A-76992, JULY 27, 1936, 16 COMP. GEN. 72

A-76992, JULY 27, 1936, 16 COMP. GEN. 72

FEDERAL HOUSING ADMINISTRATION - DEFAULTED MODERNIZATION LOAN ACCOUNTS - UNCOLLECTIBLE BALANCES - TRANSMISSION TO GENERAL ACCOUNTING OFFICE SECTION 236, REVISED STATUTES, AS AMENDED BY THE ACT OF JUNE 10, 1921, 42 STAT. 24, CONTEMPLATES THAT, UNLESS OTHERWISE SPECIFICALLY PROVIDED BY SUBSEQUENT LEGISLATION, ALL CLAIMS OF THE GOVERNMENT AGAINST ITS DEBTORS SHALL IN THE FIRST INSTANCE BE SETTLED AND ADJUSTED BY THE GENERAL ACCOUNTING OFFICE. THE PAPERS PERTAINING TO THE CLAIM OF THE UNITED STATES FOR THE BALANCE DUE ON A DEFAULTED MODERNIZATION LOAN ACCOUNT INSURED UNDER TITLE I OF THE NATIONAL HOUSING ACT OF JUNE 27, 1934, 48 STAT. 1246, WHICH THE ADMINISTRATOR, FEDERAL HOUSING ADMINISTRATION, CANNOT COLLECT, UNDER THE STATUTORY AUTHORITY IN SAID ACT "TO SUE OR BE SUED," TOGETHER WITH AN ADMINISTRATIVE REPORT AND RECOMMENDATION, SHOULD BE TRANSMITTED TO THE GENERAL ACCOUNTING OFFICE FOR SETTLEMENT OF THE CLAIM UNDER THE GENERAL AUTHORITY CONFERRED BY SECTION 236, REVISED STATUTES, AS AMENDED BY THE ACT OF JUNE 10, 1921, 42 STAT. 24.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE ADMINISTRATOR, FEDERAL HOUSING ADMINISTRATION, JULY 27, 1936:

THERE HAS BEEN CONSIDERED THE LETTER OF YOUR GENERAL COUNSEL DATED JUNE 13, 1936, WITH ENCLOSURES, AS FOLLOWS:

THERE IS ENCLOSED FOR YOUR INFORMATION A COPY OF A LETTER DATED MARCH 19, 1936, ADDRESSED TO THE ATTORNEY GENERAL, TOGETHER WITH A COPY OF HIS REPLY DATED MAY 11, 1936; ALSO A SUPPLEMENTAL LETTER ADDRESSED TO THE ATTORNEY GENERAL DATED MAY 19, 1936, TOGETHER WITH HIS REPLY OF JUNE 5, 1936.

THIS CORRESPONDENCE RELATES TO THE PROPER PROCEDURE TO BE FOLLOWED BY THE FEDERAL HOUSING ADMINISTRATION IN TRANSMITTING CERTAIN DEFAULTED MODERNIZATION LOAN ACCOUNTS TO YOUR OFFICE AS ,CLOSED" WITHOUT FORWARDING THEM TO THE DEPARTMENT OF JUSTICE FOR APPROPRIATE LEGAL ACTION IF THE FACTS IN THE PARTICULAR CASE WARRANT SUCH ACTION BE TAKEN.

THERE IS ALSO ENCLOSED FOR YOUR INFORMATION A SPECIMEN CASE PREPARED FOR TRANSMITTAL TO THE DEPARTMENT OF JUSTICE, AND IT IS RESPECTFULLY SUGGESTED THAT THE SAME PROCEDURE BE FOLLOWED IN TRANSMITTING THESE CASES TO YOUR OFFICE.

THIS CORRESPONDENCE IS REFERRED TO YOUR OFFICE FOR CONSIDERATION FOR WE DESIRE TO ADOPT THE PROCEDURE SUGGESTED BY THE ATTORNEY GENERAL PROVIDING IT MEETS WITH YOUR APPROVAL.

THE ENCLOSURES DATED MARCH 19 AND MAY 11, 1936, RELATE TO CASES "INVOLVING THE REPOSSESSION OF MOVABLE EQUIPMENT WHERE THE EQUIPMENT HAS BEEN REPOSSESSED AND SOLD BY THE DIVISION OF COLLECTIONS, INVESTIGATION AND FRAUD AND WHERE, BY STATE LAWS, A DEFICIENCY JUDGMENT MAY STILL BE OBTAINED.' THE DEPARTMENT OF JUSTICE, BY THE SAID LETTER OF MAY 11, 1936, RECOMMENDED THAT:

* * * ALL CASES INVOLVING ITEMS FOUND BY THE HOUSING ADMINISTRATION TO BE UNCOLLECTIBLE SHOULD BE TRANSMITTED TO THE GENERAL ACCOUNTING OFFICE WITH COPIES OF THE INVESTIGATOR'S REPORTS, AND THE FINDING BASED THEREON TO BE ACCEPTED BY THAT OFFICE AS CLOSING THEM, UNLESS, IN EXCEPTIONAL CASES, SOMETHING SHOULD APPEAR THAT WOULD WARRANT REFERENCE BY THE GENERAL ACCOUNTING OFFICE TO THIS DEPARTMENT.

THE ENCLOSURES DATED MAY 19 AND JUNE 5, 1936, RELATE TO CASES IN WHICH REPOSSESSED EQUIPMENT HAS BEEN TAKEN OVER FROM THE FEDERAL HOUSING ADMINISTRATION BY THE PROCUREMENT DIVISION OF THE TREASURY DEPARTMENT, SUCH EQUIPMENT BEING "IN A STATE WHERE A DEFICIENCY JUDGMENT MAY BE OBTAINED BUT FROM THE FACTS IT IS CONSIDERED ADVISABLE TO MARK THE CASE "CLOSED" RATHER THAN OBTAIN A DEFICIENCY JUDGMENT; " ALSO, TO CASES NOT INVOLVING REPOSSESSABLE EQUIPMENT WHERE, IN THE OPINION OF THE FEDERAL HOUSING ADMINISTRATION, TRANSMITTAL OF THE CASES TO THE DEPARTMENT OF JUSTICE WOULD BE FUTILE. THE DEPARTMENT OF JUSTICE, BY THE SAID LETTER OF JUNE 5, 1936, SUGGESTED THE SAME PROCEDURE FOR THE CLASSES OF CASES MENTIONED IN THIS PARAGRAPH AS THAT SUGGESTED FOR CASES REFERRED TO IN THE ENCLOSURE OF MARCH 19, 1936, SUGGESTING, HOWEVER, THAT THE ENTIRE MATTER BE FORMALLY SUBMITTED TO THIS OFFICE.

SECTION 236, REVISED STATUTES, AS AMENDED BY THE ACT OF JUNE 10, 1921, 42 STAT. 24, PROVIDES THAT---

ALL CLAIMS AND DEMANDS WHATEVER BY THE GOVERNMENT OF THE UNITED STATES OR AGAINST IT, AND ALL ACCOUNTS WHATEVER IN WHICH THE GOVERNMENT OF THE UNITED STATES IS CONCERNED, EITHER AS DEBTOR OR CREDITOR, SHALL BE SETTLED AND ADJUSTED IN THE GENERAL ACCOUNTING OFFICE.

THIS PROVISION OF LAW, WHICH ORIGINATED WITH THE ACT OF MARCH 3, 1817, 3 STAT. 366, CONTEMPLATES THAT, UNLESS OTHERWISE SPECIFICALLY PROVIDED BY SUBSEQUENT LEGISLATION, ALL CLAIMS OF THE GOVERNMENT AGAINST ITS DEBTORS SHALL IN THE FIRST INSTANCE BE SETTLED AND ADJUSTED BY THE GENERAL ACCOUNTING OFFICE. SECTIONS 882 AND 886, REVISED STATUTES, AS AMENDED BY SECTION 306 OF THE BUDGET AND ACCOUNTING ACT OF JUNE 10, 1921, SUPRA, AS CONSTRUED BY THE COURTS, GIVE TO THE SETTLEMENTS OF THE GENERAL ACCOUNTING OFFICE OF CLAIMS OF THE GOVERNMENT AGAINST ITS DEBTORS A PRIMA FACIE EFFECT WHEN SUIT IS BROUGHT TO RECOVER THE AMOUNT CERTIFIED TO BE DUE THE GOVERNMENT. SEE SOULE V. UNITED STATES, 100 U.S. 8; DENNIS V. UNITED STATES, 52 PAC. 353; AND UNITED STATES V. PIERSON, 145 FED.REP. 814.

IN THE MATTER OF CLAIMS OF THE UNITED STATES, THERE ARE FOR CONSIDERATION BY THIS OFFICE BOTH THE FACTS AND THE LAW AND ITS ACTION MUST BE ACCORDINGLY. IF THE ACTION BE FAVORABLE TO THE UNITED STATES COLLECTION MUST BE UNDERTAKEN AND, IF NOT OTHERWISE ACCOMPLISHED, REFERENCE MADE TO THE DEPARTMENT OF JUSTICE FOR SUIT. THE ADVANTAGES OF HAVING ALL CLAIMS OF THE UNITED STATES, NOT OTHERWISE PROVIDED FOR BY LAW, ACTED UPON AS CONTEMPLATED BY SECTION 305 OF THE ACT OF JUNE 10, 1921, APPEAR MANY. THE BRINGING TOGETHER OF THE FACTS; UNIFORM CONSIDERATION AND TREATMENT OF CLAIMS REGARDLESS OF THE AGENCY OF ORIGIN; AND POSSIBILITY OF AMICABLE ADJUSTMENT WITH RESORT TO THE OVERBURDENED COURTS ONLY AS A LAST ALTERNATIVE, ARE AMONG THE ADVANTAGES SUGGESTING THEMSELVES AND NO DOUBT WERE AMONG THOSE THAT BROUGHT ABOUT THE ENACTMENT UNDER DISCUSSION.

IN THE INSTANT MATTER RELATING TO DEFAULTED MODERNIZATION LOAN ACCOUNTS WHICH HAVE BEEN INSURED UNDER TITLE I OF THE NATIONAL HOUSING ACT OF JUNE 27, 1934, 48 STAT. 1246, AS AMENDED BY THE ACT OF AUGUST 23, 1935, 49 STAT. 722, THERE APPEARS TO BE NO APPLICABLE STATUTE PROVIDING FOR ANY DISPOSITION OF THE SAID ACCOUNTS CONTRARY TO THE USUAL PROCEDURE IN SIMILAR CASES AS ABOVE SET OUT. ACCORDINGLY YOU ARE ADVISED THAT IN ALL CASES SUCH AS THOSE REFERRED TO IN YOUR SUBMISSION OF JUNE 13, 1936, ARISING UNDER TITLE I OF THE NATIONAL HOUSING ACT, WHERE THE BALANCE DUE THE GOVERNMENT CANNOT BE COLLECTED BY YOU WITHOUT REFERENCE TO THE DEPARTMENT OF JUSTICE, IT BEING NOTED IN THIS CONNECTION THAT THE ACT OF AUGUST 23, 1935, 49 STAT. 722, AMENDING THE NATIONAL HOUSING ACT, AUTHORIZES YOU IN YOUR OFFICIAL CAPACITY "TO SUE AND BE SUED IN ANY COURT OF COMPETENT JURISDICTION, STATE OR FEDERAL," THERE SHOULD BE TRANSMITTED TO THIS OFFICE THE ORIGINAL PAPERS PERTAINING TO SUCH CLAIMS, TOGETHER WITH A COMPLETE REPORT OF ALL PERTINENT FACTS AND CIRCUMSTANCES AND AN ADMINISTRATIVE RECOMMENDATION. IT WILL THEN BE FOR THIS OFFICE TO DETERMINE WHAT FURTHER ACTION, IF ANY, SHOULD BE TAKEN TO ATTEMPT COLLECTION IN INDIVIDUAL CASES.