B-120918, JUL. 18, 1955

B-120918, JUL. 18, 1955

TO MR. J. D. REYNOLDS, AUDITOR OF AGENCIES, CANADIAN NATIONAL RAILWAYS:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 14, 1955, AND EARLIER LETTER, FILE GF 10-42035, REQUESTING REVIEW OF OUR SETTLEMENT DATED OCTOBER 31, 1950, IN CLAIM TK-039860, WHICH DISALLOWED YOUR CLAIM BY BILL U-5610-A, FOR $567.14 ADDITIONAL TO THE CHARGES PAID FOR TRANSPORTATION SERVICES ON GOVERNMENT BILL OF LADING MC-325028, DECEMBER 14, 1943.

BILL OF LADING MC-325028 COVERED A SHIPMENT OF 28,050 POUNDS OF "KITES WITH SLINGS" TRANSPORTED FROM THE CONTRACTORS MACHINERY COMPANY, INC., BATAVIA, NEW YORK, TO THE UNITED STATES MARITIME COMMISSION, CARE OF VICTORIA MACHINERY DEPOT COMPANY, LIMITED, OGDEN POINT, VICTORIA, BRITISH COLUMBIA. FOR THIS SERVICE, YOU CLAIMED ORIGINALLY, AND WERE PAID BY A GOVERNMENT DISBURSING OFFICER, CHARGES OF $1,017.57, COMPUTED ON THE BASIS OF THE CARLOAD MINIMUM WEIGHT OF 30,000 POUNDS AT A CARLOAD RATE OF $3.17 PER 100 POUNDS, PLUS A 7 PERCENT SURCHARGE. THEREAFTER,BY BILL U-5610-A, YOU CLAIMED $567.14 ADDITIONAL CHARGES, BASED UPON THE ACTUAL WEIGHT AT A LESS-THAN CARLOAD RATE OF $5.28 PER 100 POUNDS. YOUR CLAIM WAS DISALLOWED IN THE ABOVE SETTLEMENT AND OUR FORM 1003 REQUESTED REFUND OF $11.17 IN CANADIAN FUNDS, REPRESENTING LAND-GRANT DEDUCTIONS FROM THE NAMED CARLOAD RATE. YOU REFUSED TO REFUND THIS AMOUNT, TAKING THE POSITION THAT THIS WAS A LESS-THAN-CARLOAD SHIPMENT ON WHICH CARLOAD CHARGES WERE INAPPLICABLE BECAUSE PICK-UP SERVICE WAS PERFORMED BY THE ORIGINAL CARRIER. IN SUPPORT OF YOUR POSITION, YOU CITED AMERICAN SALES BOOK COMPANY, INC. V. NEW YORK CENTRAL RAILROAD COMPANY ET AL., 263 I.C.C. 511, IN WHICH THE INTERSTATE COMMERCE COMMISSION FOUND NOT UNREASONABLE LESS- THAN-CARLOAD CHARGES WHICH WERE ONLY $36.48 IN EXCESS OF THE CHARGES COMPUTED ON THE CARLOAD BASIS. HERE, HOWEVER, YOU SEEK LESS-THAN-CARLOAD CHARGES 57 PERCENT GREATER THAN THE MINIMUM CARLOAD CHARGES, FOR THE TRANSPORTATION OF 6 PERCENT LESS WEIGHT.

OUT SETTLEMENT ACTION WAS PREDICATED UPON THE PRINCIPLE ESTABLISHED BY THE INTERSTATE COMMERCE COMMISSION IN CRANE COMPANY V. ALTON RAILROAD COMPANY, 268 I.C.C. 511, THAT THE EXCEPTION IN SECTION 1 (B) TO THE GENERAL RULE EXPRESSED IN RULE 15 OF THE CONSOLIDATED FREIGHT CLASSIFICATION IS PATENTLY UNJUST AND UNREASONABLE WHEN ITS APPLICATION RESULTS IN CHARGES WHICH ARE ,EXTORTIONATE, UNJUST, AND UNREASONABLE.' THAT CASE, THE COMMISSION FOUND THAT THE LESS-THAN CARLOAD CHARGES, WHICH WERE 87 PERCENT GREATER THAN THE CARLOAD CHARGES FOR TRANSPORTING WEIGHT 39 PERCENT LESS THAN THE CARLOAD MINIMUM WEIGHT, ALTHOUGH APPLICABLE, WERE "EXTORTIONATE, UNJUST, AND UNREASONABLE," AND AWARDED REPARATION TO THE CARLOAD BASIS PLUS UNLOADING CHARGES. SEE ALSO CARNATION COMPANY V. SOUTHERN PACIFIC COMPANY, 269 I.C.C. 470, WHEREIN THE COMMISSION FOUND THE EXCEPTION TO RULE 15 TO BE UNJUSTIFIABLE WHERE ITS APPLICATION RESULTED IN LESS-THAN CARLOAD CHARGES FOR A SHIPMENT 1,600 POUNDS UNDER THE CARLOAD MINIMUM WHICH WERE ABOUT 111 PERCENT HIGHER THAN THE MINIMUM CARLOAD CHARGES PLUS PICK-UP AND LOADING CHARGES.

OUR AUTHORITY TO APPLY THE PRINCIPLE ESTABLISHED BY THE COMMISSION AND TO ADJUST CARRIERS' ACCOUNTS TO THE GENERAL BASIS FOUND REASONABLE BY THE COMMISSION RESULTS FROM OUR STATUTORY DUTY TO SETTLE AND ADJUST CLAIMS BY OR AGAINST THE UNITED STATES, UNDER THE BUDGET AND ACCOUNTING ACT OF 1921, 31 U.S.C. 71. WHERE DOUBT EXISTS AS TO THE VALIDITY OF A CLAIM, WE WOULD BE UNJUSTIFIED IN SANCTIONING ITS PAYMENT, SINCE GENERALLY OUR OFFICE IS THE FINAL ARBITER ON THE QUESTION OF LEGALITY OF EXPENDITURES FROM PUBLIC FUNDS, EXCEPT WHEN RECOURSE IS HAD TO THE COURTS. SEE UNITED STATES EX REL. SKINNER AND EDDY CORP. V. MCCARL, 275 U.S. 1, FOOTNOTE ON PAGES 4 AND 5. DUE PROTECTION OF THE GOVERNMENT'S INTEREST REQUIRES THAT WE GIVE EFFECT IN THIS CASE TO THE PRINCIPLE ESTABLISHED BY THE COMMISSION IN SIMILAR CASES.

THE DISALLOWANCE OF YOUR CLAIM IN OUR SETTLEMENT WAS CONSISTENT WITH THE FOREGOING AND THEREFORE IS SUSTAINED. THE AMOUNT OF THE OVERPAYMENT, $11.17 (CANADIAN FUNDS), SHOULD BE REMITTED PROMPTLY.