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B-131027, APR. 12, 1957

B-131027 Apr 12, 1957
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INCORPORATED: REFERENCE IS MADE TO YOUR PROTEST AS TO THE AUDIT ACTION TAKEN BY OUR TRANSPORTATION DIVISION IN STATING AN OVERPAYMENT IN THE SUM OF $90.90 MADE ON YOUR BILL NO. THIS SHIPMENT WAS TENDERED TO THE EAST TEXAS MOTOR FREIGHT LINES AT HOUSTON. YOU CLAIMED AND WERE PAID $737.30. OUR TRANSPORTATION DIVISION DETERMINED THAT THE APPLICABLE CHARGES WERE $646.40. MEMPHIS IS REPORTED TO BE THE AUTHORIZED AND USUAL POINT OF INTERCHANGE BETWEEN THE CARRIERS INVOLVED. WHETHER THE ONE FACTOR JOINT THROUGH RATE OR THE COMBINATION OF LOCAL RATES IS USED. THE AGGREGATE OF INTERMEDIATE RATES THUS WAS CONSTRUCTED VIA THE NORMAL ROUTE OF MOVEMENT. WHICH YOU HAVE REFUSED TO PAY APPARENTLY BECAUSE (1) THE GOVERNMENT'S CLAIM IS MORE THAN TWO YEARS OLD.

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B-131027, APR. 12, 1957

TO MALONE FREIGHT LINES, INCORPORATED:

REFERENCE IS MADE TO YOUR PROTEST AS TO THE AUDIT ACTION TAKEN BY OUR TRANSPORTATION DIVISION IN STATING AN OVERPAYMENT IN THE SUM OF $90.90 MADE ON YOUR BILL NO. US-1111 (VOUCHER NO. 346342, MARCH 1945 ACCOUNTS OF DISBURSING OFFICER M. B. HALE) FOR THE TRANSPORTATION OF SULPHUR, WEIGHING 50,500 POUNDS, FROM HOUSTON, TEXAS, TO HUNTSVILLE ARSENAL, ALABAMA, UNDER GOVERNMENT BILL OF LADING NO. WV-7304391 IN MARCH 1945.

THIS SHIPMENT WAS TENDERED TO THE EAST TEXAS MOTOR FREIGHT LINES AT HOUSTON, WITH INSTRUCTIONS TO FORWARD IT TO HUNTSVILLE ARSENAL VIA THAT CARRIER AND THE MALONE FREIGHT LINES. FOR THE INVOLVED SERVICES, YOU CLAIMED AND WERE PAID $737.30, PREDICATED ON A FOURTH-CLASS RATE (THROUGH) OF $1.46 PER 100 POUNDS. IN THE AUDIT OF THE CHARGES PAID, OUR TRANSPORTATION DIVISION DETERMINED THAT THE APPLICABLE CHARGES WERE $646.40, COMPUTED AT $1.28 PER 100 POUNDS, CONSISTING OF CLASS 5 AND CLASS 7 RATES OF 83 CENTS AND 45 CENTS TO AND BEYOND MEMPHIS, TENNESSEE, RESPECTIVELY. MEMPHIS IS REPORTED TO BE THE AUTHORIZED AND USUAL POINT OF INTERCHANGE BETWEEN THE CARRIERS INVOLVED, WHETHER THE ONE FACTOR JOINT THROUGH RATE OR THE COMBINATION OF LOCAL RATES IS USED, ENTAILING IN EITHER CASE A JOURNEY OF 796 MILES. THE AGGREGATE OF INTERMEDIATE RATES THUS WAS CONSTRUCTED VIA THE NORMAL ROUTE OF MOVEMENT, NO BACK-HAUL BEING INVOLVED. WE ISSUED A NOTICE OF OVERPAYMENT, OUR FORM NO. 1003, IN THE SUM OF $90.90 ($737.30 LESS $646.40), WHICH YOU HAVE REFUSED TO PAY APPARENTLY BECAUSE (1) THE GOVERNMENT'S CLAIM IS MORE THAN TWO YEARS OLD, AND THUS ALLEGEDLY TIME BARRED UNDER THE INTERSTATE COMMERCE ACT; (2) AN AGGREGATE OF INTERMEDIATE RATES, OR A COMBINATION OF LOCAL RATES, CANNOT BE USED TO DEFEAT AN ESTABLISHED JOINT THROUGH RATE, IN THE ABSENCE OF A SPECIFIC RULING BY THE INTERSTATE COMMERCE COMMISSION THAT THE ATTACHED JOINT THROUGH RATE IS UNREASONABLE; AND (3) YOU QUESTION THE RIGHT OF OUR OFFICE TO COLLECT OVERPAYMENTS OF THIS NATURE PRIOR TO A RULING BY THE INTERSTATE COMMERCE COMMISSION ON THE REASONABLENESS OF THE JOINT THROUGH RATE.

CONCERNING THE QUESTION PF THE STATUTE OF LIMITATIONS, IT IS NOT UNDERSTOOD THAT THE RIGHT OF THE GOVERNMENT TO RECOVER OVERPAYMENTS FOR TRANSPORTATION CHARGES IS TO BE DEFEATED BECAUSE OF THE LIMITATION YOU CITE. IT WAS HELD BY THE UNITED STATES SUPREME COURT, IN GRAND TRUNK WESTERN RY. CO. V. UNITED STATES, 252 U.S. 112, 121, THAT---

"* * * IT MATTERS NOT HOW LONG A TIME ELAPSED BEFORE THE ERROR IN MAKING THE OVERPAYMENT WAS DISCOVERED OR HOW LONG THE ATTEMPT TO RECOVER IT WAS DEFERRED. THE STATUTE OF LIMITATIONS DOES NOT ORDINARILY RUN AGAINST THE UNITED STATES AND WOULD NOT PRESENT A BAR TO A SUIT FOR THE AMOUNT * *

IN THIS CONNECTION, SEE OUR LETTER OF OCTOBER 15, 1956, B-126767, PERTAINING TO YOUR BILL US-707, AND THE COURT CASES THERE CITED.

AS TO THE APPLICATION OF THE AGGREGATE-OF-INTERMEDIATE RATES IN THE COMPUTATION OF THE CHARGES IT IS TO BE OBSERVED THAT THE GENERAL ACCOUNTING OFFICE, IN THE DISCHARGE OF THE DUTY IMPOSED UPON IT BY THE LAW, 31 U.S.C. 71, IS GOVERNED IN THE AUDIT OF INTERSTATE TRANSPORTATION ACCOUNTS BY DULY FILED AND PUBLISHED TARIFF RATES, WHERE APPLICABLE, EXCEPT IN SUCH INSTANCES AS THOSE IN WHICH THE INTERSTATE COMMERCE COMMISSION MAY HAVE MADE A DETERMINATION ESTABLISHING THE UNREASONABLENESS OF SUCH APPLICABLE TARIFF RATES, OR WHERE SUCH APPLICABLE TARIFF RATES ARE PRIMA FACIE UNREASONABLE, CONSISTENT WITH PRINCIPLES ENUNCIATED BY THE COMMISSION IN COMPARABLE CASES. OUR OFFICE DOES NOT MAKE DETERMINATIONS AS TO THE REASONABLENESS OR UNREASONABLENESS OF TARIFF RATES. WE DO, HOWEVER, DETERMINE WHETHER THE FACTS AND CIRCUMSTANCES IN CONNECTION WITH A GIVEN CLAIM SHOW THAT THE CLAIM IS BASED ON A RATE APPLIED UNDER CIRCUMSTANCES WHERE SIMILAR RATES IN SIMILAR CIRCUMSTANCES HAVE BEEN DECLARED BY THE COMMISSION TO BE PRIMA FACIE UNREASONABLE. TO SANCTION THE AVAILABILITY OF PUBLIC FUNDS FOR PAYMENT OF CHARGES CLAIMED IN SUCH SITUATIONS WOULD VIOLATE THE DUTY IMPOSED BY LAW UPON OUR OFFICE TO CONSIDER IN THE SETTLEMENT OF CLAIMS, SUBSTANTIVE DEFENSES IN LAW.

IN THE PRESENT CASE IT IS OUR DUTY TO DECIDE WHETHER APPROPRIATED FUNDS ARE PROPERLY AVAILABLE FOR THE PAYMENT OF CHARGES ON THE BASIS OF A THROUGH RATE WHEN WE KNOW THAT IN PROCEEDINGS BEFORE THE INTERSTATE COMMERCE COMMISSION INVOLVING A SIMILAR SITUATION SUCH A RATE HAS BEEN FOUND PRESUMPTIVELY UNREASONABLE TO THE EXTENT THAT IT EXCEEDS THE CORRESPONDING AGGREGATE OF INTERMEDIATE RATES. SEE KINGAN AND COMPANY V. OLSON TRANSPORTATION CO., 32 M.C.C. 10; VICTORY GRANITE CO. V. CENTRAL TRUCK LINES, INC., 44 M.C.C. 320, 324; AND STOKELY FOODS,INC. V. FOSTER FREIGHT LINES, INC., 62 M.C.C. 179, 182. THE CITED CASES DO NOT SPECIFICALLY REQUIRE, AS A CONDITION PRECEDENT TO THE PRESUMPTION OF UNREASONABLENESS, EVIDENCE CONCERNING THE REASONABLENESS OF THE ASSAILED THROUGH RATE. IN ANY CASE INVOLVING CLAIMS OF DOUBTFUL VALIDITY THE ACCOUNTING OFFICERS OF THE GOVERNMENT ARE REQUIRED TO RESOLVE THE DOUBT IN FAVOR OF THE GOVERNMENT. IN LONGWILL AND JOHNSON'S CASES, 17 C.CLS. 288, 291, THE COURT SAID:

"THE ACCOUNTING OFFICERS OF THE TREASURY ARE IN DUTY BOUND TO SCRUTINIZE CLAIMS AND ACCOUNTS WITH GREAT CARE, AS IS THEIR CUSTOM; AND IT IS THE UNDOUBTED RIGHT AND DUTY OF THE COMPTROLLERS * * * WHO ALONE OF THE ACCOUNTING OFFICERS HAVE AUTHORITY TO DECIDE THEREON, TO REJECT, IN WHOLE OR IN PART, AS THEIR JUDGMENT DICTATES, ALL THOSE CLAIMS WHICH THEY HAVE REASONABLE CAUSE TO SUSPECT TO BE TAINTED WITH FRAUD, OR TO WHICH THEY BELIEVE THERE MAY BE SUBSTANTIAL DEFENSE IN LAW, OR AS TO THE VALIDITY OF WHICH THEY ARE IN DOUBT.'

AND IN CHARLES V. UNITED STATES, 19 C.CLS. 316, 319:

"WHEN, IN THE COURSE OF THE EXAMINATION OF ACCOUNTS IN THE DEPARTMENTS, SUSPICIONS ARE AROUSED OR DOUBTS ARE ENTERTAINED AS TO THE VALIDITY OF THE DEMANDS OF CLAIMANTS, THE PARTIES MAY BE SENT TO THIS COURT TO PROVE THEIR CASES UNDER THE RULES AND FORMS OF LAW, UPON LEGAL AND COMPETENT EVIDENCE, OR THEIR DEMANDS MAY BE REJECTED ALTOGETHER, LEAVING THE CLAIMANTS TO PROSECUTE THEM HERE UPON THEIR VOLUNTARY PETITIONS, IF THEY SO DESIRE. THAT IS THE MAIN PROTECTION WHICH THE ACCOUNTING OFFICERS CAN SECURE FOR THEMSELVES AND FOR THE GOVERNMENT IN THE CASE OF CLAIMS OF DOUBTFUL VALIDITY IN FACT OR IN LAW * * *.'

IN THE INSTANT MATTER, AND BEARING IN MIND THAT THE COMBINATION OF LOCAL RATES WAS CONSTRUCTED VIA THE NORMAL ROUTE OF MOVEMENT APPLICABLE TO THE THROUGH JOINT RATE AND THE COMBINATION OF LOCAL RATES, BOTH INVOLVING THE SAME MILEAGE, THERE APPEARS NOT MERELY A DOUBT AS TO THE VALIDITY OF THE CHARGES CLAIMED, BUT RATHER A PRESUMPTION OF PARTIAL INVALIDITY ARISING FROM THE PRIMA FACIE UNREASONABLENESS OF THE RATE EMPLOYED AS A BASIS FOR THE CLAIM. UNDER THE CIRCUMSTANCES, THEREFORE, IT DOES NOT APPEAR THAT WE WOULD BE JUSTIFIED IN HOLDING APPROPRIATED FUNDS TO BE AVAILABLE FOR THE PAYMENT OF THE TOTAL CHARGES CLAIMED.

AS TO OUR RIGHT TO EFFECT COLLECTION OF OVERPAYMENTS BASED ON RATES WHICH HAVE BEEN FOUND BY THE INTERSTATE COMMERCE COMMISSION IN SIMILAR SITUATIONS TO BE UNREASONABLE, SEE UNITED STATES V. WESTERN PACIFIC RAILROAD COMPANY ET AL., 352 U.S. 59.

THE AUDIT ACTION OF OUR TRANSPORTATION DIVISION WAS CONSISTENT WITH THE FOREGOING AND IS NOT SHOWN TO HAVE BEEN IN ERROR OTHERWISE. ACCORDINGLY, THE OVERPAYMENT OF $90.90 SHOULD BE PROMPTLY REFUNDED.

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