B-66060, MAY 14, 1947, 26 COMP. GEN. 873

B-66060: May 14, 1947

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IS VOID UNDER SECTION 3477. 1947: I HAVE YOUR LETTER OF APRIL 28. AS FOLLOWS: ENCLOSED HEREWITH ARE COPIES OF ASSIGNMENTS FILED WITH THE SECOND ASSISTANT POSTMASTER GENERAL BY PEOPLES NATIONAL BANK OF WASHINGTON IN SEATTLE. EXCEPT IN CASES WHEREIN THE ASSIGNMENT IS MADE TO A BANK TRUST COMPANY. THERE IS NO FORMAL WRITTEN CONTRACT BETWEEN THE UNITED STATES GOVERNMENT OR ANY AGENCY THEREOF AND THE WEST COAST AIRLINES. THE STATUTE ABOVE REFERRED TO WAS ADOPTED FOR THE PURPOSE OF PROTECTING THE GOVERNMENT IN ITS DEALINGS WITH THE GENERAL PUBLIC. THE OBVIOUS DESIGN OF THE STATUTE IS TO PREVENT THE GOVERNMENT FROM BECOMING INVOLVED IN DISPUTES AMONG INDIVIDUALS AND CONCERNS OVER MONIES DUE ON CLAIMS OR CONTRACTS AGAINST THE GOVERNMENT.

B-66060, MAY 14, 1947, 26 COMP. GEN. 873

ASSIGNMENT OF CLAIMS - PAYMENTS UNDER CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY AN ASSIGNMENT OF MONEYS DUE OR TO BECOME DUE AN AIR CARRIER UNDER A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY FOR THE TRANSPORTATION OF MAIL AT A TEMPORARY RATE ESTABLISHED BY THE CIVIL AERONAUTICS BOARD- - AN ARRANGEMENT CONTEMPLATING A SERIES OF SEPARATE CONTRACTS WHICH COME INTO EXISTENCE ONLY AFTER THE SERVICE HAS BEEN RENDERED PURSUANT TO AN ORDER OF THE POST OFFICE DEPARTMENT--- MAY NOT BE REGARDED AS COVERING AMOUNTS DUE OR TO BECOME DUE "UNDER A CONTRACT PROVIDING FOR PAYMENTS AGGREGATING $1,000 OR MORE" WITHIN THE MEANING OF THE ASSIGNMENT OF CLAIMS ACT OF 1940 AND, THEREFORE, IS VOID UNDER SECTION 3477, REVISED STATUTES, AS AMENDED, INSOFAR AS CONCERNS THE GOVERNMENT.

COMPTROLLER GENERAL WARREN TO THE POSTMASTER GENERAL, MAY 14, 1947:

I HAVE YOUR LETTER OF APRIL 28, 1947, AS FOLLOWS:

ENCLOSED HEREWITH ARE COPIES OF ASSIGNMENTS FILED WITH THE SECOND ASSISTANT POSTMASTER GENERAL BY PEOPLES NATIONAL BANK OF WASHINGTON IN SEATTLE. THESE ASSIGNMENTS PURPORT TO ASSIGN TO THE BANK ALL SUMS OF MONEY DUE OR TO BECOME DUE WEST COAST AIRLINES, INC., UNDER ITS CERTIFICATE OF PUBLIC, CONVENIENCE AND NECESSITY ISSUED BY THE CIVIL AERONAUTICS BOARD AND THE ORDER OF THE BOARD WHICH ESTABLISHED A TEMPORARY RATE OF MAIL PAY TO BE PAID WEST COAST AIRLINES, INC., FOR TRANSPORTATION OF THE UNITED STATES MAILS.

SUBSEQUENT TO THE RECEIPT OF THESE ASSIGNMENTS WEST COAST AIRLINES, INC. FILED A CLAIM FOR MONIES DUE IT UNDER THE ABOVE MENTIONED CERTIFICATE AND ORDER FOR SERVICES PERFORMED FROM DECEMBER 5, 1946 TO FEBRUARY 1, 1947.

TITLE 31, U.S.C. SECTION 203, AS AMENDED, PROVIDES A POSITIVE LEGAL BAR TO THE ASSIGNMENT OF ANY CLAIM AGAINST THE UNITED STATES OR ANY PART THEREOF UNLESS AND UNTIL THE CLAIM HAS BEEN ALLOWED, THE AMOUNT THEREOF ASCERTAINED AND A WARRANT ISSUED FOR THE PAYMENT THEREOF, EXCEPT IN CASES WHEREIN THE ASSIGNMENT IS MADE TO A BANK TRUST COMPANY, OR OTHER FINANCING INSTITUTION AND THE ASSIGNMENT COVERS MONIES DUE OR TO BECOME DUE "UNDER A CONTRACT PROVIDING FOR PAYMENTS AGGREGATING $1000 OR MORE.'

THERE IS NO FORMAL WRITTEN CONTRACT BETWEEN THE UNITED STATES GOVERNMENT OR ANY AGENCY THEREOF AND THE WEST COAST AIRLINES, INC. THE STATUTE ABOVE REFERRED TO WAS ADOPTED FOR THE PURPOSE OF PROTECTING THE GOVERNMENT IN ITS DEALINGS WITH THE GENERAL PUBLIC. THE OBVIOUS DESIGN OF THE STATUTE IS TO PREVENT THE GOVERNMENT FROM BECOMING INVOLVED IN DISPUTES AMONG INDIVIDUALS AND CONCERNS OVER MONIES DUE ON CLAIMS OR CONTRACTS AGAINST THE GOVERNMENT. IT IS BELIEVED, THEREFORE, THAT THIS STATUTE SHOULD BE STRICTLY CONSTRUED AND IN THE ABSENCE OF ANY FORMAL WRITTEN CONTRACT THE ASSIGNMENTS HEREIN DISCUSSED SHOULD BE CONSIDERED NULL AND VOID.

THE PRINCIPALS INVOLVED IN THIS RELATIONSHIP ARE THE CIVIL AERONAUTICS BOARD, WEST COAST AIRLINES, INC. AND THE POST OFFICE DEPARTMENT. BETWEEN THE FIRST TWO ORGANIZATIONS THERE IS SUCH A CLOSE RELATIONSHIP AS TO PERMIT A DETERMINATION ON THE PART OF THE BOARD OF THE CURRENT FINANCIAL CONDITION OF WEST COAST AIRLINES, INC. THERE IS NO SUCH CLOSE RELATIONSHIP BETWEEN THE POST OFFICE DEPARTMENT AND WEST COAST AIRLINES, INC. IT IS CONCEIVABLE, THEREFORE, THAT THE DEPARTMENT MIGHT BECOME INVOLVED IN DISPUTES AMONG CREDITORS IF THESE ASSIGNMENTS WERE HONORED.

IN VIEW OF THE FACT THAT YOU MUST PASS UPON ALL PAYMENTS MADE TO WEST COAST AIRLINES, INC. BY THE DEPARTMENT, YOUR OPINION CONCERNING THE VALIDITY OF THESE ASSIGNMENTS IS REQUESTED. TO PERMIT AN EARLY DISPOSITION OF THIS MATTER IT IS REQUESTED THAT YOU LET ME HAVE YOUR OPINION AT THE EARLIEST POSSIBLE DATE.

SECTION 401 OF THE CIVIL AERONAUTICS ACT, AS AMENDED, 49 U.S.C. 481, PROVIDES THAT NO AIR CARRIER SHALL ENGAGE IN ANY AIR TRANSPORTATION UNLESS THERE IS IN FORCE A CERTIFICATE AUTHORIZING SUCH AIR CARRIER TO ENGAGE IN SUCH TRANSPORTATION. SECTION 405 (G), 52 STAT. 995, PROVIDES THAT AFTER THE ISSUANCE OF A CERTIFICATE AUTHORIZING THE TRANSPORTATION OF MAIL BY AIRCRAFT THE POSTMASTER GENERAL SHALL TENDER MAIL TO THE HOLDER THEREOF "TO THE EXTENT REQUIRED BY THE POSTAL SERVICE.' AND, AS INDICATED IN YOUR LETTER, THE CARRIER IS PAID FOR SUCH SERVICE AT RATES OF COMPENSATION FIXED BY THE CIVIL AERONAUTICS BOARD.

APPARENTLY, IT IS INTENDED MERELY THAT THE HOLDER OF A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY WILL HOLD ITSELF IN READINESS TO CARRY AIR MAIL BETWEEN CERTAIN POINTS AT SUCH TIMES AND IN SUCH QUANTITIES AS MAY BE ORDERED BY THE POST OFFICE DEPARTMENT. THUS, NOT ONLY IS THERE, AS STATED IN YOUR LETTER, NO FORMAL WRITTEN CONTRACT BETWEEN THE UNITED STATES AND THE WEST COAST AIRLINES, INC., BUT THERE IS NO FIXED CONTRACTUAL OBLIGATION UPON THE GOVERNMENT TO ORDER ANY SERVICE FROM THE COMPANY, OR BY THE SAME TOKEN, TO MAKE ANY PAYMENTS WHATEVER TO IT. RATHER, THE ARRANGEMENT CONTEMPLATES A SERIES OF SEPARATE CONTRACTS WHICH COME INTO EXISTENCE ONLY AFTER THE SERVICE HAS BEEN RENDERED.

UNDER SUCH CIRCUMSTANCES, IT MUST BE CONCLUDED THAT THE ASSIGNMENT DOES NOT COVER AMOUNTS DUE OR TO BECOME DUE FROM THE UNITED STATES "UNDER A CONTRACT PROVIDING FOR PAYMENTS AGGREGATING $1,000 OR MORE AUTHORIZED BY THE ASSIGNMENT OF CLAIMS ACT OF 1940, 54 STAT. 1029. CONSEQUENTLY, SUCH ASSIGNMENT IS VOID UNDER SECTION 3477, REVISED STATUTES, AS AMENDED, 31 U.S.C. 203, INSOFAR AS THE GOVERNMENT IS CONCERNED. CF. 21 COMP. GEN. 265, 23 ID. 989.