B-154102, JUN. 16, 1964

B-154102: Jun 16, 1964

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YOUR CLAIM FOR DAMAGES WAS CONSIDERED BY THE DEPARTMENT OF THE NAVY UNDER THE PROVISIONS OF 10 U.S.C. 2733. WAS PRESENTED TO THE CONGRESS ON MARCH 28. Z -2236474 WAS ISSUED UNDER DATE OF JUNE 5. THE AMOUNT WHICH WAS AGREED UPON BY FOOD FAIR STORES AS FULL SATISFACTION AND FINAL SETTLEMENT OF THE CLAIM. THE DATE PAYMENT WAS RECEIVED. FOOD FAIR STORES ALLEGES THAT IT IS ENTITLED TO INTEREST ON THE AGREED AMOUNT BECAUSE OF THE LENGTH OF TIME WHICH ELAPSED BETWEEN THE DATE OF THE ACCIDENT AND THE DATE PAYMENT OF THE AGREED AMOUNT WAS MADE BY THE GOVERNMENT. IT IS WELL-SETTLED THAT THE PAYMENT OF INTEREST BY THE UNITED STATES ON ITS UNPAID ACCOUNTS OR CLAIMS MAY NOT BE MADE EXCEPT WHERE INTEREST IS SPECIFICALLY STIPULATED BY CONTRACT OR DIRECTED BY STATUTE.

B-154102, JUN. 16, 1964

TO FOOD FAIR STORES:

YOUR LETTER OF APRIL 27, 1964, SIGNED BY MR. PENNARTZ, PRESENTS A CLAIM FOR INTEREST IN THE AMOUNT OF $6,469.58 ON A SETTLEMENT PAID TO YOUR COMPANY BY OUR CERTIFICATE OF SETTLEMENT NO. Z-2236474 DATED JUNE 5, 1963.

THE RECORD BEFORE OUR OFFICE INDICATES THAT ON AUGUST 27, 1961, A NAVAL AIRCRAFT CRASHED INTO THE BARGAIN CITY DEPARTMENT STORE IN HORSHAM, PENNSYLVANIA, WHEREIN FOOD FAIR STORES, INC., OPERATES A RETAIL FOOD STORE. THE CRASH CAUSED DAMAGE TO MERCHANDISE AND FIXTURES AND LOSSES DUE TO INTERRUPTION OF BUSINESS. YOUR CLAIM FOR DAMAGES WAS CONSIDERED BY THE DEPARTMENT OF THE NAVY UNDER THE PROVISIONS OF 10 U.S.C. 2733, AND FOOD FAIR STORES, INC., AGREED TO ACCEPT THE AMOUNT OF $72,214.68 IN FULL SATISFACTION AND FINAL SETTLEMENT OF THE CLAIM. PURSUANT TO THE CITED STATUTE, THE DEPARTMENT OF THE NAVY ON APRIL 23, 1962, CERTIFIED THAT AMOUNT TO THE BUREAU OF THE BUDGET FOR SUBMISSION TO THE CONGRESS FOR AN APPROPRIATION. YOUR CLAIM, WITH OTHERS, WAS PRESENTED TO THE CONGRESS ON MARCH 28, 1963 (SEE HOUSE OF REPRESENTATIVES DOCUMENT NO. 90, 88TH CONGRESS, 1ST SESSION). TITLE III OF THE SUPPLEMENTAL APPROPRIATION ACT, 1963, APPROVED MAY 17, 1963, PUB. L. 88-25, 77 STAT. 43, APPROPRIATED MONEY "FOR PAYMENT OF CLAIMS AS SETTLED AND DETERMINED BY DEPARTMENTS AND AGENCIES IN ACCORD WITH LAW AND JUDGMENTS RENDERED AGAINST THE UNITED STATES BY THE UNITED STATES COURT OF CLAIMS AND UNITED STATES DISTRICT COURTS, AS SET FORTH IN * * * HOUSE DOCUMENT NUMBERED 90, EIGHTY-EIGHTH CONGRESS, * * * TOGETHER WITH SUCH AMOUNTS AS MAY BE NECESSARY TO PAY INTEREST (AS AND WHEN SPECIFIED IN SUCH JUDGMENTS OR PROVIDED BY LAW) * *

IN ACCORDANCE WITH THIS APPROPRIATION OUR CERTIFICATE OF SETTLEMENT NO. Z -2236474 WAS ISSUED UNDER DATE OF JUNE 5, 1963, IN THE AMOUNT OF $72,214.68, THE AMOUNT WHICH WAS AGREED UPON BY FOOD FAIR STORES AS FULL SATISFACTION AND FINAL SETTLEMENT OF THE CLAIM, CERTIFIED BY THE DEPARTMENT OF THE NAVY, AND SET FORTH IN HOUSE DOCUMENT NUMBERED 90. HOWEVER, FOOD FAIR STORES IN NOW CLAIMING $6,469.58 REPRESENTING INTEREST AT 5 PERCENT ON THE AGREED AMOUNT OF $72,214.68 FOR THE PERIOD FROM AUGUST 27, 1961, THE DATE OF THE DAMAGE, TO JUNE 12, 1963, THE DATE PAYMENT WAS RECEIVED. FOOD FAIR STORES ALLEGES THAT IT IS ENTITLED TO INTEREST ON THE AGREED AMOUNT BECAUSE OF THE LENGTH OF TIME WHICH ELAPSED BETWEEN THE DATE OF THE ACCIDENT AND THE DATE PAYMENT OF THE AGREED AMOUNT WAS MADE BY THE GOVERNMENT.

IT IS WELL-SETTLED THAT THE PAYMENT OF INTEREST BY THE UNITED STATES ON ITS UNPAID ACCOUNTS OR CLAIMS MAY NOT BE MADE EXCEPT WHERE INTEREST IS SPECIFICALLY STIPULATED BY CONTRACT OR DIRECTED BY STATUTE, EVEN THOUGH THERE HAS BEEN DEFAULT IN THE PAYMENT OF THE PRINCIPAL AMOUNT. IN THE CASE OF UNITED STATES V. NORTH CAROLINA, 136 U.S. 211, THE SUPREME COURT OF THE UNITED STATES STATED ON PAGE 216:

"INTEREST, WHEN NOT STIPULATED FOR BY CONTRACT, OR AUTHORIZED BY STATUTE, IS ALLOWED BY THE COURTS AS DAMAGES FOR THE DETENTION OF MONEY OR OF PROPERTY, OR OF COMPENSATION, TO WHICH THE PLAINTIFF IS ENTITLED; AND, AS HAS BEEN SETTLED ON GROUNDS OF PUBLIC CONVENIENCE, IS NOT TO BE AWARDED AGAINST A SOVEREIGN GOVERNMENT, UNLESS ITS CONSENT TO PAY INTEREST HAS BEEN MANIFESTED BY AN ACT OF ITS LEGISLATURE, OR BY A LAWFUL CONTRACT OF ITS EXECUTIVE OFFICERS.'

ALSO, THE SAME COURT STATED, IN ANGARICA V. BAYARD, 127 U.S. 251, AT PAGE 260:

"* * * THE UNITED STATES ARE NOT LIABLE TO PAY INTEREST ON CLAIMS AGAINST THEM, IN THE ABSENCE OF EXPRESS STATUTORY PROVISION TO THAT EFFECT. HAS BEEN ESTABLISHED, AS A GENERAL RULE, IN THE PRACTICE OF THE GOVERNMENT, THAT INTEREST IS NOT ALLOWED ON CLAIMS AGAINST IT, WHETHER SUCH CLAIMS ORIGINATE IN CONTRACT OR IN TORT, AND WHETHER THEY ARISE IN THE ORDINARY BUSINESS OF ADMINISTRATION OR UNDER PRIVATE ACTS OF RELIEF, PASSED BY CONGRESS ON SPECIAL APPLICATION. THE ONLY RECOGNIZED EXCEPTIONS ARE, WHERE THE GOVERNMENT STIPULATES TO PAY INTEREST AND WHERE INTEREST IS GIVEN EXPRESSLY BY AN ACT OF CONGRESS, EITHER BY THE NAME OF INTEREST OR BY THAT OF DAMAGES.

"NOT ONLY IS THIS THE GENERAL PRINCIPLE AND SETTLED RULE OF THE EXECUTIVE DEPARTMENT OF THE GOVERNMENT, BUT IT HAS BEEN THE RULE OF THE LEGISLATIVE DEPARTMENT, BECAUSE CONGRESS, THOUGH WELL KNOWING THE RULE OBSERVED AT THE TREASURY, AND FREQUENTLY INVITED TO CHANGE IT, HAS REFUSED TO PASS ANY GENERAL LAW FOR THE ALLOWANCE AND PAYMENT OF INTEREST ON CLAIMS AGAINST THE GOVERNMENT. * * *"

SEE ALSO, UNITED STATES V. NEW YORK RAYON IMPORTING CO., 329 U.S. 654; UNITED STATES V. HOTEL CO., 329 U.S. 585; SMYTH V. UNITED STATES, 302 U.S. 329; SEABOARD AIRLINE RY.CO. V. UNITED STATES, 261 U.S. 299; UNITED STATES V. NORTH AMERICAN TRANSPORTATION AND TRADING CO., 253 U.S. 330; AND TILLSON V. UNITED STATES, 100 U.S. 43.

SO RIGOROUSLY IS THIS RULE APPLIED THAT IN THE ADJUSTMENT OF MUTUAL CLAIMS BETWEEN AN INDIVIDUAL AND THE GOVERNMENT THE LATTER HAS BEEN HELD ENTITLED TO INTEREST ON ITS CREDITS ALTHOUGH RELIEVED FROM THE PAYMENT OF INTEREST ON THE CHARGES AGAINST IT. UNITED STATES V. VERDIER, 164 U.S. 213, 218-219, AND UNITED STATES V. NORTH AMERICAN TRANSPORTATION AND TRADING ., SUPRA.

THERE IS NO CONTRACT PROVIDING FOR THE PAYMENT OF INTEREST BY THE GOVERNMENT IN THIS CASE. LIKEWISE, THERE IS NO STATUTE HERE APPLICABLE SO PROVIDING. OBVIOUSLY, THE PROVISIONS IN TITLE III OF THE SUPPLEMENTAL APPROPRIATION ACT, 1963, SUPRA, APPROPRIATING FUNDS TO PAY YOUR CLAIM AND OTHERS "TOGETHER WITH SUCH AMOUNTS AS MAY BE NECESSARY TO PAY INTEREST (AS AND WHEN SPECIFIED IN SUCH JUDGMENTS OR PROVIDED BY LAW)" CONTEMPLATED INTEREST PROVIDED BY OTHER STATUTES AND DOES NOT OF ITSELF AUTHORIZE INTEREST PAYMENTS.

IN VIEW OF THE ABOVE, WE HAVE NO ALTERNATIVE BUT TO DISALLOW YOUR CLAIM FOR INTEREST.