B-148182, MAR. 22, 1962

B-148182: Mar 22, 1962

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GLEED GRONQUIST: REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 2. THIS BID WAS REJECTED BY THE CORPS OF ENGINEERS AND YOUR DEPOSIT RETURNED. YOU WERE NOTIFIED OF THE NEW RENTAL FIGURE. THE MATTER WAS REFERRED HERE. YOU CONTEND THAT THE GOVERNMENT HAD NO RIGHT TO OFFSET ONE DEBT AGAINST THE OTHER WITHOUT AFFORDING YOU A JURY TRIAL WHICH YOU URGE IS GUARANTEED UNDER ARTICLE VII OF THE AMENDMENTS TO THE CONSTITUTION. YOU CLAIM THAT RENTAL FIGURE IS TOO HIGH AND CONTEND THAT THE AMOUNT OF RENT TO BE PAID IS FOR JUDICIAL DETERMINATION. YOU ARE ADVISED THAT UNDER THE PROVISIONS OF SECTION 236 OF THE REVISED STATUTES. OUR RIGHT OF SETOFF IS GROUNDED IN THE COMMON-LAW RIGHT OF EVERY CREDITOR TO APPLY THE MONEYS OF HIS DEBTOR IN HIS HANDS TO THE EXTINGUISHMENT OF DEBTS DUE HIM FROM THE DEBTOR.

B-148182, MAR. 22, 1962

TO MR. GLEED GRONQUIST:

REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 2, 1962, RELATIVE TO OUR ACTION ON MAY 24, 1961, WITHHOLDING $1,138.66 OTHERWISE DUE YOU IN PAYMENT OF YOUR RESETTLEMENT CLAIM MADE AS A RESULT OF MOVING FROM TRACTS NOS. L- 1232 AND L-1246, TUTTLE CREEK DAM AND RESERVOIR PROJECT, KANSAS, ON ACCOUNT OF THE GOVERNMENT'S CLAIM AGAINST YOU IN THE AMOUNT OF $3,150 FOR THE USE AND OCCUPANCY OF SUCH LANDS FROM MARCH 1958 TO MARCH 1959.

THE RECORD SHOWS THAT THE GOVERNMENT ACQUIRED TITLE TO THE SUBJECT LANDS ON MAY 10, 1957, BY A DECLARATION OF TAKING FILED IN CONNECTION WITH THE TUTTLE CREEK DAM AND RESERVOIR PROJECT AND ACQUIRED RIGHT TO POSSESSION ON MARCH 2, 1958. PRIOR TO THAT TIME YOU OCCUPIED THE LANDS AS A TENANT ON A SHARE-PROFIT BASIS WITH MR. K. C. HAWKINSON, THE NON RESIDENT, FORMER OWNER. AS TENANT IN OCCUPANCY YOU EXECUTED A BID FOR LEASE OF THE TRACTS FOR ONE YEAR'S OCCUPANCY IN THE AMOUNT OF $2,500. THIS BID WAS REJECTED BY THE CORPS OF ENGINEERS AND YOUR DEPOSIT RETURNED. A NEW RENTAL APPRAISAL DETERMINED THE FAIR RENTAL VALUE OF THESE TRACTS TO BE $3,150 FOR ONE YEAR'S OCCUPANCY. YOU WERE NOTIFIED OF THE NEW RENTAL FIGURE, BUT REFUSED TO EXECUTE A NEW LEASE ON THE BASIS OF THE REVISED RENTAL VALUE. ALTHOUGH BILLED ON SEVERAL OCCASIONS FOR PAYMENT OF THE QUARTERLY RENTALS DUE ON THE BASIS OF THE NEW RENTAL FIGURE, YOU REFUSED TO MAKE ANY PAYMENT, REFUSED TO EXECUTE ANY LEASE, AND CONTINUED TO CONDUCT YOUR FARMING OPERATIONS ON THE TWO TRACTS UNTIL EARLY IN MARCH OF 1959 AT WHICH TIME YOU MOVED.

ON JANUARY 27, 1960, YOU APPLIED FOR RESETTLEMENT REIMBURSEMENT, CLAIMING $2,119.31. THE DEPARTMENT OF THE ARMY FOUND $1,138.66 TO BE DUE YOU. BECAUSE OF THE PRE-EXISTING DEBT, THE MATTER WAS REFERRED HERE.

YOU CONTEND THAT THE GOVERNMENT HAD NO RIGHT TO OFFSET ONE DEBT AGAINST THE OTHER WITHOUT AFFORDING YOU A JURY TRIAL WHICH YOU URGE IS GUARANTEED UNDER ARTICLE VII OF THE AMENDMENTS TO THE CONSTITUTION. YOU POINT OUT THAT YOU NEVER SIGNED ANYTHING AGREEING TO PAY $3,150 IN RENT. YOU CLAIM THAT RENTAL FIGURE IS TOO HIGH AND CONTEND THAT THE AMOUNT OF RENT TO BE PAID IS FOR JUDICIAL DETERMINATION. FINALLY, YOU DEMAND FULL PAYMENT OF THE ORIGINAL AMOUNT CLAIMED FOR MOVING EXPENSES PLUS 7 PERCENT INTEREST FROM FEBRUARY 13, 1959.

WITH RESPECT TO THE LEGALITY OF THE WITHHOLDING ACTION TAKEN BY THIS OFFICE, YOU ARE ADVISED THAT UNDER THE PROVISIONS OF SECTION 236 OF THE REVISED STATUTES, AND AMENDMENT THERETO--- SECTION 305 OF THE BUDGET AND ACCOUNTING ACT OF JUNE 10, 1921 (31 U.S.C. 71/--- IT HAS BEEN HELD TO BE THE DUTY OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT, IN ANY CASE WHERE A PARTY APPEARS AS BOTH DEBTOR AND CREDITOR TO THE UNITED STATES IN ANY FORM TO ALLOW FOR PAYMENT ONLY THE NET BALANCE DUE. MCKNIGHT V. UNITED STATES, 13 CT.CL. 306, AFFIRMED 98 U.S. 170. TAGGART V. UNITED STATES, 17 CT.CL. 332; O-LEARY V. UNITED STATES, 82 CT.CL. 305. OUR RIGHT OF SETOFF IS GROUNDED IN THE COMMON-LAW RIGHT OF EVERY CREDITOR TO APPLY THE MONEYS OF HIS DEBTOR IN HIS HANDS TO THE EXTINGUISHMENT OF DEBTS DUE HIM FROM THE DEBTOR. GRATIOT V. UNITED STATES, 40 U.S. 336; BARRY V. UNITED STATES, 229 U.S. 47. FURTHERMORE, ARTICLE VII OF THE AMENDMENTS TO THE CONSTITUTION, WHICH GUARANTEES TRIAL BY JURY, HAS NO APPLICATION, IN ITS OWN FORCE, IN ACTIONS AGAINST THE UNITED STATES. THIS IS BECAUSE JURY TRIALS ARE NOT A MATTER OF RIGHT FOR PERSONS ASSERTING CLAIMS AGAINST THE SOVEREIGN. BURKE V. UNITED STATES, 85 F.SUPP. 93, AFFIRMED 176 F.2D 438.

SECTION 401 (B) OF THE ACT OF JULY 14, 1952, AS AMENDED, 66 STAT. 606, 624; 69 STAT. 352; 73 STAT. 589, AUTHORIZES THE MILITARY DEPARTMENTS "TO THE EXTENT ADMINISTRATIVELY DETERMINED BY EACH TO BE FAIR AND REASONABLE" TO REIMBURSE THE OWNERS AND TENANTS OF LAND TO BE ACQUIRED FOR ANY PUBLIC WORKS PROJECT OF THE MILITARY DEPARTMENT CONCERNED FOR EXPENSES AND OTHER LOSSES AND DAMAGES INCURRED BY SUCH OWNERS AND TENANTS IN THE PROCESS AND AS A DIRECT RESULT OF THE MOVING OF THEMSELVES AND THEIR FAMILIES AND POSSESSIONS BECAUSE OF SUCH ACQUISITION OF LAND.

INASMUCH AS THIS STATUTE ONLY AUTHORIZES SO MUCH REIMBURSEMENT AS IS ADMINISTRATIVELY DETERMINED TO BE FAIR AND REASONABLE, WE ARE WITHOUT AUTHORITY TO QUESTION SUCH AN ADMINISTRATIVE DETERMINATION. FURTHER, WITH RESPECT TO YOUR CLAIM FOR INTEREST, PLEASE BE ADVISED THAT IT IS A SETTLED PRINCIPLE OF LAW THAT THE UNITED STATES IS NOT LIABLE FOR THE PAYMENT OF INTEREST ON UNPAID ACCOUNTS OR CLAIMS UNLESS A STATUTE OR A CONTRACT SPECIFICALLY SO PROVIDES. SEE UNITED STATES V. N.Y. RAYON CO., 329 U.S. 654; AND FEENER TECHNICAL SCHOOLS, INC. V. UNITED STATES, 136 CT.CL. 94.

REGARDING YOUR DEBT TO THE UNITED STATES, YOU ARE LIABLE FOR THE PAYMENT OF RENT FOR THE USE AND OCCUPANCY OF THE SUBJECT LAND UNDER THE STATUTES OF THE STATE OF KANSAS. GS 67-520 PROVIDES THAT THE OCCUPANT WITHOUT SPECIAL CONTRACT OF ANY LANDS SHALL BE LIABLE FOR THE RENT TO ANY PERSON ENTITLED THERETO. UNDER SUCH STATUTE YOU ARE LIABLE FOR THE RENT IN THE ABSENCE OF AGREEMENT AND IRRESPECTIVE OF WHETHER YOU OCCUPIED THE LAND AS A TENANT AT SUFFERANCE OR AS A TENANT AT WILL. SORENSEN V. HENDRY, 69 P. 2D 1114; MARTIN V. ALLEN, 74 P. 249; BENTON V. BEAKEY, 81 P. 196; COLONIAL AND UNITED STATES MORTGAGE CO. V. ELSEA, 116 P. 249. THE AMOUNT OF THE RENT DUE FROM YOU CLEARLY EXCEEDS THE AMOUNT ALLOWED BY THE DEPARTMENT OF THE ARMY ON YOUR RESETTLEMENT CLAIM.

ACCORDINGLY, UPON REVIEW, OUR ACTION OF MAY 24, 1961, IS SUSTAINED. THE BALANCE OF THE DEBT YOU STILL OWE TO THE UNITED STATES FOR THE USE AND OCCUPATION OF THE LANDS IN QUESTION IS BEING GIVEN FURTHER CONSIDERATION AND YOU WILL BE NOTIFIED AT A LATER DATE.