B-55761, MARCH 29, 1946, 25 COMP. GEN. 685

B-55761, MARCH 29, 1946, 25 COMP. GEN. 685

VIRGIN ISLANDS COMPANY - AVAILABILITY OF FUNDS FOR COMPROMISE SETTLEMENT OF CLAIMS ARISING OUT OF PERSONAL INJURIES THE VIRGIN ISLANDS COMPANY (A GOVERNMENT CORPORATION), HAVING BEEN GRANTED THE POWER "TO SUE AND BE SUED"--- WHICH POWER INCLUDES SUITS ARISING FROM TORTS--- MAY USE FUNDS DERIVED FROM THE OPERATION OF THE COMPANY FOR PAYMENT OF THE AMOUNT OF A COMPROMISE SETTLEMENT OF A CLAIM FOR DAMAGES ARISING OUT OF PERSONAL INJURIES RESULTING FROM AN ACCIDENT CAUSED BY AN EMPLOYEE'S NEGLIGENCE, EVEN THOUGH SUCH FUNDS ARE CONSIDERED TO BE "PUBLIC FUNDS" WHICH GENERALLY ARE NOT AVAILABLE FOR DAMAGES RESULTING FROM INJURIES TO PERSONS OR PROPERTY CAUSED BY THE TORTS OR NEGLIGENCE OF GOVERNMENT EMPLOYEES.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE INTERIOR, MARCH 29, 1946:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 1, 1946, AS FOLLOWS:

YOUR ADVICE IS REQUESTED AS TO THE PROPRIETY OF A COMPROMISE OF A CLAIM AGAINST THE VIRGIN ISLANDS COMPANY.

THE VIRGIN ISLANDS COMPANY WAS CREATED BY ORDINANCE OF THE COLONIAL COUNCIL OF ST. THOMAS AND ST. JOHN ON APRIL 16, 1934. AMONG THE CORPORATE POWERS GRANTED TO THE COMPANY WAS THAT TO "SUE AND BE SUED.' A COPY OF THE ORDINANCE IS ENCLOSED. UNDER AN OPERATING AGREEMENT ENTERED INTO WITH THE DEPARTMENT OF THE INTERIOR ON NOVEMBER 16, 1934, AND REEXECUTED FOR TWO SUBSEQUENT FIVE-YEAR TERMS, THE LAST TO END NOVEMBER 25, 1949, THE COMPANY OPERATES CERTAIN PROPERTIES OF THE UNITED STATES IN THE VIRGIN ISLANDS.

ON FEBRUARY 23, 1945, ONE CYRIL ALLEN, A NATIVE OF ST. CROIX, WAS STRUCK AND INJURED BY A TRUCK BEING DRIVEN BY AN EMPLOYEE OF THE COMPANY ON COMPANY BUSINESS. MR. ALLEN LATER DIED AS A RESULT OF THE INJURIES SUSTAINED. ON APRIL 11, 1945, THE DRIVER WAS FOUND GUILTY OF MANSLAUGHTER. A COPY OF THE REPORT OF THE TRIAL, PREPARED BY DISTRICT ATTORNEY JAMES BOUGH, IS ALSO ENCLOSED. SUBSEQUENTLY MR. ALLEN'S WIDOW, THROUGH HER ATTORNEY, APPROACHED THE COMPANY ASKING FOR DAMAGES AND SUGGESTING A COMPROMISE OF $2,500 INSTEAD OF A LAW SUIT.

THE OFFICERS OF THE COMPANY, AS WELL AS ITS LEGAL COUNSEL, ARE OF THE OPINION THAT IF MRS. ALLEN SHOULD PRESENT HER CLAIM IN COURT SHE WOULD RECOVER JUDGMENT, AND THAT A COMPROMISE OF THE MATTER WOULD BE ADVANTAGEOUS TO THE COMPANY. IT IS PROPOSED, THEREFORE, THAT THE BOARD OF DIRECTORS OF THE COMPANY BY RESOLUTION AUTHORIZE A COMPROMISE OF THE CLAIM PRESENTED BY MRS. ALLEN AND THE PREPARATION OF A VOUCHER REPRESENTING SUCH COMPROMISE.

IN THIS CONNECTION, IT IS NOTED THAT YOU HAVE RULED THE FUNDS DERIVED FROM THE OPERATIONS OF THE VIRGIN ISLANDS COMPANY ARE "PUBLIC FUNDS" AND ARE SUBJECT GENERALLY TO SPECIFIC STATUTORY RESTRICTIONS AND LIMITATIONS APPLICABLE TO THE EXPENDITURE OF MONEYS BY THE REGULARLY ESTABLISHED FEDERAL AGENCIES. 21 COMP. GEN. 928; 15 ID. 485. INASMUCH AS THE CLAIM WOULD HAVE TO BE PAID OUT OF SUCH FUNDS A QUESTION ARISES AS TO THE APPLICABILITY IN THE PRESENT INSTANCE OF SUCH RESTRICTIONS AS MAY EXIST WITH RESPECT TO THE COMPROMISING OF CLAIMS PAYABLE OUT OF "PUBLIC DS.'

ACCORDINGLY, I WOULD APPRECIATE LEARNING WHETHER YOU WOULD HAVE ANY OBJECTIONS TO A VOUCHER REPRESENTING A COMPROMISE FIGURE OF MRS. ALLEN'S CLAIM. YOUR EARLY CONSIDERATION OF THIS MATTER WILL BE APPRECIATED.

AS IS STATED IN YOUR LETTER, IT HAS BEEN HELD THAT FUNDS DERIVED FROM THE OPERATION OF THE VIRGIN ISLANDS COMPANY ARE PUBLIC FUNDS AND ARE SUBJECT, GENERALLY, TO THE SPECIFIC STATUTORY RESTRICTIONS AND LIMITATIONS APPLICABLE TO THE EXPENDITURE OF MONEYS APPROPRIATED FOR THE OPERATION OF THE REGULARLY ESTABLISHED FEDERAL DEPARTMENTS AND AGENCIES. GENERALLY, THE UNITED STATES IS NOT LIABLE FOR INJURIES OR DAMAGES TO THE PERSON OR PROPERTY OF AN INDIVIDUAL CAUSED BY TORTS OR NEGLIGENCE OF ITS OFFICERS OR EMPLOYEES OR BY ITS AUTHORIZED ACTIVITIES. 13 COMP. GEN. 406, 408. HOWEVER, THE ORDINANCE OF THE COLONIAL COUNCIL FOR ST. THOMAS AND ST. JOHN BY WHICH THE VIRGIN ISLANDS COMPANY WAS CREATED SPECIFICALLY PROVIDES IN SECTION 2 (C) THAT THE COMPANY "MAY SUE AND BE SUED IN ITS CORPORATE NAME.' THE CONGRESS HAS RECOGNIZED THE CORPORATE EXISTENCE AND STATUS OF THE VIRGIN ISLANDS COMPANY AND ALSO THE CORPORATE PURPOSES OF THE COMPANY AS SET FORTH IN THE REFERRED-TO ORDINANCE. SEE 21 COMP. GEN. 928, 930. ALSO, SEE SECTION 101 OF THE GOVERNMENT CORPORATION CONTROL ACT, PUBLIC LAW NO. 248, 79TH CONGRESS, 59 STAT. 597, WHICH PROVIDES THAT "AS USED IN THIS ACT THE TERM "WHOLLY OWNED GOVERNMENT CORPORATION" MEANS * * * THE VIRGIN ISLANDS COMPANY.' IN THE CASE OF KEIFER AND KEIFER V. RECONSTRUCTION FINANCE CORPORATION, 306 U.S. 381, IT WAS HELD THAT THE AUTHORIZATION BY THE CONGRESS OF A GOVERNMENT CORPORATION "TO SUE AND BE SUED" EXTEND TO AND INCLUDES SUITS ARISING FROM TORTS. HENCE, AS THE CONGRESS HAS RECOGNIZED THE CORPORATE EXISTENCE OF THE VIRGIN ISLANDS COMPANY AND THE ORDINANCE UNDER WHICH IT WAS CREATED, ANY JUDGMENT OBTAINED AGAINST THE COMPANY IN A SUIT BROUGHT FOR DAMAGES ARISING OUT OF THE ACCIDENT REFERRED TO IN YOUR LETTER PROPERLY WOULD BE PAYABLE FROM FUNDS DERIVED FROM THE OPERATION OF THE COMPANY.

ACCORDINGLY, SINCE IT IS REPORTED IN YOUR LETTER THAT THE OFFICERS OF THE COMPANY AND ITS LEGAL COUNSEL ARE OF THE OPINION THAT, IF A CLAIM WAS PRESENTED IN COURT BY THE DECEDENT'S WIDOW, SHE WOULD RECOVER A JUDGMENT, AND SINCE THE REPORTED FACTS RELATIVE TO THE ACCIDENT REASONABLY SUPPORT SUCH CONCLUSION, YOU ARE ADVISED THAT, IF A COMPROMISE OF THE CLAIM IS AUTHORIZED BY THE BOARD OF DIRECTORS OF THE COMPANY AS BEING TO ITS ADVANTAGE, THE PAYMENT OF THE AMOUNT OF THE COMPROMISE SETTLEMENT FROM FUNDS DERIVED FROM THE OPERATION OF THE VIRGIN ISLANDS COMPANY WILL NOT BE OBJECTED TO BY THIS OFFICE.