A-5119, APRIL 16, 1925, 4 COMP. GEN. 858

A-5119: Apr 16, 1925

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THE GENERAL ACCOUNTING OFFICE HAS AUTHORITY TO SET OFF AGAINST THE AMOUNT OF THE JUDGMENT ANY BALANCE FOUND DUE THE UNITED STATES WHICH WAS NOT CONSIDERED OR EMBRACED IN THE JUDGMENT AND WHICH THE JUDGMENT CREDITOR FAILS OR REFUSES TO PAY UPON DEMAND. THERE IS FOR CONSIDERATION THE QUESTION OF WHETHER THE SUM OF $42.70 DUE THE UNITED STATES AS THE UNCHECKED DIFFERENCE IN PAY AND ALLOWANCE BETWEEN THE GRADES OF FIRST AND SECOND LIEUTENANT FOR THE PERIOD FROM JANUARY 2 TO APRIL 27. THE PETITION PRESENTED IN THE COURT OF CLAIMS WAS FOR $150 UNIFORM GRATUITY UNDER THE ACT OF AUGUST 29. NO DEFENSE TO THE PETITION WAS INTERPOSED IN THE COURT OF CLAIMS. JUDGMENT WAS RENDERED JULY 2. AN APPROPRIATION WAS MADE TO PAY SAID JUDGMENT.

A-5119, APRIL 16, 1925, 4 COMP. GEN. 858

JUDGMENTS - SET-OFF OF AMOUNTS DUE THE UNITED STATES IN THE PAYMENT OF A JUDGMENT AGAINST THE UNITED STATES RENDERED BY THE COURT OF CLAIMS AND APPROPRIATED FOR BY CONGRESS, THE GENERAL ACCOUNTING OFFICE HAS AUTHORITY TO SET OFF AGAINST THE AMOUNT OF THE JUDGMENT ANY BALANCE FOUND DUE THE UNITED STATES WHICH WAS NOT CONSIDERED OR EMBRACED IN THE JUDGMENT AND WHICH THE JUDGMENT CREDITOR FAILS OR REFUSES TO PAY UPON DEMAND.

DECISION BY COMPTROLLER GENERAL MCCARL, APRIL 16, 1925:

EDWARD F. BAILEY, FORMERLY FIRST LIEUTENANT, UNITED STATES MARINE CORPS, OBTAINED JULY 2, 1923, A JUDGMENT IN THE COURT OF CLAIMS FOR $150 UNIFORM GRATUITY, AND THERE IS FOR CONSIDERATION THE QUESTION OF WHETHER THE SUM OF $42.70 DUE THE UNITED STATES AS THE UNCHECKED DIFFERENCE IN PAY AND ALLOWANCE BETWEEN THE GRADES OF FIRST AND SECOND LIEUTENANT FOR THE PERIOD FROM JANUARY 2 TO APRIL 27, 1919, SHOULD BE DEDUCTED FROM THE AMOUNT OF THE JUDGMENT IN STATING A SETTLEMENT BY THIS OFFICE UNDER THE APPROPRIATION FOR THE JUDGMENT MADE BY THE ACT OF APRIL 2, 1924.

THE PETITION PRESENTED IN THE COURT OF CLAIMS WAS FOR $150 UNIFORM GRATUITY UNDER THE ACT OF AUGUST 29, 1916, 39 STAT. 589. IN VIEW OF THE DECISIONS IN BANCROFT V. UNITED STATES, 56 CT.CLS. 218, AND UNITED STATES V. BANCROFT, 260 U.S. 706, NO DEFENSE TO THE PETITION WAS INTERPOSED IN THE COURT OF CLAIMS. ACCORDINGLY, JUDGMENT WAS RENDERED JULY 2, 1923, AND IN THE DEFICIENCY APPROPRIATION ACT OF APRIL 2, 1924, AN APPROPRIATION WAS MADE TO PAY SAID JUDGMENT. WHEN THE TRANSCRIPT OF JUDGMENT WAS REFERRED TO THIS OFFICE FOR SETTLEMENT PURSUANT TO THE ACT OF FEBRUARY 18, 1904, 33 STAT. 41, IT WAS DISCOVERED THAT AN ERROR HAD BEEN MADE BY WILLIAM G. POWELL, COLONEL, UNITED STATES MARINE CORPS, IN CHECKING THE ACCOUNT OF THE SAID EDWARD F. BAILEY, ON VOUCHER NO. 91, SECOND QUARTER, 1921, IN THE SUM OF ONLY $100.37 AS DIFFERENCE BETWEEN THE PAY AND ALLOWANCES OF THE GRADES OF FIRST AND SECOND LIEUTENANT DURING THE PERIOD FROM JANUARY 2 TO APRIL 27, 1919, THE REAL DIFFERENCE BETWEEN THE PAY AND ALLOWANCES OF A FIRST AND SECOND LIEUTENANT FOR THE PERIOD INVOLVING BEING $143.07, MAKING AN UNDERCHECKAGE OF $42.70. BY LETTERS DATED AUGUST 9 AND SEPTEMBER 22, 1924, REQUEST WAS MADE FOR PAYMENT OF THE INDEBTEDNESS OF $42.70 TO THE UNITED STATES, BUT THESE REQUESTS HAD NOT BEEN COMPLIED WITH; ON THE CONTRARY, THE ATTORNEYS FOR THE JUDGMENT CREDITOR DEMAND PAYMENT OF THE WHOLE OF THE JUDGMENT, NOTWITHSTANDING THE CLAIMANT'S INDEBTEDNESS TO THE UNITED STATES.

THE CLAIM PRESENTED BY THE PETITION AND ADJUDICATED BY THE COURT OF CLAIMS WAS FOR THE UNIFORM GRATUITY OF $150. THE COURT DID NOT CONSIDER THE WHOLE OF THE ACCOUNT BETWEEN THE UNITED STATES AND BAILEY, NOR WAS THE ITEM OF $42.70 CONSIDERED AND ADJUDGED BY THE COURT. THIS OFFICE EXPRESSLY DISCLAIMS ANY AUTHORITY TO REVISE THE JUDGMENT OF THE COURT OF CLAIMS IN THIS OR ANY OTHER CASE. O-GRADY V. UNITED STATES, 22 WALL. 641; JONES V. UNITED STATES, 119 U.S. 480. HOWEVER, IN THE LANGUAGE OF THE JONES CASE, THE CREDITOR HERE IS A DEBTOR TO THE UNITED STATES FOR AN ITEM THAT IS NOT INCLUDED IN THE JUDGMENT, AND THE JUDGMENT IS NOT CONCLUSIVE AS TO SAID ITEM. IT WAS SAID BY THE COURT OF CLAIMS IN LABADIE V. UNITED STATES, 33 CT.CLS. 476, THAT---

* * * WHEN THE TIME OF PAYMENT (OF A JUDGMENT) COMES THE STATUTES GIVE THE ACCOUNTING OFFICERS OF THE TREASURY (NOW THE GENERAL ACCOUNTING OFFICE) ABUNDANT AUTHORITY TO SET OFF AN INDEBTEDNESS DUE FROM A CLAIMANT TO THE UNITED STATES AGAINST A JUDGMENT IN HIS FAVOR. (REV.STAT.SECS. 236, 1766; ACT MARCH 3, 1875, 18 STAT.L.P. 481; HOWE'S CASE, 24 C.CLS.R. 170; PENNEBAKER'S CASE, 29 ID. 35.)

IN THE SCHOONER HENRY ET AL. V. UNITED STATES, 35 CT.CLS. 394, A SUM OF MONEY HAD BEEN APPROPRIATED TO PAY A CLAIM, BUT A CERTIFICATE WAS REQUIRED FROM THE COURT OF CLAIMS THAT THE CLAIMANT WAS THE PROPER PARTY. THE UNITED STATES RESISTED THE GRANTING OF THE CERTIFICATE ON THE GROUND THAT THE DECEDENT WAS INDEBTED TO THE UNITED STATES IN EXCESS OF THE SUM APPROPRIATED. THE COURT OVERRULED THE OBJECTIONS, GRANTED THE CERTIFICATE, AND SAID:

IT IS AMONG THE GENERAL DUTIES OF THE TREASURY DEPARTMENT, THROUGH THE ACCOUNTING OFFICERS (NOW OF THE GENERAL ACCOUNTING OFFICE), TO SETTLE ALL CLAIMS AND DEMANDS BY AND AGAINST THE UNITED STATES, AND IN PROPER CASES TO SET OFF ONE AGAINST THE OTHER WHEN THE GOVERNMENT IS BOTH DEBTOR AND CREDITOR FO THE SAME PARTY. (TAGGART'S CASE, 17 C.CLS.R. 323; BONNAFON'S CASE, 14 C.CLS.R. 489; REV.STAT.SECS. 236, 1766; ACT OF MARCH 3, 1875, CH. 149, SUP.REV.STAT. 185; HOWE'S CASE, 24 C.CLS.R. 170.)

IT WILL BE SEEN BY THESE DECISIONS AND CITATION OF THE STATUTES THAT THE TREASURY (NOW THE GENERAL ACCOUNTING OFFICE) IS IN POSSESSION OF ADEQUATE POWER TO GUARD THE UNITED STATES AGAINST THE PAYMENT OF JUDGMENTS OR CLAIMS WHEN THERE EXISTS IN THE DEPARTMENT A DEMAND AGAINST THE CLAIMANT WHICH IS A PROPER SUBJECT OF SET-OFF.

THE COURT SAID IN THE TAGGART CASE, 17 CT.CLS. 323, AT PAGE 327, THAT---

WHERE A PERSON IS BOTH DEBTOR AND CREDITOR OF THE UNITED STATES, IN ANY FORM, THE OFFICERS OF THE TREASURY DEPARTMENT, IN SETTLING THE ACCOUNTS, NOT ONLY HAVE THE POWER BUT ARE REQUIRED, IN THE PROPER DISCHARGE OF THEIR DUTIES, TO SET OFF THE ONE INDEBTEDNESS AGAINST THE OTHER AND TO ALLOW AND CERTIFY FOR PAYMENT ONLY THE BALANCE FOUND DUE ON ONE SIDE OR THE OTHER. SECTION 1766 OF THE REVISED STATUTES SO PROVIDES, AND SPECIAL PROVISIONS ON THE SUBJECT, TO MEET THE CASE OF JUDGMENTS RECOVERED AGAINST THE UNITED STATES "OR OTHER CLAIM DULY ALLOWED BY LEGAL AUTHORITY," ARE MADE BY THE ACT OF MARCH 3, 1875, CHAPTER 149. (1 SUPPLMT. TO R.S.P. 185.) BUT THE RIGHT OF SET-OFF IN SUCH CASES EXISTS INDEPENDENTLY OF THOSE SPECIAL ENACTMENTS AND IS FOUNDED UPON WHAT IS NOW SECTION 236 OF THE REVISED STATUTES, AS FOLLOWS:

"SEC. 236. ALL CLAIMS AND DEMANDS WHATEVER BY THE UNITED STATES, OR AGAINST THEM, AND ALL ACCOUNTS WHATEVER IN WHICH THE UNITED STATES ARE CONCERNED, EITHER AS DEBTORS OR CREDITORS, SHALL BE SETTLED AND ADJUSTED IN THE DEPARTMENT OF THE TREASURY.'

THE DUTY OF THE ACCOUNTING OFFICERS IN MATTERS OF SET-OFF HAS FREQUENTLY BEEN RECOGNIZED BY THE COURTS. (MCKNIGHT'S CASE, 13 C.CLS.R.,306, AFFIRMED ON APPEAL; BONNAFON'S CASE, 14 C.CLS.R., 489.) * * *.

SECTION 236, REVISED STATUTES, QUOTED BY THE COURT, IS NOW SECTION 305 OF THE BUDGET AND ACCOUNTING ACT OF JUNE 10, 1921, 42 STAT. 24. SEE ALSO UNITED STATES V. GRISWOLD, 30 FED.REP. 04; TELLER V. UNITED STATES, 113 ID. 463; UNITED STATES V. ENNIS, 132 ID. 133; WANNER V. LOUIS WANNER, JR. (INC.), 300 ID. 376.

THERE IS CLEARLY AUTHORITY, BOTH STATUTORY AND JUDICIAL, FOR THE DEDUCTION BY THE GENERAL ACCOUNTING OFFICE FROM THE AMOUNT OF A JUDGMENT OF A BALANCE DUE THE UNITED STATES WHICH WAS NOT CONSIDERED OR EMBRACED IN A JUDGMENT AND WHICH THE JUDGMENT CREDITOR FAILS AND REFUSES TO PAY UPON DEMAND, ALTHOUGH NOT EXPRESSLY DENYING LIABILITY. A SETTLEMENT WILL BE STATED ALLOWING $150 AS THE AMOUNT OF THE JUDGMENT AND DEDUCTING THEREFROM THE OVERPAYMENT OF $42.70 AND CERTIFYING THE BALANCE OF $107.30 DUE EDWARD F. BAILEY.