B-155073, SEP. 23, 1964

B-155073: Sep 23, 1964

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TO HARTFORD ACCIDENT AND INDEMNITY COMPANY: REFERENCE IS MADE TO YOUR LETTER OF JULY 30. YOUR CLAIM IS FOR THE SUM OF $14. YOU REQUEST THAT THE AMOUNT DUE BE PAID TO YOU TO BE APPLIED IN SATISFACTION OF THE CLAIMS OF MATERIALMEN AND SUBCONTRACTORS ON THE GROUNDS THAT THERE ARE OUTSTANDING ACCOUNTS IN EXCESS OF $75. IT LONG HAS BEEN THE RULE OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT THAT UPON COMPLETION OF THE CONTRACT WORK THE CONTRACTOR IS ENTITLED TO BE PAID THE CONTRACT PRICE EVEN THOUGH THERE MAY BE UNPAID CLAIMS FOR LABOR AND MATERIAL OUTSTANDING AGAINST IT. AS WHEN THE CONTRACTOR IS IN DEFAULT OR IS BANKRUPT. WE HAVE ISSUED INSTRUCTIONS TODAY FOR PAYMENT OF $14.

B-155073, SEP. 23, 1964

TO HARTFORD ACCIDENT AND INDEMNITY COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF JULY 30, 1964, PRESENTING A CLAIM AS SURETY FOR FRED BELL CONTRACTING COMPANY UNDER CONTRACT NO. V1006C-536, DATED JUNE 22, 1962, FOR AIR-CONDITIONING A BUILDING AT THE VETERANS ADMINISTRATION HOSPITAL, BIG SPRING, TEXAS.

YOUR CLAIM IS FOR THE SUM OF $14,658.49 DUE UNDER THE CONTRACT. A LIKE CLAIM HAS BEEN PRESENTED BY THE CONTRACTOR. YOU REQUEST THAT THE AMOUNT DUE BE PAID TO YOU TO BE APPLIED IN SATISFACTION OF THE CLAIMS OF MATERIALMEN AND SUBCONTRACTORS ON THE GROUNDS THAT THERE ARE OUTSTANDING ACCOUNTS IN EXCESS OF $75,000 FOR MATERIALS AND/OR LABOR FURNISHED THE CONTRACTOR. IT APPEARS FROM YOUR LETTER OF JUNE 18, 1964, TO THE VETERANS ADMINISTRATION THAT YOU RELY UPON ROYAL INDEMNITY COMPANY V. UNITED STATES, 93 F.SUPP. 891, 117 CT.CL. 736; NATIONAL SURETY CORPORATION V. UNITED STATES, 133 F.SUPP. 381, 132 CT.CL. 724; AND NEWARK INSURANCE COMPANY V. UNITED STATES, 169 F.SUPP. 955, 144 CT.CL. 655.

IT LONG HAS BEEN THE RULE OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT THAT UPON COMPLETION OF THE CONTRACT WORK THE CONTRACTOR IS ENTITLED TO BE PAID THE CONTRACT PRICE EVEN THOUGH THERE MAY BE UNPAID CLAIMS FOR LABOR AND MATERIAL OUTSTANDING AGAINST IT. SEE 10 COMP. GEN. 433, 23 ID. 655; AND 37 ID. 115. WHILE EXCEPTIONS MAY BE PROPER UNDER CERTAIN CIRCUMSTANCES, AS WHEN THE CONTRACTOR IS IN DEFAULT OR IS BANKRUPT, WHEN THE SURETY HAS SATISFIED ALL CLAIMS UNDER THE CONTRACT, OR WHEN A COURT HAS ADJUDGED THE RIGHTS OF THE PARTIES, WE FIND NO SUCH CIRCUMSTANCES IN THE PRESENT CASE. AS TO THE CASES YOU CITE, IN THE ROYAL INDEMNITY AND NATIONAL SURETY CASES, THE CONTRACTOR HAD DEFAULTED, WHILE THE NEWARK CASE INVOLVED A DETERMINATION OF THE RIGHTS OF A SURETY AS AGAINST AN ASSIGNEE BANK. WE THEREFORE DO NOT BELIEVE THOSE CASES AFFORD A BASIS FOR PAYMENT OF YOUR CLAIM.

ACCORDINGLY, WE HAVE ISSUED INSTRUCTIONS TODAY FOR PAYMENT OF $14,658.49, AS THE AMOUNT PRESENTLY DUE, TO THE CONTRACTOR.

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