B-128058, JUL. 3, 1956

B-128058, JUL. 3, 1956

THE CHAMPION COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF MAY 19, 1956, ADDRESSED TO THE HONORABLE CLARENCE J. BROWN, TRANSMITTING YOUR ENTIRE FILE RELATIVE TO YOUR REPORTED INDEBTEDNESS TO THE UNITED STATES IN THE AMOUNT OF $1,452.40, AS RENTAL DUE FOR CERTAIN GOVERNMENT-OWNED EQUIPMENT UNDER FACILITIES LEASE AGREEMENT NO. AF-20/600/-26, AS AMENDED, WITH THE DEPARTMENT OF THE AIR FORCE. THE INDEBTEDNESS IS STATED IN OUR CLAIMS DIVISION LETTER OF APRIL 16, 1956, TO YOU, WHICH INCLUDED NOTICE OF THE APPLICATION OF THE PROCEEDS OF TWO CHECKS IN THE AMOUNTS OF $49 AND $43.39 OTHERWISE DUE, THUS REDUCING THE UNPAID BALANCE TO $1,360.01.

THE ORIGINAL LEASE, INSOFAR AS PERTINENT HERE, COVERED THE RENTAL OF CERTAIN LISTED ITEMS OF EQUIPMENT AT THE RATE OF 1 PERCENT PER MONTH OF THE ACQUISITION COST. PROVISION ALSO WAS MADE PERMITTING THE PARTIES, BY MUTUAL AGREEMENT, TO AUGMENT THE ORIGINAL LISTING BY SUPPLEMENTAL AGREEMENT. TWO ADDITIONAL ITEMS WERE ADDED TO THE ORIGINAL LISTING UNDER SUPPLEMENTAL AGREEMENT NO. 4, WITH THE BASIC LEASE OTHERWISE REMAINING IN FULL FORCE AND EFFECT. THEREAFTER, ON THE BASIS OF AN ADMINISTRATIVE REPORT THAT THE PROPER RENTAL RATE FOR THE ADDED EQUIPMENT WAS 2 PERCENT, RATHER THAN 1 PERCENT AS STIPULATED IN THE ORIGINAL AGREEMENT, THERE WAS EXECUTED SUPPLEMENTAL AGREEMENT NO. 5, DATED JANUARY 21, 1954, PURPORTING TO GIVE RETROACTIVE EFFECT TO THE INCREASED RENTAL FOR THE ADDITIONAL ITEMS BEGINNING FEBRUARY 18, 1953. HOWEVER AT THAT TIME A DISPUTE AROSE CONCERNING THE LACK OF ANY MUTUALITY WITH RESPECT TO THE PAYMENT OF THE INCREASED RENTAL RATE FOR THE PERIOD PRIOR TO JANUARY 20, 1954, THE DATE OF SUPPLEMENTAL AGREEMENT NO. 5. THE EVIDENCE INDICATES THAT ALTHOUGH YOU SIGNED THE AGREEMENT OF JANUARY 20, 1954, MAKING THE INCREASED RATE RETROACTIVE TO FEBRUARY 18, 1953, YOU NEVER DID IN FACT AGREE TO A RETROACTIVE RENTAL INCREASE. YOUR INDEBTEDNESS WAS ADMINISTRATIVELY REPORTED TO OUR OFFICE COMPUTED AS FOLLOWS:

1. DUE ON MACHINES AF-354633 AND 355128 ON SUPPLEMENT NO. 5 FROM FEBRUARY 18 THROUGH DECEMBER 31, 1953 $1,067.87

2. DUE ON 1ST QUARTERS PAYMENT. THIS AMOUNT CONSIDERS THE INCREASE OF 1 PERCENT FOR MACHINES IN SUPPLEMENT NO. 5 AND THE FACT THAT RENT WAS NOT PAID FOR THE ENTIRE QUARTER (SEE YOUR LETTER OF JUNE 1, 1954, FORWARDING YOUR CHECK FOR $140.64). ADDITIONAL 1 PERCENT AT $103.01 FOR 3 MONTHS, PLUS ALL ITEMS 7 DAYS AT $4.8492 PER DAY. 342.98

3. DUE FOR 22 DAYS IN APRIL 1954 AS SPECIFIED IN SUPPLEMENT NO. 6, INCLUDING THE INCREASE FROM 1 PERCENT TO 2 PERCENT FOR TWO MACHINES 182.19

TOTAL $1,593.04

LESS CREDIT FOR PAYMENT OF $140.64 - 140.64

$1,452.40

IN CONSIDERATION OF ALL THE REPORTED FACTS AND CIRCUMSTANCES UNDER WHICH THE INCREASED RENTAL WAS ASSESSED, AND IN VIEW OF THE APPARENT LACK OF MUTUALITY BETWEEN THE PARTIES AS TO WHETHER THE INCREASED RENTAL SHOULD BE EFFECTIVE RETROACTIVELY, IT HAS BEEN DETERMINED THAT YOUR LIABILITY FOR THE INCREASED RATE COVERS THE PERIOD COMMENCING JANUARY 20, 1954, THE DATE OF SUPPLEMENTAL AGREEMENT NO. 5. ACCORDINGLY, YOUR REPORTED INDEBTEDNESS HAS BEEN REDUCED IN THE AMOUNT OF $1,143.41, COVERING THE 1 PERCENT INCREASED RATE ON THE TWO MACHINES ADDED UNDER SUPPLEMENT NO. 4, FROM FEBRUARY 18, 1953, TO JANUARY 21, 1954 (11 MONTHS AND 3 DAYS), THUS LEAVING A BALANCE DUE OF $308.99 ($1,452.40 LESS $1,143.41). ALSO, THERE HAS BEEN APPLIED AGAINST THIS AMOUNT THE PROCEEDS OF THE CHECKS HERETOFORE MENTIONED AGGREGATING $92.39, LEAVING A NET BALANCE OF $216.60 DUE THE UNITED STATED. ACCORDINGLY, UPON RECEIPT OF YOUR CHECK IN THE LATTER AMOUNT, APPROPRIATE ACTION WILL BE TAKEN TO CLEAR YOUR CURRENT ACCOUNTS WITH THE GOVERNMENT, INVOLVING THIS TRANSACTION.