A-27951, JULY 31, 1929, 9 COMP. GEN. 46

A-27951: Jul 31, 1929

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AS TO WHAT ARE CONTRACTS AND IN THIS CONNECTION YOUR ATTENTION IS INVITED TO THE GENERAL RULE THAT A CONTRACT REPRESENTS A MEETING OF THE MINDS OF THE PARTIES. SIMPLE WRITTEN CONTRACTS ARE TO BE DIVIDED INTO THREE CLASSES: (1) CONTRACTS WHICH ARE IN WRITING. THIS CLASSIFICATION IS NOT ONE OF GRADE OR RANK OF THE VARIOUS KINDS OF CONTRACT. THEY ARE ALL OF THE SAME RANK. NOR IS THE DIFFERENCE BETWEEN THEM IN THE MANNER OF EXECUTION. THESE THREE CLASSES OF CONTRACTS PRESENT MANY RESEMBLANCES AND BUT FEW DIFFERENCES IN QUESTIONS ARISING OUT OF THE MATERIAL ON WHICH AND WITH WHICH THE CONTRACTS ARE TO BE WRITTEN. THESE ARE FORMAL CONTRACTS AND ARE OF THE CLASS THREE MENTIONED IN THE ABOVE QUOTED EXTRACT FROM PAGE ON CONTRACTS.

A-27951, JULY 31, 1929, 9 COMP. GEN. 46

CONTRACTS - TUITION OF INDIAN CHILDREN WHILE THE ACT OF MARCH 7, 1928, 45 STAT. 215, WAIVED THE REQUIREMENTS OF SECTION 3744, REVISED STATUTES, WITH RESPECT TO AGREEMENTS FOR THE TUITION OF INDIAN CHILDREN IN STATE AND PRIVATE SCHOOLS, IT DID NOT WAIVE THE REQUIREMENT THAT THERE BE FILED IN THE GENERAL ACCOUNTING OFFICE EVIDENCE OF THE CONTRACT--- IN WHATEVER FORM- - FOR SUCH TUITION.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE INTERIOR, JULY 31, 1929:

THERE HAS BEEN RECEIVED WITH REFERENCE TO LETTER DATED MAY 2, 1929, OF THIS OFFICE, RESPECTING THE FILING OF EVIDENCE OF AGREEMENTS BETWEEN SUPERINTENDENTS, ETC., OF INDIAN AGENCIES AND STATE SCHOOL AUTHORITIES, FOR THE EDUCATION OF INDIAN CHILDREN, YOUR LETTER OF JULY 10, 1929, IN WHICH YOU SUBMIT THAT THE ACT OF MARCH 7, 1928, 45 STAT. 215, DID NOT REQUIRE THE EXECUTION OF SUCH CONTRACTS FOR FILING IN THIS OFFICE. SEEMS TO BE THE CONTENTION OF THE SUBMISSION THAT ANY SUCH REQUIREMENT WOULD MAKE IT MORE DIFFICULT IN SECURING AGREEMENTS WITH STATE SCHOOLS FOR THE EDUCATION OF INDIAN CHILDREN.

THERE APPEARS TO BE SOME CONFUSION IN THE SUBMISSION OF JULY 10, 1929, AS TO WHAT ARE CONTRACTS AND IN THIS CONNECTION YOUR ATTENTION IS INVITED TO THE GENERAL RULE THAT A CONTRACT REPRESENTS A MEETING OF THE MINDS OF THE PARTIES, AND TO THE FOLLOWING EXTRACT FROM VOLUME 2, PAGE ON CONTRACTS, PAGE 883, SECTION 568:

WHILE THE GROWTH OF OUR LAW HAS BEEN STEADILY OBLITERATING THE ONCE IMPORTANT DISTINCTION BETWEEN THE FORMAL AND THE SIMPLE CONTRACT, A NEW CLASSIFICATION OF SIMPLE WRITTEN CONTRACTS HAS DEVELOPED. SIMPLE WRITTEN CONTRACTS ARE TO BE DIVIDED INTO THREE CLASSES: (1) CONTRACTS WHICH ARE IN WRITING, BUT WHICH NEITHER NEED TO BE IN WRITING NOR TO BE PROVEN BY WRITING; (2) CONTRACTS WHICH DO NOT NEED TO BE IN WRITING BUT MUST BE PROVEN BY WRITING; (2) CONTRACTS WHICH DO NOT NEED TO BE IN WRITING BUT MUST BE PROVEN BY WRITING; AND (3) CONTRACTS WHICH MUST BE IN WRITING. THIS CLASSIFICATION IS NOT ONE OF GRADE OR RANK OF THE VARIOUS KINDS OF CONTRACT. THEY ARE ALL OF THE SAME RANK, BEING ALL SIMPLE CONTRACTS, NOR IS THE DIFFERENCE BETWEEN THEM IN THE MANNER OF EXECUTION. THESE THREE CLASSES OF CONTRACTS PRESENT MANY RESEMBLANCES AND BUT FEW DIFFERENCES IN QUESTIONS ARISING OUT OF THE MATERIAL ON WHICH AND WITH WHICH THE CONTRACTS ARE TO BE WRITTEN, THE METHOD AND FORM OF SIGNATURE, AND DELIVERY. THE GREAT DISTINCTION BETWEEN THESE CLASSES OF CONTRACTS ARISES ON THE QUESTION OF WHAT IN LAW CAN CONSTITUTE THE CONTRACT, FOR THE PURPOSE OF DETERMINING THE TERMS THEREOF. * * *

SECTION 3744, REVISED STATUTES, REQUIRES ALL CONTRACTS OF THE SECRETARIES OF WAR, NAVY, AND INTERIOR AND OF THE OFFICERS UNDER THEM APPOINTED TO MAKE CONTRACTS, TO BE REDUCED TO WRITING AND SIGNED BY THE PARTIES WITH THEIR NAMES AT THE END THEREOF. THESE ARE FORMAL CONTRACTS AND ARE OF THE CLASS THREE MENTIONED IN THE ABOVE QUOTED EXTRACT FROM PAGE ON CONTRACTS. WITH RESPECT TO THE INTERIOR DEPARTMENT, THE ACT OF JUNE 5, 1924, 43 STAT. 392, WAIVED THE REQUIREMENTS OF SECTION 3744, REVISED STATUTES, IN THE CASE OF CONTRACTS NOT EXCEEDING $100 IN AN AGGREGATE AMOUNT BY PERMITTING THEM TO BE MADE IN THE MANNER COMMON AMONG BUSINESS MEN AND THE ACT OF MARCH 7, 1928, MAKING APPROPRIATIONS FOR THE SUPPORT OF INDIAN DAY AND INDUSTRIAL SCHOOLS, ETC., PROVIDED THAT CERTAIN EXPENDITURES COULD BE MADE

* * * FOR THE TUITION OF INDIAN CHILDREN ENROLLED IN THE PUBLIC SCHOOLS UNDER SUCH RULES AND REGULATIONS AS THE SECRETARY OF THE INTERIOR MAY PRESCRIBE, BUT FORMAL CONTRACTS SHALL NOT BE REQUIRED, FOR COMPLIANCE WITH SECTION 3744 OF THE REVISED STATUTES, FOR THE PAYMENT OF TUITION OF INDIAN CHILDREN IN PUBLIC SCHOOLS OR OF INDIAN CHILDREN IN SCHOOLS FOR THE DEAF AND DUMB, BLIND, OR MENTALLY DEFICIENT.

THAT IS TO SAY, THE ACT OF MARCH 7, 1928, FOR THE FISCAL YEAR 1929, WAIVED THE REQUIREMENTS OF SECTION 3744, REVISED STATUTES, FOR CONTRACTS FOR THE TUITION OF INDIAN CHILDREN IN PUBLIC SCHOOLS OR OF INDIAN CHILDREN IN SCHOOLS FOR THE DEAF AND DUMB, BLIND, OR MENTALLY DEFICIENT, REGARDLESS OF THE AMOUNT OF THE TUITION, BUT IT DID NOT WAIVE THE REQUIREMENT OF A CONTRACT FOR SUCH SERVICE. THE WAIVER WAS AS TO FORM AND NOT AS TO SUBSTANCE AND THIS OFFICE HAS NOT BEEN ADVISED OF ANY SITUATION WHERE INDIAN CHILDREN ARE SENT TO STATE SCHOOLS OR DEFICIENT INDIAN CHILDREN ARE SENT TO OTHER SCHOOLS WITHOUT SOME FORM OF UNDERSTANDING WITH THE AUTHORITIES OF SAID SCHOOLS FOR THE TUITION OF THESE CHILDREN. IT MAY BE POSSIBLE THAT IN MANY INSTANCES THE UNDERSTANDING--- CONTRACT, MEETING OF THE MINDS OF THE PARTIES--- IS EVIDENCED BY LETTERS BETWEEN THOSE RESPONSIBLE OFFICERS HAVING THE INDIAN CHILDREN IN CHARGE AND THE SCHOOL AUTHORITIES, OR THE CONTRACT MAY BE MORE FORMAL THAN THIS BUT LESS FORMAL THAN THE TERMS OF SECTION 3744, REVISED STATUTES, REQUIRE. IT IS THE EVIDENCE OF SUCH UNDERSTANDING, OR CONTRACT, THAT IS REQUIRED TO BE FILED IN THIS OFFICE FOR USE IN THE AUDIT AND SETTLEMENT OF CLAIMS AND ACCOUNTS ARISING OUT OF THE PAYMENT OF THE TUITION. THIS WAS THE SUBSTANCE OF THE DECISION DATED MARCH 27, 1929 (A-26332), TO YOU, WHEREIN IT WAS SAID:

THE DECISION IN 4 COMP. GEN. 159, REFERRED TO IN YOUR SUBMISSION, IS TO THE EFFECT THAT NEITHER ADVERTISING NOR FORMAL CONTRACTS ARE REQUIRED WHERE THE PURCHASES DO NOT EXCEED $100 IN AMOUNT, AND THE ACTION TAKEN IN THE AUDIT, REFERRED TO IN YOUR SUBMISSION, WAS NOT INTENDED AS A MODIFICATION OF SAID DECISION. THAT IS TO SAY, IT WAS NOT INTENDED BY SUCH ACTION TO REQUIRE EITHER ADVERTISING OR THE EXECUTION OF A FORMAL CONTRACT, BUT MERELY TO REQUIRE THAT THE INFORMAL CONTRACT OR THE WRITTEN EVIDENCE OF THE AGREEMENT OUT OF WHICH THE CONTINUING OBLIGATION AROSE BE FILED AS REQUIRED BY SECTION 3743, REVISED STATUTES, AS AMENDED. SEE 4 COMP. GEN. 568; 5 ID. 130; 6 ID. 12 AND 642.

THIS OFFICE DOES NOT UNDERSTAND THAT THE REQUIREMENT THERE BE FILED HERE THE EVIDENCE OF THE AGREEMENT FOR THE TUITION OF INDIAN CHILDREN-- WHETHER THE AGREEMENT CONSISTS OF A FORMAL CONTRACT EXECUTED IN ACCORDANCE WITH SECTION 3744, REVISED STATUTES, OR LESS FORMAL CONTRACTS CONSISTING OF AN EXCHANGE OF LETTERS, A SIGNED MEMORANDUM OF THE TERMS OF THE AGREEMENT, OR IN WHATEVER FORM THE AGREEMENT FOR THE TUITION MAY BE STATED--- SHOULD AFFECT, IN ANY MANNER, THE ARRANGEMENTS BETWEEN THOSE HAVING IN CHARGE THE EDUCATION OF INDIAN CHILDREN AND STATE OR PRIVATE SCHOOLS TO WHICH THESE CHILDREN ARE SENT.

THE PURPOSE OF SECTION 3743, REVISED STATUTES, IS TO PROVIDE A BASIS FOR THE AUDIT OF EXPENDITURES MADE IN FULFILLMENT OF GOVERNMENT OBLIGATIONS. IT IS FUNDAMENTAL THAT THERE BE WRITTEN EVIDENCE OF ALL GOVERNMENT OBLIGATIONS ON WHICH PAYMENTS ARE TO BE MADE, AND THAT THE GOVERNMENT BE NOT IN THE POSITION OF RELYING UPON THE MEMORY OR RECOLLECTION OF SOME OFFICER OR EMPLOYEE TO ESTABLISH THE TERMS OF ITS OBLIGATIONS. IT IS THIS WRITTEN EVIDENCE THAT IS REQUIRED TO BE FILED IN THIS OFFICE FOR USE IN THE AUDIT AND SETTLEMENT OF CLAIMS AND ACCOUNTS.