B-144182 October 19, 1980

B-144182 October 19, 1980

The Pennsylvania Railroad Company C/o Bernes, Dechert, Price, Myers and Rhoads 1600 Thres Penn Center Plaza Philadelphia 2, Pennsylvania

Attention: William H. Lowery, Esq.

Re: Arnold Hankinson v. Pennsylvania Railroad Company v. United States USDC ED Pa. Civil No. 21051, U.S. Ct. of Appeals for 3rd Circuit, No. 13001

Gentlemen:

We have been advised by the United States Attorney, Philadelphia, Pennsylvania, that your attorney had declined delivery of a check payable to the Pennsylvania Railroad Company in the amount of $15,257.85, in satisfaction of the judgement in the above-entitled action because of the fact that the costs included therein were less than those believed due and, also because no interest was allowed on the amount of the judgement. A request was made that a check in the sum of $15, 971.87 be issue. This refusal of acceptance and request for a new check will be regarded as a request for a review of our settlement.

Our Claims Division, pursuant to section 1302 of Public Law 814, 84th Congress, approved July 27, 1956, 70 Stat. 694, 31 U.S.C. 724a, issued a certificate of settlement on August 23, 1960, in the amount of $257.85, and forwarded the check to the United States Attorney, Philadelphia, Pennsylvania, for delivery to the party entitled. Your attorney, by letter dated September 14, 1960, raised a question with the United States Attorney in regard to the amount of the check and stated that it should be in the sum of $15,971.87, computed as follows:

Judgement $15,000.00 Interest at 4 % from 6/10/59 to 8/12/60 706.60 Costs in the District Court 72.50 Costs in the Court of Appeals 192.77

Total $15,971.87

The difference in costs allowed in the amount of $7.42 relates to costs taxed by the Court of Appeals. Since the mandate specifically taxed $185.35 ($192.77 less $7.42 Pennsylvania Sales Tax) in favor of the Pennsylvania Railroad Company, only that amount which was included in the check, is due. No interest was paid on the judgement for the reasons set out below.

Generally speaking, prior to July 27, 1956, there were no funds available for the payment of judgements rendered against the United States and it was necessary that the amount of each judgement be certified to the Congress for a specific appropriation for payment. Section 1302 of Public Law 814, established a permanent appropriation for the payment of judgements (not in excess of $100,000 in any one case) and interest thereon in certain cases. That section provides:

"There are appropriated, out of any money in the Treasury not otherwise appropriated, and out of the postal revenues, respectively, such sums as may on and after July 27, 1956 be necessary for the payment, not otherwise provided [sic] for, as certified by the Comptroller General, of judgements (not in excess of $100,000 in any one case) rendered by the district courts and the Court of Claims against the United States which have become final, together with such interest and costs as may be specified in such judgements or otherwise authorized by law: Provided, That, whenever a judgement of a district court to which the provisions of section 2411(b) of Title 28, United States Code apply, is payable from this appropriation, interest should be paid thereon only when such judgement becomes final after review on appeal or petition by the United States, and then only from the date of the filing of the transcript thereof in the General Accounting Office to the date of the mandate of affirmance (except that in cases reviewed by the Supreme Court interest shall not be allowed beyond the term of the Court at which the judgement was affirmed): Provided further, that whenever a judgement rendered by the Court of Claims is payable from this appropriation, interest payable therein in accordance with subsection 2516(b) of Title 28, United States Code, shall be computed from the date of the filing of the transcript thereof in the General Accounting Office."

The judgment in the instant case is in an amount less than $100,000; was rendered by a district court against the United States; has become final; and, no appropriation for its payment has otherwise been provided. Thus, there is no room for doubt that it properly was payable from the appropriation made by section 1302. It is well established, however, that interest may be charged against the United States only if specifically provided by statute or by a valid contract. The claim is not the type which draws interest as a matter of law nor did it arise under a contract providing for interest. It thus appears interest would be allowable, if at all only by virtue of 28 U.S.C. 2411(b). However, the interest authorized to be paid on district court judgements by 28 U.S.C. 2411(b) is limited by the first proviso of section 1302 quoted above. That proviso in clear and unequivocal language limits such interest to those judgements which become final after review on appeal or petition by the United States, and further limits the period for which such interest may be paid to the period from the date of the filing of the transcript of the judgement in the General Accounting Office to the date of the mandate of affirmance.

In the present case, the judgement was rendered by the United States district Court for the eastern District of Pennsylvania on June 10, 1959. However, the first filing thereof in the General Accounting Office was accomplished by the Acting Assistant Attorney General's letter of August 16, 1960, received in the General Accounting Office on August 17, 1960, The mandate of affirmance by the United States Court of Appeals for the Third Circuit was handed down on the date of June 15, 1960. Since the date of the mandate of affirmance preceded the date of the filing of the transcript of the judgement in the General Accounting Office, it is obvious that payment of any interest on the judgement is prohibited by the limitation contained in the first proviso of section 1302.

Sincerely yours,

FRANK H. WEITZEL Assistant Comptroller General of the United States