B-125254, DEC. 15, 1955
Highlights
ATTORNEY AT LAW: REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 2. WHICH ACTION WAS SUSTAINED IN OUR DECISION OF OCTOBER 19. YOU REQUEST RECONSIDERATION OF THE SETTLEMENT PRIMARILY FOR THE REASON THAT THE FINAL CONTRACT PAYMENT SHOULD HAVE ISSUED IN FAVOR OF THE BANK ASSIGNEE UNDER THE INSTRUMENT SIGNED JOINTLY BY CONTRACTOR AND THE SURETY. YOU CONTEND THAT THE REVOCATION OF THE ASSIGNMENT WAS ACCOMPLISHED UPON THE CONDITION THAT ONLY THE REQUESTED DISTRIBUTION BE MADE OF THE FUNDS. WHICH IS NOT THE CASE HERE. ARE SET FORTH AND EXPLAINED IN OUR DECISION OF OCTOBER 19. A COPY OF WHICH WAS MADE AVAILABLE TO YOU. YOUR ATTENTION AGAIN IS INVITED TO THE DECISION HANDED DOWN IN THE CASE OF STANDARD ACCIDENT INSURANCE COMPANY V.
B-125254, DEC. 15, 1955
TO MR. ALAN A. MARSHALL, ATTORNEY AT LAW:
REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 2, 1955, WRITTEN ON BEHALF OF THE EMPLOYERS MUTUAL CASUALTY COMPANY, THE SURETY WHO FURNISHED THE CONTRACT PERFORMANCE AND PAYMENT BONDS UNDER THE CONTRACT FOR WHICH FINAL PAYMENT ISSUED AS REFLECTED ON CERTIFICATE OF SETTLEMENT NO. 2261232, DATED MAY 19, 1955, WHICH ACTION WAS SUSTAINED IN OUR DECISION OF OCTOBER 19, 1955. YOU REQUEST RECONSIDERATION OF THE SETTLEMENT PRIMARILY FOR THE REASON THAT THE FINAL CONTRACT PAYMENT SHOULD HAVE ISSUED IN FAVOR OF THE BANK ASSIGNEE UNDER THE INSTRUMENT SIGNED JOINTLY BY CONTRACTOR AND THE SURETY, THUS PERMITTING A DISTRIBUTION OF THE FUNDS AS OUTLINED IN THE REQUEST CONTAINED IN THE NOTICE OF THE REVOCATION OF THE ASSIGNMENT DATED JULY 1, 1954. YOU CONTEND THAT THE REVOCATION OF THE ASSIGNMENT WAS ACCOMPLISHED UPON THE CONDITION THAT ONLY THE REQUESTED DISTRIBUTION BE MADE OF THE FUNDS.
AN EXAMINATION OF THE REVOCATION INSTRUMENT DATED JULY 1, 1954, CLEARLY EVIDENCES A PROPER REVOCATION BY THE INTERESTED PARTIES OF THE ASSIGNMENT INSTRUMENT DATED MAY 16, 1953. THE FACT THAT THE NOTICE OF THE REVOCATION CONTAINED AN ADDITIONAL REQUEST AS TO THE MANNER OF PAYMENT AND FINAL DISTRIBUTION OF FUNDS THEN REMAINING UNPAID UNDER THE CONTRACT IN NOWISE AFFECTS THE LEGAL STATUS OF THE CLEARLY ANNOUNCED REVOCATION, NOR DOES THE REQUEST CONDITION THE ACCEPTANCE THEREOF BY THE GOVERNMENT. IN OTHER WORDS THE SITUATION THEN BECAME ONE NOT COVERED BY ANY ASSIGNMENT, THEREBY REMOVING ANY APPLICATION OF THE ASSIGNMENT OF CLAIMS ACT OF 1940, OR APPLICATION OF THE DECISION IN THE CASE OF CENTRAL BANK V. UNITED STATES, 345 U.S. 639, REFERRED TO BY YOU, WHICH INVOLVED THE RIGHTS OF THE ASSIGNEE UNDER A VALID ASSIGNMENT, WHICH IS NOT THE CASE HERE.
IT APPEARS THAT ALL OF THE REPORTED FACTS, INCLUDING THE MATTER OF LITIGATION BEFORE THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA, CIVIL NO. 579, ARE SET FORTH AND EXPLAINED IN OUR DECISION OF OCTOBER 19, 1955, A COPY OF WHICH WAS MADE AVAILABLE TO YOU. YOUR ATTENTION AGAIN IS INVITED TO THE DECISION HANDED DOWN IN THE CASE OF STANDARD ACCIDENT INSURANCE COMPANY V. UNITED STATES, 119 C.CLS. 749, WHEREIN THE COURT HELD IN SUBSTANCE THAT THE GOVERNMENT'S RIGHT TO SET OFF THE RETURNED PERCENTAGES AGAINST A CONTRACTOR'S TAX DEBT WAS SUPERIOR TO THE COMPLETING SURETY'S RIGHTS AS SUBROGEE. IT APPEARS THAT THIS DECISION IS PROPERLY FOR APPLICATION IN THE INSTANT CASE SINCE THE ONLY REAL PARTY IN INTEREST HERE IS THE SURETY. THE ONLY PARTY THAT IS PROTECTED BY THE "NO SET-OFF" PROVISIONS OF THE 1940 ACT IS THE ASSIGNEE. THE UNITED STATES WAS MORE THAN A MERE STAKEHOLDER IN THIS CASE AND THE DECISION IN THE STANDARD ACCIDENT INSURANCE COMPANY CASE MUST BE ACCEPTED AS CONTROLLING RATHER THAN THE CASES REFERRED TO BY YOU.