICE" WILL

BEAR THE FOLLOWING NOTATIONS:

"SPECIAL MILITARY SERVICE WAS REQUESTED AS FOLLOWS:

TIME AND DATE -----------------------------------------------

SIGNATURE OF SHIPPING OFFICER

SPECIAL MILITARY SERVICE WAS RECEIVED

TIME AND DATE RECEIVED --------------------------------------

SIGNATURE OF RECEIVING OFFICER" "

THUS THE QUOTATION SPECIFICALLY REQUIRES, WHERE SPECIAL MILITARY SERVICE IS REQUESTED THAT THE BILL OF LADING SHOW AN ANNOTATION DENOTING SUCH REQUEST. THE PRESCRIBED NOTATION QUOTED ABOVE DOES NOT APPEAR ON BILL OF LADING NO. AF-139742. FURTHERMORE, THERE IS NO WRITTEN NOTATION ON THE BILL OF LADING WHICH WOULD REASONABLY GIVE NOTICE THAT THE SHIPPER REQUESTED SPECIAL MILITARY SERVICE.

IN REQUESTING REVIEW OF THE MATTER YOU SUBMIT, AMONG OTHER THINGS, A COPY OF A MEMORANDUM DATED FEBRUARY 26, 1960, FROM THE DEPUTY REGIONAL DIRECTOR, MILITARY TRAFFIC MANAGEMENT AGENCY, OAKLAND ARMY TERMINAL, OAKLAND, CALIFORNIA, TO THE EXECUTIVE DIRECTOR, MILITARY TRAFFIC MANAGEMENT AGENCY, WASHINGTON, D.C., WHICH STATES THAT IN VIEW OF THE UNUSUAL DELIVERY REQUIREMENTS PLACED UPON THE CARRIER UNDER THE PROVISIONS OF ITS RATE TENDER S-292, IT WAS THE OPINION OF THE REGIONAL OFFICE THAT CERTAIN OVERCHARGE CLAIMS MADE BY OUR OFFICE AGAINST THE CARRIER WERE NOT IN ORDER AND SHOULD BE WITHDRAWN. ALSO, YOU FURNISH A COPY OF A LETTER DATED AUGUST 6, 1962, FROM THE CHIEF, TRAFFIC SERVICES DIVISION, DEFENSE TRAFFIC MANAGEMENT SERVICE, OAKLAND ARMY TERMINAL, OAKLAND, CALIFORNIA, WHICH STATES THAT THE RECORDS INDICATE THAT SPECIAL MILITARY SERVICE WAS REQUIRED ON THE SHIPMENT HERE INVOLVED AND THE BILL OF LADING SHOULD HAVE BEEN SO ANNOTATED. IT APPEARS TO BE YOUR POSITION THAT THIS SUPPLEMENTAL INFORMATION SUBMITTED APPROXIMATELY THREE YEARS SUBSEQUENT TO THE DATE THE SHIPMENT MOVED IS SUFFICIENT TO SATISFY THE REQUIREMENTS OF TENDER S 292 SO AS TO JUSTIFY ALLOWANCE OF ADDITIONAL CHARGES THEREUNDER FOR SPECIAL MILITARY SERVICES.

OUR DISALLOWANCE OF DECEMBER 17, 1962, WAS PREDICATED ON THE PRINCIPLE LAID DOWN IN GUS BLASS COMPANY V. POWELL BROTHERS TRUCK LINES, 53 M.C.C. 603. IN THAT CASE THE INTERSTATE COMMERCE COMMISSION CONSIDERED A MOTOR CARRIER'S CONTENTION THAT EXCLUSIVE USE CHARGES WERE APPLICABLE ON THE SHIPMENT IN ISSUE ALTHOUGH AN EXCLUSIVE USE ANNOTATION DID NOT APPEAR ON EITHER THE BILL OF LADING OR THE FREIGHT BILL AS REQUIRED BY TARIFF. ADOPTING THE CONSIGNEE'S POINT OF VIEW, THE COMMISSION SAID, AT PAGE 605:

"IT APPEARS THAT DEFENDANT'S (CARRIER-S) POSITION IS THAT ITS FAILURE PROPERLY TO ENDORSE THE BILL OF LADING AND FREIGHT BILL DOES NOT RENDER INAPPLICABLE THE PROVISIONS OF THE RULE GOVERNING THE CHARGES TO BE ASSESSED, AND THAT THE REQUIREMENT FOR SUCH ENDORSEMENT IS MERELY A MATTER OF FORM, THE ABSENCE OF WHICH DOES NOT AFFECT THE REMAINING PROVISIONS OF THE RULE. WE THINK NOT. IT IS WELL SETTLED THAT A RULE CONTAINED IN A TARIFF IS PART OF THE TARIFF, AND CANNOT BE WAIVED. * * *"

THE REASONING EMPLOYED BY THE COMMISSION IN THE GUS BLASS CASE WAS BASED IN PART ON THE DECISION OF THE SUPREME COURT IN THE CASE OF DAVIS V. HENDERSON, 266 U.S. 92. THERE A SHIPPER OF CATTLE SUED THE CARRIER FOR DAMAGE DUE TO THE FAILURE OF THE LATTER TO FURNISH A CAR WITHIN A REASONABLE TIME AFTER IT REQUESTED. SINCE THE PLAINTIFF HAD GIVEN NOTICE OF A REQUEST ORALLY, RATHER THAN IN WRITING, AS REQUIRED BY THE PERTINENT TARIFF, TO THE STATION AGENT, THE CARRIER DEFENDED ON THE GROUND THAT THE SHIPPER HAD NOT COMPLIED WITH THE TARIFF RULE REQUIRING ORDERS FOR CARS TO BE IN WRITING. AT PAGE 93 THE COURT SAID:

"THERE IS NO CLAIM THAT THE RULE REQUIRING WRITTEN NOTICE WAS VOID. THE CONTENTION IS THAT THE RULE WAS WAIVED. IT COULD NOT BE. THE TRANSPORTATION SERVICE TO BE PERFORMED WAS THAT OF A COMMON CARRIER UNDER PUBLISHED TARIFFS. THE RULE WAS A PART OF THE TARIFF.'

SINCE THE REQUIREMENT THAT AN ANNOTATION EVIDENCING A REQUEST FOR SPECIAL MILITARY USE SERVICE BE PLACED ON THE BILL OF LADING APPEARS PREREQUISITE UNDER THE TENDER TO PAYMENT FOR THE PREMIUM CHARGES--- ANALOGOUS TO THE TARIFF REQUIREMENTS--- ANCILLARY OR COLLATERAL DOCUMENTS, SUCH AS LETTERS WRITTEN LONG AFTER THE TRANSPORTATION WAS PERFORMED, CANNOT BE REGARDED AS EVIDENCE OF A REQUEST IN DEROGATION OF THE TARIFF RULE OR AS A CONTRACT OF AGREEMENT STANDING IN SUBSTITUTION OF THE REQUIREMENT ITSELF. NO PART OF ANY OF THE ESSENTIAL LANGUAGE EVIDENCING A DESIRE OR REQUEST BY THE SHIPPER FOR SPECIAL MILITARY SERVICE APPEARS ON THE BILL OF LADING IN QUESTION.

THE PLACEMENT OF THE REQUIRED ANNOTATION ON THE BILL OF LADING WAS A CONDITION PRECEDENT UPON WHICH THE CARRIER'S OBLIGATION TO PERFORM THE REQUESTED SERVICE AND RIGHT TO COLLECT THE PREMIUM CHARGES DEPENDED. SOUTHERN KNITWEAR MILLS, INC. V. ASSOCIATED TRANSPORT, INC., NO. MC-C 1410, 9 FEDERAL CARRIERS CASES 710; DEEP FREEZE DIVISION MOTOR PRODUCTS CORPS. V. C. A. CONKLIN TRUCK LINES ET AL., MC-C-1712, 11 FEDERAL CARRIER CASES 248. IN THE ABSENCE, AS HERE, OF THE REQUISITE ANNOTATION ON THE BILL OF LADING IN SUBSTANTIALLY THE FORM PRESCRIBED, OUR SETTLEMENT OF DECEMBER 17, 1962, DISALLOWING THE CLAIM FOR SPECIAL MILITARY SERVICE, APPEARS PROPER AND IS SUSTAINED.