A-83242, JULY 14, 1937, 17 COMP. GEN. 25

A-83242, JULY 14, 1937, 17 COMP. GEN. 25

STATUTES OF LIMITATIONS - APPLICABILITY TO THE UNITED STATES THE RULE THAT THERE MUST BE SPECIFIC STATUTORY ENACTMENT BEFORE THE UNITED STATES IS BOUND BY STATUTES OF LIMITATIONS IS NOT CONFINED TO SUCH STATUTES MERELY TERMINATING THE REMEDY, BUT IS ALSO FOR APPLICATION TO THOSE STATUTES TERMINATING THE RIGHT AS DISTINGUISHED FROM THE REMEDY. THE STATUTE OF LIMITATIONS (SEC. 16 (3), TITLE 49, U.S. CODE) WITH RESPECT TO THE FILING OF ,COMPLAINTS AGAINST CARRIERS * * * FOR THE RECOVERY OF DAMAGES NOT BASED ON OVERCHARGES," IS NOT APPLICABLE TO THE UNITED STATES. 16 COMP. GEN. 882, AMPLIFIED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE MISSOURI-KANSAS-TEXAS RAILROAD COMPANY, JULY 14, 1937:

YOUR LETTER OF MAY 7, 1937, IS AS FOLLOWS:

REFERRING TO YOUR LETTER OF MARCH 24, FILE A-83242, RELATIVE TO DEDUCTION MADE FROM YOUR REMITTANCE IN SETTLEMENT OF OUR BILL 60, DECEMBER 1935 ACCOUNT ALLEGED ERRONEOUS RATES APPLIED LUMBER SHIPMENTS IN OUR PREVIOUS BILL.

WHILE IT MAY BE THE GENERAL RULE THAT STATUTES OF LIMITATION DO NOT RUN AGAINST THE GOVERNMENT, IT IS ALSO TRUE THAT THE COURTS HAVE HELD THAT SECTION 16 (3) IS NOT THE ORDINARY STATUTE OF LIMITATIONS BUT THAT IT AFFECTS NOT MERELY THE REMEDY BUT TERMINATES AND DESTROYS THE LIABILITY WHICH THE ACT CREATED. PHILLIPS V. GRAND TRUNK RY. CO., 236 U.S. 662; PENINSULA PRODUCE EXCHANGE V. NEW YORK, P. AND N. RAILROAD CO., 137 ATLANTIC 350, AFFIRMED 276 U.S. 599; AND LOUISVILLE CEMENT CO. V. I.C.C., 246 U.S. 638.

THE RULING OF THE ACTING COMPTROLLER GENERAL IS DIRECTLY CONTRARY TO THE DECISION OF THE INTERSTATE COMMERCE COMMISSION IN UNITED STATES OF AMERICA V. DIRECTOR GENERAL, AS AGENT, BALTIMORE AND OHIO RAILROAD CO. ET AL., 80 I.C.C. 143. IN THAT CASE IT IS SAID AT PAGE 150:

"WE HAVE NO JURISDICTION TO AWARD REPARATION AGAINST THE WHARTON ON INTERSTATE SHIPMENTS DELIVERED OR TENDERED FOR DELIVERY MORE THAN TWO YEARS PRIOR TO THE DATES ON WHICH THE COMPLAINTS WERE FILED WITH US AND WE MAKE NO FINDING WITH RESPECT TO THE RATES CHARGED THEREON. IT IS FUNDAMENTAL THAT WE ACT ONLY UNDER THE JURISDICTION CONFERRED UPON US BY THE CONGRESS. THE POWER TO AWARD DAMAGES FOR VIOLATIONS OF THE ACT CREATED RIGHTS AS WELL AS REMEDIES. FAILURE TO ASSERT THE RIGHT WITHIN THE STATUTORY PERIOD NOT ONLY BARS THE REMEDY BUT DESTROYS THE RIGHT. PHILLIPS V. GRAND TRUNK RY., 236 U.S. 662; LOUISVILLE CEMENT CO. V. INT. COM. COMM., 246 U.S. 638. IN THIS RESPECT THE STATUTE DIFFERS FROM THE ORDINARY STATUTE OF LIMITATIONS WHICH, WHEN INVOKED, BARS ONLY THE REMEDY. THE UNITED STATES GOVERNMENT WAS NOT SPECIFICALLY EXCEPTED FROM THE STATUTORY REQUIREMENT WITH RESPECT TO THE TIME WITHIN WHICH COMPLAINTS FOR THE RECOVERY OF DAMAGES MUST BE FILED WITH US, ALTHOUGH IT IS SPECIFICALLY EXCEPTED FROM OTHER PROVISIONS OF THE ACT.'

IT THEREFORE APPEARS THAT IT WAS IMPROPER TO DEDUCT FROM OUR BILL THE AMOUNT OF $664.56 CLAIMED AS REPARATION, AND WE SHALL APPRECIATE YOUR FORWARDING ADDITIONAL REMITTANCE TO OUR TREASURER, MR. T. H. SIMPSON, AT ST. LOUIS, MISSOURI.

SECTION 16 (3), TITLE 49, U.S. CODE, PROVIDES IN PART:

(B) ALL COMPLAINTS AGAINST CARRIERS SUBJECT TO THIS CHAPTER FOR THE RECOVERY OF DAMAGES NOT BASED ON OVERCHARGES SHALL BE FILED WITH THE COMMISSION WITHIN TWO YEARS FROM THE TIME THE CAUSE OF ACTION ACCRUES, AND NOT AFTER, * * *.

YOUR CONTENTION APPEARS TO BE THAT SINCE THE DEDUCTION COMPLAINED OF--- WHICH WAS MADE FROM AMOUNTS OTHERWISE DUE YOU TO RECOVER FREIGHT CHARGES COLLECTED IN EXCESS OF THOSE ACCRUING ON THE BASIS OF RATES FOUND REASONABLE BY THE INTERSTATE COMMERCE COMMISSION IN E. H. MILTON AND SONS ET AL. V. ALTON AND SOUTHERN RAILROAD ET AL.--- WAS NOT ACCOMPLISHED WITHIN THE PERIOD OF LIMITATION STIPULATED IN THE ABOVE QUOTED PROVISION OF THE INTERSTATE COMMERCE ACT, THE RIGHT--- AS DISTINGUISHED FROM THE REMEDY--- TO THE REFUND IN QUESTION HAS BEEN DESTROYED.

APPARENTLY, YOU DO NOT CONTEST THE REASONABLENESS OF THE RATES ESTABLISHED BY THE COMMISSION AND APPLIED IN THE SETTLEMENT. IN OTHER WORDS, YOUR LIABILITY FOR THE AMOUNT DEBITED IN THE STATEMENT OF YOUR ACCOUNT IS NOT CONTROVERTED EXCEPT UPON THE GROUND ALREADY STATED.

YOUR CONTENTION MUST BE REJECTED UPON THE BROAD GROUND THAT IT LEADS TO A LIMITATION UPON THE RIGHTS OF A SOVEREIGN NOT SPECIFICALLY AUTHORIZED BY STATUTE AND NOT CONTEMPLATED UNDER THE TERMS OF THE INTERSTATE COMMERCE ACT AS AMENDED. IN THIS CONNECTION IT WAS STATED BY THE COURT IN MISSOURI -KANSAS-TEXAS R.R. CO. OF TEXAS V. UNITED STATES, 62 CT.CLS. 373, 377:

* * * UNQUESTIONABLY THE RULE IS THAT IT REQUIRES CONGRESSIONAL ACTION CLEARLY MANIFESTING SUCH A PURPOSE BEFORE THE UNITED STATES CAN BE BOUND BY STATUTES OF LIMITATIONS. SEE UNITED STATES V. NASHVILLE RY. CO., 118 U.S. 120, 125. IT IS SAID THAT "NO LACHES CAN BE IMPUTED TO THE GOVERNMENT, AND AGAINST IT NO TIME RUNS SO AS TO BAR ITS RIGHTS.' SEE THOMPSON CASE, 98 U.S. 486, 488. THE RULE IS NOT CONFINED TO STATUTES OF LIMITATIONS. IN KIRKPATRICK'S CASE, 9 WHEAT. 720, 735, MR. JUSTICE STORY, SPEAKING FOR THE COURT, SAYS: "THE GENERAL PRINCIPLE IS THAT LACHES IS NOT IMPUTABLE TO THE GOVERNMENT; AND THIS MAXIM IS FOUNDED NOT IN THE NOTION OF EXTRAORDINARY PREROGATIVE BUT UPON A GREAT PUBLIC POLICY. THE GOVERNMENT CAN TRANSACT ITS BUSINESS ONLY THROUGH ITS AGENTS, AND ITS FISCAL OPERATIONS ARE SO VARIOUS AND ITS AGENCIES SO NUMEROUS AND SCATTERED THAT THE UTMOST VIGILANCE WOULD NOT SAVE THE PUBLIC FROM THE MOST SERIOUS LOSSES IF THE DOCTRINE OF LACHES CAN BE APPLIED TO ITS TRANSACTIONS.' SEE UNITED STATES V. AMERICAN BELL TELEPHONE CO., 159 U.S. 548, 554. * * *

FINALLY, IN REJECTING THE CONTENTION THAT THE LIMITATIONS AS SET FORTH IN SECTION 16, SUPRA, ARE APPLICABLE TO GOVERNMENT TRANSPORTATION, IT WAS POINTED OUT IN SOUTHERN PACIFIC CO. V. UNITED STATES, 62 CT.CLS. 391, 399 --- WITH RESPECT TO THE NECESSITY FOR RULES OF ACCOUNTING FOR GOVERNMENT TRANSPORTATION IN SOME RESPECTS SUI GENERIS AND INAPPLICABLE TO THE ORDINARY COMMERCIAL TRANSACTIONS BETWEEN THE CARRIERS AND PRIVATE SHIPPERS --- THAT:

WHILE IN THE VAST MAJORITY OF INSTANCES THE CHARGES ARE PROMPTLY PAID UPON PRESENTATION, NEVERTHELESS A LARGE NUMBER OF LITIGATED CASES, JUST AS THE FACTS HEREIN DISCLOSE, ARISE FROM SUBSEQUENT DEDUCTIONS MADE BY THE ACCOUNTING OFFICERS FROM UNDISPUTED TRANSPORTATION BILLS SOME MONTHS AND FREQUENTLY YEARS AFTER THE INITIAL PAYMENT WAS MADE. PLACING GOVERNMENT TRANSPORTATION IN A SOMEWHAT DIFFERENT SITUATION FROM THAT WHICH OBTAINS IN THE ORDINARY COMMERCIAL SHIPMENT. IN ADDITION TO WHAT HAS BEEN SAID, THE INTERSTATE COMMERCE ACT HAS CONTINUOUSLY MADE EXCEPTIONS AS TO THE APPLICATION OF THE LAW TO GOVERNMENT TRANSPORTATION. THE GOVERNMENT MAY BY SPECIAL CONTRACT OBTAIN A SPECIAL RATE. MISSOURI PACIFIC V. UNITED STATES, 50 C.CLS. 341; ST. LOUIS, BROWNSVILLE AND MEXICO RY. CO. V. UNITED STATES, 268 U.S. 169, 173. LIKEWISE IT IS ENTITLED TO AN EXTENSION OF CREDIT IN THE PAYMENT OF FREIGHT CHARGES, DIRECT RECOGNITION OF THE SOMEWHAT EXCEPTIONAL RELATIONSHIP OF THE GOVERNMENT TO INTERSTATE CARRIERS.

IT IS DIFFICULT FROM A REVIEW OF THE STATUTES INVOLVED TO CONCLUDE THAT CONGRESS INTENDED TO APPLY THE THREE-YEAR LIMITATION TO CLAIMS OF CARRIERS AGAINST THE GOVERNMENT. IN THE CASE OF INTERSTATE COMMERCE COMMISSION V. BALTIMORE AND OHIO RAILROAD CO., 145 U.S. 263, 276, THE SUPREME COURT SAID:

"THE PRINCIPAL OBJECTS OF THE INTERSTATE COMMERCE ACT WERE TO SECURE JUST AND REASONABLE CHARGES FOR TRANSPORTATION; TO PROHIBIT UNJUST DISCRIMINATIONS IN THE RENDITION OF LIKE SERVICES UNDER SIMILAR CIRCUMSTANCES AND CONDITIONS; TO PREVENT UNDUE OR UNREASONABLE PREFERENCES TO PERSONS, CORPORATIONS, OR LOCALITIES; TO INHIBIT GREATER COMPENSATION FOR A SHORTER THAN FOR A LONGER DISTANCE ON THE SAME LINE; AND TO ABOLISH COMBINATIONS FOR THE POOLING OF FREIGHTS.'

MANIFESTLY THE INTENTION HERE IS TO REGULATE AND CONTROL THE RELATIONSHIP BETWEEN THE INTERSTATE CARRIERS AND PRIVATE INDIVIDUALS, NATURAL AND CORPORATE. CONGRESS WAS DEALING WITH THE ORDINARY COMMERCIAL TRANSPORTATION. ALL DOUBT WITH RESPECT TO THE FACT IS PUT AT REST BY SECTION 22 OF THE ORIGINAL INTERSTATE COMMERCE ACT, WHEREIN IT IS PROVIDED: "THAT NOTHING IN THIS ACT SHALL PREVENT THE CARRIAGE, STORAGE, OR HANDLING OF PROPERTY FREE OR AT REDUCED RATES FOR THE UNITED STATES, STATE, OR MUNICIPAL GOVERNMENTS.' THIS SAME EXCEPTION IN FAVOR OF THE GOVERNMENT WAS CARRIED FORWARD IN THE TRANSPORTATION ACT OF 1920. THIS STATUTE IN AMENDING PARAGRAPH 3 OF SECTION 16OF THE INTERSTATE COMMERCE ACT, BY PARAGRAPH (2) THEREOF, RESTRAINED THE RAILROADS FROM RELINQUISHING POSSESSION TO FREIGHT TRANSPORTED UNTIL ALL TARIFF RATES AND CHARGES THEREON HAVE BEEN PAID AT THE POINT OF DESTINATION, EXCEPT UNDER SUCH RULES AND REGULATIONS AS THE INTERSTATE COMMERCE COMMISSION MAY PRESCRIBE; BUT A PROVISO THERETO IN PRECISE AND EXPRESS TERMS EXCEPTED THE UNITED STATES AS WELL AS ALL OTHER POLITICAL SUBDIVISIONS OF THE NATION FROM ITS OPERATION.

THE EXTENSION OF CREDIT TO THE UNITED STATES, TOGETHER WITH THE RIGHT TO SECURE AND PROFIT BY RATES OTHER THAN THE PUBLISHED TARIFFS, SEEMS TO CLEARLY INDICATE THAT CONGRESS WAS LEGISLATING IN THE ADOPTION OF THIS AMENDMENT, WITH REFERENCE TO COMMERCIAL TRANSPORTATION, TO TRANSPORTATION FURNISHED TO PRIVATE SHIPPERS AND NOT THE GOVERNMENT. THE ACT OF JUNE 7, 1924, AGAIN AMENDS PARAGRAPH 3 OF SECTION 16 OF THE INTERSTATE COMMERCE ACT, 43 STAT. 633, WITH THE EXCEPTION OF PARAGRAPH (A), THE THREE-YEAR STATUTE OF LIMITATIONS; THE REMAINING SECTIONS PRESCRIBING LIMITATIONS FOR THE PROSECUTION OF CLAIMS FOR DAMAGES AND OVERCHARGES ARE INAPPLICABLE TO GOVERNMENT TRANSPORTATION. THE MEANS AVAILABLE TO THE GOVERNMENT FOR REIMBURSEMENT OF ALL OVERCHARGES, DAMAGES, ETC., DEALT WITH IN THE SECTION OF THE TRANSPORTATION ACT IN ISSUE, IS BY DEDUCTING FROM UNPAID AND UNDISPUTED BILLS FOR SUBSEQUENT TRANSPORTATION--- A PROCEEDING IN THE NATURE OF A COUNTERCLAIM--- LEAVING THE CARRIER THE RIGHT AND THE BURDEN TO SUE IN THIS COURT FOR THE RECOVERY OF THE AMOUNT DEDUCTED. * * *

IT APPEARS UPON REVIEW THAT THE SETTLEMENT COMPLAINED OF WAS LEGAL AND CORRECT. ACCORDINGLY THE DECISION OF MARCH 24, 1937, 16 COMP. GEN. 882, MUST BE AND IS SUSTAINED.