B-147781, MARCH 24, 1969, 48 COMP. GEN. 638

B-147781: Mar 24, 1969

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MAY NOT BE REFUNDED TO THE CARRIER ON THE BASIS THE LOADING RECORDS WERE ONLY A "SHIPPER'S COUNT AND WEIGHT" AND WERE INACCURATE. THE SHIP'S LOG ARE IN AGREEMENT AS TO THE NUMBER AND WEIGHT OF THE BAGS OF RICE LOADED AND THE RECORD IS NOT IMPEACHED BY THE DAILY LOADING HATCH REPORTS NOR BY THE UNLOADING TALLY SLIPS. THE ACTION TO RECOVER THE LOSS WILL NOT BE DISTURBED. SUBSTANTIAL BECAUSE PROCEEDINGS BY THE UNITED STATES GENERAL ACCOUNTING OFFICE ARE NOT COMPARABLE TO JUDICIAL PROCEEDINGS. IN THE ABSENCE OF PLAIN AND CONVINCING PROOF BEYOND REASONABLE CONTROVERSY THAT THE RECORDS PREPARED BY THE ARMY AT A PORT OF ORIGIN IN THE UNITED STATES OF A SHIPMENT OF RICE TO AN OVERSEAS DESTINATION WAS IN ERROR.

B-147781, MARCH 24, 1969, 48 COMP. GEN. 638

PROPERTY--PUBLIC--DAMAGE, LOSS, ETC.--SHORTAGES--EVIDENCE THE DEDUCTION MADE FROM AMOUNTS OWING AN OCEAN CARRIER TO REIMBURSE THE GOVERNMENT FOR AN UNEXPLAINED SHORTAGE IN A 1950 ARMY SHIPMENT OF RICE UNDER A GOVERNMENT BILL OF LADING FROM STOCKTON, CALIFORNIA TO KOBE, JAPAN, MAY NOT BE REFUNDED TO THE CARRIER ON THE BASIS THE LOADING RECORDS WERE ONLY A "SHIPPER'S COUNT AND WEIGHT" AND WERE INACCURATE, WHERE THE BILL OF LADING, THE ARMY MANIFEST, AND THE SHIP'S LOG ARE IN AGREEMENT AS TO THE NUMBER AND WEIGHT OF THE BAGS OF RICE LOADED AND THE RECORD IS NOT IMPEACHED BY THE DAILY LOADING HATCH REPORTS NOR BY THE UNLOADING TALLY SLIPS. THE PRESUMPTION OF CORRECTNESS IN THE RECORD OF THE NUMBER OF BAGS LOADED SUPPORTING THE SETOFF BY THE ARMY ALMOST 16 YEARS AGO TO RECOVER THE VALUE OF LOST UNITED STATES PROPERTY, THE ACTION TO RECOVER THE LOSS WILL NOT BE DISTURBED. EVIDENCE--PREPONDERANCE V. SUBSTANTIAL BECAUSE PROCEEDINGS BY THE UNITED STATES GENERAL ACCOUNTING OFFICE ARE NOT COMPARABLE TO JUDICIAL PROCEEDINGS, THE OFFICE DOES NOT SETTLE CLAIMS AND MAKE DETERMINATIONS SUBJECT TO A "PREPONDERANCE OF THE EVIDENCE," EXCEPT AS THAT TERM MAY BE EQUATED WITH CLEAR AND CONVINCING EVIDENCE. THEREFORE, IN THE ABSENCE OF PLAIN AND CONVINCING PROOF BEYOND REASONABLE CONTROVERSY THAT THE RECORDS PREPARED BY THE ARMY AT A PORT OF ORIGIN IN THE UNITED STATES OF A SHIPMENT OF RICE TO AN OVERSEAS DESTINATION WAS IN ERROR, THE PRIMA FACIE CASE IN FAVOR OF THE GOVERNMENT HAS NOT BEEN OVERCOME AND THE OCEAN CARRIER IS LIABLE FOR THE SHORTAGE OF RICE AT THE DESTINATION OF THE SHIPMENT.

TO THE STATES MARINE LINES, INC; MARCH 24, 1969:

ON NOVEMBER 29, 1967, MR. MILTON C. GRACE, YOUR ATTORNEY, REQUESTED RECONSIDERATION OF OUR DECISION OF SEPTEMBER 21, 1967, B 147781, WHICH DECLINED TO REVIEW ON ITS MERITS, PURSUANT TO YOUR REQUEST OF JULY 10, 1967, THE SETTLEMENT CERTIFICATE DATED APRIL 26, 1962.

THE CERTIFICATE IN QUESTION DISALLOWED A CLAIM FILED WITH THE DEPARTMENT OF THE ARMY ON JANUARY 25, 1961, WHICH WAS FORWARDED TO THE GENERAL ACCOUNTING OFFICE FOR SETTLEMENT ON FEBRUARY 15, 1961. THE CLAIM WAS FOR $21,830.40 COLLECTED BY THE DEPARTMENT OF THE ARMY ON OCTOBER 5, 1953, FROM AMOUNTS OTHERWISE DUE THE STATES MARINE LINES, INC; BECAUSE OF A LOSS OF 4,195 SACKS OF RICE SHIPPED UNDER GOVERNMENT BILL OF LADING NO. WV- 9698659. THE RICE WAS LOADED ABOARD THE SS. WESTPORT, WHICH SAILED FROM STOCKTON, CALIFORNIA, ON JANUARY 15, 1950. THE BASIS FOR THE CLAIM IS THAT THE BILL OF LADING, THE BRIDGE LOG BOOK AND THE ARMY MANIFEST SHOW THAT 45,696 BAGS OF RICE WERE LOADED ABOARD AT THE PORT OF STOCKTON, AND 41,501 BAGS WERE OFF-LOADED AT KOBE, JAPAN.

SUBSEQUENT TO THE ARMY'S DEDUCTION ON OCTOBER 5, 1953, A COMPLETE INVESTIGATION AND SURVEY WAS MADE OF ALL AVAILABLE RECORDS PERTAINING TO THE LOADING AND DISCHARGE OF THIS CARGO OF RICE. ON AUGUST 12, 1955, THE ARMY ADVISED STATES MARINE LINES IN DETAIL OF THE INFORMATION ON WHICH RELIANCE WAS PLACED IN CONCLUDING THE VESSEL WAS LIABLE FOR THE UNEXPLAINED SHORTAGE OF 4,195 BAGS OF RICE; IT WAS EMPHASIZED THAT THE RECORDS AVAILABLE AT STOCKTON ESTABLISHED THAT THE AMOUNT OF RICE WHICH THE VESSEL ACKNOWLEDGED AS HAVING BEEN LOADED WAS ACTUALLY PUT ABOARD.

NO FURTHER ACTION WAS TAKEN IN THIS MATTER UNTIL JANUARY 25, 1961, WHEN STATES MARINE LINES, THROUGH MR. GRACE, PRESENTED ITS CLAIM FOR $21,830.40. MR. GRACE SUPPORTED THE CLAIM WITH TWO PROPOSITIONS: (1) THAT NO SETOFF SHOULD HAVE BEEN MADE AGAINST UNRELATED ACCOUNTS OF THE STATES MARINE LINES, AND (2) THAT THE LOADING RECORDS OF STOCKTON WERE NOT RELIABLE AND DID NOT ACCURATELY REFLECT THAT 45,696 BAGS OF RICE WERE LOADED.

THE SETTLEMENT CERTIFICATE OF APRIL 26, 1962, ANSWERS BOTH PROPOSITIONS AND, WITH REGARD TO THE LOADING RECORDS AT STOCKTON, INDICATES THAT THE ARMY MANIFEST, THE BILL OF LADING AND THE HATCH CLERK REPORTS SHOW THAT 45,696 BAGS OF RICE, WEIGHING 2,055.3 LONG TONS WERE LOADED; THE VESSEL'S LOG AND THE HATCH CLERK REPORTS AGAIN VERIFIED THAT 2,056 LONG TONS WERE LOADED ABOARD THE VESSEL. THE DISALLOWANCE IN THE SETTLEMENT CERTIFICATE IS THUS PREMISED ON THE FACT THAT THE VESSEL HAS NOT REBUTTED THE ORIGIN LOADING RECORDS WHICH ESTABLISH THAT 45,696 BAGS OF RICE WERE LOADED.

FIVE YEARS LATER, ON JULY 10, 1967, MR. GRACE REQUESTED REVIEW OF THE SETTLEMENT CERTIFICATE. THE PRESENTATION MADE IN SUPPORT OF THIS REQUEST FOR REVIEW WAS AN EXTENDED DISCUSSION OF THE FACTS AND ARGUMENT SUBMITTED IN JANUARY 1961. AS NOTED, THE REQUEST FOR REVIEW WAS DENIED IN OUR DECISION OF SEPTEMBER 21, 1967. ON NOVEMBER 29, 1967, MR. GRACE REQUESTED RECONSIDERATION OF THAT DECISION AND AGAIN ASKED THAT REVIEW OF THE SETTLEMENT CERTIFICATE BE UNDERTAKEN.

MR. GRACE HAD SEVERAL CONFERENCES WITH REPRESENTATIVES OF OUR OFFICE IN APRIL, MAY, JUNE, JULY, AND OCTOBER 1968, AND IN FEBRUARY 1969. HE FILED ADDITIONAL BRIEFS TO SUPPORT HIS POSITION. WE ARE STILL OF THE OPINION THAT THE EVIDENCE IN THE CASE DOES NOT JUSTIFY FAVORABLE CONSIDERATION OF YOUR COMPANY'S CLAIM FOR REFUND OF THE MONEY RECOVERED BY THE ARMY IN ADJUSTMENT OF THE LOSS.

AS BEFORE STATED, THE BILL OF LADING, SIGNED FOR THE MASTER ON JANUARY 16, 1950, RECITES THAT 45,696 BAGS OF RICE WEIGHING 4,603,873 POUNDS (2,055.3 LONG TONS) WERE DELIVERED TO THE VESSEL. THE ARMY OCEAN MANIFEST SHOWS THAT THE SAME NUMBER OF BAGS AND WEIGHT WERE LOADED BY THE JONES STEVEDORING COMPANY. THE VESSEL'S BRIDGE LOG BOOK RECITES THE LOADING ACTIVITIES IN DETAIL, SHOWING ALSO THE WEIGHT IN TONS LOADED (1) 365 LONG TONS DURING THE DAY ON JANUARY 14, (2) 1,172 LONG TONS DURING THE NIGHT OF JANUARY 14-15 AND (3) 519 LONG TONS TO NOON ON JANUARY 15, THE VESSEL GETTING UNDER WAY AT 1:00 P.M. ON THAT DAY.

THUS, THE BILL OF LADING, THE ARMY MANIFEST AND THE SHIP'S LOG ARE IN AGREEMENT AS TO NUMBER AND WEIGHT OF THE BAGS OF RICE LOADED. MR. GRACE ADVANCES THE ARGUMENT, AS IN A MEMORANDUM OF APRIL 17, 1968, THAT THESE WEIGHTS ARE NOT ACCURATE; THAT THE VESSEL DID NOT TALLY THE CARGO INTO THE HOLDS; AND THAT NO HATCH TALLY WAS MADE, AND THAT THE COUNT TO THE VESSEL WAS MADE FROM "PILES" OF BAGS ON THE WHARF, SAID TO CONSIST OF 1,000 BAGS EACH. IN SHORT, IT IS CONTENDED THAT THE NUMBER OF BAGS REPORTED AS LOADED TO THE VESSEL IS ONLY A "SHIPPER'S COUNT," AND THAT THE VESSEL DID NOT MAKE ITS OWN TALLY OR COUNT OF THE BAGS OF RICE LOADED AT STOCKTON. IT IS CONTENDED FURTHER THAT THE ENTRIES IN THE LOG REGARDING THE WEIGHT OF THE CARGO ARE NOT COMPETENT EVIDENCE. IT IS NOTED, HOWEVER, THAT IN THE GEORGIAN, 76 F. 2D 550 (5 CIR. 1935), IT WAS STATED AT PAGE 551:

A VESSEL'S LOGBOOK IS PERHAPS THE MOST IMPORTANT DOCUMENT AMONG HER PAPERS, AND THE OWNER IS BOUND BY ENTRIES MADE THEREIN BY THE SHIP'S OFFICERS.

FURTHERMORE, ASSUMING THAT THE COUNT OF THE NUMBER OF BAGS AND WEIGHT RECITED ON THE BILL OF LADING AND CONFIRMED BY THE MASTER BY VIRTUE OF HIS SIGNATURE ON THE BILL OF LADING, IS THE "SHIPPER'S COUNT AND WEIGHT," THE PRESUMPTION OF CORRECTNESS NEVERTHELESS ARISES, AND THE BURDEN IS ON THE VESSEL TO BRING ITSELF WITHIN THE BILL OF LADING EXCEPTIONS OR OTHERWISE PROVE THAT IT DID NOT RECEIVE THE COUNT AND WEIGHT STATED ON THE BILL OF LADING---IN THIS CASE COINCIDING WITH THE FIGURES ENTERED IN THE SHIP'S LOG. IN SPANISH-AMERICAN SKIN COMPANY V. THE M. S. FERNGULF, 143 F. SUPP. 345 (1956), AFFIRMED 242 F. 2D 551 (1957), THE COURT STATED, AT PAGE 350:

A BILL OF LADING MAY BE A RECEIPT FOR GOODS PLUS A CONTRACT FOR THE CARRIAGE OF GOODS AND ALSO A NEGOTIABLE DOCUMENT OF TITLE. KNAUTH, OCEAN BILLS OF LADING (1953) PP. 134, 384. ONE OF THE PURPOSES OF THE CARRIAGE OF GOODS BY SEA ACT IS TO PROVIDE A PRIMA FACIE DESCRIPTION OF THE GOODS NOT MERELY AS BETWEEN THE SHIPPER AND THE CARRIER, BUT ALSO FOR THE BENEFIT OF ANY THIRD PARTY RELYING UPON THE BILL OF LADING. THUS, IF THE CARRIER PUTS DESCRIPTIVE DATA IN THE BILL OF LADING AS TO THE WEIGHT OF THE SHIPMENT, HE MAY NOT DISAVOW LIABILITY THEREFOR BY STATING THAT IT IS THE SHIPPER'S WEIGHT. IF THERE IS ANY DOUBT IN THE MIND OF THE SHIPPER AS TO THE WEIGHT BEING ACCURATE, HE NEED NOT PUT THE WEIGHT IN THE BILL OF LADING.

THE ARGUMENT IN THIS INSTANCE IS THAT THE CLERK'S DAILY HATCH REPORTS AT ORIGIN, WHICH, WHEN TOTALED, SHOW 45,696 BAGS, WEIGHING 2,056 TONS, MAY NOT BE RELIED UPON AS SUPPORTING THE BILL OF LADING AND SHIP'S LOG WEIGHT AND COUNT. MR. GRACE STATES THAT THESE REPORTS ARE NOT IN FACT HATCH TALLIES, AND THAT THEY ARE NOT BASED UPON HATCH TALLIES.

WE UNDERSTAND THAT THE HATCH REPORTS IN THE RECORD ARE NOT THE INDIVIDUAL STROKE TALLY REPORTS SIMILAR TO THOSE SUBMITTED TO SHOW THE NUMBER OF BAGS UNLOADED AT KOBE. HOWEVER, TO SAY THAT THESE REPORTS ARE NOT BASED ON HATCH TALLIES IS TO OVERLOOK THE FACT THAT THEY ACCOUNT FOR ALL OF THE TIME THAT THE STEVEDORES WERE WORKING THE VESSEL. FOR EXAMPLE, THE DAILY HATCH REPORT ON HATCH NO. 5 FOR JANUARY 14, 1950, FROM 8:00 A.M. TO 6:00 P.M. SHOWS THAT FROM 8:00 A.M. TO 10:00 A.M. THE GANG (14 MEN) WAS RIGGING GEAR, LAYING DUNNAGE AND LINING THE HOLD. FROM 10:00 TO 12 NOON, RICE WAS BEING LOADED; FROM NOON TO 1:00 P.M. TIME WAS TAKEN FOR LUNCH; FROM 1:00 P.M. TO 6:00 P.M. RICE WAS BEING LOADED. THE SUMMARY SHOWS THAT FOR THE 9 HOURS ON BOARD, 7 HOURS WERE SPENT LOADING 4,599 PIECES (BAGS), 207 WEIGHT TONS AND 253 MEASUREMENT TONS.

THE HATCH REPORTS FOR THE NIGHT OF THE 14TH AND FOR THE EARLY HOURS OF THE 15TH ACCOUNT FOR ALL THE TIME THE STEVEDORES WERE WORKING CARGO UNTIL THE LOWER HOLD WAS COVERED AT 9:30 A.M. ON THE 15TH, AND 1,152 PIECES (BAGS) WERE LOADED IN THE UPPER TWEEN-DECK. THE HATCH WAS COVERED AND SECURED AT 12 NOON, THE VESSEL GETTING UNDER WAY AT 1:00 P.M.

THESE ACTIVITIES CAN BE VERIFIED BY ENTRIES IN THE LOG BOOK. FOR EXAMPLE, THE LOG BOOK ENTRIES ON JANUARY 14 SHOW THE FOLLOWING: 8:00 A.M; TWO GANGS ON BOARD BEGIN LOADING THE NO. 1 AND NO. 5 HOLDS; 12 NOON, KNOCK OFF FOR LUNCH; 1:00 P.M; RESUME LOADING NO. 5 HOLD AND START LOADING NO. 2 HOLD. ON JANUARY 15 THE LOG BOOK SHOWS: NO. 5 LOWER HOLD COMPLETED LOADING AT 9:15 AND BEGAN LOADING NO. 5, TWEEN DECK; CEASED LOADING NO. 5 AT 11:30 A.M.; ALL LOADING COMPLETED AND SEA WATCHES SET AT 12 NOON.

THUS, IT IS CLEAR THAT THESE DAILY HATCH REPORTS WERE SUMMARIES OF ACTIVITIES TAKEN ON DECK AND THE NUMBER OF PIECES MENTIONED ON EACH OF THESE REPORTS IS A SUMMARY OF TALLIES OF SLINGS AS THE RICE CAME OVER THE SIDE. ON JANUARY 4, 1954, STATES MARINE LINES, BY LETTER TO THE ARMY FINANCE OFFICE, INDICATED THAT THE SAN FRANCISCO PORT OF EMBARKATION ADVISED TO THE EFFECT THAT THE TALLY WAS BY SLING LOAD. THIS INFORMATION WAS GIVEN TO STATES MARINE LINES BY THE SAN FRANCISCO PORT OF EMBARKATION ON JULY 18, 1952. THE FACT THAT A SLING TALLY WAS MADE WHEN THE RICE WAS LOADED NEGATES ANY AGREEMENT WHICH CONTEMPLATED A COUNT DERIVED FROM THE NUMBER OF PILES OF RICE ON THE WHARF AND AN AGREED NUMBER OF BAGS IN EACH PILE.

WE THEREFORE BELIEVE THAT THE CORRECTNESS OF THE DAILY HATCH REPORTS AND THE SUPERCARGO SUMMARIES OF THE NUMBER OF BAGS AND WEIGHT AS SHOWN IN THE BILL OF LADING AND THE LOG BOOK HAVE NOT BEEN IMPEACHED ON THIS RECORD. INCIDENTALLY, WE NOTE THAT ON JULY 3, 1952, STATES MARINE LINES REPORTED THAT THE ONLY LOADING RECORDS IT SAW WERE THE THREE SUPERCARGO REPORTS. YOUR COMPANY APPARENTLY DID NOT RECEIVE COPIES OF THE 15 DAILY HATCH REPORTS IN THE PRESENT RECORD.

AFTER SAILING FROM STOCKTON, THE VESSEL STOPPED AT OAKLAND, CALIFORNIA, ASTORIA, OREGON, AND SEATTLE, WASHINGTON. ITS FIRST PORT OF UNLOADING IN JAPAN WAS YOKOHAMA. THE VESSEL ARRIVED AT KOBE ON SUNDAY, FEBRUARY 19, 1950, AT 10:45 P.M. STEVEDORES COMMENCED DISCHARGING ALL HOLDS AT 8:30 A.M. ON THE 20TH.

THE MANNER AND RECORD OF UNLOADING THIS RICE AT KOBE, WHERE THE SHORTAGE OF 4,195 BAGS OF RICE WAS DISCOVERED, ARE SAID TO ESTABLISH THE PROBABILITY THAT THE MISSING RICE WAS NOT LOADED ABOARD THE VESSEL AT STOCKTON. AS SUPPORT FOR THIS CONTENTION REFERENCE IS MADE TO STATEMENTS FROM THE STEVEDORING COMPANIES THAT NO RICE WAS UNLOADED AT YOKOHAMA AND THAT THE LOWER HOLDS WERE NOT EVEN OPENED AT YOKOHAMA.

IT IS STATED FURTHER THAT THE RICE WAS TALLIED BY THE ARMY AND THE VESSEL WHEN OFF-LOADED INTO BARGES, AND AGAIN TALLIED ON SHORE. THE TALLY SHEETS OF SENKO FREIGHT CLERK & CO; AGENTS OF THE VESSEL, HAVE BEEN FURNISHED BY MR. GRACE AND THEY DO SHOW A TOTAL OF 41,501 BAGS OF RICE AS BEING TALLIED INTO THE BARGES. NO STROKE TALLY SHEETS PREPARED BY THE NIPPON TALLY COMPANY, SAID TO BE ACTING FOR THE ARMY, HAVE BEEN FURNISHED. A SUMMARY REPORT OF RECHECKED ON SHORE (FINAL) BY THE JAPAN CARGO-TALLY CORPORATION ALLEGEDLY THE TALLY CLERK FOR THE CONSIGNEE, SHOWS 41,501 BAGS AS HAVING BEEN UNLOADED FROM BARGES. AGAIN, NO STROKE TALLY WAS FURNISHED IN THIS CASE. IT IS MAINTAINED THAT THESE PAPERS HELP ESTABLISH THAT THERE WERE ONLY 41,501 BAGS OF RICE ON BOARD, NOTWITHSTANDING THE CLEAR SHOWING THAT 45,696 BAGS OF RICE WERE LOADED ABOARD AT STOCKTON.

WHILE THE EVIDENCE CONCERNING THE OFF-LOADING AT KOBE MAY BE TAKEN AS SHOWING THE QUANTITY OF RICE ACCOUNTED FOR AT THAT TIME, WE DO NOT BELIEVE SUCH EVIDENCE REBUTS THE CLEAR LOADING RECORD. THIS IS FOR THE REASON THAT (1) THE TALLY SLIPS PURPORTING TO BE A TALLY OF ALL THE RICE ON BOARD ARE INCONCLUSIVE BECAUSE OF UNEXPLAINED TIME GAPS IN THE CONTINUITY OF THE UNLOADING OPERATION, AND (2) THE REPORT OF THE RECHECK ON SHORE BEARS NO IDENTIFIABLE RELATIONSHIP TO THE 20 BARGES APPARENTLY USED IN TRANSPORTING THE CARGO FROM THE VESSEL TO SHORE; THE RECHECK REPORT DOES NOT DISCLOSE THE NUMBER OF BAGS UNLOADED FROM EACH OF THE BARGES USED.

AS FOR THE SENKO TALLY SLIPS, THE SHIP'S LOG SHOWS THAT STEVEDORES COMMENCED DISCHARGING CARGO FROM ALL HOLDS AT 8:30 A.M. HOWEVER, NONE OF THE TALLY SLIPS FOR ANY OF THE HOLDS SHOWS A TALLY BEGINNING BEFORE 9:00 A.M; AND THE TALLY FOR NO. 4 HOLD DID NOT COMMENCE UNTIL 9:50 A.M. THE LOG BOOK SHOWS THAT WITH THE EXCEPTION OF LUNCH PERIODS AND MINOR WINCH OR RIGGING REPAIRS, THE HOLDS WERE WORKED CONTINUOUSLY UNTIL 5:00 A.M. ON THE 21ST OF FEBRUARY, WITH ALL HOLDS BEING UNLOADED AGAIN AT 8:15 A.M. THERE IS NO TALLY FOR HOLD NO. 1 FOR THE PERIOD 4:00 P.M. TO 10:10 P.M. ON FEBRUARY 20 ALTHOUGH THERE IS NO NOTATION IN THE LOG BOOK THAT THIS HOLD WAS NOT BEING WORKED DURING THIS PERIOD, WITH THE EXCEPTION OF THE 1 HOUR LUNCH PERIOD.

FURTHERMORE, THERE IS NO INDICATION ON ANY OF THE TALLIES THAT ANY RICE WAS UNLOADED FROM HOLDS 3 AND 4 AFTER 4:30 A.M. ON THE 21ST; AFTER 2:30 P.M. FROM HOLD NO. 1; AFTER 11:00 A.M. ON THE 21ST FROM HOLD NO. 2; AND 11:30 P.M. ON THE 20TH FROM HOLD NO. 5. THE LOG BOOK FIRST MENTIONS DISCHARGING THE LOWER HOLDS CONTAINING PHOSPHATE AT 1:00 A.M. FEBRUARY 22. IN OTHER WORDS, THERE ARE FEW TALLIES COVERING RICE FOR THE DAYTIME PERIOD OF THE 21ST, ALTHOUGH THE LOG BOOK SHOWS THAT STEVEDORES WERE AT WORK ON THAT DAY. THERE ARE PERIODS WHEN THE STEVEDORES WERE WORKING FOR WHICH NO TALLIES ARE SHOWN, AND IN THIS CONNECTION THERE ARE NO TALLIES FOR THE 7,575 BAGS OF WHEAT UNLOADED. WHILE THE UNLOADING OF WHEAT MAY ACCOUNT FOR THE REMAINDER OF THE TIME FOR WHICH NO TALLIES ARE AVAILABLE, IT IS ALSO POSSIBLE THAT SOME UNAUTHORIZED UNLOADING WAS TAKING PLACE DURING THAT PERIOD OF TIME. REFERENCE TO THE TALLY SHEETS---33 IN NUMBER- --SHOWS THAT THE RICE WAS LOADED FROM THE VESSEL INTO 20 BARGES ON THE 20TH AND 21ST. THE "REPORT OF RECHECKED ON SHORE" LUMPS INTO THREE FIGURES THE QUANTITIES OF RICE APPARENTLY UNLOADED FROM THE 20 BARGES ON FEBRUARY 21, 22 AND 23. SINCE NO RICE WAS UNLOADED FROM THE VESSEL AFTER 2:30 P.M. ON THE 21ST, THE MAJOR PORTION HAVING BEEN UNLOADED ON THE 20TH, QUESTION ARISES AS TO HOW THE THREE FIGURES---"21/2 21897, 22/2 18359, 23/2 1245"---WERE PRODUCED.

IN REACHING OUR CONCLUSION THAT THE SETTLEMENT CERTIFICATE OF APRIL 26, 1962, DISALLOWING YOUR CLAIM IS NOT IN ERROR, WE HAVE GIVEN CAREFUL CONSIDERATION TO YOUR MEMORANDUM OF APRIL 17, 1968, AND LATER BRIEFS, IN WHICH YOU UNDERTAKE A REVIEW OF THE APPLICABLE LAW REGARDING THE DEGREE OF PROOF WHICH IS REQUIRED IN THIS CASE. YOU POINT OUT THAT THE DECISION OF OUR OFFICE ON THIS CLAIM "MUST, UNDER SETTLED LAW, BE BASED UPON PROBABILITIES, NOT POSSIBILITIES." YOU BELIEVE THAT THE PRIMA FACIE CASE WHICH IS ESTABLISHED BY THE FACTS DISCLOSED IN THE DOCUMENTATION AT ORIGIN AND THE REPORT OF SHORTAGE AT DESTINATION HAS BEEN OVERCOME BY A "PREPONDERANCE OF THE EVIDENCE" THAT ALL THE RICE WHICH WAS LOADED ON THE WESTPORT AT STOCKTON WAS DELIVERED TO THE CONSIGNEE AT KOBE, REGARDLESS OF WHAT WAS REPORTED AS THE AMOUNT OF RICE DELIVERED TO THE VESSEL AT STOCKTON.

WE DO NOT QUESTION THE PROPRIETY OF ESTABLISHING A LEGAL POSITION BASED ON INDIRECT AS WELL AS DIRECT EVIDENCE AND ON INFERENCES DRAWN FROM THE ESTABLISHED FACTS THAT MIGHT BE OF SUFFICIENT STRENGTH TO SUPPORT A CONCLUSION THAT THE DELIVERY OF ALL THE CARGO OF RICE PLACED ON BOARD FOR KOBE WAS "MORE LIKELY OR PROBABLE THAN ITS NON OCCURRENCE." HOWEVER, WE DO NOT BELIEVE THAT A PROBABILITY OF FAILURE TO LOAD AT STOCKTON 4,195 BAGS OF RICE, FOUND SHORT AT KOBE, JAPAN, MAY BE INFERRED FROM THE EVIDENCE UPON WHICH YOU RELY. THIS EVIDENCE CONSISTING PRINCIPALLY OF THE DETAILS FURNISHED BY THE SENKO FREIGHT CLERK & CO; AND THE LOCATION OF THE RICE, AS LOADED IN THE SEVERAL HOLDS OF THE VESSEL, IS NOT ACCEPTABLE AS COMPELLING A CONCLUSION CONTRARY TO THAT REACHED IN PREVIOUS CONSIDERATIONS OF THIS MATTER, BECAUSE OF THE DEFICIENCIES WHICH WE HAVE DESCRIBED ABOVE.

IT WOULD SEEM THAT WHILE THE PROPRIETY OF A CLAIM SUCH AS THE PRESENT ONE MAY BE ESTABLISHED BY CIRCUMSTANTIAL EVIDENCE, WE ARE OF THE OPINION THAT THE EVIDENCE WHICH YOU FURNISH IS INSUFFICIENT TO OVERCOME THE PRIMA FACIE CASE IN FAVOR OF THE GOVERNMENT. BUT SINCE OUR PROCEEDINGS OBVIOUSLY ARE NOT COMPARABLE TO JUDICIAL PROCEEDINGS, WE DO NOT SETTLE CLAIMS AND MAKE DETERMINATIONS SUBJECT TO A "PREPONDERANCE OF THE EVIDENCE," EXCEPT AS THAT TERM MAY BE EQUATED WITH CLEAR AND CONVINCING PROOF. SUCH PROOF MUST BE PLAIN AND CONVINCING BEYOND REASONABLE CONTROVERSY THAT THE ARMY AND THE RECORDS PREPARED AT THE PORT OF ORIGIN, STOCKTON, ARE IN ERROR.

THE EVIDENCE YOU HAVE SUBMITTED DOES NOT, IN OUR OPINION, REMOVE ALL REASONABLE DOUBT AS TO THE PROPRIETY OF REVERSING THE ACTION TAKEN BY THE ARMY TO RECOVER THE VALUE OF UNITED STATES PROPERTY ALMOST 16 YEARS AGO. BECAUSE OF THIS DOUBT WE DECLINE NOW TO SUBSTITUTE OUR JUDGMENT FOR THAT OF THE ARMY OFFICIALS WHO WERE THEN IN THE BEST POSITION TO INVESTIGATE AND DETERMINE THE RIGHTS AND OBLIGATIONS OF THE PARTIES. OUR DECLINATION IS PREDICATED ON A FURTHER REVIEW OF THE AVAILABLE RECORD, WHICH WE FEEL SUPPORTS THE SETOFF MADE BY THE ARMY IN 1953, AND ON THE INADEQUACY OF YOUR THEORY OF PROBABILITIES.

IN THIS RESPECT WE FIND SUPPORT IN THE CASE OF HONGKONG & SHANGHAI BANKING CORP. V. UNITED STATES, 133 CT. CL. 753, 137 F. SUPP. 425, 427 (1956), WHERE THE UNITED STATES COURT OF CLAIMS SAID: "WE CANNOT HOLD THE GOVERNMENT LIABLE ON THE THEORY OF PROBABILITIES. WE MUST HAVE SOME PROOF EITHER DIRECT OR CIRCUMSTANTIAL, TO SHOW NOT WHAT THE ARMY PROBABLY DID, BUT WHAT IT ACTUALLY DID." AND, AS SAID IN A LATER CASE INVOLVING THE HONGKONG & SHANGHAI BANKING CORP; THE "PLAINTIFF HAS FAILED TO REMOVE THIS CASE FROM THE REALM OF CONJECTURE, AND FOR SUCH FAILURE ITS CASE MUST FAIL." 135 CT. CL. 722, 145 F. SUPP. 631 (1956).

ACCORDINGLY, THE SETTLEMENT CERTIFICATE OF APRIL 26, 1962, DISALLOWING YOUR CLAIM FOR $21,830.40, IS SUSTAINED. THE VESSEL'S LOG BOOKS AND THE SENKO TALLIES ARE RETURNED HEREWITH, AS REQUESTED.