B-172576, JUN 22, 1971

B-172576, JUN 22, 1971

CONTRACTS - DAMAGED MERCHANDISE - CONTRACTOR LIABILITY AUTHORIZING THAT AUTOMATION BUSINESS SYSTEMS, INC., BE PAID FOR MARGINALLY PUNCHED CONTINUOUS FORMS DELIVERED UNDER A PRINTING OFFICE CONTRACT SINCE THE GOVERNMENT HAS NOT MADE A CASE OF CONTRACTOR OR CARRIER LIABILITY FOR THE DAMAGE TO THE FORMS. THE STATEMENT OF THE AIR FORCE MADE MORE THAN FOUR MONTHS AFTER THE SHIPMENT WAS RECEIVED THAT THE CARTONS WERE DAMAGED BY THE BASKET CONTAINERS IN WHICH THEY WERE RECEIVED IS NOT SUPPORTED BY THE RECORD ESPECIALLY AS DAMAGE REPORTS PREPARED THE DAY AFTER DELIVERY OF THE CARTONS INDICATE THAT THE DAMAGE TO THE SHIPMENT WAS CAUSED BY THE AIR FORCE PERSONNEL STACKING "6" HIGH ON SKIDS INSTEAD OF "3" HIGH.

TO MR. SPENCE:

REFERENCE IS MADE TO A LETTER DATED APRIL 6, 1971, WITH ENCLOSURES, FROM YOUR GENERAL COUNSEL, FURNISHING A REPORT ON THE CLAIM OF AUTOMATION BUSINESS SYSTEMS, INC., FOR PAYMENT OF MARGINALLY PUNCHED CONTINUOUS FORMS FURNISHED UNDER GOVERNMENT PRINTING OFFICE (GPO) CONTRACT NO. GP73053A.

IN RESPONSE TO PURCHASE ORDER NO. F33601-70-M-5000, ISSUED BY WRIGHT PATTERSON AIR FORCE BASE, OHIO, PURSUANT TO GPO CONTRACT NO. GP73053A, AUTOMATION BUSINESS SYSTEMS, INC., SHIPPED UNDER ITEM 1 OF SUCH ORDER 132 CARTONS OF THREE-PART TABULATING PAPER VIA THE MCLEAN TRUCKING COMPANY. IN A LETTER OF OCTOBER 23, 1970, TO GPO, THE AIR FORCE STATED THAT THE CARTONS OF FORMS WERE RECEIVED AT THE AIR BASE ON JUNE 2, 1970; THAT THE MATERIAL WAS OFF-LOADED IN THE CENTRAL RECEIVING AREA, AS RECEIVED, IN LARGE BASKET-LIKE CONTAINERS; AND THAT THE BARS OF THESE CONTAINERS HAD IMBEDDED INTO THE SURFACES OF THE CONTAINERS INFLICTING EXTENSIVE DAMAGE TO THE CARTONS. HOWEVER, NO EXCEPTION WAS STATED ON THE TRUCKER'S DELIVERY RECEIPT. ON THE DAY FOLLOWING DELIVERY, JUNE 3, 1970, A JOINT INSPECTION OF THE SHIPMENT WAS MADE BY BOTH THE CARRIER'S CLAIM REPRESENTATIVE AND A THIRD PARTY, RETAIL CREDIT COMPANY, AT THE REQUEST OF WRIGHT-PATTERSON AIR FORCE BASE. THE INSPECTION WAS MADE OF THE CARTONS THAT THE WRIGHT-PATTERSON PERSONNEL HAD STACKED ON SKIDS AND MOVED. JUNE 8, 1970, A DISCREPANCY REPORT WAS ISSUED BY THE AIR FORCE TRANSPORTATION OFFICE WHICH REJECTED THE ENTIRE SHIPMENT. BY LETTER DATED JUNE 12, 1970, AUTOMATION WAS ADVISED OF THE REJECTION OF THE ENTIRE SHIPMENT OF FORMS AND WAS REQUESTED TO FURNISH DISPOSITION INSTRUCTIONS. ON JULY 24, 1970, NOT HAVING RECEIVED ANY DISPOSITION INSTRUCTIONS, THE AIR FORCE ADVISED AUTOMATION THAT FAILURE TO RESPOND WITHIN 15 DAYS WOULD RESULT IN RETURN OF THE SHIPMENT AT THE COMPANY'S EXPENSE. NO DELIVERY INSTRUCTIONS WERE RECEIVED. THEREFORE, THE SHIPMENT WAS RETURNED TO AUTOMATION COLLECT VIA MCLEAN TRUCKING COMPANY. AUTOMATION REFUSED TO ACCEPT DELIVERY AND THE MATERIAL HAS BEEN IN STORAGE WITH THE CARRIER SINCE SEPTEMBER 21, 1970.

IN THE DAMAGE REPORT OF JUNE 3, 1970, THE CARRIER'S CLAIM REPRESENTATIVE STATED: "SHOULDN'T BE STACKED OVER 3 HIGH - SHIPMENT STACKED 6 HIGH." FURTHER, THE DAMAGE REPORT OF JUNE 3, 1970, PREPARED BY THE RETAIL CREDIT COMPANY FOR THE AIR FORCE STATED:

" *** DURING INSPECTION IT WAS NOTED THAT APPROXIMATELY 8-10 CARTONS ARE BADLY CRUSHED AND BENT, AND ESTIMATED BY CONTRACTING OFFICER THAT THERE WERE POSSIBLY 50-60 CARTONS WHICH HE CONSIDERED UNUSABLE. AND HE HAS REFUSED THE WHOLE SHIPMENT. *** IT WAS ALSO INDICATED THAT THESE CARTONS SHOULDN'T BE STACKED OVER '3' HIGH AND THE SHIPMENT IS STACKED '6' HIGH THUS CAUSING TOO MUCH WEIGHT ON THE BOTTOM CARTONS.

"IT WAS ALSO NOTED THAT DUE TO THIS EXCESS WEIGHT, ONE (OF) THE SKIDS HAS GIVEN AWAY, HAVING SMALL METAL RUNNERS ON THE BOTTOM OF THE SKID WHICH HAS CAVED IN AND ALSO THAT THE SKID ITSELF IS NOT LARGE ENOUGH TO HOLD THE CARTONS WHICH ARE STACKED ON IT, WHEREAS THE CARTONS OVERHANG THE SKID AND DUE TO BEING STACKED '6' HIGH HAS CAUSED THE LOWER CARTONS TO BEND OVER THE SIDE OF THE SKID, THUS PUTTING A CRIMP IN THE CARTON ITSELF AS WELL AS THE FORMS OR PRINTED MATTER."

THE CARRIER HAS DENIED LIABILITY FOR THE DAMAGE TO THE SHIPMENT BECAUSE IT HAS A CLEAR DELIVERY RECEIPT SIGNED BY THE CONSIGNEE SHOWING THAT SHIPMENT WAS RECEIVED AT DESTINATION IN GOOD CONDITION. THE PRIMARY PURPOSE OF A RECEIPT IS TO AFFORD A WRITTEN RECORD OF FACTS EXISTING AT THE TIME THE RECEIPT IS EXECUTED, AND AS BETWEEN THE CARRIER AND THE SHIPPER IF THE RECEIPT IS FOUND TO BE ERRONEOUS, IT MAY BE AMENDED TO REFLECT THE CONDITIONS WHICH ACTUALLY EXISTED. THE CLEAR DELIVERY RECEIPT IS THUS NOT CONCLUSIVE BUT IS SUBJECT TO EXPLANATION AND CORRECTION. SEE MISSOURI PACIFIC RAILWAY COMPANY V MCFADDEN, 154 U.S. 155, 162 (1894); MEERS V NEW YORK, N. H. & H. R. CO., 52 A. 610 (1902); CONTINENTAL DISTRIBUTING CO., INC. V READING CO., 168 F. 2D 967, 971 (1948).

SINCE WRIGHT-PATTERSON AIR FORCE BASE IS CHALLENGING THE DELIVERY RECEIPT, THIS PLACES THE BURDEN ON THE BASE TO AFFIRMATIVELY PROVE THAT THE DAMAGE TO APPROXIMATELY 65 OF THE 132 CARTONS OCCURRED DURING TRANSIT OF THE SHIPMENT. IN ITS LETTER OF OCTOBER 23, 1970, TO THE GPO, THE AIR FORCE STATED THAT THE CARTONS WERE RECEIVED IN LARGE BASKET-LIKE CONTAINERS AND THAT THE BARS OF THESE CONTAINERS HAD BECOME IMBEDDED INTO THE SURFACES OF THE CARTONS INFLICTING EXTENSIVE DAMAGE TO THE CARTONS.

HOWEVER, IT IS NOTED THAT NEITHER THE CARRIER'S CLAIM REPRESENTATIVE NOR THE AIR FORCE'S REPRESENTATIVE REPORTED THAT THE DAMAGE TO THE CARTONS WAS CAUSED BY THE BARS OF THE BASKET-LIKE CONTAINERS. IN FACT, BOTH REPORTS STATED THAT THE DAMAGE TO THE CARTONS WAS CAUSED BY STACKING THE CARTONS "6" HIGH INSTEAD OF "3" HIGH ON SKIDS. IN HIS DAMAGE REPORT, THE AIR FORCE REPRESENTATIVE STATED THAT THE STACKING OF THE CARTONS "6" HIGH CAUSED TOO MUCH WEIGHT ON THE BOTTOM CARTONS AND THAT DUE TO THE EXCESS WEIGHT ONE OF THE SKIDS WHICH HAD SMALL METAL RUNNERS CAVED IN. IN ITS LETTER OF JULY 17, 1970, TO THE AIR FORCE, AUTOMATION STATED THAT THE CARTONS WERE PICKED UP BY THE MCLEAN TRUCKING COMPANY IN GOOD CONDITION FROM ITS DOCK AND THAT THEY EVIDENTLY WERE IN GOOD CONDITION AT THAT TIME, SINCE A CARRIER WILL NOT ACCEPT FOR TRANSPORTATION MERCHANDISE THAT HAS BEEN DAMAGED.

THE RECORD INDICATES THAT AFTER THE CARRIER DELIVERED THE CORRUGATED CARTONS TO THE AIR FORCE RECEIVING CLERK, WRIGHT-PATTERSON PERSONNEL STACKED THE CARTONS ON SKIDS AND MOVED THEM TO ANOTHER PART OF THE DOCKING FACILITY. WHEN GOODS PASS THROUGH THE HANDS OF SUCCESSIVE CUSTODIANS, A PRESUMPTION EXISTS THAT ANY LOSS OR DAMAGE OCCURRED DURING THE TIME THE PROPERTY WAS IN THE CONTROL OF THE LAST CUSTODIAN. JULIUS KLUGMAN'S SONS, INC. V OCEANIC STEAM NAV. CO., 42 F. 2D 461 (1930); ELDER & JOHNSTON CO. V COMMERCIAL MOTOR FREIGHT, 115 N. E. 2D 179 (1953).

MOREOVER, THE DAMAGE REPORTS PREPARED THE DAY AFTER THE DELIVERY OF THE CARTONS INDICATE THAT THE DAMAGE TO THE SHIPMENT WAS CAUSED BY THE AIR FORCE PERSONNEL STACKING THE CARTONS "6" HIGH ON SKIDS. THE STATEMENT BY THE AIR FORCE MORE THAN 4 MONTHS AFTER THE SHIPMENT WAS RECEIVED THAT THE CARTONS WERE DAMAGED BY THE BASKET CONTAINERS IN WHICH THEY WERE RECEIVED IS NOT SUPPORTED BY THE RECORD OR THE TIMELY DAMAGE REPORTS.

SINCE THE GOVERNMENT HAS NOT MADE A CASE OF CONTRACTOR OR CARRIER LIABILITY, AUTOMATION SHOULD BE PAID FOR THE FORMS DELIVERED TO THE AIR FORCE UNDER ITEM 1 OF PURCHASE ORDER NO. F33601-70-M-5000 AT THE PRICE SPECIFIED THEREIN. IT ALSO FOLLOWS THAT AUTOMATION IS NOT LIABLE FOR THE DELIVERY AND STORAGE CHARGES INCURRED BY THE GOVERNMENT.