A-88085, AUGUST 10, 1937, 17 COMP. GEN. 130

A-88085: Aug 10, 1937

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ITS VALUE BECOMES SUBSTANTIALLY LESSENED BEFORE PAYMENT IS ACCOMPLISHED. IS AS FOLLOWS: IN THE ACQUISITION OF LANDS BY THE RESETTLEMENT ADMINISTRATION AT THE TIME THE PURCHASE PRICE IS TENDERED BY THE ATTORNEY IN THE FIELD. IT OCCASIONALLY HAPPENS THAT THE VENDOR IS UNABLE TO CONVEY THE AMOUNT OF PROPERTY FOR WHICH THE CHECK IS DRAWN. SUCH INABILITY MAY ARISE BECAUSE TIMBER OR BUILDINGS ON THE LAND HAVE BEEN DAMAGED OR DESTROYED SUBSEQUENT TO THE SURVEY OF THE RESETTLEMENT ADMINISTRATION OR BECAUSE THERE IS A DEFECT IN THE TITLE TO CERTAIN OF THE LANDS WHICH. AS YOU ARE AWARE. WHEN THE ATTORNEY GENERAL'S PRELIMINARY OPINION IS RECEIVED STATING THAT WHEN THE REQUIREMENTS ENUMERATED IN SUCH OPINION ARE MET.

A-88085, AUGUST 10, 1937, 17 COMP. GEN. 130

CHECKS - PERSONAL - ADMINISTRATIVE ACCEPTANCE TO OFFSET EXCESS AMOUNT OF GOVERNMENT CHECK WHERE, IN CONNECTION WITH THE PURCHASE OF LAND, ITS VALUE BECOMES SUBSTANTIALLY LESSENED BEFORE PAYMENT IS ACCOMPLISHED, THE MATTER OF PAYMENT MAY NOT BE ADJUSTED ADMINISTRATIVELY BY ACCEPTANCE OF VENDOR'S PERSONAL CHECK FOR THE EXCESS AMOUNT OF GOVERNMENT CHECK SIMULTANEOUSLY DELIVERED TO HIM, BUT THE GOVERNMENT CHECK SHOULD BE TRANSMITTED TO THE GENERAL ACCOUNTING OFFICE FOR CONSIDERATION AS TO ITS CANCELATION AND THE ISSUANCE OF A NEW SETTLEMENT IN THE PROPER AMOUNT.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF AGRICULTURE, AUGUST 10, 1937:

YOUR LETTER OF JULY 31, 1937, IS AS FOLLOWS:

IN THE ACQUISITION OF LANDS BY THE RESETTLEMENT ADMINISTRATION AT THE TIME THE PURCHASE PRICE IS TENDERED BY THE ATTORNEY IN THE FIELD, IT OCCASIONALLY HAPPENS THAT THE VENDOR IS UNABLE TO CONVEY THE AMOUNT OF PROPERTY FOR WHICH THE CHECK IS DRAWN. SUCH INABILITY MAY ARISE BECAUSE TIMBER OR BUILDINGS ON THE LAND HAVE BEEN DAMAGED OR DESTROYED SUBSEQUENT TO THE SURVEY OF THE RESETTLEMENT ADMINISTRATION OR BECAUSE THERE IS A DEFECT IN THE TITLE TO CERTAIN OF THE LANDS WHICH, WHILE NOTICED BY THE ATTORNEY GENERAL IN HIS PRELIMINARY OPINION, CAN NOT BE CURED.

AS YOU ARE AWARE, WHEN THE ATTORNEY GENERAL'S PRELIMINARY OPINION IS RECEIVED STATING THAT WHEN THE REQUIREMENTS ENUMERATED IN SUCH OPINION ARE MET, A VALID TITLE WILL VEST IN THE UNITED STATES, A CHECK IN THE AMOUNT STATED IN THE CONTRACT, LESS ANY DEDUCTIONS FOR LANDS WHICH IT APPEARS AT THAT TIME CAN NOT BE CONVEYED OR FOR DAMAGES TO OR DESTRUCTION OF WHICH THE GOVERNMENT IS COGNIZANT AT THAT TIME, IS DRAWN IN FAVOR OF THE VENDOR. BUT OCCASIONALLY, AFTER THE CHECK HAS BEEN DRAWN, THE IMPROVEMENTS OR TIMBER ON THE LAND MAY BE DAMAGED OR DESTROYED OR IT MAY THEN BECOME APPARENT FOR THE FIRST TIME THAT CERTAIN DEFECTS CANNOT BE CURED, OR THE VENDOR MAY HAVE SOLD A PORTION OF HIS LAND WHICH THE GOVERNMENT HAD CONTRACTED TO PURCHASE. THE CUSTOMARY PROCEDURE WOULD PROBABLY REQUIRE, UNDER SECTION 236 OF THE REVISED STATUTES, AS AMENDED (31 U.S.C. SEC. 71), THAT THE CHECK BE SUBMITTED TO THE GENERAL ACCOUNTING OFFICE FOR DIRECT SETTLEMENT, BUT A CUSTOM HAS DEVELOPED, WITHOUT ANY SPECIFIC INSTRUCTIONS FROM THE ADMINISTRATOR OR THE SECRETARY OF AGRICULTURE, WHEREBY IN CASES IN WHICH THE VENDOR VOLUNTARILY OFFERS SO TO DO, A CHECK OR MONEY ORDER REPRESENTING THE AMOUNT OF THE DAMAGE OR DESTRUCTION TO TIMBER OR BUILDINGS, OR THE VALUE OF THE LAND WHICH HE HAS CONTRACTED TO CONVEY BUT CANNOT, IS ACCEPTED BY THE ATTORNEY ON BEHALF OF THE UNITED STATES, AND THE GOVERNMENT'S CHECK DRAWN IN FAVOR OF SUCH VENDOR IS DELIVERED TO HIM.

SOME OF THE ATTORNEYS HAVE FORWARDED THE CHECKS OR MONEY ORDERS TO WASHINGTON THROUGH THE DEPARTMENT OF JUSTICE; AND OTHERS TO WASHINGTON THROUGH THE PROJECT OR REGIONAL OFFICE OF THE RESETTLEMENT ADMINISTRATION. WHILE SUCH SETTLEMENTS HAVE NOT YET BEEN QUESTIONED BY YOUR OFFICE, THERE WOULD SEEM TO BE SOME DOUBT AS TO WHETHER, WITHOUT YOUR EXPRESS APPROVAL, THE MAKING OF SUCH SETTLEMENTS SHOULD BE CONTINUED, AND YOUR APPROVAL OF THE PRACTICE IS THEREFORE REQUESTED IF CONSISTENT WITH YOUR POLICY. THE RESETTLEMENT ADMINISTRATION FEELS THAT IN CASES IN WHICH THE AMOUNT OF THE REFUND MAY BE DEFINITELY ASCERTAINED AND DOES NOT EXCEED $300, IN THE INTEREST OF ECONOMY OF TIME AND APPROPRIATED MONEYS YOU MIGHT AUTHORIZE THE MAKING OF SETTLEMENTS BY THE ATTORNEYS IN THE FIELD.

BECAUSE OF THE MANNER IN WHICH THE APPRAISAL OF THE PROPERTY IS ITEMIZED, IT IS AN EASY MATTER, FROM AN ADMINISTRATIVE POINT OF VIEW, FOR THE AMOUNT OF THE REFUND TO BE DETERMINED. IN THE MAJORITY OF THE CASES THE PURCHASE PRICE OF THE LAND AND IMPROVEMENTS WHICH THE RESETTLEMENT ADMINISTRATION IS ACQUIRING IS BASED UPON THE APPRAISED VALUE OF SUCH LAND AND IMPROVEMENTS AT APPROXIMATELY THE SAME TIME THAT THE OPTION WAS TAKEN. WOULD THEREFORE SEEM THAT SINCE SUCH PURCHASE PRICE DOES NOT REFLECT DEPRECIATION OR APPRECIATION FROM THE TIME THE OPTION WAS OBTAINED, THE AMOUNT OF THE ADJUSTMENT NEED NOT REFLECT THE AMOUNT OF ANY DEPRECIATION OR APPRECIATION IN THE VALUE OF SUCH LAND AND IMPROVEMENTS.

WHILE, AS STATED ABOVE, IN MOST CASES THE PURCHASE PRICE AND THE APPRAISED VALUE OF THE LAND AND IMPROVEMENTS ARE IDENTICAL, CASES OCCASIONALLY ARISE IN WHICH THE PURCHASE PRICE AS STATED IN THE OPTION WILL BE EITHER GREATER OR LESS THAN THE APPRAISED VALUE. IN SUCH CASES THE ADJUSTMENT WOULD BE MADE ON A PRO RATA BASIS BY DETERMINING THE PROPORTION OF THE TOTAL APPRAISED VALUE OF THE DAMAGED OR DESTROYED PROPERTY OR OF THE LAND WHICH THE VENDOR CAN NOT CONVEY AND APPORTIONING IT TO THE CONTRACT PRICE.

IT IS PROBABLE THAT IN SOME CASES THE VENDOR WOULD OBJECT TO THE SETTLEMENT PROPOSED AND THE MATTER WOULD, OF COURSE, IN THAT EVENT BE SUBMITTED TO YOU FOR SETTLEMENT.

IF YOU APPROVE THE PROCEDURE AS REQUESTED, THE REFUNDS WILL BE CREDITED TO THE APPROPRIATION FROM WHICH PAYMENT FOR THE LAND IS MADE RATHER THAN COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS.

YOUR ADVICE ON THIS MATTER WOULD BE APPRECIATED.

THE ACCEPTANCE OF THE PERSONAL CHECK OF A CLAIMANT AND THE DELIVERY OF THE GOVERNMENT CHECK TO HIM WITHOUT AWAITING PAYMENT ON THE PERSONAL CHECK MIGHT RESULT IN A SITUATION IN WHICH THE PERSONAL CHECK WOULD BE RETURNED UNPAID DUE TO LACK OF FUNDS, ETC. FURTHERMORE, THE SUGGESTED PROCEDURE WOULD RESULT IN THE LOCAL "ATTORNEY" MAKING SETTLEMENT OF CLAIMS CONTRARY TO SECTION 236, OF THE REVISED STATUTES AS AMENDED BY THE BUDGET AND ACCOUNTING ACT OF JUNE 10, 1921, 42 STAT. 24, AND WOULD MAKE IT EXTREMELY DIFFICULT TO COLLECT FROM THE VENDOR SHOULD THE AMOUNT PAID TO THE ATTORNEY NOT REPRESENT THE TRUE DIFFERENCE BETWEEN THE OLD AND NEW VALUES. ACCORDINGLY, IN ALL CASES IN WHICH THE VALUE OF THE PROPERTY IS SUBSTANTIALLY LESSENED BEFORE PAYMENT IS ACCOMPLISHED, PAYMENT SHOULD BE WITHHELD AND THE CHECK SHOULD BE TRANSMITTED TO THIS OFFICE WITH A STATEMENT OF THE FACTS INVOLVED SO THAT THERE MAY BE GIVEN CONSIDERATION TO ITS CANCELATION AND TO THE ISSUANCE OF A NEW SETTLEMENT FOR THE PROPER AMOUNT.