A-23988, OCTOBER 16, 1928, 8 COMP. GEN. 184

A-23988: Oct 16, 1928

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IS NULL AND VOID UNDER THE PROVISIONS OF SECTION 3477 OF THE REVISED STATUTES AND CONFERS NO RIGHT UPON THE ASSIGNEE TO THE PROCEEDS OF THE CHECKS. THE PHRASE "COUPLED WITH AN INTEREST" IN CONNECTION WITH A POWER OF ATTORNEY MEANS AN INTEREST IN THE PROPERTY ON WHICH THE POWER IS TO OPERATE. THE POWER AND INTEREST ARE UNITED IN THE SAME PERSON. WHERE A POWER OF ATTORNEY IS GIVEN BY A CONTRACTOR TO AN AGENT TO COLLECT CHECKS DUE FROM THE GOVERNMENT FOR WORK TO BE PERFORMED UNDER AN EXISTING CONTRACT. WHICH BY ITS EXPRESS TERMS SHOWS THAT IT IS ONE OF AGENCY ONLY AND SUBJECT TO REVOCATION AT THE PLEASURE OF THE PRINCIPAL. SUCH POWER OF ATTORNEY IS NO LONGER IN EFFECT AFTER ITS REVOCATION BY THE CONTRACTOR.

A-23988, OCTOBER 16, 1928, 8 COMP. GEN. 184

CONTRACTS - PAYMENTS BY CHECK - ASSIGNMENT - POWER OF ATTORNEY COUPLED WITH AN INTEREST THE ATTEMPTED ASSIGNMENT OF CHECKS TO BE ISSUED BY THE TREASURER OF THE UNITED STATES PURSUANT TO A CLAIM ALLOWED BY THE GENERAL ACCOUNTING OFFICE, SUCH ASSIGNMENT HAVING BEEN EXECUTED BEFORE THE ISSUANCE OF THE CHECKS OR THE ALLOWANCE OF THE CLAIM, IS NULL AND VOID UNDER THE PROVISIONS OF SECTION 3477 OF THE REVISED STATUTES AND CONFERS NO RIGHT UPON THE ASSIGNEE TO THE PROCEEDS OF THE CHECKS. THE PHRASE "COUPLED WITH AN INTEREST" IN CONNECTION WITH A POWER OF ATTORNEY MEANS AN INTEREST IN THE PROPERTY ON WHICH THE POWER IS TO OPERATE. THE POWER MUST BE INGRAFTED ON AN ESTATE IN THE THING. THE POWER AND INTEREST ARE UNITED IN THE SAME PERSON. THE INTEREST OR TITLE IN THE THING, BEING VESTED IN THE PERSON WHO GIVES THE POWER, REMAINS IN HIM UNLESS IT BE CONVEYED WITH THE POWER AND CAN PASS OUT OF HIM ONLY BY REGULAR ACT IN HIS OWN NAME. WHERE A POWER OF ATTORNEY IS GIVEN BY A CONTRACTOR TO AN AGENT TO COLLECT CHECKS DUE FROM THE GOVERNMENT FOR WORK TO BE PERFORMED UNDER AN EXISTING CONTRACT, WHICH BY ITS EXPRESS TERMS SHOWS THAT IT IS ONE OF AGENCY ONLY AND SUBJECT TO REVOCATION AT THE PLEASURE OF THE PRINCIPAL, AND IT APPEARS THAT SUCH AGENT HAS NO INTEREST IN THE CONTRACT OR THE PROCEEDS THEREOF, SUCH POWER OF ATTORNEY IS NO LONGER IN EFFECT AFTER ITS REVOCATION BY THE CONTRACTOR, AND THE BALANCE OF THE CONTRACT PRICE DUE THE CONTRACTOR FOR PERFORMANCE SHOULD BE PAID TO HIM IN ACCORDANCE WITH THE TERMS OF THE CONTRACT INVOLVED.

DECISION BY COMPTROLLER GENERAL MCCARL, OCTOBER 16, 1928:

THERE IS FOR CONSIDERATION THE CLAIM OF EARL W. POWERS FOR THE SUM OF $1,156 AS BALANCE ALLEGED TO BE DUE UNDER VETERANS' BUREAU CONTRACT NO. VBC-268, DATED MARCH 23, 1928, FOR EXTERIOR AND INTERIOR PAINTING OF THE UNITED STATES VETERANS' HOSPITAL, LOCATED AT MOUNT ALTO, WASHINGTON, D.C.

UNDER THE TERMS AND CONDITIONS OF SAID CONTRACT AND THE SPECIFICATIONS MADE A PART THEREOF, THE CONTRACTOR AGREED, FOR AND IN CONSIDERATION OF THE PAYMENT OF $6,400, TO FURNISH ALL LABOR AND MATERIALS AND TO PERFORM ALL WORK REQUIRED FOR THE EXTERIOR AND INTERIOR PAINTING AT THE MOUNT ALTO UNITED STATES VETERANS' HOSPITAL, AND TO REPAIR AND PAINT PORTIONS OF THE EXTERIOR OF THE BOILER HOUSE IN ACCORDANCE WITH THE SPECIFICATIONS, SCHEDULES, AND DRAWINGS THEREFOR, AND TO COMMENCE THE WORK WITHIN 60 CALENDAR DAYS AFTER DATE OF RECEIPT OF NOTICE TO PROCEED AND TO COMPLETE SAME WITHIN 75 CALENDAR DAYS FROM THAT DATE. IN THE EVENT OF DELAY IN THE COMPLETION OF SAID WORK, THE CONTRACT PROVIDED FOR THE DEDUCTION OF LIQUIDATED DAMAGES AS PROVIDED IN THE SPECIFICATIONS, TO WIT, AT THE RATE OF $15 PER CALENDAR DAY FOR EACH DAY COMPLETION THEREOF WAS DELAYED.

TO GUARANTEE THE PERFORMANCE OF SAID CONTRACT IN ACCORDANCE WITH THE CONDITIONS THEREOF, THE CONTRACTOR, AS PRINCIPAL, AND THE COLUMBIA CASUALTY CO., A CORPORATION OF THE STATE OF NEW YORK, AS SURETY, EXECUTED A PERFORMANCE BOND IN THE SUM OF $3,200, DATED APRIL 3, 1928, PAYABLE TO THE UNITED STATES OF AMERICA.

THE CONTRACTOR APPEARS TO HAVE RECEIVED NOTICE TO PROCEED WITH THE WORK ON APRIL 23, 1928. THEREFORE, THE WORK SHOULD HAVE BEEN COMPLETED WITHIN 75 DAYS FROM THAT DATE WHICH WAS JULY 7, 1928.

ALL OF THE WORK CONTRACTED FOR WAS NOT FINALLY COMPLETED AND ACCEPTED UNTIL JULY 17, 1928, A DELAY OF 10 DAYS AFTER THE DATE FIXED BY THE CONTRACT FOR ITS COMPLETION.

PROGRESS PAYMENTS, AGGREGATING $5,094, WERE MADE TO THE CONTRACTOR BY THE VETERANS' BUREAU DISBURSING OFFICER FOR THE WORK PERFORMED UNDER THE INVOLVED CONTRACT, LEAVING UNPAID OF THE CONTRACT PRICE THE SUM OF $1,306. UNDER THE TERMS OF THE CONTRACT LIQUIDATED DAMAGES ACCRUED TO THE UNITED STATES AT THE RATE OF $15 PER DAY FOR THE 10 CALENDAR DAYS THE CONTRACT WORK WAS DELAYED IN COMPLETION, AMOUNTING TO $150, AND DEDUCTING SUCH SUM FROM THE AMOUNT OTHERWISE DUE UNDER THE CONTRACT LEAVES AN UNPAID BALANCE OF $1,156.

THE COLUMBIA CASUALTY CO., SURETY ON THE CONTRACTOR'S PERFORMANCE BOND, CLAIMS THE $1,156 BALANCE DUE UNDER THE CONTRACT, BASING ITS CLAIM ON A POWER OF ATTORNEY, DATED JUNE 5, 1928, AS FOLLOWS:

POWER OF ATTORNEY TO COLLECT MONEY DUE ON DISBURSING OFFICER'S CHECKS

KNOW ALL MEN BY THESE PRESENTS, THAT I, EARL W. POWERS, OF 1805 WINDSOR MILL ROAD, BALTIMORE, STATE OF MARYLAND, DO HEREBY MAKE, CONSTITUTE AND APPOINT COLUMBIA CASUALTY COMPANY, OF TRANSPORTATION BUILDING, WASHINGTON, D.C., MY TRUE AND LAWFUL ATTORNEY FOR ME AND IN MY PLACE AND STEAD, TO INDORSE MY NAME ON AND COLLECT MONEY DUE ON CHECKS DRAWN IN MY FAVOR BY ANY DISBURSING OFFICER OF THE UNITED STATES FOR WHATEVER ACCOUNT, CHECKS TO BE MAILED IN CARE OF COLUMBIA CASUALTY COMPANY, TRANSPORTATION BUILDING, WASHINGTON, D.C., GIVING AND GRANTING TO MY SAID ATTORNEY FULL POWER AND AUTHORITY TO DO AND PERFORM ALL AND EVERY ACT AND THING WHATEVER REQUISITE AND NECESSARY TO BE DONE IN AND ABOUT THE PREMISES, AS FULLY TO ALL INTENTS AND PURPOSES AS I MIGHT OR COULD DO IF PERSONALLY PRESENT AT THE DOING THEREOF, WITH FULL POWER OF SUBSTITUTION AND REVOCATION, HEREBY RATIFYING AND CONFIRMING ALL THAT MY SAID ATTORNEY, OR HIS SUBSTITUTE, MAY OR SHALL LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF. THIS AUTHORITY TO REMAIN IN FULL FORCE UNTIL REVOKED BY ME.

IN TESTIMONY WHEREOF, I HAVE HEREUNTO SET MY HAND AND SEAL THIS 5TH DAY OF JUNE, A.D. 1928.

EARL W. POWERS. (SEAL.)

TWO WITNESSES REQUIRED---

GEORGE C. WATHEN.

MARY G. TRICE.

DISTRICT OF COLUMBIA, SS:

ON THE 5TH DAY OF JUNE, IN THE YEAR NINETEEN HUNDRED AND TWENTY EIGHT, BEFORE ME CAME EARL W. POWERS TO ME KNOWN TO BE THE PERSON WHO EXECUTES THE FOREGOING POWER OF ATTORNEY BEARING DATE ON THE 4TH DAY OF JUNE, A.D. 1928, AND THEN AND THERE ACKNOWLEDGED THE SAME TO BE HIS ACT AND DEED.

WITNESS MY HAND AND OFFICIAL SEAL THIS 5TH DAY OF JUNE, A.D. 1928.

CARL W. DAHR, NOTARY PUBLIC, D.C.

A COPY OF SAID POWER OF ATTORNEY APPEARS TO HAVE BEEN TRANSMITTED BY THE CONTRACTOR TO THE UNITED STATES VETERANS' BUREAU OFFICIALS ON JUNE 6, 1928, WITH THE REQUEST THAT THE CHECKS FOR PAYMENT UNDER THE INVOLVED CONTRACT BE FORWARDED TO THE SURETY. HOWEVER, TWO CHECKS, AGGREGATING $5,094, COVERING PROGRESS PAYMENTS UNDER THE CONTRACT, WERE THEREAFTER SENT OR GIVEN TO THE CONTRACTOR WITHOUT NOTICE TO THE SURETY, AND ON JULY 22, 1928, THE CONTRACTOR FORWARDED TO THE DIRECTOR OF THE UNITED STATES VETERANS' BUREAU, ATTENTION OF THE CONSTRUCTION DIVISION, A WRITTEN NOTICE REVOKING THE PREVIOUS INSTRUCTIONS GIVEN AS TO THE DISPOSITION OF ANY CHECKS OR MAIL FOR HIM, AND REQUESTED THAT FUTURE CORRESPONDENCE AND THE CHECK FOR THE FINAL PAYMENT ON THE MOUNT ALTO PAINTING CONTRACT BE FORWARDED TO HIM AT AN ADDRESS THEREIN GIVEN.

IT FURTHER APPEARS THAT ON AUGUST 6, 1928, SAID CONTRACTOR EXECUTED ANOTHER POWER OF ATTORNEY APPOINTING JOHN A. REILLY, OF WASHINGTON, D.C., AS HIS TRUE AND LAWFUL ATTORNEY TO RECEIVE AND COLLECT ALL MONEYS DUE HIM FROM THE GOVERNMENT ON THE SAID MOUNT ALTO PAINTING CONTRACT OF MARCH 23, 1928, WHEREIN IT IS STATED THAT ALL PREVIOUS POWERS OF ATTORNEY EXECUTED BY THE CONTRACTOR ARE THEREBY REVOKED.

IT IS CONTENDED BY THE SURETY THAT ITS SAID POWER OF ATTORNEY WAS A POWER COUPLED WITH AN INTEREST, AND, THEREFORE, THAT IT WAS IRREVOCABLE BY THE CONTRACTOR. ALSO, THE SURETY ALLEGES THAT WHEN SUCH POWER OF ATTORNEY WAS EXECUTED ON JUNE 5, 1928, THE CONTRACTOR WAS IN FINANCIAL DIFFICULTIES AND, IN ORDER TO AVOID HIS DEFAULTING ON THE GOVERNMENT MOUNT ALTO CONTRACT, THE SURETY COMPANY LOANED HIM $1,200 WITH AN UNDERSTANDING THAT REIMBURSEMENT THEREOF WOULD BE MADE FROM THE PROCEEDS OF SAID CONTRACT, AND THAT THE POWER OF ATTORNEY WAS EXECUTED TO ENABLE THE SURETY TO RECEIVE CONTRACTOR'S FUNDS AND TO RETAIN THEREFROM SUCH AMOUNTS AS WERE NECESSARY TO REPAY THE LOAN.

WITH REFERENCE TO THE SURETY'S CONTENTION THAT THE POWER OF ATTORNEY WAS GIVEN AS SECURITY FOR THE LOAN, THE CONTRACTOR MAKES THE FOLLOWING STATEMENT:

THAT AT TIME OF GIVING THE POWER OF ATTORNEY, SAME WAS ONLY TEMPORARY UNTIL CERTAIN LEGAL PAPERS WERE DRAWN UP GIVING THEM A MORTGAGE ON PROPERTY AND EQUIPMENT OF MINE TO COVER THE LOAN ADVANCED BY THEM.

THE INVOLVED POWER OF ATTORNEY, HEREINABOVE QUOTED, AUTHORIZED SAID SURETY, AS ATTORNEY OR AGENT OF THE CONTRACTOR, TO COLLECT MONEY DUE ON CHECKS DRAWN TO THE CONTRACTOR BY ANY DISBURSING OFFICER OF THE UNITED STATES FOR WHATEVER ACCOUNT. SUCH POWER OF ATTORNEY SPECIFICALLY PROVIDED THAT THE AUTHORITY THEREIN CONFERRED ON THE AGENT WAS TO REMAIN IN FULL FORCE UNTIL REVOKED BY THE PRINCIPAL.

IT IS A GENERALLY RECOGNIZED PRINCIPLE OF LAW THAT A PRINCIPAL MAY REVOKE THE AUTHORITY GRANTED TO AN AGENT AT ANY TIME, PROVIDED SUCH AUTHORITY IS NOT COUPLED WITH AN INTEREST. 6 COMP. GEN. 737; 31 "CYC.' 1924. THE PHRASE "COUPLED WITH AN INTEREST" IN CONNECTION WITH A POWER OF ATTORNEY DOES NOT MEAN AN INTEREST IN THE EXERCISE OF THE POWER BUT AN INTEREST IN THE PROPERTY ON WHICH THE POWER IS TO OPERATE. HUNT V. ROUSMANIER'S ADMINISTRATORS, 21 U.S. (B WHEAT,) 174, 184; TAYLOR V. BURNS, 203 U.S. 120. A "POWER COUPLED WITH AN INTEREST" MUST BE AN INTEREST IN THE THING ITSELF. THE POWER MUST BE INGRAFTED ON AN ESTATE IN THE THING. THE POWER AND INTEREST ARE UNITED IN THE SAME PERSON. THE INTEREST OR TITLE IN THE THING, BEING VESTED IN THE PERSON WHO GIVES THE POWER, REMAINS IN HIM UNLESS IT BE CONVEYED WITH THE POWER AND CAN PASS OUT OF HIM ONLY BY REGULAR ACT IN HIS OWN NAME. SEE VOLUME 3, WORDS AND PHRASES, 1107 AND 1108, AND THE CASES THEREIN CITED.

IN THE INSTANT CASE THE EVIDENCE DOES NOT SHOW THAT THE CONTRACTOR BY SUCH POWER OF ATTORNEY, OR OTHERWISE, CONVEYED TO THE SURETY ANY INTEREST IN HIS MOUNT ALTO PAINTING CONTRACT OR IN THE PROCEEDS TO BE DERIVED THEREFROM. THERE IS NOTHING CONTAINED IN THE POWER OF ATTORNEY TO INDICATE THAT IT WAS GIVEN TO SECURE A LOAN FROM THE SURETY, OR TO CREATE A LIEN IN ITS FAVOR ON THE PROCEEDS OF THE CONTRACTOR'S CHECKS WHICH IT WAS AUTHORIZED TO COLLECT THEREUNDER, OR THAT IT WAS IRREVOCABLE. ON THE CONTRARY, THE POWER OF ATTORNEY, BY ITS EXPRESS TERMS, SHOW THAT IT WAS ONE OF AGENCY ONLY, AND SUBJECT TO REVOCATION AT THE PLEASURE OF THE PRINCIPAL.

THE SURETY COMPANY HAS SUBMITTED AFFIDAVITS OF THREE OF ITS OFFICIALS SEEKING TO ESTABLISH THAT ITS ARRANGEMENT WITH THE CONTRACTOR AND HIS EXECUTION OF SAID POWER OF ATTORNEY CONSTITUTED AN ASSIGNMENT TO IT OF THE MONEYS THEREAFTER TO BECOME DUE TO THE CONTRACTOR FOR WORK TO BE PERFORMED AT THE VETERANS' BUREAU MOUNT ALTO HOSPITAL UNDER THE INVOLVED CONTRACT OF MARCH 23, 1928. HOWEVER, SECTION 3477, REVISED STATUTES, SPECIFICALLY MAKES NULL AND VOID ALL ASSIGNMENTS OR POWERS OF ATTORNEY TO COLLECT CLAIMS AGAINST THE GOVERNMENT "UNLESS THEY ARE FREELY MADE AND EXECUTED * * * AFTER THE ALLOWANCE OF SUCH A CLAIM, THE ASCERTAINMENT OF THE AMOUNT DUE AND THE ISSUING OF A WARRANT (CHECK) FOR THE PAYMENT THEREOF.' EVEN ASSUMING THAT THERE WAS SUCH AN ATTEMPTED ASSIGNMENT OF THE CHECK TO BE ISSUED BY THE TREASURER OF THE UNITED STATES PURSUANT TO A CLAIM ALLOWED BY THE GENERAL ACCOUNTING OFFICE, SUCH ASSIGNMENT HAVING BEEN EXECUTED BEFORE THE ISSUANCE OF THE CHECKS, OR THE ALLOWANCE OF THE CLAIM, WOULD BE NULL AND VOID UNDER THE PROVISIONS OF SAID SECTION 3477, REVISED STATUTES, AND WOULD CONFER NO RIGHTS UPON THE ASSIGNEE TO THE PROCEEDS OF THE CHECKS. THE LOAN OF MONEY TO THE CONTRACTOR BY THE SURETY WAS A PRIVATE TRANSACTION BETWEEN THESE PARTIES, WITH WHICH THE GOVERNMENT HAD NO CONCERN, AND, UNDER THE CIRCUMSTANCES, THIS OFFICE CAN NOT ASSIST IN THE COLLECTION OF SUCH DEBT. SEE 6 COMP. GEN. 809.

THE RECORD CLEARLY ESTABLISHES THAT THE POWER OF ATTORNEY GIVEN BY THE CONTRACTOR TO THE SURETY ON HIS PERFORMANCE BOND ON JUNE 5, 1928, WAS ONE OF AGENCY ONLY; THAT SAME WAS SUBSEQUENTLY REVOKED BY THE CONTRACTOR; THAT THE SAID SURETY HAS NO TITLE OR INTEREST IN THE INVOLVED MOUNT ALTO HOSPITAL PAINTING CONTRACT OR THE PROCEEDS THEREOF; AND THAT THE WORK CONTRACTED FOR WAS PERFORMED BY THE CONTRACTOR IN ACCORDANCE WITH THE PROVISIONS OF HIS CONTRACT THEREFOR, EXCEPT AS TO THE DELAY HEREINBEFORE MENTIONED. THEREFORE, HE IS ENTITLED TO RECEIVE THE $1,156 BALANCE DUE UNDER THE CONTRACT.

ACCORDINGLY, THERE IS CERTIFIED AS DUE THE CLAIMANT, EARL W. POWERS, THE SUM OF $1,156 AS THE BALANCE DUE HIM FOR SERVICES PERFORMED UNDER VETERANS' BUREAU CONTRACT NO. VBC-268, DATED MARCH 23, 1928, AND A CHECK THEREFOR WILL ISSUE TO HIM IN DUE COURSE.