B-4005, JUNE 19, 1939, 18 COMP. GEN. 938

B-4005: Jun 19, 1939

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AS REIMBURSEMENT OF EXPENSES ALLEGED TO HAVE BEEN INCURRED IN CONNECTION WITH THE DELIVERY OF CERTAIN QUANTITIES OF LUMBER TO THE DEPARTMENT OF AGRICULTURE. THAT YOU HAVE BEEN PAID THE CONTRACT PRICE OF $3. YOU NOW CLAIM THE ADDITIONAL SUM OF $206.73 AS REIMBURSEMENT OF EXPENSES ALLEGED TO HAVE BEEN INCURRED AS A RESULT OF HAVING BEEN REQUIRED TO MAKE DELIVERY OF THE LUMBER TO THE ROANOKE FARMS PROJECT SITE RATHER THAN F.O.B. IT IS CONTENDED. - SPECIFICALLY STATED THAT DELIVERY WAS TO BE MADE "F.O.B. THE QUESTION IS WHETHER THESE TERMS REQUIRED YOU TO BEAR ALL EXPENSES OF DELIVERY TO THE ROANOKE FARMS PROJECT SITE NEAR TILLERY. ARE AS FREE FROM AMBIGUITY AS MOST OTHER WORDS AND SYMBOLS.

B-4005, JUNE 19, 1939, 18 COMP. GEN. 938

CONTRACTS - DELIVERY COST LIABILITY - PLACE OF DELIVERY "F.O.B. ROANOKE FARMS, TILLERY, N.C.' CONTRACT PROVISION FOR DELIVERY "F.O.B.--- ROANOKE FARMS, TILLERY, N.C.' REQUIRES DELIVERY, ALL TRANSPORTATION EXPENSES PAID, TO ROANOKE FARMS NEAR TILLERY, N.C., AND NOT MERELY DELIVERY TO RAILROAD STATION AT TILLERY.

ACTING COMPTROLLER GENERAL ELLIOTT TO MCLEOD AND SINCLAIR, JUNE 19, 1939:

YOUR LETTER OF NOVEMBER 16, 1938, IN EFFECT REQUESTS REVIEW OF SETTLEMENT DATED NOVEMBER 14, 1938, WHICH DISALLOWED YOUR CLAIM FOR $206.73, AS REIMBURSEMENT OF EXPENSES ALLEGED TO HAVE BEEN INCURRED IN CONNECTION WITH THE DELIVERY OF CERTAIN QUANTITIES OF LUMBER TO THE DEPARTMENT OF AGRICULTURE, FARM SECURITY ADMINISTRATION, UNDER CONTRACT NO. ER-TPS-32- 2276, DATED NOVEMBER 16, 1937.

UNDER THE TERMS OF THE CONTRACT AND PURCHASE ORDER NO. 27930, DATED NOVEMBER 16, 1937, AS AMENDED, YOU AGREED TO DELIVER "F.O.B. ROANOKE FARMS, TILLERY, N.C., " APPROXIMATELY 179,779 BOARD FEET OF VARIOUS ITEMS OF LUMBER, FOR THE CONSIDERATION OF $3,505.69. THE RECORD SHOWS THAT YOU DELIVERED SUCH LUMBER TO THE ROANOKE FARMS PROJECT, FARM SECURITY YOU DELIVERED SUCH LUMBER TO THE ROANOKE FARMS PROJECT, FARM SECURITY ADMINISTRATION, TILLERY, N.C., AND THAT YOU HAVE BEEN PAID THE CONTRACT PRICE OF $3,505.69, LESS 2-PERCENT DISCOUNT ($70.12), OR NET OF $3,435.57.

YOU NOW CLAIM THE ADDITIONAL SUM OF $206.73 AS REIMBURSEMENT OF EXPENSES ALLEGED TO HAVE BEEN INCURRED AS A RESULT OF HAVING BEEN REQUIRED TO MAKE DELIVERY OF THE LUMBER TO THE ROANOKE FARMS PROJECT SITE RATHER THAN F.O.B. CARS TILLERY, N.C. IT IS CONTENDED, IN SUBSTANCE, THAT THE CONTRACT DID NOT PROVIDE FOR DELIVERY TO THE PROJECT SITE BUT MERELY TO ROANOKE FARMS, TILLERY, N.C.

THE INVITATION FOR BIDS--- WHICH BECAME A PART OF YOUR CONTRACT--- SPECIFICALLY STATED THAT DELIVERY WAS TO BE MADE "F.O.B. ROANOKE FARMS, TILLERY, N.C.' PURCHASE ORDER NO. 27930, ISSUED NOVEMBER 16, 1937, FOR THE ITEMS OF LUMBER IN QUESTION STIPULATED "F.O.B. ROANOKE FARMS, TILLER, N.C.' THE QUESTION IS WHETHER THESE TERMS REQUIRED YOU TO BEAR ALL EXPENSES OF DELIVERY TO THE ROANOKE FARMS PROJECT SITE NEAR TILLERY, N.C., OR WHETHER DELIVERY TO THE RAILROAD STATION AT TILLERY SATISFIED THE REQUIREMENTS OF THE CONTRACT.

IN BROOKS-SCANLON CO. V. ILLINOIS CENTRAL RAILROAD CO., 257 FED. 235, 237, THE COURT SAID:

THE EXPRESSIONS "F.O.B; " "F.O.B. CARS," "F.O.B. TRACKS," ETC., ARE AS FREE FROM AMBIGUITY AS MOST OTHER WORDS AND SYMBOLS. BUT, HOWEVER WELL DEFINED WORDS USED IN A CONTRACT MAY BE, IT IS FREQUENTLY THE CASE THAT THERE CAN BE NO PROPER DETERMINATION OF THE MEANING OF A CONTRACT WITHOUT AN UNDERSTANDING OF THE CIRCUMSTANCES AND CONDITIONS WITH REFERENCE TO WHICH IT IS MADE. THE MEANING OF A WORD IS SOMETIMES INDICATED BY THE CONTEXT, AND SOMETIMES DEPENDENT UPON THE CONDITIONS UNDER WHICH IT IS USED. WHILE THE LETTERS "F.O.B.' CARRY THE IDEA THAT THE DELIVERY IS TO BE MADE WITHOUT A CHARGE FOR PRIOR TRANSPORTATION SERVICE, THE USE OF THE EXPRESSION WOULD NOT PRECLUDE INQUIRY AS TO WHAT WOULD BE REGARDED AS WITHIN SUCH CHARGES, IF THE CONDITIONS WERE DIFFERENT FROM THOSE UNDER WHICH IT HAD ACQUIRED THE ORDINARY BUSINESS SIGNIFICANCE. * * *

RELATIVE TO THE PRESENT MATTER IT WOULD SEEM THAT IF DELIVERY ONLY TO THE FREIGHT STATION AT TILLERY, N.C., WAS REQUIRED, THE CONTRACT TERM WOULD HAVE BEEN "F.O.B. TILLERY, NORTH CAROLINA.' HOWEVER, THE TERM ACTUALLY EMPLOYED WAS "F.O.B. ROANOKE FARMS, TILLERY, N.C.' THE WORDS "ROANOKE FARMS" WERE OF SOME IMPORT AND CANNOT BE READ OUT OF THE CONTRACT. THE ORDINARY BUSINESS SIGNIFICANCE OF THE TERM "F.O.B.' IS THAT THE SELLER WILL DELIVER THE GOODS AT THE DESIGNATED POINT "WITHOUT A CHARGE FOR PRIOR TRANSPORTATION SERVICE.' BROOKS-SCANLON CASE, SUPRA. THEY IMPLY THAT THE BUYER SHALL BE FREE FROM ALL EXPENSES AND RISKS ATTENDING THE DELIVERY OF THE PROPERTY AT THE POINT NAMED IN THE CONTRACT FOR SUCH PURPOSE. THE DESIGNATED POINT IN THIS CASE WAS NOT TILLERY, N.C., OR THE TRACKS OR FREIGHT STATION AT TILLERY, BUT WAS SPECIFICALLY "ROANOKE FARMS, TILLERY, NORTH CAROLINA.' THE INTENT OF THE CONTRACT WAS CLEARLY TO HAVE THE LUMBER DELIVERED TO THE ROANOKE FARMS PROJECT, AND HAVING SO CONTRACTED THERE IS NO LEGAL BASIS FOR ALLOWING YOU ANY AMOUNT IN ADDITION TO YOUR CONTRACT PRICE FOR SUCH DELIVERY.

ACCORDINGLY, THE SETTLEMENT DISALLOWING YOUR CLAIM MUST BE, AND IS, SUSTAINED.