T-SR-09271, B-127907, MAY 11, 1956

TO MERCURY FREIGHT LINES, INC.:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 24, 1956, AND TO YOUR SUPPLEMENTAL BILL NO. M-35154 IN THE SUM OF $855.10, RECLAIMING AMOUNTS ALLEGED TO HAVE BEEN DEDUCTED BECAUSE OF OVERPAYMENTS MADE TO YOUR COMPANY FOR THE TRANSPORTATION OF NINE SHIPMENTS OF GOVERNMENT PROPERTY TO POINTS IN ALABAMA AND FLORIDA FROM SEATTLE, WASHINGTON, AND LOS ANGELES, OAKLAND, AND PLANEHAVEN, CALIFORNIA, IN 1951 AND 1952.

YOUR CLAIM IS BASED ON THE USE OF THROUGH RATES PUBLISHED TO APPLY BETWEEN THE ORIGINS AND DESTINATIONS OF THE SHIPMENTS. HOWEVER, THE RECORD SHOWS THAT ON THE DATES OF SERVICE THERE WERE IN EFFECT BETWEEN THE ORIGINS AND DESTINATIONS AGGREGATES OF INTERMEDIATE RATES. WHILE PART II OF THE INTERSTATE COMMERCE ACT, AS AMENDED, DOES NOT CONTAIN AN AGGREGATE OF INTERMEDIATES CLAUSE AS DOES PART I, IT IS PROVIDED IN SECTION 216, PARAGRAPH (D), PART II THEREOF, THAT EVERY UNJUST AND UNREASONABLE CHARGE FOR SERVICE RENDERED BY ANY COMMON CARRIER BY MOTOR VEHICLE ENGAGED IN INTERSTATE COMMERCE IS UNLAWFUL. IT HAS BEEN SAID, IN THE CASE OF RAIL CARRIERS, THAT:

"* * * APART FROM STATUTORY ENACTMENT, IT IS PRIMA FACIE UNREASONABLE TO CHARGE MORE FOR A SHORTER THAN FOR A LONGER HAUL. TO CHARGE MORE FOR A THROUGH HAUL THAN THE AGGREGATE OF THE INTERMEDIATE RATES IF LIKEWISE PRIMA FACIE UNREASONABLE. * * *"

PATTERSON V. LOUISVILLE AND NASHVILLE RAILROAD COMPANY, 269 U.S. 1, 11. MOREOVER, IN THE CASE OF KINGAN AND COMPANY V. OLSON TRANSPORTATION COMPANY, ET AL., 32 M.C.C. 10, INVOLVING A COMMON CARRIER BY MOTOR VEHICLE, THE INTERSTATE COMMERCE COMMISSION SAID:

"COMPLAINANT SUBMITTED NO EVIDENCE CONCERNING THE REASONABLENESS OF THE ASSAILED RATES EXCEPT THE FACT THAT THEY EXCEEDED THE CORRESPONDING AGGREGATE OF INTERMEDIATE RATES. PART II DOES NOT CONTAIN AN AGGREGATE-OF -INTERMEDIATE-RATES PROVISION AS DOES PART I (SECTION 4). BUT PRIOR TO THE ENACTMENT OF THAT PROVISION IN 1910 (MANN-ELKINS ACT), THE COMMISSION HELD THAT THE BURDEN OF PROOF WAS UPON RAIL CARRIERS TO DEFEND THE REASONABLENESS OF A JOINT THROUGH RATE THAT EXCEEDED THE AGGREGATE OF INTERMEDIATE RATES BETWEEN THE SAME POINTS OVER THE PARTICULAR ROUTE. SEE PATTERSON V. LOUISVILLE AND N.R.R. CO., 269 U.S. 1. THE SAME PRINCIPLES THAT GOVERNED RAIL RATES UNDER SUCH CIRCUMSTANCES PRIOR TO THE 1910 AMENDMENT ARE APPLICABLE TO SIMILAR CONDITIONS INVOLVING MOTOR CARRIER RATES. THEREFORE, THE ASSAILED JOINT RATES ARE PRESUMED TO HAVE BEEN UNREASONABLE TO THE EXTENT THAT THEY EXCEEDED THE CORRESPONDING AGGREGATE OF INTERMEDIATE RATES. DEFENDANT SUBMITTED NO EVIDENCE TO REBUT THIS PRESUMPTION.

LIKEWISE, IN VICTORY GRANITE COMPANY V. CENTRAL TRUCK LINES, 44 M.C.C. 320, THE COMMISSION HELD TO BE UNREASONABLE A THROUGH RATE WHICH EXCEEDED THE CORRESPONDING AGGREGATE OF INTERMEDIATE RATES, AGAIN RELYING APPARENTLY, UPON A PRESUMPTION OF UNREASONABLENESS NOT REBUTTED BY DEFENDANT. THE COMMISSION SAID:

"* * * JOINT RATES WHICH EXCEED THE AGGREGATE OF INTERMEDIATE RATES ARE PRIMA FACIE UNREASONABLE. THIS PRESUMPTION CAN BE OVERCOME ONLY BY A CLEAR SHOWING THAT THE AGGREGATE OF INTERMEDIATE RATES IS UNREASONABLY LOW. * * *" SEE ALSO BELL POTATO CHIP CO. V. ABERDEEN TRUCK LINE, 43 M.C.C. 337.

THE GENERAL ACCOUNTING OFFICE, IN THE DISCHARGE OF THE DUTY IMPOSED UPON IT BY THE BUDGET AND ACCOUNTING ACT, 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 IN THE LIGHT OF ESTABLISHED PRINCIPLES ENUMERATED BY THE COMMISSION. THE GENERAL ACCOUNTING OFFICE DOES NOT MAKE DETERMINATIONS AS TO THE REASONABLENESS OR UNREASONABLENESS OF TARIFF RATES. IT DOES, 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 APPEAR TO VIOLATE THE DUTY IMPOSED BY LAW UPON THIS OFFICE, TO CONSIDER SUBSTANTIVE DEFENSES IN LAW IN THE SETTLEMENT OF CLAIMS.

IN THE PRESENT CASE, THERE IS FOR CONSIDERATION WHETHER OR NOT APPROPRIATED FUNDS MAY BE VIEWED AS PROPERLY AVAILABLE FOR THE PAYMENT OF CHARGES BASED ON THROUGH RATES THAT ARE PRESUMPTIVELY UNREASONABLE TO THE EXTENT THAT THEY EXCEED THE CORRESPONDING AGGREGATE OF INTERMEDIATE RATES PUBLISHED TO APPLY BETWEEN THE ORIGINS AND DESTINATIONS OF THE SHIPMENTS. 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 DEFENSES 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 THIS INSTANCE 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 RATES EMPLOYED AS A BASIS FOR THE CLAIM. UNDER THE CIRCUMSTANCES, THEREFORE, IT DOES NOT APPEAR THAT THIS OFFICE WOULD BE JUSTIFIED IN HOLDING APPROPRIATED FUNDS TO BE AVAILABLE FOR THE PAYMENT OF THE FULL CHARGES CLAIMED, AND THE AMOUNT OF $176.79, STILL OUTSTANDING IN CONNECTION WITH BILL OF LADING NO. N-1246244, SHOULD BE REFUNDED PROMPTLY SO AS TO OBVIATE THE NECESSITY FOR MAKING A DEDUCTION OF THAT AMOUNT FROM AN AMOUNT OTHERWISE DUE YOUR COMPANY.