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POST OFFICE DEPARTMENT - MAILS - INSURED - INDEMNITY PAYMENTS THE AMOUNT OF INDEMNITY PAYABLE BY THE GOVERNMENT FOR THE LOSS OF INSURED PARCEL POST PACKAGES IN THE MAILS IS LIMITED. TO THE AMOUNT FOR WHICH THE FEES ARE ACTUALLY PAID. EVEN THOUGH SENDERS ACTUALLY REQUESTED INSURANCE IN LARGER AMOUNTS AND POSTAL EMPLOYEES ADMIT THAT IT WAS ONLY THROUGH THEIR ERRORS THAT THE FEES FOR SMALLER AMOUNTS WERE PAID. 1954: REFERENCE IS MADE TO YOUR LETTER OF APRIL 12. THROUGH THE ERROR OF THE CLERK AN INSURANCE FEE OF ONLY 20 CENTS WAS PAID. THE CLAIM FOR INDEMNITY IN THIS CASE WAS PAID BY THE POSTMASTER AT JACKSONVILLE IN THE SUM OF $50. FROM WHICH IT IS CLEAR THAT THE SENDER REQUESTED INSURANCE IN THE SUM OF $200 BUT THAT AN OBSOLETE INSURANCE RECEIPT FORM WAS UTILIZED BY THE POSTAL EMPLOYEE AND AN INSURANCE FEE OF ONLY 30 CENTS WAS COLLECTED AS A RESULT.

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B-118232, JULY 8, 1954, 34 COMP. GEN. 14

POST OFFICE DEPARTMENT - MAILS - INSURED - INDEMNITY PAYMENTS THE AMOUNT OF INDEMNITY PAYABLE BY THE GOVERNMENT FOR THE LOSS OF INSURED PARCEL POST PACKAGES IN THE MAILS IS LIMITED, UNDER SECTION 8 OF THE ACT OF OCTOBER 30, 1951, TO THE AMOUNT FOR WHICH THE FEES ARE ACTUALLY PAID, AND THEREFORE ADDITIONAL FEES MAY NOT BE COLLECTED AFTER LOSS OF PACKAGES FOR THE EXPRESS PURPOSE OF INCREASING THE AMOUNT OF INDEMNITY TO BE PAID, EVEN THOUGH SENDERS ACTUALLY REQUESTED INSURANCE IN LARGER AMOUNTS AND POSTAL EMPLOYEES ADMIT THAT IT WAS ONLY THROUGH THEIR ERRORS THAT THE FEES FOR SMALLER AMOUNTS WERE PAID.

ACTING COMPTROLLER GENERAL WEITZEL TO THE POSTMASTER GENERAL, JULY 8, 1954:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 12, 1954, REQUESTING A DECISION AS TO THE PROPRIETY OF CERTAIN PROPOSED ACTION IN TWO CASES INVOLVING CLAIMS FOR INDEMNITY FOR INSURED PARCELS.

CASE NO. 275174-P INVOLVES A CLAIM FOR INDEMNITY COVERING INSURED PARCEL NO. 94, MAILED BY MR. BERNARD T. RASMUSSEN, AT LA BELLE, FLORIDA, ON SEPTEMBER 22, 1953, ADDRESSED TO POST JEWELERS, BROOKLYN, NEW YORK. THE POSTMASTER AT LA BELLE STATES IN LETTER DATED DECEMBER 1, 1953, TO THE POSTMASTER AT JACKSONVILLE, FLORIDA, THAT THE CLERK WHO ACCEPTED THE PARCEL FOR MAILING REMEMBERS THAT THE SENDER ASKED FOR IT TO BE INSURED FOR $100. HOWEVER, THROUGH THE ERROR OF THE CLERK AN INSURANCE FEE OF ONLY 20 CENTS WAS PAID. THE CLAIM FOR INDEMNITY IN THIS CASE WAS PAID BY THE POSTMASTER AT JACKSONVILLE IN THE SUM OF $50, THE LIMIT FIXED BY LAW FOR THE INSURANCE FEE PAID. IN LETTER DATED MAY 4, 1954, TO THE POST OFFICE DEPARTMENT, THE POSTMASTER REITERATES HIS PRIOR VIEW THAT MR. RASMUSSEN SHOULD NOT BEAR THE LOSS INVOLVED.

CASE NO. 275649-P INVOLVES A CLAIM FOR INDEMNITY COVERING INSURED PARCEL NO. 232, MAILED BY MR. J. KENNETH MARTIN OF LORTIN FARMS CREAMERY, AT EAST SAUGATUCK, MICHIGAN, ON OCTOBER 14, 1953, ADDRESSED TO CREAMERY PACKAGE MANUFACTURING COMPANY, CHICAGO, ILLINOIS. YOU ENCLOSE A LETTER DATED JANUARY 19, 1954, FROM THE POSTMASTER AT EAST SAUGATUCK, FROM WHICH IT IS CLEAR THAT THE SENDER REQUESTED INSURANCE IN THE SUM OF $200 BUT THAT AN OBSOLETE INSURANCE RECEIPT FORM WAS UTILIZED BY THE POSTAL EMPLOYEE AND AN INSURANCE FEE OF ONLY 30 CENTS WAS COLLECTED AS A RESULT. THE CLAIM FOR INDEMNITY IN THIS CASE WAS PAID BY THE POSTMASTER AT DETROIT, MICHIGAN, IN THE SUM OF $100, THE LIMIT FIXED BY LAW FOR THE INSURANCE FEE PAID.

YOU STATE THAT "IT IS CLEAR THAT THE ACCEPTING EMPLOYEES HAVE ADMITTED THAT THEY HAD KNOWLEDGE THAT THE RESPECTIVE SENDERS REQUESTED THAT THE PARCELS IN QUESTION BY INSURED FOR $100 AND $200, RESPECTIVELY," AND YOU REQUEST A DECISION AS TO THE PROPRIETY OF COLLECTING AN ADDITIONAL FEE IN EACH CASE MAKING AN INSURANCE FEE OF 30 CENTS PAID ON ONE PARCEL AND 35 CENTS ON THE OTHER, WITH A VIEW TO INCREASING THE INDEMNITY PAYABLE TO $100 AND $200, RESPECTIVELY.

YOU REFER TO OFFICE DECISION B-118232, DATED FEBRUARY 23, 1954, 33 COMP. GEN. 370, IN WHICH THERE WAS CONSIDERED A CASE WHICH ALSO INVOLVED THE ERRONEOUS USE BY A POSTAL EMPLOYEE OF AN OBSOLETE INSURANCE RECEIPT FORM. APPARENTLY, THE INSTANT CASES ARE CONSIDERED BY YOUR DEPARTMENT TO BE DISTINGUISHABLE FROM THE CASE BECAUSE OF THE ADMISSION BY THE POSTAL EMPLOYEES INVOLVED IN EACH OF THE PRESENT CASES THAT THE PATRON REQUESTED INSURANCE IN A LARGER AMOUNT AND ONLY THROUGH THE POSTAL EMPLOYEE'S ERROR WAS THE FEE FOR A SMALLER AMOUNT PAID.

THE LIMITS OF INDEMNITY FOR INSURED PARCELS ARE SET FORTH IN SECTION 8 OF THE ACT OF OCTOBER 30, 1951, 65 STAT. 675. IN CASE NO. 275174-P A FEE OF ONLY 20 CENTS HAVING BEEN PAID, BY THE EXPRESS TERMS OF THE STATUTE, THE LIMIT OF INDEMNITY IF $50 AND THE FACT THAT THE PATRON HAD REQUESTED INSURANCE IN A LARGER AMOUNT CANNOT SERVE TO RAISE THE AMOUNT OF THE INDEMNITY SO LIMITED BY THE STATUTE. SIMILARLY, IN CASE NO. 275649-P A FEE OF ONLY 30 CENTS HAVING BEEN PAID, THE STATUTE FIXES THE LIMIT OF INDEMNITY AT $100, REGARDLESS OF THE AMOUNT OF INSURANCE REQUESTED BY THE PATRON. THESE CONCLUSIONS ARE IMPELLED BY LONG ESTABLISHED PRINCIPLES OF LAW DEALING WITH THE RIGHTS AND DUTIES OF THE UNITED STATES AND OF PERSONS CONTRACTING WITH IT. IT IS APTLY STATED IN FEDERAL CROP INSURANCE CORPORATION V. MERRILL, 332 U.S. 380, AT PAGE 384:

* * * WHATEVER THE FORM IN WHICH THE GOVERNMENT FUNCTIONS, ANYONE ENTERING INTO AN ARRANGEMENT WITH THE GOVERNMENT TAKES THE RISK OF HAVING ACCURATELY ASCERTAINED THAT HE WHO PURPORTS TO ACT FOR THE GOVERNMENT STAYS WITHIN THE BOUNDS OF HIS AUTHORITY. THE SCOPE OF THIS AUTHORITY MAY BE EXPLICITLY DEFINED BY CONGRESS OR BE LIMITED BY DELEGATED LEGISLATION, PROPERLY EXERCISED THROUGH THE RULE-MAKING POWER. AND THIS IS SO EVEN THOUGH, AS HERE, THE AGENT HIMSELF MAY HAVE BEEN UNAWARE OF THE LIMITATIONS UPON HIS AUTHORITY. * * *

ACCORDINGLY, EVEN THOUGH IT BE ENTIRELY CLEAR, AS IN THE PRESENT CASES, THAT THE PATRON DID IN FACT REQUEST INSURANCE IN A LARGER AMOUNT AND THAT PAYMENT OF THE FEE FOR A SMALLER AMOUNT RESULTED SOLELY FROM THE POSTAL EMPLOYEE'S ERROR, THE AMOUNT OF INDEMNITY PAYABLE IS LIMITED BY STATUTE TO THE SMALLER AMOUNT FOR WHICH THE FEE WAS ACTUALLY PAID AND THE SUBSEQUENT COLLECTION OF AN ADDITIONAL FEE FOR THE EXPRESS PURPOSE OF INCREASING THE AMOUNT OF INDEMNITY PAYABLE IS NOT AUTHORIZED.

THE LETTERS FROM THE POSTMASTERS INVOLVED ARE RETURNED HEREWITH AS REQUESTED.

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