MARCH 8, 1924, 3 COMP. GEN. 602

MARCH 8, 1924, 3 COMP. GEN. 602

CONTRACTS - GOODS LOST IN TRANSIT UNDER A CONTRACT FOR SUPPLIES TO BE FURNISHED F.O.B. POINT OF SHIPMENT, SUBJECT TO INSPECTION AT DESTINATION, THE TITLE TO THE GOODS PASSES TO THE GOVERNMENT WHEN DELIVERED TO THE CARRIER PROPERLY PACKED, SUBJECT TO THE RIGHT OF REJECTION AT DESTINATION AS TO SUCH OF THE SUPPLIES AS DID NOT CONFORM TO SPECIFICATIONS, AND THE CONTRACTOR IS NOT LIABLE FOR ANY LOSSES IN TRANSIT.

DECISION BY COMPTROLLER GENERAL MCCARL, MARCH 8, 1924:

THE CITRO CHEMICAL CO. REQUESTED JANUARY 2, 1924, REVIEW OF SETTLEMENT NO. 6-W, DATED DECEMBER 19, 1923, CHARGING THE AMERICAN BROMINE CO. WITH $271.80 ITEMIZED AS $92.40 UNDER AN AGREEMENT DATED MARCH 8, 1918, AND $179.40 UNDER AN AGREEMENT DATED MAY 1, 1918, FOR 453 POUNDS OF BROMINE AT 60 CENTS A POUND LOST IN TRANSIT OF SHIPMENTS FROM MIDLAND, MICH., TO THE UNITED STATES AT CLEVELAND, OHIO, AND EDGEWOOD ARSENAL, MD. THE SETTLEMENT WAS IN ACCORDANCE WITH A WAR DEPARTMENT CERTIFICATION, DATED JUNE 8, 1923, OF THE INDEBTEDNESS TO THIS OFFICE FOR COLLECTION UNDER SECTION 236, REVISED STATUTES, AS AMENDED BY THE ACT OF JUNE 10, 1921, 42 STAT., 24, AND THE CITRO CHEMICAL CO., AS SUCCESSOR TO THE AMERICAN BROMINE CO., DISCLAIMS RESPONSIBILITY ON THE GROUND THAT THE BROMINE WAS DELIVERED F.O.B. MIDLAND, MICH.

THE AGREEMENT OF MARCH 8, 1918, REQUIRED THE DELIVERY AT 60 CENTS A POUND OF 63,750 POUNDS OF BROMINE "IN GLASS-STOPPERED BOTTLES WHICH ARE TO BE CHARGED FOR AND CREDITED AT THE SAME PRICE WHEN RETURNED IN GOOD ORDER," AND DELIVERED "F.O.B. CARS AT OR NEAR THE POINT OF MANUFACTURE.' THE AGREEMENT OF MAY 1, 1918, REQUIRED THE DELIVERY, AT 60 CENTS A POUND, OF 25,000 POUNDS OF BROMINE "F.O.B. CARS AT OR NEAR THE POINT OF MANUFACTURE," SHIPMENTS TO BE MADE "IN GLASS-STOPPERED BOTTLES PACKED IN MINERAL WOOL IN SPECIAL CASES" WHICH WERE TO BE CHARGED FOR AT $6 A CASE.

UNDER THE AGREEMENT DATED MARCH 8, 1918, THE CONTRACTOR APPEARS TO HAVE DELIVERED 51,456 POUNDS OF BROMINE AT 60 CENTS A POUND, AMOUNTING TO $30,873.60, EXCLUDING NET PAYMENTS OF $2,502 FOR PACKING CASES. SETTLEMENT AGREEMENT DATED FEBRUARY 20, 1919, THE UNITED STATES ALLOWED THE CONTRACTOR $386.46 BY REASON OF THE CANCELLATION OF FURTHER DELIVERIES UNDER SAID AGREEMENT. PAYMENTS FOR THE DELIVERIES OF 51,456 POUNDS OF BROMINE APPEAR TO HAVE BEEN MADE PRIOR TO RECEIPT OR INSPECTION AND IN WAR DEPARTMENT PROPERTY AUDIT ON OR ABOUT MAY 25, 1923, A CHARGE WAS CERTIFIED AGAINST THE CONTRACTOR:

* * * BASED ON A SHORTAGE OF 154 LBS. OF BROMINE OF THAT DELIVERED BY HIM UNDER THE DELIVERED PORTION OF THE CONTRACT AND FOR WHICH HE WAS PAID AT THE RATE OF $0.60 PER LB., AGGREGATING A TOTAL VALUE OF $92.40, FOR WHICH CLAIM IS MADE AGAINST HIM FOR REFUND. THIS SHORTAGE IS FOUND TO HAVE OCCURRED IN SHIPMENT OF 485 LBS. ON CONTRACTOR'S INVOICE NO. 113, DATED OCT. 2, 1918, SHIPPED IN CASES NOS. 567 TO 571, INCLUSIVE, * * *.

UNDER THE AGREEMENT OF MAY 1, 1918, THE CONTRACTOR APPEARS TO HAVE MADE DELIVERY OF AND RECEIVED PAYMENT OF 3,584 POUNDS AT 60 CENTS A POUND, INCLUDING 37 CASES AT $6 EACH, OR $2,372.40. BY SETTLEMENT AGREEMENT DATED APRIL 3, 1919, THE UNITED STATES ALLOWED THE CONTRACTOR $1,661.54 BY REASON OF THE CANCELLATION OF FURTHER DELIVERIES UNDER THE ORIGINAL AGREEMENT OF MAY 1, 1918. PAYMENTS FOR THE DELIVERIES OF 3,584 POUNDS OF BROMINE APPEAR TO HAVE BEEN MADE PRIOR TO RECEIPT OF INSPECTION, AND IN WAR DEPARTMENT PROPERTY AUDIT ON OR ABOUT MAY 25, 1923, IT WAS FOUND THAT:

* * * OF THE BROMINE PAID FOR UNDER THE DELIVERED PORTION OF THE CONTRACT, 299 LBS. WAS SUPPLIED BY THE CONTRACTOR TO REPLACE A LIKE AMOUNT WHICH WAS FOUND SHORT UPON RECEIPT OF A SHIPMENT OF 480 LBS. ON CONTRACTOR'S INVOICE NO. 111, DATED SEPT. 19, 1918, IN CASES NOS. 533 TO 537, INCLUSIVE. THERE ARE INCLOSED HEREWITH COPIES OF VARIOUS COMMUNICATIONS BETWEEN THE EDGEWOOD PLANT AND THE CLEVELAND PLANT OF THE EDGEWOOD ARSENAL AND BETWEEN THE DEPARTMENTS RELATIVE TO THIS SHORTAGE. INASMUCH AS THE CONTRACTOR HAD BEEN PAID FOR THIS MATERIAL ON THE ORIGINAL BILLING AT THE TIME OF THE ORIGINAL SHIPMENT, THE PAYMENT FOR SAME THE SECOND TIME, ON THE REPLACEMENT SHIPMENT, ON VOUCHER NO. 10659 WAS ERRONEOUSLY MADE AND CONSTITUTES AN OVERPAYMENT IN THE AMOUNT OF THE VALUE OF THE 299 LBS. AT $0.60 PER LB. OR $179.40, CHARGE FOR WHICH IS MADE AGAINST THE CONTRACTOR. AS WILL BE NOTED FROM THE INCLOSED CORRESPONDENCE, IT WAS THE INTENTION OF THE CONTRACTOR TO MAKE CLAIM AGAINST THE CARRIER FOR THE VALUE OF THIS SHORTAGE WHICH OCCURRED IN SHIPMENT, * * *.

RELATIVE TO THE CHARGE OF $92.40 UNDER THE AGREEMENT OF MARCH 18, 1918, FOR LOSS OF 154 POUNDS OF BROMINE IN TRANSIT AND TO THE CHARGE OF $179.40 UNDER THE AGREEMENT OF MAY 1, 1918, FOR 299 POUNDS OF BROMINE, DELIVERY BY THE CONTRACTOR MADE NECESSARY BY REASON OF LOSS IN SHIPMENT OF A SIMILAR QUANTITY, IT IS STATED IN THE PAPERS ACCOMPANYING THE CERTIFICATE OF JUNE 8, 1923, OF THE INDEBTEDNESS THAT:

THIS OFFICE IS OF THE OPINION THAT THE SHIPMENT OF THIS MATERIAL WAS A TRANSACTION BETWEEN THE CONTRACTOR AND THE CARRIER, THAT COLLECTION FOR THE VALUE OF THIS SHORTAGE IS A MATTER TO BE ADJUSTED BY AND BETWEEN THEM AND THAT REFUND SHOULD BE MADE BY THE CONTRACTOR TO THE UNITED STATES FOR THE VALUE OF THIS MATERIAL, ERRONEOUSLY PAID HIM, PARTICULARLY AS THE CONTRACT SPECIFIED INSPECTION AT POINT OF DESTINATION.

THE GLASS STOPPERS APPEAR TO HAVE BEEN FASTENED IN THE BOTTLES BY MEANS OF PLASTER OF PARIS SEALS AND THE BOTTLES PACKED IN BOXES MARKED "THIS SIDE UP.' THE HANDLING DIRECTIONS ON THE BOXES DO NOT APPEAR TO HAVE BEEN OBSERVED, WITH THE RESULT THAT SOME OF THE STOPPERS CAME OUT OF THE BOTTLES AND 154 POUNDS OF BROMINE IN ONE SHIPMENT AND 299 POUNDS IN ANOTHER WERE LOST IN TRANSIT. BOTH AGREEMENTS SPECIFIED A PRICE OF 60 CENTS A POUND F.O.B. CARS AT OR NEAR POINT OF MANUFACTURE, SUBJECT TO INSPECTION AT DESTINATION.

THERE IS NO CONTENTION THAT THE BROMINE WAS NOT IN ACCORDANCE WITH THE SPECIFICATIONS NOR THAT IT WAS NOT PACKED IN ACCORDANCE WITH USUAL COMMERCIAL PRACTICES AND IN BOXES, SPECIFIED IN THE AGREEMENTS, FOR THAT PURPOSE. UNDER SUCH CIRCUMSTANCES, THE CONTRACTOR WAS NOT RESPONSIBLE FOR THE FAILURE OF THE CARRIERS TO OBSERVE SHIPPING INSTRUCTIONS STENCILED ON THE BOXES, NOR FOR THE BROMINE AFTER DELIVERY TO THE CARRIER. TITLE TO THE BROMINE PASSED UNDER THESE AGREEMENTS TO THE UNITED STATES ON DELIVERY TO THE CARRIERS WITH THE RIGHT OF REJECTION AT DESTINATION AS TO THAT WHICH DID NOT CONFORM TO SPECIFICATIONS. SEE UNITED STATES V. ANDREWS AND CO., 207 U.S., 299

THE RECOURSE OF THE UNITED STATES FOR THE LOSS IN TRANSIT IN THIS CASE IS NOT AGAINST THE CONTRACTOR, WHOSE RESPONSIBILITY CEASED UPON DELIVERY TO THE CARRIER PROPERLY PACKED FOR SHIPMENT. UPON REVIEW THE SETTLEMENT IS REVERSED AND THE CHARGE OF $271.80 AGAINST THE CONTRACTOR IS REMOVED.