B-132815, NOVEMBER 16, 1960, 40 COMP. GEN. 286

B-132815: Nov 16, 1960

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PAYMENT OF INTEREST IS NOT PROPER. THE JUDGMENT INVOLVING A CLAIM FOR BREACH OF CONTRACT WAS ENTERED JUNE 23. IS PROVIDED FOR BY THE SECOND SUPPLEMENTAL APPROPRIATION ACT. INTEREST ON THE JUDGMENT IS CLAIMED AS A MATTER OF LAW. THE APPROPRIATION IS FOR THE PAYMENT OF INTEREST WHEN "PROVIDED BY LAW.'. THE RULE EMBODIED IN SECTION 2516 (A) IS "A COMPLETE ONE COVERING ALL TYPES OF CLAIMS. THAT THE SECTION IS APPLICABLE TO COURT OF CLAIMS JUDGMENTS HAS BEEN SPECIFICALLY HELD IN UNITED STATES V. ALTHOUGH IN THAT CASE THE ACTION IN THE COURT OF CLAIMS WAS FOUNDED UPON A JUDGMENT OF THE CUSTOMS COURT. IT IS CONTENDED THAT SECTION 2517. (2) WHERE IT IS DETERMINED THAT A CLAIM ON ACCOUNT OF WHICH GOVERNMENT WITHHELD PAYMENT OF THE JUDGMENT IS WITHOUT MERIT (31 U.S.C. 227).

B-132815, NOVEMBER 16, 1960, 40 COMP. GEN. 286

CLAIMS AGAINST THE UNITED STATES - JUDGMENTS BY COURT OF CLAIMS - INTEREST TO CONSTRUE THE PROVISION IN 28 U.S.C. 2517 FOR PAYMENT OF INTEREST ON JUDGMENTS RENDERED BY THE COURT OF CLAIMS AGAINST THE UNITED STATES AS A BLANKET AUTHORIZATION FOR PAYMENT OF INTEREST ON ALL JUDGMENTS WOULD NOT BE IN CONSONANCE WITH THE RULE IN 28 U.S.C. 2516 (A) THAT INTEREST ON CLAIMS AGAINST THE UNITED STATES CANNOT BE RECOVERED IN THE ABSENCE OF AN EXPRESS PROVISION FOR INTEREST IN A STATUTE OR A CONTRACT AND WOULD MAKE THE SPECIFIC PROVISIONS FOR INTEREST ON COURT OF CLAIMS JUDGMENTS IN 28 U.S.C. 2516 (B) AND IN 31 U.S.C. 227 OF LITTLE SIGNIFICANCE; THEREFORE, PAYMENT OF INTEREST ON A COURT OF CLAIMS JUDGMENT AGAINST THE UNITED STATES, WHICH DID NOT PROVIDE FOR ANY INTEREST PAYMENT, MAY NOT BE REGARDED AS AUTHORIZED BY LAW UNDER 28 U.S.C. 2517 AND, IN THE ABSENCE OF SPECIFIC AUTHORIZATION, PAYMENT OF INTEREST IS NOT PROPER.

TO FREDERICK A. BALLARD, NOVEMBER 16, 1960:

YOUR LETTER OF OCTOBER 14, 1960, REQUESTS REVIEW OF THE ACTION OF OUR CLAIMS DIVISION, DATED OCTOBER 7, 1960, WHICH DISALLOWED THE CLAIM OF RUSSELL AND COMPANY, INC., FOR INTEREST ON THE JUDGMENT ENTERED BY THE COURT OF CLAIMS IN RUSSELL AND COMPANY, INC. V. UNITED STATES, CT. CL. NO. 314-57, DECIDED JUNE 23, 1960.

THE JUDGMENT INVOLVING A CLAIM FOR BREACH OF CONTRACT WAS ENTERED JUNE 23, 1960, FOR THE SUM OF $575,000. PAYMENT THEREOF, AND OTHER DESIGNATED JUDGMENTS AGAINST THE UNITED STATES, IS PROVIDED FOR BY THE SECOND SUPPLEMENTAL APPROPRIATION ACT, 1961, 74 STAT. 821, APPROVED SEPTEMBER 8, 1960. THE ACT APPROPRIATES FUNDS FOR THE PAYMENT OF THE JUDGMENTS, INCLUDING "SUCH AMOUNTS AS MAY BE NECESSARY TO PAY INTEREST (AS AND WHEN SPECIFIED IN SUCH JUDGMENTS OR PROVIDED BY LAW).' IT FURTHER PROVIDES " THAT UNLESS OTHERWISE SPECIFICALLY REQUIRED BY LAW FOR HEREIN SHALL NOT CONTINUE FOR MORE THAN THIRTY DAYS AFTER THE DATE OF APPROVAL OF THIS ACT.'

THE JUDGMENT IN FAVOR OF RUSSELL AND COMPANY, INC., DOES NOT PROVIDE FOR THE PAYMENT OF INTEREST. INTEREST ON THE JUDGMENT IS CLAIMED AS A MATTER OF LAW, FROM THE DATE OF JUDGMENT ENTRY, JUNE 23, 1960, TO THE DATE OF PAYMENT BUT NOT BEYOND OCTOBER 8, 1960, THE CUT-OFF DATE PRESCRIBED BY THE APPROPRIATION ACT.

THE APPROPRIATION IS FOR THE PAYMENT OF INTEREST WHEN "PROVIDED BY LAW.' SECTION 2516 (A) OF TITLE 28, U.S.C. STATES THAT INTEREST ON A CLAIM AGAINST THE UNITED STATES SHALL BE ALLOWED IN A JUDGMENT OF THE COURT OF CLAIMS "ONLY UNDER A CONTRACT OR ACT OF CONGRESS EXPRESSLY PROVIDING FOR PAYMENT THEREOF.' THE SECTION SETS FORTH THE TRADITIONAL RULE THAT INTEREST ON CLAIMS AGAINST THE UNITED STATES CANNOT BE RECOVERED IN THE ABSENCE OF AN EXPRESS PROVISION TO THE CONTRARY IN THE RELEVANT STATUTE OR CONTRACT. UNITED STATES V. THAYER-WEST POINT HOTEL CO., 329 U.S. 585, 588. THE RULE EMBODIED IN SECTION 2516 (A) IS "A COMPLETE ONE COVERING ALL TYPES OF CLAIMS, INCLUDING THOSE ARISING OUT OF PREEXISTING JUDGMENTS.' UNITED STATES V. N.Y. RAYON IMPORTING CO., 329 U.S. 654, 661. THAT THE SECTION IS APPLICABLE TO COURT OF CLAIMS JUDGMENTS HAS BEEN SPECIFICALLY HELD IN UNITED STATES V. EASTPORT STEAMSHIP CORPORATION, 255 F.2D 795, 804. THE UNITED STATES COURT OF APPEALS, SECOND CIRCUIT, STATED: "1IN UNITED STATES V. NEW YORK RAYON IMPORTING CO. * * * THE SUPREME COURT HELD THAT THE PREDECESSOR OF SECTION 2516 (A) APPLIED NOT ONLY TO ORIGINAL CLAIMS AGAINST THE UNITED STATES BUT ALSO TO JUDGMENTS OBTAINED AGAINST IT. ALTHOUGH IN THAT CASE THE ACTION IN THE COURT OF CLAIMS WAS FOUNDED UPON A JUDGMENT OF THE CUSTOMS COURT, THE RATIONALE UNDERLYING THE SUPREME COURT'S DECISION APPLIES EQUALLY TO JUDGMENTS RENDERED BY THE COURT OF CLAIMS.'

IT IS CONTENDED THAT SECTION 2517, TITLE 28, U.S.C. PROVIDES FOR THE PAYMENT OF INTEREST ON COURT OF CLAIMS JUDGMENTS AGAINST THE UNITED STATES. THAT SECTION STATES:

(A) EVERY FINAL JUDGMENT RENDERED BY THE COURT OF CLAIMS AGAINST THE UNITED STATES SHALL BE PAID OUT OF ANY GENERAL APPROPRIATION THEREFOR, ON PRESENTATION TO THE GENERAL ACCOUNTING OFFICE OF A CERTIFICATION OF THE JUDGMENT BY THE CLERK AND CHIEF JUDGE OF THE COURT.

(B) PAYMENT OF ANY SUCH JUDGMENT AND OF INTEREST THEREON SHALL BE A FULL DISCHARGE TO THE UNITED STATES OF ALL CLAIMS AND DEMANDS ARISING OUT OF THE MATTERS INVOLVED IN THE CASE OF CONTROVERSY.

WE DO NOT CONSTRUE THE SECTION, PARTICULARLY SUBSECTION (B), AS A BLANKET CONGRESSIONAL AUTHORIZATION FOR THE PAYMENT OF INTEREST ON COURT OF CLAIMS JUDGMENTS AGAINST THE UNITED STATES. CONGRESS HAS AUTHORIZED PAYMENT OF INTEREST ON SUCH JUDGMENTS (1) WHEN AFFIRMED BY THE SUPREME COURT AFTER REVIEW ON PETITION OF THE UNITED STATES (28 U.S.C. 2516 (B) (, AND (2) WHERE IT IS DETERMINED THAT A CLAIM ON ACCOUNT OF WHICH GOVERNMENT WITHHELD PAYMENT OF THE JUDGMENT IS WITHOUT MERIT (31 U.S.C. 227). WHERE CONGRESS HAS AUTHORIZED THE PAYMENT OF INTEREST ON JUDGMENTS IT HAS EXPRESSLY PROVIDED THEREFOR IN CONSONANCE WITH SECTION 2516 (A). SEE 31 U.S.C. 724A. TO VIEW SECTION 2517 AS A BLANKET AUTHORITY FOR THE PAYMENT OF INTEREST WOULD DO VIOLENCE TO THE PROVISIONS OF SECTION 2516 (A) AND ASCRIBE LITTLE SIGNIFICANCE TO SECTION 2516 (B) AND SECTION 227. RATHER, WE READ SECTION 2517 AS MERELY STATING THE EFFECT THAT PAYMENT OF A JUDGMENT, INCLUDING INTEREST WHERE AUTHORIZED, SHALL HAVE. CF. EDGAR M. CARPENTER V. UNITED STATES, 123 CT. CL. 517, 520. THAT THIS IS THE PURPOSE OF THE SECTION, AND NOT THE BLANKET AUTHORIZATION FOR PAYMENT OF INTEREST, IS APPARENT UPON LOOKING TO THE SOURCE FROM WHICH THE PRESENT SUBSECTION (B) STEMS, SECTION 285, TITLE 28, U.S.C. 1940 EDITION. THE EARLIER SECTION PROVIDES:

THE PAYMENT OF THE AMOUNT DUE BY ANY JUDGMENT OF THE COURT OF CLAIMS, AND OF ANY INTEREST THEREON ALLOWED BY LAW, AS PROVIDED BY LAW, SHALL BE A FULL DISCHARGE TO THE UNITED STATES OF ALL CLAIM AND DEMAND TOUCHING ANY OF THE MATTERS INVOLVED IN THE CONTROVERSY.

IN THE LIGHT OF THE FOREGOING, AND AS THERE APPEARS TO BE NO CONGRESSIONAL AUTHORIZATION FOR THE PAYMENT OF INTEREST IN THIS CASE, THE DISALLOWANCE OF THE CLAIM IS SUSTAINED.