B-156797, JUL. 27, 1965

B-156797, JUL. 27, 1965

TO THE SECRETARY OF TREASURY:

REFERENCE IS MADE TO LETTER DATED MAY 13, 1965, ACKNOWLEDGED JUNE 2, 1965, FROM ASSISTANT SECRETARY ROBERT A. WALLACE, RELATIVE TO DAMAGES TO A SHIPMENT OF STAMPING PRESSES WHICH MOVED UNDER GOVERNMENT BILL OF LADING A -5751607. MR. WALLACE ASKS WHETHER THE SUM OF $721 WITHHELD FOR THE DAMAGES FROM THE QUAKER EXPORT PACKAGING COMPANY, INC. (HEREAFTER REFERRED TO AS QUAKER) SHOULD BE RETAINED OR WHETHER SUCH AMOUNT SHOULD BE RECOVERED FROM THE CARRIERS UNDER THE BILL OF LADING CONTRACT.

THE RECORD SHOWS THAT DUE TO THE URGENCY FOR CONVERTING CERTAIN PROOF COINING PRESSES TO REGULAR AUTOMATIC COIN OPERATION, LETTER BIDS WERE SOLICITED FOR THE RIGGING, PACKING, AND LOADING OF FIVE PRESSES FOR PENNSYLVANIA RAILROAD PIGGY-BACK TRAILER SHIPMENT FROM THE UNITED STATES MINT, PHILADELPHIA, PENNSYLVANIA, TO PAGE AIRWAYS, ATCHISON, KANSAS, WHERE THE NECESSARY MODIFICATIONS IN THE PRESSES WERE TO BE MADE. BY LETTER OF DECEMBER 23, 1964, QUAKER SUBMITTED THE LOW BID OF $7,738.58 FOR THE PRESERVATION, PACKAGING AND PACKING OF FIVE BLANKING PRESSES AND FIVE ELECTRIC BOXES.

THE SHIPMENT AS PACKED AND LOADED BY QUAKER MOVED UNDER GOVERNMENT BILL OF LADING A-5751607 DATED JANUARY 8, 1965. THE BILL OF LADING BEARS THE USUAL CERTIFICATE INDICATING THE SHIPMENT WAS ACCEPTED BY PENNSYLVANIA TRUCK TRAINS AT ORIGIN IN APPARENT GOOD ORDER AND CONDITION. THE SHIPMENT MOVED IN TRAILER-ON-FLAT-CAR SERVICE (PIGGY BACK) AND DELIVERY WAS MADE ON JANUARY 20, 1965, BY THE ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY. ALTHOUGH THE DAMAGE WAS DISCOVERED AT DESTINATION, NO NOTATION AS TO THE DAMAGES WAS MADE ON THE REVERSE OF THE BILL OF LADING AS CONTEMPLATED BY ITS PROVISIONS WHERE LOSS OR DAMAGE IS INVOLVED AND THE FREIGHT BILL WAS PAID AS PRESENTED.

IN A DAMAGE REPORT DATED JANUARY 26, 1965, MR. W. R. PATTEN OF PAGE AIRWAYS FURNISHED THE BUREAU OF THE MINT, WASHINGTON, D.C., AN ITEMIZATION OF THE ESTIMATED COSTS OF REPAIRING EACH OF THE FIVE DAMAGED PRESSES, WHICH TOTAL $721 FOR THE FIVE PRESSES. IN SUCH REPORT, HE EXPLAINED THE DAMAGES AS SHOWN ON VARIOUS PHOTOGRAPHS SUBMITTED AND STATED THAT IN HIS OPINION THE DAMAGE INVOLVED WAS THE RESULT OF IMPROPER BLOCKING AND BRACING. BY LETTER DATED FEBRUARY 6, 1965, HEADQUARTERS, DEFENSE INDUSTRIAL PLANT EQUIPMENT CENTER, MEMPHIS, TENNESSEE, NOTIFIED YOUR DEPARTMENT THAT THE DAMAGE SUSTAINED IN CONNECTION WITH THIS SHIPMENT WAS DUE TO INADEQUATE PACKAGING. IN A MEMORANDUM DATED JUNE 24, 1965, EXPLAINING THE FACTS SURROUNDING THE SHIPMENT, MR. L. SOUDER OF THE PHILADELPHIA MINT ALSO POINTED OUT AS TO THE PHOTOGRAPHS SUBMITTED BY MR. PATTEN THAT THE PICTURE MARKED " NO. 1" SHOWS A STENCILED MARKING ON THE CRATE "PACKED RIGHT BY THE QUAKER EXPORT COMPANY," AND FURTHER, THAT AN EXAMINATION OF THESE PICTURES SHOWS THAT THE PRESSES IN PHOTOGRAPHS MARKED "NO. 2" AND "NO. 3" WERE BROKEN THROUGH THE BACK OF THE CRATES, INDICATING THE DAMAGE MAY HAVE OCCURRED WHEN THE TRAIN WAS HUMPED OR THE TRAIN BRAKES APPLIED SUDDENLY. HE CONCLUDED THAT THIS DAMAGE INDICATED THE PACKING WAS DEFICIENT IN THAT THE CRATING WOULD ONLY PROTECT THE SHIPMENT FROM HUMPING OR BRAKING ON ONE DIRECTION AND THE QUALITY AND TYPE OF MATERIAL USED IN THE CRATING LEFT MUCH TO BE DESIRED.

THE GENERAL RULE IS THAT WHEN THE CONSIGNOR LOADS FREIGHT UPON A CAR OR PACKS ARTICLES FOR SHIPMENT, THE CARRIER WHICH RECEIVES THE CAR AS LOADED, OR THE PACKAGES AS PREPARED, IS NOT LIABLE FOR DAMAGES WHICH ARISE FROM THE DEFECT IN LOADING OR THE PACKING. BLYTHEVILLE COTTON OIL CO. V. KURN, 155 F.2D 467, 470 (1946); HOOVER MOTOR EXPRESS CO., INC. V. UNITED STATES, 262 F.2D 832 (1959); KLAUBER V. AMERICAN EXPRESS CO., 91 AM.DEC. 452 (1866); GULF, W.T. AND P. RY. CO. V. WITTNEBERT, 108 S.W. 150, 151 (1908); NORTHWESTERN MARBLE AND TILE CO. V. WILLIAMS, 151 N.W. 419, 421 (1915). SINCE THE SHIPPER KNOWS BETTER THAN THE CARRIER THE MANNER IN WHICH THE GOODS HAVE BEEN PACKED, HE GENERALLY MUST ASSUME RESPONSIBILITY FOR ANY LATENT AND CONCEALED DEFECTS IN THE PACKAGING WHICH CANNOT BE DISCERNED BY ORDINARY OBSERVATION BY THE AGENT OF THE CARRIER. WELLS LAUNDRY AND LINEN SUPPLY CO., INC. V. ACME FAST FREIGHT, INC., 85 A.2D 907 (1952); UNITED STATES V. SAVAGE TRUCK LINE, INC., 209 F.2D 442 (1953), CERTIORARI DENIED 347 U.S. 952; MODERN TOOL CORP. V. PENNSYLVANIA R.CO., 100 F.SUPP. 595 (1951). ALTHOUGH THE CARRIER ACCEPTED THE SHIPMENT AS PACKED AND LOADED, THE RECORD DOES NOT SHOW DEFINITELY THAT AN INSPECTION OF THE SHIPMENT WAS MADE BY THE CARRIER OR THAT THE DEFECTIVE PACKING WAS DISCERNIBLE BY ORDINARY OBSERVATION. THE PHOTOGRAPHS OF THE SHIPMENT AT DESTINATION AND THE TERMS OF THE CONTRACT WITH QUAKER INDICATE THE MACHINERY, IN ADDITION TO BEING CRATED, WAS WRAPPED AND SHROUDED SO THAT IT IS UNLIKELY THAT THE DEFECTS IN PACKING WOULD BE DISCERNIBLE BY ORDINARY VISUAL OBSERVATION BY THE CARRIER EVEN IF IT HAD MADE AN EXAMINATION OF THE SHIPMENT AT ORIGIN. THE RECORD THUS IS SUCH AS TO INDICATE THAT THE DAMAGES INCURRED WERE THE RESULT OF IMPROPER PACKING AND LOADING BY THE SHIPPER'S AGENT AND, IN THE ABSENCE OF SPECIFIC PROOF OF NEGLIGENCE ON THE PART OF THE CARRIER, IT SEEMS PROPER TO CONCLUDE FROM THE EVIDENCE OF RECORD THAT THE CARRIER MAY NOT BE HELD LIABLE FOR THE DAMAGES UNDER THE TERMS OF THE BILL OF LADING.

IN ITS LETTER OF DECEMBER 23, 1964, QUAKER OFFERED TO

"1) PERFORM ALL RIGGING SERVICES NECESSARY TO REMOVE MACHINERY FROM YOUR PLANT AND LOAD ON OUR TRUCKS.

2) HAUL EQUIPMENT TO OUR PLANT FOR PROCESSING.

3) CLEAN, PRESERVE AND WRAP ALL UNPAINTED BARE METAL SURFACES.

4) SHROUD, SKID AND CRATE ALL EQUIPMENT IN A MANNER TO ASSURE ITS SAFE ARRIVAL AT PAGE AIRWAYS, ATCHISON, KANSAS.

5) LOAD EQUIPMENT ON MOTOR CARRIER AT OUR PLANT.

6) BLOCK AND BRACE EQUIPMENT ON MOTOR CARRIER.'

ALTHOUGH THIS OFFER REFERS TO LOADING UPON A MOTOR CARRIER, AND, THE MANAGER OF QUAKER IN A LETTER DATED APRIL 21, 1965, STATES ITS ORIGINAL QUOTATION WAS BASED UPON MOTOR TRUCK SHIPMENT FROM ITS PLANT TO DESTINATION AND NOT ON RAILROAD OR PIGGY-BACK AND THAT HE WARNED MR. SOUDER OF THE PHILADELPHIA MINT THAT IT WOULD BE DANGEROUS TO SHIP THIS TYPE OF EQUIPMENT BY PIGGY-BACK, IT APPEARS FROM A LETTER OF DECEMBER 24, 1964, FROM THE SUPERINTENDENT OF THE PHILADELPHIA MINT TO THE DIRECTOR OF THE MINT IN WASHINGTON WRITTEN AT OR ABOUT THE TIME OF THE CONTRACTUAL ARRANGEMENTS FOR RIGGING, PACKING, AND LOADING OF THE PRESSES THAT PIGGY- BACK SHIPMENT WAS CONTEMPLATED. ALSO, MR. SOUDER IN HIS MEMORANDUM OF JUNE 24, 1965, MENTIONED ABOVE, STATES THAT HIS RECOLLECTION IS THAT QUAKER ENCOURAGED SHIPMENT BY THIS MEANS AND THAT THE WARNING AGAINST USE OF PIGGY-BACK SHIPMENT WAS MADE AT A LATER DATE AND CONCERNED A SHIPMENT OF SIX REGULAR MINT-TYPE COIN PRESSES WHICH HAVE A HIGHER CENTER OF GRAVITY, A LARGE FLYWHEEL ON ONE SIDE AND WHICH WERE MORE DIFFICULT TO HANDLE. THUS IT APPEARS EVEN THE PRELIMINARY NEGOTIATIONS WHICH RESULTED IN THE LETTER-BID CONTEMPLATED PACKING FOR PIGGY-BACK SHIPMENT. MOREOVER, PURCHASE ORDER NO. P 65 790 DATED DECEMBER 29, 1964, SOME 10 DAYS BEFORE THE SHIPMENT WAS TENDERED TO THE CARRIER ON JANUARY 8, 1965, STATES THAT QUAKER WOULD

"* * * SHROUD, SKID AND CRATE FOR SAFE HANDLING. LOAD EQUIPMENT ON CARRIERS TRAILER AND BLOCK AND BRACE AS REQUIRED BY PENNA. R.R. FOR PIGGY BACK HANDLING.'

WHEN UNDER THE TERMS OF THE PURCHASE ORDER THE PACKAGING CONTRACTOR WAS DEFINITELY INFORMED, IF HE HAD NOT BEEN PREVIOUSLY SO ADVISED, AS TO THE MODE OF TRANSPORTATION TO BE USED ON THIS SHIPMENT, BY PROCEEDING WITH THE CONTRACT IT SIGNIFIED ITS ACCEPTANCE THEREOF AND INTENTION TO BE BOUND THEREBY. IN THIS CONNECTION, AN ACCEPTANCE MAY BE IMPLIED FROM ACTS OR CONDUCT. JOHNSON V. CAPITAL CITY FORD CO., 85 SO.2D 75 (1955); BARBER- GREENE CO., INC. V. M. F. DOLLARD, JR., INC., 196 N.E. 571 (1935). MOREOVER, EVEN IF THE PACKING FOR PIGGY-BACK SHIPMENT WERE TO BE REGARDED AS SOMETHING NEW FIRST INTRODUCED BY THE TERMS OF THE PURCHASE ORDER AND NOT PREVIOUSLY CONTEMPLATED--- WHICH ON THE RECORD APPEARS UNLIKELY--- AN EXPRESS ASSENT TO NEW TERMS AND CONDITIONS ATTACHED TO THE ACCEPTANCE OF AN OFFER IS NOT NECESSARY IN ORDER TO MAKE SUCH TERMS AND CONDITIONS A PART OF THE CONTRACT. ANY LANGUAGE OR CONDUCT ON THE PART OF THE ORIGINAL OFFEROR SHOWING HIS ASSENT TO THE NEW TERMS AND CONDITIONS WILL BE SUFFICIENT. ROTOLITH, LTD. V. F. P. BARTLETT AND CO., INC., 297 F.2D 497 (1962); AMERICAN LUMBER AND MFG. CO. V. ATLANTIC MILL AND LUMBER CO., 290 F. 632 (1923); MCKELL V. CHESAPEAKE AND OHIO BY. CO., 175 F. 321 (1910) AFFIRMED 186 F. 39,CERTIORARI DENIED 220 U.S. 613.

THUS, ON THE PRESENT RECORD THE QUAKER EXPORT PACKAGING COMPANY APPEARS TO BE LIABLE FOR THE DAMAGES AND IT IS OUR VIEW THAT YOUR DEPARTMENT WOULD BE WARRANTED IN RETAINING THE AMOUNT OF ESTIMATED COST OF REPAIRS, $721, FROM THAT COMPANY. OF COURSE SHOULD THE ACTUAL COSTS OF REPAIRS DIFFER IN AMOUNT FROM THE ESTIMATE, AN ADJUSTMENT IN THE AMOUNT WITHHELD WOULD APPEAR PROPER.