B-63628, FEBRUARY 20, 1947, 26 COMP. GEN. 618

B-63628: Feb 20, 1947

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THE MEASURE OF DAMAGES IS NOT THE OPA CEILING PRICE THEN IN EFFECT FOR THE SALE OF THE VEHICLE BUT. IS THE FAIR AND REASONABLE MARKET VALUE OF THE VEHICLE IMMEDIATELY BEFORE THE ACCIDENT. IF SUCH VALUE WAS GREATER THAN THE OPA CEILING PRICE. THE COST OF REMOVING TO STORAGE A GOVERNMENT VEHICLE DAMAGED BY A PRIVATELY OWNED TRUCK AND THE COST OF STORAGE WHILE SETTLEMENT IS BEING NEGOTIATED ARE ELEMENTS OF DAMAGES SUFFERED BY THE UNITED STATES AND SHOULD BE RECOVERED FROM THE PERSON WHOSE NEGLIGENCE CAUSED THE DAMAGES. THE RECOVERY OF DAMAGES ON ACCOUNT OF AN ACCIDENT BETWEEN A GOVERNMENT- OWNED VEHICLE AND A PRIVATELY OWNED TRUCK IS NOT A SALE OR EXCHANGE OF THE VEHICLE AS CONTEMPLATED BY SECTION 8 OF THE ADMINISTRATIVE EXPENSE STATUTE OF AUGUST 2.

B-63628, FEBRUARY 20, 1947, 26 COMP. GEN. 618

PROPERTY - PUBLIC - GOVERNMENT VEHICLE DAMAGED IN ACCIDENT - MEASURE OF DAMAGE; DISPOSITION OF DAMAGES RECOVERED; SETTLEMENT JURISDICTION WHERE THE INSURANCE COMPANY REPRESENTING THE OWNER OF A TRUCK WHICH DAMAGED A GOVERNMENT VEHICLE IN AN ACCIDENT PROPOSES TO MAKE SETTLEMENT ON THE BASIS OF THE VALUE OF THE VEHICLE AT THE TIME OF THE ACCIDENT, TAKING THE WRECKAGE FOR ITS SALVAGE VALUE, THE MEASURE OF DAMAGES IS NOT THE OPA CEILING PRICE THEN IN EFFECT FOR THE SALE OF THE VEHICLE BUT, RATHER, IS THE FAIR AND REASONABLE MARKET VALUE OF THE VEHICLE IMMEDIATELY BEFORE THE ACCIDENT, IF SUCH VALUE WAS GREATER THAN THE OPA CEILING PRICE. THE COST OF REMOVING TO STORAGE A GOVERNMENT VEHICLE DAMAGED BY A PRIVATELY OWNED TRUCK AND THE COST OF STORAGE WHILE SETTLEMENT IS BEING NEGOTIATED ARE ELEMENTS OF DAMAGES SUFFERED BY THE UNITED STATES AND SHOULD BE RECOVERED FROM THE PERSON WHOSE NEGLIGENCE CAUSED THE DAMAGES. THE RECOVERY OF DAMAGES ON ACCOUNT OF AN ACCIDENT BETWEEN A GOVERNMENT- OWNED VEHICLE AND A PRIVATELY OWNED TRUCK IS NOT A SALE OR EXCHANGE OF THE VEHICLE AS CONTEMPLATED BY SECTION 8 OF THE ADMINISTRATIVE EXPENSE STATUTE OF AUGUST 2, 1946, PURSUANT TO WHICH EXCHANGE ALLOWANCES OR PROCEEDS OF SALES MAY BE APPLIED IN WHOLE OR IN PART PAYMENT TOWARD THE PURCHASE PRICE OF NEW VEHICLES; INSTEAD, THE AMOUNT RECOVERED SHOULD BE DEPOSITED AND COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS AS REQUIRED BY SECTION 3617, REVISED STATUTES. THE DETERMINATION AS TO THE AMOUNT OF DAMAGES THAT SHOULD BE RECOVERED ON ACCOUNT OF DAMAGE TO A GOVERNMENT-OWNED VEHICLE OCCASIONED BY AN ACCIDENT PRIMARILY IS FOR ADMINISTRATIVE CONSIDERATION, ADJUSTMENT AND SETTLEMENT; HOWEVER, WHERE A SATISFACTORY SETTLEMENT CANNOT BE EFFECTED ADMINISTRATIVELY, THE CLAIM MAY BE FORWARDED TO THE CLAIMS DIVISION OF THE GENERAL ACCOUNTING OFFICE ACCOMPANIED BY A COMPLETE REPORT OF ALL PERTINENT FACTS.

COMPTROLLER GENERAL WARREN TO THE CHAIRMAN, INTERSTATE COMMERCE COMMISSION, FEBRUARY 20, 1947:

THERE WAS RECEIVED FEBRUARY 11 YOUR LETTER DATED JANUARY 7, 1947, AS FOLLOWS:

THERE IS SUBMITTED HEREWITH FOR YOUR CONSIDERATION AND DECISION THE CORRESPONDENCE AND REPORT REGARDING AN ACCIDENT WHICH OCCURRED ON OCTOBER 28, 1946 BETWEEN ICC CAR NO. 52 (A 1940 MODEL, STANDARD FORD COUPE) AND A TRUCK OWNED BY THE TALLADEGA PRODUCE CO. OF TALLADEGA, ALA., AS FURTHER DESCRIBED IN THE ATTACHMENTS.

IT WILL BE NOTED FROM A LETTER DATED JANUARY 3, 1947 THAT THE EMPLOYERS INSURANCE CO. OF ALABAMA, WHICH SEEMS TO REPRESENT THE TRUCK OWNER ACKNOWLEDGES THAT THE BLAME WAS ENTIRELY THAT OF THE INSURED, AND OFFERS TO MAKE A SETTLEMENT ON THE BASIS OF TAKING OVER THE DAMAGED CAR AND PAYING THE GOVERNMENT THE FULL VALUE THEREOF, WHICH IT ESTIMATES TO BE BETWEEN $600 AND $700. IT WILL BE SEEN FROM THE CORRESPONDENCE THAT IT APPEARS THAT THE OPA CEILING PRICE OF THIS CAR ON THE DATE OF THE ACCIDENT WAS $672.75 WHEN EQUIPPED WITH A HEATER, AND THAT THERE MIGHT BE AN ADDITIONAL ALLOWANCE FOR THE FOG-LIGHT WITH WHICH IT WAS EQUIPPED.

HOWEVER THE CAR HAD BEEN RUN LESS THAN 40,000 MILES, AND WAS IN SUCH CONDITION THAT IT PROBABLY WOULD HAVE BEEN USED FOR AT LEAST TWO YEARS MORE, BEFORE BEING TURNED IN ON A NEW ONE. INASMUCH AS THE NUMBER OF NEW CARS THAT CAN BE PURCHASED BY THE COMMISSION IN 1947 IS LIMITED, AND IT WAS PLANNED TO CONTINUE THE USE OF THE SUBJECT CAR FOR AN INDEFINITE PERIOD, ITS VALUE TO THE COMMISSION CANNOT BE MEASURED BY THE OPA CEILING ON OCT. 28, 1946.

IN ADDITION TO THE LOSS ON THE CAR, THERE IS AN ITEM OF 50 CENTS PER DAY FOR DEAD STORAGE FROM THE TIME OF THE ACCIDENT, UNTIL THE INSURANCE CO. ASSUMES POSSESSION OF THE CAR. THIS CAR WAS ASSIGNED TO OUR ATLANTA OFFICE AT WHICH POINT WE HAD A CONTRACT FOR GARAGING IT WHEN IT WAS THERE OVER NIGHT. OUR CONTRACT WITH THE BANKHEAD GARAGE AT BIRMINGHAM WHERE WE ALSO HAVE A BRANCH OFFICE PROVIDES FOR A RATE OF $10.00 PER MONTH FOR REGULAR STORAGE, AND 50 CENTS PER DAY FOR CARS OTHER THAN THOSE ASSIGNED TO BIRMINGHAM.

THEN, THERE IS, OF COURSE, THE MATTER OF THE LOSS OF THE USE OF THE CAR PENDING SETTLEMENT OF THE CASE.

IN VIEW OF THE SITUATION AS OUTLINED, WE HAVE THE FOLLOWING QUESTIONS ON WHICH WE WOULD LIKE YOUR DECISION:

1. IF THE INSURANCE COMPANY SETTLES ON THE BASIS OF THE VALUE OF THE CAR ON DATE OF ACCIDENT, TAKING THE WRECK FOR ITS SALVAGE VALUE, CAN IT CLAIM THE OPA CEILING AT THE TIME AS THE MAXIMUM FOR WHICH IT CAN BE HELD LIABLE? IS THE GOVERNMENT BOUND BY THE OPA CEILINGS UNDER SUCH CIRCUMSTANCES?

2. CAN THE INSURANCE COMPANY BE HELD LIABLE FOR STORAGE CHARGES, WHILE SETTLEMENT IS BEING NEGOTIATED OR WILL THE COMMISSION BE COMPELLED TO PAY THEM? IF THE LATTER, WILL THAT REDUCE THE AMOUNT THAT CAN BE CREDITED ON A NEW CAR PROVIDED QUESTION NO. 3 IS ANSWERED IN THE AFFIRMATIVE?

3. UNDER FORMER LAWS AND DECISIONS ANY AMOUNTS RECOVERED FOR LOSS OR DAMAGE TO GOVERNMENT PROPERTY WERE FOR CREDITING TO MISCELLANEOUS RECEIPTS. HOWEVER SEC. 8 OF PUBLIC LAW 600--- 79TH CONGRESS, APPROVED AUGUST 2, 1946, WOULD SEEM TO AUTHORIZE THE CREDITING OF THE AMOUNT RECOVERED TO SPECIAL DEPOSIT ACCOUNT (30) 6690 FOR APPLICATION AGAINST THE PURCHASE PRICE OF A NEW CAR. THIS MATTER IS VERY IMPORTANT, BECAUSE OF THE APPROPRIATION LIMITATIONS IN THE PURCHASE OF PASSENGER AUTOMOBILES.

4. IF YOUR DECISION DOES NOT FOLLOW THE VIEWS OF THE INSURANCE COMPANY AS TO THE VALUE OF THE CAR AND/OR COLLATERAL DAMAGES, SHOULD THE CASE BE SUBMITTED TO YOUR OFFICE FOR SETTLEMENT? IF NOT WE WILL APPRECIATE YOUR SUGGESTION FOR ITS PROPER HANDLING.

IN VIEW OF THE NEED OF THE COMMISSION TO REPLACE THE DAMAGED CAR AS SOON AS POSSIBLE, YOUR EARLY DECISION WILL BE GREATLY APPRECIATED.

IF, AS STATED, THE INSURANCE COMPANY HAS ASSUMED LIABILITY FOR THE DAMAGES TO THE GOVERNMENT-OWNED AUTOMOBILE, THE MEASURE OF DAMAGES IS THE AMOUNT WHICH WILL COMPENSATE FOR ALL OF THE DETRIMENT PROXIMATELY CAUSED ON ACCOUNT OF THE ACCIDENT. IF THE AUTOMOBILE CAN BE REPAIRED, THE MEASURE OF DAMAGES IS THE COST OF REPAIRS AND THE VALUE OF THE LOSS OF ITS USE WHILE BEING REPAIRED. IF DAMAGED BEYOND REPAIR, THE MEASURE OF DAMAGES IS THE DIFFERENCE BETWEEN THE MARKET VALUE BEFORE THE ACCIDENT AND THE SALVAGE VALUE OF THE WRECKAGE. WHEN TOTALLY DESTROYED, THE MEASURE OF DAMAGES IS ITS REASONABLE MARKET VALUE BEFORE ITS DESTRUCTION. SEE 5 AM. JUR. 905.

SPECIFICALLY, IN REPLY TO QUESTION NO. 1, YOU ARE ADVISED THAT, IF THE INSURANCE COMPANY SETTLES ON THE BASIS OF THE VALUE OF THE CAR AT THE TIME OF THE ACCIDENT, TAKING THE WRECKAGE FOR ITS SALVAGE VALUE, THE AMOUNT OF THE GOVERNMENT'S CLAIM NEED NOT BE LIMITED TO THE OPA CEILING PRICE THEN IN EFFECT BUT THE GOVERNMENT WOULD BE ENTITLED TO THE FAIR AND REASONABLE MARKET VALUE OF THE AUTOMOBILE IMMEDIATELY BEFORE THE COLLISION, IF SUCH VALUE WAS GREATER THAN THE CEILING PRICE FIXED BY THE OPA FOR THE SALE OF THE CAR. SEE ROSS PRODUCE CO. V. THOMPSON, ET AL. ( IOWA), 20 N.W.2D 7; AND SOUTHERN RAILWAY CO. V. FARMER ( GEORGIA), 39 S.E.2D 714. IN THE ROSS PRODUCE CO. CASE, THE SUPREME COURT OF IOWA, AFTER POINTING OUT THAT THE EMERGENCY PRICE CONTROL ACT OF 1942, AS AMENDED, 50 U.S.C., APPENDIX, SECTION 901, ET SEQ., HAD AS ITS PURPOSE THE PLACING OF A CEILING LIMIT ON PRICES IN "SALES" OF COMMODITIES, SERVICES, ETC., STATED (PAGE 61) AS FOLLOWS:

* * * SURELY IT WAS NEVER ENACTED TO PLACE A CEILING UPON RECOVERIES FOR PROPERTY LOSSES UNDER INSURANCE POLICIES, OR FOR RECOVERIES FOR INJURY TO OR DESTRUCTION OF PROPERTY BY TORTFEASORS OR OTHER WRONGDOERS, AND THUS SERVE TO RELIEVE THEM OF MAKING JUST COMPENSATION FOR INJURIES CAUSED BY THEIR WRONGDOING. THESE ADJUSTMENTS COULD NEVER BE A SERIOUS FACTOR IN THE BATTLE AGAINST INFLATION. THE MATTER BETWEEN THE PARTIES RESULTING FROM THE COLLISION OF THE VEHICLES IS NOT A VOLUNTARY SALE OF THE TRUCK OR ANY OTHER TRANSACTION WITHIN THE PURVIEW OF THE ACT, BUT IT IS A CLAIM FOR DAMAGES OF APPELLEE AGAINST APPELLANTS FOR THEIR NEGLIGENT DESTRUCTION OF ITS PROPERTY. * * *

AS TO QUESTION NO. 2, YOU ARE ADVISED THAT THE COST OF REMOVING THE AUTOMOBILE TO STORAGE AND THE COST OF STORAGE ARE ELEMENTS OF DAMAGES SUFFERED BY THE UNITED STATES AND SHOULD BE RECOVERED FROM THE PERSON WHOSE NEGLIGENCE CAUSED THE DAMAGES. APPARENTLY, THE INSURANCE COMPANY HAS ASSUMED LIABILITY IN THIS CASE. HOWEVER, THE RECOVERY OF SUCH DAMAGES WILL NOT AFFECT THE AMOUNT AVAILABLE FOR CREDIT TOWARD THE PURCHASE OF A NEW CAR SINCE QUESTION NO. 3 IS BEING ANSWERED IN THE NEGATIVE.

WITH RESPECT TO SAID QUESTION NO. 3, SECTION 8 OF THE ACT OF AUGUST 2, 1946, PUBLIC LAW 600, 79TH CONGRESS, 60 STAT. 808, PROVIDES:

IN PURCHASING MOTOR-PROPELLED OR ANIMAL-DRAWN VEHICLES OR TRACTORS, OR ROAD, AGRICULTURAL, MANUFACTURING, OR LABORATORY EQUIPMENT, OR BOATS, OR PARTS, ACCESSORIES, TIRES, OR EQUIPMENT THEREOF, OR ANY OTHER ARTICLE OR ITEM THE EXCHANGE OF WHICH IS AUTHORIZED BY LAW, THE HEAD OF ANY DEPARTMENT OR HIS DULY AUTHORIZED REPRESENTATIVE MAY EXCHANGE OR SELL SIMILAR ITEMS AND APPLY THE EXCHANGE ALLOWANCES OR PROCEEDS OF SALES IN SUCH CASES IN WHOLE OR IN PART PAYMENT THEREFOR: PROVIDED, THAT ANY TRANSACTION CARRIED OUT UNDER THE AUTHORITY OF THIS SECTION SHALL BE EVIDENCED IN WRITING.

IT IS OBVIOUS THAT SAID STATUTE DOES NOT AUTHORIZE THE APPLICATION OF MONEYS RECOVERED AS DAMAGES ON ACCOUNT OF AN ACCIDENT TOWARD THE PURCHASE PRICE OF REPLACEMENT EQUIPMENT. THE RECOVERY OF DAMAGES IS NOT A SALE OR EXCHANGE AS CONTEMPLATED BY THE STATUTE AND ANY AMOUNT RECOVERED AS DAMAGES IN THE INSTANT CASE SHOULD BE DEPOSITED AND COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS AS REQUIRED BY SECTION 3617, REVISED STATUTES. SEE 14 COMP. DEC. 87; 20 ID. 349; 22 ID. 379; 3 COMP. GEN. 808; 5 ID. 928; AND 15 ID. 683.

AS TO QUESTION NO. 4, YOU ARE ADVISED THAT THE MATTER OF THE GOVERNMENT'S CLAIM PRIMARILY IS FOR ADMINISTRATIVE CONSIDERATION, ADJUSTMENT, AND SETTLEMENT BUT, IN CASE SATISFACTORY SETTLEMENT CANNOT BE EFFECTED, THE CLAIM MAY BE FORWARDED TO THE CLAIMS DIVISION OF THE GENERAL ACCOUNTING OFFICE ACCOMPANIED BY A COMPLETE REPORT OF THE PERTINENT FACTS INCLUDING AN ADMINISTRATIVE DETERMINATION AS TO THE FAIR MARKET VALUE OF THE DAMAGED CAR, THE TOWING AND STORAGE COSTS INCURRED, AND THE NATURE AND AMOUNT OF ANY OTHER ITEMS OF DAMAGE SUSTAINED BY THE GOVERNMENT AS A RESULT OF THE ACCIDENT.