B-136335 August 18, 1958
B-136335: Aug 18, 1958
Class: We have considered your letter of March 1 and May 20. Elsie Maud Snyder as executrix and principal beneficiary of the will of Philip Sheridan Neison (deceased) in the amount of $3. This amount was reported to our office for collection by the Railroad Retirement Board as the indebtedness of Mr. Neison was awarded an annuity effective February 1. Such payments were terminated on October 31. It was disclosed that he had been employed by the Norwood Building and Loan Association. Which were received by Mr. Neision prior to terminating his employment with the Norwood Building and Loan Association represent an overpayment and were erroneous. The record disclosed that under the term of the will of Mr.
B-136335 August 18, 1958
Mr. George H. Class, Attorney at Law c/o Lindersmith and Class County Building Media, Pennsylvania
Dear Mr. Class:
We have considered your letter of March 1 and May 20, 1958, in effect responding record duration of the claim of the Government against Mrs. Elsie Maud Snyder as executrix and principal beneficiary of the will of Philip Sheridan Neison (deceased) in the amount of $3,372. This amount was reported to our office for collection by the Railroad Retirement Board as the indebtedness of Mr. Neison (deceased) for erroneous payment of an annuity to the deceased by the Board.
The report of the Railroad Retirement Board shows that Mr. Neison was awarded an annuity effective February 1, 1941, based on information furnished by him that he had not been employed since he last worked for the Pennsylvania Railroad on January 31, 1941. Such payments were terminated on October 31, 1943, by reason of his death on November 29, 1943. Subsequent to the death of Mr. Neison, it was disclosed that he had been employed by the Norwood Building and Loan Association, Prospect Park, Pennsylvania, from 1939 until the third quarter in 1943. Therefore, annuity payments, in the amount of $3,960, which were received by Mr. Neision prior to terminating his employment with the Norwood Building and Loan Association represent an overpayment and were erroneous. By withholding the lump - sum death benefit the Board reduced the overpayment to $3,372.
The record disclosed that under the term of the will of Mr. Neison Mrs. Snyder was named executrix and was the principal beneficiary. The will was probated in the Orphans' Court of Delaware County, Pennsylvania, and on September 25, 1945, the court entered a final decree of distribution under which Mrs. Snyder as residual legatee received an amount in excess of the overpayment to Mr. Neison. To the extent that Mrs. Snyder received the amount overpaid Mr. Neison, she received moneys of the United States and is holding it in trust for it, as stated in United States v. Anderson, 66 F. Supp. 870, 871:
"The Government here does not seek to enforce its right against the estate. It seeks to enforce a trust. It contends that the Heir holds an amount equal to the claim in trust for it. It is well settled that a court of equity may enforce an express or constructive trust. Because this Court's jurisdiction is derived from the Federal Constitution and statutes, not state law, its power to entertain this case under its equity function and also its right to exercise that jurisdiction here cannot be doubted."
You question the right of the Government to pursue its claim for the sum erroneously paid to Mr. Neison, in view of the time that has elapsed since the final settlement of the estate.
As to the debts due the United States, section 3466 and 3467 of the Revised Statutes, 31 U. S. C. 191 and 192, provide, in part, as follows (quoting the United States Code):
Section 3466 -
"Whenever any person indebted to the United States is insolvent, or whenever the estate of any deceased debtor, in the hands of the executors or administrators, is insufficient to pay all the debts due from the deceased, the debts due to the United States shall be first satisfied; ***."
Section 3467 -
"Every executor, administrator, or assignee, or other person, who pays, in whole or in part, any debt due by the person or estate for whom or which he acts before he satisfies and pays the debts due the United States form such person or estate, shall became answerable in his own person and estate to the extent of such payments for the debts so due to the United States, or for so much thereof as may remain due and unpaid."
The United States of necessity must act through its officers or agents, and the fact that a claim is not filed against an estate prior to the close of probate proceeding and final settlement of the estate does not affect the Government's right to collect its debts. See United States v. Anderson, referred to above, The language of the Court in that case (questing from page 871) as to the point raised, is as follows:
"Thus it seems clear that the Government's failure to file its claim during the time required by the state statutes and court order does not defeat its right to enforce its claim *** against the administrator of the deceased. Like reasoning sustains the conclusion that the Government's failure to file the claim prior to the final decree of distribution and discharge of the administrator is unimportant to its right against the heir."
Furthermore, it is a long established principle of public policy that laches is not imputable to the Government, and that the United States is not bound by state statutes of limitation unless Congress has clearly manifested its intentions that it should be as bound. The United States Supreme Court in the case of United States v. Summerlin, 310 U. S. 414, held, "It is well settled that the United States is not bound by state statutes of limitation or subject to the defense of laches in enforcing its rights." See, also, United States v. Nashville, G. & St. L. Ry. Co., 118 U. S. 120, 125, 126; United States v. American Bell Telephone Company, 167 U. S. 224, 264 - 265; E. I. Du Font De Nemours & Co. v. Davis, 264 U. S. 456, 462; Missouri - Texas - Kansas has not bound the Government by a statute of limitations in cases involving overpayment or erroneous payment of annuities by the Railroad Retirement Board.
Therefore, under the law prompt payment of the amount due is required. In the event of failure to satisfy this obligation within 45 days of this letter - or the making within such period of satisfactory arrangement to liquidate the debt, the matter will be referred to the Department of Justice for appropriate legal action.
Payment or any correspondence relative to arrangement for liquidating the debt should be addressed to the U. S. General Accounting Office, Post Office Box 2610, Washington 13, D. C.
Vary truly yours,
FRANK H. WETLZEL
Assistant Comptroller General of the United States