A-18671, JUNE 9, 1927, 6 COMP. GEN. 810

A-18671: Jun 9, 1927

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IS INDEBTED TO THE GOVERNMENT IN THE SUM OF $163.80 BALANCE OF DUTIES DUE ON WAREHOUSE ENTRY 25266. IS ENTITLED TO A REFUND OF $577.65 REPRESENTED BY REFUND CHECK NO. 189127 OF MARCH 5. WHICH ASSIGNMENT THE COLLECTOR IS OF THE OPINION CAN NOT BE RECOGNIZED BY THE GOVERNMENT. ARE HEREWITH ENCLOSED. YOUR OPINION IS REQUESTED AS TO THE VALIDITY OF THE SAID ASSIGNMENT MADE BY TNE IMPORTING COMPANY TO THE BOARD OF FIRE UNDERWRITERS. AS THE COMMISSIONER OF CUSTOMS IS NOT AUTHORIZED BY LAW TO SUBMIT QUESTIONS TO THIS OFFICE FOR DECISION. THE PRESENT REQUEST OF THE ACTING COMMISSIONER OF CUSTOMS WILL BE TREATED AS HAVING BEEN MADE BY YOUR AUTHORITY AND AT YOUR DIRECTION AND WILL BE CONSIDERED ACCORDINGLY.

A-18671, JUNE 9, 1927, 6 COMP. GEN. 810

CLAIMS - SET-OFF - ASSIGNMENT THE GOVERNMENT IRRESPECTIVE OF STATUTORY AUTHORITY, HAS THE COMMON LAW RIGHT TO SET OFF AMOUNTS DUE IT BY A CREDITOR AGAINST AN AMOUNT OWED TO THE CREDITOR BY THE GOVERNMENT. AS SECTION 3477 OF THE REVISED STATUES PROHIBITS THE ASSIGNMENT OF CLAIMS UPON THE UNITED STATES OR ANY INTEREST THEREIN, THE ASSIGNMENT BY AN IMPORTING COMPANY OF ITS CLAIM UPON THE UNITED STATES FOR REFUND OF CUSTOMS DUTIES MAY NOT BE RECOGNIZED.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, JUNE 9, 1927:

THERE HAS BEEN RECEIVED FROM THE ACTING COMMISSIONER OF CUSTOMS A LETTER DATED MAY 23, 1927, REQUESTING DECISION OF MATTERS THEREIN PRESENTED AS FOLLOWS:

THE COLLECTOR OF CUSTOMS AT NEW YORK HAS ADVISED THE BUREAU IN A LETTER DATED THE 2D INSTANT THAT THE HELLENDALL IMPORTING CO., INC., IS INDEBTED TO THE GOVERNMENT IN THE SUM OF $163.80 BALANCE OF DUTIES DUE ON WAREHOUSE ENTRY 25266; THAT THE COMPANY HAS DISCONTINUED BUSINESS; IS ENTITLED TO A REFUND OF $577.65 REPRESENTED BY REFUND CHECK NO. 189127 OF MARCH 5, 1927; AND REQUEST AUTHORITY UNDER THE PROVISIONS OF SECTION 6407 OF THE COMPILED STATUTES TO USE SO MUCH OF THE REFUND AS MAY BE NECESSARY TO PAY THE GOVERNMENT'S CLAIM IN FULL, THE BALANCE TO BE HELD FOR THE ACCOUNT OF THE SAID IMPORTING COMPANY.

THE COLLECTOR TRANSMITS A COMMUNICATION RECEIVED FROM THE NEW YORK BOARD OF FIRE UNDERWRITERS DATED APRIL 13, 1927, REQUESTING A DEDUCTION OF $111 AS PART OF THE BALANCE OF DUTIES DUE FROM THE AMOUNT OF THE REFUND, AND THE PAYMENT TO THE BOARD OF THE BALANCE UNDER AN ASSIGNMENT MADE BY THE IMPORTING COMPANY TO THE BOARD OF THE AMOUNT OF THE REFUND, WHICH ASSIGNMENT THE COLLECTOR IS OF THE OPINION CAN NOT BE RECOGNIZED BY THE GOVERNMENT.

COPIES OF THE CORRESPONDENCE AND A MEMORANDUM PREPARED IN THIS OFFICE RELATIVE TO SET-OFFS UNDER AN ASSIGNMENT OF REFUND, ARE HEREWITH ENCLOSED, AND YOUR OPINION IS REQUESTED AS TO THE VALIDITY OF THE SAID ASSIGNMENT MADE BY TNE IMPORTING COMPANY TO THE BOARD OF FIRE UNDERWRITERS, AND THE RIGHT OF THE GOVERNMENT TO OFFSET A PORTION OF THE REFUND DUE THE IMPORTING COMPANY AGAINST ITS INDEBTEDNESS OF $163.80, THE BALANCE OF DUTIES DUE UNDER WAREHOUSE ENTRY 25266.

AS THE COMMISSIONER OF CUSTOMS IS NOT AUTHORIZED BY LAW TO SUBMIT QUESTIONS TO THIS OFFICE FOR DECISION, THE PRESENT REQUEST OF THE ACTING COMMISSIONER OF CUSTOMS WILL BE TREATED AS HAVING BEEN MADE BY YOUR AUTHORITY AND AT YOUR DIRECTION AND WILL BE CONSIDERED ACCORDINGLY.

THE QUESTIONS FOR DECISION ARE, FIRST, WHETHER THE INDEBTEDNESS OF THE HELLENDALL IMPORTING COMPANY, INC., TO THE GOVERNMENT FOR BALANCE OF DUTIES ON WAREHOUSE ENTRY 25266 MAY BE SET OFF AGAINST AN AMOUNT DUE THAT COMPANY AS A REFUND OF CUSTOMS DUTIES OVERPAID, AND, SECOND, WHETHER AN ASSIGNMENT OF THE AMOUNT OF THE REFUND, AS REDUCED BY AN AGREED-TO DEDUCTION BY THE ASSIGNEE, THE NEW YORK BOARD OF FIRE UNDERWRITERS, MAY BE RECOGNIZED.

THE ACT OF MARCH 3, 1875, 18 STAT. 481, REFERRED TO IN THE SUBMISSION AS THE AUTHORITY UNDER WHICH IT IS PROPOSED TO MAKE THE CONTEMPLATED SET-OFF, DOES NOT APPEAR TO BE APPLICABLE TO THIS CASE. THE GOVERNMENT, IRRESPECTIVE OF STATUTORY AUTHORITY, HAS THE COMMON LAW RIGHT TO SET OFF AMOUNTS DUE IT FROM CREDITORS AGAINST AMOUNTS DUE FROM IT TO CREDITORS. COMP. GEN. 605; 4 ID. 1006. GRATIOT V. UNITED STATES, 15 PET. 370; BARRY V. UNITED STATES, 229 U.S. 47. YOU ARE, THEREFORE, ADVISED THAT THE BALANCE DUE THE GOVERNMENT BY THE IMPORTING COMPANY MAY AND SHOULD BE SET OFF AGAINST THE AMOUNT OF THE REFUND DUE TO SAID COMPANY.

SECTION 3477, REVISED STATUTES, PROHIBITS THE ASSIGNMENT OF ANY CLAIM UPON THE UNITED STATES OR ANY INTERESTS THEREIN, AND ALL POWERS OF ATTORNEY OR OTHER AUTHORITY FOR RECEIVING PAYMENT OF ANY SUCH CLAIM OR SHARE THEREOF ARE MADE ABSOLUTELY NULL AND VOID EXCEPT WHEN FREELY MADE AND EXECUTED IN THE PRESENCE OF AT LEAST TWO ATTESTING WITNESSES AFTER THE ALLOWANCE OF THE CLAIMS, THE ASCERTAINMENT OF THE AMOUNTS DUE, AND THE ISSUANCE OF A WARRANT (CHECK) IN PAYMENT OF THE AMOUNT DUE, WITH ADDED CONDITIONS AS TO THE STEPS TO BE TAKEN BEFORE THE WARRANT (CHECK) MAY BE DELIVERED TO THE ASSIGNEE.

THE WORD "CLAIM" AS USED IN SECTION 3477, REVISED STATUTES, EMBRACES ALL CLAIMS AGAINST THE UNITED STATES OF WHATSOEVER CHARACTER AND COMPREHENDS ALL DEMANDS UPON THE UNITED STATES, WHETHER MADE FOR LIQUIDATED OR UNLIQUIDATED CLAIMS, 4 COMP. DEC. 496; UNITED STATES V. GILLIS, 95 U.S. 413; SPOFFARD V. KIRK, 97 ID. 488; AND THE CLAIM OF THE NEW YORK BOARD OF FIRE UNDERWRITERS AGAINST THE IMPORTING COMPANY, WHICH IS THE SUBJECT OF THE CLAIMED ASSIGNMENT HERE IN QUESTION, INVOLVES A PAYMENT TO BE MADE BY THE UNITED STATES, AND CONSEQUENTLY IS SUCH A CLAIM UPON THE UNITED STATES AS IS CONTEMPLATED UNDER THE STATUTE. YOU ARE ACCORDINGLY ADVISED THAT THE RECOGNITION OF ANY ASSIGNMENT MADE BY THE IMPORTING COMPANY OF ITS CLAIM UPON THE UNITED STATES FOR ANY PART DUE IT FROM THE UNITED STATES AS A REFUND OF CUSTOMS DUTIES, ETC., WOULD BE IN VIOLATION OF THE PROVISIONS OF THE CITED STATUTE UNLESS MADE IN THE FORM AND MANNER PRESENTED IN THE STATUTE AFTER ISSUANCE OF THE REFUND CHECK, AND THE BALANCE DUE THE IMPORTING COMPANY, AFTER DEDUCTING THE AMOUNT OF THE SET-OFF REFERRED TO ABOVE, SHOULD BE PAID DIRECTLY TO SAID COMPANY OR, IF IN LIQUIDATION, TO SUCH PARTIES AS MAY APPEAR TO BE LEGALLY AUTHORIZED TO RECEIVE AND DISTRIBUTE ANY ASSETS BELONGING TO THAT COMPANY.