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CHAPTER 11

CLAIMS BY THE UNITED STATES

Collection, 722.

Liability for failure to give priority, 725. Compromise, 723.

Survival of action to recover damages, 725a. Priority, 724. 722. Collection.-*

The auditors, under the direction of the Comptroller of the Treasury, shall superintend the recovery of all debts finally certified by them, respectively, to be due to the United States.

Sec. 4, act of July 31, 1894 (28 Stat. 206); 31 U. 8. C. 93.

The duties of the auditors and Comptroller of the Treasury are now performed by the General Accounting Office. See 1646, post.

Notes of Decisions Liability of owner.-Liability does not at-, bodily harm to himself and others, is liable tach against owner for negligent operation of for bodily harm caused thereby, applies not automobile by another unless legal status of only to owner of automobile but also to one master and servant or principal and agent who has right to permit and power to proexists; mere relationship of father and son hibit its use. Rounds v. Phillips (Md., 1935), being insufficient to impose liability. Spegele 177 A. 174. 1. Blumfield (Pa., 1935), 182 A, 149.

Contributory negligence.-In suit by United Automobile owner cannot be held liable for States for damages alleged to have occurred negligent act of another operating automo- to automobile owned by it, defendants held bile merely with owner's consent, in absence entitled to set up defense that negligence of of proof that driver operated automobile as employee of United States at time of acowner's agent or servant. Tourkakis v. Bill-cident was proximate cause of damage. U. S. man (Mo., 1934), 71 S. W. (20) 1084.

V. Moscow Seed Co. (D. C., 1936), 14 F. Liability of father for acts of minor son. Supp. 135. Father, furnishing minor son with automo- Contributory negligence is not complete bile, was liable for his negligence, though defense to action against railway company for automobile was first registered in son's name death of one struck by train, but only reand later in mother's name after son's license quires reduction of damages in proportion was revoked, if father permitted son to drive that it contributed to deceased's injury. though knowing of son's recklessness and in- Thomas v. Southern Ry. Co. (C. C. A., 1937), competency in operating automobiles. Rounds 92 F. (20) 445. 1. Philips (Md., 1934), 170 A. 532.

Laches.--Defense of laches is not availRule that one who supplies automobile for able in suit by state or federal government use of another whom supplier knows or to enforce public right or protect public inshould know to be likely, because of his terest. State v. Vincent (Oreg., 1935), 52 youth, inexperience, or otherwise, to use it P. (20) 203. in manner involving unreasonable risk of

723. Compromise.—Upon a report by a district attorney, or any special attorney or agent having charge of any claim in favor of the United States, showing in detail the condition of such claim, and the terms upon which the same may be compromised, and recommending that it be compromised upon the terms so offered, and upon the recommendation of the Solicitor of the Treasury, the Secretary of the Treasury is authorized to compromise such claim accordingly. But the provisions of this section shall not apply to any claim arising under the postal laws. R. 8. 3469; 31 U. S. O. 194.

As to any case referred to the Department of Justice for prosecution, the function of decision whether and in what manner to prosecute, or to compromise, or to appeal, or to abandon prosecution, formerly exercised by any agency or officer, is transferred to the Department of Justice by Executive Order No. 6166 of June 10, 1933, issued under authority of Title IV, Part II, act of June 30, 1932 (47 Stat. 413), as amended.

The office of Solicitor of the Treasury was abolished, and its powers, duties, and functions transferred to the General Counsel for the Treasury Department, by section 512, Revenue Act of May :9. 1934 (48 Stat. 758), which created the latter office.

Rules and regulations for carrying into effect the provisions of this section are published in Treasury Department Circular No. 39, May 20, 1936 (Federal Register, May 29, 1936, p. 575).

Notes of Decisions

In general.—By reason of the broad and undisputed—and there is no doubt as to the general terms of this section and in the ability of the Government to collect, there light of the principle that the sovereign must is no room for mutual concessions and therepossess incidental powers necessary to carry fore no basis for compromise under R. S. general statutes giving general powers into 3469 ; but where there is a bona fide dispute effect, the United States may accept an offer as to either a question of fact or of law, and of a railroad company to compromise a claim accordingly room for mutual concession, comof the United States against said company promise settlement is not precluded, the adein the sum of $204,862.74 for fire trespass, quacy of the offer to be determined by the by the payment of $10,000 in cash and the exercise of sound discretion. This should relinquishment of the right of the company not, however, be understood to curtail the to receive from the United States certain inherent and statutory power of the Attorney lands selected by it in accordance with the General to absolutely dismiss or discontinue terms of a congressional grant. (1933) 37 suits in which the Government is interested, Op. Atty. Gen. 298.

and, a fortiori, to terminate the same upon Authority of Attorney General.---Where terms at any stage by way of compromise or liability has been established by a valid settlement. (1933) 38 Op. Atty. Gen. 94 ; judgment, or is certain-i. e., liquidated or (1934) 38 Op. Atty. Gen. 98.

724. Priority.-Whenever any person indebted to the United States is insoivent, or whenever the estate of any deceased debtor, in the hands of the executors or administrators, is insufficient to pay all the debts due from the deceased, the debts due to the United States shall be first satisfied; and the priority hereby established shall extend as well to cases in which a debtor, not having sufficient property to pay all his debts, makes a voluntary assignment thereof, or in which the estate and effects of an absconding, concealed, or absent debtor are attached by process of law, as to cases in which an act of bankruptcy is committed. R. S. 3466; 31 U. S. C. 191.

Notes of Decisions In general.--Statutory mandate that upon | solvent contractor's bodd to United States voluntary assignment of insolvent debtor debt for amount due for labor and materials due to United States shall first be satisfied furnished contractor held not entitled to is absolute so long as property has not been priority as for debt due United States, divested out of debtor before right of pref- though statute authorizes suit against conerence of United States accrues (31 U. S. C. A. tractor's receiver and surety in name of sec. 191). In re Lincoln Chair & Novelty Co. United States for claimant's benefit (U. S. (N. Y., 1937), 9 N. E. (20) 7.

C. A. 31:191; U. S. C. A. 40: 270). EmClaims against insolvent contractor.-- mons v. Union Indemnity Co. (N. J., 1934), Claims against insolvent surety

in- 175 A. 141. 725. Liability for failure to give priority to the United States.-Every executor, administrator, or assignee, or other person, who pays any debt due by the person or estate from whom or for which he acts, before he satisfies and pays the debts due to the United States from such person or estate, shall become answerable in his own person and estate for the debts so due to the United States, or for so much thereof as may remain due and unpaid. R. S. 3467; 31 U. S. C. 192.

on

725a. Survival of action to recover damages.---That no civil action to recover damages, brought by the United States or in its behalf, or in which the United States shall be directly or indirectly interested, and pending against any defendant prior to the time of his death, in any court of the United States, shall abate by reason of the death of any such defendant; but any such action shall survive and be enforceable against the estate of any such deceased defendant. This Act shall not be construed to deprive the plaintiff in any such action of any remedy which he may have against a surviving defendant. Act of June 16, 1933 (48 Stat. 311); 28 U. S. C. 780a.

CHAPTER 12

CONTRACTS

Authority and appropriations, 726.
Advertising requirements, 727.
Bids, 728.
Combination of projects, 729.
Execution :

In general, 730.

By Secretary of War, 731. Extra expense :

Adjustment of claims, 732.

Jurisdiction of Court of Claims, 733.
Filing :

In returns office, Interior Department, 734.
In General Accounting Office, 735.
With Commissioner of Internal Revenue,

736.

Interest by Member of Congress, 737.
Term, 738.
Transfer, 739.
Anti-Rebate Act, 740.
Bituminous Coal Act, 741.
Buy-American Act, 742.
Eight-hour law (civil), 743,
Eight-hour law (penal), 744.
Suspension of Eight-hour laws in emergency,

745.
Bacon-Davis Act, 746.
Walsh-Healy Act, 747.

*

726. Authority and appropriations.--No executive department or other Gov. ernment establishment of the United States shall expend, in any one fiscal year, any sum in excess of appropriations made by Congress for that fiscal year, or involve the Government in any contract or other obligation for the future payment of money in excess of such appropriations unless such contract or obligation is authorized by law.

* R. S. 3679; sec. 3, act Feb. 27, 1906 (34 Stat. 48); 31 U. 8. C. 665.

No contract or purchase on behalf of the United States shall be made, unless the same is authorized by law or is under an appropriation adequate to its fulfillment, except in the War and Navy Departments, for clothing, subsistence, forage, fuel, quarters, or transportation, which, however, shall not exceed the necessities of the current year. R. S. 3732; 41 U. S. C. 11.

Provided, That no contract or purchase on behalf of the United States shall be made, unless the same is authorized by law or is under an appropriation adequate to its fulfillment, except in the War and Navy Departments, for clothing, subsistence, forage, fuel, quarters, transportation, or medical and hospital supplies, which, however, shall not exceed the necessities of the current year. Act of June 12, 1906 (34 Stat. 255); 11 U.S. C. 11.

No contract shall be entered into for the erection, repair, or furnishing of any public building, or for any public improvement which shall bind the Government to pay a larger sum of money than the amount in the Treasury appropriated for the specific purpose. R. 8. 3733; 41 U. S. C. 12.

The heads of the executive departments were required to apportion the appropriations for the contingent funds among the bureaus and offices of the departments by act of Aug. 23, 1912, sec. 6, post, 1743.

Restrictions on contracts for the rent of any building in the city of Washington, until an appropriation therefor had been made, were made by a provision of act Mar. 3, 1877, past, 961.

Apportionment of appropriations for contingent expenses in monthly or other allotments, 1731, post.

Appropriations for printing not to be exceeded, limitation on number of reports, etc.. post, 1751a, 1780, 1782.

Notes of Decisions Requisites and validity; authority to ex | binding. Southern Surety Co. v. U. S. ecute.--It is axiomatic that Government of- (1932), 75 Ct. Cl. 47. ficials must act within the scope of their

Congress may by statute require Governauthority, and that all persons dealing with

ment contracts to contain provisions governthem must be held to know the extent of ing the wages to be paid by the contractors, their authority. Alliance Construction Co. v.

and for the determination of facts relating U. S. (1934), 79 Ct. Cl. 730.

thereto by a specified Government official; The failure of the Government to comply and whether or not such provisions be with statutory requirements relative to actually contained in the contract as written public contracts enacted solely for the pro- and executed, they become a part of it by tection of the Government does not render virtue of the statute itself. Alliance Consuch contracts void, but only voidable at struction Co. v. U. S. (1934), 79 Ct. Cl. 730. the Government's option; and only the Government can take advantage of such

Rights and liabilities of Government.failure. (1935) 38 Op. Atty. Gen. 328.

When the United States, with constitutional Consideration,-Public officers are

authority, makes contracts, it has rights and

incurs liabilities similar to those of indiwithout authority to make a contract for

viduals who are parties to such instruments. which the Government receives no benefit or

Banister v. Lollis (S. C., 1937), 190 S. E. consideration. Vulcanite Cement Co.

511. U. S. (1932), 74 Ct. CI. 693. Contingent fees.--Contingent fee

Bids.- Where the United Shipbuilding and contracts are valid where not in contraven- Dry Dock Corporation, a subsidiary of United tion of public policy and are condemned only Dry Docks, Incorporated, received an award where attorney has taken advantage of client's through competitive bidding to construct two circumstances to exact an unreasonable and torpedo boat destroyers for a specific amount, unconscionable proportion of client's claim and accompanying its bid was a copy of a (Mason's Minn. St. 1927, sec. 9470). Hol-contract between it and the United Dry lister v. Ulvi (Minn., 1937), 271 N. W. 493. Docks, Incorporated, showing the relation

Forms and provisions.—The pro- ship between the two companies, and an posed contract between the Department of undertaking on the part of the latter comCommerce and the Remington-Rand Company to furnish the shipyards, equipment pany, for the rental of 42 tabulating ma

and labor in case of award, it was Held, That chines at $1,850 per month, the contract although the bid was formally submitted stipulating that said rental is based upon the by the former company only, such bid might understanding that all cards used with the be properly considered the joint bid of the equipment shall be purchased from the lessor two companies, and the award amended to and that if such cards are not purchased make both companies jointly and severally from the lessor the machine rentals sball parties to the formal contract. (1934) 38 be $2,170 per month, is illegal in respect of Op. Atty. Gen. 91. the restriction upon the purchase and use of Construction of terms; in general.-(1) It cards, which is in violation of Sec. 3 of the is the duty of the court to give effect, if Clayton Act (38 Stat. 731). The execution possible, to every word or phrase of a conof the proposed contract will not impose tract and to avoid a construction that would upon the Department of Commerce any imply that the parties used meaningless or legal obligation to refrain from purchasing superfluous words, or that they were ignorant cards from other sources, or to pay the in- of the meaning of the language employed by creased rental for doing so. (1932), 36 Op. them. (2) Courts can not amend or alter Atty. Gen. 524.

the terms of contracts under the guise of There is no prohibition, express or im- construing them. Bethlehem Steel Co. D. plied, preventing the head of a department U. S. (1932), 75 Ct. Cl. 845. or independent establishment from insert

By parties.-Practical construction ing in contracts for the purchase of sup- of contract by parties to contract is entitled plies such provisions, in addition to those to great weight, where their interpretation is specifically required by statute, as he may a fair one. U. S. v. I. B. Miller, Inc. (C. C. A., deem to be desirable in the interest of the 1936), 81 F. (20) 8. Government or of the public welfare. Such

Preliminary negotiations.-Where authority must necessarily be included the meaning of a contract is clearly exwithin the discretion vested in him. (1933), pressed in the formal written instrument, the 37 Op. Atty. Gen. 199.

negotiations leading up to its execution are A provision in a Government contract that irrelevant. The written contract merged the contractor “will make no claim against all previous negotiations, and is presumed, the United States by reason of estimates, in law, to express the final understanding of tests, or representations of any officer or the parties. Tiedemann Corp. v. U. S. (1933), agent of the United States," is valid and | 78 Ct. Cl. 16.

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