B-127866, JUL. 10, 1956

B-127866, JUL. 10, 1956

TO MR. ROBERT BUGDANOWITZ:

REFERENCE IS MADE TO YOUR LETTER OF MAY 31, 1956, CONCERNING A CLAIM OF ERNEST HAGLER, 2036 MARKET STREET, DENVER, COLORADO, FOR $3,069.60, ON ACCOUNT OF A SEIZURE BY THE INTERNAL REVENUE SERVICE OF A QUANTITY OF ETHYL ALCOHOL PURCHASED BY MR. HAGLER FROM THE DEPARTMENT OF THE ARMY. YOU REFER TO THE FACT THAT THE CLAIM HAS BEEN FORWARDED HERE FOR SETTLEMENT AND THAT THERE IS ALSO PENDING BEFORE THE ARMED SERVICES BOARD OF CONTRACT APPEALS AN APPEAL FILED ON BEHALF OF MR. HAGLER FROM A DECISION RENDERED BY THE PROPERTY DISPOSAL OFFICER AT HEADQUARTERS, ST. LOUIS AREA SUPPORT CENTER, U.S. ARMY.

A COPY OF YOUR LETTER HAS BEEN FORWARDED TO MR. WILLIAM N. LYONS, RECORDER, ARMED SERVICE BOARD OF CONTRACT APPEALS, AND WE WERE ADVISED THAT YOUR STATEMENT THAT "I FILED MY GROUNDS OF APPEAL AND NOT JUST A NOTICE OF APPEAL" WOULD BE ACCEPTED AS SUFFICIENT TO WARRANT A REFERENCE OF THE CASE TO THE DEPARTMENT OF THE ARMY FOR THE PURPOSE OF PREPARING AN APPROPRIATE ANSWER. IT IS UNDERSTOOD, HOWEVER, THAT, SINCE THE DEPARTMENT OF THE ARMY HAS REFERRED YOUR CLAIM TO OUR OFFICE, THE BOARD WILL TAKE NO FURTHER ACTION IN THE MATTER PENDING ITS OUTCOME HERE.

IN OUR OPINION, THE FACTS OF THE CASE ARE NOT SUCH AS TO WARRANT THE CONCLUSION THAT THERE EXISTS ANY LEGAL OBLIGATION ON THE PART OF THE GOVERNMENT IN THIS MATTER OTHER THAN TO REFUND THE PURCHASE PRICE PAID FOR THE ALCOHOL, AND NO APPROPRIATION IS AVAILABLE FROM WHICH ANY AMOUNT IN ADDITION TO THE PURCHASE PRICE PROPERLY MAY BE PAID TO YOUR CLIENT. HOWEVER, IT APPEARS THAT THE CLAIM CONTAINS CERTAIN ELEMENTS OF EQUITY SUCH AS MIGHT JUSTIFY THE MAKING OF A REPORT TO THE CONGRESS UNDER THE ACT OF APRIL 10, 1928, 45 STAT. 413, 31 U.S.C. 236, WHICH PROVIDES AS FOLLOWS:

"WHEN THERE IS FILED IN THE GENERAL ACCOUNTING OFFICE A CLAIM OR DEMAND AGAINST THE UNITED STATES THAT MAY NOT LAWFULLY BE ADJUSTED BY THE USE OF AN APPROPRIATION THERETOFORE MADE, BUT WHICH CLAIM OR DEMAND IN THE JUDGMENT OF THE COMPTROLLER GENERAL OF THE UNITED STATES CONTAINS SUCH ELEMENTS OF LEGAL LIABILITY OR EQUITY AS TO BE DESERVING OF THE CONSIDERATION OF THE CONGRESS, HE SHALL SUBMIT THE SAME TO THE CONGRESS BY A SPECIAL REPORT CONTAINING THE MATERIAL FACTS AND HIS RECOMMENDATION THEREON.'

WE WOULD NOT FEEL WARRANTED IN RECOMMENDING PAYMENT OF THE FULL AMOUNT CLAIMED BY MR. HAGLER BUT WE WOULD BE DISPOSED TO RECOMMEND AN ALLOWANCE WHICH WOULD HAVE THE EFFECT OF RESTORING MR. HAGLER TO THE POSITION HE WAS IN PRIOR TO HIS PURCHASE OF THE ALCOHOL FROM THE DEPARTMENT OF THE ARMY. IN THIS CONNECTION, THE CLAIM FOR $3,069.60 INCLUDES THE SUM OF $2,199.60 WHICH IS ALLEGED TO BE THE FAIR MARKET VALUE OF THE ALCOHOL AS DETERMINED BY THE INTERNAL REVENUE SERVICE. HOWEVER, MR. HAGLER PAID ONLY THE AMOUNT OF $209.72 FOR THE ALCOHOL AND WE ARE OF THE OPINION THAT REIMBURSEMENT OF THE LATTER AMOUNT, PLUS FREIGHT COSTS AND OTHER EXPENSES INCURRED BY MR. HAGLER INCLUDING AN ALLOWANCE OF A REASONABLE ATTORNEY'S FEE, WOULD REPRESENT A FAIR AND EQUITABLE ADJUSTMENT OF THE CLAIM.

ACCORDINGLY, IF AGREEABLE TO YOUR CLIENT, WE WILL CONSIDER THE MATTER OF REPORTING THE CLAIM TO THE CONGRESS UNDER THE ACT OF APRIL 10, 1928, WITH THE RECOMMENDATION THAT AN APPROPRIATION BE MADE FOR PAYMENT TOMR. HAGLER OF THE SUM OF $1,079.72, WHICH IS IN ACCORDANCE WITH THE STATEMENT OF CLAIM SUBMITTED EXCEPT FOR THE DIFFERENCE BETWEEN THE AMOUNT PAID FOR THE ALCOHOL AND ITS ALLEGED FAIR MARKET VALUE. HOWEVER, ACTION IN THIS REGARD WILL BE WITHHELD PENDING A STATEMENT FROM YOUR CLIENT AS TO WHETHER HE IS WILLING TO ACCEPT THE SUM OF $1,079.72 IN FULL AND FINAL SETTLEMENT OF HIS CLAIM IN THE EVENT THE CONGRESS SHOULD AUTHORIZE SETTLEMENT ON THAT BASIS.