B-123397, JUN. 3, 1955

B-123397: Jun 3, 1955

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OR OF THE ARTICLES DELIVERED PREVIOUSLY TO SUCH PAYMENT. * * *" THE RELATIONSHIP BETWEEN A BANK AND A RENTER OF A SAFETY DEPOSIT BOX IS HELD. WE HAVE CONSISTENTLY HELD THAT SECTION 3648 OF THE REVISED STATUTES PROHIBITS PAYMENT IN ADVANCE. THE DECISIONS YOU CITE AS PROVIDING AUTHORITY FOR APPROVAL OF THE INSTANT INVOICE ARE CLEARLY NOT APPLICABLE. THE CONTRACTOR'S FAILURE TO DELIVER WAS DUE TO THE GOVERNMENT'S OWN INABILITY TO RECEIVE IT. THERE WERE AUTHORIZED THE MODIFICATION OF THE CONTRACT INVOLVED TO PROVIDE FOR THE VESTING OF TITLE TO THE ARTICLES IN THE UNITED STATES AND PARTIAL PAYMENTS FOR THE ARTICLES. THE PROPERTY WAS PARTIALLY COMPLETED. THE PAYMENTS AUTHORIZED WERE IN THE NATURE OF "PROGRESS" PAYMENTS.

B-123397, JUN. 3, 1955

TO MR. H. E. CLEEK, AUTHORIZED CERTIFYING OFFICER, SMALL BUSINESS ADMINISTRATION:

WE REFER TO YOUR LETTER OF MARCH 24, 1955, TO WHICH YOU REQUEST A DECISION AS TO THE PROPRIETY OF CERTIFYING FOR PAYMENT A VOUCHER FOR THE PREPAYMENT OF RENT ON A SAFETY DEPOSIT BOX USED FOR THE SAFEGUARDING OF READILY NEGOTIABLE DOCUMENTS HELD AS SECURITY FOR SMALL BUSINESS LOANS. YOUR DOUBT AS TO THE PROPRIETY OF PAYMENT ARISES BECAUSE OF SECTION 3648 OF THE REVISED STATUTES, 31 U.S.C. 529. YOU SUGGEST THAT THE SECTION MAY BE INAPPLICABLE TO THE PROPOSED PAYMENT UNDER THE RATIONALE OF OUR DECISIONS IN 20 COMP. GEN. 917, 28 ID. 468 AND 30 ID. 348.

SECTION 3648 READS, IN PERTINENT PART:

"NO ADVANCE OF PUBLIC MONEY SHALL BE MADE IN ANY CASE UNLESS AUTHORIZED BY THE APPROPRIATION CONCERNED OR OTHER LAW. AND IN ALL CASES OF CONTRACTS FOR THE PERFORMANCE OF ANY SERVICE, OR THE DELIVERY OF ARTICLES OF ANY DESCRIPTION, FOR THE USE OF THE UNITED STATES, PAYMENT SHALL NOT EXCEED THE VALUE OF THE SERVICE RENDERED, OR OF THE ARTICLES DELIVERED PREVIOUSLY TO SUCH PAYMENT. * * *"

THE RELATIONSHIP BETWEEN A BANK AND A RENTER OF A SAFETY DEPOSIT BOX IS HELD, GENERALLY, TO BE THAT OF BAILEE AND BAILOR. SEE ALFORD V. UNITED STATES, 113 F.2D 885, AND THE CASES CITED IN FOOTNOTE 2 ON PAGE 887. THE SUPREME COURT OF GEORGIA HAS HELD SUCH RELATIONSHIP TO BE THAT OF LESSOR AND LESSEE. TOW V. EVANS, 20 S.E. 2D. 922. IN CASES INVOLVING LEASES OF REAL PROPERTY AND BAILMENTS OF PERSONAL PROPERTY TO THE GOVERNMENT, WE HAVE CONSISTENTLY HELD THAT SECTION 3648 OF THE REVISED STATUTES PROHIBITS PAYMENT IN ADVANCE, IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY. SEE 3 COMP. GEN. 542, 18 ID. 839 AND 19 ID. 758.

THE DECISIONS YOU CITE AS PROVIDING AUTHORITY FOR APPROVAL OF THE INSTANT INVOICE ARE CLEARLY NOT APPLICABLE. IN 20 COMP. GEN. 917, MANUFACTURE OF THE ARTICLES HAD BEEN ENTIRELY COMPLETED, AND THE CONTRACTOR'S FAILURE TO DELIVER WAS DUE TO THE GOVERNMENT'S OWN INABILITY TO RECEIVE IT. ACCORDINGLY, THERE WERE AUTHORIZED THE MODIFICATION OF THE CONTRACT INVOLVED TO PROVIDE FOR THE VESTING OF TITLE TO THE ARTICLES IN THE UNITED STATES AND PARTIAL PAYMENTS FOR THE ARTICLES. IN 28 COMP. GEN. 468, THE PROPERTY WAS PARTIALLY COMPLETED, AND THE PAYMENTS AUTHORIZED WERE IN THE NATURE OF "PROGRESS" PAYMENTS. IN BOTH CASES THE GOVERNMENT BECAME THE ABSOLUTE OWNER OF THE COMPLETED PROPERTY. THUS, THE PAYMENTS WERE IN FACT NOT ADVANCE PAYMENTS, AND CONSEQUENTLY SECTION 3648 OF THE REVISED STATUTES DID NOT APPLY. THE QUESTION IN 30 COMP. GEN. 348 WAS WHETHER A COMMON CARRIER, BY PAYING FOR LOST PROPERTY, MAKES A DELIVERY SUFFICIENT TO ENTITLE IT TO PAYMENT OF TRANSPORTATION CHARGES, AND THE VALIDITY OF AN ADVANCE PAYMENT WAS NOT AT ALL INVOLVED.

WE FIND NO PROVISION OF LAW AUTHORIZING THE SMALL BUSINESS ADMINISTRATION TO MAKE PAYMENTS FOR GOODS OR SERVICES BEFORE THEY ARE RECEIVED. ACCORDINGLY, THE VOUCHER SUBMITTED MAY NOT BE CERTIFIED FOR PAYMENT, AND IS RETAINED IN OUR FILES.