Wendell B. Barnes, B-136271

• Decision Date: 10 July 1958
• Docket Number: B-136271
• Parties: HONORABLE WENDELL B. BARNES, ADMINISTRATOR, SMALL BUSINESS ADMINISTRATION
• Court: Comptroller General of the United States

HONORABLE WENDELL B. BARNES, ADMINISTRATOR, SMALL BUSINESS ADMINISTRATION

No. B-136271

Comptroller General of the United States

July 10, 1958

Your letter of May 22, 1958, requests our decision regarding the liquidation of various debts transferred to your agency by reorganization plan no. 1 of 1957.

By reorganization plan no. 1 of 1957, all of the disaster loan functions of the reconstruction finance corporation which were not transferred to the small business administration by reorganization plan no. 2 of 1954, and all matters arising out of the reconstruction finance corporation's financial-assistance programs to business enterprises except those relating to assistance to railroads, financial institutions, insurance companies, and certain other specific exceptions were transferred to the administrator of the small business administration. Reorganization plan no. 1 of 1957 also transferred to the small business administration the pertinent assets and liabilities of the reconstruction finance corporation relating to the functions transferred. You say that included in the transfer were numerous loans evidenced by promissory notes, made to business enterprises and victims of floods or other disasters.

In connection with the liquidation of one of the loans transferred you request our decision on the following:

"1. Whether in the liquidation of the various debts transferred by said reorganization plan such debts are entitled to the priority available to the United States pursuant to section 3466 of the revised statutes; and

"2. In the event you determine such debts are entitled to the priority available pursuant to said section, should this agency assert such priority in the liquidation of a debt due from a debtor whose assets had passed to an insolvent decedent's or creditor's estate prior to the effective date of such reorganization plan.'

The jurisdiction of this office to render decisions to heads of government agencies is set out in 31 U.S.C. 74, as follows:

"Disbursing officers, or the head of any executive departments, or other establishment not under any of the executive departments, May apply for and the comptroller general shall render his decisions upon any question involving a payment to be made by them or under them, which decisions, when rendered shall govern the general accounting office in passing upon the account containing said disbursement.'

Reorganization plan no. 1 of 1957 which transferred to you the above- mentioned loan functions of the rfc, in section 2 (C) also transferred to you for use in executing your functions thereunder, the powers, rights and immunities applicable to the RFC for carrying out the functions transferred. Such powers include, 15 U.S.C. 603 (2), the power to determine except as otherwise provided in the reconstruction finance corporation act or in the government corporation control act the necessity for and the character and amount of the obligations and expenditures and the manner in which they shall be incurred, allowed, paid and accounted for without regard to the provisions of other laws governing the expenditure of public funds, and such determinations are made final and conclusive upon all other officers of the government. Since the only expenditure or payment involved in the questions raised would appear to be the expenses incident to assertion of the priorities, as to which your determination would appear to be controlling, the questions raised do not appear to be ones on which we May render an authoritative decision.

Yet the questions do involve government collection procedures with which we are concerned and familiar because of our general authority to settle claims in favor of the government under 31 U.S.C. 71 and to superintend the recovery of debts due the United States under 31 U.S.C. 93. We, therefore, wish to take this occasion to express our views in this matter.

Section 3466 of the revised statutes, 31 U.S.C. 191, provides as follows:

"Whenever any person indebted to the United States is insolvent, 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 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.'

The United States court of claims in the...