B-131129, FEB. 25, 1964

B-131129, FEB. 25, 1964

TO SANTA FE NATIONAL BANK:

WE REFER TO YOUR LETTER DATED DECEMBER 31, 1963, REQUESTING RECONSIDERATION OF OUR DECISION TO YOU, B-131129, DECEMBER 13, 1963, IN WHICH WE STATED THAT YOU WERE NOT ENTITLED TO $5,904.83, WHICH REPRESENTED THE BALANCE DUE UNDER DEFAULTED CONTRACT NO. DA-29-005-ENG 1473, PURSUANT TO YOUR ASSIGNMENT WITH FOSTER CONSTRUCTION COMPANY, EXECUTED ON JUNE 1, 1955. THE REASON FOR THIS CONCLUSION WAS THAT CORRESPONDENCE WITH YOU INDICATED THAT TRAVELERS INDEMNITY COMPANY, THE SURETY ON FOSTER'S BONDS, AND THE GUARANTOR ON YOUR LOAN TO FOSTER, HAD PAID THE FULL AMOUNT OF THE FOSTER LOAN TO YOU. WE STATED FURTHER THAT SINCE YOU HAD BEEN MADE WHOLE IN THE MATTER, AND SINCE THE BALANCE DUE UNDER THE FOSTER CONTRACT WAS APPLIED TO THE SATISFACTION OF CLAIMS BY THE GOVERNMENT AGAINST FOSTER RESULTING FROM DEFAULTS UNDER OTHER CONTRACTS, FOR WHICH TRAVELERS WAS ALSO SURETY, WHICH RESULTED IN A DECREASE OF THE GOVERNMENT'S CLAIM AGAINST THE SURETY, NO FURTHER PAYMENT WOULD BE MADE TO YOU.

YOUR LETTER DATED DECEMBER 31, 1963, AGAIN ADVISES THAT IT WAS NECESSARY TO CALL ON TRAVELERS TO PAY $6,674.58, THE BALANCE OF THE FOSTER LOAN, TO YOUR BANK UNDER THE GUARANTEE AGREEMENT WITH TRAVELERS. IT IS YOUR OPINION THAT YOU ARE ENTITLED TO AN ADDITIONAL $5,904.83 SINCE THE $6,674.58 FORWARDED TO YOU BY TRAVELERS REPRESENTED PAYMENT UNDER YOUR GUARANTEE ARRANGEMENT WITH TRAVELERS, AND THAT UPON PAYMENT OF $5,904.83 UNDER FOSTER'S CONTRACT NO. DA-29-005 ENG-1473 YOUR LOAN TO FOSTER WOULD BE REDUCED BY THAT AMOUNT, AND TO THE EXTENT THAT THE FOSTER LOAN IS SATISFIED YOU WOULD RETURN TRAVELERS PAYMENT UNDER THE GUARANTEE ARRANGEMENT. YOU HAVE CITED OUR DECISIONS B-124314 DATED AUGUST 25, 1955, AND B-132347 DATED SEPTEMBER 20, 1957, IN SUPPORT OF YOUR POSITION THAT YOU ARE ENTITLED TO THE BALANCE UNDER THE FOSTER CONTRACT. HOWEVER, IN BOTH OF THE DECISIONS CITED IN YOUR LETTER, THE ASSIGNEE BANK WAS NOT MADE WHOLE BY THE PAYMENT OF THE LOAN WHICH WAS THE SUBJECT OF THE ASSIGNMENT BY A THIRD PARTY AS IS THE CASE HERE, AND THE CASES ARE FURTHER DISTINGUISHABLE AS THE AMOUNT YOU CLAIM HAD ALREADY BEEN CREDITED TO THE SURETY'S BENEFIT UNDER OTHER CONTRACTS ON WHICH THE SURETY WAS LIABLE TO THE GOVERNMENT. IN THIS REGARD, OUR RECORDS CLEARLY INDICATES THAT ON DECEMBER 21, 1959, WE ADVISED THE DEPARTMENT OF JUSTICE THAT THE AMOUNT DUE UNDER CONTRACT NO. DA-29-005-ENG-1473, HAD BEEN CREDITED AGAINST EXCESS COSTS DUE UNDER CONTRACT NO. DA-29-005-ENG-1470, ON WHICH FOSTER WAS THE CONTRACTOR AND TRAVELERS WAS THE SURETY, AND THAT THE EXCESS COSTS RECOVERABLE AGAINST TRAVELERS WERE THEREBY REDUCED BY THAT AMOUNT. THESE CIRCUMSTANCES WE DO NOT FIND THE CITED DECISIONS AUTHORITY FOR PAYMENT OF ANY ADDITIONAL AMOUNTS TO YOU.

CONSIDERING THAT YOUR LETTER DATED DECEMBER 31, 1963, AGAIN INDICATES THAT YOU HAVE BEEN MADE WHOLE IN THIS MATTER, AND THAT APPARENTLY THERE IS NO UNLIQUIDATED BALANCE ON THE FOSTER LOAN DUE YOU IN YOUR OWN RIGHT, AND AS THE SURETY HAS RECEIVED THE BENEFIT OF THE BALANCE DUE UNDER CONTRACT NO. DA-29-005-ENG-1473 WE AGAIN STATE THAT WE DO NOT BELIEVE ANY FURTHER PAYMENTS UNDER THE ASSIGNMENT WHICH WOULD BE MERELY FOR THE BENEFIT OF THE SURETY WOULD BE PROPER.

FOR THE FOREGOING REASONS OUR DECISION B-131129, DECEMBER 13, 1963, DENYING YOUR CLAIM IS AFFIRMED.