B-172243, MAR 2, 1972, 51 COMP GEN 541

B-172243: Mar 2, 1972

Additional Materials:

Contact:

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

 

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

TRANSPORTATION - OVERCHARGES - TENDER CANCELLATION DISPUTED RATE TENDERS WHICH OFFER REDUCED FREIGHT RATES PURSUANT TO SECTION 22 OF THE INTERSTATE COMMERCE ACT (49 U.S.C. 22 AND 317(B)) ON GOVERNMENT TRAFFIC ARE CONTINUING OFFERS TO PERFORM TRANSPORTATION SERVICES FOR STATED PRICES. AS CONTINUING OFFERS POWER IS CREATED IN THE OFFEREE TO MAKE A SERIES OF SEPARATE CONTRACTS BY A SERIES OF INDEPENDENT ACCEPTANCES UNTIL AT LEAST 30 DAYS WRITTEN NOTICE BY EITHER PARTY TO A TENDER OF THE CANCELLATION OR MODIFICATION OF THE TENDED IS RECEIVED. WHERE THE MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE MAINTAINS SUPPLEMENTS CANCELLING OR MODIFYING FOUR RATE TENDERS WERE NOT RECEIVED AND THE CARRIER INSISTS THEY WERE MAILED.

B-172243, MAR 2, 1972, 51 COMP GEN 541

TRANSPORTATION - OVERCHARGES - TENDER CANCELLATION DISPUTED RATE TENDERS WHICH OFFER REDUCED FREIGHT RATES PURSUANT TO SECTION 22 OF THE INTERSTATE COMMERCE ACT (49 U.S.C. 22 AND 317(B)) ON GOVERNMENT TRAFFIC ARE CONTINUING OFFERS TO PERFORM TRANSPORTATION SERVICES FOR STATED PRICES, AND AS CONTINUING OFFERS POWER IS CREATED IN THE OFFEREE TO MAKE A SERIES OF SEPARATE CONTRACTS BY A SERIES OF INDEPENDENT ACCEPTANCES UNTIL AT LEAST 30 DAYS WRITTEN NOTICE BY EITHER PARTY TO A TENDER OF THE CANCELLATION OR MODIFICATION OF THE TENDED IS RECEIVED. THEREFORE, WHERE THE MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE MAINTAINS SUPPLEMENTS CANCELLING OR MODIFYING FOUR RATE TENDERS WERE NOT RECEIVED AND THE CARRIER INSISTS THEY WERE MAILED, A QUESTION OF FACT IS RAISED AND THE ADMINISTRATIVE STATEMENTS MUST BE ACCEPTED, AND THE OVERCHARGES RESULTING FROM THE CONTROVERSY ARE FOR RECOVERY FROM THE CARRIER EITHER DIRECTLY OR BY DEDUCTION FROM ANY AMOUNTS SUBSEQUENTLY DUE THE CARRIER AS PROVIDED BY 49 U.S.C. 66.

TO WILLIAM S. RICHARDS, MARCH 2, 1972:

WE REFER TO YOUR LETTER DATED JANUARY 28, 1972, WRITTEN IN BEHALF OF BARTON TRUCK LINE, INC. (HEREAFTER BARTON). WE HAVE CONSIDERED YOUR LETTER AS A REQUEST FOR RECONSIDERATION OF THE POSITION TAKEN IN OUR LETTER OF JULY 7, 1971, B-172243, TO BARTON, CONCERNING THE EFFECTIVE DATE OF SUPPLEMENTS CANCELLING OR MODIFYING FOUR RATE TENDERS PREVIOUSLY ISSUED BY BARTON IN WHICH, PURSUANT TO SECTION 22 OF THE INTERSTATE COMMERCE ACT, MADE APPLICABLE TO MOTOR CARRIERS BY SECTION 217(B), 49 U.S.C. 22 AND 317(B), IT OFFERED REDUCED FREIGHT RATES ON CERTAIN GOVERNMENT TRAFFIC. WE HELD IN OUR LETTER OF JULY 7, 1971, TO BARTON, THAT THE TENDERS REMAINED UNCHANGED AND IN EFFECT UNTIL 30 DAYS AFTER RECEIPT BY THE MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE (MTMTS) OF COPIES OF THE SUPPLEMENTS MAILED SEPTEMBER 8, 1970.

EACH OF THE TENDERS INCLUDES A PARAGRAPH HEADED "TERMINATION OR MODIFICATION OF TENDER" PROVIDING THAT THE TENDER MAY BE CANCELLED OR MODIFIED BY WRITTEN NOTICE OF NOT LESS THAN 30 DAYS BY EITHER PARTY TO THE OTHER.

RATE TENDERS LIKE THESE ARE CONSIDERED TO BE CONTINUING OFFERS TO PERFORM TRANSPORTATION SERVICES FOR STATED PRICES. 43 COMP. GEN. 54, 59 (1963); 39 ID. 352 (1959); 37 ID. 753, 754 (1958). AS CONTINUING OFFERS THEY CREATE IN THE PERSON TO WHOM THE OFFERS ARE MADE (THE OFFEREE) THE POWER TO MAKE A SERIES OF SEPARATE CONTRACTS BY A SERIES OF INDEPENDENT ACCEPTANCES, AND THAT POWER IS GOOD UNTIL EFFECTIVELY REVOKED BY THE PERSON MAKING THE OFFERS. CORBIN ON CONTRACTS, SECTION 38; WILLISTON ON CONTRACTS, 3RD ED., SECTION 58; RESTATEMENT OF CONTRACTS, SECTION 44. AND IT IS SETTLED THAT TO BE EFFECTIVE THE OFFEROR'S REVOCATION OF AN OFFER MUST BE COMMUNICATED TO THE OFFEREE. UNITED STATES V. SABIN METAL CORPORATION, 151 F. SUPP. 683, 687 (1957), AFFIRMED 253 F.2D 956. CORBIN ON CONTRACTS, SECTION 39; WILLISTON ON CONTRACTS, SECTIONS 56, 89; RESTATEMENT OF CONTRACTS, SECTIONS 41, 69.

THE GENERAL RULE IS SUMMARIZED IN CORBIN ON CONTRACTS, SECTION 39, NOTICE OF REVOCATION NECESSARY, PAGES 165-6, WHICH READS IN PART:

IF THERE HAS BEEN NO EXPRESS PROVISION AS TO THE MODE OF REVOCATION, EITHER IN THE TERMS OF THE OFFER AS ORIGINALLY MADE OR BY SOME OTHER COMMUNICATION TO THE OFFEREE, A POWER OF REVOCATION EXISTS NONE THE LESS. THE DECISIONS HAVE ESTABLISHED THE RULE IN SUCH CASES, HOWEVER, THAT REVOCATIONS IS NOT EFFECTIVE UNLESS IT HAS BEEN COMMUNICATED TO THE OFFEREE. IT IS NOT ENOUGH MERELY TO MAIL A NOTICE OF REVOCATION, PROPERLY ADDRESSED TO THE OFFEREE; HIS POWER OF ACCEPTANCE WILL REMAIN UNAFFECTED UNTIL THE LETTER HAS BEEN RECEIVED BY HIM. IT HAS NOT YET BEEN DETERMINED WHETHER, IN ORDER TO BE EFFECTIVE, THE LETTER OF REVOCATION MUST HAVE BEEN ACTUALLY READ BY HIM. IT IS HERE SUGGESTED, HOWEVER, THAT IT SHOULD BE HELD EFFECTIVE AS SOON AS THE OFFEREE HAS HAD A REASONABLE OPPORTUNITY TO OPEN AND READ THE LETTER AFTER IT HAS BEEN PUT INTO HIS HANDS OR HAS BEEN DELIVERED AT HIS BUSINESS OR HOME ADDRESS.

*** UNLESS A POWER OF REVOCATION WITHOUT NOTICE IS EXPRESSLY RESERVED *** A MESSAGE OF REVOCATION IS NOT EFFECTIVE TO TERMINATE THE POWER OF ACCEPTANCE UNTIL IT IS RECEIVED.

IN THIS RESPECT A REVOCATION OF OFFER DIFFERS FROM AN ACCEPTANCE OF OFFER; AND IT IS REASONABLE THAT THEY SHOULD DIFFER. AN OFFEROR INVITES AN ACCEPTANCE BY THE OFFEREE AND, BECAUSE OF THE CUSTOM OF MEN, HAS REASON TO KNOW THAT THE OFFEREE WILL REGARD HIS EXPRESSION OF ACCEPTANCE AS CLOSING THE DEAL AND AS JUSTIFYING IMMEDIATE STEPS TOWARD PERFORMANCE OR OTHER ACTION IN RELIANCE. THE OFFEREE, ON THE OTHER HAND, HAS NEVER INVITED A REVOCATION OF THE OFFER AND USUALLY HAS NO REASON TO EXPECT ONE. THIS IS AGAIN CONSIDERED IN DISCUSSING ACCEPTANCE BY POST.

SEE, ALSO, 17 C.J.S. CONTRACTS, SECTION 50D.

CF. CORBIN, SECTION 78, PAGE 340:

SO, ALSO, WHERE IN AN ALREADY COMPLETED CONTRACT, A POWER OF REVOCATION OR TERMINATION BY NOTICE IS RESERVED, THE NOTICE IS NOT OPERATIVE UNTIL ACTUALLY RECEIVED.

FURTHERMORE, THE USE IN THE "TERMINATION OR MODIFICATION" PARAGRAPH OF EACH OFFER OF THE PHRASE "WRITTEN NOTICE" LIKELY WOULD BE CONSTRUED TO MEAN A COMMUNICATION RECEIVED. SEE N.L.R.B. V. VAPOR RECOVERY SYSTEMS COMPANY, 311 F.2D 782, 785 (1962); UNITED STATES V. CONTINENTAL CASUALTY CO., 245 F. SUPP. 871, 873 (1965); CF. CORBIN ON CONTRACTS, SECTION 78. AND CF. BENEDICT V. ANDALMAN, 475 F.2D 593 (1970): NOTICE SOUGHT TO BE SERVED BY MAIL IS NOT EFFECTIVE UNTIL IT IS RECEIVED BY THE ONE SOUGHT TO BE SERVED.

THUS THE GOVERNMENT'S POSITION IS THAT THE TENDERS WERE IN EFFECT UNTIL 30 DAYS AFTER WRITTEN NOTICE OF THE CANCELLATION OR MODIFICATION OF THEM WAS RECEIVED BY THE GOVERNMENT'S DULY AUTHORIZED AGENT, IN THIS INSTANCE THE COMMANDER, MTMTS, AS SPECIFICALLY PROVIDED IN THE RATE TENDERS.

YOU STATE THAT BARTON'S POSITION IS THAT ON APRIL 22, 1970, IT MAILED TO MTMTS 2 SIGNED AND 23 UNSIGNED COPIES OF SUPPLEMENTS TO BARTON'S SECTION 22 TENDERS IN ACCORDANCE WITH MTMTS REGULATIONS.

YOU ALSO STATE THAT YOU CAN PROVE THAT SUPPLEMENTS CANCELLING OR MODIFYING THE TENDERS WERE MAILED ON APRIL 22, 1970, AND THAT YOU HAVE PERSONALLY INTERVIEWED THE PARTIES RESPONSIBLE FOR PREPARING AND MAILING THEM. AND AS PROOF OF THE FACT THAT WRITTEN NOTICE OF THE CANCELLATION OR MODIFICATION OF THE TENDERS WAS RECEIVED BY THE COMMANDER, MTMTS, BARTON RESTS ITS CASE ON THE RULE OF EVIDENCE THAT WHERE PROOF IS GIVEN THAT A LETTER HAS BEEN DULY MAILED, A PRESUMPTION OF THE RECEIPT OF THE LETTER BY THE SENDEE ARISES. 29 AM. JUR. 2D EVIDENCE SEC 193, P. 246. BUT THE NEXT SENTENCE OF THAT SECTION READS:

***ON THE OTHER HAND, PROOF OF THE FAILURE OF A LETTER TO ARRIVE AT ITS DESTINATION RAISES A PRESUMPTION THAT IT WAS NEVER MAILED.

LOVING V. ALLSTATE INS. CO., 149 N.E. 2D 641, 644 (1958), INVOLVED THE RULE OF EVIDENCE THAT YOU ARE RELYING ON; THE COURT SAID THAT "PROOF OF THE DUE MAILING OF A LETTER RAISES THE PRESUMPTION OF ITS RECEIPT, AND WHEN THE RECEIPT THEREOF IS DENIED, THE EFFECT IS TO RAISE AN ISSUE OF FACT." THIS GENERAL RULE IS RECOGNIZED IN THE TENTH CIRCUIT, CRUDE OIL CORP. OF AMERICA V. COMMISSIONER OF INTERNAL REVENUE, 161 F.2D 809, 810 (1947), AND IN THE COURT OF CLAIMS. MCCALLIN V. UNITED STATES, 180 CT. CL. 220, 227 (1967). CF. PATRICK V. BOWMAN, 149 U.S. 411, 424 (1893): "BOWMAN DENIES THAT HE EVER RECEIVED THIS LETTER, AND AS THERE IS NO DIRECT EVIDENCE THAT HE DID, HIS DENIAL MUST BE ACCEPTED AS CONCLUSIVE."

WE HAVE NO DIRECT KNOWLEDGE WHETHER THE NOTICES CANCELLING OR MODIFYING YOUR OFFERS WHICH YOU ALLEGE AND INDICATE YOU CAN PROVE WERE MAILED ON APRIL 22, 1970, WERE RECEIVED BY MTMTS. BUT AS YOU KNOW THE OFFICERS AND PERSONNEL AT MTMTS RESPONSIBLE FOR RECEIVING SUCH NOTICES REPORT AND MAINTAIN THAT SUCH NOTICES WERE NOT RECEIVED. IN SUCH A FACTUAL MATTER WE ARE REQUIRED TO ACCEPT THE STATEMENT OF FACTS FURNISHED BY THE ADMINISTRATIVE OFFICERS OF THE GOVERNMENT. 45 COMP. GEN. 99, 100 (1965); 16 ID. 325, 329 (1936). ALSO, WHILE YOU MAY BE ABLE TO PRODUCE EVIDENCE OF MAILING OF THE NOTICES ON APRIL 22, 1970, IT SEEMS CLEAR THAT YOU ARE IN NO POSITION TO ESTABLISH, IN THE FACE OF THE ADMINISTRATIVE REPORT TO THE CONTRARY, THAT THEY WERE RECEIVED BY MTMTS. AND IN VIEW OF SUCH REPORT, THE PRESUMPTION OF RECEIPT UPON PROOF OF DUE MAILING MUST BE CONSIDERED TO HAVE BEEN REBUTTED.

ACCORDINGLY, THE POSITION TAKEN IN OUR LETTER OF JULY 7, 1971, TO BARTON IS AFFIRMED AND UNLESS BARTON REFUNDS THE INVOLVED OUTSTANDING OVERCHARGES RESULTING FROM THIS CONTROVERSY, OUR TRANSPORTATION DIVISION, IN ACCORDANCE WITH ITS USUAL PROCEDURES, WILL IN DUE COURSE DEDUCT THE AMOUNTS OF THE OVERCHARGES FROM ANY AMOUNTS SUBSEQUENTLY FOUND DUE AS PROVIDED BY 49 U.S.C. 66.