B-130972, MAR. 25, 1957

B-130972: Mar 25, 1957

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ESQUIRE: FURTHER REFERENCE IS MADE TO A LETTER DATED FEBRUARY 19. WE ARE IN RECEIPT OF A LETTER DATED MARCH 5. STEVENS DIED SUDDENLY AND THAT HIS AFFAIRS ARE NOW BEING HANDLED BY YOU. WE ARE ADDRESSING YOU AS THE ATTORNEY FOR MR. IT WAS STATED IN THE LETTER OF FEBRUARY 19. WAS IMMEDIATELY ASSIGNED TO THE ORDER OF MR. THAT THIS TRANSACTION WAS PERFORMED IN GOOD FAITH. THE ONLY EXCEPTION TO THIS RULE IS THAT MADE BY THE ASSIGNMENT OF CLAIMS ACT OF 1940. THAT UNTIL THIS IS DONE THE ASSIGNMENT IS NOT EFFECTIVE. IT IS TO BE NOTED THAT THE GROSS AMOUNT PAYABLE UNDER THE CONTRACT OF SEPTEMBER 18. WAS ONLY $825. THUS WAS LESS THAN THE MINIMUM AMOUNT REQUIRED BY THE ASSIGNMENT OF CLAIMS ACT TO PERMIT AN ASSIGNMENT.

B-130972, MAR. 25, 1957

TO WILLIAM J. F. BELL, ESQUIRE:

FURTHER REFERENCE IS MADE TO A LETTER DATED FEBRUARY 19, 1957, FROM THE LATE MR. MATTHEW K. STEVENS, RELATING TO A CLAIM BY MR. MORRIS KIMMELSMAN AS ASSIGNEE UNDER A CONTRACT DATED SEPTEMBER 18, 1956, BETWEEN THE SELCO METAL PRODUCTS COMPANY AND THE DEPARTMENT OF THE ARMY. WE ARE IN RECEIPT OF A LETTER DATED MARCH 5, 1957, FROM HONORABLE HUGH SCOTT, HOUSE OF REPRESENTATIVES, ADVISING THAT MR. STEVENS DIED SUDDENLY AND THAT HIS AFFAIRS ARE NOW BEING HANDLED BY YOU. ACCORDINGLY, WE ARE ADDRESSING YOU AS THE ATTORNEY FOR MR. KIMMELSMAN.

IT WAS STATED IN THE LETTER OF FEBRUARY 19, 1957, AMONG OTHER THINGS, THAT THE AMOUNT OF $825 TO BE PAID UNDER THE CONTRACT OF SEPTEMBER 18, 1956, WAS IMMEDIATELY ASSIGNED TO THE ORDER OF MR. KIMMELSMAN IN CONSIDERATION OF THE ADVANCEMENT BY MR. KIMMELSMAN OF THE SUM OF $500 TO THE CONTRACTOR TO ENABLE IT TO PURCHASE THE MATERIALS REQUIRED AND MONEY FOR THE LABOR TO COMPLETE THE ORDER, AND THAT THIS TRANSACTION WAS PERFORMED IN GOOD FAITH. MR. STEVENS FURTHER INDICATED HIS BELIEF THAT THE UNITED STATES SHOULD FILE A PROOF OF CLAIM FOR THE AMOUNT DUE UNDER A PRIOR CONTRACT IN THE PROCEEDINGS FOR AN ARRANGEMENT UNDER CHAPTER XI OF THE BANKRUPTCY ACT, NOW PENDING IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA.

SECTION 3477 OF THE REVISED STATUTES (31 U.S.C. 203) PROVIDES THAT--

"ALL TRANSFERS AND ASSIGNMENTS MADE OF ANY CLAIM UPON THE UNITED STATES, OR OF ANY PART OR SHARE THEREOF, OR INTEREST THEREIN, WHETHER ABSOLUTE OR CONDITIONAL, AND WHATEVER MAY BE THE CONSIDERATION THEREFOR, * * * SHALL BE ABSOLUTELY NULL AND VOID * * *.'

THE ONLY EXCEPTION TO THIS RULE IS THAT MADE BY THE ASSIGNMENT OF CLAIMS ACT OF 1940, 54 STAT. 1029, AS AMENDED BY THE ACT OF MAY 15, 1951, 65 STAT. 41, WHICH PERMITS THE ASSIGNMENT TO A "BANK, TRUST COMPANY, OR OTHER FINANCING INSTITUTION," OF MONEYS DUE OR TO BECOME DUE UNDER CERTAIN CONTRACTS, THE EXCEPTION BEING APPLICABLE ONLY TO CONTRACTS WHICH PROVIDE FOR PAYMENTS AGGREGATING $1,000 OR MORE. THE ACT FURTHER REQUIRES THAT NOTICE OF AN ASSIGNMENT, TOGETHER WITH A TRUE COPY OF THE INSTRUMENT OF ASSIGNMENT, MUST BE FURNISHED TO THE GOVERNMENT CONTRACTING AND DISBURSING OFFICERS, AND THAT UNTIL THIS IS DONE THE ASSIGNMENT IS NOT EFFECTIVE. COCONUT GROVE EXCHANGE BANK V. NEW AMSTERDAM CASUALTY COMPANY, 149 F.2D 73.

IT IS TO BE NOTED THAT THE GROSS AMOUNT PAYABLE UNDER THE CONTRACT OF SEPTEMBER 18, 1956, WAS ONLY $825, AND THUS WAS LESS THAN THE MINIMUM AMOUNT REQUIRED BY THE ASSIGNMENT OF CLAIMS ACT TO PERMIT AN ASSIGNMENT. RESPECTING THE REQUIREMENT THAT NOTICE OF AN ASSIGNMENT, ETC., MUST BE FURNISHED THE GOVERNMENT CONTRACTING AND DISBURSING OFFICERS, THE ARMY SIGNAL SUPPLY AGENCY, 225 SOUTH 18TH STREET, PHILADELPHIA 3, PENNSYLVANIA, ADVISED THE CHIEF OF FINANCE, DEPARTMENT OF THE ARMY, BY ENDORSEMENT DATED JANUARY 15, 1957, IN PART, AS FOLLOWS:

"1. WITH REFERENCE TO INFORMATION REQUESTED IN BASIC COMMUNICATION, IT IS ADVISED THAT THIS AGENCY HAS NO RECORD OF RECEIVING AT ANY TIME A NOTICE OF ASSIGNMENT AGAINST PURCHASE ORDER NUMBER 32721-P-57. IF THE ACCOUNT WAS TRANSFERRED TO AN ASSIGNEE AS STATED IN BASIC COMMUNICATION, THE EXISTENCE OF SUCH AN ASSIGNMENT IS UNKNOWN IN THIS AGENCY.'

UNDER THE FACTS AND THE LAW OF THIS CASE, WE MUST CONCLUDE THAT THE PURPORTED ASSIGNMENT TO MR. KIMMELSMAN IS WITHOUT FORCE AND EFFECT AND MAY NOT BE RECOGNIZED AS CONSTITUTING THE BASIS OF A CLAIM AGAINST THE UNITED STATES UNDER THE INDICATED CONTRACT. FURTHERMORE, WHILE NOT NECESSARY TO THE DISPOSITION OF THIS MATTER, IT SEEMS DOUBTFUL THAT MR. KIMMELSMAN WAS A "BANK, TRUST COMPANY, OR OTHER FINANCING INSTITUTION" WITHIN THE MEANING OF THE ASSIGNMENT OF CLAIMS ACT.