B-4494 September 18, 1939

B-4494 September 18, 1939

The Honorable, The Secretary of Commerce.

Sir:

Consideration has been given your letter of June 7, 1939, as follows:

"There is submitted herewith claim if the Louisville and Nashville Railroad Company (Commerce No. 70666) covering freight transportation furnished the Lighthouse Service in the amount of $168.59, from which has been deducted $101.83 account of damage to Government property while in transit. There is also inclosed preaudit rate memorandum of the Claims Division of your office indicating that the $101.83 deducted account of damage to Lighthouse property is for deposit to miscellaneous Receipts, and letter of March 14, 1939, from the Bureau of Lighthouses of this Department expressing the view that this deduction should remain to the credit of the appropriation from which the freight charged and damaged equipment in question are payable.

"In this connection attention is invited to your decision of May 22,1929, 8 Comp. Gen. 615, wherein it is stated (page 616) that in cases in which the fright bill upon the shipment of the property damaged or lost is in excess of the amount paid for repair, in which cases where the same appropriation is involved, the bill is merely reduced and the amount of expenses of repairs is allowed to remain to the credit of the appropriation. The Department's understanding of this statement is that where the carrier's bill, as in this case, includes payment for transportation of the particular property damaged payable from the same appropriation is in such reduction in the amount of said bill as per decision cited, this course may be followed without other adjustment as to fund or appropriation. With such understanding it appears that the adjustment interpretation of the decision of May 22, 1929, 8 Comp. Gen. 615 is incorrect, it will be appreciated if you will appropriately advise this Department with a view of clarifying its understanding with respect to other similar cases."

The letter dated March 14, 1939, from the Commissioner, Bureau of Lighthouses, referred to, is as follows:

"Reference is made to Pre-Audit Appropriation Memorandum attached to Commerce Freight Claim No. 70666 in the amount of $168.59, submitted by the Louisville & Nashville R. R.

"It is noted from the above-mentioned Memorandum that the General Accounting Office has approved this claim on the basis of $66.59 payable to the carrier and $101.83 covering damage to Government property while in transit, to be deposited to the credit of Miscellaneous Receipts. However, it is the opinion of this office that so far as the fundamental circumstances are involved, the case is analogous to the one referred to in decision of March 17, 1915, of the Comptroller of the Treasury (21 Cop. Dec. 632) and decision of May 22, 1929 of the Comptroller General of the United States (S Comp. Gen. 615) wherein it was ruled 'that where in the settlement of a claim for freight charges an amount is withheld or deducted therefrom offsetting the amount paid for damages from the same appropriation, and the sum found due the claimant carrier merely reduced, no charge should be raised against said appropriation for the amount set off.'

"In the case under review, the equipment in question was purchased under appropriation General Expenses, Lighthouse Service, 1939 (Commerce Claim 69250, paid October 5, 1938, by O. F. Allen, Chief Disbursing Officer, Washington, D.C., his voucher No. 507, 495) and since the carrier's bill from which the deduction was made is payable from the same appropriation, the allowance of this amount to remain to the credit of the appropriation, will not operate to increase the appropriation beyond that specified by Congress.

"In view of the above, the above-mentioned claim and supporting papers are returned with the request that the requirements of the Pre-Audit memorandum that $010.83 be deposited to Miscellaneous Receipts, be withdrawn."

It is not apparent why there should be such patent misunderstanding of the decision S Comp. Gen. 615. Said decision specifically sets forth the general rule that recoveries from common carriers either in actual cash or by deductions from the carriers' bills for damage to of loss of public property while in transit are for depositing and covering into the Treasury as miscellaneous receipts, the only exception being in cases strictly within the holding in the decision 21 Comp. Dec. 632, that is, where the freight bill upon the shipment of the property damaged or lost is in excess of the amount paid for repairs or replacement, in which event, the same appropriation being involved, the bill is merely reduced, and the amount deducted to cover the cost of repairs or replacement is allowed to remain to the credit of the appropriation.

In the instant case it appears that the transportation charges on bill of lading No. C-220463, covering shipment of the damaged property, amounts to only $8.41, whereas the damage to certain of the property on the same bill of lading amounts to $101.83. While the same appropriation may be involved, to permit a credit thereto of the amount of $101.83, representing the cost of replacing the property damaged on the shipment covered by bill of lading C-220463, and collected on the bill for $168.59, covering the aggregate cost of freight transportation of various other property on sundry bills of lading, would be contrary to the rule herein stated, and not authorized under the law.

Accordingly, I have to advise that the action heretofore taken by this office in the matter was correct and must be, and is, sustained.

Respectfully,

Comptroller General of the United States