A-32514, JULY 22, 1930, 10 COMP. GEN. 31

A-32514: Jul 22, 1930

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WHEN A LEASE IS SO DRAWN PAYMENT MAY BE MADE TO THE DESIGNATED AGENT. AS FOLLOWS: THERE IS INCLOSED A COPY OF A TELEGRAM FROM THE AMERICAN CONSUL GENERAL AT SHANGHAI. THE IRVING TRUST COMPANY IS THE REPRESENTATIVE OF THE NATIONAL COMMERCIAL BANK. THE CONSUL GENERAL SAYS THAT THE DISCOUNTS OF A FIVE-DAY DRAFT IN PAYMENT OF RENT BY DEMAND DRAFT ON NEW YORK WILL INCUR A LOSS OF ONE HALF OF 1 PERCENT. UNLESS THEY ARE FREELY MADE AND EXECUTED IN THE PRESENCE OF AT LEAST TWO ATTESTING WITNESSES. THE ISSUING OF A WARRANT FOR THE PAYMENT THEREOF. * * * WHEN A LEASE IS EXECUTED BY THE AGENT OF THE LESSOR UNDER A PROPER POWER OF ATTORNEY. A POWER OF ATTORNEY GIVEN TO A THIRD PERSON TO COLLECT THE RENT IS NULL AND VOID UNLESS EXECUTED IN ACCORDANCE WITH SECTION 203.

A-32514, JULY 22, 1930, 10 COMP. GEN. 31

LEASES - PAYMENT OF RENT TO AGENT OF LESSOR THE INCORPORATION IN A LEASE OF A PROVISION DIRECTING PAYMENT OF RENT TO A DESIGNATED AGENT OF THE OWNER DOES NOT CONSTITUTE A POWER OF ATTORNEY NOR AN ASSIGNMENT OF THE CLAIM WITHIN THE CONTEMPLATION OF SECTION 3477, REVISED STATUTES, AND WHEN A LEASE IS SO DRAWN PAYMENT MAY BE MADE TO THE DESIGNATED AGENT.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF STATE, JULY 22, 1930:

THERE HAS BEEN RECEIVED YOUR LETTER OF JULY 3, 1930, AS FOLLOWS:

THERE IS INCLOSED A COPY OF A TELEGRAM FROM THE AMERICAN CONSUL GENERAL AT SHANGHAI, CHINA, REQUESTING AUTHORITY TO INSERT IN THE LEASE BEING ENTERED INTO FOR THE OCCUPANCY OF THE KALEE HOTEL AT SHANGHAI FOR OFFICE AND RESIDENCE PURPOSES BY THE CONSULATE GENERAL AND CERTAIN OTHER UNITED STATES GOVERNMENT OFFICES IN SHANGHAI A PROVISION FOR THE PAYMENT OF THE RENT AT THE END OF EACH MONTH BY THE DEPARTMENT OF STATE TO THE IRVING TRUST COMPANY OF NEW YORK FOR THE ACCOUNT OF THE NATIONAL COMMERCIAL BANK AT SHANGHAI. THE IRVING TRUST COMPANY IS THE REPRESENTATIVE OF THE NATIONAL COMMERCIAL BANK, WHICH OWNS THE KALEE HOTEL.

THE CONSUL GENERAL SAYS THAT THE DISCOUNTS OF A FIVE-DAY DRAFT IN PAYMENT OF RENT BY DEMAND DRAFT ON NEW YORK WILL INCUR A LOSS OF ONE HALF OF 1 PERCENT, AND THAT HE CONSIDERS THE ABOVE A PRACTICAL AND ECONOMICAL SUGGESTION.

I SHOULD BE GLAD TO KNOW WHETHER YOU PERCEIVE ANY OBJECTION TO THE INCLUSION OF THE ABOVE-MENTIONED PROVISION IN THE LEASE INDICATED. EARLY DECISION WOULD BE APPRECIATED.

SECTION 203, TITLE 31, OF THE U.S.C. SECTION 3477, REVISED STATUTES, PROVIDES:

ALL TRANSFERS AND ASSIGNMENTS MADE OF ANY CLAIM UPON THE UNITED STATES, OR OF ANY PART OR SHARE THEREOF, * * * AND ALL POWERS OF ATTORNEY, ORDERS, OR OTHER AUTHORITIES FOR RECEIVING PAYMENT OF ANY SUCH CLAIM, * * * SHALL BE ABSOLUTELY NULL AND VOID, UNLESS THEY ARE FREELY MADE AND EXECUTED IN THE PRESENCE OF AT LEAST TWO ATTESTING WITNESSES, AFTER THE ALLOWANCE OF SUCH A CLAIM, THE ASCERTAINMENT OF THE AMOUNT DUE, AND THE ISSUING OF A WARRANT FOR THE PAYMENT THEREOF. * * *

WHEN A LEASE IS EXECUTED BY THE AGENT OF THE LESSOR UNDER A PROPER POWER OF ATTORNEY, IT HAS BEEN HELD THAT THE RENT MAY BE PAID TO THE AGENT LESSOR. BUT WHERE A LEASE HAS BEEN NEGOTIATED BY THE OWNER, A POWER OF ATTORNEY GIVEN TO A THIRD PERSON TO COLLECT THE RENT IS NULL AND VOID UNLESS EXECUTED IN ACCORDANCE WITH SECTION 203, TITLE 31, OF THE U.S.C. SUPRA, 9 COMP. DEC. 611; 5 COMP. GEN. 749.

HOWEVER, IN THE CASE SUBMITTED BY YOU, IT IS UNDERSTOOD THAT IT IS PROPOSED TO INCORPORATE IN THE LEASE ITSELF A DIRECTION THAT PAYMENT BE MADE TO THE IRVING TRUST CO. OF NEW YORK FOR THE ACCOUNT OF THE LESSOR, THE NATIONAL COMMERCIAL BANK OF SHANGHAI. THE INCORPORATION OF SUCH A PROVISION IN THE LEASE DOES NOT CONSTITUTE A POWER OF ATTORNEY NOR AN ASSIGNMENT OF A CLAIM WITHIN THE CONTEMPLATION OF SECTION 203, TITLE 31, OF THE CODE, SUPRA, AND IF THE LEASE BE SO DRAWN, PAYMENT MAY BE MADE TO THE AGENT SO NAMED, SUCH A SITUATION BEING CONSIDERED SIMILAR TO THAT IN WHICH THE AGENT EXECUTES THE LEASE. 5 COMP. GEN. 749.