A-75880, OCTOBER 9, 1936, 16 COMP. GEN. 361

A-75880: Oct 9, 1936

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SET-OFF - ADJUSTED COMPENSATION - FAILURE OR REFUSAL OF VETERAN TO FILE APPLICATION FOR BENEFITS THE UNITED STATES IS NOT PRECLUDED. 1936: REFERENCE IS MADE TO LETTER DATED AUGUST 4. AS FOLLOWS: REFERENCE IS MADE TO YOUR LETTER OF JUNE 5. TO WHOM THE MATTER WAS REFERRED FOR COLLECTION. YOU ARE INFORMED THAT INASMUCH AS THE VETERAN HAS NOT SUBMITTED AN APPLICATION (FORM 1701) FOR SETTLEMENT THE PROVISIONS OF THIS ACT ARE NOT APPLICABLE. THE ATTORNEY GENERAL WAS ADVISED AS FOLLOWS: BASED UPON ADJUSTED SERVICE CREDIT CERTIFIED TO THE VETERANS' ADMINISTRATION BY THE WAR DEPARTMENT. ADJUSTED SERVICE CERTIFICATE NO. 426508 FOR $661 WAS ISSUED IN FAVOR OF FRANK H. THE VETERAN WAS ENTITLED TO AN ADJUSTED SERVICE CERTIFICATE FOR $305 INSTEAD OF FOR $661.

A-75880, OCTOBER 9, 1936, 16 COMP. GEN. 361

SET-OFF - ADJUSTED COMPENSATION - FAILURE OR REFUSAL OF VETERAN TO FILE APPLICATION FOR BENEFITS THE UNITED STATES IS NOT PRECLUDED, BY REASON OF A VETERAN'S FAILURE OR REFUSAL TO FILE AN APPLICATION FOR BENEFITS UNDER THE ADJUSTED COMPENSATION PAYMENT ACT OF 1936, 49 STAT. 1099, FROM INVOKING THAT ACT TO LIQUIDATE THE VETERAN'S INDEBTEDNESS TO THE UNITED STATES "ON ACCOUNT OF ANY LIEN AGAINST THE ADJUSTED-SERVICE CERTIFICATE AUTHORIZED BY LAW," PROVIDED THE LIEN MAY NOT BE LIQUIDATED UNDER THE PROCEDURE PRESCRIBED BY THE WORLD WAR ADJUSTED COMPENSATION ACT, AS AMENDED, NOTWITHSTANDING THE INDEBTEDNESS AROSE OUT OF AN EXCESS ADJUSTED SERVICE-CERTIFICATE LOAN RESULTING FROM THE FAULT OR NEGLIGENCE OF GOVERNMENT PERSONNEL.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, OCTOBER 9, 1936:

REFERENCE IS MADE TO LETTER DATED AUGUST 4, 1936, FROM THE DIRECTOR OF FINANCE, VETERANS' ADMINISTRATION (FILE DBC-H, FROST, FRANK H., A 1522829), AS FOLLOWS:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 5, 1936, FORWARDING A COPY OF LETTER ADDRESSED BY YOUR OFFICE TO THE DEPARTMENT OF JUSTICE IN CONNECTION WITH FORM 496, REPORT OF UNCOLLECTIBLE INDEBTEDNESS, IN THE AMOUNT OF $191.81 ON THE LOAN GRANTED ON THE SECURITY OF THE ABOVE NAMED VETERAN'S ADJUSTED SERVICE CERTIFICATE.

IN CONNECTION WITH YOUR LETTER TO THE DEPARTMENT OF JUSTICE SUGGESTING THAT THE UNITED STATES ATTORNEY, MACON, GEORGIA, TO WHOM THE MATTER WAS REFERRED FOR COLLECTION, BE INFORMED THAT THE AMOUNT OF THE INDEBTEDNESS BE REDUCED TO $25.50, DUE TO THE APPLICATION OF THE ACT OF JANUARY 27, 1936, PUBLIC, NO. 425, 74TH CONGRESS, YOU ARE INFORMED THAT INASMUCH AS THE VETERAN HAS NOT SUBMITTED AN APPLICATION (FORM 1701) FOR SETTLEMENT THE PROVISIONS OF THIS ACT ARE NOT APPLICABLE.

BY OFFICE LETTER, DATED JANUARY 15, 1934, THE ATTORNEY GENERAL WAS ADVISED AS FOLLOWS:

BASED UPON ADJUSTED SERVICE CREDIT CERTIFIED TO THE VETERANS' ADMINISTRATION BY THE WAR DEPARTMENT, ADJUSTED SERVICE CERTIFICATE NO. 426508 FOR $661 WAS ISSUED IN FAVOR OF FRANK H. FROST, A-1552829, AFTER WHICH HE OBTAINED A LOAN THEREON, WHICH, WITH ACCRUED INTEREST, AMOUNTED TO $344.31 ON JANUARY 11, 1933. BASED ON A CORRECTED CERTIFICATION ISSUED BY THE WAR DEPARTMENT, THE VETERAN WAS ENTITLED TO AN ADJUSTED SERVICE CERTIFICATE FOR $305 INSTEAD OF FOR $661, AND THEREFORE ADJUSTED SERVICE CERTIFICATE NO. 426508 WAS CANCELED AND ADJUSTED SERVICE CERTIFICATE NO. 3856365 FOR $305 WAS ISSUED IN LIEU THEREOF. SINCE THE LOAN HAD BEEN GRANTED ON THE BASIS OF A FACE VALUE OF $661, THE VETERAN HAD RECEIVED AN AMOUNT IN EXCESS OF THE LOAN VALUE OF ADJUSTED SERVICE CERTIFICATE NO. 3856365.

ACCORDINGLY, BY SETTLEMENT NO. US-3410-VA, DATED OCTOBER 9, 1933, THIS OFFICE CERTIFIED FRANK H. FROST, A-1552829, TO BE INDEBTED TO THE UNITED STATES IN THE SUM OF $142.27, REPRESENTING THE AMOUNT OF THE EXCESS OF THE LOAN AS OF JANUARY 11, 1933, OVER AN AMOUNT WHICH WITH INTEREST TO THE MATURITY OF THE CERTIFICATE WOULD EQUAL THE FACE VALUE OF THE CERTIFICATE, AS FOLLOWS:

TABLE ADJUSTED SERVICE CERTIFICATE NO. 426508 REDEEMED BY VETERANS'

ADMINISTRATION, FROM THE FIRST NATIONAL BANK, ATLANTA, GEORGIA,

ON JANUARY 11, 1933, BY PAYMENT OF PRINCIPAL OF $330.50 AND

INTEREST OF $13.81 -------------------------------------------- $344.31LESS THE AMOUNT WHICH WITH INTEREST FROM JANUARY 11, 1933, TO

JANUARY 1, 1945, AT 3 1/2 PERCENT PER ANNUM, WILL EQUAL $305,

FACE VALUE OF ADJUSTED SERVICE CERTIFICATE NO. 3856365 AT DATE

OF MATURITY --------------------------------------------------- 202.04

BALANCE OVERPAID AND DUE THE UNITED STATES ----------------- 142.27

AND BY LETTER DATED MAY 28, 1936, THE ATTORNEY GENERAL WAS FURTHER ADVISED AS FOLLOWS:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 6, 1936, FILE JWM:77-19 M- 11, RELATIVE TO THE CLAIM OF THE UNITED STATES AGAINST FRANK H. FROST, 183 GRADY AVENUE, ATHENS, GEORGIA, FOR $142.27, WHICH MATTER WAS REFERRED TO YOUR OFFICE FOR COLLECTION BY LETTER OF JANUARY 15, 1934.

THE CLAIM HAS NOW BEEN CONSIDERED IN CONNECTION WITH THE ACT OF JANUARY 27, 1936, PUBLIC, NO. 425, 74TH CONGRESS, AND IT HAS BEEN DETERMINED THAT THERE IS DUE FROM THE VETERAN THE AMOUNT OF $25.50, COMPUTED AS FOLLOWS:

TABLE LOAN OF $330.50 ON DECEMBER 29, 1931 ------------------------ -- $330.50 LESS FACE VALUE OF ADJUSTED SERVICE CERTIFICATE NO. 3856365 ---- 305.00

BALANCE DUE UNITED STATES ---------------------------------- 25.50

THE ABOVE-QUOTED LETTER FROM THE DIRECTOR OF FINANCE IS IN REPLY TO OFFICE LETTER OF JUNE 5, 1936, TRANSMITTING TO YOU A COPY OF THE LAST QUOTED LETTER TO THE ATTORNEY GENERAL.

WHILE THE ADJUSTED COMPENSATION PAYMENT ACT, 1936, APPROVED JANUARY 27, 1936, 49 STAT. 1099, REQUIRES THE FILING OF AN APPLICATION BY OR ON BEHALF OF A VETERAN IN ORDER FOR HIM TO RECEIVE ANY BENEFITS UNDER THE STATUTE, THE UNITED STATES IS NOT PRECLUDED, BY REASON OF A VETERAN'S FAILURE OR REFUSAL TO FILE APPLICATION, FROM INVOKING THE STATUTE IN ORDER TO LIQUIDATE THE VETERAN'S INDEBTEDNESS TO THE UNITED STATES "ON ACCOUNT OF ANY LIEN AGAINST THE ADJUSTED SERVICE CERTIFICATE AUTHORIZED BY LAW" (QUOTING FROM SEC. 7 OF THE ACT), PROVIDED THE LIEN, REPRESENTING THE AGGREGATE OF THE VETERAN'S UNPAID LOANS WITH INTEREST, MAY NOT BE LIQUIDATED UNDER THE PROCEDURE PRESCRIBED BY THE WORLD WAR ADJUSTED COMPENSATION ACT, AS AMENDED. SEE GENERALLY 15 COMP. GEN. 966, 968. THE EXCESS LOAN MADE IN THIS CASE, EVEN THOUGH RESULTING FROM THE FAULT OR NEGLIGENCE OF GOVERNMENT PERSONNEL, CONSTITUTES A "LIEN AGAINST THE ADJUSTED SERVICE CERTIFICATE AUTHORIZED BY LAW.' SEE DECISION OF SEPTEMBER 1, 1936, A 80056, 16 COMP. GEN. 211.

WHERE, AS IN THIS CASE, THE LOAN VALUE OF THE CERTIFICATE DOES NOT EQUAL OR EXCEED THE AMOUNT DUE THE UNITED STATES FROM THE VETERAN ON ACCOUNT OF UNPAID LOANS, THE UNITED STATES HAS NO REMEDY UNDER THE WORLD WAR ADJUSTED COMPENSATION ACT, AS AMENDED, OTHER THAN TO ENTER A CHARGE AGAINST THE CERTIFICATE TO BE CONSIDERED IN THE SETTLEMENT AT MATURITY, AND, ACCORDINGLY, MAY PROCEED UNDER THE TERMS OF THE ADJUSTED COMPENSATION PAYMENT ACT, 1936, TO LIQUIDATE THE LIENS AFTER DUE NOTICE TO THE VETERAN, WHETHER OR NOT HE FILES AN APPLICATION. SUCH ACTION SHOULD BE TAKEN IN THIS CASE.