B-168042, OCT. 22, 1969

B-168042: Oct 22, 1969

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WHILE LESSORS HAVE REFUSED REIMBURSEMENT. GOVERNMENT HAS RIGHT TO RECOVER FUNDS ITS AGENTS HAVE ERRONEOUSLY OR ILLEGALLY PAID. POSTMASTER GENERAL: REFERENCE IS MADE TO A LETTER WITH ENCLOSURES DATED OCTOBER 2. WAS RECORDED IN THE KANE COUNTY. IT WAS DISCOVERED BY THE POSTAL DATA CENTER THAT THE WATER AND SEWERAGE BILLS FOR THE TERM OF THE LEASE TO DATE TOTALING $372.09 HAD BEEN ERRONEOUSLY PAID DUE TO IMPROPER CERTIFICATIONS OF THE BILLS BY THE LOCAL POSTMASTER. THE LESSORS HAVE REFUSED TO REIMBURSE THE GOVERNMENT AND HAVE REQUESTED THAT OUR OFFICE WAIVE REPAYMENT BECAUSE OF THE GOVERNMENT'S MISTAKE. SHALL HAVE THIS LEASE DULY RECORDED. HEATING FIXTURES OF SUFFICIENT SIZE AND CAPACITY TO HEAT THE BUILDING TO A UNIFORM TEMPERATURE OF 70 DEGREES THROUGHOUT WHEN THE OUTSIDE TEMPERATURE IS THE DESIGN TEMPERATURE IN GENERAL USE BY THE HEATING INDUSTRY FOR THIS LOCALITY.

B-168042, OCT. 22, 1969

POST OFFICE DEPARTMENT--LEASES--ADDITIONAL CHARGES--WATER, SEWERAGE, ETC. LOCAL POSTMASTER IMPROPERLY CERTIFIED WATER AND SEWERAGE BILLS ON LEASED POSTAL FACILITY, RESULTING IN ERRONEOUS PAYMENT OF $372.09. WHILE LESSORS HAVE REFUSED REIMBURSEMENT, REQUESTING GAO TO WAIVE REPAYMENT, NO BASIS EXISTS FOR WAIVER AND ACTION SHOULD BE TAKEN TO COLLECT $372.09 BY SET-OFF FROM RENTAL PAYMENTS SINCE LEASE PROVISIONS IMPOSE OBLIGATION ON LESSORS TO PROVIDE AND BE RESPONSIBLE FOR PAYMENT OF WATER AND SEWERAGE CHARGES, GAO REGARDS PAYMENTS AS EXCESS PAYMENTS TO LESSORS, AND GOVERNMENT HAS RIGHT TO RECOVER FUNDS ITS AGENTS HAVE ERRONEOUSLY OR ILLEGALLY PAID; MOREOVER, ESTOPPEL MAY NOT BE INVOKED EVEN IN EVENT OF LONG CONTINUANCE OF ILLEGAL OR ERRONEOUS OVERPAYMENTS BY GOVT.

TO MR. POSTMASTER GENERAL:

REFERENCE IS MADE TO A LETTER WITH ENCLOSURES DATED OCTOBER 2, 1969, FROM THE ASSISTANT GENERAL COUNSEL, REAL PROPERTY AND PROCUREMENT DIVISION, FURNISHING A REPORT RELATIVE TO THE REFUSAL OF CERTAIN LESSORS TO REIMBURSE THE GOVERNMENT THE AMOUNT OF $372.09 WHICH IT ERRONEOUSLY PAID FOR WATER AND SEWERAGE CHARGES INCURRED AT LEASED PREMISES HOUSING THE SOUTH ELGIN, ILLINOIS, POSTAL FACILITY.

THE RECORD DISCLOSES THAT ON APRIL 3, 1958, THE POST OFFICE DEPARTMENT ACCEPTED A PROPOSAL TO LEASE QUARTERS LOCATED IN SOUTH ELGIN, ILLINOIS, SUBMITTED BY EDWIN G. HAAS, GEORGE HAAS, AND ANNA B. HAAS ON FEBRUARY 4, 1958. THE RESULTANT LEASE, DATED FEBRUARY 2, 1960, WAS RECORDED IN THE KANE COUNTY, ILLINOIS, RECORDS ON APRIL 5, 1960.

IT WAS DISCOVERED BY THE POSTAL DATA CENTER THAT THE WATER AND SEWERAGE BILLS FOR THE TERM OF THE LEASE TO DATE TOTALING $372.09 HAD BEEN ERRONEOUSLY PAID DUE TO IMPROPER CERTIFICATIONS OF THE BILLS BY THE LOCAL POSTMASTER. THE LESSORS HAVE REFUSED TO REIMBURSE THE GOVERNMENT AND HAVE REQUESTED THAT OUR OFFICE WAIVE REPAYMENT BECAUSE OF THE GOVERNMENT'S MISTAKE.

PARAGRAPH 3 (A) OF THE PROPOSAL TO LEASE QUARTERS, EXECUTED BY THE LESSORS, PROVIDES: "WE * * * FURTHER AGREE, IN CONSIDERATION OF THE RENTAL HEREINBEFORE SPECIFIED:

"/A) TO FURNISH SATISFACTORY * * * WATER, * * * AND SEWERAGE SERVICE; " IN THIS SAME REGARD, PARAGRAPH 6 OF THE LEASE EXECUTED BY THE LESSORS REQUIRES IN PERTINENT PART THAT:

"6. THE LESSOR SHALL FURNISH TO THE GOVERNMENT, DURING THE OCCUPANCY OF SAID PREMISES, UNDER THE TERMS OF THIS LEASE, AS PART OF THE RENTAL CONSIDERATION, THE FOLLOWING:

"THE LESSOR SHALL PAY ALL TAXES AND WATER RATES, AND SHALL HAVE THIS LEASE DULY RECORDED, AND SHALL PROPERLY PROTECT ALL DOORS AND WINDOWS, ACCORDING TO REQUIREMENT. THE LESSOR SHALL FURNISH LIGHTING FIXTURES, PLUMBING AND TOILET FACILITIES, AND GAS, WATER, AND ELECTRIC METERS, ALL AS NOW INSTALLED IN THE DEMISED PREMISES; HEATING FIXTURES OF SUFFICIENT SIZE AND CAPACITY TO HEAT THE BUILDING TO A UNIFORM TEMPERATURE OF 70 DEGREES THROUGHOUT WHEN THE OUTSIDE TEMPERATURE IS THE DESIGN TEMPERATURE IN GENERAL USE BY THE HEATING INDUSTRY FOR THIS LOCALITY; SATISFACTORY WATER AND SEWERAGE SERVICE.'

CLEARLY THESE PROVISIONS IMPOSE AN OBLIGATION ON THE PART OF THE LESSORS TO PROVIDE AND BE RESPONSIBLE FOR THE PAYMENT OF ALL WATER AND SEWERAGE CHARGES INCURRED IN THE OPERATION OF THE POST OFFICE. WE REGARD THE PAYMENT BY THE GOVERNMENT OF THE WATER AND SEWERAGE CHARGES TO BE, IN EFFECT, EXCESS PAYMENTS TO THE LESSORS.

THE GOVERNMENT HAS THE RIGHT TO RECOVER FUNDS WHICH ITS AGENTS HAVE WRONGFULLY, ERRONEOUSLY, OR ILLEGALLY PAID. THIS RIGHT EXISTS WHETHER SUCH PAYMENTS ARE MADE UNDER A MISTAKE OF LAW OR FACT, WHETHER BECAUSE IN EXCESS OF AUTHORITY OR BASED UPON AN ERRONEOUS INTERPRETATION OF A CONTRACT LATER FOUND TO BE INCORRECT. B-157999, MARCH 28, 1966, AND CASES CITED THEREIN. IN FANSTEEL METALLURGICAL CORPORATION V UNITED STATES, 172 F.SUPP. 268 (1959) AT PAGE 271, THE COURT DISCUSSED ERRONEOUS OVERPAYMENTS AND HELD:

"* * * THE SUPREME COURT HAS MANY TIMES HELD THAT ESTOPPEL MAY NOT BE INVOKED AGAINST THE GOVERNMENT IN A SITUATION SUCH AS PRESENTED HERE * * *. THIS IS ESPECIALLY SO SINCE, AS STATED EARLIER, WHERE MONEY IS ALLEGEDLY ERRONEOUSLY PAID IT IS THE DUTY OF THE GOVERNMENT TO SUE FOR ITS RETURN. FURTHER, LONG CONTINUANCE OF ILLEGAL OR ERRONEOUS OVERPAYMENTS DOES NOT PREVENT THEIR RECOVERY EVEN WHEN CONTRACTUAL RELATIONS ARE INVOLVED. NOR DOES IT MATTER HOW MUCH TIME ELAPSED BEFORE THE ERROR OF OVERPAYMENT WAS DISCOVERED OR HOW LONG THE ACT TO RECOVER IT WAS DEFERRED.' SEE ALSO B-165739, JULY 24, 1969; B-157999, SUPRA.

THE LEASE VESTED IN THE UNITED STATES A RIGHT OF OCCUPANCY OF THE PREMISES FOR A CONSIDERATION WHICH INCLUDED WATER AND SEWERAGE SERVICES. IT IS WELL ESTABLISHED THAT WITHOUT A COMPENSATING BENEFIT AGENTS AND OFFICERS OF THE GOVERNMENT HAVE NO AUTHORITY TO SURRENDER OR WAIVE VESTED CONTRACT RIGHTS. SEE SIMPSON V UNITED STATES, 172 U.S. 372; UNITED STATES V AMERICAN SALES CORPORATION, 27 F.2D 389. THUS, NO LEGAL BASIS EXISTS FOR WAIVING THE GOVERNMENT'S RIGHT TO RECOVERY OF THE AMOUNT PAID FOR THE ACCOUNT OF THE LESSORS.

IN LIGHT OF THE AFORE GOING, AND SINCE REIMBURSEMENT OF THE CHARGES ERRONEOUSLY PAID HAS BEEN REFUSED BY THE LESSORS, APPROPRIATE ACTION SHOULD BE TAKEN TO COLLECT THE AMOUNT OF $372.09 BY SETOFF FROM RENTAL PAYMENTS OTHERWISE DUE THE LESSORS.