American Farm Lines
| Decision Date | 29 May 1981 |
| Docket Number | B-200939 |
| Parties | AMERICAN FARM LINES |
| Court | Comptroller General of the United States |
Digest 1. Statement in one section of rule in carrier's rate tender, ICC no. 345, that condition 5 of government bill of lading (GBL) is sufficient to release shipments to specified value unless higher valuation is stated on GBL constitutes carrier's offer to transport certain commodities at rates therein despite failure of government's agents to insert declared valuation in form specified by rule; condition 5 states that shipment is made at restricted or limited valuation unless otherwise indicated on gbl. 2. In absence of statement referring to condition 5 from other sections of rule which contain similar requirement for declaration of value in specified form, tender is not applicable to shipments where government fails to annotate gbls. 3. Change of language in condition 5 (now among terms and conditions in 41 C.F.R. Sec. 101-41.302-3(e) governing gbls) which clarified application to tenders and other agreements as well as tariffs, does not affect validity of holdings in 53 Comp.Gen. 747 (1974) and 38 Comp.Gen. 768 (1959); "tariff" includes "tender" within meaning of condition 5. Comp.Gen. 335 (1968).
American farm lines, Inc. (afl), under 31 U.S.C. 244 (supp. III 1979), requests review of general services administration (GSA) audit action disallowing 73 AFL claims for additional transportation charges, totaling $321, 018.81. The shipments moved on government bills of lading (GBL) between various points covered by AFL interstate commerce commission tender no. 345 (tender 345) during 1978. The carrier's original bills, which were based on rates in tender 345, were paid upon presentation beginning in 1978; however AFL submitted supplemental bills for the additional transportation charges in 1980 on the theory that tender 345 was inapplicable.
The issue of whether the tender is applicable arises because the government failed to declare a released value on each gbl. AFL contends that item 30 requires that as a condition precedent to the application of tender 345 rates the shipper must declare the released value in a notation of specified form; therefore, the lower rates and charges of the tender do not apply since the government did not comply with the notation requirements of item 30. Gsa contends that the charges as originally billed are correct and reflect the actual contract between the parties. The agency believes that item 30 is ambiguous and should be construed against afl, the drafter, to give the government the benefit of the lower rates. Resolution of the issue requires interpretation of item 30.
Tenders are considered the same as any other offer made by a party seeking to form a contract and their interpretation is subject to traditional rules of contract Law. Union pacific R. R. v. United states, 434 F.2d 1341, 1345 (ct.Cl. 1970); Illinois central railroad, 44 Comp.Gen. 419, 420 (1965).
Traditional rules of contract law specify that "absent highly unusual circumstances, the parties to a contract should be able to rely on their contract's express language "artisan electronics corporation v. United states, 499 F.2d 606, 611 (ct.Cl. 1974). We find no special circumstances in this case, and believe the plain meaning of the words and terms of the contract are clear.
Tender 345 is in the nature of a released valuation quotation in that item 30 provides that applicability of the various rates and valuation charges therein depend upon the declared or agreed value of the commodity shipped. The item is subdivided into three pertinent sections - (A), (B) and (C) - according to commodities and the declared or agreed value.
Each section contains a requirement that the value be declared on the bill of lading by notation in a specified form. Sections (B) and (C) contain lists of specified commodities. Section (B) applies to passenger vehicles and trucks, while section (C) applies to commodities which because of size, weight or structure require specialized equipment, such as rockets missiles and sonar equipment. Section (A) applies generally to commodities not listed in other sections. Section (A) is materially different from the other sections in that it contains a provision which states in effect that on shipments moving under gbls, condition 5 applies to release the shipment without a declaration to a value not exceeding $5 000 per ton of 2, 000 pounds unless a higher valuation is declared. Generally, condition 5 relieves the government of a requirement to declare value as a condition to application of the lowest available rates.
Afl cites secretary of defense, 38 Comp.Gen. 768 (1959) and O. K. Trucking company, 53 Comp.Gen. 747 (1974), to support its position that condition 5 of the GBL does not relieve the government from the tender's notation requirements. The cited decisions concern the effect of condition 5 (AS it then appeared on the reverse side of the gbl) in relieving the government of declaring value on the gbl. These decisions held that condition 5 does not satisfy a specific tariff and/or tender requirement for a notation of released valuation where none is inserted by the shipper. Gsa asserts that the decisions are distinguishable on several bases or that they should be overruled.
Gsa presents no basis for overruling the decisions, and while we conclude that they are inapposite as to shipments transported under section (A), in the absence of a provision similar to that included in section (A), the decisions are pertinent to sections (B) and (C).
The thrust of gsa's argument is that the released valuation provision governing the GBL contracts in this case contains different language than condition 5, as considered in the cited decisions. Reference is to the terms and conditions governing gbls now in 41 C.F.R. Sec. 101-41.302-3 (1980). Among them, in subsection 101-41.302 3(e), is a revised version of "condition 5", which reads as follows:
"The shipment is made at the restricted or limited valuation specified in the tariff or classification or established pursuant to section 22 of the interstate commerce act, as amended (49 U.S.C. 22), or to another equivalent contract, arrangement, or exemption from regulation at or under which the lowest rate is available, unless otherwise indicated on the face of the gbl."
Gsa presents no evidence that this change in language by adding reference to section 22 quotations affects the validity of the principle applied in the cited decisions that condition 5 does not satisfy the requirement to annotate a GBL with a released valuation statement when specifically required as a condition to application of a tender. Nor have we found anything in our review of the history of the regulations to support that view.
The change of language has no affect on the annotation under sections (B) and (C) because in Georgia highway express, Inc., 48 Comp.Gen. 335 (1968) we held that the term "tariff" as used in condition 5 of the GBL was not restricted to "tariffs, " but also extended to section 22 quotations. That case the quotation required no specific form of notation of released valuation on the bill of lading to obtain the reduced rates. Therefore, condition 5 was applied to obtain the lowest rate. In the decisions cited by AFL we specifically found that condition 5 did not control where a tender was involved, not because the language of condition 5 did not extend to tenders, but because the tender required a declaration of released valuation as a condition of contract formation.
However, the cited decisions have no relevance to section (A). Even though the section contains a general requirement for a notation in specified form, the section contains a specific reference to condition 5 and express language relieving the shipper of the requirement where the shipment is transported on a gbl.
Based on the foregoing, we believe that with regard to shipments under sections (B) and (C), where the government failed to annotate the GBL in the form specified, AFL could properly bill the higher rates. However, for shipments under section (A), we believe AFL agreed, in the absence of a released value annotation to permit a released value of $5, 000.00 per ton of 2, 000 pounds.
Gsa also refers to language found in section (C) which states that if the GBL is not properly annotated, the shipment will not be accepted for...
To continue reading
Request your trial