Comptroller General Warren to the Federal Works Administrator

• Decision Date: 04 November 1941
• Docket Number: B-19298
• Citation: 21 Comp.Gen. 411
• Parties: COMPTROLLER GENERAL WARREN TO THE FEDERAL WORKS ADMINISTRATOR
• Court: Comptroller General of the United States

21 Comp.Gen. 411

COMPTROLLER GENERAL WARREN TO THE FEDERAL WORKS ADMINISTRATOR

No. B-19298

Comptroller General of the United States

November 4, 1941

Private property - damages caused by negligence of government employees claims settlement jurisdiction the authority in section 20 of the 1942 emergency relief appropriation act for the commissioner of work projects to settle, and pay from the appropriation, any claim not in excess of $500 on account of damage to or loss of privately owned property caused by the negligence of w.P.A. Employees while acting within the scope of their employment, relates exclusively to tort claims and affords no basis for the commissioner to settle claims for damages resulting from the negligence of employees in those cases, such as damage to rented equipment, in which the claimants otherwise have a legal remedy against the government.

In the absence of Mr. Carmody there has been received your letter of August 25, 1941 (b-19298), in reply to his communication of July 28, 1941, concerning the question whether the work projects administration could consider, under section 20 of the emergency relief appropriation act, fiscal year 1942 (55 Stat. 396), claims for damage to property under rental to the administration, the written presentation of which claims was made within the prescribed statutory period, not to the work projects administration, but to the procurement division of the treasury department, the agency required, under executive order no. 7034, dated May 6, 1935, to provide for the procurement of all materials, etc., for the work projects administration.

It is noted that you are of the opinion that "if the claims were presented in writing within the time required by law the fact that they were filed with the procurement division rather than with the work projects administration would not preclude their consideration, etc., under the law, supra, by the commissioner of work projects, and their payment from funds appropriated for the work projects administration provided, of course, they are claims otherwise properly for consideration under said law.' you are of the further opinion, however, that such claims are not otherwise properly for consideration under said Law. The conclusion is reached that "where the leased property, at the time it is damaged or lost, is in the custody of the government under a rental contract, it must be assumed that the amounts payable by the government for such use, including any damages for which the government May be liable, are for determination under and in accordance with the terms of the rental contract and that there is no authority, unless otherwise specifically provided by law, to impose upon the government any liability aside from and in addition to such as May be imposed under the provisions of the contract.'

The first interpretation to which the decision is susceptible is that claims for damage to rented property or equipment cannot be considered under the laws authorizing the consideration of claims "on account of damage to or loss of privately owned property, " for the reason that such laws "apparently contemplate that the "privately owned property" referred to therein is property in the control of the private owners or their agents at the time it was damaged or lost rather than property leased or hired to the united states and lost or damaged while being used for the purposes contemplated by the rental contract.' such an interpretation, in effect, holds that when an individual rents or leases personally owned property to the government the property ceases to become privately owned, merely because the owner contracts away his right or control over the equipment during the life of the contract. The test applied in the decision is control, not ownership. Control, however is only an indicia of ownership. It is well settled that a bailor retains the general ownership of bailed property even though he has no control over it, the bailee obtaining only the special ownership necessary to protect his interest (see 3 r.C.L. 84 and cases cited therein). The parting with possession does not destroy the bailor's ownership or title but merely restricts his complete dominion over the chattel in accordance with the limitations specified in the rental contract or bailment. The general ownership and legal title still remain in the bailor.

The procurement division awards contracts for the rental of equipment with operators, in which cases the government obtains no right of possession or custody of the equipment but merely a contractual right to direct the type of work to be performed. Such rented equipment would fall within the category mentioned in the decision as "property leased or hired to the united states and lost or damaged while being used for the purposes contemplated by the rental contract.' however, it is submitted, it could not be held that the same equipment was not "in the control of the private owners or their agents at the time it was damaged or lost * * *.' in such instances, the commissioner of work projects would be at a loss to determine which of the tests to apply, in order to ascertain whether a claim for damage to the equipment could be considered.

It is submitted that the decision is contrary, not only to logic but to precedent. The words, privately owned property" are used in the same sense in section 20 of the emergency relief appropriation act, fiscal year 1942 (55 Stat. 396), and in the act of December 28, 1922 (42 Stat. 1066). This is inferentially admitted in the decision. Also, in a decision of November 18, 1939 (b-6466), addressed to the federal works administrator, it was specifically stated, concerning section 26 of the emergency relief appropriation act of 1939 (53 Stat. 927), which contains a provision identical with section 20 of the emergency relief appropriation act, fiscal year 1942 (55 Stat. 396), that "the provisions of this section appear to be substantially the same as those of the act of December 28, 1922, 42 Stat. 1066, * * *.' it would therefore seem free from doubt that any difference existed between the statutes in question, as far as the points under discussion are involved.

Although the decision recites that such laws as the act of December 28, 1922 (42 Stat. 1066), and section 20 of the emergency relief appropriation act, fiscal year 1942 (55 Stat. 6), "apparently contemplate that the "privately owned property" referred to therein is property in the control of the private owner or their agents at the time it was damaged or lost rather than property leased or hired to the united states and lost or damaged while being used for the purposes contemplated by the rental contract, " the legislative history of the act of December 28, 1922, is devoid of any discussion of the meaning of the words "privately owned property.' as pointed out by the attorney general of the united states in an opinion dated August 12, 1936 (38 op. A.G. 514), "ordinarily privately owned property, or private property, is understood to embrace property owned by individuals or private corporations as distinguished from property owned by governmental bodies or agencies; but this conception of private property is subject to qualification. It has been held, for instance, that property owned by a state May be private property in relation to the federal government with respect to the clause of the fifth amendment prohibiting the taking of private property without just compensation * * * (italics supplied.) (* * ** * * *

"While the legislative history of the act of December 28, 1922, contains no discussion of the meaning of the words "privately owned property, " the broad purpose of the act--- to relieve the congress of the burden of passing upon numerous small meritorious claims against the government not within the jurisdiction of the courts--- as indicated by such history (H.R. No. 342, 67th cong., st sess.) Is consonant with the view that claims of municipalities May properly be considered under its provisions.'

The only reference cited in support of the decision on the point in question is 14 Comp.Gen. 139. It was there held that "there is no authority of law or appropriations available for the authorization of contracts for the rental of motor vehicles containing stipulations for the payment of damages resulting to the motor vehicles operated by the government under rental agreements.' in discussing the possibility that the claim might be considered either under section 9 of the act of June 5, 1920 (41 Stat. 1015), or under the act of December 28, 1922 (42 Stat. 1066), it was stated that "both the 1920 and 1922 statutes contemplate the damaged property shall have been in the control, etc., of persons and not leased to the united states when it is damaged.' it is desired to emphasize that no reason is given to support this conclusion and no authority is cited.

The decision of August 25, 1941, appears to be directly in conflict with a decision in 4 Comp.Gen. 1028. In that case two horses were hired from their owner by the united states geological survey pursuant to the provisions of a written contract, wherein the government was bound to use reasonable care. Although the claim under the contract was disallowed for the reason that it was not shown that the government failed to exercise reasonable care for the protection of the animals, the comptroller general suggested that "the only relief which could be afforded the owner in case of negligence, would be under the act of December 28, 1922, 42 Stat. 1066, which is a matter for administrative determination and certification to congress and not for payment by or through the general accounting office.' there appears no logical or legal distinction between property such as a horse and other property,...