B-144819, JUL. 17, 1961

B-144819, JUL. 17, 1961

TO CENTRAL OF GEORGIA RAILWAY COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF JANUARY 11, 1961 (FILE NOS. N-25547-G-A AND N-22152-GA), WHEREIN YOU REQUESTED A REVIEW OF OUR SETTLEMENTS NO. TK 538619 AND NO. TK 203374, DATED DECEMBER 29, 1960, WHICH DISALLOWED YOUR CLAIMS FOR ADDITIONAL FREIGHT CHARGES ON SEVERAL SHIPMENTS OF LUMBER (GUM VENEER) THAT MOVED BETWEEN MEMPHIS, TENNESSEE, AND SAVANNAH, GEORGIA, DURING 1943, UNDER GOVERNMENT BILLS OF LADING. EACH BILL OF LADING WAS ANNOTATED "FOR EXPORT" AND BORE REFERENCE TO UNITED KINGDOM LEND-LEASE REQUISITION NO. 11906.

THE QUESTION YOU PRESENT CENTERS ABOUT THE PROVISIONS OF SECTION 321 (A) OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 898, 954; 49 U.S.C. 65, 1940 ED., WHEREBY FULL COMMERCIAL RATES ARE MADE APPLICABLE TO GOVERNMENT SHIPMENTS WITH CERTAIN EXCEPTIONS, INCLUDING THOSE CASES WHERE THE MATERIAL SHIPPED CONSISTED OF "MILITARY OR NAVAL PROPERTY OF THE UNITED STATES MOVING FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE" TO WHICH LAND- GRANT RATES WERE APPLICABLE. THE SETTLEMENTS IN QUESTION WERE BASED ON THE DETERMINATION THAT THE LUMBER TRANSPORTED WAS OF A MILITARY CHARACTER AND WAS DESTINED FOR MILITARY USE, AND PAYMENT FOR THE SERVICES RENDERED WAS MADE ON THE BASIS OF NET LAND-GRANT RATES.

THE BASIS OF YOUR CLAIM FOR PAYMENT AT THE FULL COMMERCIAL RATES SEEMS TO BE THAT THERE IS NO EVIDENCE IN THE RECORD "THAT THE FULL END USE WAS ALL MILITARY.' YOU CITE IN THIS CONNECTION SECTION 5J OF REQUISITION NO. 11906 WHICH READS AS FOLLOWS:

"THE TIMBER IS FOR THE MINISTRY OF SUPPLY NATIONAL STOCK WHICH IS HELD IN CUSTODY BY FIRMS ON BEHALF OF THE MINISTRY. ON A LICENSE BEING ISSUED THE FIRM IS AUTHORIZED TO SELL THE TIMBER TO A CONSUMER AT THE FIXED PRICES LAID DOWN BY THE MINISTRY. THE FIRM THEN PAYS TO THE MINISTRY THE VALUE OF THE TIMBER LESS AN APPROVED SELLING COMMISSION.'

IN OUR DECISION TO YOU DATED JULY 22, 1960, B-142701, YOUR FILE NOS. N- 34111-G-A, AND N-28325-G-A, WE CONSIDERED AN IDENTICAL PROVISION THAT APPEARED IN OTHER REQUISITIONS, WHICH WAS THE BASIS OF LUMBER PROCUREMENT BY THE BRITISH MINISTRY OF SUPPLY MISSION. ON PAGE 2 OF THAT LETTER WE SAID, IN CONNECTION WITH THE PROVISION IN THE REQUISITION,WHICH YOU CITED, THAT:

"THIS PROVISION APPEARS TO PERTAIN TO THE MANNER OF DISTRIBUTING THE MATERIALS FOR ULTIMATE USE AND MERELY DESCRIBES THE MEANS SELECTED BY THE MINISTRY OF SUPPLY TO EFFECT THE USE OF THE PROPERTY FOR THE MILITARY NEEDS SHOWN ELSEWHERE IN THE REQUISITIONS. THE FIRMS HOLDING CUSTODY OF THE PROPERTY WERE SIMPLY ACTING AS AGENTS FOR THE MINISTRY AND, FOR SUCH SERVICES, WERE TO RECEIVE COMPENSATION AS APPROVED BY THE MINISTRY.'

IN OUR DECISION OF JULY 22, 1960, WE SUSTAINED THE SETTLEMENTS THERE UNDER CONSIDERATION UNDER THE RULE ADOPTED BY THE COURTS IN THESE LEND LEASE CASES THAT THE INTENDED USE OF THE PRODUCT AT TIME OF SHIPMENT, AS EVIDENCED FROM THE INTENTION OF USE AS STATED ON THE REQUISITION; PLUS THE GENERAL CHARACTER OF THE COMMODITY, AND THE CONDITIONS PREVAILING IN THE COUNTRY REQUISITIONING THE PRODUCT, WAS CONTROLLING AS TO THE APPLICATION OF LAND-GRANT RATES UNDER THE STATUTE.

WE CITED IN SUPPORT OF THIS PROPOSITION, UNITED STATES V. SPOKANE, PORTLAND AND SEATTLE RY.CO., 261 F.2D 681; AND NORTHERN PACIFIC R.CO. V. UNITED STATES, 330 U.S. 248, 254. SEE ALSO IN THIS CONNECTION, PENNSYLVANIA RAILROAD CO. V. UNITED STATES, 129 CT.CL. 781, 788, WHERE THE COURT REFERS TO THE INTENDED USE OF THE PLYWOOD. WE CONCLUDE FURTHER THAT THE DECISION IN CENTRAL OF GEORGIA RY.CO. V. UNITED STATES, CT.CL.NO. 316- 57, DECIDED APRIL 7, 1961, IS CONTROLLING IN THE PRESENT SITUATION.

THE CHICAGO AND NORTHWESTERN CASE TO WHICH YOU REFER, 129 CT.CL. 439, PERTAINS TO A PURELY DOMESTIC SITUATION WHERE THE COURT FOUND THAT THERE WAS NOT SUFFICIENT EVIDENCE TO ESTABLISH THE INTENTION OF MILITARY OR NAVAL USE AT TIME OF SHIPMENT.

AS TO THE INSTANT SHIPMENTS THERE IS NO QUESTION OF THE INTENTION OF THE USE FOR WHICH THESE SHIPMENTS WERE MADE. SECTION 5H OF REQUISITION NO. 11906 STATES THAT "THE SUPPLY IS URGENTLY NEEDED FOR THE CONSTRUCTION OF AIRCRAFT FOR THE FIGHTING FORCES.' WITH THIS EVIDENCE OF INTENTION TO SHIP FOR MILITARY OR NAVAL USE WE SUSTAIN THE SETTLEMENTS ALLOWING YOU CHARGES ON THE BASIS OF LAND-GRANT RATES.