B-43676, AUGUST 17, 1944, 24 COMP. GEN. 138

B-43676: Aug 17, 1944

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IN WHICH MATERIAL IS DELIVERED UNDER CONTRACT IS THAT OF BAILOR AND BAILEE UNDER A BAILMENT FOR MUTUAL BENEFIT. PURSUANT TO WHICH THE GOVERNMENT IS REQUIRED TO EXERCISE ONLY ORDINARY CARE. THE GOVERNMENT IS NOT LIABLE FOR LOSS OF THE CONTAINERS IN THE ABSENCE OF A SPECIAL CONTRACT OR A SHOWING THAT THE LOSS WAS DUE TO NEGLIGENCE. 1944: REFERENCE IS MADE TO YOUR LETTER OF JULY 27. WHILE THE RECORDS OF THIS OFFICE FAIL TO INDICATE THAT CONTRACT SA2H 161 HAS BEEN FORWARDED HERE FOR FILING IT IS ASSUMED THAT THE PROVISIONS OF SUCH CONTRACT ARE SIMILAR TO THOSE CONTAINED IN CONTRACT SA2H-242. THE CONTRACT IS SILENT AS TO THE OWNERSHIP OF THE CONTAINERS UPON DELIVERY OF THE PRODUCTS AND MAKES NO PROVISION FOR PAYMENT FOR THE CONTAINERS IN EVENT THE GOVERNMENT FAILS TO RETURN THEM.

B-43676, AUGUST 17, 1944, 24 COMP. GEN. 138

CONTRACTS - EMPTY CONTAINERS - LIABILITY FOR LOSS, DAMAGE, OR DESTRUCTION THE RELATIONSHIP BETWEEN A CONTRACTOR AND THE GOVERNMENT WITH REFERENCE TO CONTAINERS, BELONGING TO THE CONTRACTOR, IN WHICH MATERIAL IS DELIVERED UNDER CONTRACT IS THAT OF BAILOR AND BAILEE UNDER A BAILMENT FOR MUTUAL BENEFIT, PURSUANT TO WHICH THE GOVERNMENT IS REQUIRED TO EXERCISE ONLY ORDINARY CARE, AND THE GOVERNMENT IS NOT LIABLE FOR LOSS OF THE CONTAINERS IN THE ABSENCE OF A SPECIAL CONTRACT OR A SHOWING THAT THE LOSS WAS DUE TO NEGLIGENCE.

COMPTROLLER GENERAL WARREN TO CHARLES E. BURBRIDGE, FEDERAL SECURITY AGENCY, AUGUST 17, 1944:

REFERENCE IS MADE TO YOUR LETTER OF JULY 27, 1944, WHEREIN YOU REQUEST AN ADVANCE DECISION AS TO THE PROPRIETY OF CERTIFYING FOR PAYMENT VOUCHERS IN FAVOR OF EMBASSY DAIRY, INC., AND RICHFIELD DAIRY CORPORATION, IN THE TOTAL AMOUNT OF $117.39, REPRESENTING THE VALUE OF UNACCOUNTED FOR CANS, CASES, AND BOTTLES NOT RETURNED TO THE CONTRACTORS IN CONNECTION WITH CONTRACTS NOS. SA2H-161 AND SA2H-242, DATED JUNE 29, 1942, AND JULY 1, 1943, RESPECTIVELY.

WHILE THE RECORDS OF THIS OFFICE FAIL TO INDICATE THAT CONTRACT SA2H 161 HAS BEEN FORWARDED HERE FOR FILING IT IS ASSUMED THAT THE PROVISIONS OF SUCH CONTRACT ARE SIMILAR TO THOSE CONTAINED IN CONTRACT SA2H-242. UNDER THE TERMS OF CONTRACT NO. SA2H-242 THE CONTRACTOR AGREED TO DELIVER TO FREEDMEN'S HOSPITAL, WASHINGTON, D.C., CERTAIN QUANTITIES OF MILK, BUTTERMILK AND CREAM AT THE PRICES NAMED THEREIN DURING THE FISCAL YEAR BEGINNING JULY 1, 1943, AND ENDING JUNE 30, 1944. THE CONTRACT IS SILENT AS TO THE OWNERSHIP OF THE CONTAINERS UPON DELIVERY OF THE PRODUCTS AND MAKES NO PROVISION FOR PAYMENT FOR THE CONTAINERS IN EVENT THE GOVERNMENT FAILS TO RETURN THEM. THUS, THE GOVERNMENT, UNDER THE TERMS OF THE CONTRACTS, IN NO WAY BECAME AN INSURER OF THE CONTAINERS, AND IT APPEARS THAT THE CONTRACTS WERE PRIMARILY FOR THE SALE OF DAIRY PRODUCTS AND THE DELIVERY OF THE CONTAINERS TO THE GOVERNMENT WAS MERELY INCIDENT THERETO.

ASSUMING THAT IT WAS THE CUSTOM OF THE DAIRY INDUSTRY THAT TITLE TO THE CONTAINERS WAS TO REMAIN IN THE CONTRACTORS AFTER DELIVERY OF THE PRODUCT, THEN THE RELATIONSHIP BETWEEN THE CONTRACTORS WOULD APPEAR TO HAVE BEEN THAT OF BAILOR AND BAILEE UNDER A BAILMENT FOR MUTUAL BENEFIT UNDER WHICH THE GOVERNMENT WAS REQUIRED TO EXERCISE ONLY ORDINARY CARE. 8 C.J.S. 269. IT IS WELL SETTLED THAT IN THE ABSENCE OF A SPECIAL CONTRACT A BAILEE IS NOT THE INSURER OF THE THING BAILED AND IS NOT RESPONSIBLE FOR DAMAGES FOR LOSS ARISING FROM AN INEVITABLE ACCIDENT OR UNDER CIRCUMSTANCES WHICH MIGHT NOT BE REASONABLY FORESEEN AND PROVIDED AGAINST. BOYDEN V. UNITED STATES, 13 WALL. 17, 22; UNITED STATES V. THOMAS, 15 WALL, 337; SMADBECK V. HELING CONTRACTING CORP., 50 F.2D 100; MULVANEY V. KING PAINT CO., 256 FED. REP. 612, 614; 11 COMP. DEC. 767; 18 ID. 252; 19 ID. 131; 26 ID. 70; 5 COMP. GEN. 253; ID 984. THE RECORD FAILS TO SHOW OR INDICATE THAT THE LOSS WAS DUE TO NEGLIGENCE, IN THE ABSENCE OF WHICH THERE WOULD BE NO LIABILITY FOR THEIR LOSS.

ACCORDINGLY, THE VOUCHERS ARE RETURNED HEREWITH AND YOU ARE ADVISED THAT THEY MAY NOT PROPERLY BE CERTIFIED FOR PAYMENT ON THE PRESENT RECORD.