A-29781, DECEMBER 27, 1929, 9 COMP. GEN. 262

A-29781: Dec 27, 1929

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PAYMENT MAY BE CONSIDERED AS MADE ON THE DATE THE CHECK OF THE CONTRACTOR IS RECEIVED IN THE GOVERNMENT PRINTING OFFICE. PROVIDED THE CHECKS IS HONORED IN DUE COURSE. IF THE CHECK IS NOT RECEIVED WHEN PAYMENT IS DUE. INCLUDING THE DAY THE CHECK IS FINALLY RECEIVED. REQUIRES PAYMENT OF OUR BILL NOT LATER THAN THE LAST DAY OF THE MONTH IN WHICH SAID BILL IS RENDERED. OTHERWISE 6 PERCENT INTEREST IS CHARGED FOR EACH CALENDAR DAY PAYMENT IS DELAYED BEYOND THAT DAY. PAYMENT IS BY CHECK. THE QUESTION ARISES AS TO WHETHER THE DAY ON WHICH CHECK IS MADE OUT. OR THE DAY IT IS MAILED. OR THE DAY IT IS RECEIVED IN THIS OFFICE IS TO BE CONSIDERED THE PAYING DATE UNDER CONTRACT. YOUR ADVICE ON THIS QUESTION IS REQUESTED.

A-29781, DECEMBER 27, 1929, 9 COMP. GEN. 262

CONTRACTS - PAYMENTS BY CHECK - INTEREST ON DELAYED PAYMENTS UNDER A CONTRACT FOR THE SALE OF WASTE PAPER BY THE PUBLIC PRINTER, PROVIDING FOR PAYMENT OF INTEREST BY THE CONTRACTOR FOR EACH CALENDAR DAY'S DELAY IN PAYMENT BEYOND THE TIME SPECIFIED IN THE CONTRACT, PAYMENT MAY BE CONSIDERED AS MADE ON THE DATE THE CHECK OF THE CONTRACTOR IS RECEIVED IN THE GOVERNMENT PRINTING OFFICE, PROVIDED THE CHECKS IS HONORED IN DUE COURSE. IF THE CHECK IS NOT RECEIVED WHEN PAYMENT IS DUE, INTEREST SHOULD BE CHARGED FOR EACH CALENDAR DAY'S DELAY IN PAYMENT THEREAFTER, INCLUDING THE DAY THE CHECK IS FINALLY RECEIVED, OR THE DEBT OTHERWISE LIQUIDATED.

COMPTROLLER GENERAL MCCARL TO THE PUBLIC PRINTER, DECEMBER 27, 1929:

THERE HAS BEEN RECEIVED YOUR LETTER OF DECEMBER 6, 1929, AS FOLLOWS:

CONTRACT NUMBERED G.P. 757 (NOW ON FILE IN YOUR OFFICE) BETWEEN THE PUBLIC PRINTER AND THOMAS H. O-CONNOR COMPANY, INCORPORATED, COVERING THE SALE OF WASTE PAPER BY THE PUBLIC PRINTER, REQUIRES PAYMENT OF OUR BILL NOT LATER THAN THE LAST DAY OF THE MONTH IN WHICH SAID BILL IS RENDERED; OTHERWISE 6 PERCENT INTEREST IS CHARGED FOR EACH CALENDAR DAY PAYMENT IS DELAYED BEYOND THAT DAY. PAYMENT IS BY CHECK.

THE QUESTION ARISES AS TO WHETHER THE DAY ON WHICH CHECK IS MADE OUT, OR THE DAY IT IS MAILED, OR THE DAY IT IS RECEIVED IN THIS OFFICE IS TO BE CONSIDERED THE PAYING DATE UNDER CONTRACT.

YOUR ADVICE ON THIS QUESTION IS REQUESTED.

THE CONTRACT IN QUESTION PROVIDES THAT---

* * * THE SAID PARTY OF THE SECOND PART (THE CONTRACTOR) SHALL PAY TO THE SAID PARTY OF THE FIRST PART (THE UNITED STATES OF AMERICA) (IN LAWFUL MONEY OF THE UNITED STATES) NOT LATER THAN THE LAST DAY OF THE MONTH IN WHICH BILL IS RENDERED, * * *.

IT IS COVENANTED AND AGREED THAT IN CASE PAYMENT IS NOT MADE WITHIN THE TIME SPECIFIED INTEREST AT THE RATE OF SIX PERCENT PER ANNUM WILL BE CHARGED FOR EACH AND EVERY CALENDAR DAY PAYMENT IS DELAYED BEYOND THE LAST DAY OF THE MONTH IN WHICH BILL IS RENDERED.

IT IS GENERALLY RECOGNIZED THAT WHERE A CHECK DELIVERED TO A CREDITOR IS PAID IN DUE COURSE THE DEBT IS DISCHARGED PRO TANTO AS OF THE TIME THE CHECK WAS RECEIVED BY THE CREDITOR. SEE 48 CORPUS JURIS 618, CITING, AMONG OTHER CASES, CLEVELAND V. CRAVEN CHEMICAL COMPANY, 18 FED. REP. (2D) 11; BENNET V. BANK OF COMMERCE AND TRUST COMPANY ET AL., 220 FED.REP. 950. AS TO GOVERNMENT CHECKS THIS RULE HAS BEEN RECOGNIZED, AND IT HAS BEEN HELD CONSISTENTLY THAT A GOVERNMENT CHECK IS NOT A PAYMENT UNLESS AND UNTIL THE SAME HAS BEEN RECEIVED AND NEGOTIATED BY THE PAYEE. SEE 9 COMP. GEN. 144, 146, AND THE SEVERAL DECISIONS OF THE ACCOUNTING OFFICERS AND THE OPINION OF THE ATTORNEY GENERAL THEREIN CITED. IN A DECISION DATED NOVEMBER 9, 1929, A-29085, ADDRESSED TO THE CHAIRMAN OF THE FEDERAL FARM BOARD, IT WAS HELD:

I DO NOT FIND IN THE AGRICULTURAL MARKETING ACT OF JUNE 15, 1929, 46 STAT. 11, ANY SPECIFIED PROVISION WITH RESPECT TO THE METHOD OF COMPUTING THE LENGTH OF TIME FOR WHICH INTEREST SHALL BE CHARGED UPON LOANS MADE IN ACCORDANCE WITH THAT ACT. IT MUST BE ASSUMED, THEREFORE, THAT THE USUAL COMMERCIAL PRACTICES ARE TO BE APPLIED. ACCORDINGLY, YOU ARE ADVISED THAT INTEREST SHOULD BE COMPUTED FROM THE DATE THE CHECK OF THE FEDERAL FARM BOARD IS DRAWN AND FORWARDED TO THE BORROWER TO THE DATE THE CHECK IN PAYMENT THEREFOR IS RECEIVED BY THE BOARD, PROVIDED THE CHECK IS PAID (COLLECTED) IN THE REGULAR COURSE OF BUSINESS. * * *

YOU ARE ADVISED, THEREFORE, THAT IN THE ABSENCE OF ANY EXPRESS CONTRACT PROVISION COVERING THE MATTER, PAYMENT FOR THE WASTE PAPER UNDER THE CONTRACT IN QUESTION SHOULD BE CONSIDERED AS MADE UPON THE RECEIPT IN THE GOVERNMENT PRINTING OFFICE OF THE CHECK OF THE CONTRACTOR, PROVIDED THE CHECK IS HONORED UPON PRESENTATION TO THE BANK. IN THE EVENT THE CHECK IS NOT PAID UPON FIRST PRESENTATION TO THE BANK ON WHICH DRAWN, PAYMENT SHOULD BE CONSIDERED AS MADE AS OF THE DATE THE CHECK IS THEREAFTER HONORED OR THE DEBT OTHERWISE LIQUIDATED. IF THE CHECK IS NOT RECEIVED ON THE LAST DAY OF THE MONTH IN WHICH THE BILL IS RENDERED, INTEREST AT THE RATE OF 6 PERCENT PER ANNUM SHOULD BE CHARGED THE CONTRACTOR FOR EACH AND EVERY CALENDAR DAY'S DELAY IN PAYMENT THEREAFTER, INCLUDING THE DATE THE CHECK OF THE CONTRACTOR IS SUBSEQUENTLY RECEIVED OR THE DEBT OTHERWISE LIQUIDATED.