B-177437, MAR 9, 1973

B-177437, MAR 9, 1973

MILITARY PERSONNEL - CANCELLATION OF ALLOTMENT - INJURY TO MEMBER - MERITORIOUS CLAIMS ACT DECISION DENYING THE CLAIM OF SP5 EARL COSTEN MADE UNDER THE MERITORIOUS CLAIMS ACT, 31 U.S.C. 236, FOR AN AMOUNT EQUAL TO THE EQUITY HE LOST IN REAL PROPERTY HE WAS BUYING ON AN INSTALLMENT BASIS, WHICH WAS SOLD AT A FORECLOSURE SALE AS A RESULT OF NONPAYMENT OF THE INSTALLMENTS BECAUSE OF THE ALLEGED ERRONEOUS DISCONTINUANCE OF THE ALLOTMENT. SINCE THIS ALLOTMENT WAS ADMINISTERED IN ACCORDANCE WITH THE MEMBER'S INSTRUCTIONS, GAO DOES NOT FEEL HIS CLAIM CONTAINS SUCH ELEMENTS OF LEGAL LIABILITY OR EQUITY AS WOULD WARRANT REPORTING IT TO CONGRESS PURSUANT TO 31 U.S.C. 236.

TO SP5 EARL COSTEN:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 7, 1972, IN WHICH YOU SUBMITTED A CLAIM IN THE AMOUNT OF $784.77 FOR CONSIDERATION UNDER THE MERITORIOUS CLAIMS ACT, 31 U.S.C. 236. YOU CONTEND THAT THE AMOUNT REPRESENTS LOST EQUITY IN REAL PROPERTY PURCHASED BY YOU ON AN INSTALLMENT BASIS, WHICH WAS SOLD AT A FORECLOSURE SALE AS A RESULT OF NONPAYMENT OF THE INSTALLMENTS BECAUSE OF THE ERRONEOUS DISCONTINUANCE OF AN ALLOTMENT.

YOU SAY IN YOUR LETTER THAT YOU PURCHASED PROPERTY IN LAWTON, OKLAHOMA, IN DECEMBER OF 1969 AND THAT YOU FINANCED THE PURCHASE BY BORROWING MONEY FROM A MORTGAGE AND INVESTMENT COMPANY AND COMMENCED REPAYING THE LOAN ON A MONTHLY INSTALLMENT BASIS DIRECTLY TO THE MORTGAGE COMPANY. IN DECEMBER OF 1970, YOU SAY THAT YOU ESTABLISHED AN ALLOTMENT FROM YOUR PAY TO BE PAID DIRECTLY TO THE MORTGAGE COMPANY.

IT IS INDICATED IN YOUR LETTER THAT YOU LEFT THE LAWTON, OKLAHOMA, AREA ON JANUARY 27, 1972, PURSUANT TO ORDERS TRANSFERRING YOU TO FORT LEWIS, WASHINGTON. YOU SAY THAT YOUR PAY VOUCHERS AT ALL TIMES INDICATED THAT YOUR ALLOTMENT TO THE MORTGAGE COMPANY WAS BEING DEDUCTED. HOWEVER, YOU STATE THAT YOUR ALLOTMENT PAYABLE TO THE MORTGAGE COMPANY HAD BEEN STOPPED BY THE ARMY FINANCE CENTER WITHOUT YOUR KNOWLEDGE EFFECTIVE DECEMBER 1971.

ATTACHMENTS TO YOUR LETTER OF NOVEMBER 7 INDICATE THAT THE MORTGAGE COMPANY RECEIVED THE LAST ALLOTMENT CHECK ON JANUARY 3, 1972. IT IS ALSO INDICATED BY THE MORTGAGE COMPANY THAT ON APRIL 13, 1972, YOUR PROPERTY WAS CHECKED AND FOUND TO BE VACANT, AND SINCE THEY WERE NOT AWARE OF YOUR TRANSFER, IT WAS PRESUMED THE PROPERTY HAD BEEN ABANDONED. SUBSEQUENTLY, THE FORECLOSURE PROCEEDINGS WERE INSTITUTED ON APRIL 26, 1972.

IN VIEW OF THESE CIRCUMSTANCES, IT APPEARS TO BE YOUR VIEW THAT THE FORECLOSURE SALE WAS THE DIRECT RESULT OF THE FINANCE CENTER'S ACTION IN STOPPING YOUR ALLOTMENT TO THE MORTGAGE COMPANY, AND YOU BELIEVE YOUR CLAIM FOR AN AMOUNT REPRESENTING WHAT YOU BELIEVE TO BE YOUR EQUITY IN THE PROPERTY SHOULD BE CONSIDERED UNDER THE PROVISIONS OF THE MERITORIOUS CLAIMS ACT OF 1928, 45 STAT. 413, 31 U.S.C. 236.

AS WE INDICATED IN OUR LETTER OF JANUARY 8, 1972 TO YOU, SINCE THE ONLY INFORMATION BEFORE US WAS THAT PRESENTED IN YOUR LETTER OF NOVEMBER 7, 1972, WE REQUESTED AN ADMINISTRATIVE REPORT ON THIS MATTER FROM THE DEPARTMENT OF THE ARMY, FINANCE CENTER, U.S. ARMY. THE ADMINISTRATIVE REPORT FROM THE FINANCE CENTER, U.S. ARMY, INDICATES THAT YOU REQUESTED A CLASS E ALLOTMENT IN THE AMOUNT OF $68 BE PAID TO AUST MORTGAGE AND INVESTMENT COMPANY EFFECTIVE DECEMBER 1970 FOR THE PURPOSE OF A HOUSE PAYMENT. IT IS INDICATED THAT THIS ALLOTMENT WAS PAID AS REQUESTED.

THE REPORT INDICATED THAT ON NOVEMBER 10, 1971, YOU EXECUTED A REQUEST THAT THE CLASS E ALLOTMENT TO THE AUST MORTGAGE AND INVESTMENT COMPANY BE DISCONTINUED EFFECTIVE DECEMBER 1971. IT IS STATED IN THE REPORT THAT THE ALLOTMENT WAS DISCONTINUED AND THE LAST CHECK ISSUED TO THE ALLOTTEE WAS FOR THE MONTH OF DECEMBER 1971. ENCLOSED WITH THE ARMY'S REPORT ARE COPIES OF THE FORMS EXECUTED BY YOU TO ESTABLISH AND DISCONTINUE THE ALLOTMENT.

THE REPORT ALSO STATES THAT WHILE A DEDUCTION WAS MADE FROM YOUR PAY ACCOUNT FOR THE DECEMBER 1970 ALLOTMENT, DEDUCTIONS WERE NOT MADE FOR THE MONTHS OF JANUARY 1971 THROUGH OCTOBER 1971. HOWEVER, IT APPEARS THAT A DEDUCTION FROM YOUR PAY ACCOUNT WAS MADE IN NOVEMBER 1971 WHICH RECONCILED THE LACK OF DEDUCTION FOR THE PRIOR MONTHS.

IT IS ALSO INDICATED THAT DEDUCTIONS WERE ERRONEOUSLY MADE FROM YOUR PAY ACCOUNT FOR THE MONTHS OF JANUARY 1972 THROUGH AUGUST 1972. IT IS INDICATED, HOWEVER, THAT A CREDIT WAS MADE TO YOUR ACCOUNT FOR THE MONTHS OF SEPTEMBER AND OCTOBER OF 1972 FOR THE AMOUNTS DEDUCTED SUBSEQUENT TO THE DISCONTINUANCE OF THE ALLOTMENT.

APPARENTLY THE PAY RECORD INFORMATION YOU RECEIVED DID NOT REFLECT THE VARIOUS DISCREPANCIES WHICH EXISTED IN YOUR PAY ACCOUNT.

THE MERITORIOUS CLAIMS ACT OF 1928 PROVIDES THAT WHEN A CLAIM IS FILED IN THIS OFFICE THAT MAY NOT BE LAWFULLY ADJUSTED BY USE OF AN APPROPRIATION THERETOFORE MADE, BUT WHICH CLAIM, IN OUR JUDGMENT, CONTAINS SUCH ELEMENTS OF LEGAL LIABILITY OR EQUITY AS TO BE DESERVING OF THE CONSIDERATION OF THE CONGRESS, IT SHALL BE SUBMITTED TO THE CONGRESS WITH OUR RECOMMENDATION.

THE FINANCE CENTER, U.S. ARMY STATES THAT YOUR PAY ACCOUNT HAS BEEN ADJUSTED CORRECTLY AT THIS TIME, WITH THE EXCEPTION OF A DEDUCTION OF DECEMBER 1970, WHICH WE HAVE BEEN INFORMED WILL BE CORRECTED. AS WAS POINTED OUT ABOVE, IT IS UNFORTUNATE THAT THE PAY INFORMATION YOU RECEIVED MAY HAVE LED YOU TO BELIEVE THAT YOUR ALLOTMENT TO THE MORTGAGE COMPANY WAS IN EFFECT SUBSEQUENT TO DECEMBER 1971. HOWEVER, THE FACT REMAINS THAT THE ALLOTMENT WAS ADMINISTERED IN ACCORDANCE WITH YOUR INSTRUCTIONS, AS EVIDENCED BY DA FORM 1341 EXECUTED BY YOU ON NOVEMBER 10, 1971, REQUESTING YOUR ALLOTMENT TO THE MORTGAGE COMPANY BE DISCONTINUED SUBSEQUENT TO DECEMBER 1971.

ACCORDINGLY, ON THE RECORD BEFORE US, WE ARE OF THE OPINION THAT YOUR CLAIM DOES NOT CONTAIN SUCH ELEMENTS OF LEGAL LIABILITY OR EQUITY AS WOULD WARRANT REPORTING IT TO THE CONGRESS UNDER THE MERITORIOUS CLAIMS ACT OF 1928. THEREFORE, NO ACTION WILL BE TAKEN TO REPORT THE CLAIM TO THE CONGRESS FOR CONSIDERATION.