A-80303, OCTOBER 13, 1936, 16 COMP. GEN. 365

A-80303, OCTOBER 13, 1936, 16 COMP. GEN. 365

DECEDENTS, ESTATES OF - CLAIMS - ADMINISTRATORS OF FOREIGN DECEDENTS - CLAIMANTS, FORMER GOVERNMENT EMPLOYEES - STALE CLAIMS AND GOVERNMENT'S RIGHT OF SET-OFF A CLAIM FOR THE PROCEEDS OF CHECKS DRAWN AS REFUNDS OF CUSTOMS DUTIES PAID BY A RESIDENT OF GREECE, NOW DECEASED, MAY NOT BE PAID TO AN ADMINISTRATOR, APPOINTED BY THE SUPREME COURT OF THE DISTRICT OF COLUMBIA, WHERE SAID CLAIM REPRESENTS THE ONLY ASSETS OF THE DECEDENT IN THIS COUNTRY. IF SAID ADMINISTRATOR IS A FORMER GOVERNMENT EMPLOYEE, AND THE CLAIM IS PRESENTED WITHIN 2 YEARS AFTER SEPARATION FROM SERVICE, THERE ARE FOR CONSIDERATION THE PROVISIONS OF SECTION 190, REVISED STATUTES, PROHIBITING FORMER GOVERNMENT OFFICERS AND EMPLOYEES FROM PROSECUTING OR AIDING IN THE PROSECUTION OF ANY CLAIM PENDING IN ANY OF THE DEPARTMENTS WHILE HE WAS SUCH OFFICER OR EMPLOYEE. WHERE A PRIMA FACIE CLAIM AGAINST A DECEDENT'S ESTATE IS ESTABLISHED BY THE UNITED STATES IN CONNECTION WITH THE DEFRAUDING OF THE GOVERNMENT BY THE DECEDENT WHO FLED THE COUNTRY TO AVOID CRIMINAL PROSECUTION IN CONNECTION WITH CUSTOMS DUTIES PAYABLE BUT FOR THE CONSPIRACY OF THE DECEDENT AND CERTAIN GOVERNMENT EMPLOYEES, THE SEEMING INABILITY OF THE UNITED STATES TO SHOW SPECIFICALLY ALL OF THE ENTRIES INVOLVED IN ITS CLAIM MAY NOT BE AVAILED OF TO DEFEAT THE GOVERNMENT'S RIGHT OF SET-OFF AGAINST A CLAIM BY THE ADMINISTRATOR OF THE DECEDENT'S ESTATE FOR CUSTOMS DUTIES REFUNDS, PARTICULARLY WHERE THE CLAIM IS NOT TIMELY MADE. THE AUTHORITY AND RESPONSIBILITY OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT TO APPLY AN AMOUNT OTHERWISE FOUND DUE A CLAIMANT ON ONE ACCOUNT IN LIQUIDATION OR REDUCTION OF AN AMOUNT FOUND DUE FROM CLAIMANT ON SOME OTHER ACCOUNT IS NOT DEPENDENT ON THE ACT OF MARCH 3, 1875, AS AMENDED, EXCEPT IN THE CASE OF A JUDGMENT AGAINST THE UNITED STATES, BUT EXISTS BY VIRTUE OF SECTION 305 OF THE BUDGET AND ACCOUNTING ACT OF JUNE 10, 1921, 42 STAT. 24.

ACTING COMPTROLLER GENERAL ELLIOTT TO EMORY W. CLAPPER, OCTOBER 13, 1936:

THERE HAS BEEN CONSIDERED YOUR CLAIM FOR THE PROCEEDS OF THE CHECKS DESCRIBED BELOW, AGGREGATING $19,603.34, DRAWN ON THE TREASURER OF THE UNITED STATES TO THE ORDER OF EUSTADIO D. PAPAVASILOPULO, BY HARRY M. DURNING, COLLECTOR OF CUSTOMS, NEW YORK, N.Y., UNDER SYMBOL NO. 12 723.

TABLE

CHECK NO. DATE AMOUNT 247396 ----------------------------- JUNE 25, 1934 $11.40 247567 ----------------------------- ---- DO ---- 22.05 247569 ---- ------------------------ ---- DO ---- 2,410.50 247850 ------------- ------ --------- JUNE 26, 1934 16,616.39 247855 ------------------ ---------- --- - DO ---- 543.00

THE SUBJECT CHECKS ARE REPORTED TO HAVE BEEN DRAWN IN PAYMENT OF EXCESS DUTIES PAID UPON FOREIGN MERCHANDISE ENTERED AT THE PORT OF NEW YORK DURING THE PERIOD 1905 TO 1909, INCLUSIVE. THE PAYEE IS REPORTED TO HAVE DIED ON OCTOBER 18, 1918, A RESIDENT OF GREECE. THE RECORD SHOWS THAT ON JANUARY 23, 1936, THE SUPREME COURT OF THE DISTRICT OF COLUMBIA (NOW DESIGNATED AS UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA) GRANTED LETTERS OF ADMINISTRATION TO YOU UPON ,ALL THE MONEY, GOODS, CHATTELS, RIGHTS, AND CREDITS OF EUSTADIO D. PAPAVASILOPULO, LATE OF GREECE.' ON THE BASIS OF THIS APPOINTMENT YOU HAVE FILED CLAIM FOR THE PROCEEDS OF THE CHECKS AS THE ADMINISTRATOR OF THE DECEASED PAYEE'S ESTATE.

IT APPEARS FROM THE RECORD THAT THE ONLY "ASSET" OF THE DECEDENT IN THIS COUNTRY CONSISTS OF THE CLAIM IN QUESTION HERE. THEREFORE, THERE ARISES THE QUESTION OF THE LEGAL EFFICACY OF THE LETTERS OF ADMINISTRATION GRANTED TO YOU BY THE LOCAL COURT, UPON THE DECEDENT'S ESTATE. IN 5 COMP. GEN. 842, INVOLVING SUBSTANTIALLY IDENTICAL FACTS, THE FOLLOWING WAS SAID:

* * * THE GENERAL RULE MAY BE STATED THAT MONEY DUE FROM THE UNITED STATES HAS NO SITUS IN THE DISTRICT OF COLUMBIA. VAUGHAN V. NORTHRUP, 15 PETERS 1; WYMAN V. HALSTEAD, 109 U.S. 654; UNITED STATES V. BORCHERLING, 185 U.S. 223; 25 COMP. DEC. 656; 4 COMP. GEN. 418, 419. IN MAKING PAYMENTS OF AMOUNTS DUE AN ESTATE THE GOVERNMENT MAY NOT RECOGNIZE AN ADMINISTRATOR APPOINTED BY A COURT WHERE THE APPOINTMENT OF THE ADMINISTRATOR IS SOLELY UPON THE FACT THAT THE ONLY ASSET IS THE CLAIM AGAINST THE UNITED STATES, AND NO NEED FOR ADMINISTRATION OR PROPER PURPOSE NECESSITATING ADMINISTRATION AT SUCH PLACE APPEARS, AS AGAINST THE KNOWN DOMICILE OF DECEDENT. 18 COMP. DEC. 1039, 20 ID. 5.

IN THE CIRCUMSTANCES THE GOVERNMENT MAY NOT RECOGNIZE YOUR APPOINTMENT AS ADMINISTRATOR IN THIS CASE. ALSO, THE RECORDS OF THIS OFFICE SHOW THAT YOU SERVED AS AN EMPLOYEE IN THIS OFFICE FROM JULY 31, 1935, UNTIL JANUARY 15, 1936, HAVING BEEN ASSIGNED OVER THE GREATER PORTION OF THIS PERIOD IN THE CHECK UNIT OF CLAIMS DIVISION WHERE THERE WAS THEN PENDING A CLAIM ON THE CHECKS HERE IN QUESTION. YOUR ATTENTION IN THIS CONNECTION IS INVITED TO THE PROVISIONS OF SECTION 190, REVISED STATUTES, INCORPORATED AS SECTION 99, TITLE 5, U.S.C. AS FOLLOWS:

IT SHALL NOT BE LAWFUL FOR ANY PERSON APPOINTED AFTER THE FIRST DAY OF JUNE, ONE THOUSAND EIGHT HUNDRED AND SEVENTY-TWO, AS AN OFFICER, CLERK, OR EMPLOYE IN ANY OF THE DEPARTMENTS, TO ACT AS COUNSEL, ATTORNEY, OR AGENT FOR PROSECUTING ANY CLAIM AGAINST THE UNITED STATES WHICH WAS PENDING IN EITHER OF SAID DEPARTMENTS WHILE HE WAS SUCH OFFICER, CLERK, OR EMPLOYE, NOR IN ANY MANNER, NOR BY ANY MEANS, TO AID IN THE PROSECUTION OF ANY SUCH CLAIM, WITHIN TWO YEARS NEXT AFTER HE SHALL HAVE CEASED TO BE SUCH OFFICER, CLERK, OR EMPLOYE.

HOWEVER, ASIDE FROM THE FOREGOING, THE CLAIM WILL BE CONSIDERED AND DISCUSSED UPON ITS MERITS.

WITH RESPECT TO THE CHECKS LISTED ABOVE IT APPEARS FROM THE RECORD THAT IN 1910 THE BOARD OF GENERAL APPRAISERS SUSTAINED A CLAIM MADE BY THE DECEDENT, AN IMPORTER OF FOODSTUFFS, FOR THE FREE ENTRY OF OLIVES AND PURSUANT TO THAT DECISION THE ENTRIES WERE LIQUIDATED FOR THE AMOUNT REPRESENTED BY THE CHECKS, SUPRA. HOWEVER, SAID CHECKS WERE NOT DRAWN IN PAYMENT THEREOF AT THAT TIME BECAUSE OF THE GOVERNMENT'S OUTSTANDING CLAIM AGAINST THE IMPORTER, WHO WAS NOT THEN AVAILABLE, AND SINCE HE MADE NO CLAIM FOR THE REFUNDS NO ADJUSTMENT WAS MADE. IN ORDER TO CLEAR THE TREASURY RECORDS, HOWEVER, AND NOTWITHSTANDING THE NAMED PAYEE WAS DECEASED AT THE TIME, THE CHECKS WERE DRAWN IN 1934 AND TRANSMITTED TO THIS OFFICE FOR PROPER DISPOSITION.

THE FACTS AND CIRCUMSTANCES SURROUNDING THE MATTER INVOLVED HERE ARE STATED IN A REPORT DATED JUNE 9, 1936, FROM THE ASSISTANT COLLECTOR, UNITED STATES CUSTOMS SERVICE, NEW YORK, TO THE COMMISSIONER OF CUSTOMS, IN PERTINENT PART, AS FOLLOWS:

IT APPEARS THAT EUSTADIO D. PAPAVASILOPULO WAS AN IMPORTER OF CONSIDERABLE QUANTITIES OF VARIOUS FOOD STUFFS FROM GREECE. WE ARE CHIEFLY CONCERNED WITH HIS IMPORTATIONS OF FIGS, CHEESE, AND OLIVES DURING THE CALENDAR YEARS 1905, 1906, AND 1907.

IT ALSO APPEARS THAT PAPAVASILOPULO HAD ENTERED INTO AN UNSAVORY CONSPIRACY WITH CERTAIN EMPLOYEES OF THE GOVERNMENT ENGAGED AS WEIGHERS. HIS SCHEME WAS TO MAKE IT APPEAR THAT HIS IMPORTATIONS WEIGHED LESS THAN THEIR TRUE WEIGHTS. THE GOVERNMENT WEIGHERS ASSISTED HIM IN THIS SCHEME, AS A RESULT OF WHICH HE PAID DUTIES ON MUCH LESS THAN HE ACTUALLY IMPORTED, THUS DEFRAUDING THE GOVERNMENT OF MANY THOUSANDS OF DOLLARS.

WE ARE NOT ABLE TO ESTABLISH THE BASIS OF THE EXACT LOSS, BUT WE HAVE BEEN ABLE TO LOCATE IN THE FILES OF THE UNITED STATES ATTORNEY FOR THE SOUTHERN DISTRICT OF NEW YORK A LETTER FROM THE COLLECTOR OF CUSTOMS, DATED AUGUST 31, 1911, IN WHICH IT IS STATED,

"I WISH TO INFORM YOU THAT AN EXAMINATION MADE BY THIS OFFICE OF IMPORTATIONS BY EUSTADIO D. PAPAVASILOPULO DISCLOSES THE FACT THAT THE DUTIES FRAUDULENTLY WITHHELD DURING THE YEARS 1904, 1905, 1906, AND 1907 AMOUNT TO $22,944.28.'

IT FURTHER APPEARS THAT THE UNITED STATES ATTORNEY INSTITUTED TWO SUITS FOR FORFEITURE VALUE UNDER SECTION 9 OF THE ACT OF JUNE 10, 1890. ONE SUIT FOR $9,394.09 WAS INSTITUTED MAY 3, 1910, AND A SECOND SUIT FOR $19,864.86 WAS COMMENCED JULY 15, 1910. WE DO NOT HAVE THE ENTRIES ON WHICH THESE SUITS WERE BASED, BUT WE HAVE BEEN ABLE TO OBTAIN FROM THE FILES OF THE UNITED STATES ATTORNEY PHOTOSTATIC COPIES OF TWO DOCUMENTS ENTITLED "BILL OF PARTICULARS," WHICH SHOW ENTRY NUMBERS AND VALUES. ONE IS IN THE SUM OF $9,394.09, AND THE SECOND IN THE SUM OF $19,864.86. SINCE THESE FIGURES CORRESPOND EXACTLY WITH THE AMOUNTS MENTIONED IN THE ABOVE-MENTIONED SUITS, WE ARE LED TO BELIEVE THAT THE ENTRIES MENTIONED IN SAID BILLS OF PARTICULARS WERE THE BASES OF THE GOVERNMENT'S SUITS REFERRED TO ABOVE. THE PERSON WHO PREPARED THESE DOCUMENTS IS NOW RETIRED FROM THE GOVERNMENT SERVICE, AND THE WRITER OF THIS LETTER HAS RECENTLY DISCUSSED THIS CASE WITH HIM. HE RECOGNIZES HIS HANDWRITING AND RECALLS PREPARING THE SCHEDULES, ALTHOUGH HE IS UNABLE TO STATE WHAT AMOUNT THE GOVERNMENT ACTUALLY LOST IN DUTIES.

IT FURTHER APPEARS THAT PAPAVASILOPULO FLED FROM THIS COUNTRY TO AVOID PROSECUTION FOR THESE FRAUDS FOR WHICH HE HAD BEEN INDICTED, AND WAS CONSIDERED A FUGITIVE FROM JUSTICE. ACCORDINGLY, THE GOVERNMENT WAS NEITHER ABLE TO EFFECT PERSONAL SERVICE IN THE TWO SUITS FOR FORFEITURE VALUE NOR WAS IT ABLE TO APPREHEND HIM FOR THE PURPOSE OF PUNISHING HIM FOR THE CRIMINAL VIOLATIONS.

IT APPEARS THAT PAPAVASILOPULO DIED OCTOBER 18, 1918, AND THAT NO CLAIM WAS MADE BY HIM PRIOR TO HIS DEATH, OR BY HIS ESTATE AFTER HIS DEATH, UNTIL THE PRESENT CLAIM WAS MADE BY MR. CLAPPER AS ADMINISTRATOR OF THE ESTATE.

IN A LETTER TO THIS OFFICE RECEIVED FROM THE UNITED STATES ATTORNEY, DATED APRIL 17, 1936, A COPY OF WHICH IS HEREWITH ENCLOSED, THAT OFFICER STATED:

"I AM OF THE OPINION THAT THE ABOVE-MENTIONED SUITS ARE ABATED UPON THE DEATH OF THE DEFENDANT AND CANNOT NOW BE REVIVED AND PROSECUTED TO JUDGMENT AGAINST HIS ADMINISTRATOR. A SUIT, SUCH AS HEREIN INVOLVED, IS ONE FOR THE RECOVERY OF A PENALTY OR FORFEITURE, AND IS NOT A CAUSE OF ACTION WHICH SURVIVES BY LAW. UNITED STATES V. RILEY (D.C., S.D., N.Y.), 104 FED. 275; SCHREIBER V. SHARPLESS, 110 U.S. 76; UNITED STATES V. WITTEMAN (C.C.A.2ND), 152 FED. 377.

"I AM NEVERTHELESS OF THE OPINION THAT THE GOVERNMENT HAS A CLAIM AGAINST THE ADMINISTRATOR FOR THE DUTIES OF WHICH IT WAS DEPRIVED BY REASON OF THE FRAUDULENT ACTS OF THE DEFENDANT. IF THE GOVERNMENT CAN AT THIS TIME ESTABLISH THE AMOUNT OF THOSE DUTIES THERE IS AMPLE GROUNDS FOR WITHHOLDING THE REFUNDS UNTIL SUCH DUTIES ARE PAID. IN VIEW OF THE FACT THAT THE ADMINISTRATOR IS A RESIDENT OF THE DISTRICT OF COLUMBIA IT WILL BE NECESSARY FOR THE GOVERNMENT TO ESTABLISH ITS CLAIM FOR DUTIES IN THAT JURISDICTION.'

THIS NOW BRINGS US TO CONSIDERATION OF WHAT LEGAL EVIDENCE THERE IS AVAILABLE TO ESTABLISH THE GOVERNMENT'S CLAIM FOR DUTIES AT THIS TIME. FORTUNATELY WE HAVE IN OUR POSSESSION THOSE ENTRIES ON WHICH THE REFUNDS WERE ALLOWED.

IT APPEARS THAT IN 1910 THE BOARD OF GENERAL APPRAISERS SUSTAINED A CLAIM FOR THE FREE ENTRY OF OLIVES, AND UNDER THAT DECISION THESE ENTRIES WERE LIQUIDATED FOR THE AMOUNT OF THE REFUNDS NOW CLAIMED. HOWEVER, CHECKS WERE NOT DRAWN IN PAYMENT OF THESE REFUNDS BECAUSE OF THE GOVERNMENT'S OUTSTANDING CLAIM AGAINST THE IMPORTER. THE IMPORTER WAS NOT AVAILABLE, HENCE SUIT WAS NEVER INSTITUTED AGAINST HIM, AND SINCE HE MADE NO CLAIM FOR THE REFUNDS NO CHECKS WERE EVER DRAWN. THE ENTIRE MATTER REMAINED IN STATUS QUO.

HOWEVER, IN 1934, IN ORDER TO CLEAR THE RECORDS, THE CHECKS WERE DRAWN AND SENT TO THE GENERAL ACCOUNTING OFFICE, AND THEREAFTER THE ADMINISTRATOR OF THE ESTATE OF PAPAVASILOPULO ASSERTED HIS CLAIM.

EXAMINATION OF THESE ENTRIES ON WHICH REFUNDS WERE ALLOWED DISCLOSES THAT ON 18 ENTRIES THE GOVERNMENT SUSTAINED A LOSS OF REVENUE ON IMPORTATIONS OF FIGS AND CHEESE ESTIMATED TO AMOUNT TO $9,234.90, AND THE INTEREST ON THIS LOSS OF REVENUE AMOUNTS TO $42,799.32, MAKING A TOTAL CLAIM OF $52,034.22 ON THESE 18 ENTRIES.

THE LIST OF THE 18 ENTRIES SHOWING THE LOSS OF REVENUE ON EACH OF THEM IS AS FOLLOWS:

LIST

INTEREST AT

AMOUNT OF 6 PERCENT

ENTRY DATE LOSS IN COMPOUNDED TOTAL

REVENUE ANNUALLY 276680 ------ DEC. 15, 1905 $717.22

$3,504.97 $4,222.19 40022 -------- MAR. 15, 1906 478.62 2,311.47 2,790.09 24135 -------- JAN. 27, 1906 394.62 1,917.13 2,311.75 69289 -------- MAR. 31, 1906 656.22 3,150.34 3,806.56 97784 -------- APR. 19, 1906 611.88

2,919.90 3,531.78 112398 ------- MAY 7, 1906 207.60 984.71 1,192.31 176700 ------- JULY 21, 1906 650.46 3,050.08 3,700.54 232944 ------- SEPT. 25, 1906 624.42 2,894.14 3,518.56 287713 ------- NOV. 21, 1906 912.24

4,178.74 5,090.98 285922 ------- NOV. 23, 1906 1,070.52 4,903.78 5,974.30 312927 ------- DEC. 18, 1906 429.66 1,956.52 2,386.18 10567 -------- JAN. 15, 1907 731.94 3,313.18 4,045.12 41929 -------- FEB. 18, 1907 460.32

2,071.20 2,531.52 61045 -------- MAR. 8, 1907 203.12 908.43 1,111.55 85584 -------- APR. 2, 1907 277.62 1,234.10 1,511.72 143353 ------- JUNE 3, 1907 32.94 144.69 177.63 163521 ------- JUNE 25, 1907 379.98

1,669.11 2,049.09 289838 ------- NOV. 4, 1907 395.52 1,686.83 2,082.35

TOTAL -------------------9,234.90 42,799.32 52,034.22

THE CLAIM FOR LOSS OF REVENUE IS BASED ON THE FOLLOWING ANALYSIS OF THESE 18 IMPORTATIONS. ATTACHED TO EACH ENTRY IS A BILL OF LADING SHOWING THE WEIGHTS FOR SHIPPING PURPOSES, AND IT WAS ON THESE WEIGHTS THAT THE IMPORTER PAID FREIGHT CHARGES TO THE STEAMSHIP COMPANY. IT IS REASONABLE TO ASSUME THAT HE DID NOT OVERPAY FOR FREIGHT, AND IT IS ALSO REASONABLE TO ASSUME THAT THE WEIGHTS ON THE BILLS OF LADING ARE SUBSTANTIALLY CORRECT.

COMPARISON OF THE BILL OF LADING, THE INVOICE, AND THE WEIGHER'S RETURN SHOWS THE FOLLOWING FACTS:

1. THE INVOICE WEIGHTS WERE SUBSTANTIALLY LOWER THAN THE BILL OF LADING WEIGHTS.

2. THE TARE EXPRESSED ON THE INVOICES WAS EXCESSIVE.

3. THE WEIGHTS RETURNED ON THE WEIGHERS' RETURNS WERE SUBSTANTIALLY LOWER THAN THE WEIGHTS GIVEN ON THE BILLS OF LADING.

4. THE TARE EXPRESSED ON THE WEIGHERS' RETURNS WAS EXCESSIVE.

THE ESTIMATED LOSS OF REVENUE IS DETERMINED BY CALCULATING THE DUTIES ON THE DIFFERENCE IN WEIGHT AS SHOWN BY THE BILL OF LADING AND AS SHOWN ON THE WEIGHER'S RETURN. THE IMPORTER PAID FREIGHT CHARGES TO THE STEAMSHIP COMPANY ON THE WEIGHT SHOWN IN THE BILL OF LADING, WHEREAS HE PAID DUTY ON THE WEIGHT SHOWN IN THE WEIGHER'S RETURN. THIS LOSS OF REVENUE WAS CALCULATED BY AN EMPLOYEE OF THE GOVERNMENT WHO IS NOW IN OUR LIQUIDATING DIVISION BUT WHO, AT THE TIME WHEN THESE FRAUDS WERE COMMITTED, WAS EMPLOYED IN THE DEPARTMENT CONCERNED WITH THE WEIGHING OF IMPORTATIONS. HE IS PERSONALLY FAMILIAR WITH THIS CASE, AND DISTINCTLY RECALLS THE FRAUDS WHICH WERE COMMITTED, AND WE HAVE EVERY REASON TO BELIEVE THAT HIS CALCULATIONS ARE SUBSTANTIALLY CORRECT. IT MAY BE ASSUMED THAT THE FRAUDS WERE COMMITTED WITH RESPECT TO OTHER ENTRIES OF FIGS AND CHEESE. THESE ENTRIES ARE NO LONGER IN EXISTENCE. IT WAS ONLY WHERE OLIVES WERE ALSO INCLUDED IN THE SAME SHIPMENT RESULTING IN REFUNDS THAT THE ENTRIES ARE STILL INTACT.

IT FURTHER APPEARS THAT SEVERAL GOVERNMENT EMPLOYEES WERE DISMISSED FROM THE SERVICE, AND INDEED WERE SENTENCED TO IMPRISONMENT AS A RESULT OF THESE WEIGHING FRAUDS. PAPAVASILOPULO ESCAPED PUNISHMENT ONLY BECAUSE HE FLED THE COUNTRY. BY OPERATION OF LAW THE SUITS FOR FORFEITURE VALUE ABATED UPON HIS DEATH.

IT SEEMS OBVIOUS, HOWEVER, THAT NEITHER HIS FLIGHT FROM THE COUNTRY NOR HIS DEATH HAVE IN ANY WAY CHANGED THE GOVERNMENT'S CLAIM FOR DUTIES. NEITHER DO WE BELIEVE THAT THE FAILURE TO RELIQUIDATE THE ENTRIES BECAUSE OF FRAUDS OUTLINED ABOVE OPERATES AS A BAR TO THE GOVERNMENT'S CLAIM.

IT WAS THE OPINION OF THE UNITED STATES ATTORNEY AS HERETOFORE MENTIONED THAT IF THE GOVERNMENT CAN AT THIS TIME ESTABLISH THE AMOUNT OF THE DUTIES, THERE IS AMPLE GROUND FOR WITHHOLDING THE REFUNDS UNTIL SUCH DUTIES ARE PAID.

WE BELIEVE THAT AT LEAST WITH RESPECT TO THE 18 ENTRIES OUTLINED ABOVE, THE GOVERNMENT'S CLAIM FOR DUTIES IS CLEARLY ESTABLISHED.

IT IS THEREFORE THE RECOMMENDATION OF THIS OFFICE THAT THE REFUNDS IN THE SUM OF $19,603.34 BE USED BY THE GOVERNMENT IN PART PAYMENT OF THIS CLAIM FOR DUTIES PLUS INTEREST THEREON.

IN LETTER DATED JUNE 13, 1936, THE BUREAU OF CUSTOMS CONCURRED IN THE RECOMMENDATION CONTAINED IN THE REPORT, SUPRA.

THE BRIEFS SUBMITTED IN SUPPORT OF YOUR CLAIM STRESS THE POINT OF THE GOVERNMENT'S APPARENT INABILITY AT THIS TIME TO SHOW SPECIFICALLY ALL OF THE ENTRIES THAT ARE INVOLVED IN THE GOVERNMENT'S CLAIM. HAVING IN VIEW THE LONG LAPSE OF TIME BETWEEN THE LIQUIDATION OF THE ENTRIES IN 1910 FOR THE REFUNDS REPRESENTED BY THE SUBJECT CHECKS AND THE TIME OF FILING CLAIM IN THE MATTER IN 1935--- APPROXIMATELY 25 YEARS--- IT IS READILY APPARENT THAT SUCH SEEMING INABILITY TO PROVE BY COMPLETE DOCUMENTARY EVIDENCE ALL OF THE ITEMS THAT MAY BE INVOLVED IN THE ENTIRE CLAIM IS DUE TO A CONDITION BROUGHT ABOUT BY THE FAILURE OF THE DECEDENT AND HIS ESTATE TO TIMELY ASSERT THE INSTANT CLAIM AND THE DECEDENT'S ACT IN ABSENTING HIMSELF FROM THIS COUNTRY MAKING IT IMPOSSIBLE TO SERVE DUE PROCESS UPON HIM FOR THE PURPOSE OF ADJUDICATING THE MATTER. CERTAINLY SUCH A SELF- WROUGHT CONDITION MAY NOT BE AVAILED OF BY YOU AS ADMINISTRATOR OF THE DECEDENT'S ESTATE TO DEFEAT THE GOVERNMENT'S CLAIM. SUFFICIENT FACTS, WHICH ARE OF NECESSITY PECULIARLY WITHIN THE KNOWLEDGE OF THE CUSTOMS BUREAU, ARE CONTAINED IN THE REPORT, SUPRA, AND SUFFICIENT DOCUMENTARY EVIDENCE HAS BEEN IDENTIFIED BY THE ADMINISTRATIVE OFFICE TO ESTABLISH A PRIMA FACIE CLAIM AGAINST THE DECEDENT'S ESTATE IN THE MATTER, AND TECHNICALITIES MAY NOT BE INDULGED IN, AS IS NOW ATTEMPTED, TO PREVENT THE DOING OF SUBSTANTIAL JUSTICE.

ANOTHER POINT WHICH IS STRONGLY URGED IN THE SUBMITTED BRIEFS IS THAT THERE IS NO AUTHORITY IN THIS OFFICE TO SET OFF THE GOVERNMENT'S INDEBTEDNESS REPORTED HERE AGAINST THE AMOUNT OTHERWISE DUE AS REFUND OF DUTIES PAID--- CITATION HAVING BEEN MADE TO THE ACT OF MARCH 3, 1875, 18 STAT. 481, AS AMENDED BY THE ACT OF MARCH 3, 1933, 47 STAT. 1516. THE AUTHORITY AND RESPONSIBILITY OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT TO CONSIDER BOTH DEBITS AND CREDITS IN THE SETTLEMENT OF CLAIMS FOR AND AGAINST THE UNITED STATES; THAT IS, TO APPLY AN AMOUNT OTHERWISE FOUND DUE A CLAIMANT ON ONE ACCOUNT IN LIQUIDATION OR REDUCTION OF AN AMOUNT FOUND DUE FROM THE CLAIMANT TO THE UNITED STATES ON SOME OTHER ACCOUNT, IS NOT DEPENDENT ON THE ACT OF MARCH 3, 1875, AS AMENDED BY THE ACT OF MARCH 3, 1933, EXCEPT IN THE CASE OF A JUDGMENT AGAINST THE UNITED STATES, BUT EXISTS BY VIRTUE OF SECTION 305 OF THE BUDGET AND ACCOUNTING ACT OF JUNE 10, 1921, 42 STAT. 24, WHICH PROVIDES AS FOLLOWS:

SECTION 236 OF THE REVISED STATUTES IS AMENDED TO READ AS FOLLOWS:

"ALL CLAIMS AND DEMANDS WHATEVER BY THE GOVERNMENT OF THE UNITED STATES OR AGAINST IT, AND ALL ACCOUNTS WHATEVER IN WHICH THE GOVERNMENT OF THE UNITED STATES IS CONCERNED, EITHER AS DEBTOR OR CREDITOR, SHALL BE SETTLED AND ADJUSTED IN THE GENERAL ACCOUNTING OFFICE.'

SEE IN THIS CONNECTION 1 COMP. GEN. 605; 14 ID. 849.

IN FURTHER SUPPORT OF THE RIGHT OF THIS OFFICE TO CONSIDER DEBITS AND CREDITS IN THE SETTLEMENT OF CLAIMS FOR AND AGAINST THE GOVERNMENT, YOUR ATTENTION IS INVITED TO THE HOLDING IN TAGGART V. UNITED STATES, 17 CT.CLS. 322, AT PAGE 327, AS FOLLOWS:

WHERE A PERSON IS BOTH DEBTOR AND CREDITOR OF THE UNITED STATES, IN ANY FORM, THE OFFICERS OF THE TREASURY DEPARTMENT, IN SETTLING THE ACCOUNTS, NOT ONLY HAVE THE POWER, BUT ARE REQUIRED IN THE PROPER DISCHARGE OF THEIR DUTIES, TO SET OFF THE ONE INDEBTEDNESS AGAINST THE OTHER, AND TO ALLOW AND CERTIFY FOR PAYMENT ONLY THE BALANCE FOUND DUE ON ONE SIDE OR THE OTHER. SECTION 1766 OF THE REVISED STATUTES SO PROVIDES, AND SPECIAL PROVISIONS ON THE SUBJECT, TO MEET THE CASE OF JUDGMENTS RECOVERED AGAINST THE UNITED STATES "OR OTHER CLAIM DULY ALLOWED BY LEGAL AUTHORITY," ARE MADE BY THE ACT OF MARCH 3, 1875, CH. 149 (1 SUPPLMT. TO R.S., P. 185). BUT THE RIGHT OF SET-OFF IN SUCH CASES EXISTS INDEPENDENTLY OF THOSE SPECIAL ENACTMENTS AND IS FOUNDED UPON WHAT IS NOW SECTION 236 OF THE REVISED STATUTES, AS FOLLOWS:

"SEC. 236. ALL CLAIMS AND DEMANDS WHATEVER, BY THE UNITED STATES OR AGAINST THEM, AND ALL ACCOUNTS WHATEVER IN WHICH THE UNITED STATES ARE CONCERNED, EITHER AS DEBTORS OR CREDITORS, SHALL BE SETTLED AND ADJUSTED IN THE DEPARTMENT OF THE TREASURY.'

THE DUTY OF THE ACCOUNTING OFFICERS IN MATTERS OF SET-OFF HAS FREQUENTLY BEEN RECOGNIZED BY THE COURTS. (MCKNIGHT'S CASE, 13 C.CLS.R. 306, AFFIRMED ON APPEAL; BONNAFON'S CASE, 14 C.CLS.R., 489.) * * *

OBVIOUSLY, THEREFORE, THE CONTENTION MADE THAT THERE IS NO RIGHT IN THIS OFFICE TO MAKE PROPER OFFSET WITHOUT A JUDICIAL DETERMINATION OF THE GOVERNMENT'S CLAIM IN THIS MATTER IS WITHOUT MERIT.

IN VIEW OF THE FACTS OF RECORD AND THE CIRCUMSTANCES APPEARING, YOUR CLAIM MUST BE AND IS DISALLOWED. SETTLEMENT WILL ISSUE IN FAVOR OF THE TREASURER OF THE UNITED STATES FOR THE AMOUNT OF THE INVOLVED CHECKS REPORTED TO HAVE BEEN COVERED INTO THE APPROPRIATION ACCOUNT "OUTSTANDING LIABILITIES," WITH DIRECTION THAT SAID AMOUNT BE APPLIED AS PARTIAL LIQUIDATION OF THE GOVERNMENT'S CLAIM AS REPORTED BY THE ADMINISTRATIVE OFFICE.