A-88382, SEPTEMBER 3, 1937, 17 COMP. GEN. 217

A-88382: Sep 3, 1937

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- GENERAL ACCOUNTING OFFICE PROCEDURE WHERE THE RECORD AS TO OWNERSHIP OF CROPS SOLD TO SATISFY A FARM CREDIT ADMINISTRATION CROP PRODUCTION LOAN IS SUCH AS TO RENDER IT IMPOSSIBLE TO DETERMINE WHETHER THE LANDLORD OR TENANT IS ENTITLED TO THE BALANCE REMAINING AFTER LIQUIDATION OF THE LOAN INDEBTEDNESS. BEFORE VACATING THE PREMISES 4 BALES OF THIS COTTON WAS PLACED AS COLLATERAL ON THE $200 LOAN DUE THE UNITED STATES. IT BEING ASSUMED AT THAT TIME THAT THE VALUE OF THE COTTON WAS NOT SUFFICIENT TO PAY THE LOAN IN FULL. IT IS STATED THAT THE LANDLORD PAID HIM $75 "FOR THE REST OF THE CROP WHICH WAS LEFT.'. IT IS STATED THAT THE LANDLORD PURCHASED THE INTEREST OF THE TENANT AND TOOK OVER THE BALANCE OF HIS CROP.

A-88382, SEPTEMBER 3, 1937, 17 COMP. GEN. 217

CLAIMS--- CONFLICTING--- GENERAL ACCOUNTING OFFICE PROCEDURE WHERE THE RECORD AS TO OWNERSHIP OF CROPS SOLD TO SATISFY A FARM CREDIT ADMINISTRATION CROP PRODUCTION LOAN IS SUCH AS TO RENDER IT IMPOSSIBLE TO DETERMINE WHETHER THE LANDLORD OR TENANT IS ENTITLED TO THE BALANCE REMAINING AFTER LIQUIDATION OF THE LOAN INDEBTEDNESS, PAYMENT MAY NOT BE MADE TO EITHER PARTY, AND UNLESS THE PARTIES CAN AGREE UPON SETTLEMENT, OR COMPOSE THEIR DIFFERENCES IN SOME WAY, NO FURTHER ACTION IN THE MATTER MAY BE TAKEN BY THE GENERAL ACCOUNTING OFFICE.

DECISION BY ACTING COMPTROLLER GENERAL ELLIOT, SEPTEMBER 3, 1937:

CONSIDERATION HAS BEEN GIVEN THE CLAIMS OF W. L. EDMONDS, ROUTE 1, WINNFIELD, LA., AND W. D. BARRETT, CHOUDRANT, LA., AS AGENT AND TRUSTEE FOR THE ESTATE OF W. R. BARRETT, FOR THE PROCEEDS OF UNITED STATES TREASURY CHECK NO. 279,031, DRAWN APRIL 26, 1934, BY C. M. MARTIN, DISBURSING OFFICER, SYMBOL NO. 92-733, FOR $19.07, PAYABLE TO THEIR JOINT ORDER.

IT APPEARS FROM THE RECORD THAT IN THE SPRING OF 1931, WHILE A SHARE TENANT ON THE BARRETT ESTATE, MR. EDMONDS OBTAINED FROM THE FARM CREDIT ADMINISTRATION A CROP PRODUCTION LOAN OF $200. W. D. BARRETT, AS AGENT AND TRUSTEE FOR THE BARRETT ESTATE, SIGNED A WAIVER SUBORDINATING THE LANDLORD'S LIEN TO THAT CREATED BY THE CROP MORTGAGE TO THE UNITED STATES. IN THE FALL OF 1931 MR. BARRETT, ACTING AS LANDLORD, NEGOTIATED AN AGREEMENT WITH HIS TENANT PURSUANT TO WHICH MR. EDMONDS VACATED THE PREMISES AND APPARENTLY SURRENDERED HIS INTEREST IN THE CROPS PRODUCED AND IN PROCESS OF PRODUCTION DURING THE SEASON. IT APPEARS AGREED THAT MR. EDMONDS RECEIVED FROM THE LANDLORD, $75 IN CASH, BUT IT DOES NOT CLEARLY APPEAR WHAT INTEREST, IF ANY, THE TENANT RETAINED IN THE CROPS.

IT FURTHER APPEARS THAT TENANT PRODUCED, AMONG OTHER THINGS, 10 BALES OF COTTON, AND BEFORE VACATING THE PREMISES 4 BALES OF THIS COTTON WAS PLACED AS COLLATERAL ON THE $200 LOAN DUE THE UNITED STATES. IT BEING ASSUMED AT THAT TIME THAT THE VALUE OF THE COTTON WAS NOT SUFFICIENT TO PAY THE LOAN IN FULL, MR. BARRETT PAID $20.31 ON THE INDEBTEDNESS TO REDUCE IT TO THE VALUE OF THE COLLATERAL. IN THE AFFIDAVIT OF MR. EDMONDS DATED JULY 25, 1936, IT IS STATED THAT THE LANDLORD PAID HIM $75 "FOR THE REST OF THE CROP WHICH WAS LEFT.' IN THE AFFIDAVIT OF MR. BARRETT DATED JULY 28, 1936, IT IS STATED THAT THE LANDLORD PURCHASED THE INTEREST OF THE TENANT AND TOOK OVER THE BALANCE OF HIS CROP.

THEREAFTER THE COTTON PLACED AS COLLATERAL WAS SOLD AND THE NET PROCEEDS AMOUNTED TO MORE THAN THE LOAN INDEBTEDNESS. AFTER LIQUIDATING THE INDEBTEDNESS, THE CHECK IN QUESTION WAS DRAWN IN FAVOR OF W. D. BARRETT AND W. L. EDMONDS. THE CHECK WAS RETURNED BY MR. EDMONDS, WITH THE NOTATION THAT MR. BARRETT COULD NOT BE LOCATED FOR THE PURPOSE OF OBTAINING HIS ENDORSEMENT. INVESTIGATION DISCLOSED THAT MR. BARRETT CLAIMS THE WHOLE AMOUNT OF THE CHECK FOR THE BARRETT ESTATE AND MR. EDMONDS CLAIMS THE WHOLE AMOUNT AS HIS OWN.

NO REFERENCE IS MADE TO A WRITTEN CONTRACT AND APPARENTLY THE AGREEMENT BETWEEN LANDLORD AND TENANT WAS NOT REDUCED TO WRITING. NEITHER PARTY CLAIMS THERE WAS ANY AGREEMENT AS TO DISPOSITION OF MONEYS RECEIVED FOR THE COTTON IN EXCESS OF THE AMOUNT OF THE LOAN INDEBTEDNESS. THE RECORD INDICATES THAT THE LANDLORD, MR. BARRETT, PURCHASED THE INTEREST OF THE TENANT IN THE CROPS PRODUCED, BUT IT HAS BEEN REPORTED BY THE FARM CREDIT ADMINISTRATION THAT THE TENANT, MR. EDMONDS, RETAINED TITLE TO THE FOUR BALES OF COTTON PLACED AS COLLATERAL. THE TENANT CONTENDS HE DID NOT SELL HIS INTEREST IN THE FOUR BALES OF COTTON, BUT SOLD HIS INTEREST IN THE REEST OF THE CROPS PRODUCED. THE LANDLORD CONTENDS HE PURCHASED HIS TENANT'S INTEREST IN ALL THE CROPS PRODUCED.

THE CHECK IN QUESTION WAS ISSUED TO THE CLAIMANTS AS JOINT PAYEES. HAS BEEN CANCELED AND THE AMOUNT COVERED INTO OUTSTANDING LIABILITIES. THE STATEMENTS MADE IN SUPPORT OF THE CONFLICTING CLAIMS GIVE RISE TO SUCH SERIOUS DOUBT AS TO THE PARTY ENTITLED TO PAYMENT AS NOT TO PROVIDE PROPER ACQUITTANCE TO THE GOVERNMENT SHOULD PAYMENT BE MADE TO EITHER PARTY ON THE PRESENT RECORD. IN THE CIRCUMSTANCE, UNLESS THE PARTIES CAN AGREE UPON SETTLEMENT, OR COMPOSE THEIR DIFFERENCES IN SOME WAY, NO FURTHER ACTION IN THE MATTER MAY BE TAKEN BY THIS OFFICE.