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B-154459, JUL. 26, 1965

B-154459 Jul 26, 1965
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ENCLOSED WITH THE GENERAL COUNSEL'S LETTER IS A COPY OF AN EXECUTED CONTRACT BETWEEN THE AEOLIAN-SKINNER ORGAN COMPANY (AEOLIAN). HE STATES THAT THE CONTRACT IS AN AGREEMENT BY FILENE TO PURCHASE FROM AEOLIAN AN ORGAN AS A GIFT TO THE CENTER WHEREBY THE FILENE FOUNDATION OR MEMBERS OF THE FILENE FAMILY WILL BE MEMORIALIZED. IT IS THE OPINION OF THE GENERAL COUNSEL THAT THIS CONTRACT CONSTITUTES AN INSTRUMENT ENFORCEABLE BY THE CENTER AGAINST THE BUILDER AND AGAINST FILENE FOR THE AGREED PAYMENT PRICE OF $116. IT IS ALSO HIS OPINION THAT THIS AMOUNT IS A GIFT TO THE CENTER WITHIN THE REQUIREMENTS OF THE JOHN F. AS FOLLOWS: "SEC. 8 THERE IS HEREBY AUTHORIZED TO BE APPROPRIATED TO THE BOARD FOR USE IN ACCORDANCE WITH THIS ACT.

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B-154459, JUL. 26, 1965

TO CHAIRMAN OF THE BOARD OF TRUSTEES, JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS:

LETTER DATED JUNE 23, 1965, FROM THE GENERAL COUNSEL, JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS (CENTER), CONCERNS THE CONVERSION OF PLEDGES INTO ASSETS FOR THE PURPOSE OF MATCHING THE FEDERAL APPROPRIATION CONTAINED IN PUBLIC LAW 88-356.

ENCLOSED WITH THE GENERAL COUNSEL'S LETTER IS A COPY OF AN EXECUTED CONTRACT BETWEEN THE AEOLIAN-SKINNER ORGAN COMPANY (AEOLIAN), THE FILENE FOUNDATION (FILENE), AND THE CENTER. HE STATES THAT THE CONTRACT IS AN AGREEMENT BY FILENE TO PURCHASE FROM AEOLIAN AN ORGAN AS A GIFT TO THE CENTER WHEREBY THE FILENE FOUNDATION OR MEMBERS OF THE FILENE FAMILY WILL BE MEMORIALIZED. THE PAYMENT PRICE AUTHORIZED BY THE AGREEMENT TOTALS $116,200 PLUS A GUARANTY OF AN ADDITIONAL $10,000, IF NECESSARY TO ADJUST TO INCREASES IN COSTS OF PRODUCTION.

IT IS THE OPINION OF THE GENERAL COUNSEL THAT THIS CONTRACT CONSTITUTES AN INSTRUMENT ENFORCEABLE BY THE CENTER AGAINST THE BUILDER AND AGAINST FILENE FOR THE AGREED PAYMENT PRICE OF $116,200. HE STATES THAT ACCORDINGLY, IT IS ALSO HIS OPINION THAT THIS AMOUNT IS A GIFT TO THE CENTER WITHIN THE REQUIREMENTS OF THE JOHN F. KENNEDY CENTER ACT, AS AMENDED, AND THAT SUCH AMOUNT QUALIFIES FOR APPLICATION TOWARD MATCHING THE FEDERAL APPROPRIATION AUTHORIZED BY THE ACT.

THE GENERAL COUNSEL ASKS WHETHER WE CONCUR IN HIS OPINION THAT THE CONTRACT INVOLVED HERE REPRESENTS AN ENFORCEABLE RIGHT IN THE VALUE OF $116,200 QUALIFYING FOR MATCHING PURPOSES.

THE JOHN F. KENNEDY CENTER ACT (FORMERLY THE NATIONAL CULTURAL CENTER ACT) 72 STAT. 1698, AS AMENDED BY PUB.L. 88-260, 78 STAT. 4, PROVIDES, IN PART, AS FOLLOWS:

"SEC. 8 THERE IS HEREBY AUTHORIZED TO BE APPROPRIATED TO THE BOARD FOR USE IN ACCORDANCE WITH THIS ACT, AMOUNTS WHICH IN THE AGGREGATE WILL EQUAL GIFTS, BEQUESTS, AND DEVISES OF MONEY, SECURITIES, AND OTHER PROPERTY, HELD BY THE BOARD UNDER THIS ACT, EXCEPT THAT NOT TO EXCEED $15,500,000 SHALL BE APPROPRIATED PURSUANT TO THIS SECTION.'

THE FOLLOWING EXPLANATION OF THE ABOVE PROVISION OF LAW APPEARS ON PAGES 3 AND 4 OF HOUSE REPORT NO. 1050, 88TH CONGRESS, 1ST SESSION:

"FOURTH: APPROPRIATIONS ARE AUTHORIZED TO BE MADE WHICH IN THE AGGREGATE WILL EQUAL GIFTS, BEQUESTS, AND DEVISES HELD BY THE BOARD. THESE APPROPRIATIONS ARE TO MATCH ON A DOLLAR-FOR-DOLLAR BASIS PRIVATE CONTRIBUTIONS AND FEDERAL EXPENDITURES FOR THIS PURPOSE ARE LIMITED TO $15,500,000. PLEDGES ARE NOT TO BE CONSIDERED AS HAVING BEEN RECEIVED OR HELD BY THE BOARD FOR PURPOSES OF MATCHING BY THE FEDERAL GOVERNMENT UNTIL SUCH TIME AS THOSE PLEDGES ARE REDUCED TO MONEY OR OTHER ASSETS ACTUALLY HELD BY THE BOARD.'

AS INDICATED IN THE GENERAL COUNSEL'S LETTER THE CONTRACT PROVIDES GENERALLY THAT IN CONSIDERATION OF THE SUM OF $116,200 TO BE PAID BY THE FILENE FOUNDATION (PURCHASER) AND THE PROMISES MADE THEREIN BY THE CENTER, THE AEOLIAN-SKINNER ORGAN COMPANY, INC. (BUILDER) WILL PLAN, CONSTRUCT, AND INSTALL AN ORGAN IN THE CENTER. THE CONTRACT FURTHER PROVIDES THAT THE CENTER WILL FURNISH TO THE BUILDER A METAL PLAQUE, IN FORM AND CONTENT SATISFACTORY TO THE PURCHASER, MEMORIALIZING THE GIFT OF THE ORGAN BY THE PURCHASER TO THE CENTER, THE PLAQUE TO BE AFFIXED TO THE ORGAN BY THE BUILDER, AND THAT THE CENTER WILL PERFORM CERTAIN ACTS TO ENABLE THE BUILDER TO INSTALL THE ORGAN. THUS, THERE IS CONSIDERATION FLOWING FROM THE CENTER TO BOTH THE BUILDER AND THE PURCHASER. HENCE, THE CENTER HAS AN ENFORCEABLE RIGHT UNDER THE CONTRACT AGAINST THE BUILDER OR THE PURCHASER, EVEN THOUGH THE ORGAN IS DESIGNATED AS A GIFT TO THE CENTER IN THE CONTRACT. CF. B-154459, JUNE 23, 1965.

AN ENFORCEABLE CONTRACT IS A "CHOSE IN ACTION.' GULF, C. AND S.F. RY. CO. V. CITIES SERVICE CO. (1921), 273 F. 946. SYLVANIA INDUSTRIAL CORPORATION V. LILIENFELD'S ESTATE ET AL. (1943), 132 F.2D 887. A "CHOSE IN ACTION" IS AN ASSET. MCCOOL V. OLD NAT. BANK IN EVANSVILLE (1938), 17 N.E. 2D 820; GOCHENOUR V. GEORGE AND FRANCIS BALL FOUNDATION (1940), 35 F.SUPP. 508.

ACCORDINGLY, IT IS OUR VIEW THAT THE CONTRACT INVOLVED HERE MAY BE CONSIDERED AN ASSET OF THE CENTER AND THE AMOUNT ($116,200) TO BE PAID THEREUNDER TO THE BUILDER FOR THE ORGAN MAY BE USED TO MATCH THE FEDERAL APPROPRIATION CONTAINED IN PUBLIC LAW 88-356.

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