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B-124089, MAR. 28, 1956

B-124089 Mar 28, 1956
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GREAT LAKES MANUFACTURING CORPORATION: REFERENCE IS MADE TO YOUR LETTER OF MARCH 3. THE AMOUNT OF YOUR CLAIM ORIGINALLY WAS WITHHELD BY THE ADMINISTRATIVE OFFICE TO PROTECT THE INTEREST OF THE UNITED STATES IN CONNECTION WITH YOUR INDEBTEDNESS TO THE UNITED STATES AS SET FORTH IN PRICE REDETERMINATION AGREEMENTS ARISING UNDER CONTRACTS NOS. THE MATTER WAS REFERRED TO US FOR FINAL DISPOSITION. THE CLAIMS DIVISION OF OUR OFFICE WAS DIRECTED TO ISSUE A SETTLEMENT IN THE SUM OF $2. SUCH ACTION WAS TAKEN PURSUANT TO THE ASSIGNMENT EXECUTED BY YOU AND THE BANK UNDER CONTRACT NO. SINCE THE ASSIGNMENT WAS PROPER. SINCE NOTICE THEREOF WAS GIVEN PROMPTLY TO THE ADMINISTRATIVE OFFICE PRIOR TO THE SETTLEMENT ACTION TAKEN BY THE FINANCE OFFICER IN CONNECTION WITH YOUR REFERRED-TO DEBTS.

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B-124089, MAR. 28, 1956

TO MR. DON B. REAGAN, PRESIDENT, GREAT LAKES MANUFACTURING CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 3, 1956, AND TO PRIOR CORRESPONDENCE, RELATIVE TO YOUR CLAIM FOR $4,168.86, REPRESENTING THE AMOUNT WITHHELD FROM PAYMENTS OTHERWISE DUE YOU UNDER CONTRACTS NOS. AF 33/600/-24370 AND AF 33/600/-23725, AND APPLIED BY THE DEPARTMENT OF THE AIR FORCE IN LIQUIDATION OF YOUR INDEBTEDNESS TO THE UNITED STATES. YOU REQUEST TO BE ADVISED, FOR THE PURPOSE OF YOUR RECORDS, AS TO THE ACTION TAKEN BY US IN THE MATTER, AND THE LEGAL BASIS RELIED UPON FOR SUCH ACTION.

THE AMOUNT OF YOUR CLAIM ORIGINALLY WAS WITHHELD BY THE ADMINISTRATIVE OFFICE TO PROTECT THE INTEREST OF THE UNITED STATES IN CONNECTION WITH YOUR INDEBTEDNESS TO THE UNITED STATES AS SET FORTH IN PRICE REDETERMINATION AGREEMENTS ARISING UNDER CONTRACTS NOS. AF 33/038/-17835 AND AF 33/038/-22363. THEREAFTER, THE MATTER WAS REFERRED TO US FOR FINAL DISPOSITION, AND UNDER DATE OF DECEMBER 22, 1955, THE CLAIMS DIVISION OF OUR OFFICE WAS DIRECTED TO ISSUE A SETTLEMENT IN THE SUM OF $2,828.66 IN FAVOR OF THE CALUMET NATIONAL BANK OF HAMMOND, HAMMOND, INDIANA. SUCH ACTION WAS TAKEN PURSUANT TO THE ASSIGNMENT EXECUTED BY YOU AND THE BANK UNDER CONTRACT NO. AF 33/600/-23725, AFTER RECEIPT OF A DEMAND FROM THE BANK FOR THE AMOUNTS ADVANCED TO YOU, PLUS INTEREST, EQUAL TO THE ABOVE SETTLEMENT. SINCE THE ASSIGNMENT WAS PROPER, AND SINCE NOTICE THEREOF WAS GIVEN PROMPTLY TO THE ADMINISTRATIVE OFFICE PRIOR TO THE SETTLEMENT ACTION TAKEN BY THE FINANCE OFFICER IN CONNECTION WITH YOUR REFERRED-TO DEBTS, THE BANK BECAME ENTITLED TO PAYMENT OF AN AMOUNT REPRESENTING THE BALANCE OWED BY YOU TO IT UNDER THE ASSIGNMENT, PURSUANT TO THE PROVISIONS OF THE ASSIGNMENT OF CLAIMS ACT OF 1940, 54 STAT. 1029, AS AMENDED, 65 STAT. 41. THE BALANCE OF THE AMOUNT CLAIMED, $1,340.20, HAS BEEN APPLIED IN PARTIAL LIQUIDATION OF YOUR REFERRED-TO INDEBTEDNESS TO THE UNITED STATES.

YOUR BASIC PROTEST COVERING THE SETOFF ACTION TAKEN IS PREDICATED UPON THE CONTENTION THAT THE PREDECESSOR COMPANY WHICH INCURRED THE INDEBTEDNESS TO THE UNITED STATES HAD NO RELATION TO, OR IDENTITY OF INTEREST WITH, THE CLAIMANT COMPANY WHICH YOU NOW STATE HAS BEEN DISSOLVED. THAT CONTENTION IS UNTENABLE. THE RECORD CLEARLY ESTABLISHES THAT THE COMPANIES WERE IDENTIFIED BY THE SAME NAME, WERE LOCATED AT THE SAME ADDRESS, WERE MANAGED BY THE SAME PERSONNEL, AND SUCCEEDED EACH OTHER IN PROPRIETORSHIP OF THE PHYSICAL ASSETS, AND CONTRACT OBLIGATIONS. THE FACT THAT THERE WAS AN INTERVENING CORPORATE ENTITY CHARTERED, INDUSTRIAL CENTER, INCORPORATED, IS NOT MATERIAL TO THE ISSUE. THE ABOVE FACTS WERE ACKNOWLEDGED BY YOU IN LETTERS OF JUNE 24,AND JULY 2, 1953, TO THE AIR MATERIEL COMMAND, WRIGHT PATTERSON AIR FORCE BASE. IN THE FORMER LETTER YOU ADVISED THAT THE COMPANY WAS SUCCEEDED BY THE CORPORATION, AND IN THE LATTER COMMUNICATION YOU ACKNOWLEDGED YOUR LIABILITY FOR THE DEBTS OF THE PRIOR COMPANY, AND SUGGESTED A METHOD BY WHICH THOSE DEBTS MIGHT BE LIQUIDATED.

THE POSITION YOU NOW TAKE THAT THE TWO CONCERNS ARE UNRELATED IS AN OBVIOUS ATTEMPT TO AVOID PAYMENT OF YOUR JUST OBLIGATIONS BY RESORTING TO A LEGAL TECHNICALITY. THE DECISIONS OF THE COURTS DO NOT SUPPORT SUCH A POSITION. WHERE, AS HERE, THE RECOGNITION OF A CORPORATION AS A DISTINCT LEGAL ENTITY WOULD DEFEAT PUBLIC CONVENIENCE OR JUSTIFY A WRONG, AMONG OTHER ABUSES, THE LAW WILL DISREGARD THE ORGANIZATION AS A SEPARATE ENTITY. MCCASKILL CO. V. UNITED STATES, 216 U.S. 504. COURTS WILL LOOK BEYOND A CORPORATE ENTITY WHENEVER JUSTICE REQUIRES, HAMILTON RIDGE LUMBER SALES CORPORATION V. WILSON, 25 F.2D 592, AND WILL GO BEHIND SUCH ENTITY TO DETERMINE AN ATTEMPTED EVASION OF FEDERAL LIABILITY. SEE PALMOLIVE CO. V. CONWAY, 43 F.2D 226.

IN VIEW OF THE FACTS OF RECORD, AND SINCE NO EVIDENCE HAS BEEN FURNISHED IN SUPPORT OF YOUR CONTENTIONS, THE ACTION TAKEN APPEARS PROPER AND THEREFORE MUST BE AFFIRMED.

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