B-102296, APR. 19, 1956

B-102296, APR. 19, 1956

TO INTERSTATE OIL TRANSPORT COMPANY:

REFERENCE IS MADE TO YOUR LETTER DATED MARCH 24, 1952, TRANSMITTING A BILL IN THE AMOUNT OF $1,350.81 AND QUESTIONING THE PROPRIETY OF THE ACTION TAKEN BY THIS OFFICE ON JANUARY 2, 1952, IN WITHHOLDING AN IDENTICAL AMOUNT, REPRESENTING AN OVERPAYMENT ON THE SHIPMENT OF 14,150.89 BARRELS OF AVIATION GASOLINE FROM SAVANNAH, GEORGIA, TO WILMINGTON, NORTH CAROLINA, UNDER BILL OF LADING WQ-16742491 DURING FEBRUARY 1944, FROM AN AMOUNT OTHERWISE DUE YOUR COMPANY FOR SERVICES RENDERED IN APRIL AND MAY 1951, UNDER BILL OF LADING AF-465741.

THE SUM OF $1,350.81 SO WITHHELD REPRESENTS THE DIFFERENCE BETWEEN THE PRICE OF $0.38 PER BARREL (INCLUDING PUMPING OFF CHARGES) EVIDENCED BY YOUR AFFREIGHTMENT AGREEMENT DATED FEBRUARY 8, 1944, AND ACCEPTED BY ARTHUR B. ANDERSON, FIRST LIEUTENANT, AC, TRAFFIC SECTION, PETROLEUM TRAFFIC BRANCH, HQ, ASC, PATTERSON FIELD, OHIO, AND THE RATE OF 6.60 MILLS PER TON MILE (PLUS 3/4 OF ONE CENT PER BARREL PUMPING OUT CHARGES) PRESCRIBED BY AMENDMENT NO. 1, REVISED SUPPLEMENTARY REGULATION NO. 14, ISSUED BY THE OFFICE OF PRICE ADMINISTRATION ON 7/15/43. (SEE 8FR. 9880). IT IS APPARENTLY YOUR CONTENTION THAT SUCH REGULATION IS NOT APPLICABLE TO THE MOVEMENT FROM SAVANNAH, GEORGIA, TO WILMINGTON, NORTH CAROLINA, BECAUSE THE PRICE OF $0.38 PER BARREL REPRESENTED THE NEGOTIATED VALUE OF THE SERVICES PERFORMED, AND THAT THIS OFFICE WAS WITHOUT AUTHORITY TO DEDUCT AN OVERPAYMENT, BASED ON THE APPLICATION OF SUCH REGULATION, APPROXIMATELY EIGHT YEARS AFTER SUCH MOVEMENT OCCURRED.

AMENDMENT NO. 1 TO REVISED SUPPLEMENTARY REGULATION NO. 14, CITED ABOVE, AMENDED SECTION 7.6 OF THE GENERAL MAXIMUM PRICE REGULATIONS TO READ IN PERTINENT PART AS FOLLOWS:

"/D) MAXIMUM PRICES ON THE ATLANTIC INTRACOASTAL WATERWAY. MAXIMUM PRICES FOR THE TRANSPORTATION, BY CARRIERS OTHER THAN COMMON CARRIERS, OF PETROLEUM AND PETROLEUM PRODUCTS IN BULK BY BARGE BETWEEN POINTS ON THE ATLANTIC INTRACOASTAL WATERWAY SOUTH OF NORFOLK, VIRGINIA, AND ITS TRIBUTARIES, SHALL CONTINUE TO BE DETERMINED UNDER THE PROVISIONS OF SEC. 1499.2 OF THE GENERAL MAXIMUM PRICE REGULATION, EXCEPT THAT THE MAXIMUM PRICES FOR DISTANCES OF 25 MILES OR MORE SHALL BE AS FOLLOWS:

TABLE

(RATE IN MILLS PER NET TON PER MILE)

MINIMUM CARGOES IN TOW

DISTANCE IN MILES

750 1,000 2,000 3,000

TONS TONS TONS TONS

* * * * * * * 150 TO, BUT NOT INCLUDING, 300 MILES 9.40 8.60 6.60 5.50"

POINTS ON THE ATLANTIC INTRACOASTAL WATERWAY ARE DEFINED UNDER SECTION 7.6 (A) AS FOLLOWS:

"/6) "POINTS ON THE ATLANTIC INTRACOASTAL WATERWAY" MEAN ALL POINTS WHICH ARE OR MAY BE SERVED WITH BARGE TRANSPORTATION BY USE OF THE ATLANTIC INTRACOASTAL WATERWAY SOUTH OF, AND INCLUDING NORFOLK, VIRGINIA, AND ALL POINTS ON THE TRIBUTARIES OF THE ATLANTIC INTRACOASTAL WATERWAY SOUTH OF NORFOLK, VIRGINIA.'

BOTH SAVANNAH, GEORGIA, AND WILMINGTON, NORTH CAROLINA, FALL WITHIN THE ABOVE DEFINITION OF ,POINTS ON THE ATLANTIC INTRACOASTAL WATERWAY, AND THE ABOVE-QUOTED LANGUAGE FROM SECTION 7.6 (D) ESTABLISHES BEYOND ANY REASONABLE DOUBT THAT THE PRICE ADMINISTRATOR INTENDED THE MAXIMUM RATES SET OUT IN AMENDMENT NO. 1 SHOULD APPLY TO MOVEMENTS BETWEEN THE TWO CITIES HERE INVOLVED.

UNDER THE PROVISIONS OF SECTION 4 (A) OF THE EMERGENCY PRICE CONTROL ACT OF 1942, 56 STAT. 28, THE SALE OR DELIVERY OF ANY COMMODITY, INCLUDING SERVICES OF THE TYPE FURNISHED IN THIS CASE, AT A PRICE IN EXCESS OF APPLICABLE MAXIMUM PRICE REGULATIONS, WAS UNLAWFUL, REGARDLESS OF ANY CONTRACT OR AGREEMENT FOR PAYMENT IN EXCESS OF SUCH MAXIMUM PRICE. UNDER THE CIRCUMSTANCES, THE MAXIMUM PRICES ESTABLISHED BY AMENDMENT NO. 1 FOR MOVEMENTS FROM SAVANNAH, GEORGIA, TO WILMINGTON, NORTH CAROLINA, WERE ALSO THE MAXIMUM PRICES WHICH COULD HAVE BEEN LAWFULLY PAID TO, OR RECEIVED BY, YOU FOR SUCH SERVICES, AND THE PURCHASING AGENTS OF THE DEPARTMENT OF THE ARMY WERE WITHOUT AUTHORITY TO WAIVE SUCH MAXIMUM PRICES OR TO CONTRACT IN EXCESS THEREOF. NICK DELIS CO., INC. V. UNITED STATES, 126 C.CLS. 133, 135.

WITH REFERENCE TO THE AUTHORITY OF THIS OFFICE TO EFFECTUATE RECOVERY IN 1952 OF AN OVERPAYMENT ARISING OUT OF A VIOLATION OF MAXIMUM PRICE REGULATIONS IN 1944, IT SHOULD BE NOTED THAT THE PROVISIONS OF SECTION 205 (3) OF THE EMERGENCY PRICE CONTROL ACT OF 1942, 56 STAT. 34, LIMITING THE PERIOD DURING WHICH A PURCHASER MAY BRING SUIT TO RECOVER DAMAGES FOR VIOLATION OF MAXIMUM PRICE REGULATIONS, IS APPLICABLE ONLY IN THOSE CASES IN WHICH RECOVERY OF TREBLE DAMAGES IS ATTEMPTED BY INSTITUTION OF A COURT ACTION. THE RECOVERY IN THE INSTANT CASE WAS LIMITED TO THE AMOUNT OF THE OVERPAYMENT AND WAS ACCOMPLISHED BY APPLICATION OF THE GOVERNMENT'S COMMON -LAW RIGHT OF SET-OFF, BARRY V. UNITED STATES, 229 U.S. 47, 52. THE AUTHORITY GRANTED THIS OFFICE BY THE PROVISIONS OF SECTION 236 OF THE REVISED STATUTES, AS AMENDED BY SECTION 305 OF THE ACT OF JUNE 19, 1921, 42 STAT. 24, MAKES IT INCUMBENT UPON US TO SET-OFF THE AMOUNT OF UNLAWFUL OR UNAUTHORIZED PAYMENTS AGAINST ANY SUBSEQUENT CREDITS ACCRUING TO THE ACCOUNT OF THE RECIPIENT OF SUCH PAYMENTS. UNITED STATES V. MUNSEY TRUST CO., 332 U.S. 234, 239-240.

THE AMOUNT OF OVERPAYMENT FOR WHICH SET-OFF WAS ACCOMPLISHED IN THE INSTANT CASE WAS CLEARLY BOTH ILLEGAL AND UNAUTHORIZED, AND ACCORDINGLY, UPON REVIEW, THE ACTION TAKEN BY THIS OFFICE TO RECOVER SUCH OVERPAYMENT IS SUSTAINED AND PAYMENT OF THE AMOUNT CLAIMED ON YOUR PRESENT BILL IS DENIED.