A-61131, JUNE 11, 1935, 14 COMP. GEN. 884

A-61131: Jun 11, 1935

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INDEBTEDNESS - PAYMENT BY DELIVERY OF MERCHANDISE THERE IS NO AUTHORITY OF LAW FOR THE ACCEPTANCE OF AN OFFER BY A DEBTOR OF THE UNITED STATES TO DELIVER MERCHANDISE IN PAYMENT OF AN ACKNOWLEDGED OBLIGATION TO THE UNITED STATES. IT WAS STATED IN THE LETTER APRIL 19. THAT THE LAW REQUIRES PURCHASES FOR THE NAVY TO BE MADE AFTER COMPETITIVE BIDDING AND THAT THERE IS NO AUTHORITY TO LIQUIDATE THE INDEBTEDNESS BY DELIVERING MERCHANDISE EQUAL IN VALUE TO THE AMOUNT OF THE INDEBTEDNESS. AMOUNT TO A PURCHASE OF PROPERTY BY THE NAVY BUT IS SIMPLY AN OFFER TO SUPPLY SOMETHING IN SATISFACTION OF A DEBT. UNDER SECTION 3469 OF THE REVISED STATUTES OF THE UNITED STATES AND IT IS NOT SEEN WHEREIN THE SAME SUPPORTS YOUR SUGGESTION IN THE INSTANT MATTER FOR THE REASON THAT THERE IS NOT INVOLVED HEREIN ANY QUESTION OF COMPROMISE.

A-61131, JUNE 11, 1935, 14 COMP. GEN. 884

INDEBTEDNESS - PAYMENT BY DELIVERY OF MERCHANDISE THERE IS NO AUTHORITY OF LAW FOR THE ACCEPTANCE OF AN OFFER BY A DEBTOR OF THE UNITED STATES TO DELIVER MERCHANDISE IN PAYMENT OF AN ACKNOWLEDGED OBLIGATION TO THE UNITED STATES.

COMPTROLLER GENERAL MCCARL TO THE ATTORNEY GENERAL, JUNE 11, 1935:

THERE HAS BEEN RECEIVED YOUR LETTER OF MAY 9, 1935, YOUR REFERENCE GCS. WJD 77-11-57, IN REPLY TO LETTER OF THIS OFFICE DATED APRIL 19, 1935, RELATING TO THE CLAIM OF THE UNITED STATES AGAINST ARTHUR A. GOEPP, INC., FOR THE SUM OF $105.90, ON ACCOUNT OF EXCESS COST INCURRED BY REASON OF THE DEBTOR'S FAILURE TO FURNISH 30 AIRPORT GLASSES TO THE NAVY DEPARTMENT UNDER PROPOSAL DATED APRIL 3, 1929, AND ACCEPTANCE DATED APRIL 6, 1929, BY THE NAVY PURCHASING OFFICE, SAN FRANCISCO, CALIF. YOUR LETTER HAS REFERENCE TO THE DEALER'S OFFER TO SETTLE THE CLAIM BY TURNING OVER TO THE NAVY DEPARTMENT CERTAIN SUPPLIES OR MERCHANDISE THE VALUE OF WHICH WOULD BE EQUAL TO ITS INDEBTEDNESS IN THE CASE.

IT WAS STATED IN THE LETTER APRIL 19, 1935, THAT THE LAW REQUIRES PURCHASES FOR THE NAVY TO BE MADE AFTER COMPETITIVE BIDDING AND THAT THERE IS NO AUTHORITY TO LIQUIDATE THE INDEBTEDNESS BY DELIVERING MERCHANDISE EQUAL IN VALUE TO THE AMOUNT OF THE INDEBTEDNESS. WITH RESPECT TO THIS YOU STATE THAT THE PROPOSITION MADE BY THE DEALER DOES NOT, IN THE OPINION OF THE DEPARTMENT OF JUSTICE, AMOUNT TO A PURCHASE OF PROPERTY BY THE NAVY BUT IS SIMPLY AN OFFER TO SUPPLY SOMETHING IN SATISFACTION OF A DEBT. YOU INCLOSE A COPY OF AN OPINION OF THE ATTORNEY GENERAL OF OCTOBER 20, 1933, ON A QUESTION OF COMPROMISE AND RENEW YOUR REQUEST THAT THE MATTER BE TAKEN UP WITH THE NAVY DEPARTMENT IN AN EFFORT TO WORK OUT AN ADJUSTMENT.

THE OPINION OF OCTOBER 20, 1933, HAD REFERENCE TO WHETHER THE UNITED STATES MIGHT ACCEPT AN OFFER TO COMPROMISE A CLAIM AGAINST THE SOUTHERN PACIFIC CO. UNDER SECTION 3469 OF THE REVISED STATUTES OF THE UNITED STATES AND IT IS NOT SEEN WHEREIN THE SAME SUPPORTS YOUR SUGGESTION IN THE INSTANT MATTER FOR THE REASON THAT THERE IS NOT INVOLVED HEREIN ANY QUESTION OF COMPROMISE. THE DEBTOR IN THIS CASE HAS ACKNOWLEDGED ITS INDEBTEDNESS IN THE AMOUNT CLAIMED AND SIMPLY SUGGESTS THE PAYMENT THEREOF BY DELIVERING TO THE NAVY DEPARTMENT SUPPLIES OR MERCHANDISE EQUAL IN VALUE TO THE AMOUNT OF THE DEBT. IN SUCH CONNECTION, YOUR ATTENTION IS INVITED THAT SECTION 3473, REVISED STATUTES OF THE UNITED STATES, PROVIDES THAT "ALL TAXES AND ALL OTHER DEBTS AND DEMANDS THAN DUTIES ON IMPORTS, ACCRUING OR BECOMING DUE TO THE UNITED STATES, SHALL BE PAID IN GOLD AND SILVER COIN, TREASURY NOTES, UNITED STATES NOTES, OR NOTES OF NATIONAL BANKS.'

IT IS TO BE NOTED, ALSO, THAT THE APPROPRIATION INVOLVED IN THIS CASE WAS CHARGED WITH THE AMOUNT OF THE EXCESS COST AND EVEN IF THERE WAS AUTHORITY OTHERWISE FOR THE NAVY DEPARTMENT TO ACCEPT PROPERTY FROM THE DEALER AS PAYMENT OF THE GOVERNMENT'S CLAIM, SUCH ACTION WOULD NECESSITATE A CHARGE AGAINST THE CURRENT NAVY DEPARTMENT APPROPRIATION IN THE AMOUNT OF THE VALUE OF THE SUPPLIES OR MERCHANDISE SO RECEIVED, AND THE TRANSACTION WOULD BE IN EFFECT, A PURCHASE BY THE NAVY DEPARTMENT IN A MANNER OTHER THAN AS REQUIRED BY LAW, FOR INSTANCE, WITHOUT OBSERVANCE OF SECTION 3709, REVISED STATUTES. THE NAVY DEPARTMENT APPROPRIATION IS NOT AVAILABLE FOR EXPENDITURES THEREFROM FOR SUPPLIES OR MERCHANDISE EXCEPT AS THE SAME MAY BE OBTAINED IN THE MANNER PRESCRIBED AND AUTHORIZED BY LAW. THE PROPOSED TRANSACTION INVOLVING, IN EFFECT, A PURCHASE OF SUPPLIES, THIS OFFICE CANNOT COMPLY WITH YOUR REQUEST THAT THE MATTER BE TAKEN UP WITH THE NAVY DEPARTMENT, AS PROPOSED BY YOU.