B-120034, FEB. 29, 1956

B-120034: Feb 29, 1956

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

PORTLAND AND SEATTLE RAILWAY COMPANY: REFERENCE IS MADE TO YOUR LETTERS OF JANUARY 27 AND APRIL 2. INQUIRING WHETHER WE WILL PAY SUPPLEMENTAL BILLS RECLAIMING COLLECTIONS OF OVERPAYMENTS ON BILLS OF YOUR COMPANY PAID BY THE COMMODITY CREDIT CORPORATION WHERE THE NOTICES OF OVERPAYMENT WERE ISSUED MORE THAN SIX YEARS AFTER THE TRANSPORTATION SERVICES WERE COMPLETED. THE RIGHT OF THE GOVERNMENT TO RECOVER OTHER THAN BY SUIT WAS NOT INVOLVED IN THE LINDSAY CASE. THE ABOVE-CITED STATUTE PROVIDES IN PERTINENT PART THAT: "NO SUIT BY OR AGAINST THE CORPORATION SHALL BE ALLOWED UNLESS (1) IT SHALL HAVE BEEN BROUGHT WITHIN SIX YEARS AFTER THE RIGHT ACCRUED ON WHICH SUIT IS BROUGHT * * *.'. THE GENERAL RULE IS THAT STATUTES OF LIMITATIONS APPLICABLE TO SUITS FOR DEBTS OR MONEY DEMANDS BAR OR RUN ONLY AGAINST THE REMEDY TO WHICH THEY APPLY AND DO NOT DISCHARGE THE DEBT OR EXTINGUISH.

B-120034, FEB. 29, 1956

TO SPOKANE, PORTLAND AND SEATTLE RAILWAY COMPANY:

REFERENCE IS MADE TO YOUR LETTERS OF JANUARY 27 AND APRIL 2, 1954, FILE TA 331 K-1229-54, TO THE DIRECTOR OF OUR TRANSPORTATION DIVISION, INQUIRING WHETHER WE WILL PAY SUPPLEMENTAL BILLS RECLAIMING COLLECTIONS OF OVERPAYMENTS ON BILLS OF YOUR COMPANY PAID BY THE COMMODITY CREDIT CORPORATION WHERE THE NOTICES OF OVERPAYMENT WERE ISSUED MORE THAN SIX YEARS AFTER THE TRANSPORTATION SERVICES WERE COMPLETED. YOUR LETTER INDICATES THAT YOUR INQUIRY ARISES AS A RESULT OF THE DECISION OF THE SUPREME COURT IN UNITED STATES V. LINDSAY, 346 U.S. 568.

THE RIGHT OF THE GOVERNMENT TO RECOVER OTHER THAN BY SUIT WAS NOT INVOLVED IN THE LINDSAY CASE. IT MERELY DECIDED THAT, UNDER THE STATUTE OF LIMITATIONS PRESCRIBED IN THE ACT OF JUNE 29, 1948, 62 STAT. 1070, AS AMENDED BY THE ACT OF JUNE 7, 1949, 63 STAT. 154, 15 U.S.C. 714B (C), SUITS CANNOT BE BROUGHT MORE THAN SIX YEARS AFTER THE DATE A CAUSE OF ACTION ACCRUED NOTWITHSTANDING THAT THE ACT DID NOT BECOME EFFECTIVE UNTIL JUNE 30, 1948.

THE ABOVE-CITED STATUTE PROVIDES IN PERTINENT PART THAT:

"NO SUIT BY OR AGAINST THE CORPORATION SHALL BE ALLOWED UNLESS (1) IT SHALL HAVE BEEN BROUGHT WITHIN SIX YEARS AFTER THE RIGHT ACCRUED ON WHICH SUIT IS BROUGHT * * *.'

THE GENERAL RULE IS THAT STATUTES OF LIMITATIONS APPLICABLE TO SUITS FOR DEBTS OR MONEY DEMANDS BAR OR RUN ONLY AGAINST THE REMEDY TO WHICH THEY APPLY AND DO NOT DISCHARGE THE DEBT OR EXTINGUISH, OR EVEN IMPAIR, THE RIGHT OR OBLIGATION, EITHER IN LAW OR IN FACT, AND THE CREDITOR MAY AVAIL HIMSELF OF EVERY OTHER LAWFUL MEANS OF REALIZING ON THE DEBT OR OBLIGATION. CAMPBELL V. HAVERHILL, 155 U.S. 610; HAWKINSON V. JOHNSTON, 122 F.2D 724, CERTIORARI DENIED 314 U.S. 694; MASCOT OIL CO. V. UNITED STATES, 42 F.2D 309, AFFIRMED 282 U.S. 434; 33 COMP. GEN. 66.

IT IS WELL SETTLED THAT STATUTES OF LIMITATION ARE BINDING ON THE UNITED STATES ONLY WHERE CONGRESS CLEARLY EXPRESSES SUCH AN INTENTION. UNITED STATES V. SUMMERLIN, 310 U.S. 414; GUARANTY TRUST COMPANY V. UNITED STATES, 304 U.S. 126; UNITED STATES V. NASHVILLE, CHATTANOOGA AND ST. LOUIS R.CO., 118 U.S. 120; UNITED STATES V. THOMPSON, 98 U.S. 486; MCCLURE V. UNITED STATES, 19 C.CLS. 18. WHILE IT SEEMS CLEAR THAT UNDER THE INVOLVED PROVISION COURT ACTION IS PRECLUDED IF NOT COMMENCED WITHIN SIX YEARS OF THE ACCRUAL OF THE RIGHT OF ACTION, THERE IS NOTHING IN THE LANGUAGE USED TO SHOW THE CONGRESS INTENDED THE SIX YEAR STATUTORY BAR TO APPLY TO THE OBLIGATION RATHER THAN THE REMEDY ONLY; OR TO PRECLUDE OTHER AVAILABLE METHODS OF SETTLING AND ADJUSTING MUTUAL DEBITS AND CREDITS. HAD SUCH INTENTION EXISTED IT COULD EASILY HAVE BEEN EXPRESSED IN SECTION 4 (K) OF THE ACT, 62 STAT. 1071, WHICH GRANTS TO THE CORPORATION THE RIGHT TO SETTLE AND ADJUST CLAIMS BY OR AGAINST THE CORPORATION. THAT SECTION, HOWEVER, CONTAINS NO INDICATION THAT ANY TIME LIMITATION WAS INTENDED FOR APPLICATION IN THE SETTLEMENT OF CLAIMS BY THE CORPORATION. THE ABSENCE OF SUCH INDICATION REQUIRES THE CONCLUSION THAT NO SUCH TIME LIMITATION WAS INTENDED. IN ANY CASE, THE DEDUCTIONS CONCERNING WHICH YOU INQUIRE WERE SPECIFICALLY AUTHORIZED BY SECTION 322 OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 955, 49 U.S.C. 66, WHICH RESERVES THE RIGHT TO THE UNITED STATES "TO DEDUCT THE AMOUNT OF ANY OVERPAYMENT TO ANY SUCH CARRIER FROM ANY AMOUNT SUBSEQUENTLY FOUND TO BE DUE SUCH CARRIER.' NO STATUTE OF LIMITATIONS IS ATTACHED TO THAT RIGHT.

IT THEREFORE APPEARS THAT THE STATUTE OF LIMITATIONS IN THE ACT OF JUNE 29, 1948, AS AMENDED, AFFECTS ONLY THE RIGHT TO SUE AND DOES NOT EXTINGUISH THE RIGHT OF THE GOVERNMENT TO DEDUCT FROM CURRENT BILLS OVERPAYMENTS MADE MORE THAN SIX YEARS EARLIER. THERE IS, THEREFORE, NO BASIS FOR ALLOWING CLAIMS FOR THE RECOVERY OF OVERPAYMENTS COLLECTED MORE THAN SIX YEARS AFTER THE RIGHT TO REIMBURSEMENT FIRST ACCRUED. YOU MAY BE INTERESTED IN KNOWING THAT THE RIGHT TO RECOVER OVERPAYMENTS BY THE COMMODITY CREDIT CORPORATION BY OFFSET WHERE THE NOTICES OF OVERPAYMENT ISSUED MORE THAN SIX YEARS AFTER THE SHIPMENT WAS COMPLETED IS NOW PENDING BEFORE THE COURT OF CLAIMS IN NORTHERN PACIFIC RAILWAY CO. V. UNITED STATES, C.CLS. NO. 67-55, AND, UNLESS THAT CASE IS FINALLY DECIDED ADVERSELY TO THE GOVERNMENT, WE WILL NOT ALLOW ANY SUCH CLAIM AS THAT REFERRED TO BY YOU.