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B-142108, MAY 2, 1960

B-142108 May 02, 1960
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OVE WESTERGAARD: REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 26. WHICH REPRESENTS INTEREST AT "6.5 PERCENT PLUS 1/4 PERCENT PRO ANNO" ON AMOUNTS PAID TO YOU FOR THE AMMUNITION SHELLS FURNISHED UNDER THE CONTRACTS BECAUSE PAYMENT WAS NOT RECEIVED BY YOU WITHIN 10 DAYS AFTER DATE OF DELIVERY OF THE SUPPLIES. THE TOTAL AMOUNT OF INTEREST THUS CLAIMED ON THE BASIS THAT SUCH PAYMENTS WERE UNREASONABLY DELAYED BY THE GOVERNMENT AMOUNTS TO $5. YOUR CLAIM THEREFOR IS IN THE NATURE OF A CLAIM FOR DAMAGES FOR THE DETENTION OF MONEY TO WHICH YOU ARE ENTITLED. IS ALLOWED BY THE COURTS AS DAMAGES FOR THE DETENTION OF MONEY OR OF PROPERTY. TO WHICH THE PLAINTIFF IS ENTITLED. IS NOT TO BE AWARDED AGAINST A SOVEREIGN GOVERNMENT.

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B-142108, MAY 2, 1960

TO MR. OVE WESTERGAARD:

REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 26, 1960, PROTESTING THE ACTION TAKEN BY OUR OFFICE UNDER DATE OF MAY 19, 1959, IN DISALLOWING THAT PART OF YOUR TOTAL CLAIM FOR $5,705.64 ON STANDARD FORM NO. 1034A, PUBLIC VOUCHER UNDER UNITED STATES DEPARTMENT OF THE ARMY CONTRACTS NOS. DA-91- 557-EUC-258 AND DA-91-557-EUC-379, DATED JUNE 26, 1953, AND JUNE 22, 1954, WHICH REPRESENTS INTEREST AT "6.5 PERCENT PLUS 1/4 PERCENT PRO ANNO" ON AMOUNTS PAID TO YOU FOR THE AMMUNITION SHELLS FURNISHED UNDER THE CONTRACTS BECAUSE PAYMENT WAS NOT RECEIVED BY YOU WITHIN 10 DAYS AFTER DATE OF DELIVERY OF THE SUPPLIES. THE TOTAL AMOUNT OF INTEREST THUS CLAIMED ON THE BASIS THAT SUCH PAYMENTS WERE UNREASONABLY DELAYED BY THE GOVERNMENT AMOUNTS TO $5,247.69.

SINCE THE CONTRACTS INVOLVED DID NOT PROVIDE FOR PAYMENT OF INTEREST ON AMOUNTS DUE THEREUNDER, YOUR CLAIM THEREFOR IS IN THE NATURE OF A CLAIM FOR DAMAGES FOR THE DETENTION OF MONEY TO WHICH YOU ARE ENTITLED. HOWEVER, IT APPEARS TO BE A WELL-ESTABLISHED PRINCIPLE OF COMMON LAW THAT DELAY OR DEFAULT IN PAYMENT (UPON WHICH, IN THE ABSENCE OF EXPRESS AGREEMENT, THE RIGHT TO RECOVER INTEREST RESTS) CANNOT BE ATTRIBUTED TO THE SOVEREIGN, IN THIS CASE THE UNITED STATES. SEE UNITED STATES V. THAYER-WEST POINT HOTEL CO. 329 U.S. 585, 588; UNITED STATES V. GOLTRA, 312 U.S. 203, 207; UNITED STATES V. NORTH AMERICAN TRANSPORTATION AND TRADING COMPANY, 253 U.S. 330, 336; TILSON V. UNITED STATES, 100 U.S. 43, 47. ALSO, SEE UNITED STATES V. NORTH CAROLINA, 136 U.S. 211, 216, WHEREIN THE SUPREME COURT OF THE UNITED STATES STATED:

"INTEREST, WHEN NOT STIPULATED FOR BY CONTRACT, OR AUTHORIZED BY STATUTE, IS ALLOWED BY THE COURTS AS DAMAGES FOR THE DETENTION OF MONEY OR OF PROPERTY, OR OF COMPENSATION, TO WHICH THE PLAINTIFF IS ENTITLED; AND, AS HAS BEEN SETTLED ON GROUNDS OF PUBLIC CONVENIENCE, IS NOT TO BE AWARDED AGAINST A SOVEREIGN GOVERNMENT, UNLESS ITS CONSENT TO PAY INTEREST HAS BEEN MANIFESTED BY AN ACT OF ITS LEGISLATURE, OR BY A LAWFUL CONTRACT OF ITS EXECUTIVE OFFICERS. UNITED STATES V. SHERMAN, 98 U.S. 565; ANGARICA V. BAYARD, 127 U.S. 251, 260, AND AUTHORITIES THERE COLLECTED; IN RE GOSMAN, 17 CH.D. 771.'

SO RIGOROUSLY IS THE RULE APPLIED THAT IN THE ADJUSTMENT OF MUTUAL CLAIMS BETWEEN AN INDIVIDUAL AND THE GOVERNMENT THE LATTER HAS BEEN HELD ENTITLED TO INTEREST ON ITS CREDITS ALTHOUGH RELIEVED FROM THE PAYMENT OF INTEREST ON THE CHARGES AGAINST IT. UNITED STATES V. VERDIER, 164 U.S. 213, 218- 219.

NEEDLESS TO SAY, THE ABOVE RULE HAS BEEN UNIFORMLY APPLIED IN THE EXECUTIVE DEPARTMENTS AND AGENCIES OF THE UNITED STATES. ACCORDINGLY, THE ACTION TAKEN IN OUR SETTLEMENT MUST NECESSARILY BE SUSTAINED.

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