B-128846, AUGUST 23, 1956, 36 COMP. GEN. 157

B-128846, AUGUST 23, 1956, 36 COMP. GEN. 157

CLAIMS - ASSIGNMENTS - CONTRACT PAYMENTS - ASSIGNMENT BY OPERATION BY LAW A COURT ORDER WHICH DESIGNATES A THIRD PARTY, NOT A BANK, TRUST COMPANY OR FINANCING INSTITUTION, TO COLLECT AMOUNTS DUE UNDER A GOVERNMENT CONTRACT EFFECTS A VALID ASSIGNMENT BY OPERATION OF LAW, AND COMPLIANCE WITH THE ATTESTATION REQUIREMENTS APPLICABLE TO VOLUNTARY ASSIGNMENTS PRESCRIBED IN SECTION 3477, REVISED STATUTES, 31 U.S.C. 203, IS NOT NECESSARY.

TO W. M. WILSON, DEPARTMENT OF THE ARMY, AUGUST 23, 1956:

REFERENCE IS MADE TO YOUR UNDATED LETTER, FILE NO. MRHCF, FORWARDED BY SECOND ENDORSEMENT OF THE OFFICE OF THE CHIEF OF ENGINEERS DATED AUGUST 1, 1956. YOU REQUEST AN ADVANCE DECISION AS TO WHETHER THE ENCLOSED VOUCHER REPRESENTING AN AMOUNT FOUND TO BE DUE UNDER CONTRACT NO. DA-25-066-ENG- 1602, MAY BE PAID TO THE CORRUGATED ASBESTOS CONTRACTORS, ASSIGNEE OF THE CONTRACTOR, THE JACK V. BOYD CONSTRUCTION COMPANY, PURSUANT TO ORDER OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO.

ON JUNE 11, 1956, THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO ORDERED THAT THE JACK V. BOYD CONSTRUCTION COMPANY AND THE MANUFACTURERS CASUALTY INSURANCE COMPANY, THE SURETY UNDER THE CONTRACT, ASSIGN TO THE CORRUGATED ASBESTOS CONTRACTORS "ALL RIGHT, TITLE AND INTEREST OF ANY KIND IN AND TO ANY CLAIM AND PROCEEDINGS THEREOF PENDING BEFORE THE CLAIMS AND APPEALS BOARD OF THE UNITED STATES CORPS OF ENGINEERS.' THE COURT BY SUPPLEMENT TO THE ORDER ADJUDGED THAT THE CLAIM WAS OWNED FROM JULY 7, 1955, THE DATE OF THE ASSIGNMENT, BY THE CORRUGATED ASBESTOS CONTRACTORS WHICH ALONE HAD THE RIGHT TO PROSECUTE SUCH CLAIM AND TO RECEIVE THE PROCEEDS OF ANY AWARD MADE BY THE CLAIMS AND APPEALS BOARD. SUBSEQUENTLY, THE BOARD DETERMINED THAT THERE REMAINED DUE FOR SERVICES PERFORMED UNDER MODIFICATION NO. 7 OF THE CONTRACT $5,959.08, THE AMOUNT OF THE ENCLOSED VOUCHER.

THE CORRUGATED ASBESTOS CONTRACTORS IS PATENTLY NOT A "BANK TRUST COMPANY, OR OTHER FINANCING INSTITUTION," THE ONLY PROPER ASSIGNEES UNDER THE ASSIGNMENT OF CLAIMS ACT OF 1940, AS AMENDED, 31 U.S.C. 203. THE VALIDITY OF THE ASSIGNMENT THEREFORE DEPENDS ON WHETHER IT IS PROHIBITED BY THE PROVISIONS OF SECTION 3477, REVISED STATUTES, 31 U.S.C. 203. SECTION 3477 PROVIDES IN SUBSTANCE THAT ASSIGNMENTS OF CLAIMS AGAINST THE UNITED STATES ARE NULL AND VOID UNLESS "THEY ARE FREELY MADE AND EXECUTED IN THE PRESENCE OF AT LEAST TWO ATTESTING WITNESSES, AFTER THE ALLOWANCE OF SUCH A CLAIM, THE ASCERTAINMENT OF THE AMOUNT DUE, AND THE ISSUING OF A WARRANT FOR THE PAYMENT THEREOF.'

ALTHOUGH SECTION 3477 PROHIBITS THE ASSIGNMENT OF CLAIMS NOT MEETING THE REQUIREMENTS THEREIN STATED, IT HAS CONSISTENTLY BEEN HELD TO APPLY ONLY TO VOLUNTARY ASSIGNMENTS OF CLAIMS TO THE UNITED STATES AND NOT TO TRANSFERS BY OPERATION OF LAW. THE NATIONAL BANK OF COMMERCE V. DOWNIE, 218 U.S. 345. WHERE A COURT OF COMPETENT JURISDICTION ORDERS THE COLLECTION BY A THIRD PARTY DESIGNATED BY THE COURT OF ANY AMOUNTS TO BECOME DUE FROM THE UNITED STATES TO THE CONTRACTOR, SUCH ORDER, NOTWITHSTANDING THE PROVISIONS OF SECTION 3477, EFFECTS A VALID TRANSFER OF THE CLAIM TO THE THIRD PARTY BY OPERATION OF LAW. PEOPLE'S TRUST COMPANY V. UNITED STATES, 38 C.1CLS. 359; 3 COMP. GEN. 623.

ACCORDINGLY, THE ASSIGNMENT MAY BE REGARDED AS A VALID TRANSFER BY OPERATION OF LAW AND THE VOUCHER, WHICH, TOGETHER WITH SUPPORTING PAPERS, IS RETURNED HEREWITH, MAY BE PAID, IF OTHERWISE PROPER.