B-161219, MAY 12, 1967, 46 COMP. GEN. 801

B-161219: May 12, 1967

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THE CARRIER IS NOT BARRED FROM QUESTIONING IN COURT OR OTHERWISE THE PROPRIETY OF THE DEDUCTION. CLAIM FOR REFUND IN THE COURTS IS GOVERNED BY THE 6-YEAR STATUTE. ATTACHED TO THE SUPPLEMENTAL BILL IS COPY OF A LETTER DATED SEPTEMBER 13. WAS CAUSED BY THE CLAIMANT'S FURNISHING AN INCORRECT CARRIER'S BILL NUMBER WITH RESULTING DIFFICULTY IN ASSOCIATING THE CLAIM WITH THE PERTINENT FILE. 31 U.S.C. 951 NOTE? (2) DOES THE LAPSE OF MORE THAN 3 YEARS FROM THE DATE THE DEDUCTION WAS MADE BEFORE RECEIPT IN THE GENERAL ACCOUNTING OFFICE OF THE CLAIM FOR REFUND OF A PORTION OF THE AMOUNT DEDUCTED RESULT IN THE BARRING OF SUCH CLAIM UNDER 49 U.S.C. 66? CONTENTIONS THAT A UNILATERAL DEDUCTION BY A GOVERNMENT OFFICIAL EFFECTS PAYMENT OF THE GOVERNMENT'S LOSS AND DAMAGE CLAIM AND THUS FINALLY LIQUIDATES SUCH CLAIM HAVE ON SEVERAL OCCASIONS BEEN REJECTED BY THE COURTS.

B-161219, MAY 12, 1967, 46 COMP. GEN. 801

COMPROMISES - DAMAGE AND LOSS CLAIMS - WITHHOLDING FROM CARRIER ACCOUNTS AN ADMINISTRATIVE DEDUCTION FROM AMOUNTS PAYABLE TO A CARRIER OF THE FULL AMOUNT CLAIMED BY THE GOVERNMENT FOR LOSS OF OR DAMAGE TO A SHIPMENT DOES NOT PRECLUDE THE LATER COMPROMISE OF THE CLAIM UNDER THE FEDERAL CLAIMS COLLECTION ACT OF 1966, THE UNILATERAL ADMINISTRATIVE ACTION NOT CONSTITUTING PAYMENT OF THE LOSS OR DAMAGE CLAIM, THE CARRIER IS NOT BARRED FROM QUESTIONING IN COURT OR OTHERWISE THE PROPRIETY OF THE DEDUCTION. THEREFORE, AN OFFER BY A CARRIER TO ASSUME PARTIAL RESPONSIBILITY FOR A LOSS AND DAMAGE CLAIM BY THE GOVERNMENT MAY BE ACCEPTED AND THE SUPPLEMENTAL BILL OF THE CARRIER TO RECOVER A PORTION OF THE AMOUNT ADMINISTRATIVELY WITHHELD MAY BE PAID. STATUTES OF LIMITATION - CLAIMS - TRANSPORTATION - SET-OFF RECLAIMS THE FACT THAT A CARRIER WAITED MORE THAN 3 YEARS FROM THE DATE OF AN ADMINISTRATIVE DEDUCTION OF A LOSS AND DAMAGE CLAIM FROM AMOUNTS PAYABLE TO PRESENT TO THE GENERAL ACCOUNTING OFFICE (GAO) AN OFFER IN COMPROMISE AND A SUPPLEMENTAL BILL FOR PARTIAL REFUND OF THE AMOUNT DEDUCTED, DOES NOT BAR THE RECLAIM, 49 U.S.C. 66 PRECLUDING ALLOWANCE OF A REFUND CLAIM BY GAO UNLESS FILED WITHIN 3 YEARS OF THE DEDUCTION APPLYING TO A WITHHOLDING FROM CARRIER ACCOUNTS TO RECOVER TRANSPORTATION OVERCHARGES, AND THE WITHHOLDING MADE UNDER THE GOVERNMENT'S COMMON LAW RIGHT OF SET- OFF, CLAIM FOR REFUND IN THE COURTS IS GOVERNED BY THE 6-YEAR STATUTE, 28 U.S.C. 2401 AND 2501, AND A CLAIM FILED WITH GAO BY THE 10-YEAR STATUTE, 31 U.S.C. 71A.

ASSISTANT COMPTROLLER GENERAL WEITZEL, MAY 12, 1967:

THE READING COMPANY, PHILADELPHIA, PENNSYLVANIA, BY ITS SUPPLEMENTAL BILL NO. 77902-A, DATED APRIL 18, 1966, RECEIVED IN THE GENERAL ACCOUNTING OFFICE ON AUGUST 3, 1966, BY REFERENCE FROM THE GENERAL SERVICES ADMINISTRATION, RECLAIMS $356.12, REPRESENTING PART OF $775.67 ADMINISTRATIVELY WITHHELD FROM THE CARRIER'S BILL NO. 77969 TO RECOVER THE AMOUNT OF A LOSS AND DAMAGE CLAIM BY THE GOVERNMENT AGAINST THE CARRIER RESULTING FROM A SHORTAGE OF EIGHT BALES AND DAMAGE TO ONE BALE OF CORDAGE FIBER FROM TWO SHIPMENTS DURING APRIL 1960 UNDER GOVERNMENT BILLS OF LADING NOS. A-9529974 AND A-9529975.

ATTACHED TO THE SUPPLEMENTAL BILL IS COPY OF A LETTER DATED SEPTEMBER 13, 1962, FROM THE READING COMPANY TO GENERAL SERVICES ADMINISTRATION FROM WHICH IT APPEARS THAT THE AMOUNT RECLAIMED REPRESENTS AN OFFER TO COMPROMISE THE GOVERNMENT'S CLAIM FOR THE EIGHT BALE SHORTAGE ON A 50 PERCENT BASIS. IT APPEARS THE DELAY IN PROCESSING THE OFFER IN COMPROMISE, AT LEAST IN PART, WAS CAUSED BY THE CLAIMANT'S FURNISHING AN INCORRECT CARRIER'S BILL NUMBER WITH RESULTING DIFFICULTY IN ASSOCIATING THE CLAIM WITH THE PERTINENT FILE.

THE CARRIER'S CLAIM POSES TWO GENERAL LEGAL QUESTIONS WHICH MAY BE STATED AS FOLLOWS:

(1) DOES THE ADMINISTRATIVE DEDUCTION, FROM AMOUNTS OTHERWISE PAYABLE TO A CARRIER, OF THE FULL AMOUNT OF A CLAIM BY THE GOVERNMENT FOR LOSS OR DAMAGE PRECLUDE LATER COMPROMISE OF SUCH CLAIM UNDER THE FEDERAL CLAIMS COLLECTION ACT OF 1966, APPROVED JULY 19, 1966, PUBLIC LAW 89-508, 80 STAT. 308, 31 U.S.C. 951 NOTE?

(2) DOES THE LAPSE OF MORE THAN 3 YEARS FROM THE DATE THE DEDUCTION WAS MADE BEFORE RECEIPT IN THE GENERAL ACCOUNTING OFFICE OF THE CLAIM FOR REFUND OF A PORTION OF THE AMOUNT DEDUCTED RESULT IN THE BARRING OF SUCH CLAIM UNDER 49 U.S.C. 66?

THESE GENERAL QUESTIONS AFFECT NOT ONLY THE COMPROMISE AUTHORITY OF THE GENERAL ACCOUNTING OFFICE BUT ALSO THE SIMILAR AUTHORITY OF THE HEADS OF AGENCIES UNDER PUBLIC LAW 89-508, SUPRA.

CONTENTIONS THAT A UNILATERAL DEDUCTION BY A GOVERNMENT OFFICIAL EFFECTS PAYMENT OF THE GOVERNMENT'S LOSS AND DAMAGE CLAIM AND THUS FINALLY LIQUIDATES SUCH CLAIM HAVE ON SEVERAL OCCASIONS BEEN REJECTED BY THE COURTS. THUS IN GRACE LINE V. UNITED STATES, 255 F.2D 810, 813, WHERE THE WITHHOLDING WAS BY OUR OFFICE RATHER THAN THE ADMINISTRATIVE OFFICE INVOLVED, THE COURT STATED:

* * * THE FACT THAT THE COMPTROLLER GENERAL HAS DECIDED THE CLAIM IN FAVOR OF THE GOVERNMENT EX PARTE BY WITHHOLDING THE AMOUNT THEREOF FROM A PAYMENT JUSTLY DUE A CREDITOR OF THE UNITED STATES NEITHER CONSTITUTES A PAYMENT OF AND DISCHARGE OF THE DEBT NOR DOES IT STOP HE RUNNING OF THE APPLICABLE STATUTE OF LIMITATIONS AGAINST THE GOVERNMENT CLAIM IN ALLEGED SATISFACTION OF WHICH THE COMPTROLLER GENERAL TAKES THIS UNILATERAL ACTION.

ALSO, THE COURT ON PAGE 814 STATED,

THUS IT IS ABUNDANTLY CLEAR TO US, AND WE SO HOLD, THAT THE UNILATERAL WITHHOLDING AND APPLYING OF MONEY ALLEGEDLY DUE TO THE UNITED STATES ON A DISPUTED CLAIM AGAINST A CREDITOR DOES NOT CONSTITUTE PAYMENT OF THAT CREDITOR'S CLAIM AGAINST THE UNITED STATES. ALSO SEE CLIMATIC RAINWEAR CO. V. UNITED STATES, 115 CT. CL. 520, 88 F.SUPP. 415, 418, AND UNITED STATES V. ISTHMIAN S.S. O., 359 U.S. 314, 318.

WHILE THE SETTLEMENT ACTION OF THE GENERAL ACCOUNTING OFFICE ON A CLAIM UNDER 31 U.S.C. 71 IS GIVEN FINALITY AS TO THE EXECUTIVE BRANCH OF THE GOVERNMENT, NO ACTION BY OUR OFFICE OR OFFICIALS OF THE EXECUTIVE BRANCH CAN BAR THE RIGHT OF A CLAIMANT TO HAVE A COURT DETERMINE WHETHER IT IS ENTITLED TO RECOVER THE AMOUNT WITHHELD ALTHOUGH SUCH RIGHT MAY BE LOST BY FAILURE TO INVOKE IT WITHIN THE STATUTORY PERIOD OR SOME ACT OR OMISSION ON THE PART OF THE CLAIMANT WHICH DISCHARGES THE CAUSE OF ACTION. ST. LOUIS, B. AND M. RY. V. UNITED STATES, 268 U.S. 169, 174. SEE ALSO FLYING TIGER LINE, INC. V. UNITED STATES, 145 CT. CL. 1, 170 F.SUPP. 422, 426, WHERE THE COURT SAID,"ALTHOUGH THE GOVERNMENT CAN WITHHOLD MONEY, * * * SUCH UNILATERAL ACTION * * * IS SUBJECT TO JUDICIAL REVIEW * * *.'

SINCE THERE THUS SEEMS TO BE NO QUESTION BUT THAT THE ADMINISTRATIVE DEDUCTION DID NOT EFFECT PAYMENT OF THE GOVERNMENT'S CLAIM AND THE CARRIER HAD THE RIGHT TO QUESTION IN COURT OR OTHERWISE THE PROPRIETY OF THE DEDUCTION, IT IS OUR VIEW THAT THE LOSS AND DAMAGE CLAIM OF THE GOVERNMENT CONTINUED TO EXIST AND SUCH CLAIM MAY--- UNLESS OTHERWISE EXTINGUISHED--- BE COMPROMISED UNDER THE FEDERAL CLAIMS COLLECTION ACT OF 1966.

THE DEDUCTION ON ACCOUNT OF THE LOSS AND DAMAGE CLAIM WAS MADE IN APRIL 1962 AND ALTHOUGH BY ITS LETTER OF SEPTEMBER 13, 1962, TO THE GENERAL SERVICES ADMINISTRATION, THE CLAIMANT FIRST RECLAIMED 50 PERCENT OF THE AMOUNT DEDUCTED BECAUSE OF THE SHORTAGE, SUCH CLAIM WAS NOT FORWARDED HERE FOR SETTLEMENT UNTIL AUGUST 2, 1966. BUT THE WITHHOLDING WAS NOT TO RECOVER AN OVERCHARGE FOR TRANSPORTATION SERVICES AS TO WHICH 49 U.S.C. 66 PRECLUDES ALLOWANCE OF A CLAIM BY THE GENERAL ACCOUNTING OFFICE UNLESS CLAIM FOR REFUND IS FILED HERE WITHIN 3-YEARS OF THE DEDUCTION. THE WITHHOLDING WAS MADE UNDER GOVERNMENT'S COMMON LAW RIGHT OF SET-OFF, THE RIGHT WHICH BELONGS TO EVERY CREDITOR TO APPLY THE UNAPPROPRIATED MONEYS OF HIS DEBTOR IN HIS HANDS IN EXTINGUISHMENT OF THE DEBTS DUE HIM, UNITED STATES V. MUNSEY TRUST CO., 332 U.S. 234, 239, BUT THE PROPRIETY OF THE OFFSET MAY BE QUESTIONED IN THE COURTS OR OTHERWISE.

THE 3-YEAR LIMITATION IS NOT APPLICABLE TO THE PERIOD DURING WHICH SUCH ACTION MAY BE QUESTIONED, THE 6-YEAR STATUTE, 28 U.S.C. 2401 AND 2501, BEING FOR APPLICATION TO COURT ACTIONS AND THE 10-YEAR STATUTE, 31 U.S.C. 71A, BEING FOR APPLICATION AS TO SUCH A CLAIM FILED WITH OUR OFFICE. ACCORDINGLY, THE SECOND QUESTION IS ANSWERED IN THE NEGATIVE.

THE CARRIER'S OFFER TO ASSUME RESPONSIBILITY FOR ALL OF THE DAMAGE, $63.42, AND 50 PERCENT OF THE SHORTAGE, $356.13, CONSIDERING THE PRESENTLY AVAILABLE RECORD, APPEARS TO BE IN THE BEST INTEREST OF THE UNITED STATES, AND THE SUPPLEMENTAL BILL IS BEING FORWARDED TO OUR TRANSPORTATION DIVISION WITH INSTRUCTIONS TO ACCEPT THE OFFER IN COMPROMISE AND TO REFUND $356.12 REPRESENTING 50 PERCENT OF THE DEDUCTION BECAUSE OF THE SHORTAGE.