B-124759, OCTOBER 4, 1955, 35 COMP. GEN. 187

B-124759: Oct 4, 1955

Additional Materials:

Contact:

Julie Matta
(202) 512-4023
MattaJ@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

1955: REFERENCE IS MADE TO YOUR LETTER OF JULY 19. IT IS STATED THAT. YOUR DEPARTMENT RECEIVES CLAIMS FOR PAYMENT OF INDEMNITY FOR LOSS OR DESTRUCTION OF INSURED MATTER WHERE THE FEE PAID WOULD HAVE BEEN SUFFICIENT TO OBTAIN THE AMOUNT OF INSURANCE COVERAGE DESIRED BY THE SHIPPER HAD THE PREVIOUS FEE SCHEDULE REMAINED IN EFFECT. THERE IS CLEAR AND CONVINCING EVIDENCE SHOWING THE INTENT OF THE SHIPPER TO PURCHASE A CERTAIN STATED AMOUNT OF INSURANCE. LIKEWISE THERE IS EVIDENCE THAT SUCH INTENT WAS FRUSTRATED BY THE ERROR OF A POSTAL EMPLOYEE IN COLLECTING A FEE LESS THAN THE FEE REQUIRED BY THE REVISED SCHEDULE FOR THE AMOUNT OF INSURANCE SOUGHT BY THE SHIPPER. IT IS EXPLAINED THAT THE POST OFFICE DEPARTMENT FEELS THAT IN SUCH CASES THE PAYMENT TO THE INSURED OF A LESSER INDEMNITY THAN THAT WHICH THE INSURED SOUGHT WORKS AN INJUSTICE AND HARDSHIP UPON THE INSURED.

B-124759, OCTOBER 4, 1955, 35 COMP. GEN. 187

POST OFFICE DEPARTMENT - MAILS - INSURED - INDEMNITY PAYMENTS POSTMASTER GENERAL MAY ISSUE A REGULATION UNDER THE BROAD AUTHORITY IN 39 U.S.C. 246F TO PROVIDE THAT A SENDER WHO REQUESTED POSTAL INSURANCE TO COVER THE FULL VALUE OF THE ARTICLE MAILED, BUT RECEIVED LESS DUE TO AN ERROR BY A POSTAL EMPLOYEE IN COLLECTING A FEE LESS THAN THAT REQUIRED MAY, UPON LOSS, RECOVER FULL VALUE TO THE AMOUNT OF INSURANCE ASKED FOR BY PAYING THE PROPER FEE; HOWEVER, OBLIGATIONS OF THE GOVERNMENT MAY NOT BE INCREASED RETROACTIVELY AND, THEREFORE, THE REGULATION MAY OPERATE PROSPECTIVELY ONLY.

TO THE POSTMASTER GENERAL, OCTOBER 4, 1955:

REFERENCE IS MADE TO YOUR LETTER OF JULY 19, 1955, REQUESTING TO BE ADVISED WHETHER A REGULATION PROPOSED THEREIN PROPERLY MAY BE ISSUED AND, IF SO, WHETHER CLAIMS PRESENTLY PENDING BEFORE YOUR DEPARTMENT MAY BE SETTLED IN ACCORDANCE THEREWITH.

IT IS STATED THAT, FOLLOWING EACH REVISION OF THE SCHEDULE OF FEES ON INSURED MAIL MATTER, YOUR DEPARTMENT RECEIVES CLAIMS FOR PAYMENT OF INDEMNITY FOR LOSS OR DESTRUCTION OF INSURED MATTER WHERE THE FEE PAID WOULD HAVE BEEN SUFFICIENT TO OBTAIN THE AMOUNT OF INSURANCE COVERAGE DESIRED BY THE SHIPPER HAD THE PREVIOUS FEE SCHEDULE REMAINED IN EFFECT. IN MOST OF THESE CASES, THERE IS CLEAR AND CONVINCING EVIDENCE SHOWING THE INTENT OF THE SHIPPER TO PURCHASE A CERTAIN STATED AMOUNT OF INSURANCE, LIKEWISE THERE IS EVIDENCE THAT SUCH INTENT WAS FRUSTRATED BY THE ERROR OF A POSTAL EMPLOYEE IN COLLECTING A FEE LESS THAN THE FEE REQUIRED BY THE REVISED SCHEDULE FOR THE AMOUNT OF INSURANCE SOUGHT BY THE SHIPPER.

IT IS EXPLAINED THAT THE POST OFFICE DEPARTMENT FEELS THAT IN SUCH CASES THE PAYMENT TO THE INSURED OF A LESSER INDEMNITY THAN THAT WHICH THE INSURED SOUGHT WORKS AN INJUSTICE AND HARDSHIP UPON THE INSURED. CONSEQUENTLY, IN ORDER TO REMEDY SUCH SITUATIONS, YOUR DEPARTMENT PROPOSES TO ISSUE A REGULATION WORDED SUBSTANTIALLY AS FOLLOWS:

WHENEVER IT SHALL BE SHOWN TO THE SATISFACTION OF THE POSTMASTER GENERAL THAT THE SENDER WAS CHARGED A FEE LESS THAN THAT REQUIRED TO COVER THE AMOUNT OF INSURANCE DESIRED BY THE SENDER, THROUGH ERROR ON THE PART OF THE POSTAL SERVICE, THE DEFICIENCY IN FEE MAY BE COLLECTED FROM THE SENDER AND POSTAL INSURANCE MAY BE PAID WITHIN THE LIMIT FIXED FOR THE HIGHER FEE.

IN CIRCUMSTANCES SUCH AS THOSE DESCRIBED ABOVE, IT WAS HELD IN 34 COMP. GEN. 14, QUOTING FROM THE SYLLABUS, THAT---

THE AMOUNT OF INDEMNITY PAYABLE BY THE GOVERNMENT FOR THE LOSS OF INSURED PARCEL POST PACKAGES IN THE MAILS IS LIMITED, UNDER SECTION 8 OF THE ACT OF OCTOBER 30, 1951, TO THE AMOUNT FOR WHICH THE FEES ARE ACTUALLY PAID, AND THEREFORE ADDITIONAL FEES MAY NOT BE COLLECTED AFTER LOSS OF PACKAGES FOR THE EXPRESS PURPOSE OF INCREASING THE AMOUNT OF INDEMNITY TO BE PAID, EVEN THOUGH SENDERS ACTUALLY REQUESTED INSURANCE IN LARGER AMOUNTS AND POSTAL EMPLOYEES ADMIT THAT IT WAS ONLY THROUGH THEIR ERRORS THAT THE FEES FOR SMALLER AMOUNTS WERE PAID.

OBVIOUSLY, THE ABOVE QUOTED PROPOSED REGULATION IS INTENDED TO OVERCOME THE FOREGOING RULING. SECTIONS 244 AND 246 OF TITLE 39, U.S.C. CITED AS AUTHORITY THEREFOR, PROVIDE AS FOLLOWS:

SECTION 244. * * *

THE POSTMASTER GENERAL SHALL MAKE PROVISION BY REGULATION FOR THE INDEMNIFICATION OF SHIPPERS OF ARTICLES SENT BY FOURTH-CLASS MAIL OR THIRD -CLASS DOMESTIC MAIL, FOR SHIPMENTS INJURED OR LOST, BY INSURANCE OR OTHERWISE, AND, WHEN DESIRED, FOR THE COLLECTION ON DELIVERY OF THE POSTAGE AND PRICE OF THE ARTICLE SHIPPED, FIXING SUCH CHARGES AS MAY BE NECESSARY TO PAY THE COST OF SUCH ADDITIONAL SERVICES.

SECTION 246F. * * *

(A) THE POSTMASTER GENERAL IS AUTHORIZED TO PRESCRIBE BY REGULATION FROM TIME TO TIME THE FEES WHICH SHALL BE CHARGED BY THE POSTAL SERVICE---

(2) FOR THE INSURANCE OF MAIL MATTER, OR OTHER INDEMNIFICATION OF SENDERS THEREOF FOR ARTICLES DAMAGED OR LOST;

(B) REGULATIONS ISSUED BY THE POSTMASTER GENERAL UNDER SUBSECTION (A) OF THIS SECTION SHALL, TO THE EXTENT PRESCRIBED THEREIN, SUPERSEDE EXISTING LAWS, REGULATIONS, AND ORDERS GOVERNING THE FEES FOR THE SERVICES COVERED THEREBY.

IT SCARCELY CAN BE ARGUED THAT THE PROPOSED REGULATION DOES NOT RELATE TO "THE INDEMNIFICATION OF SHIPPERS OF ARTICLES SENT BY FOURTH CLASS MAIL OR THIRD-CLASS DOMESTIC MAIL," SUCH CLASSES OF MAIL BEING THE ONLY MAIL SUBJECT TO INSURANCE. THE REGULATION BEING A STATUTORY ONE WOULD HAVE THE FULL FORCE AND EFFECT OF LAW. FURTHERMORE, THE QUOTED PROVISIONS OF 39 U.S.C. 246F CONFER BROAD AUTHORITY UPON THE POSTMASTER GENERAL WITH RESPECT TO THE REGULATION OF FEES FOR THE INSURANCE OF MAIL MATTER. THE FACT THAT SUCH A REGULATION WAS NOT CONSIDERED FOR PROMULGATION UNTIL AFTER OUR ADVERSE DECISIONS IN THE MATTER SHOULD BE OF NO CONSEQUENCE. ACCORDINGLY, YOU ARE ADVISED THAT WE WOULD HAVE NO OBJECTION TO THE ISSUANCE OF THE PROPOSED REGULATION.

WE ARE OF THE OPINION, HOWEVER, THAT SUCH REGULATION, IF ISSUED, PROPERLY MAY BE APPLIED ONLY TO CLAIMS ARISING THEREAFTER AND MAY NOT BE USED AS A BASIS FOR THE SETTLEMENT OF ANY CLAIMS ARISING OUT OF INSURANCE PURCHASED PRIOR THERETO SINCE SUCH APPLICATION WOULD SERVE TO INCREASE RETROACTIVELY THE OBLIGATIONS OF THE GOVERNMENT. SEE, IN THIS CONNECTION 32 COMP. GEN. 316, WHERE, CONCERNING THE AUTHORITY OF AN ADMINISTRATIVE OFFICE TO ISSUE RETROACTIVE REGULATIONS IT WAS STATED THAT---

* * * WHILE NO EXPRESS JUDICIAL DETERMINATION HAS BEEN FOUND REGARDING THE RIGHT OF AN ADMINISTRATIVE OFFICE TO ISSUE RETROACTIVE AMENDMENTS TO REGULATIONS GENERALLY, IT WOULD APPEAR THAT ONCE SUCH REGULATIONS ARE ISSUED, THE RIGHTS THEREUNDER BECOME FIXED, AND ALTHOUGH SUCH REGULATIONS MAY BE AMENDED PROSPECTIVELY TO INCREASE OR DECREASE THE RIGHTS GIVEN THEREBY, THEY MAY NOT BE SO AMENDED RETROACTIVELY. CF. ARIZONA GROCERY V. ATCHISON RY., 284 U.S. 370. CERTAINLY THAT WOULD BE TRUE IN THE INSTANT CASE IF THE EFFECT OF THE AMENDMENT WERE TO DECREASE RETROACTIVELY THE ALLOWANCES PREVIOUSLY AUTHORIZED FOR THE PERSONNEL CONCERNED (31 COMP. GEN. 619), AND NO SOUND REASON IS PERCEIVED WHY A DIFFERENT RULE SHOULD APPLY WHERE THE EFFECT OF THE AMENDMENT IS TO INCREASE RETROACTIVELY THE OBLIGATIONS ON THE GOVERNMENT. WHILE THE CONGRESS IS EMPOWERED TO ENACT LEGISLATION RETROACTIVELY INCREASING OR CREATING NEW GOVERNMENT OBLIGATIONS, IT IS NOT TO BE SUPPOSED, IN THE ABSENCE OF DEFINITE STATUTORY PROVISION, THAT THE CONGRESS HAS INTENDED TO GRANT SUCH AUTHORITY TO ADMINISTRATIVE OFFICIALS. TO RECOGNIZE SUCH AN ADMINISTRATIVE AUTHORITY WOULD MEAN THAT THE GOVERNMENT'S OBLIGATION UNDER EXISTING AND PREEXISTING REGULATIONS WOULD NEVER BE FIXED OR FINALLY SETTLED. * * * ..END :

Nov 19, 2018

Nov 16, 2018

Nov 15, 2018

Nov 14, 2018

Looking for more? Browse all our products here