B-153527, SEP. 30, 1964

B-153527: Sep 30, 1964

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THAT IS. THAT YOU WERE AUTHORIZED BY THE GOVERNMENT TO DIVERT A STATED AMOUNT OF GRAIN. YOU WILL SUFFER A LOSS BECAUSE OF THE DIVERSION WITHOUT REIMBURSEMENT BY THE GOVERNMENT OF A QUANTITY OF GRAIN WHICH YOU OTHERWISE COULD HAVE SOLD AT A HIGHER PRICE. THE AUTHORIZATION TO DIVERT IN THIS CASE WAS ERRONEOUS SINCE. YOU ACTUALLY DIVERTED AND WERE PAID FOR MORE SEED THAN COULD PROPERLY BE AUTHORIZED UNDER THE PERTINENT REGULATIONS. AS YOU WERE PREVIOUSLY ADVISED. IT IS A WELL-ESTABLISHED RULE OF LAW THAT THE UNITED STATES CANNOT BE BOUND OR ESTOPPED BY AN ERRONEOUS PAYMENT MADE THROUGH ADMINISTRATIVE ERROR BY ITS OFFICERS OR AGENTS AND THAT PARTIES RECEIVING SUCH ERRONEOUS PAYMENTS ACQUIRE NO RIGHT TO THEM BUT ARE LIABLE IN EQUITY AND GOOD CONSCIENCE TO REFUND THEM.

B-153527, SEP. 30, 1964

TO NC PLUS HYBRIDS:

YOUR LETTER OF AUGUST 4, 1964, CONCERNING THE ABOVE-CAPTIONED MATTER, HAS BEEN RECEIVED. WE DID NOT REPLY THERETO EARLIER INASMUCH AS WE EXPECTED TO RECEIVE FROM YOU OR YOUR ATTORNEY EVIDENCE SUPPORTING YOUR ALLEGED MONETARY LOSS WHICH YOUR ATTORNEY'S LETTER OF AUGUST 3 STATED WOULD BE FORTHCOMING.

YOUR LETTER MERELY REITERATES ARGUMENTS PREVIOUSLY PRESENTED, THAT IS, THAT YOU WERE AUTHORIZED BY THE GOVERNMENT TO DIVERT A STATED AMOUNT OF GRAIN; THAT YOU IN FACT DIVERTED LESS THAN THE AMOUNT AUTHORIZED; THAT IF YOU COMPLY WITH THE GOVERNMENT'S REQUEST FOR REFUND, YOU WILL SUFFER A LOSS BECAUSE OF THE DIVERSION WITHOUT REIMBURSEMENT BY THE GOVERNMENT OF A QUANTITY OF GRAIN WHICH YOU OTHERWISE COULD HAVE SOLD AT A HIGHER PRICE.

THE AUTHORIZATION TO DIVERT IN THIS CASE WAS ERRONEOUS SINCE, BY REASON OF A MISTAKE IN COMPUTATION, IT PURPORTED TO AUTHORIZE THE DIVERSION OF AND PAYMENT FOR MORE SEED THAN THE REGULATIONS PERMITTED. THUS, WHILE YOU DIVERTED LESS SEED THAN THE AUTHORIZATION PURPORTED TO ALLOW, YOU ACTUALLY DIVERTED AND WERE PAID FOR MORE SEED THAN COULD PROPERLY BE AUTHORIZED UNDER THE PERTINENT REGULATIONS. THE AMOUNT PAID FOR THE EXCESS DIVERSION CONSTITUTES AN ERRONEOUS PAYMENT MADE THROUGH ADMINISTRATIVE ERROR BY AN EMPLOYEE OR AGENT OF THE UNITED STATES.

AS YOU WERE PREVIOUSLY ADVISED, IT IS A WELL-ESTABLISHED RULE OF LAW THAT THE UNITED STATES CANNOT BE BOUND OR ESTOPPED BY AN ERRONEOUS PAYMENT MADE THROUGH ADMINISTRATIVE ERROR BY ITS OFFICERS OR AGENTS AND THAT PARTIES RECEIVING SUCH ERRONEOUS PAYMENTS ACQUIRE NO RIGHT TO THEM BUT ARE LIABLE IN EQUITY AND GOOD CONSCIENCE TO REFUND THEM. HENCE THE DEBT IS VALID AND, IN THE ABSENCE OF EXTENUATING CIRCUMSTANCES WHICH WOULD WARRANT EXCUSE OF REPAYMENT BY YOU, MUST BE PAID.

THE ONLY EXTENUATING CIRCUMSTANCE WHICH HAS BEEN MENTIONED IN CONNECTION WITH THIS DEBT IS YOUR ALLEGATION THAT, BECAUSE OF THE ERRONEOUS AUTHORIZATION, YOU DIVERTED AND DESTROYED SEED WHICH YOU OTHERWISE COULD HAVE SOLD AS SEED AT A HIGHER PRICE AND, HENCE, THAT YOU SUFFERED A LOSS BY REASON OF THE GOVERNMENT'S ERROR. I BELIEVE YOU WILL AGREE THAT WE CANNOT ACCEPT YOUR UNSUPPORTED ALLEGATION--- A SELF-SERVING DECLARATION--- AS PROOF OF YOUR STATEMENT.

THE PURPOSE OF THE HYBRID CORN AND GRAIN SORGHUM SEED DIVERSION PROGRAM CMD-137A (UNDER WHICH THE DIVERSION AND PAYMENT HERE INVOLVED WERE ACCOMPLISHED) WAS EXPRESSED IN PARAGRAPH 2 OF AGRICULTURAL STABILIZATION AND CONSERVATION SERVICE NOTICE GR-759 DATED MARCH 19, 1962, AS FOLLOWS:

"* * * THE PURPOSE OF THE PROGRAM IS TO LESSEN THE ADVERSE ECONOMIC SITUATION FOR HYBRID SEED PRODUCER-PROCESSORS CAUSED BY THE LATE DEVELOPMENT OF THE 1961 FEED GRAIN PROGRAM.'

IT IS OUR UNDERSTANDING THAT AT THE TIME THIS DIVERSION PROGRAM WAS INSTITUTED PRODUCER-PROCESSORS OF HYBRID SEED--- SUCH AS YOUR ASSOCIATION- -- HAD ON HAND LARGE QUANTITIES OF SEED WHICH COULD NOT BE SOLD AS SEED BECAUSE OF DEPARTMENT OF AGRICULTURE LIMITATIONS ON THE ACREAGE WHICH COULD BE PLANTED. THE PROGRAM WAS INTENDED TO LESSEN THE LOSS TO THE AFFECTED PRODUCER-PROCESSORS BY PAYING THEM A STATED AMOUNT FOR STIPULATED QUANTITIES OF SUCH SEED WHICH WERE RENDERED UNFIT FOR USE AS SEED AND THEN SOLD FOR OTHER LESS REMUNERATIVE PURPOSES, SUCH AS FEED. IT IS OUR THOUGHT THAT SUCH PRODUCER PROCESSORS SOLD AS SEED ALL THE SEED THAT COULD BE SO SOLD, AND PUT INTO THE DIVERSION PROGRAM ONLY THAT SEED FOR WHICH THERE WAS NO MARKET AS SEED AND WHICH WOULD OF NECESSITY HAVE BEEN SOLD AS FEED OR FOR SOME OTHER LOWER PRICED PURPOSE REGARDLESS OF THE EXISTENCE OF THE DIVERSION PROGRAM. THIS THOUGHT WOULD APPEAR TO BE SUPPORTED BY YOUR LETTER OF NOVEMBER 26, 1962, WHEREIN YOU INDICATE THAT YOU DID NOT DIVERT THE FULL AMOUNT AUTHORIZED AND STATE AS THE REASON THEREFOR THAT:

"* * * WE DID NOT DIVERT THE MAXIMUM BECAUSE WE HAD SOME SEED THAT WE FELT COULD BE MOVED THIS COMING SEASON AS SEED WITHOUT FURTHER LOSS TO THE GOVERNMENT AS WELL AS TO OURSELVES.'

CLEARLY, IF THIS THOUGHT IS CORRECT, YOU WERE NOT IN ANY WAY INJURED BY DIVERTING MORE THAN THE PROPER AMOUNT OF SEED, NOR WERE YOU ACTUALLY INDUCED BY THE ERRONEOUS PROGRAM AUTHORIZATION TO DIVERT SEED WHICH YOU COULD OTHERWISE HAVE SOLD FOR A HIGHER PRICE.

YOU HAVE ALREADY HAD A CONSIDERABLE PERIOD OF TIME IN WHICH TO FURNISH EVIDENCE SUPPORTING YOUR ALLEGATION OF LOSS OCCASIONED BY THE ERRONEOUS DIVERSION AUTHORIZATION. HOWEVER, INASMUCH AS IT MAY BE THAT YOU DID NOT UNDERSTAND THE NECESSITY FOR FURNISHING SUCH EVIDENCE, AND IN RECOGNITION OF THE DIFFICULTY WHICH MAY BE ENCOUNTERED IN ASSEMBLING ADEQUATE EVIDENCE, WE WILL REFRAIN FROM FURTHER COLLECTION ACTION HEREIN FOR A PERIOD OF 30 DAYS FROM THE DATE OF THIS LETTER. IF SATISFACTORY EVIDENCE IS NOT RECEIVED BY THAT TIME, WE WILL HAVE NO ALTERNATIVE BUT TO REFER THE MATTER TO THE DEPARTMENT OF JUSTICE FOR INSTITUTION OF SUIT.