A-89617, FEBRUARY 18, 1938, 17 COMP. GEN. 664

A-89617: Feb 18, 1938

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IS SUFFICIENT TO CREATE AN OBLIGATION AGAINST THE APPROPRIATION AVAILABLE FOR THE PURCHASE OF THE LANDS. EVEN IF THE PAYMENT IS SUBJECT TO CONTINGENCIES. IS BASED ON AN ACCEPTED OPTION. THE INVOLVED APPROPRIATION IS OBLIGATED AT THE TIME OF THE GOVERNMENT'S ACCEPTANCE OF THE OPTION WITHIN THE OPTION PERIOD. WHERE THERE IS NO CONTRACT OR OPTION FOR PURCHASE OF LAND BY THE FOREST SERVICE UNDER ACT OF MARCH 1. THE ACQUISITION IS THROUGH CONDEMNATION PROCEEDINGS. THE INVOLVED APPROPRIATION IS OBLIGATED BY THE REQUEST UPON THE ATTORNEY GENERAL TO INSTITUTE CONDEMNATION PROCEEDINGS. WHERE LAND IS UNDER OPTION AND. SATISFACTORY CONVEYANCE IS NOT POSSIBLE. PAYMENT MAY BE MADE EITHER FROM THE APPROPRIATION OBLIGATED WHEN THE OPTION WAS ACCEPTED.

A-89617, FEBRUARY 18, 1938, 17 COMP. GEN. 664

APPROPRIATIONS - OBLIGATION AND PAYMENT AVAILABILITY - LAND PURCHASES BY FOREST SERVICE UNDER ACCEPTED OPTIONS, CONTRACTS, CONDEMNATION, ETC. ADMINISTRATIVE ACTION BY WHICH THE GOVERNMENT UNDERTAKES TO ACQUIRE LANDS FOR THE FOREST SERVICE UPON THE ACT OF MARCH 1, 1911, 36 STAT. 961, UPON CONSIDERATION OF THE PAYMENT OF A CERTAIN PURCHASE PRICE, RESULTING IN GOVERNMENT LIABILITY FOR THE PAYMENT, IS SUFFICIENT TO CREATE AN OBLIGATION AGAINST THE APPROPRIATION AVAILABLE FOR THE PURCHASE OF THE LANDS, EVEN IF THE PAYMENT IS SUBJECT TO CONTINGENCIES. WHERE PURCHASE OF LAND BY THE FOREST SERVICE UNDER ACT OF MARCH 1, 1911, 36 STAT. 961, IS BASED ON AN ACCEPTED OPTION, A FORMAL CONTRACT, OR A DEED ONLY, THE INVOLVED APPROPRIATION IS OBLIGATED AT THE TIME OF THE GOVERNMENT'S ACCEPTANCE OF THE OPTION WITHIN THE OPTION PERIOD; ON THE DATE OF EXECUTION AND DELIVERY OF THE FORMAL CONTRACT; OR, ON THE DATE OF ACKNOWLEDGMENT AND DELIVERY OF THE DEED, RESPECTIVELY. WHERE THERE IS NO CONTRACT OR OPTION FOR PURCHASE OF LAND BY THE FOREST SERVICE UNDER ACT OF MARCH 1, 1911, 36 STAT. 961, AND THE ACQUISITION IS THROUGH CONDEMNATION PROCEEDINGS, THE INVOLVED APPROPRIATION IS OBLIGATED BY THE REQUEST UPON THE ATTORNEY GENERAL TO INSTITUTE CONDEMNATION PROCEEDINGS, RATHER THAN BY THE INSTITUTION OF SUCH PROCEEDINGS, BUT WHERE LAND IS UNDER OPTION AND, BECAUSE OF DEFECTIVE TITLE, SATISFACTORY CONVEYANCE IS NOT POSSIBLE, PAYMENT MAY BE MADE EITHER FROM THE APPROPRIATION OBLIGATED WHEN THE OPTION WAS ACCEPTED, OR A NEW OBLIGATION MAY BE SET UP UNDER THE REQUEST FOR CONDEMNATION PROCEEDINGS AND PAYMENT MADE FROM AN APPROPRIATION AVAILABLE FOR OBLIGATION AT THAT TIME. WHERE LAND TO BE ACQUIRED BY THE FOREST SERVICE UNDER ACT OF MARCH 1, 1911, 36 STAT. 961, IS UNDER OPTION BUT SATISFACTORY CONVEYANCE IS NOT POSSIBLE WITHOUT CONDEMNATION PROCEEDINGS, AND THE ORIGINAL APPROPRIATION OBLIGATION ESTABLISHED BY THE OPTION ACCEPTANCE IS ALLOWED TO STAND, THE APPROPRIATION CURRENT WHEN THE CONDEMNATION PROCEEDINGS WERE REQUESTED MAY BE CHARGED WITH THE AMOUNT BY WHICH THE CONDEMNATION AWARD EXCEEDS THE AMOUNT AVAILABLE IN THE APPROPRIATION OBLIGATED BY THE OPTION ACCEPTANCE, BUT IN CONDEMNATION WITHOUT OPTION, THERE IS NO AUTHORITY FOR CHARGING ANY PART OF THE AWARD TO ANY OTHER APPROPRIATION THAN THAT OBLIGATED BY THE REQUEST FOR THE CONDEMNATION PROCEEDINGS, ANY INSUFFICIENCY THEREIN BEING A MATTER FOR BRINGING TO THE ATTENTION OF THE CONGRESS AS A DEFICIENCY ITEM. WHERE, IN CONNECTION WITH THE PURCHASE OF LAND BY THE FOREST SERVICE UNDER ACT OF MARCH 1, 1911, 36 STAT. 961, A PER-ACRE PRICE IS AGREED UPON AND A SURVEY REVEALS AN ACREAGE SUBSTANTIALLY LARGER THAN ANTICIPATED, AND THE UNOBLIGATED BALANCE IN THE INVOLVED APPROPRIATION IS NOT SUFFICIENT TO COVER THE ADDITIONAL COST, THERE IS NO AUTHORITY FOR CHARGING ANY OTHER APPROPRIATION THAN THAT ORIGINALLY OBLIGATED REGARDLESS OF WHETHER IT BE SUFFICIENT OR WHETHER A DEFICIENCY THEREIN MAY HAVE TO BE REPORTED TO THE CONGRESS. GENERALLY AN OBLIGATION AGAINST AN APPROPRIATION RESULTING FROM A CONTEMPLATED ACQUISITION OF LAND MAY BE DISCHARGED OTHER THAN BY PAYMENT, IF, WHERE CREATED BY CONTRACT, THE CONTRACT HAS BEEN TERMINATED IN SUCH MANNER AS TO REMOVE ALL POSSIBILITY OF GOVERNMENT LIABILITY, AND, IF CREATED BY CONDEMNATION PROCEEDINGS, WHEN NECESSARY ACTION HAS BEEN TAKEN TO RELIEVE THE GOVERNMENT FROM ANY LIABILITY UNDER THE AWARD OR WHEN THE PROCEEDINGS ARE DISCONTINUED IN ACCORDANCE WITH LAW, BUT THE DETERMINATION IN EACH CASE MUST OF NECESSITY DEPEND UPON THE FACTS AND CIRCUMSTANCES INVOLVED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF AGRICULTURE, FEBRUARY 18, 1938:

YOUR LETTER OF OCTOBER 12, 1937, IS AS FOLLOWS:

ON JUNE 19, MR. M. V. BOONE, AN AUDITOR OF YOUR OFFICE, SUGGESTED THAT THERE BE SUBMITTED TO YOU IN WRITING THE VIEWS OF THIS DEPARTMENT AS TO THE PARTICULAR STAGE AT WHICH AN OFFER TO SELL LANDS TO THE UNITED STATES BECOMES A DEFINITE CONTRACTUAL OBLIGATION UNDER THE PROVISIONS OF THE ACT OF MARCH 1, 1911, AS AMENDED. MR. BOONE PROPOUNDED TWO SPECIFIC QUESTIONS WHICH, AS UNDERSTOOD BY MEMBERS OF THIS DEPARTMENT, ARE AS FOLLOWS:

1. AT WHAT STAGE IN THE ACTION UPON A CERTAIN OFFER TO SELL LANDS TO THE UNITED STATES SHOULD THE PROPOSED PURCHASE BE REGARDED AS A DEFINITE CONTRACT BETWEEN THE LANDOWNER AND THE UNITED STATES, AND SO RECORDED ON THE BOOKS OF THE FOREST SERVICE?

2. AT WHAT POINT AND BY WHAT PROCEDURE SHOULD AN EXISTING OBLIGATION BE REGARDED AS TERMINATED IN WHOLE OR IN PART, OTHER THAN BY PAYMENT OF THE AGREED CASH CONSIDERATION; OR, TO PUT IT IN OTHER WORDS, AFTER A CERTAIN CASE OR PART THEREOF IS FOUND TO BE NON ACTIONABLE BY REASON OF DEFECTIVE TITLE, OR A DIFFERENCE IN SURVEYED AREA, OR CHANGE IN THE CONDITIONS ON WHICH THE ORIGINAL CONTRACT WAS BASED, AT WHAT STAGE IS THE EXISTING CONTRACT TERMINATED OR MODIFIED, AND BY WHAT PROCEDURE?

BEFORE CATEGORICAL ANSWERS TO THESE QUESTIONS ARE ATTEMPTED, UNDERSTANDING MAY BE PROMOTED BY A DISCUSSION OF CERTAIN FUNDAMENTAL PHASES OF THE MATTER, AMONG WHICH ARE THE FOLLOWING:

SECTION 6 OF THE ACT OF MARCH 1, 1911, VESTS IN THE SECRETARY OF AGRICULTURE AUTHORITY TO EXAMINE, LOCATE, AND RECOMMEND FOR PURCHASE SUCH LANDS AS IN HIS JUDGMENT MAY BE NECESSARY TO CARRY OUT THE PROVISIONS OF THE ACT AND TO REPORT TO THE NATIONAL FOREST RESERVATION COMMISSION THE RESULTS OF SUCH EXAMINATION.

SECTION 7 OF THE ACT VESTS IN THE SECRETARY OF AGRICULTURE AUTHORITY TO PURCHASE IN THE NAME OF THE UNITED STATES SUCH LANDS AS HAVE BEEN APPROVED FOR PURCHASE BY THE NATIONAL FOREST RESERVATION COMMISSION AT THE PRICE OR PRICES FIXED BY SAID COMMISSION.

SECTION 8 OF THE ACT PROVIDES THAT THE SECRETARY OF AGRICULTURE MAY DO ALL THINGS NECESSARY TO SECURE THE SAFE TITLE IN THE UNITED STATES TO THE LANDS TO BE ACQUIRED UNDER THE ACT.

SECTION 4 OF SAID ACT, WHICH CREATES THE NATIONAL FOREST RESERVATION COMMISSION, SPECIFIES THAT ITS FUNCTION SHALL BE TO CONSIDER AND PASS UPON SUCH LANDS AS MAY BE RECOMMENDED FOR PURCHASE BY THE SECRETARY OF AGRICULTURE.

IT IS THUS EVIDENT THAT THE EXECUTIVE OR ADMINISTRATIVE FUNCTIONS UNDER THE ACT ARE VESTED EXCLUSIVELY IN THE SECRETARY OF AGRICULTURE; THE FUNCTION OF THE NATIONAL FOREST RESERVATION COMMISSION BEING PRIMARILY TO REVIEW THE RECOMMENDATIONS OF THE SECRETARY OF AGRICULTURE TO DETERMINE WHETHER THEY ARE IN ACCORD WITH THE OBJECTIVES OF THE ACT AND WHETHER THE CONDITIONS OF PURCHASE, THAT IS, PRICES, RESERVATIONS, OUTSTANDING RIGHTS, ETC., ARE EQUITABLE TO THE UNITED STATES. COMMISSION APPROVAL IS CONSTRUED TO APPLY TO THE DESCRIBED LANDS AND TERMS OF PURCHASE RATHER THAN TO A PARTICULAR VENDOR, SO THAT PURCHASE OF APPROVED LAND FROM A DIFFERENT OWNER DOES NOT REQUIRE THE SANCTION OF THE COMMISSION IF THE TERMS OF PURCHASE ARE IDENTICAL TO THOSE APPROVED BY THE COMMISSION. APPROVAL BY THE NATIONAL FOREST RESERVATION COMMISSION IS PREREQUISITE TO DEFINITE CONTRACTUAL OBLIGATIONS BY THE SECRETARY OF AGRICULTURE, BUT IS NOT IN ITSELF AN ESTABLISHMENT OF A DEFINITE CONTRACTUAL OBLIGATION SINCE THE COMMISSION IS NOT AUTHORIZED BY LAW TO TAKE SUCH ACTION.

IN EXECUTING AN OPTION UPON THE FORM USED IN THE LAND ACQUISITION WORK OF THE FOREST SERVICE, THE VENDOR AGREED TO EXECUTE AND DELIVER, FOR THE LANDS COVERED BY THE OPTION, A TITLE WHICH SHALL BE SATISFACTORY TO THE ATTORNEY GENERAL OF THE UNITED STATES. THE TITLE REQUIREMENTS OF THE ATTORNEY GENERAL ARE RIGID AND EXACTING, CONSEQUENTLY MANY OF THE PERSONS WHO EXECUTE OPTIONS SUBSEQUENTLY FIND THAT THEY ARE UNABLE TO COMPLY WITH THE TERMS OF SUCH OPTION BECAUSE THEY DO NOT HOLD THE DOMINANT OR COMPLETE TITLE, OR BECAUSE CONFLICTING STATUTES PREVENT TRANSFERS OF TITLE IN THE MANNER AGREED. ALSO, AD INTERIM CHANGES IN THE CONDITION OF THE OFFERED PROPERTIES, SUCH AS THE REMOVAL OF TIMBER VALUES WITH OR WITHOUT THE AUTHORITY OF THE OWNER, OR BY FIRE, OR DISEASE, OR WINDTHROW; OR ADVERSE OCCUPANCY OF THE PROPERTY, MAY MAKE THE OPTION UNACCEPTABLE TO THE UNITED STATES. IN MANY CASES THE TITLE IS SO DEFECTIVE AS TO BE UNACCEPTABLE UNLESS CURED BY PROCEEDINGS IN CONDEMNATION, TO WHICH THE PARTY EXECUTING THE OPTION MAY AGREE, BUT IN WHICH OTHER CLAIMANTS TO THE LANDS MAY INTERVENE AND SUCCEED IN ESTABLISHING VALUATIONS NOT ACCEPTABLE TO THE UNITED STATES BECAUSE OF THEIR EXCESSES OVER THE VALUES FOUND BY APPRAISAL AND APPROVED BY THE NATIONAL FOREST RESERVATION COMMISSION.

THE OCCURRENCE OF CIRCUMSTANCES SUCH AS NOTED IN THE PRECEDING PARAGRAPH MAY OPERATE AS MODIFICATIONS OF THE ORIGINAL CONTRACT. SOME SUCH MODIFICATIONS DEFINITELY TERMINATE THE CONTRACT, CAUSING THE FOREST SERVICE TO CLOSE THE CASE; OTHERS DO NOT TERMINATE THE CONTRACT, BUT MAY OPERATE TO ESTABLISH NEW DATES OF LEGAL EFFECTIVENESS IN RELATION TO AVAILABLE APPROPRIATIONS, ETC.

PROCEEDING NOW TO THE ANSWER OF THE SPECIFIC QUESTIONS, IT IS THE UNDERSTANDING OF THIS DEPARTMENT THAT ESTABLISHMENT OF AN OBLIGATION AND APPROPRIATION ENCUMBRANCE MAY OCCUR AT VARIOUS STAGES AS HEREINAFTER INDICATED, DEPENDENT UPON THE CIRCUMSTANCES IN THE INDIVIDUAL TRANSACTION.

1. PURCHASE BASED ON ACCEPTED OPTIONS.--- THE OBLIGATION IS CREATED BY THE GOVERNMENT'S ACCEPTANCE OF THE OPTION WITHIN THE OPTION PERIOD (1 C.G. 625; A-59458, JAN. 15, 1935). THE 1935 DECISION INDICATES THAT THIS FORM OF CONTRACT IS NOT FAVORED IN LAW BUT WILL BE CONSIDERED AS AN OBLIGATION, AT LEAST WHEN LIMITED TIME DOES NOT PERMIT PROCUREMENT OF FORMAL PURCHASE CONTRACT OR DEED. IN THE ABSENCE OF UNQUALIFIED APPROVAL IN THAT DECISION OF THE OPTION BASIS IT IS ASSUMED THAT DATE OF EXECUTING A VALID DEED COULD ALSO BE CONSIDERED AS CREATING AN OBLIGATION WHERE AN APPROPRIATION IS CURRENTLY AVAILABLE AT THE TIME, MAKING IT UNNECESSARY TO DEPEND UPON PAYMENT FROM A PREVIOUS APPROPRIATION AVAILABLE AT TIME OF OPTION ACCEPTANCE.

2. PURCHASE ON FORMAL CONTRACT.--- THE DATE OF CONTRACT EXECUTION IS CONSIDERED AS OBLIGATING THE APPROPRIATION, ALTHOUGH IT SEEMS THAT DATE OF EXECUTING A VALID DEED, DEFINED AS THE OBLIGATION DATE IN 4 COMP. GEN. 371, COULD BE SUBSTITUTED.

3. PURCHASE ON DEED ONLY.--- THE DATE A VALID DEED IS EXECUTED BECOMES THE OBLIGATING DATE (4 COMP. GEN. 371). THIS NECESSITATES CONSIDERING FUNDS OBLIGATED BY ANY EXECUTED DEED, ALTHOUGH LATER FOUND INVALID, WHICH MAY NOT BE DETERMINED DURING THE PERIOD OF AVAILABILITY OF THE APPROPRIATION.

4. PURCHASE THROUGH CONDEMNATION PROCEEDINGS.--- IN THE ABSENCE OF CONTRACT OR OPTION, IT IS UNDERSTOOD THAT THE APPROPRIATION IS OBLIGATED BY THE REQUEST UPON THE ATTORNEY GENERAL TO INSTITUTE CONDEMNATION PROCEEDINGS (4 COMP. GEN. 208). THIS IS NOT FREE FROM DOUBT, HOWEVER, AS 1 COMP. GEN. 735 AND 21 COMP. DEC. 870 ARE TO THE EFFECT THAT OBLIGATION IS ESTABLISHED BY THE INSTITUTION OF CONDEMNATION RATHER THAN BY REQUEST FOR SUCH INSTITUTION.

WHEN LAND IS UNDER OPTION, BUT BECAUSE OF DEFECTIVE TITLE SATISFACTORY CONVEYANCE BY THE OPTION OR IS NOT POSSIBLE, IT HAS BEEN OUR UNDERSTANDING THAT (A) THE ORIGINAL OBLIGATION ESTABLISHED BY OPTION ACCEPTANCE MAY BE ALLOWED TO STAND AND PAYMENT FOR THE CONDEMNED LAND MADE FROM THE APPROPRIATION AVAILABLE WHEN OPTION WAS ACCEPTED, OR (B) THE OPTION OBLIGATION MAY BE ABANDONED AND NEW OBLIGATION SET UP AT SUCH TIME AS IT IS DECIDED TO REQUEST ACQUISITION THROUGH CONDEMNATION, AND PAYMENT MADE FROM AN APPROPRIATION AVAILABLE FOR OBLIGATION AT THAT TIME. UNDER (A) IF THE CONDEMNATION AWARD EXCEEDS THE OPTION PRICE (BUT IS ACCEPTABLE TO THE GOVERNMENT) IT MAY BECOME NECESSARY BECAUSE OF INSUFFICIENT BALANCE IN THE ORIGINAL APPROPRIATION TO CHARGE THE EXCESS AT LEAST TO A LATER APPROPRIATION; ALSO, IN CONDEMNATION WITHOUT OPTION IF THE AMOUNT ALLOWED IN EXCESS OF THE ANTICIPATED COST WOULD OVERBURDEN THE APPROPRIATION CURRENT WHEN THE PROCEEDINGS WERE REQUESTED, RENDERING IMPOSSIBLE FULL SETTLEMENT FROM THAT APPROPRIATION, EITHER PART OR ALL OF THE AWARD WOULD HAVE TO BE PAID FROM ANOTHER APPROPRIATION OR A DEFICIENCY APPROPRIATION OBTAINED. ALSO, WHEN A PER-ACRE PRICE IS AGREED UPON AND SURVEY REVEALS A SUBSTANTIALLY LARGER ACREAGE THE OBLIGATED APPROPRIATION MAY NOT HAVE A SUFFICIENT UNOBLIGATED BALANCE TO COVER THE ADDITIONAL COST, NECESSITATING PARTIAL PAYMENT FROM ANOTHER APPROPRIATION.

FREQUENTLY, BOTH IN DIRECT PURCHASES AND IN CONDEMNATION CASES, PARTIAL OWNERSHIPS ARE FOUND TO BE IN PERSONS OTHER THAN THOSE EXECUTING THE OPTION, BUT WITH ALL SUCH PARTIES SIGNIFYING WILLINGNESS TO ABIDE BY THE TERMS OF THE OPTION. HOWEVER, WITH THESE PARTIES PARTICIPATING IN THE DEEDS, OR RECEIVING JUDICIAL RECOGNITION, THERE ARE MODIFICATIONS OF THE ORIGINAL CONTRACT. RIGHTS FOUND TO BE OUTSTANDING IN THIRD PARTIES, BUT SUBSEQUENTLY APPROVED BY THE SECRETARY OF AGRICULTURE AND THE NATIONAL FOREST RESERVATION COMMISSION, TO CERTAIN DEGREES ARE ALSO MODIFICATIONS OF THE ORIGINAL CONTRACT.

IN CIRCUMSTANCES SUCH AS THOSE ABOVE SET FORTH, THE FULL DETAILS OF THE CONTRACT ARE DEVELOPED BY ACTION SUBSEQUENT TO THE ACCEPTANCE OF THE OPTION AFTER APPROVAL BY THE NATIONAL FOREST RESERVATION COMMISSION WHEN SUCH CHANGE IS NOT PREJUDICIAL TO THE INTERESTS OF THE GOVERNMENT. THESE DETAILS MAY BE DEFINED AND FULLY EXPRESSED IN THE DEED AS EXECUTED, OR AS RECORDED, OR AS FINALLY ACCEPTED BY THE UNITED STATES; OR MAY BE SET FORTH IN THE LETTER FROM THE DEPARTMENT OF AGRICULTURE REQUESTING THE INITIATION OF CONDEMNATION PROCEEDINGS, OR IN THE PETITIONS FILED IN SUCH PROCEEDINGS, OR IN THE DECREE OF THE COURT OF JURISDICTION, OR IN THE DECISION OF THE DEPARTMENT OF AGRICULTURE, SUBJECT TO THE APPROVAL OF THE NATIONAL FOREST RESERVATION COMMISSION WHERE NECESSARY, TO ACCEPT THE AWARDS SET FORTH IN SUCH DECREES. IN RELATION TO THE AVAILABILITY OF SPECIFIC APPROPRIATIONS FOR THE PAYMENT FOR LANDS COVERED BY SPECIFIC CONTRACTS, ANY ONE OF THE SEVERAL STAGES FOLLOWING ACCEPTANCE OF OPTION LEGALLY MAY CONSTITUTE THE BASIS FOR PAYMENT FROM A CERTAIN APPROPRIATION; THE DEGREE TO WHICH THAT IS TRUE BEING FIXED, OF COURSE, BY THE RULINGS OF YOUR OFFICE.

AS TO QUESTION TWO, IT IS BELIEVED THAT AN ESTABLISHED OBLIGATION SHOULD BE CONSIDERED AS TERMINATED UNDER THE FOLLOWING CIRCUMSTANCES:

(1) UNDER AN ACCEPTED OPTION WHEN THERE HAS BEEN ADEQUATE DETERMINATION THAT THE OPTION OR CAN NOT CONVEY SATISFACTORY TITLE, UNLESS DECISION TO REQUEST CONDEMNATION PROCEEDINGS IS REACHED IMMEDIATELY OR PROMPTLY THEREAFTER. ANY LATER REQUEST FOR CONDEMNATION SHOULD BE TREATED AS CREATING A NEW OBLIGATION UNDER AN APPROPRIATION AVAILABLE AT THAT TIME;

(2) WITH CONSENT OF THE OPTION OR WHEN FACTS LATER DEVELOP INDICATING THAT ACQUISITION AT THE AGREED PRICE IS NOT IN THE INTEREST OF THE GOVERNMENT;

(3) WHEN, SUBSEQUENT TO ACCEPTANCE OF THE OPTION, CHANGES OCCUR IN THE LAND OR COVER, WHICH DIMINISH THE VALUE FOR THE INTENDED PURPOSE AND AGREEMENT WITH THE OPTION OR AS TO CORRESPONDING REDUCTION IN PRICE CAN NOT BE REACHED;

(4) UNDER CONDEMNATION WHEN THE AWARD BY THE COURT IS IN EXCESS OF THE VALUE OF THE LAND TO THE GOVERNMENT FOR THE INTENDED PURPOSE OR IS SUBJECT TO CONDITIONS OBJECTIONABLE TO THE UNITED STATES.

THE FIRST QUESTION CONCERNS WHAT ADMINISTRATIVE ACTION CONSTITUTES AN OBLIGATION OF FUNDS AVAILABLE FOR THE PURCHASE OF LANDS FOR THE FOREST SERVICE UNDER THE ACT OF MARCH 1, 1911, 36 STAT. 961, REFERRED TO IN YOUR LETTER. GENERALLY IT MAY BE SAID THAT ANY ADMINISTRATIVE ACTION UNDER WHICH THE GOVERNMENT UNDERTAKES TO ACQUIRE THE LANDS UPON CONSIDERATION OF THE PAYMENT OF A CERTAIN PURCHASE PRICE THEREFOR, THUS IMPOSING A LIABILITY UPON THE GOVERNMENT FOR SAID PAYMENT, IS SUFFICIENT TO CREATE AN OBLIGATION AGAINST THE APPROPRIATION OR APPROPRIATIONS AVAILABLE FOR THE PURCHASE OF THE LANDS EVEN IF THE PAYMENT MUST BE CONSIDERED AS SUBJECT TO CONTINGENCIES. MORE SPECIFICALLY THE QUESTION AND THE SUBDIVISIONS THEREOF AS SET FORTH IN YOUR LETTER MAY BE ANSWERED AS FOLLOWS:

1. PURCHASE BASED ON ACCEPTED OPTIONS.--- THE APPROPRIATION SHOULD BE REGARDED AS OBLIGATED AT THE TIME OF THE GOVERNMENT'S ACCEPTANCE OF THE OPTION WITHIN THE OPTION PERIOD. WHILE IT WAS SAID IN THE DECISION OF JANUARY 15, 1935, A-59458, REFERRED TO IN YOUR LETTER, THAT IN LAW CONTRACTS RESULTING FROM ACCEPTANCE OF OPTIONS ARE NOT LOOKED UPON WITH FAVOR, WHERE THERE HAS BEEN AN ACTUAL OFFER TO SELL AND AN ACCEPTANCE OF SUCH OFFER BY THE GOVERNMENT NO REASON APPEARS WHY THE ACTION SO TAKEN SHOULD NOT BE TAKEN AS OBLIGATING THE APPROPRIATION. 2. PURCHASE ON FORMAL CONTRACT.--- THE DATE OF EXECUTION AND DELIVERY OF THE CONTRACT IS THE DATE OF OBLIGATING THE APPROPRIATION. IN THE DECISION REPORTED IN 4 COMP. GEN. 371, TO WHICH YOU REFER AS POSSIBLY INDICATING THAT THE DATE OF EXECUTION OF A VALID DEED COULD BE SUBSTITUTED AS THE DATE OF OBLIGATING THE APPROPRIATION, IT DOES NOT APPEAR THAT THERE WAS A FORMAL CONTRACT WHICH PRECEDED THE EXECUTION OF THE DEED AND NO REASON APPEARS FOR REGARDING THE DATE OF THE DEED AS THE DATE OF OBLIGATING THE APPROPRIATION WHERE THERE IS A VALID CONTRACT OF SALE AND PURCHASE PRIOR TO THE DEED AND THE DEED IS MADE PURSUANT THERETO.

3. PURCHASE ON DEED ONLY.--- THE DATE OF ACKNOWLEDGMENT AND DELIVERY OF A VALID DEED WHERE THE PURCHASE IS NOT BASED ON A CONTRACT PRIOR THERETO SHOULD BE REGARDED AS THE DATE OF OBLIGATING THE APPROPRIATION.

4. PURCHASE THROUGH CONDEMNATION PROCEEDINGS.--- IN THE ABSENCE OF CONTRACT OR OPTION, THE APPROPRIATION SHOULD BE REGARDED AS OBLIGATED BY THE REQUEST UPON THE ATTORNEY GENERAL TO INSTITUTE CONDEMNATION PROCEEDINGS RATHER THAN BY THE INSTITUTION OF SUCH PROCEEDINGS. 4 COMP. GEN. 206. WHERE, HOWEVER, LAND IS UNDER OPTION BUT, BECAUSE OF DEFECTIVE TITLE, SATISFACTORY CONVEYANCE IS NOT POSSIBLE (A) THE ORIGINAL OBLIGATION ESTABLISHED BY OPTION ACCEPTANCE MAY BE ALLOWED TO STAND AND PAYMENT FOR THE CONDEMNED LAND MADE FROM THE APPROPRIATION AVAILABLE WHEN THE OPTION WAS ACCEPTED, AS SUGGESTED BY YOU, OR (B), AS ALSO SUGGESTED BY YOU, THE OBLIGATION ESTABLISHED BY THE ACCEPTED OPTION MAY BE ABANDONED AND A NEW OBLIGATION SET UP AT SUCH TIME AS IT IS DECIDED TO REQUEST ACQUISITION THROUGH CONDEMNATION PROCEEDINGS AND PAYMENT MADE FROM AN APPROPRIATION AVAILABLE FOR OBLIGATION AT THAT TIME.

YOUR LETTER SUGGESTS (1) THAT IF UNDER (A) REFERRED TO IN THE PRECEDING PARAGRAPH HEREOF, THE CONDEMNATION AWARD EXCEEDS THE OPTION PRICE BUT IS ACCEPTABLE TO THE GOVERNMENT AND THERE MAY BE AN INSUFFICIENT BALANCE IN THE APPROPRIATION TO TAKE CARE OF THE EXCESS IT MAY BE NECESSARY TO CHARGE THE EXCESS TO A LATER APPROPRIATION; (2) THAT IF IN CONDEMNATION WITHOUT OPTION THE AMOUNT ALLOWED IN EXCESS OF THE ANTICIPATED COST WOULD OVERBURDEN THE APPROPRIATION CURRENT WHEN THE PROCEEDINGS WERE REQUESTED, EITHER PART OR ALL OF THE AWARD WOULD HAVE TO BE PAID FROM ANOTHER APPROPRIATION OR A DEFICIENCY APPROPRIATION OBTAINED; AND (3) THAT WHEN THE PRICE IS ON A PER-ACRE BASIS AND THE SURVEY REVEALS A SUBSTANTIALLY LARGER ACREAGE AND THE UNOBLIGATED BALANCE IN THE APPROPRIATION MAY NOT BE SUFFICIENT TO TAKE CARE OF THE ADDITIONAL COST, IT MAY BE NECESSARY TO MAKE PARTIAL PAYMENT FROM ANOTHER APPROPRIATION. THERE IS NO OBJECTION UNDER (1), SUPRA, WHERE THE APPROPRIATION UNDER WHICH THE OPTION WAS ACCEPTED IS NOT SUFFICIENT TO TAKE CARE OF THE EXCESS TO CHARGE SUCH EXCESS TO THE APPROPRIATION CURRENT AT THE TIME THE CONDEMNATION PROCEEDINGS WERE REQUESTED, BUT NO OTHER APPROPRIATION SHOULD BECOME INVOLVED. UNDER (2) THERE IS NO AUTHORITY OF LAW FOR CHARGING ANY OTHER APPROPRIATION THAN THAT OBLIGATED AT THE TIME THE CONDEMNATION PROCEEDINGS WERE REQUESTED. IT IS AN ADMINISTRATIVE RESPONSIBILITY TO GUARD AGAINST OVERBURDENING APPROPRIATIONS BY PROVIDING SUCH ADEQUATE RESERVES AS WILL COVER CONTINGENCIES SUCH AS MAY ARISE IN THE PROSECUTION OF CONDEMNATION PROCEEDINGS. IN SUCH CASES WHERE SUCH OVERBURDENING OCCURS THE MATTER IS FOR BRINGING TO THE ATTENTION OF THE CONGRESS AS DEFICIENCY ITEMS. THIS IS TRUE ALSO WITH RESPECT TO MATTERS UNDER (3). THERE IS NO AUTHORITY FOR CHARGING ANY OTHER APPROPRIATION THAN THAT ORIGINALLY OBLIGATED REGARDLESS OF WHETHER IT BE SUFFICIENT OR WHETHER A DEFICIENCY THEREIN MAY HAVE TO BE REPORTED TO THE CONGRESS. IN CONNECTION WITH MATTERS INVOLVING THE INCURRING OF DEFICIENCIES, ATTENTION IS INVITED TO TITLE 31, SECTION 665, U.S.C.

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