B-121465, OCT 4, 1954

B-121465, OCT 4, 1954

PRECIS-UNAVAILABLE

MR. FRANK V. SEIDELHUBER, JR., GEIDELHUBER IRON & BRONZE WORKS:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 28, 1954, WITH ENCLOSURE, RELATIVE TO YOUR INDEBTEDNESS TO THE UNITED STATES IN THE AMOUNT OF $6,191.84, WHICH SUM HAS BEEN COLLECTED BY THIS OFFICE FROM FUNDS OTHERWISE DUE YOU. YOU REQUEST REFUND OF THE FULL AMOUNT TO THE FIRMS FROM WHOM COLLECTION WAS MADE AND STATE THAT THE PROPER PARTIES ARE PREPARED TO DEFEND THEMSELVES AGAINST ANY CLAIM WHICH MAY BE ASSERTED BY THE GOVERNMENT.

THE INDEBTEDNESS AROSE IN CONNECTION WITH CONTRACT NO. MCC-25574, CONSISTING OF PROPOSAL DATED FEBRUARY 17, 1944, AND ACCEPTANCE BY PURCHASE ORDER NO. PDMC 44-29150 DATED FEBRUARY 23, 1944, BETWEEN THE SEIDELHUBER IRON & BRONZE WORKS AND THE UNITED STATES MARITIME COMMISSION. THE INITIAL COLLECTION OF $5,287.69 REPRESENTED THE PROCEEDS OF CHECK NO. 146,045 EARNED BY THE SEIDELHUBER IRON & BRONZE WORKS, INC., UNDER CONTRACT NO. DA-45-164-ENG-2068 WITH THE DEPARTMENT OF THE ARMY AND THE BALANCE OF THE INDEBTEDNESS, OR $904.15, WAS APPLIED AGAINST THE AMOUNT OF $3,274.18 DUE THE SEIDELHUBER COMPANY UNDER CONTRACT NO. N251S-5903A WITH THE DEPARTMENT OF THE NAVY. YOU STATE THAT YOU WERE COOWNER OF THE 1944 FIRM, PRESIDENT OF THE CORPORATION WHICH WAS CHARTERED IN THE STATE OF WASHINGTON DURING 1946, AND PARTNER IN THE COMPANY FORMED DURING 1953.

AN EXAMINATION OF THE RECORDS BEFORE THIS OFFICE INDICATES THAT WHILE THE 1944 CONTRACT AND PURCHASE ORDER WERE SIGNED BY YOU AS PRESIDENT, UNDER THE NAME SEIDELHUBER IRON & BRONZE WORKS, YOUR STAMPED RECEIPT ON THESE DOCUMENTS (SUBSEQUENTLY RETURNED TO THE PURCHASING OFFICE) READS "RECEIVED SEIDELHUBER IRON & BRONZE WORKS, INC *** 1944." THIS IS THE IDENTICAL FIRM NAME (WITH CHANGE IN STREET ADDRESS) OF THE CORPORATION AGAINST WHICH FUNDS DUE UNDER THE DEPARTMENT OF THE ARMY CONTRACT WERE APPLIED. REFERENCE ALSO SHOULD BE MADE TO A TELEPHONE CONVERSATION BETWEEN YOUR MR. JOHNSON AND A REPRESENTATIVE OF THIS OFFICE ON AUGUST 17, 1954, AS CONFIRMED IN A TELEGRAM OF THAT DATE READING: "WE AGREE THAT THE SET OFF HAS BEEN PROPERLY CHARGED TO THE RIGHT FIRM WITH THE RESERVATION OF A RIGHT TO FURTHER NEGOTIATE THE AMOUNTS." ACCORDINGLY, THIS OFFICE IS OF THE VIEW THAT THERE IS SUCH AN IDENTITY OF INTEREST BETWEEN THE DEBTOR AND CREDITOR FIRMS AS TO REQUIRE ACTION BY WAY OF SET-OFF OF ONE INDEBTEDNESS AGAINST THE OTHER. YOUR ATTENTION IS INVITED TO THE CASE OF UNITED STATES V. HUNSEY TRUST CO., 332 U.S. 234, 239-240, WHEREIN THE SUPREME COURT STATED:

"THE GOVERNMENT HAS THE SAME RIGHT 'WHICH BELONGS TO EVERY CREDITOR, TO APPLY THE UNAPPROPRIATED MONEYS OF HIS DEBTOR, IN HIS HANDS, IN EXTINGUISHMENT OF THE DEBTS DUE HIM.' GRATIOT V. UNITED STATES, PET. 336, 370; MCKNIGHT V. UNITED STATES, 98 U. S. 179, 186. MORE THAN THAT, FEDERAL STATUTE GIVES JURISDICTION TO THE COURT OF CLAIMS TO HEAR AND DETERMINE 'ALL SET-OFFS, COUNTERCLAIMS, CLAIMS FOR DAMAGES, WHETHER LIQUIDATED OR UNLIQUIDATED, OR OTHER DEMANDS WHATSOEVER ON THE PART OF THE GOVERNMENT OF THE UNITED STATES AGAINST ANY CLAIMANT AGAINST THE GOVERNMENT IN SAID COURT ....' JUDICIAL CODE SEC. 145, 28 U.S.C. SEC. 250(2). THIS POWER GIVEN TO THE COURT OF CLAIMS TO STRIKE A BALANCE BETWEEN THE DEBTS AND CREDITS OF THE GOVERNMENT, BY LOGICAL IMPLICATION GIVES POWER TO THE COMPTROLLER GENERAL TO DO THE SAME, SUBJECT TO REVIEW BY THAT COURT. ***"

THE FACTS AND CIRCUMSTANCES CONCERNING YOUR INDEBTEDNESS IN THE AMOUNT OF $6,191.84 ARE SET FORTH IN A STATEMENT OF ACCOUNT PREPARED BY THIS OFFICE AND MAILED IN LETTER DATED JULY 22, 1953, TO YOUR ATTORNEYS - THEREAFTER FURNISHED TO YOU - AND NEED NOT BE REPEATED HERE. HOWEVER, AN EXAMINATION OF THE RECORD FAILS TO DISCLOSE ANY SPECIFIC PROTEST BY YOU, OR IN YOUR BEHALF, IN REFERENCE TO THAT AMOUNT, EXCEPT THE STATEMENTS CONTAINED IN YOUR ATTORNEY'S LETTER DATED MAY 5, 1952, REGARDING THE AMOUNT OF $4,470.66. IT IS CONTENDED THAT THE PAYMENT OF SAID SUM OTHERWISE WAS JUSTIFIED BY REASON OF THE GOVERNMENT'S INSISTENCE UPON USE OF A RADIO WELD INSTEAD OF A COMMERCIAL WELD IN THE CONSTRUCTION OF THE SEA CHESTS AND THAT SUCH A CHANGE IN SPECIFICATIONS RESULTED IN YOUR INCREASED COST.

IN REVIEWING THIS PORTION OF YOUR CLAIM, IT IS APPARENT THAT THE AMOUNT, $4,470.66, CONCERNS SOLELY YOUR ALLEGED ERROR IN BID, AS PRESENTED IN YOUR LETTER OF MARCH 14, 1944, TO THE PURCHASING OFFICE, AND WHEREIN YOU ADMIT FULL RESPONSIBILITY IN THE MATTER. SEE FRAZIER DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C. CLS. 120, 163.

THE ACCEPTANCE OF YOUR BID IN THE CIRCUMSTANCES REPORTED HERE GAVE RISE TO A VALID AND BINDING CONTRACT (UNITED STATES V. NEW YORK AND PORTO RICE STEAMSHIP COMPANY, 239 U. S. 88. UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U. S. 313; AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U. S. 75) AND VESTED IN THE UNITED STATES THE RIGHT TO HAVE THE CONTRACT PERFORMED STRICTLY IN ACCORDANCE WITH ITS TERMS; AND NO OFFICER OF THE GOVERNMENT HAS AUTHORITY TO DIVEST THE GOVERNMENT OF SUCH VESTED RIGHT OR TO ALLOW COMPENSATION FOR PERFORMANCE IN AN AMOUNT GREATER THAN THAT AGREED UPON IN THE CONTRACT. BRAWLEY V. UNITED STATES, 96 U. S. 168; SIMPSON V. UNITED STATES, 172 U. S. 372, 379; UNITED STATES V. AMERICAN SALES COMPANY, 27 F.2D 389, AFFIRMED IN 32 F.2D 141, AND CERTIORARI DENIED, 280 U. S. 574. AS STATED BY THE UNITED STATES COURT OF CLAIMS IN THE CASE OF THE PACIFIC HARDWARE AND STEEL COMPANY V. UNITED STATES, 49 C. CLS. 327, 335, "IT IS UNQUESTIONABLY TRUE THAT AN OFFICIAL OF THE GOVERNMENT IS NOT AUTHORIZED TO GIVE AWAY OR REMIT A CLAIM DUE THE GOVERNMENT. THIS RULE IS GROUNDED IN A SOUND PUBLIC POLICY AND IS NOT TO BE WEAKENED." IT FOLLOWS THAT THE ISSUANCE OF ADDENDUM #2, DATED MARCH 27, 1944, WAS WITHOUT LEGAL FORCE AND EFFECT.

ACCORDINGLY, THE ACTION BY THIS OFFICE IN EFFECTING THE COLLECTION OF THE COMPLETE AMOUNT OF YOUR INDEBTEDNESS WAS CORRECT AND IS SUSTAINED.