B-84150 October 22, 1951

B-84150: Oct 22, 1951

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Georgia Gentlemen: Refrence is made to letters of August 14. Which claim is now the subject of a suit filed in the United States District Court for the Southern District of New York. With respect to the legality of the action taken by this Office you are advised that under the provisions of Section 236 of the Revised Statutes. It is to be noted th at in this case the Government's claim against you. Is supported by administrative findings of responsibility therefore by the Civil Aeronautics Board. While these administrative determinations are not conclusive. Until they are superseded by judicial determination or by controverting evidence . This Office is believed to be fully justified.

B-84150 October 22, 1951

Eastern Air Lines, Inc. c/o Gambrell, Harlan & Barwick Suite 825, The Citizens and Southern National Bank Building Atlanta 3, Georgia

Gentlemen:

Refrence is made to letters of August 14, September 4, and September 29, 1951, from your attorneys, relative to the withholding of payments of amounts due you by the Government, on account of the Government's claim against you in the amount of $12,408 for damages done by an airplane owned by you to a Government-owned localizer building at La Guardia Field, New York, which claim is now the subject of a suit filed in the United States District Court for the Southern District of New York.

With respect to the legality of the action taken by this Office you are advised that under the provisions of Section 236 of the Revised Statutes, and amendment thereto--section 305 of the Budget and Accounting Act of June 10, 1921 (31 U.S.C. 71)--it has been held to be the duty of the accounting officers of the Government, in any case where a party appeared as both debtor and creditor to the United States in any form, to allow for payment only the net balance due. Se McKnight v. United States, 13 C.Cls. 306, affirmed 98 U.S. 170.

It is to be noted th at in this case the Government's claim against you, as certified by certificate of settlement No. US-43763, issued by this Office under date of June 21, 1949, covers only actual costs of replacement of the damaged property, as determined by the Civil Aeronautics Administration, and is supported by administrative findings of responsibility therefore by the Civil Aeronautics Board. While these administrative determinations are not conclusive, they cannot be disregard by this Office, and until they are superseded by judicial determination or by controverting evidence --this Office is believed to be fully justified, under the principles stated in the decisions of the Court of Claims in Longhill v. United States, 17 C. Cls. 288, and Charles v. United States, 19 C. Cls. 336, in withholding payment of amounts otherwise due you, up to the amount administratively found to be due by you.

However, this Office does, in certain instances, exercise discretion by permitting payments to contractors having substantial current business with the Government and as to shoe financial responsibility there is no substantial doubt; and, in cases which have been submitted to the Department of Justice, the recommendations of that Department are customarily requested before payment are released. Accordingly, your requests for payment of current vouchers are being submitted for the comments of that Department, and upon receipt thereof such action as proper will be taken.

Very truly yours,

Frank I. Yates Assistant Comptroller General of the United States