B-169116, MAR. 5, 1970
Highlights
PROPER PARTY SUCCESSOR IN INTEREST TO ORIGINAL CONTRACTOR CHECK IN PAYMENT OF SETTLEMENT APPROVED BY ARMED SERVICES BOARD OF CONTRACT APPEALS MAY BE ISSUED IN NAME OF ORIGINAL CONTRACTING FIRM NOTWITHSTANDING IT WAS CONSOLIDATED INTO ANOTHER CONCERN AND GENERAL RELEASE IN SETTLEMENT WAS EXECUTED BY SUCCESSOR CONCERN. SINCE CONTRACT WAS NEVER AMENDED TO REFLECT SUBSTITUTION OF CONTRACTOR'S SUCCESSOR IN INTEREST AND DECISIONS RENDERED IN DISPUTE WERE IN NAME OF ORIGINAL CORPORATION. SUCCESSOR CORPORATION IS AMENDABLE TO SUCH PROCEDURE AND HAS REQUESTED DELIVERY OF CHECK TO ITS ATTORNEY. THE APPARENT REASON FOR THE CONCERN AS TO WHOM PAYMENT SHOULD BE MADE IS THE FACT THAT ON NOVEMBER 18. WAS CONSOLIDATED INTO S.
B-169116, MAR. 5, 1970
CONTRACTS--PAYMENTS--PROPER PARTY SUCCESSOR IN INTEREST TO ORIGINAL CONTRACTOR CHECK IN PAYMENT OF SETTLEMENT APPROVED BY ARMED SERVICES BOARD OF CONTRACT APPEALS MAY BE ISSUED IN NAME OF ORIGINAL CONTRACTING FIRM NOTWITHSTANDING IT WAS CONSOLIDATED INTO ANOTHER CONCERN AND GENERAL RELEASE IN SETTLEMENT WAS EXECUTED BY SUCCESSOR CONCERN; PROPER NEGOTIATION OF SUCH CHECK SHOULD CONSTITUTE VALID ACQUITTANCE TO GOVT. SINCE CONTRACT WAS NEVER AMENDED TO REFLECT SUBSTITUTION OF CONTRACTOR'S SUCCESSOR IN INTEREST AND DECISIONS RENDERED IN DISPUTE WERE IN NAME OF ORIGINAL CORPORATION. MOREOVER, SUCCESSOR CORPORATION IS AMENDABLE TO SUCH PROCEDURE AND HAS REQUESTED DELIVERY OF CHECK TO ITS ATTORNEY.
TO MR. W. A. GIBSON:
BY LETTER DATED FEBRUARY 17, 1970, THE OFFICE OF THE COMPTROLLER OF THE ARMY FORWARDED TO OUR OFFICE YOUR LETTER OF NOVEMBER 20, 1969, REQUESTING OUR APPROVAL OF PAYMENT IN THE SUM OF $175,000 IN THE NAME OF JOHN A. JOHNSON & SONS, INC; ON AN APPROVED VOUCHER COVERING REVISED FINAL PAYMENT ESTIMATE UNDER CONTRACT NO. DA 36-109-ENG-4026 WITH THAT CORPORATION.
ON JULY 20, 1967, THE COURT OF CLAIMS IN ITS DECISION REPORTED AT 180 CT. CL. 969, REVERSED AN EARLIER DECISION OF THE ARMED SERVICES BOARD OF CONTRACT APPEALS (ASBCA) DENYING THE CLAIM OF THE PROPOSED PAYEE UNDER THE CITED CONTRACT, AND SUSPENDED FURTHER PROCEEDINGS TO ALLOW THE PARTIES TO RETURN TO THE ASBCA FOR A DETERMINATION OF AN EQUITABLE ADJUSTMENT. JUNE 23, 1969, THE ASBCA APPROVED A SETTLEMENT OF $175,000 IN ACCORDANCE WITH AN AGREEMENT BETWEEN THE PARTIES.
THE APPARENT REASON FOR THE CONCERN AS TO WHOM PAYMENT SHOULD BE MADE IS THE FACT THAT ON NOVEMBER 18, 1959, JOHN A. JOHNSON & SONS, INC; WAS CONSOLIDATED INTO S. S. SILBERBLATT, INC; AND ON SEPTEMBER 29, 1969, THE GENERAL RELEASE IN SETTLEMENT OF THIS MATTER WAS EXECUTED BY "S. S. SILBERBLATT, INC; AS SUCCESSOR IN INTEREST TO JOHN A. JOHNSON & SONS, INC."
SINCE THE DECISIONS RENDERED IN THIS CASE WERE IN THE NAME OF JOHN A. JOHNSON & SONS, INC; AND THE CONTRACT WAS NEVER AMENDED TO REFLECT A SUBSTITUTION OF ITS SUCCESSOR IN INTEREST, WE BELIEVE THAT ISSUANCE OF A CHECK IN THAT NAME AND PROPER NEGOTIATION THEREOF WILL CONSTITUTE A VALID ACQUITTANCE TO THE GOVERNMENT. IN VIEW THEREOF, AND SINCE THE FILE CONTAINS A LETTER DATED SEPTEMBER 29, 1969, FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS OF S. S. SILBERTBLATT, INC; AGREEING THAT PAYMENT MAY BE MADE BY CHECK PAYABLE TO JOHN A. JOHNSON & SONS, INC; AND DELIVERED TO ITS ATTORNEY, MAX E. GREENBERG, ESQUIRE, WE HAVE NO OBJECTION TO SUCH PROCEDURE.
THE VOUCHER AND SUPPORTING FILE FURNISHED WITH YOUR LETTER IS RETURNED.