B-42126, MAY 30, 1944, 23 COMP. GEN. 907

B-42126, MAY 30, 1944, 23 COMP. GEN. 907

DAMAGE TO RENTED EQUIPMENT; FRAUDULENT CLAIMS; ETC. IN A BAILMENT FOR HIRE, THE GOVERNMENT, AS BAILEE, IS REQUIRED TO EXERCISE ONLY ORDINARY DILIGENCE IN THE CARE OF THE PROPERTY AND, IN THE ABSENCE OF SPECIFIC CONTRACT PROVISION, IS NOT LIABLE FOR LOSS OF OR DAMAGE TO THE PROPERTY SUSTAINED WITHOUT FAULT OR NEGLIGENCE ON THE PART OF ANY OFFICER OR EMPLOYEE OF THE GOVERNMENT. THE MERE FACT THAT A TRUCK, RENTED TO THE GOVERNMENT UNDER A CONTRACT WHICH ESTABLISHED A BAILOR-BAILEE RELATIONSHIP AND WHICH OBLIGATED THE CONTRACTOR TO MAKE ALL REPAIRS, WAS DAMAGED WHILE IN THE POSSESSION OF THE GOVERNMENT DOES NOT ESTABLISH NEGLIGENCE ON THE PART OF GOVERNMENT EMPLOYEES SO AS TO AUTHORIZE ALLOWANCE OF THE CONTRACTOR'S CLAIM FOR REIMBURSEMENT OF THE COST OF REPAIRING THE TRUCK; RATHER, PAYMENT IS AUTHORIZED ONLY WHERE THE RECORD MAY BE TAKEN AS REASONABLY ESTABLISHING THAT THE DAMAGES WERE PROXIMATELY CAUSED BY THE FAILURE OF THE GOVERNMENT TO EXERCISE THE DEGREE OF CARE IMPOSED BY THE BAILMENT CONTRACT. PERSONS WHO PRESENT CLAIMS AGAINST THE UNITED STATES MUST ESTABLISH CLEARLY THE FACTS AND PRINCIPLES ON WHICH THEIR CLAIMS ARE BASED AND THE BURDEN IMPOSED BY THE RULE MUST BE MET SQUARELY IN EACH CASE IN ORDER TO JUSTIFY THE ACCOUNTING OFFICERS IN CERTIFYING SUCH CLAIMS FOR PAYMENT FROM APPROPRIATED MONEYS. THE RESTATEMENT OF A CLAIM FOR A SMALLER AMOUNT AFTER DISCOVERY BY THE GOVERNMENT THAT THE ORIGINAL CLAIM, SUPPORTED BY FALSE OR FRAUDULENT EVIDENCE, WAS DELIBERATELY PRESENTED FOR AN AMOUNT GREATER THAN THAT ACTUALLY DUE DOES NOT ERADICATE THE TAINT OR SUSPICION OF FRAUD SO AS TO AUTHORIZE PAYMENT OF THE CLAIM IN THE SMALLER AMOUNT.

COMPTROLLER GENERAL WARREN TO BOWLES AND WELLER, MAY 30, 1944:

THERE HAS BEEN RECEIVED FROM C. C. CUZZORT, ATTORNEY, A LETTER DATED MAY 3, 1944, WITH ENCLOSURES, REQUESTING REVIEW OF SETTLEMENT DATED APRIL 19, 1944, WHICH DISALLOWED YOUR CLAIMS FOR $110.40 AND $220.35 AS REIMBURSEMENT FOR THE COSTS OF REPAIRS TO TRUCKS ALLEGED TO HAVE BEEN DAMAGED WHILE IN THE POSSESSION OF THE GOVERNMENT UNDER RENTAL AGREEMENT NO. ER-T43PS-18214, DATED MARCH 17, 1942.

UNDER THE TERMS OF THE CONTRACT YOU AGREED TO FURNISH FOUR TRUCKS, INCLUDING THE TWO HERE INVOLVED, FOR A RENTAL CONSIDERATION OF $5.65 EACH PER DAY. WITH RESPECT TO MAINTENANCE AND REPAIRS, THE CONTRACT CONTAINED THE FOLLOWING PROVISIONS:

SERVICES OF VENDOR.--- THE VENDOR SHALL FURNISH, DELIVER AND REMOVE THE EQUIPMENT TO AND FROM THE POINT OF OPERATION. THE VENDOR SHALL MAKE ALL REPAIRS REQUIRED TO KEEP THE EQUIPMENT IN PROPER OPERATING CONDITION WHILE IN THE CUSTODY OF THE GOVERNMENT, BUT HE SHALL NOT OTHERWISE BE RESPONSIBLE FOR MAINTAINING THE EQUIPMENT.

REPAIRS AND MAINTENANCE.--- THE GOVERNMENT SHALL DO ALL MAINTENANCE REQUIRED TO KEEP THE EQUIPMENT IN PROPER OPERATING CONDITION EXCEPT THAT OF MAKING REPAIRS. ALL REPAIRS SHALL BE MADE BY THE VENDOR, AND SHALL BE MADE PROMPTLY UPON REQUEST OF THE GOVERNMENT.

WITH RESPECT TO THE CLAIM FOR $110.40, THE RECORD INDICATES THAT TRUCK BEARING LICENSE NO. 9100F WAS DAMAGED WHEN IT WAS DRIVEN OVER A PIECE OF A SHOVEL HANDLE WHICH WAS THROWN UP AND WEDGED BETWEEN THE DRAG LINK AND THE FRONT AXLE OF THE TRUCK, LOCKING THE STEERING MECHANISM AND SEVERING THE HYDRAULIC BRAKE TUBE. AS A RESULT, THE BRAKES FAILED ON A DOWN-GRADE AND THE TRUCK OVERTURNED, SUSTAINING DAMAGES IN THE AMOUNT NOW CLAIMED.

THE RELATIONSHIP BETWEEN YOURSELF AND THE GOVERNMENT WITH REFERENCE TO THE TRUCKS WAS THAT OF BAILOR AND BAILEE, AND THE RIGHTS AND LIABILITIES IN THE PREMISES ARE TO BE DETERMINED BY THE RULES APPLICABLE UNDER THE GENERAL LAW OF BAILMENTS. IT IS WELL SETTLED THAT IN A BAILMENT FOR HIRE, SUCH AS HERE, THE BAILEE IS REQUIRED TO EXERCISE ONLY ORDINARY DILIGENCE IN THE CARE OF THE PROPERTY BAILED. SEE 6 C.J. 1121, ET SEQ. THE GENERAL RULE IN SUCH CASES IS THAT, IN THE ABSENCE OF SPECIFIC CONTRACT PROVISION, THE UNITED STATES IS NOT LIABLE FOR LOSS OF OR DAMAGES TO HIRED PROPERTY SUSTAINED WITHOUT FAULT OR NEGLIGENCE ON THE PART OF ANY OFFICER OR EMPLOYEE OF THE GOVERNMENT. 16 COMP. DEC. 68; 19 ID. 131; 1 COMP. GEN. 192; 5 ID. 557; 15 ID. 64; AND 16 ID. 123.

NO EVIDENCE HAS BEEN PRESENTED WHICH WOULD TEND TO SUBSTANTIATE YOUR CONTENTION THAT THE DAMAGE TO THE TRUCK WAS OCCASIONED BY CARELESSNESS AND GROSS NEGLIGENCE ON THE PART OF SOME WPA EMPLOYEE. ON THE CONTRARY, THE ADMINISTRATIVE OFFICE HAS REPORTED THAT THE OPERATOR, ONE CLARENCE ASHLEY, WAS A COMPETENT AND EFFICIENT DRIVER AND THAT AN INVESTIGATION REVEALED NO EVIDENCE OF NEGLIGENCE ON HIS PART IN THE OPERATION OF THE TRUCK.

CAREFUL CONSIDERATION HAS BEEN GIVEN TO THE CONTENTS OF THE AFFIDAVIT SUBMITTED BY CHESTER BOWLES, AND MORE PARTICULARLY TO THE AVERMENT TO THE EFFECT THAT THE GOVERNMENT SHOULD BE REQUIRED TO PROVE THAT IT WAS ENTIRELY FREE FROM NEGLIGENCE AND THAT UNDER BAILMENT RELATIONSHIPS SUCH AS HERE INVOLVED "LIABILITY OF THE GOVERNMENT SHOULD BE CONSTRUED LIBERALLY IN FAVOR OF THE PRIVATE CITIZEN," SINCE SUCH CITIZEN, FROM THE VERY NATURE OF THE TRANSACTION, HAS NO REPRESENTATIVE WITH HIS EQUIPMENT AND, THEREFORE, MUST HAVE HIS RIGHTS DETERMINED ON THE BASIS OF EVIDENCE SUBMITTED BY GOVERNMENT EMPLOYEES.

THE MERE FACT THAT THE TRUCK WAS DAMAGED WHILE IN THE POSSESSION OF THE GOVERNMENT UNDER A BAILMENT FOR HIRE DOES NOT ESTABLISH NEGLIGENCE ON THE PART OF GOVERNMENT EMPLOYEES ENGAGED IN THE OPERATION THEREOF. IT IS WELL SETTLED THAT A BAILEE--- EVEN UNDER A GRATUITOUS BAILMENT--- IS NOT AN INSURER OF THE THING BAILED AND IS NOT RESPONSIBLE FOR DAMAGES OR LOSSES ARISING FROM AN UNFORESEEABLE ACCIDENT OR UNDER CIRCUMSTANCES WHICH MIGHT NOT REASONABLY BE FORESEEN AND PROVIDED AGAINST. FURTHERMORE, PERSONS WHO PRESENT CLAIMS AGAINST THE UNITED STATES MUST ESTABLISH CLEARLY THE FACTS AND PRINCIPLES ON WHICH THEIR CLAIMS ARE BASED AND THE BURDEN IMPOSED BY THE RULE MUST BE MET SQUARELY IN EACH CASE IN ORDER TO JUSTIFY THE ACCOUNTING OFFICERS IN CERTIFYING SUCH CLAIMS FOR PAYMENT FROM APPROPRIATED MONEYS. IN OTHER WORDS, ALLOWANCE IN CASES SUCH AS HERE INVOLVED IS UNAUTHORIZED UNLESS THE RECORD MAY BE TAKEN AS REASONABLY ESTABLISHING THAT THE DAMAGE TO THE BAILED PROPERTY WAS PROXIMATELY CAUSED BY THE FAILURE OF THE GOVERNMENT TO EXERCISE THE DEGREE OF CARE IMPOSED BY THE BAILMENT CONTRACT.

IN VIEW OF THE FOREGOING, SINCE THE GOVERNMENT WAS REQUIRED TO EXERCISE ONLY ORDINARY DILIGENCE IN THE CARE OF THE TRUCK, AND SINCE THE DAMAGES TO THE TRUCK HAVE NOT BEEN SHOWN TO HAVE RESULTED FROM NEGLIGENCE ON THE PART OF THE OPERATOR--- OR ANY OTHER GOVERNMENT EMPLOYEE--- THERE IS NO LEGAL BASIS FOR THE ALLOWANCE OF YOUR CLAIM FOR REIMBURSEMENT OF THE COST OF REPAIRING SAID TRUCK.

WITH RESPECT TO THE OTHER ITEM OF YOUR CLAIM, THE RECORD INDICATES THAT TRUCKS BEARING LICENSE NOS. 9101F AND 9100F WERE DAMAGED WHEN THE MOTOR BLOCKS CRACKED AS THE RESULT OF FREEZING WEATHER. IT IS ADMITTED BY THE ADMINISTRATIVE OFFICE THAT SUCH DAMAGES RESULTED DIRECTLY FROM NEGLIGENCE ON THE PART OF GOVERNMENT EMPLOYEES, IN THAT THEY FAILED PROPERLY TO DRAIN THE MOTOR BLOCKS WHEN WEATHER AND STORAGE CONDITIONS INDICATED THE NECESSITY THEREFOR AS A PROTECTION AGAINST FREEZING.

THE RECORD FURTHER SHOWS THAT YOUR ORIGINAL CLAIM FOR SUCH DAMAGES AMOUNTED TO $316.70 ($158.35 PER TRUCK) AND WAS SUPPORTED BY RECEIPTED BILLS FOR SUCH AMOUNT. AN INVESTIGATION, WHICH INCLUDED THE QUESTIONING OF MEMBERS OF THE FIRM OF GENE AND JIMMIE, OWENSBORO, KENTUCKY, WHICH MADE THE REPAIRS AND RECEIPTED THE BILLS FURNISHED IN SUPPORT OF YOUR CLAIM, REVEALED THAT THE TOTAL AMOUNT PAID FOR SUCH REPAIRS AS WERE MADE BY THAT FIRM WAS ONLY $175.35. PURSUANT TO SUCH STATEMENT, YOU AGREED TO ACCEPT THE AMOUNT OF $175.35, PLUS THE ASSERTED COST OF A NEW MOTOR BLOCK, $45, OR A TOTAL OF $220.35, IN FULL SETTLEMENT.

AS STATED IN THE DISALLOWANCE OF APRIL 19, 1944, SUPRA, THE RESTATEMENT OF A CLAIM FOR A SMALLER AMOUNT AFTER DISCOVERY BY THE GOVERNMENT THAT THE ORIGINAL CLAIM WAS DELIBERATELY PRESENTED FOR AN AMOUNT GREATER THAN THAT ACTUALLY DUE, SUPPORTED BY FALSE OR FRAUDULENT EVIDENCE, DOES NOT ERADICATE THE TAINT OR SUSPICION OF FRAUD.

IN NEW YORK MARKET GARDENERS' ASSOCIATION V. UNITED STATES, 43 C.1CLS. 114, 136, IT IS STATED:

* * * THE REVISED STATUTES PROVIDE THAT ANY PERSON WHO CORRUPTLY PRACTICES OR ATTEMPTS TO PRACTICE ANY FRAUD AGAINST THE UNITED STATES IN THE PROOF, STATEMENT, ESTABLISHMENT, OR ALLOWANCE OF ANY PART OF ANY CLAIM AGAINST THE GOVERNMENT SHALL IPSO FACTO FORFEIT THE SAME. IT WOULD BE THE DUTY OF THE COURT TO DECLARE FORFEITED THE ENTIRE CONTRACT IF THE PROOF CERTAINLY ESTABLISHED THE CHARGE MADE. HARSH AS THE STATUTES ARE WHICH IMPOSE SUCH SEVERE PENALTIES FOR FRAUD IN MAKING UP A CLAIM, IT IS YET A NECESSARY STATUTE FOR THE PROTECTION OF THE GOVERNMENT, AND WHEN SUCH A CHARGE IS ESTABLISHED THIS COURT WILL NOT ONLY NOT HESITATE TO ENFORCE SUCH PENALTIES BUT WILL GO TO WHATEVER EXTREME UNDER THE LAW WHICH CAN BE JUSTIFIED BY THE FACTS PROVEN. SEE ALSO FURAY V. UNITED STATES, 34 C.1CLS. 171 AND UNITED STATES V. BREEN, ET AL. 96 F.2D 782.

YOU URGE THAT NO FRAUD WAS INTENDED IN THE PRESENTATION OF A CLAIM FOR A GREATER AMOUNT THAN ACTUALLY EXPENDED; THAT YOU WERE MERELY ATTEMPTING TO RECOVER THE TOTAL ANTICIPATED COST OF NECESSARY REPAIRS RESULTING FROM THE NEGLIGENT ACTS OF GOVERNMENT EMPLOYEES. WHILE AN ADDITIONAL RECEIPTED BILL HAS BEEN FORWARDED WITH YOUR AFFIDAVITS, INDICATING THAT YOU NOW HAVE EXPENDED FOR REPAIRS TO THE TRUCKS AN AMOUNT IN EXCESS OF THAT ORIGINALLY CLAIMED, THE FACT REMAINS THAT THE CLAIM AS ORIGINALLY PRESENTED WAS IN EXCESS OF THE ACTUAL EXPENDITURES AS OF THAT DATE AND THE RECEIPTED BILL THEN FURNISHED IN SUPPORT OF THE CLAIM WAS NOT A TRUE STATEMENT OF THE EXPENSES WHICH IT PURPORTED TO REFLECT.

FURTHERMORE, AND ASIDE FROM ANY QUESTION OF FRAUD OR IRREGULARITY AS REGARDS THE PRESENTATION OF YOUR CLAIM FOR THE DAMAGES SUSTAINED, IT IS OBSERVED THAT THE CORRECTED INVOICES UPON WHICH YOU NOW RELY INCLUDE CHARGES FOR REPAIRS AND PARTS WHICH APPARENTLY WERE NOT MADE NECESSARY AS A RESULT OF THE CRACKED MOTOR BLOCKS. FOR EXAMPLE, THERE IS INCLUDED IN THE INVOICE FOR REPAIRS TO TRUCK NO. 9101F A CHARGE OF $76.40 FOR PISTONS, RINGS, ROD MAINS, GRINDING OF VALVES, CRANK SHAFT AND, WITH RESPECT TO TRUCK NO. 9100F, THERE ARE INCLUDED CHARGES FOR REPAIRS TO A TORN CRANK SHAFT AND FOR THE INSTALLATION OF RODS IN THE AMOUNTS OF $13 AND $7.50 RESPECTIVELY. SINCE, UNDER THE CLEAR TERMS OF THE CONTRACT, SUPRA, YOU WERE OBLIGATED TO MAKE ALL ORDINARY REPAIRS TO THE TRUCKS, AND SINCE THE ABOVE REPAIRS ARE NOT SUCH AS ARE USUALLY MADE NECESSARY AS A RESULT OF CRACKED MOTOR BLOCKS, BUT, RATHER, BECOME NECESSARY AS A RESULT OF ORDINARY WEAR AND TEAR OF THE EQUIPMENT, IT WOULD APPEAR THAT, EVEN IF YOUR CLAIM WERE OTHERWISE UNOBJECTIONABLE, THE COST OF REPAIRS NOT DIRECTLY CONNECTED WITH THE FREEZING OF THE MOTORS WOULD NOT CONSTITUTE A PROPER CHARGE AGAINST THE GOVERNMENT.

IN VIEW OF ALL THE FACTS AND CIRCUMSTANCES APPEARING IN THE MATTER, THERE IS NO ALTERNATIVE BUT TO SUSTAIN THE SETTLEMENT DISALLOWING YOUR CLAIM.