A-6309, DECEMBER 12, 1924, 4 COMP. GEN. 530

A-6309: Dec 12, 1924

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STAR MAIL ROUTE CONTRACTS - SUBCONTRACTOR'S LIEN A SUBCONTRACTOR'S LIEN ON FUNDS DUE THE PRIME CONTRACTOR OF A STAR MAIL ROUTE DOES NOT ESTABLISH ANY PRIVITY OF CONTRACT WITH THE UNITED STATES NOR RENDER THE UNITED STATES LIABLE FOR PAYMENTS TO THE SUBCONTRACTOR FOR MAIL TRANSPORTATION OVER THE ROUTE WHEN NO FUNDS OF THE PRIME CONTRACTOR HAVE BEEN RETAINED BY THE UNITED STATES AND THE SUBCONTRACT WAS NOT FILED OR APPROVED BY THE POSTMASTER GENERAL WITHIN THE TIME REQUIRED BY LAW AND REGULATION. WHO WAS THE CONTRACTOR WITH THE GOVERNMENT FOR MAIL TRANSPORTATION ON STAR ROUTE NO. 69172. THE FACTS GATHERED FROM THE SUBMISSION AND ACCOMPANYING PAPERS MAY BE STATED BRIEFLY AS FOLLOWS: THE PRIME CONTRACT WAS BETWEEN THE UNITED STATES AND JOSEPH HOOTEN.

A-6309, DECEMBER 12, 1924, 4 COMP. GEN. 530

STAR MAIL ROUTE CONTRACTS - SUBCONTRACTOR'S LIEN A SUBCONTRACTOR'S LIEN ON FUNDS DUE THE PRIME CONTRACTOR OF A STAR MAIL ROUTE DOES NOT ESTABLISH ANY PRIVITY OF CONTRACT WITH THE UNITED STATES NOR RENDER THE UNITED STATES LIABLE FOR PAYMENTS TO THE SUBCONTRACTOR FOR MAIL TRANSPORTATION OVER THE ROUTE WHEN NO FUNDS OF THE PRIME CONTRACTOR HAVE BEEN RETAINED BY THE UNITED STATES AND THE SUBCONTRACT WAS NOT FILED OR APPROVED BY THE POSTMASTER GENERAL WITHIN THE TIME REQUIRED BY LAW AND REGULATION.

DECISION BY COMPTROLLER GENERAL MCCARL, DECEMBER 12, 1924:

THE POSTMASTER GENERAL ON NOVEMBER 15, 1924, SUBMITTED FOR DIRECT SETTLEMENT THE CLAIM OF GEORGE MORRELL FOR PAY FOR SERVICES PERFORMED UNDER A CONTRACT WITH JOSEPH HOOTEN, JR., WHO WAS THE CONTRACTOR WITH THE GOVERNMENT FOR MAIL TRANSPORTATION ON STAR ROUTE NO. 69172. THE FACTS GATHERED FROM THE SUBMISSION AND ACCOMPANYING PAPERS MAY BE STATED BRIEFLY AS FOLLOWS:

THE PRIME CONTRACT WAS BETWEEN THE UNITED STATES AND JOSEPH HOOTEN, JR., COVERING THE PERIOD FROM JULY 1, 1918, TO JUNE 30, 1922. ON OR ABOUT DECEMBER 20, 1921, HOOTEN CONTRACTED WITH GEORGE MORRELL TO PERFORM A PORTION OF THE SERVICE BETWEEN RICHFIELD AND FREMONT, UTAH, FOR ONE-HALF OF THE CONTRACT PRICE BETWEEN THE UNITED STATES AND HOOTEN. MORRELL PERFORMED 95 TRIPS IN DECEMBER, 1921, AND JANUARY AND FEBRUARY, 1922, FOR WHICH HE NOW CLAIMS AS DUE AND UNPAID $680.01. NOTICE OF MORRELL'S CLAIM WITH A COPY OF THE SUBCONTRACT WAS FIRST FILED WITH THE POST OFFICE DEPARTMENT JULY 28, 1922, AT WHICH TIME THERE WAS DUE HOOTEN $268.53 BUT THROUGH SOME INADVERTENCE FINAL PAYMENT WAS MADE TO HOOTEN A FEW DAYS THEREAFTER WITHOUT TAKING INTO CONSIDERATION MORRELL'S CLAIM. DEMAND WAS MADE UPON HOOTEN AND UPON HIS SURETIES BY A POSTAL INSPECTOR TO PAY OR MAKE SOME ARRANGEMENTS TO PAY THE CLAIM OF MORRELL BUT ONE OF THE SURETIES HAS SINCE DIED AND THE OTHER SURETY, WHO IS THE FATHER OF THE PRIME CONTRACTOR, IS REPORTED AS FINANCIALLY UNABLE TO MAKE ANY PAYMENTS. HOOTEN, JR., THE CONTRACTOR, ALSO PLEADS INABILITY TO PAY, STATING THAT HE LOST EVERYTHING HE POSSESSED IN FULFILLING THE CONTRACT AND IS NOW DEPENDENT UPON HIS DAY LABOR TO SUPPORT HIMSELF AND FAMILY.

SECTION 1365 OF THE POSTAL REGULATIONS PROVIDES THAT NO SUBLETTING OR TRANSFER OF ANY MAIL CONTRACT SHALL BE PERMITTED WITHOUT THE CONSENT IN WRITING OF THE POSTMASTER GENERAL, AND SECTION 1368 REQUIRES THE CONSENT OF THE POSTMASTER GENERAL IN ALL CASES BEFORE MAKING A SUBCONTRACT. SECTION 1367 REQUIRES COPIES OF ALL SUBCONTRACTS, WHEN LAWFULLY MADE, TO BE FILED IN THE OFFICE OF THE POSTMASTER GENERAL AND PRESCRIBES THE METHOD, WHEN SO FILED, BY WHICH THE SUBCONTRACTOR MAY BE PAID DIRECT BY THE GENERAL ACCOUNTING OFFICE. SECTION 1369, BASED ON THE ACT OF MAY 18, 1916, 39 STAT. 162, IS AS FOLLOWS:

THAT IF ANY PERSON SHALL HEREAFTER PERFORM ANY SERVICE FOR ANY CONTRACTOR OR SUBCONTRACTOR IN CARRYING THE MAIL, HE SHALL, UPON FILING IN THE DEPARTMENT HIS CONTRACT FOR SUCH SERVICE AND SATISFACTORY EVIDENCE OF ITS PERFORMANCE, THEREAFTER HAVE A LIEN ON ANY MONEY DUE SUCH CONTRACTOR OR SUBCONTRACTOR FOR SUCH SERVICE TO THE AMOUNT OF SAME; AND IF SUCH CONTRACTOR OR SUBCONTRACTOR SHALL FAIL TO PAY THE PARTY OR PARTIES WHO HAVE PERFORMED SERVICE AS AFORESAID, THE AMOUNT DUE FOR SUCH SERVICE WITHIN TWO MONTHS AFTER THE EXPIRATION OF THE MONTH IN WHICH SUCH SERVICE SHALL HAVE BEEN PERFORMED, THE POSTMASTER GENERAL MAY CAUSE THE AMOUNT DUE TO BE PAID SAID PARTY OR PARTIES AND CHARGED TO THE CONTRACTOR: PROVIDED, THAT SUCH PAYMENT SHALL NOT IN ANY CASE EXCEED THE RATE OF PAY PER ANNUM OF THE CONTRACTOR OR SUBCONTRACTOR.

IN THE PRESENT CASE NEITHER HOOTEN NOR MORRELL NOTIFIED THE POSTMASTER GENERAL NOR SECURED HIS CONSENT IN WRITING BEFORE ENTERING INTO THE SUBCONTRACT IN QUESTION, AND NO COPIES THEREOF WERE FILED UNTIL LONG AFTER THE SERVICE HAD BEEN RENDERED. IT IS EVIDENT THEREFORE THAT MORRELL HAS NO RIGHTS AS A SUBCONTRACTOR THAT THE UNITED STATES IS BOUND TO RECOGNIZE AND THAT NO PRIVITY OF CONTRACT EXISTS BETWEEN THE UNITED STATES AND THE SUBCONTRACTOR. THE PROVISION FOR A LIEN UNDER CERTAIN CIRCUMSTANCES IN FAVOR OF THE SUBCONTRACTOR UPON ANY MONEY DUE THE PRIME CONTRACTOR IS FOLLOWED BY A PROVISION FOR THE ENFORCEMENT OF SUCH LIEN, SAID PROVISION BEING THAT "THE POSTMASTER GENERAL MAY CAUSE THE AMOUNT DUE TO BE PAID SAID PARTY OR PARTIES AND CHARGED TO THE CONTRACTOR.' EVEN IF THE REQUIREMENTS OF THE LAW AND REGULATIONS HAD BEEN COMPLIED WITH BY THE SUBCONTRACTOR IN THIS CASE, IN ORDER FOR THE LIEN TO ATTACH AND PAYMENT TO BE AUTHORIZED IT IS ESSENTIAL THAT THERE BE FUNDS DUE THE PRIME CONTRACTOR IN THE POSSESSION OF THE UNITED STATES. AS ALL FUNDS DUE THE PRIME CONTRACTOR HAVE BEEN PAID TO HIM THERE ARE NOW NO FUNDS IN THE POSSESSION OF THE UNITED STATES UPON WHICH THE LIEN COULD OPERATE. THE FACT THAT THE LACK OF FUNDS TO PAY A PORTION OF MORRELL'S CLAIM MAY BE DUE TO THE ERRONEOUS OR INADVERTENT ACTION OF SOME EMPLOYEE OF THE POST OFFICE DEPARTMENT COULD NOT OBLIGATE THE UNITED STATES TO ASSUME RESPONSIBILITY FOR A DEBT FOR WHICH IT IS NOT LEGALLY LIABLE. SEE 1 COMP. GEN. 178, AND CASES THEREIN CITED.

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