B-150601, APR. 11, 1963

B-150601, APR. 11, 1963

TO ZELBY AND BURSTEIN:

YOUR LETTER OF SEPTEMBER 27, 1962, ADDRESSED TO OUR TRANSPORTATION DIVISION, ON BEHALF OF A-P-A TRANSPORT CORP., 2110 85TH STREET, NORTH BERGEN, NEW JERSEY, REQUESTS REVIEW OF A SETTLEMENT DATED AUGUST 28, 1962, WHICH DISALLOWED ITS CLAIM FOR REFUND OF $1,800 ADMINISTRATIVELY DEDUCTED TO COVER DAMAGES TO GOVERNMENT PROPERTY MOVING UNDER GOVERNMENT BILL OF LADING NO. A-3386883.

THE RECORD HERE SHOWS THAT THE SHIPMENT CONSISTING OF 64 CARTONS OF ELECTRON TUBES WEIGHING 1,472 POUNDS WHICH MOVED FROM A. B. DUMONT LABS., INC., CLIFTON, NEW JERSEY, TO THE EXPORT PACKING AND CRATING CO., 5401 FIRST AVENUE, BROOKLYN, NEW YORK, WAS DELIVERED ON JULY 18, 1960. THERE WAS NO APPARENT EXTERIOR DAMAGE TO THE CONTAINERS ON DELIVERY. THE SOUND OF BROKEN GLASS WAS NOTED BY THE CONSIGNEE CONTRACTOR'S PERSONNEL DURING THE PACKING OPERATION WHICH WAS CONCURRENT WITH THE RECEIPT OF THE SHIPMENT. THE CONSIGNEE CONTRACTOR'S FOREMAN ADVISED EUGENE B. SHEA, THE RESIDENT COGNIZANT INSPECTOR, OF THE SUSPECTED DAMAGE. THE LATTER REQUESTED THAT PACKING OPERATIONS BE CONTINUED AND THAT ALL CARTONS WITH SUSPECTED DAMAGE BE SET ASIDE FOR HIS INSPECTION. WHEN THE PACKING OPERATIONS WERE COMPLETED, FOUR CARTONS HAD BEEN SINGLED OUT FROM DIFFERENT SKIDS WITH SUSPECTED DAMAGE AND SET ASIDE FOR INSPECTION. WHILE NO DAMAGE WAS DISCERNIBLE TO THE EXTERIOR OF THE CARTONS, THE SOUND OF BROKEN GLASS WAS NOTED AND THE CARTONS WERE THEN OPENED BY THE INSPECTOR AND IN EACH INSTANCE IT WAS FOUND THAT THE FACE AND NECK OF EACH TUBE WAS BROKEN. IN THE JUDGMENT OF THE INSPECTOR THE CONDITION WAS CAUSED BY EXCESSIVE ROUGH HANDLING OF THE CONTAINERS. THE DEPARTMENT OF THE ARMY'S REPORT OF SURVEY FILE CONTAINS THE FOLLOWING STATEMENTS SIGNED BY THE RESIDENT COGNIZANT INSPECTOR:

"A. THE PACKING CONTRACTOR'S STANDARD OPERATING PROCEDURE AT THE PLANT FOR HANDLING DELICATE EQUIPMENT SUCH AS THAT WHICH WAS SUPPLIED ON SUBJECT ORDER, IS AND ALWAYS HAS BEEN IN MY OPINION SUFFICIENTLY EXERCISED TO PREVENT ANY DAMAGES TO GOVERNMENT PROPERTY.

"B. FROM WHAT I OBSERVED REGARDING THIS PARTICULAR RECEIVING, THE CONTRACTOR DID EXERCISE THE USUAL REASONABLE CARE IN THE HANDLING OF THE CONTAINERS ON RECEIPT FROM THE CARRIER.'

THE RECORD ALSO CONTAINS A LETTER FROM LEE SCHILLER, THE PRODUCTION MANAGER OF THE EXPORT PACKING AND CRATING CO., INC., WHICH READS, IN PERTINENT PART, AS FOLLOWS:

"WHILE HANDLING THE CARTONS OF TUBES AS THEY CAME OFF THE TRUCK, MY ATTENTION WAS CALLED TO (4) CARTONS THAT SHOWED EVIDENCE OF CONCEALED DAMAGE, IN THAT WHEN PICKED UP, THE SOUND OF BROKEN GLASS WAS HEARD INSIDE.

"THE TRANSPORTATION COMPANY WAS IMMEDIATELY NOTIFIED. ON JULY 20TH THEIR REPRESENTATIVE CAME TO ME AND WE EXAMINED THESE CARTONS. AT THIS TIME IT WAS NOTED THAT THE CONTENTS (4 EA., TUBES STK NO. 5960-552 0261) WERE COMPLETELY DESTROYED IN THE CARTONS.' THE ORIGINAL BILL OF LADING BEARS THE HANDWRITTEN NOTATION ON ITS FACE "CONCEALED DAMAGE TO 4 (FOUR) TUBES.' THUS, THE RECORD CLEARLY SUPPORTS THE CONCLUSION THAT THE DAMAGE WAS NOTED UPON DELIVERY AND THE "REPORT OF LOSS, DAMAGE, OR SHRINKAGE" COLUMN ON THE REVERSE SIDE OF THE GOVERNMENT BILL OF LADING WAS ANNOTATED AS FOLLOWS:

"DESCRIPTION: CONCEALED DAMAGE TO 4 (FOUR) TUBES SMASHED IN SEALED CONTAINER) (SIC.)

INVOICE VALUE OR COST OF REPAIRS,"$450.00 EA" (SIC.) THE ANNOTATION IS CERTIFIED TO BE CORRECT BY LEE SCHILLER AS PRODUCTION MANAGER ON THE DATE OF DELIVERY. THE REPORT OF SURVEY WAS APPROVED JANUARY 16, 1961, TO HOLD THE A-P-A TRANSPORT CORP. LIABLE IN THE AMOUNT OF $1,800 AND, UPON THE CARRIER'S FAILURE TO PAY THIS INDEBTEDNESS, COLLECTION WAS EFFECTED BY DEDUCTION FROM THE CARRIER'S REVENUE UNDER THE GOVERNMENT'S GENERAL RIGHT TO SET-OFF. SEE UNITED STATES V. MUNSEY TRUST CO., 332 U.S. 234, CITING GRATIOT V. UNITED STATES, 15 PET. 336 AND MCKNIGHT V. UNITED STATES, 98 U.S. 179.

IN DENYING CARRIER LIABILITY, YOU ENCLOSE A COPY OF A REPORT OF THE CARRIER'S INSURANCE ADJUSTER WHICH INDICATES IT CONCLUDES THAT THE DAMAGE MOST LIKELY RESULTED FROM MISHANDLING OF THE SHIPMENT BY THE CONSIGNEE- CONTRACTOR AND STATE THAT THE SHIPMENT WAS SIGNED FOR BY THE CONSIGNEE AS HAVING BEEN RECEIVED IN GOOD ORDER. YOU ALSO QUESTION WHY THE CONSIGNEE- CONTRACTOR PROCEEDED WITH THE CRATING OPERATION IF THE DAMAGE WAS NOTICED DURING THE RECEIVING OPERATION AND WHY THE CONSIGNEE-CONTRACTOR FAILED TO NOTIFY THE CARRIER OF DAMAGE FOR A PERIOD OF OVER THREE HOURS. YOU ALSO STRESS THAT THE CONTAINERS WERE MOVED BY THE CONSIGNEE-CONTRACTOR ON ITS EQUIPMENT TO THE LOADING PLATFORM ON WHICH THE PACKING OPERATION TOOK PLACE.

CONCERNING LIABILITY FOR LOSS OR DAMAGE TO GOODS WHILE IN TRANSIT, THE GENERAL RULE IS THAT THE SHIPPER BEARS THE INITIAL BURDEN OF PROVING DELIVERY OF THE GOODS TO THE CARRIER, AN UNDERTAKING BY THE CARRIER TO TRANSPORT THE GOODS, AND A FAILURE BY THE CARRIER TO PERFORM THE DUTY OF DELIVERING THE SAME QUANTITY OR QUALITY OF GOODS AT DESTINATION. MERCHANT SHIPPERS ASSOCIATION V. KELLOGG EXP. AND DRAYING CO., 170 P.2D 923; PALMER V. GILLARDE, 38 N.E.2D 352; GULF C. AND S.F.RY.CO. V. GALBRAITH, 39 S.W. 2D 91; RAILWAY EXPRESS AGENCY V. ANDERSON, 45 SO. 2D 168; SKYLAND HOSIERY CO. V. AMER.RY. EXPRESS CO., 114 S.E. 823; JOSEPH TOKER CO. V. LEHIGH VALLEY R.CO., 97 A.2D 598; AND GOLDBERG V. NEW YORK, N.H. AND H.R.CO., 153 A. 812. THE BILL OF LADING, AS A CONTRACT OF CARRIAGE AND A RECEIPT OF GOODS INDICATING ACCEPTANCE BY THE ORIGIN CARRIER IN ,APPARENT GOOD ORDER AND CONDITION" CONSTITUTES WEIGHTY AND PRIMA FACIE EVIDENCE OF THESE ELEMENTS. GULF, C. AND S.F.RY. V. GALBRAITH, SUPRA; FIRST NATIONAL BANK V. MO.PAC.RY.CO., 278 S.W. 1075; SO.RY.CO. V. NORTHWESTERN FRUIT EXCHANGE, 98 SO. 382; IDEAL PLUMBING AND HEATING CO. V. NEW YORK, N.H. AND H.R.CO., 124 A.2D 908; SILVER LINING V. SHEIN, 117 A.2D 182; 184; BERESIN V. PA.R.CO., 176 ATL. 774; JOSEPH TOKER CO. V. LEHIGH VALLEY R.CO., SUPRA; AND GOLDBERG V. NEW YORK, N.H. AND H.R.CO., SUPRA.

ONCE A PRIMA FACIE CASE OF DAMAGE IN TRANSIT HAS BEEN ESTABLISHED, THE CARRIER IS OBLIGED TO PROVE BY AFFIRMATIVE EVIDENCE EITHER THAT THE SHIPMENT WAS DELIVERED AT DESTINATION IN THE SAME ORDER AND CONDITION AS RECEIVED AT ORIGIN OR THAT THE DAMAGE, IF IT OCCURRED IN TRANSIT, WAS THE RESULT OF ONE OF THE EXCEPTED CAUSES. THOMPSON V. JAMES G. MCCARRICK CO., 205 F.2D 897; RICHARDS MACHINERY CO. V. MCNAMARA MOTOR EXPRESS, 97 N.W.2D 396; GULF C. AND S.F.RY.CO. V. GALBRAITH, SUPRA; TEX.-ARIZ. MOTOR FREIGHT V. BENNETT, 324 S.W.2D 32; SO.RY.CO. V. NORTHWESTERN FRUIT EXCHANGE, SUPRA; SPANN V. ALABAMA AND V.R.CO., 74 SO. 141; GOLDBERG V. NEW YORK, N.H. AND .R.CO., SUPRA. ONE OF THE RECOGNIZED EXCEPTIONS TO CARRIER LIABILITY IS DAMAGE CAUSED BY THE ACT OF THE SHIPPER, INCLUDING DEFECTIVE PACKING AND LOADING. HOWEVER, THE RECORD CONTAINS A LETTER FROM THE CARRIER CONCEDING THAT THE PACKING WAS ADEQUATE AND NO QUESTION HAS BEEN RAISED REGARDING THE HANDLING AT POINT OF ORIGIN.

WITH REGARD TO THE MATTER OF NOTICE, YOUR ATTENTION IS INVITED TO CONDITION 7 ON THE REVERSE OF THE GOVERNMENT BILL OF LADING, UNDER WHICH THE INSTANT SHIPMENT MOVED. THIS CONDITION PROVIDES THAT:

"IN CASE OF LOSS, DAMAGE, OR SHRINKAGE IN TRANSIT, THE RULES AND CONDITIONS GOVERNING COMMERCIAL SHIPMENTS SHALL NOT APPLY AS TO PERIOD WITHIN WHICH NOTICE THEREOF SHALL BE GIVEN THE CARRIERS OR TO PERIOD WITHIN WHICH CLAIM THEREFOR SHALL BE MADE OR SUIT INSTITUTED.'

HOWEVER, WITHOUT REGARD TO THIS CONDITION, THE PRINTED INSTRUCTIONS ON THE REVERSE OF THE CARRIERS' INSPECTION REPORT SPECIFY THAT DAMAGE SHALL BE REPORTED IMMEDIATELY UPON DISCOVERY OR IN ANY EVENT WITHIN 15 DAYS. THE RECORD AVAILABLE HERE DOES NOT SHOW WHY A FORMAL REPORT OF THE DAMAGE WAS NOT MADE TO THE CARRIER FOR APPROXIMATELY 3 HOURS, AS YOU ALLEGE, BUT CERTAINLY NOTICE ON THE SAME DAY MUST BE CONSIDERED AS MEETING ALL REASONABLE REQUIREMENTS.

WITH REGARD TO THE QUESTION OF WHY THE RESIDENT COGNIZANT INSPECTOR REQUESTED THE FOREMAN TO PROCEED WITH THE PACKING OPERATIONS OF THOSE CONTAINERS WHICH DID NOT APPEAR TO CONTAIN CONCEALED DAMAGE, YOU ARE ADVISED THAT THE AVAILABLE RECORD LIKEWISE FAILS TO SHOW WHY SUCH INSTRUCTIONS WERE ISSUED BUT POSSIBLY THE URGENCY OF THE MOVEMENT OR NEED FOR THE EQUIPMENT AT ITS ULTIMATE DESTINATION DICTATED IT. HOWEVER, WE FAIL TO SEE HOW THIS COULD HAVE ANY BEARING ON THE QUESTION OF CARRIER LIABILITY AS TO THE FOUR CARTONS WHICH GAVE FORTH THE SOUND OF BROKEN GLASS AND WERE SET ASIDE. ALSO, THE FACT THAT THE CONSIGNEE MAY HAVE MOVED THE CONTAINERS ON ITS EQUIPMENT AFTER DETECTING THE SOUND OF BROKEN GLASS "AS THEY CAME OFF THE TRUCK" WOULD SIMILARLY APPEAR TO HAVE NO BEARING ON THE QUESTION OF CARRIER LIABILITY, SINCE A CARRIER IS STILL LIABLE IF THE FAULT OF THE CARRIER CONTRIBUTED TO CAUSE THE DAMAGE. WELLS LAUNDRY AND LINEN SUPPLY CO. V. ACME FAST FREIGHT, 85 A.2D 907, 909, AND CASES CITED THEREIN.

WE HAVE NOTED THE INSURANCE ADJUSTER'S REPORT FORWARDED WITH YOUR REQUEST FOR REVIEW OF THE MATTER AND OBSERVED THAT IT CONTAINS SOME DIFFERENCES IN THE FACTS SET FORTH IN THE DEPARTMENT OF THE ARMY'S REPORT OF SURVEY. HOWEVER, IN THE ABSENCE OF EVIDENCE CLEARLY SUFFICIENT TO OVERCOME THE PRESUMPTION OF THE CORRECTNESS THEREOF, WE MUST, IN ACCORDANCE WITH THE LONG-ESTABLISHED RULE OF THE ACCOUNTING OFFICERS, ACCEPT AS TRUE THE REPORT OF THE ADMINISTRATIVE OFFICE AS TO THE FACTS STATED THEREIN. SEE 3 COMP. GEN. 51; 16 ID. 1105, 1106; 20 ID, 573, 578; 31 ID. 288 AND 34 ID. 522, 529.

ACCORDINGLY, ON THE BASIS OF THE PRESENT RECORD BEFORE US, IT DOES NOT APPEAR THAT THE CAUSE OF DAMAGE IN THIS CASE WAS SUCH THAT THE A-P A TRANSPORT CORP. WOULD BE RELIEVED OF LIABILITY AND THE DISALLOWANCE OF ITS CLAIM IS SUSTAINED.