B-4697, AUGUST 14, 1939, 19 COMP. GEN. 198

B-4697: Aug 14, 1939

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CONTRACTS - ARTICLES LOST IN TRANSIT - GOVERNMENT LIABILITY TO VENDOR A CLAIM FOR PAYMENT FOR AN ARTICLE PURCHASED BY THE GOVERNMENT CONCERNING WHICH NO EVIDENCE OF THE RECEIPT OF THE GOODS BY THE UNITED STATES WAS OBTAINABLE. IS A MATTER FOR DIRECT SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE AS A CLAIM INVOLVING DOUBTFUL QUESTIONS OF FACT AND LAW UNDER THE PROCEDURE OUTLINED IN 5 COMP. AS IS THE GENERAL RULE. THE LOSS OCCURRED WHILE THE TRANSPORTATION WAS STILL IN PROGRESS. THE VENDOR IS NOT ENTITLED TO PAYMENT. PARTICULARLY WHERE THE VENDOR WAS DIRECTLY IN FAULT BY REASON OF THE SELECTION OF A CARRIER WHICH HAD NO AGENT AT THE RAILWAY STATION OF DELIVERY FOR CUSTODY OR DELIVERY PURPOSES.

B-4697, AUGUST 14, 1939, 19 COMP. GEN. 198

CLAIMS - DOUBTFUL QUESTIONS OF FACT AND LAW - DISBURSING OFFICER PAYMENT VERSUS GENERAL ACCOUNTING OFFICE DIRECT SETTLEMENT; CONTRACTS - ARTICLES LOST IN TRANSIT - GOVERNMENT LIABILITY TO VENDOR A CLAIM FOR PAYMENT FOR AN ARTICLE PURCHASED BY THE GOVERNMENT CONCERNING WHICH NO EVIDENCE OF THE RECEIPT OF THE GOODS BY THE UNITED STATES WAS OBTAINABLE, IS A MATTER FOR DIRECT SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE AS A CLAIM INVOLVING DOUBTFUL QUESTIONS OF FACT AND LAW UNDER THE PROCEDURE OUTLINED IN 5 COMP. GEN. 1058, AND NOT FOR PAYMENT BY A DISBURSING OFFICER. WHERE PURCHASE ORDER REQUIRED DELIVERY OF AN ARTICLE PREPAID "TO THE FOREST RANGER, MORAN, MICHIGAN," THE MODE OF DELIVERY BEING LEFT FOR THE VENDOR'S DETERMINATION, AND THE SALE ACT AS ENACTED IN BOTH JURISDICTIONS INVOLVED REQUIRES, AS IS THE GENERAL RULE, ACTUAL DELIVERY PRIOR TO PASSING OF TITLE WHERE THE CONTRACT REQUIRES DELIVERY TO THE BUYER, THE ALLEGED ACTION OF THE CARRIER, AS AGENT OF THE VENDOR, IN LEAVING THE SHIPMENT WITHOUT NOTICE, UNGUARDED AND UNACCOUNTED FOR AT THE RAILWAY STATION, DOES NOT CONSTITUTE THE DELIVERY REQUIRED UNDER THE CONTRACT, AND AS THE TITLE THEREFORE DID NOT PASS TO THE GOVERNMENT, AND THE LOSS OCCURRED WHILE THE TRANSPORTATION WAS STILL IN PROGRESS, THE VENDOR IS NOT ENTITLED TO PAYMENT, PARTICULARLY WHERE THE VENDOR WAS DIRECTLY IN FAULT BY REASON OF THE SELECTION OF A CARRIER WHICH HAD NO AGENT AT THE RAILWAY STATION OF DELIVERY FOR CUSTODY OR DELIVERY PURPOSES, WHEN THERE WERE AVAILABLE OTHER MEANS--- BOTH RAILWAY EXPRESS AND PARCEL POST--- PROVIDING A GREATER MEASURE OF SAFETY IN DELIVERY AND AT NO GREATER COST THAN BY FREIGHT. 3 COMP. GEN. 602 INVOLVING DELIVERY F.O.B. POINT OF SHIPMENT, AND 15 COMP. DEC. 880 WHERE THE PURCHASE ORDER SPECIFIED THE MODE OF TRANSPORTATION TO BE USED, DISTINGUISHED.

COMPTROLLER GENERAL BROWN TO LT. COL. M. T. LEGG, UNITED STATES ARMY, AUGUST 14, 1939:

REFERENCE IS MADE TO YOUR LETTER OF MAY 1, 1939, TRANSMITTED TO THIS OFFICE BY THE OFFICE OF THE CHIEF OF FINANCE, WAR DEPARTMENT, IN WHICH YOU REQUEST REVIEW OF THE AUDIT ACTION DISALLOWING CREDIT FOR THE AMOUNT OF $23.63 PAID BY LT. COL. A. J. MAXWELL, F.D. (WHOSE ACCOUNTS ARE IN YOUR CUSTODY), ON VOUCHER NO. 50 IN HIS AUGUST 1937 ACCOUNT, REPRESENTING THE AGREED PRICE FOR AN ALEMITE VOLUME GREASE GUN, WITH FITTINGS, WHICH WAS ORDERED FROM THE ALEMITE CO. OF MILWAUKEE, IS., FOR " PREPAID DELIVERY" TO THE " U.S. FOREST RANGER, MORAN, MICHIGAN," BUT WHICH WAS NOT RECEIVED BY THE UNITED STATES.

THE RECORD DISCLOSES THAT THE EQUIPMENT WAS SHIPPED BY THE VENDOR ON COMMERCIAL BILL OF LADING DATED JULY 10, 1936, OF THE CHICAGO AND NORTH WESTERN RAILWAY COMPANY, ROUTED VIA ISHPEMING AND THE DULUTH, SOUTH SHORE, AND ATLANTIC RAILWAY, AND CONSIGNED TO THE FOREST SUPERVISOR, UNITED STATES FOREST SERVICE, MORAN, MICH. MORAN IS UNDERSTOOD TO BE A "NONAGENCY" OR "PREPAID" STATION ON THE LINE OF THE LATTER ROAD, THAT IS, A STOPPING POINT WHERE NO FREIGHT AGENT IS IN ATTENDANCE. IT IS CERTIFIED BY A CONDUCTOR OF THAT LINE THAT THE CONSIGNMENT IN QUESTION WAS ACTUALLY UNLOADED BY HIM AT MORAN ON JULY 15, 1936. WITH RESPECT TO THE EFFORTS MADE BY THE FOREST SERVICE TO PICK UP THE SHIPMENT, IT IS STATED THAT A TRUCK FROM THE CAMP ORDINARILY CALLED AT THE STATIONS EACH DAY FOR THIS PURPOSE, BUT THAT ON JULY 15 THE TRAIN WAS AHEAD OF ITS USUAL SCHEDULE AND THE TRUCK DID NOT ARRIVE UNTIL SEVERAL HOURS AFTER THE TRAIN HAD LEFT. THE MEANTIME, APPARENTLY, THE GREASE GUN DISAPPEARED, AND SUBSEQUENT INQUIRY AT THE LOCAL HARDWARE AND OTHER PLACES WAS UNSUCCESSFUL IN LOCATING IT.

OVER A YEAR LATER, NOTWITHSTANDING THE FACT THAT NO EVIDENCE OF THE RECEIPT OF THE GOODS HAD BEEN OR COULD BE OBTAINED THE DISBURSING OFFICER PAID THE ITEM INSTEAD OF FORWARDING THE VOUCHER TO THIS OFFICE FOR DIRECT SETTLEMENT AS A CLAIM AGAINST THE UNITED STATES INVOLVING DOUBTFUL QUESTIONS OF FACT AND LAW. SEE IN THIS CONNECTION GENERAL ACCOUNTING OFFICE GENERAL REGULATIONS NO. 50, 5 COMP. GEN. 1058. IN JUSTIFICATION OF THE PAYMENT IT IS STATED THAT BOTH THE VENDOR AND THE CARRIER COMPLETELY EXECUTED THEIR RESPECTIVE OBLIGATIONS BY DEPOSITING THE GOODS ON THE STATION PLATFORM AT MORAN; THAT THE RISK OF LOSS THEREAFTER WAS ON THE GOVERNMENT AS THE PURCHASER; AND THAT, ACCORDINGLY, THE PURCHASE PRICE WAS PROPERLY PAID TO THE VENDOR. NO AUTHORITY OF LAW, HOWEVER, IS CITED IN SUPPORT OF SUCH STATEMENTS, THE CASE NOT BEING ONE IN WHICH ORDER AND ACCEPTANCE PROVIDED FOR DELIVERY F.O.B. THE POINT OF SHIPMENT, MILWAUKEE (3 COMP. GEN. 602), NOR ONE IN WHICH THE PURCHASE ORDER SPECIFIED THE MODE OF TRANSPORTATION TO BE USED (15 COMP. DEC. 880). THE PURCHASE ORDER IN THIS CASE REQUIRED DELIVERY PREPAID TO THE FOREST RANGER, MORAN, MICH., THE MODE OF DELIVERY BEING LEFT FOR THE VENDOR'S DETERMINATION.

UNDER THE SALES ACT (SEC. 19-5) AS ENACTED IN BOTH JURISDICTIONS HERE CONCERNED, TITLE DOES NOT PASS WHERE THE CONTRACT REQUIRES DELIVERY TO THE BUYER, UNTIL SUCH DELIVERY HAS ACTUALLY TAKEN PLACE. ( FISHER V. SUPER MOTOR SALES CO. (1929), 247 MICH. 485; ALLEN V. WOLF RIVER LUMBER CO. (1919), 169 WIS. 253, 9 A.L.R. 271), AND THIS ACCORDS WITH THE GENERAL RULE ( LOUISVILLE AND NASHVILLE RAILROAD CO. V. UNITED STATES, 267 U.S. 394). AS TO WHAT CONSTITUTES SUCH DELIVERY, IT IS HELD THAT THE RECEIPT OF THE GOODS BY AN AGENT OF THE CARRIER AT THE DESTINATION POINT IS NOT ENOUGH, AT LEAST IN THE ABSENCE OF SPECIAL CIRCUMSTANCES. PHYSICAL DELIVERY TO THE CONSIGNEE OR HIS AGENT IS REQUIRED ( FIFTH AVENUE LIBRARY SOCIETY V. GATES, 162 MICH. 667). SEE IN THIS CONNECTION 18 COMP. GEN. 909; ID. 938, AND A-86679, SEPTEMBER 9, 1937, RESTATING THE RULE THAT GOVERNMENT PURCHASES FOR DELIVERY "F.O.B;, THE REQUISITIONING BUREAU OR OFFICE AT A SPECIFIED CITY AND STATE CONTEMPLATE ACTUAL DELIVERY TO THE OFFICE NAMED, NOT MERELY TO THE NEAREST FREIGHT STATION, AND THE EXPENSE OF UNLOADING AND HAULING FROM THE DEPOT IS FOR CHARGING TO THE VENDOR. SAID IN 18 COMP. GEN. 909,"IT SEEMS CLEAR THAT IF DELIVERY AT FREIGHT SIDING IN TUCSON, ARIZ., HAD BEEN INTENDED THE CONTRACT CLAUSE WOULD HAVE READ SIMPLY "F.O.B. TUCSON, ARIZONA.'" (THERE THE INVITATION TO BID READ,"F.O.B. FEDERAL PRISON CAMP NO. 10, TUCSON, ARIZONA.'' SUCH RULE APPLIES EQUALLY WHERE THE ORDER SPECIFIES, AS HERE," PREPAID DELIVERY, U.S. FOREST RANGER, MORAN, MICHIGAN," AND IT MUST BE HELD THAT THE ALLEGED ACTION OF THE CARRIER, AS AGENT OF THE VENDOR, IN LEAVING THE SHIPMENT WITHOUT NOTICE, UNGUARDED AND UNACCOUNTED FOR AT THE RAILWAY STATION, DOES NOT CONSTITUTE A DELIVERY TO THE FOREST RANGER AS REQUIRED BY THE ORDER.

IT MUST FOLLOW THAT TITLE DID NOT PASS TO THE GOVERNMENT, AND THE LOSS OCCURRING WHILE THE TRANSPORTATION WAS STILL IN PROGRESS, THE VENDOR WAS NOT ENTITLED TO PAYMENT. SEE GARVAN V. NEW YORK CENTRAL AND HUDSON RAILROAD CO., 210 MASS. 275, 96 N.E. 717; WILLISTON ON SALES (2D ED.), SECTION 280; 16 COMP. GEN. 338; A-76593, JULY 8, 1936. THIS RULE IS PARTICULARLY FOR APPLICATION IN THE PRESENT CASE WHERE THE VENDOR WAS DIRECTLY AT FAULT IN CONNECTION WITH THE LOSS WHICH OCCURRED BY REASON OF THE SELECTION BY THE VENDOR OF A CARRIER WHICH HAD NO AGENT AT MORAN TO KEEP THE SHIPMENT IN CUSTODY OR ARRANGE FOR ITS LOCAL DELIVERY. THIS OFFICE IS INFORMED THAT THERE IS AT MORAN A LOCAL REPRESENTATIVE OF THE RAILWAY EXPRESS AGENCY, AND, ALSO, THAT THE SHIPMENT COULD HAVE BEEN MADE BY PARCEL POST. IT IS UNDERSTOOD THAT SHIPMENT EITHER BY EXPRESS OR BY PARCEL POST COULD HAVE INSURED SAFE DELIVERY AND AT NO GREATER COST THAN BY FREIGHT. UNDER SUCH CIRCUMSTANCES, IT IS NOT APPARENT WHY THE VENDOR ELECTED TO MAKE THE SHIPMENT BY FREIGHT WHEN OTHER AND MORE ADVANTAGEOUS MODES WERE AVAILABLE, BUT, IN ANY EVENT, SINCE A LOSS OCCURRED AS A RESULT OF SUCH ELECTION, MANIFESTLY IT MUST BE BORNE BY THE PARTY AT FAULT. SEE A 30224, MAY 29, 1930.

FOR THE REASONS STATED HEREIN THE DISALLOWANCE IN THE ACCOUNTS OF LIEUTENANT COLONEL MAXWELL IS SUSTAINED AND THE AMOUNT SHOULD BE DEPOSITED WITHOUT DELAY.