B-128410, AUG. 27, 1956

B-128410: Aug 27, 1956

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WHEREIN THERE WAS DISALLOWED YOUR CLAIM FOR 25 PERCENT OF THE PROCEEDS OF TREASURY CHECK NO. 18. THE RECORDS SHOW THAT YOU WERE RETAINED AS CUSTOMS COUNSEL TO THE LAW FIRM OF BENJAMIN M. YOU WERE RETAINED ON A PERCENTAGE BASIS OF ALL REFUNDS RECOVERED. WAS ISSUED IN FAVOR OF THE COMPANY AND APPARENTLY MAILED IN YOUR CARE. IT APPEARS THAT YOU WERE NOTIFIED BY THE INTERNAL REVENUE SERVICE OF ITS CLAIM AGAINST MR. RETURNING THE CHECK TO THE INTERNAL REVENUE SERVICE YOU SPECIFIED THAT THE CHECK WAS BEING RELEASED ONLY UPON THE EXPRESS CONDITION THAT YOUR CLAIMED FEES WOULD BE PAID. THE CHECK WAS LATER CANCELED AND THE PROCEEDS APPLIED IN PARTIAL LIQUIDATION OF MR. BY NECESSARY IMPLICATION WHENEVER THERE IS INVOLVED ANY CLAIM OR DEMAND WHATEVER BY THE UNITED STATES AGAINST ANY PERSON OR ENTITY HAVING A CLAIM AGAINST THE GOVERNMENT.

B-128410, AUG. 27, 1956

TO WILLIAM WHYNMAN, ESQUIRE:

WE REFER TO YOUR LETTER PROTESTING THE ACTION TAKEN IN OUR SETTLEMENT DATED MAY 21, 1956, WHEREIN THERE WAS DISALLOWED YOUR CLAIM FOR 25 PERCENT OF THE PROCEEDS OF TREASURY CHECK NO. 18,548,985, ASSERTED TO BE DUE YOU AS ATTORNEY FEES FROM THE CRITERION LAMP AND SHADE COMPANY.

THE RECORDS SHOW THAT YOU WERE RETAINED AS CUSTOMS COUNSEL TO THE LAW FIRM OF BENJAMIN M. ROBBINS, AND HIS ASSOCIATES, TO REPRESENT THE CRITERION LAMP AND SHADE COMPANY BEFORE ALL CUSTOMS OR OTHER OFFICERS OF THE UNITED STATES, AND THE UNITED STATES CUSTOMS COURT, FOR THE RECOVERY OF CUSTOMS DUTIES WHICH HAD BEEN ASSESSED AGAINST THE COMPANY ON CERTAIN IMPORTATIONS. YOU WERE RETAINED ON A PERCENTAGE BASIS OF ALL REFUNDS RECOVERED. THE REFUND HERE INVOLVED REPRESENTS RECOVERIES AS A RESULT OF A JUDGMENT IN FAVOR OF CRITERION LAMP AND SHADE COMPANY, ENTERED IN THE UNITED STATES CUSTOMS COURT, NEW YORK, NEW YORK, ON JANUARY 26, 1954.

TREASURY CHECK NO. 18,548,985, IN THE AMOUNT OF $16,679.80, WAS ISSUED IN FAVOR OF THE COMPANY AND APPARENTLY MAILED IN YOUR CARE. IT APPEARS THAT YOU WERE NOTIFIED BY THE INTERNAL REVENUE SERVICE OF ITS CLAIM AGAINST MR. IRVING B. CANTOR, DOING BUSINESS AS THE CRITERION LAMP AND SHADE COMPANY, FOR DELINQUENT INCOME TAX. AS A RESULT OF SEVERAL CONVERSATIONS WITH REPRESENTATIVES OF THE SERVICE, YOU RELEASED THE CHECK TO THE GOVERNMENT. IN YOUR LETTER OF AUGUST 11, 1955, RETURNING THE CHECK TO THE INTERNAL REVENUE SERVICE YOU SPECIFIED THAT THE CHECK WAS BEING RELEASED ONLY UPON THE EXPRESS CONDITION THAT YOUR CLAIMED FEES WOULD BE PAID. THE CHECK WAS LATER CANCELED AND THE PROCEEDS APPLIED IN PARTIAL LIQUIDATION OF MR. CANTOR'S TAX DEBT.

SECTION 236, REVISED STATUTES, AS AMENDED BY SECTION 305 OF THE BUDGET AND ACCOUNTING ACT OF JUNE 10, 1921, 41 STAT. 24, 31 U.S.C. 71, PROVIDES THAT THE GENERAL ACCOUNTING OFFICE SHALL SETTLE AND ADJUST ALL CLAIMS, BOTH IN FAVOR OF AND AGAINST THE UNITED STATES. BY NECESSARY IMPLICATION WHENEVER THERE IS INVOLVED ANY CLAIM OR DEMAND WHATEVER BY THE UNITED STATES AGAINST ANY PERSON OR ENTITY HAVING A CLAIM AGAINST THE GOVERNMENT, OUR OFFICE NOT ONLY HAS THE AUTHORITY BUT IS REQUIRED IN THE PROPER EXERCISE OF ITS DUTY TO SET OFF ONE INDEBTEDNESS AGAINST THE OTHER AND TO CERTIFY FOR PAYMENT, OR COLLECTION, ONLY THE BALANCE FOUND DUE ON ONE SIDE OR THE OTHER. SEE TAGGART V. UNITED STATES, 17 C.CLS. 322; UNITED STATES V. MUNSEY TRUST CO., 332 U.S. 234; SEABOARD SURETY CO. V. UNITED STATES, 67 F.SUPP. 969; CHERRY COTTON MILLS, INC. V. UNITED STATES, 327 U.S. 536; GRATIOT V. UNITED STATES, 15 PET. 336, 370; O-LEARY V. UNITED STATES, 82 C.CLS. 305; AND BOERNER V. UNITED STATES, 117 F.2D 387.

UNDER THE AUTHORITIES MENTIONED ABOVE, WE HAVE NO ALTERNATIVE BUT TO APPLY THE FULL AMOUNT OF THE CHECK TO THE PARTIAL LIQUIDATION OF THE INDEBTEDNESS TO THE UNITED STATES. THE CONDITION WHICH YOU ATTACHED TO YOUR RELEASE OF THE CHECK DOES NOT OPERATE TO DEFEAT THE GOVERNMENT'S RIGHT IN THE MATTER.

THE AGREEMENT BETWEEN YOU AND YOUR CLIENT FOR THE PROSECUTION OF A CLAIM AGAINST THE GOVERNMENT ON A CONTINGENT FEE BASIS IS A PRIVATE MATTER AND YOU SHOULD LOOK TO YOUR CLIENT FOR PAYMENT OF THE AGREED FEE.

IN VIEW OF THE FOREGOING, OUR OFFICE HAS NO ALTERNATIVE BUT TO SUSTAIN THE ACTION DISALLOWING ..END :