B-125633, OCT. 27, 1955

B-125633, OCT. 27, 1955

TO MR. REX L. RAY, AUTHORIZED CERTIFYING OFFICER, UNITED STATES ATOMIC ENERGY COMMISSION:

REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 22, 1955, FILE F:RLR, REQUESTING AN ADVANCE DECISION ON THE LEGALITY OF REDUCING THE AMOUNT OF AN INDEBTEDNESS ARISING OUT OF DAMAGE TO A GOVERNMENT-OWNED FORD PICK-UP TRUCK WHILE BEING OPERATED WITHOUT AUTHORIZATION BY CHESTER E. BROWN.

YOU ADVISE THAT MR. BROWN WAS EMPLOYED AS A BUS DRIVER BY KAISER ENGINEERS DIVISION, A COST-PLUS-A-FIXED-FEE CONTRACTOR OF THE UNITED STATES ATOMIC ENERGY COMMISSION, AND THAT HE TOOK THE VEHICLE WITHOUT PERMISSION DURING HIS REGULAR HOURS OF EMPLOYMENT ON OCTOBER 10, 1954, TO DRIVE FROM THE JOB SITE TO HIS HOME TO GET A PACKAGE OF CIGARETTES. MR. BROWN LOST CONTROL OF THE VEHICLE ON THE RETURN TRIP AND DROVE INTO A DITCH, DAMAGING THE VEHICLE TO SUCH EXTENT THAT THE ESTIMATED COST OF THE REPAIR WAS APPROXIMATELY $450.00, THE AMOUNT AGREED UPON BY KAISER ENGINEERS, A REPRESENTATIVE OF YOUR COMMISSION, AND MR. BROWN'S ATTORNEYS AS THE FULL RETAIL VALUE OF THE VEHICLE IMMEDIATELY PRIOR TO THE ACCIDENT. MR. BROWN SUBSEQUENTLY, ON DECEMBER 13, 1954, EXECUTED AND DELIVERED TO KAISER ENGINEERS HIS PROMISSORY NOTE IN THE AMOUNT OF $450.00, PAYABLE TO THE RATE OF $25.00 PER MONTH WITH INTEREST AT 6 PERCENT UNTIL PAID IN FULL. HOWEVER, TITLE TO THE VEHICLE REMAINED IN THE UNITED STATES AND DURING THE PERIOD APRIL 25-28, 1955, THE VEHICLE, IN WRECKED CONDITION, WAS SOLD FOR $150.00 AT AN AUCTION OF GOVERNMENT PROPERTY CONDUCTED BY KAISER ENGINEERS.

UPON COMPLETION OF ITS WORK, KAISER ENGINEERS ASSIGNED THE NOTE AS A RECEIVABLE UNDER THE CONTRACT TO YOUR COMMISSION AND ALL PAYMENTS DUE THEREON HAVE BEEN MET THROUGH SEPTEMBER, 1955, LEAVING A BALANCE ON THE NOTE (APPARENTLY PRINCIPAL ONLY) OF $225.00. HOWEVER, MR. BROWN, HAVING BEEN ADVISED OF THE SALE OF THE VEHICLE, NOW CONTENDS THAT SINCE HE HAD AGREED TO PAY THE FULL VALUE OF THE VEHICLE, HE BELIEVES THE AMOUNT OBTAINED FROM ITS SALE SHOULD BE CREDITED AGAINST THE BALANCE DUE ON HIS NOTE. ACCORDINGLY, YOU REQUEST A DECISION ON THE LEGALITY OF SUCH REDUCTION IN MR. BROWN'S INDEBTEDNESS AND, IN THE EVENT SUCH REDUCTION IS ALLOWABLE, WHETHER INTEREST ON THE NOTE SHOULD BE COMPUTED ON THE REDUCED AMOUNT OF THE INDEBTEDNESS FROM THE DATE ON WHICH THE NOTE WAS ORIGINALLY EXECUTED. IT IS STATED IN YOUR LETTER THAT THE BEST AVAILABLE EVIDENCE WOULD INDICATE THAT COSTS OF $30.00 WERE INCURRED IN CONNECTION WITH THE SALE OF THE WRECKAGE.

WHEN AN AUTOMOBILE THAT HAS BEEN DAMAGED BY THE NEGLIGENCE OF ANOTHER CANNOT BE REPAIRED, THE MEASURE OF DAMAGES IS THE DIFFERENCE BETWEEN THE MARKET VALUE OF THE AUTOMOBILE BEFORE IT WAS DAMAGED AND THE VALUE OF THE WRECKAGE. 5 AM.JUR. 905; 26 COMP. GEN. 618, 620. THE OWNER OF A MOTOR VEHICLE INJURED BY ANOTHER'S WRONG OR NEGLIGENCE MUST USE ALL REASONABLE EFFORTS TO MINIMIZE THE DAMAGES, 42 C.J. 1290, AND CANNOT RECOVER THE FULL VALUE OF THE PROPERTY WHERE IT APPEARS THAT AFTER IT WAS DAMAGED HE COULD HAVE SOLD IT FOR A CERTAIN SUM 15 AM.JUR. 440. UNDER THE CIRCUMSTANCES, IT WAS THE DUTY OF THE UNITED STATES TO MITIGATE DAMAGES BY SALE OF THE WRECKAGE AND MR. BROWN'S LIABILITY IS LIMITED TO THE AMOUNT OF SUCH DAMAGES. ACCORDINGLY, THE SUM RECOVERED BY SALE OF THE VEHICLE, LESS REASONABLE EXPENSES OF SALVAGE AND SALE, WHICH YOU INDICATE ARE ESTIMATED TO BE $30, PROPERLY IS FOR APPLICATION AGAINST MR. BROWN'S INDEBTEDNESS AS OF THE DATE SUCH SUM WAS RECEIVED BY THE UNITED STATES.

THE COMPUTATION AND COLLECTION OF INTEREST ON THE AMOUNT OF THE NOTE, CREDITING PARTIAL PAYMENTS THEREON BY MR. BROWN AS OF THE DATE RECEIVED, TO THE DATE OF SALE OF THE WRECKAGE APPEARS PROPER. INTEREST THEREAFTER SHOULD BE COMPUTED ON THE BALANCE DUE ON THE NOTE AS OF THE DATE OF SALE OF THE WRECKAGE, CREDITING THE NET PROCEEDS OF THE SALE, WHICH APPEARS TO BE $120 ($150, SALES PRICE, LESS $30, EXPENSES OF SALE) AS OF THE DATE OF THE SALE AND PARTIAL PAYMENTS RECEIVED THEREAFTER AS OF THE DATE OF THEIR RECEIPT. WILLETT ET AL. V SCHMEISER MANUFACTURE COMPANY ET L., 255 P. 529; JENSEN V. NORTHWESTERN UNDERWRITERS' ASS-N. 159 N.W. 611.