B-159237, SEPTEMBER 20, 1966, 46 COMP. GEN. 223

B-159237: Sep 20, 1966

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THE DEDUCTION OF AN ERRONEOUS SUPPLEMENTAL PAYMENT OF FREIGHT CHARGES ON A GOVERNMENT SHIPMENT FROM SUBSEQUENT CARRIER BILLING MADE 3 YEARS AFTER PAYMENT OF THE ORIGINAL BILL IS NOT BARRED BY THE 3-YEAR STATUTE OF LIMITATIONS PROVIDED IN SECTION 322 OF THE TRANSPORTATION ACT OF 1940. 1966: REFERENCE IS MADE TO YOUR LETTER OF MAY 20. DEALS WITH CLAIM TK-657039 AS BEING TYPICAL OF ALL THE CLAIMS FOR WHICH THE REQUEST FOR REVIEW IS MADE. WERE DELIVERED AT DESTINATION ON OCTOBER 2. WERE PAID FREIGHT CHARGES OF $331.06 ON BILL OF LADING WY-7834983 AND $439.57 ON BILL OF LADING WY- 8667148 UNDER VOUCHER 198791 DATED DECEMBER 1. YOU LATER PRESENTED SUPPLEMENTAL BILL 5873-21-A FOR $728.18 WHICH WAS RECEIVED HERE JUNE 9.

B-159237, SEPTEMBER 20, 1966, 46 COMP. GEN. 223

STATUTES OF LIMITATION - CLAIMS - TRANSPORTATION - DATE OF ACCRUAL - SUPPLEMENTAL PAYMENTS. THE DEDUCTION OF AN ERRONEOUS SUPPLEMENTAL PAYMENT OF FREIGHT CHARGES ON A GOVERNMENT SHIPMENT FROM SUBSEQUENT CARRIER BILLING MADE 3 YEARS AFTER PAYMENT OF THE ORIGINAL BILL IS NOT BARRED BY THE 3-YEAR STATUTE OF LIMITATIONS PROVIDED IN SECTION 322 OF THE TRANSPORTATION ACT OF 1940, AS AMENDED, 49 U.S.C. 66, THE RIGHT RESERVED TO THE GOVERNMENT IN SECTION 322 TO RECOVER WITHIN 3 YEARS FROM "THE TIME OF PAYMENT OF BILLS" THE OVERCHARGES SUBSEQUENTLY FOUND DUE IN PAYMENTS MADE FOR TRANSPORTATION SERVICES PRIOR TO AUDIT OR SETTLEMENT HAVING REFERENCE TO BOTH INITIAL AND SUPPLEMENTAL PAYMENTS. AND A CARRIER MAKING A REFUND OF TRANSPORTATION CHARGES, VOLUNTARILY OR UNDER PROTEST, HAVING 3 YEARS FROM DATE OF REFUND TO FILE A CLAIM FOR RECOVERY, A RECIPROCAL RIGHT EXISTS ON THE PART OF THE GOVERNMENT TO RECOVER AN ERRONEOUS SUPPLEMENTAL PAYMENT UNDER PUBLIC LAW 85-762, AMENDING THE 1940 ACT TO PRESCRIBE EQUAL TREATMENT FOR CARRIERS AND THE GOVERNMENT.

TO THE LOUISVILLE AND NASHVILLE RAILROAD COMPANY, SEPTEMBER 20, 1966:

REFERENCE IS MADE TO YOUR LETTER OF MAY 20, 1966, FILE 1-12004, REQUESTING REVIEW OF OUR SETTLEMENT CERTIFICATE OF JUNE 11, 1965, WHICH DISALLOWED YOUR CLAIM (OUR TK-657039) ON SUPPLEMENTAL BILL 5873-21-B FOR ADDITIONAL TRANSPORTATION CHARGES OF $614.65 ON SHIPMENTS OF GOVERNMENT PROPERTY. YOU ALSO ASK FOR REVIEW OF THE SETTLEMENT CERTIFICATES WHICH DISALLOWED 23 OTHER CLAIMS SHOWN IN EXHIBIT A, ATTACHED TO YOUR LETTER, WHICH YOU STATE INVOLVE THE SAME ISSUE. THE 24 CLAIMS AGREGATE $14,830.20. IN SUPPORT OF YOUR REQUEST FOR REVIEW YOU ENCLOSED WITH YOUR LETTER A MEMORANDUM PREPARED BY YOUR GENERAL COUNSEL WHICH, FOR CONVENIENCE, DEALS WITH CLAIM TK-657039 AS BEING TYPICAL OF ALL THE CLAIMS FOR WHICH THE REQUEST FOR REVIEW IS MADE.

THE RECORD SHOWS THAT CLAIM TK-657039 COVERS TWO CARLOAD SHIPMENTS OF GOVERNMENT PROPERTY WHICH MOVED FROM ARMY DEPOT, GEORGIA, TO NEW ORLEANS, LOUISIANA, UNDER GOVERNMENT BILLS OF LADING WY-7834983 AND WY 8667148 ISSUED SEPTEMBER 22, 1958, AND SEPTEMBER 30, 1958, RESPECTIVELY. THESE SHIPMENTS, CONTAINING MISCELLANEOUS FREIGHT FOR EXPORT, WERE DELIVERED AT DESTINATION ON OCTOBER 2, 1958, AND OCTOBER 8, 1958, RESPECTIVELY. YOU ORIGINALLY CLAIMED AND ON DECEMBER 1, 1958, WERE PAID FREIGHT CHARGES OF $331.06 ON BILL OF LADING WY-7834983 AND $439.57 ON BILL OF LADING WY- 8667148 UNDER VOUCHER 198791 DATED DECEMBER 1, 1958, IN THE ACCOUNT OF LIEUTENANT COLONEL GEORGE M. SECKINGER, ARMY DISBURSING OFFICER. YOU LATER PRESENTED SUPPLEMENTAL BILL 5873-21-A FOR $728.18 WHICH WAS RECEIVED HERE JUNE 9, 1961. BY CERTIFICATE OF SETTLEMENT DATED FEBRUARY 21, 1962, PAYMENTS OF $117.97 ON BILL OF LADING WY-7834983, AND $496.68 ON BILL OF LADING WY-8667148, OR A TOTAL OF $614.65, WERE AUTHORIZED AND WERE SUBSEQUENTLY PAID TO YOU.

THEREAFTER, UPON REEXAMINATION OF YOUR CLAIM IT WAS ASCERTAINED THAT THE $614.65 HAD BEEN ERRONEOUSLY PAID AND OUR NOTICE OF OVERCHARGE, DATED NOVEMBER 6, 1964, WAS ISSUED TO RECOVER THE SUPPLEMENTAL AMOUNTS MISTAKENLY PAID ON YOUR SUPPLEMENTAL BILL 5873-21-A. THE AMOUNT OF THE OVERCHARGE WAS COLLECTED IN NOVEMBER 1964 BY DEDUCTION FROM AN OTHERWISE PAYABLE BILL. BY SUPPLEMENTAL BILL 5873-21-B RECEIVED IN THE GENERAL ACCOUNTING OFFICE MARCH 18, 1965, YOU CLAIMED THE AMOUNT DEDUCTED AND THIS CLAIM WAS DISALLOWED IN OUR SETTLEMENT OF JUNE 11, 1965. FROM THIS LATTER ACTION YOU NOW REQUEST A REVIEW.

IT IS YOUR CONTENTION THAT OUR OFFICE WAS BARRED BY THE 3-YEAR STATUTE OF LIMITATIONS, 49 U.S.C. 66, FROM MAKING THE DEDUCTION IN NOVEMBER 1964 SINCE MORE THAN 3 YEARS HAD ELAPSED FROM PAYMENT OF THE ORIGINAL BILL IN DECEMBER 1958. THEREFORE YOU CONTEND THAT YOUR SUPPLEMENTAL BILL 5873-21- B TO RECOVER THE DEDUCTION MADE BY OUR OFFICE SHOULD HAVE BEEN ALLOWED.

SECTION 322 OF THE TRANSPORTATION ACT OF 1940, AS AMENDED, 49 U.S.C. 66, PROVIDES:

PAYMENT FOR TRANSPORTATION OF THE UNITED STATES MAIL AND OF PERSONS OR PROPERTY FOR OR ON BEHALF OF THE UNITED STATES BY ANY COMMON CARRIER SUBJECT TO THE INTERSTATE COMMERCE ACT, AS AMENDED, OR THE CIVIL AERONAUTICS ACT OF 1938, SHALL BE MADE UPON PRESENTATION OF BILLS THEREFOR, PRIOR TO AUDIT OR SETTLEMENT BY THE GENERAL ACCOUNTING OFFICES, BUT THE RIGHT IS RESERVED TO THE UNITED STATES GOVERNMENT TO DEDUCT THE AMOUNT OF ANY OVERCHARGES BY ANY SUCH CARRIER FROM ANY AMOUNT SUBSEQUENTLY FOUND TO BE DUE SUCH CARRIER. THE TERM "OVERCHARGES" SHALL BE DEEMED TO MEAN CHARGES FOR TRANSPORTATION SERVICES IN EXCESS OF THOSE APPLICABLE THERETO UNDER THE TARIFFS LAWFULLY ON FILE WITH THE INTERSTATE COMMERCE COMMISSION AND THE CIVIL AERONAUTICS BOARD AND CHARGES IN EXCESS OF THOSE APPLICABLE THERETO UNDER RATES, FARES, AND CHARGES ESTABLISHED PURSUANT TO SECTION 22 OF THIS TITLE: PROVIDED, HOWEVER, THAT SUCH DEDUCTIONS SHALL BE MADE WITHIN THREE YEARS (NOT INCLUDING ANY TIME OF WAR) FROM THE TIME OF PAYMENT OF BILLS: PROVIDED FURTHER, THAT EVERY CLAIM COGNIZABLE BY THE GENERAL ACCOUNTING OFFICE FOR CHARGES FOR TRANSPORTATION WITHIN THE PURVIEW OF THIS SECTION SHALL BE FOREVER BARRED UNLESS SUCH CLAIM SHALL BE RECEIVED IN THE GENERAL ACCOUNTING OFFICE WITHIN THREE YEARS (NOT INCLUDING ANY TIME OF WAR) FROM THE DATE OF (1) ACCRUAL OF THE CAUSE OF ACTION THEREON, OR (2) PAYMENT OF CHARGES FOR THE TRANSPORTATION INVOLVED, OR (3) SUBSEQUENT REFUND FOR OVERPAYMENT OF SUCH CHARGES, OR (4) DEDUCTION MADE PURSUANT TO THIS SECTION, WHICHEVER IS LATER.

THE FIRST SENTENCE OF THE SECTION SETS FORTH THE REQUIREMENT THAT BILLS FOR TRANSPORTATION SERVICES PERFORMED FOR THE GOVERNMENT BY SPECIFIED INTERSTATE COMMON CARRIERS MUST BE PAID ON PRESENTATION PRIOR TO AUDIT OR SETTLEMENT BY THIS OFFICE AND COUPLES THIS REQUIREMENT WITH A RESERVATION OF RIGHT TO THE UNITED STATES TO DEDUCT THE AMOUNT OF ANY OVERCHARGES BY SUCH CARRIERS FROM ANY AMOUNTS SUBSEQUENTLY FOUND TO BE DUE SUCH CARRIERS. THE SECOND SENTENCE DEFINES THE TERM "OVERCHARGES" AND THE FIRST PROVISO FOLLOWING LIMITS THE TIME FOR MAKING DEDUCTIONS TO 3 YEARS (NOT INCLUDING TIME OF WAR) FROM THE TIME OF PAYMENT OF BILLS.

THE SECTION POSES TWO QUESTIONS WHICH THE LITERAL LANGUAGE FAILS EXPRESSLY TO ANSWER: (1) WHETHER THE DEDUCTION RIGHT REFERRED TO IN THE FIRST SENTENCE EXTENDS ONLY TO RECOVERY OF OVERCHARGES ARISING FROM INITIAL PAYMENT OF TRANSPORTATION BILLS ON PRESENTATION PRIOR TO AUDIT OR WHETHER IT EXTENDS TO RECOVERY OF ANY OVERCHARGE, WHETHER ARISING FROM AN INITIAL PAYMENT OR A SUPPLEMENTAL PAYMENT; AND (2) IF THE DEDUCTION RIGHT EXTENDS TO RECOVERY OF OVERCHARGES ARISING OUT OF SUPPLEMENTAL PAYMENTS, WHETHER THE PERIOD OF LIMITATION AS TO SUCH RECOVERIES RUNS FROM THE DATE OF THE INITIAL PAYMENT FOR THE SERVICE OR FROM THE DATE OF THE SUPPLEMENTAL PAYMENT GIVING RISE TO THE OVERCHARGE.

YOU APPARENTLY CONTEND THAT THE "TIME OF PAYMENT OF BILLS" REFERRED TO IN THE FIRST PROVISO HAS REFERENCE TO THE TIME OF PAYMENT OF INITIAL BILLS AND THAT THE OPERATIVE EVENT COMMENCING THE RUNNING OF THE LIMITATION PERIOD WOULD BE DATE OF PAYMENT OF SUCH BILLS. THE DIFFICULTY WITH THIS PREMISE IS THAT IT WOULD LIMIT THE OPERATIVE EFFECT OF THE SECTION TO RECOVERY OF OVERCHARGES ARISING FROM INITIAL PAYMENTS AND LEAVE OPEN THE QUESTION OF THE GOVERNMENT'S RIGHT, IF ANY, TO RECOVER AN OVERCHARGE ARISING FROM THE ERRONEOUS PAYMENT OF A SUPPLEMENTAL BILL.

APART FROM ANY QUESTION OF THE FINALITY OF SETTLEMENTS ISSUED BY OUR OFFICE AND THE AUTHORITY OF THE COMPTROLLER GENERAL OF THE UNITED STATES TO REVISE SUCH SETTLEMENTS, IT IS GENERALLY RECOGNIZED THAT THE UNITED STATES HAS THE INHERENT RIGHT, INDEPENDENT OF STATUTORY AUTHORIZATION, TO RECOVER PUBLIC FUNDS ERRONEOUSLY PAID OUT BY ITS AGENTS. UNITED STATES V. WURTS, 303 U.S. 414 (1938); WISCONSIN CENTRAL RAILROAD V. UNITED STATES, 164 U.S. 190 (1896); UNITED STATES V. BURCHARD, 125, U.S. 176 (1888). ALSO, IT IS GENERALLY RECOGNIZED THAT THE UNITED STATES HAS THE SAME RIGHT OF SET-OFF, INDEPENDENT OF STATUTORY AUTHORIZATION,"WHICH BELONGS TO EVERY CREDITOR, TO APPLY THE UNAPPROPRIATED MONEYS OF HIS DEBTOR, IN HIS HANDS, IN EXTINGUISHMENT OF THE DEBTS DUE TO HIM;, UNITED STATES V. MUNSEY TRUST CO; 332 U.S. 234 (1947); GRATIOT V. UNITED STATES, 40 U.S. 336 (1841); MCKNIGHT V. UNITED STATES, 98 U.S. 179 (1878).

ASSUMING, THEN, UPON THE AUTHORIITY OF THE CITED CASES, THE POSSESSION OF THESE INHERENT RIGHTS BY THE UNITED STATES, IT WOULD SEEM TO FOLLOW THAT A CONSTRUCTION OF SECTION 322 LIMITING THE DEDUCTION AUTHORITY THEREIN TO RECOVERY OF OVERCHARGES ARISING FROM TRANSPORTATION PAYMENTS MADE ON PRESENTATION OF BILLS PRIOR TO AUDIT OR SETTLEMENT WOULD LEAVE THE UNITED STATES FREE TO RECOVER, BY SET OFF AND WITHOUT ANY TIME LIMITATION, AN ERRONEOUS SUPPLEMENTAL PAYMENT. THE DEDUCTION RIGHT, IF EXERCISED ON THAT THEORY, WOULD BE BEYOND THE PURVIEW OF THE STATUTE AND THUS NOT SUBJECT TO ITS LIMITATIONS.

ON THE OTHER HAND, A CONSTRUCTION OF SECTION 322 EXTENDING THE DEDUCTION AUTHORITY THEREIN TO RECOVERY OF ANY OVERCHARGE, WHETHER ARISING FROM AN INITIAL OR SUPPLEMENTAL PAYMENT, WOULD GIVE EFFECT TO A LEGISLATIVE INTENTION TO SUBJECT ALL RIGHTS OF THE UNITED STATES RESPECTING ADMINISTRATIVE ADJUSTMENT OF THESE INTERSTATE TRANSPORTATION ACCOUNTS TO A TIME LIMITATION. IN VIEW OF THE COMPREHENSIVE NATURE OF THE AMENDMENTS TO BOTH THE INTERSTATE COMMERCE ACT (49 U.S.C. 27 NOTE) AND THE TRANSPORTATION ACT OF 1940 EFFECTED BY PUBLIC LAW 85-762, 72 STAT. 859, IT IS OUR VIEW THAT THE LATTER RESULT WAS INTENDED.

THE TITLE OF PUBLIC LAW 85-762 INDICATES THE PURPOSE OF THE ACT IS

TO AMEND THE INTERSTATE COMMERCE ACT AND THE TRANSPORTATION ACT OF 1940, WITH RESPECT TO PERIODS OF LIMITATION APPLICABLE TO ACTIONS OR CLAIMS, INCLUDING THOSE BY OR AGAINST THE UNITED STATES, FOR RECOVERY OF CHARGES FOR THE TRANSPORTATION OF PERSONS OR PROPERTY, AND FOR OTHER PURPOSES.

THE ACT AMENDS THE VARIOUS LIMITATION SECTIONS OF THE INTERSTATE COMMERCE ACT TO EXTEND THE PROVISIONS OF SUCH SECTIONS TO ALL TRANSPORTATION OF PROPERTY OR PERSONS FOR OR ON BEHALF OF THE UNITED STATES IN CONNECTION WITH ANY ACTION BROUGHT BEFORE THE COMMISSION OR ANY COURT BY OR AGAINST CARRIERS SUBJECT TO THE INTERSTATE COMMERCE ACT. THE ACT SIMILARLY AMENDS SECTION 322, AS WE HAVE SEEN, TO SUBJECT ADMINISTRATIVE ACTION TO TIME LIMITATIONS, RESPECTING CLAIMS BY OR AGAINST SUCH CARRIERS. IN VIEW OF THE OBVIOUS LEGISLATIVE INTENTION TO LIMIT THE TIME FOR ACTIONS BEFORE THE COURTS, THE COMMISSION, AND THIS OFFICE, WE BELIEVE THE DEDUCTION RIGHT RESERVED TO THE UNITED STATES IN SECTION 322, AS AMENDED, EXTENDS TO THE RECOVERY OF ANY OVERCHARGE, WHETHER ARISING FROM A PAYMENT MADE ON PRESENTATION PRIOR TO AUDIT OR SETTLEMENT OR FROM A LATER SUPPLEMENTAL PAYMENT, AND IS SUBJECT TO THE TIME LIMITATION PROVIDED IN THE SECTION.

THE FIRST PROVISO IN SECTION 322, AS AMENDED, PROVIDES THAT DEDUCTIONS SHALL BE MADE WITHIN 3 YEARS (NOT INCLUDING TIME OF WAR) FROM "THE TIME OF PAYMENT OF BILLS;, IT IS OUR VIEW THAT THE REFERENCE IN THE PROVISO INCLUDES TIME OF PAYMENT OF BOTH ORIGINAL AND SUPPLEMENTAL BILLS AND THAT AN ERRONEOUS SUPPLEMENTAL PAYMENT COULD BE RECOVERED WITHIN 3 YEARS OF THE TIME THE PAYMENT WAS MADE. FOR REASONS SET FORTH BELOW, WE THINK THE FIRST PROVISO REFERENCE TO TIME OF PAYMENT OF BILLS INCLUDES TIME OF PAYMENT OF BOTH INITIAL AND SUPPLEMENTAL BILLS.

THE SECOND PROVISO OF AMENDED SECTION 322 PROVIDES A 3-YEAR TIME LIMITATION FOR THE FILING OF CARRIER CLAIMS COGNIZABLE BY THE GENERAL ACCOUNTING OFFICE. UNDER THE EXPRESS LANGUAGE OF THE PROVISO, A CARRIER WHICH MAKES REFUND OF A TRANSPORTATION CHARGE, WHETHER VOLUNTARILY OR UNDER PROTEST, HAS 3 YEARS FROM THE DATE OF THE REFUND IN WHICH TO FILE A CLAIM FOR ITS RECOVERY IF THE REFUND IS FOUND TO BE, OR THOUGHT TO BE, ERRONEOUS.

THE LEGISLATIVE HISTORY OF PUBLIC LAW 85-762 INDICATES THAT A PRINCIPAL PURPOSE OF THE ACT WAS TO ACHIEVE AN EQUALITY OF TREATMENT BETWEEN CARRIERS ON THE ONE HAND AND THE GOVERNMENT ON THE OTHER AS TO THE TIME WITHIN WHICH THE RIGHTS OF EACH COULD BE PROTECTED IN THE ADJUSTMENT OF CHARGES FOR TRANSPORTATION SERVICES. IF A CARRIER HAS 3 YEARS UNDER THE SECOND PROVISO WITHIN WHICH TO RECLAIM A REFUND, IT WOULD SEEM FAIRLY IMPLICIT IN THE LAW THAT A RECIPROCAL RIGHT EXISTS ON THE PART OF THE GOVERNMENT TO RECOVER AN ERRONEOUS SUPPLEMENTAL PAYMENT. FOR THIS REASON, WE BELIEVE THE 3-YEAR LIMITATION IN THE FIRST PROVISO WAS INTENDED TO RUN, AS TO A SUPPLEMENTAL PAYMENT FOR A TRANSPORTATION SERVICE, FROM THE DATE OF SUCH PAYMENT.

THIS CONCLUSION IS NOT INCONSISTENT WITH THE DECISION IN B-151007, DATED SEPTEMBER 12, 1963 (43 COMP. GEN. 252), HOLDING THAT THE SECOND PROVISO PHRASE,"PAYMENT OF CHARGES FOR THE TRANSPORTATION INVOLVED", REFERRED TO INITIAL PAYMENTS AND DID NOT INCLUDE SUPPLEMENTAL PAYMENTS. THE SECOND PROVISO CONCERNS LIMITATIONS ON CARRIER RIGHTS AND IT IS OBVIOUS THAT A SUPPLEMENTAL PAYMENT TO A CARRIER BY THE UNITED STATES COULD NOT POSSIBLY CREATE AN UNDERCHARGE AS TO WHICH A NEW PERIOD OF LIMITATION WOULD BE OPERATIVE.

WHILE IN 43 COMP. GEN. 252, IN REFERRING TO THE WORD "PAYMENT", WE INDICATED THAT A WORD USED MORE THAN ONCE IN A STATUTE OR SECTION OF A STATUTE HAS THE SAME MEANING, IN THE ABSENCE OF EVIDENCE TO THE CONTRARY, IT IS CLEAR THAT A DISTINCTION MUST BE MADE AS TO WHICH PARTY UNDER THE STATUTE IS INVOLVED, THAT IS, ARE WE SPEAKING OF THE CARRIER AND ITS RIGHTS (SECOND PROVISO) OR OF THE GOVERNMENT AND ITS RIGHTS (FIRST PROVISO). OBVIOUSLY UNDER THE LIMITATION STATUTE, PAYMENT OR REFUND BY THE CARRIER CANNOT ADD TO OR ENLARGE THE GOVERNMENT'S DEDUCTION RIGHTS, JUST AS DEDUCTION BY THE GOVERNMENT CANNOT LESSEN OR FORECLOSE THE CARRIER'S CLAIM RIGHTS.

ACCORDINGLY, THE SETTLEMENT OF JUNE 11, 1965, DISALLOWING YOUR CLAIM FOR $614.95 APPEARS CORRECT AND IS SUSTAINED. LIKEWISE, SINCE THE SETTLEMENTS OF THE 23 OTHER CLAIMS INVOLVE THE SAME PRINCIPLE, THEY APPEAR TO BE PROPER AND ARE SUSTAINED.