Sec. 6372. Priority established. 6373. Liability of executors, etc. 6374. Priority of sureties. 6383. Assignments of claims void, unless, etc. 6387. Claims of disloyalists. 6387a. Same; R. S. § 3480, repealed as to services in Army prior to April 13, 1861. 6390. Payment to officers for horses lost in battle, etc. 6391. Payment to officers, etc., for loss 6392. Payment to officers, etc., for Sec. amounts found due to Con- 6402c. Same; effect of acceptance of 6403. Settlement of claims for loss of ment; pay examinations; 6404a. Settlement of claims by Auditor 6404b. Settlement of claims for dam- and 6402b. Same; authority of heads of or establishcertification departments of § 6372. (R. S. § 3466.) Priority established. See U. S. v. Birmingham Trust & Savings Co. (C. C. A. Ala.) 258 F. 562. 8. Insolvency of debtor in general.Where a receiver was appointed for a corporation on a creditor's bill, alleging solvency, but temporary embarrassment, and the corporation was subsequently found to be insolvent, and was in process of liquidation, debts due the United States were entitled to priority under this section. Davis v. Pullen (C. C. A. Mass.) 277 F. 650. Under this section, a receiver who distributes to creditors a sum of money received prior to the due date of income tax would be personally responsible, where a valid claim is made by the government, on due date. sylvania Cement Co. v. Bradley Contracting Co. (D. C. N. Y.) 274 F. 1003. Penn 15. Bankruptcy of debtor-In general.-Rev. St. § 3468 (Comp. St. § 6374), giving the surety of a government contractor, who pays the United States the amount due on the bond, a priority for the moneys like that secured to the United States, gives such surety the priority enjoyed by the United States over other claimants of an insolvent under section 3466 (Comp: St. § 6372), but does not entitle the surety to share equally with the United States in the assets of the bankrupt contractor, where the amount of the bond was insufficient to pay the government's loss under the contract, and the assets of the bankrupt were less than the claim of the United States, which construction is in harmony with the rule of subrogation that a surety, liable only for part of the debt, does not become subrogated to remedies available to the creditor, unless he pays the whole debt or it is otherwise satisfied. U. S. v. National Surety Co., 41 S. Ct. 29, 254 U. S. 73, 65 L. Ed. 143, reversing judgment (C. C. A. Mo.) 262 F. 62. Bankruptcy Act, §§ 64a, 64b (Comp. St. § 9648), as to payment of taxes and debts having priority, are in pari materia with Rev. St. § 3466 (Comp. St. § 6372), giving debts due the United States from insolvent debtors priority, and supersede such section in part, and the right of taxes to priority is governed by those sections, and not In re Jacobson (C. by section 3466. C. A. Ill.) 263 F. 883. and 19. Persons, property, debts, debtors affected, in general.—Unpaid freight charges for shipments by railroad during federal control are property of the United States, and a claim therefor is entitled to priority. In re E. J. Hibner Oil Co. (C. C. A. Ill.) 264 F. 667; Davis v. Pullen (C. C. A. Mass.) 277 F. 650; In re Tidewater Coal Exchange (C. C. A. N. Y.) 280 F. 648. The United States Shipping Board Emergency Fleet Corporation, held not entitled to priority of payment of a debt due it from a bankrupt with whom the corporation made a contract as a principal, and not as the agent of the United States government, on the theory that the debt was one due to the In re Eastern Shore United States. Shipbuilding Corporation (C. C. A. N. Y.) 274 F. 893, certiorari granted U. S. (2095) Board Emergency Fleet Corporation v. Under this section, the claim of the United States on a recognizance entered into by a company for the appearance of a defendant in criminal proceedings is entitled to priority over all other claims, where the surety company became insolvent after entering into the recognizance, but before the defendant had failed to appear, regardless of whether the claim on the recognizance had matured at the time of the entry of the insolvency order, within the meaning of the New York law. In § 6373. (R. S. § 3467.) Liability Receivers.-Under this and the preceding section, a receiver who distributes to creditors a sum of money received prior to the due date of income tax would be personally responsible, where a valid claim is made by the government, on due date. Pennsylvan § 6374. (R. S. § 3468.) re Casualty Co. of America (Sup.) 187 N. Y. S. 849. 28. Priority as against adverse rights -Priority over debts due a state.-Under Const. art. 6, providing that "this Constitution and the laws of the United States which shall be made in pursuance thereof * * # shall be the supreme law of the land," and this section, taxes due to the United States from an insolvent corporation have priority over taxes due under the laws of the state. U. S. v. San Juan County, Wash. (D. C. Wash.) 280 F. 120. Cited without definite application, In re Anderson (C. C. A. N. Y.) 279 F. 525. of executors, etc. ia Cement Co. v. Bradley Contracting Co. (D. C. N. Y.) 274 F. 1003. Cited without definite application, In re Anderson (D. C. N. Y.) 275 F. 597, order affirmed (C. C. A.) 279 F. 525. Priority of sureties. As superseding state laws.-This section supersedes the state laws governing subrogation priority in the distribution of the assets of an insolvent principal whose debt to the United States has been paid by his surety. American Surety Co. of New York v. Carbon Timber Co. (C. C. A. Wyo.) 263 F. 295. Surety's priority as against United States. This section gives a surety who pays the United States the amount due on a bond the priority enjoyed by the United States over other claimants of an insolvent under Rev. St. § 3466 (Comp. St. § 6372), but does not entitle the surety to share equally with the United States in the assets of the bankrupt contractor, where the amount of the bond was insufficient to pay the government's loss under the contract, and the assets of the bankrupt were less than the claim of the United States, which construction is in harmony with the rule of subrogation that a surety, liable only for part of the debt, does not become subrogated to remedies available to the creditor, unless he pays the whole debt or it is otherwise satisfied. U. S. v. National Surety Co., 41 S. Ct. 29, 254 U. S. 73, 65 L. Ed. 143. reversing judgment (C. C. A. Mo.) 262 F. 62. Cited without definite application, In re Anderson (C. C. A. N. Y.) 279 F. 525. § 6383. (R. S. § 3477.) Assignments of claims void, unless, etc. 4. Operation and effect-In general.This section does not prevent giving effect to an assignment by operation of law after the claim has been allowed. Houston v. Ormes, 40 S. Ct. 369, 252 U. S. 469, 64 L. Ed. 667, affirming decree McAdoo v. Same, 47 App. D. C. 364. 9. Assignments or transfers within this section-Agreements to make assignments or deliver warrants to assignee.-Under this section, a contract under which petitioner furnished automobile parts to bankrupt, to be used in filling a contract with the government, and which provided that all warrants received by bankrupt under its contract should be indorsed by it as agent and delivered to petitioner, held void, and such warrants received by the trustee held to inure to the benefit of general creditors. In re Hudford Co. of New York (C. C. A. N. Y.) 257 F. 722. 10. Merger of corporations or transfer of stock in corporation holding claim against United States.-This section does not prevent the allowance of a claim originally payable to a railroad company the right to which had vested in another corporation formed by the merger of that company and another under the provisions of Civ. Code Ga. 1895, § 2173, and Gen. St. Fla. 1906, § 2812, since, Congress intended merely to prevent evils resulting from trafficking in claims, and not to discourage or hinder the proper merger of corporations as authorized by the states. Seaboard Air Line Ry. v. U. S., 41 S. Ct. 611, 256 U. S. 655, 65 L. Ed. 1149, reversing judgment 53 Ct. Cl. 107. 11. Assignments or powers of attorney in consideration of services in collecting claims.-A provision of a contract employing an attorney on a contingent fee to prosecute a claim against the government that the fee should be a lien on any warrant issued in payment of the claim was void under this section. Calhoun v. Massie, 40 S. Ct. 474, 253 U. S. 170, 64 L. Ed. 843, affirming judgment (Va.) 97 S. E. 576. Omnibus Claims Act March 4, 1915, § 4. providing that no part of the amount of any item appropriated by that act shall be paid or delivered to any agent or attorney for services in excess of 20 per cent. of the amount appropriated, and that it shall be unlawful for any attorney to withhold or receive any sum in excess of the specified percentage any contract to the contrary notwithstanding, limits the amount recoverable by the attorney from the claimant, and not merely the amount payable from the specific fund received from the government. Id. Under Omnibus Claims Act March 4, 1915, making it unlawful for any attorney to collect any sum exceeding 20 per cent. of the amount of any item appropriated, any contract to the contrary notwithstanding, where an attorney for a claimant received from the treasury a warrant for 20 per cent. of the sum appropriated, he took under the act, and could not repudiate its provisions and any reservation by him of his rights under the contract was futile. Id. Contract by one holding claim against United States government to pay attorney for services to be rendered in obtaining payment of claim is valid, although it gives attorney no interest or share in particular money paid over by government. King v. Pons (Fla.) 81 So. 519. Contract between one having a claim against United States government and an attorney, purporting to give attorney a lien on any check or medium of payment issued in settlement of the claim as security for the fee agreed to be paid, is void under this section, in so far as attempting to create a lien. Id. An act of Congress of 1915 appropriating money to settle claim against government, providing that not over 20 per cent. of appropriation shall be paid to any agent or attorney for claimant, does not affect validity of contract between claimant's administrator and an attorney for prosecuting the claim, or make administrator's payment of agreed compensation, after money came into his hands, unlawful, in view of this section. Id. 25. Claims within purview of statute -In general.-A contract whereby one, for contingent compensation, agreed to obtain passage of acts of Congress making appropriations to contractors who had lost money in government § 6387. (R. S. § 3480.) work was not void under this section; the contractors not having claims against the United States, and the one employed to obtain the appropriation having no right or interest directly or indirectly in the claim, and the government no longer being interested in the matter after having paid out the money. Stansell v. Roach (Tenn.) 246 S. W. 520. This section does not bar claims against the United States Government which arise under involuntary assignments of patents by a duly appointed receiver. 32 Op. Atty. Gen. 135. 322. Loss and damage claims against Federal Railroad Administration. In view of U. S. Comp. St. Ann. Supp. 1919, §§ 31154j and 311541, and federal Transportation Act of 1920, §§ 206, 210, assignments of claims for injuries to cattle shipped during federal control were not within U. S. Comp. St. § 6383. Morgan v. Hines (Mont.) 211 P. 778. An assignment of a claim for damages arising out of an injury to sheep while they were being shipped on a railroad under federal control was not within this section, since under section 12 of the Federal Control Act (U. S. Comp. St. Ann. Supp. 1919, § 311547), such a claim was payable out of the general receipts of the railroad. Paradise Land & Live Stock Co. v. Davis (Utah) 207 P. 145. 323/4. Claims for unlicensed use of patented invention.-In view of this section, assignee of letters patent has no claim under Act June 25, 1910, c. 423, 36 Stat. 851 (Comp. St. § 9465) for any unlicensed use of the patented invention by the United States prior to such assignment. Brothers V. United States, 39 S. Ct. 426, 250 U. S. 88, 63 L. Ed. 859, affirming judgment 52 Ct. Cl. 462. 45. Rights of assignee under invalid assignment against persons receiving fund. Where plaintin has loaned defendant money, and defendant has executed an assignment to plaintiff of all his right, title, and interest in a contract with the United States government, although not in the statutory manner, but the government has refused to recognize the assignment, and has paid the money to defendant, plaintiff cannot maintain conversion against defendant, in view of this section. Brindze v. Kuckro (Sup.) 179 N. Y. S. 69. Cited without definite application, Capital Trust Co. v. Calhoun, 39 S. Ct. 486, 250 U. S. 208, 63 L. Ed. 942; Mangan v. U. S., 41 S. Ct. 157, 254 U. S. 494, 65 L. Ed. 370; Scott v. Schwab (C. C. A. Cal.) 255 F. 57. Claims of disloyalists. Cited without definite application, Anderson v. U. S., 57 Ct. Cl. 242. 2 SUPP.U.S.COMP. '23-132 (2097) § 6387a. (Act July 6, 1914, c. 136.) § 6390. (R. S. § 3482.) tle, etc. Same; R. S. § 3480, repealed April 13, 1861. ute of limitations and his administratrix can not recover longevity pay for cadet service as more than 6 years had elapsed during which an action could be brought even though the period from the date of the enactment of Comp. St. Ann. Ed. § 6387 to its partial repeal by this section be eliminated. Anderson v. U. S., 57 Ct. Cl. 242. Payment to officers for horses lost in bat Presentation of claims.-Under Act -Jan. 9, 1883, and Act Aug. 13, 1888, right to present claims against the United States, under this section, as amended by Act June 22, 1874 (Comp. St. §§ 6391, 6392), for horses lost in military service, finally expired in 1891. U. S. v. Babcock. 39 S. Ct. 464, 250 U. S. 328, 63 L. Ed. 1011. Reversing judgment In re Babcock, 53 Ct. Cl. 629. § 6391. (Act June 22, 1874, c. 395, § 1.) Payment to officers, etc., for loss of horses purchased in States in insurrection. Cited without definite application, U. S. 328. 63 L. Ed. 1011. Reversing U. S. v. Babcock, 39 S. Ct. 464, 250 judgment In re Babcock, 53 Ct. Cl. 629. § 6392. (Act June 22, 1874, c. 395, § 2.) Payment to officers, etc., for horses lost; limitation of time for presentation of claims. Effect of limitation.-Under Act Jan. 9, 1883, and Act Aug. 13, 1888, right to present claims against the United States, under Rev. St. § 3482 (Comp. St. § 6390), as amended by Act June 22, 1874 (Comp. St. §§ 6391, 6392), for horses lost in military service, finally expired in 1891. U. S. v. Babcock, 39 S. Ct. 464, 250 U. S. 328, 63 L. Ed. 1011, Reversing judgment In re Babcock, 53 Ct. Cl. 629. § 6402a. (Act Dec. 28, 1922, c. 17, § 1.) Settlement of claims not exceeding $1,000 in any one case; definitions. When used in this Act the terms "department and establishment" and "department or establishment" mean any executive department or other independent establishment of the Government; the word "employee" shall include enlisted men in the Army, Navy, and Marine Corps. (42 Stat. 1066.) This section, and the two sections next following, are §§ 1-3 of an act entitled "An act to provide a method for the settlement of claims arising against the Government of the United States in sums not exceeding $1,000 in any one case," cited above. Section 4 of this act repeals all conflicting laws. § 6402b. (Act Dec. 28, 1922, c. 17, § 2.) Same; authority of heads of departments or establishments; certification of amounts found due to Congress; time for presentation. Authority is hereby conferred upon the head of each department and establishment acting on behalf of the Government of the United States to consider, ascertain, adjust, and determine any claim accruing after April 6, 1917, on account of damages to or loss of privately owned property where the amount of the claim does not exceed $1,000, caused by the negligence of any officer or employee of the Government acting within the scope of his employment. Such amount as may be found to be due to any claimant shall be certified to Congress as a legal claim for payment out of appropriations that may be made by Congress therefor, together with a brief statement of the character of each claim, the amount claimed, and the amount allowed: Provided. That no claim shall be considered by a department or other independent establishment unless presented to it within one year from the date of the accrual of said claim. (42 Stat. 1066.) See note to § 6102a, ante. § 6402c. (Act Dec. 28, 1922, c. 17, § 3.) Same; effect of acceptance of amount found due. Acceptance by any claimant of the amount determined under the provisions of this Act shall be deemed to be in full settlement of such claim against the Government of the United States. (42 Stat. 1066.) See note to § 6402a, ante. § 6403. (Act March 3, 1885, c. 335, § 1, as amended, Act July 9, 1918, c. 143, subchapter VI, and Act March 4, 1921, c. 163.) Settlement of claims for loss of property in military service. Private property belonging to officers, enlisted men, and members of the Nurse Corps (female) of the Army, including all prescribed articles of equipment and clothing which they are required by law or regulation to own and use in the performance of their duties, and horses and equipment required by law or regulations to be provided by mounted officers, which since the 5th day of April, 1917, has been or shall hereafter be lost, damaged, or destroyed in the military service, shall be replaced, or the damage thereto, or its value recouped to the owner as hereinafter provided, when such loss, damage, or destruction has occurred or shall hereafter occur without, fault or negligence on the part of the owner in any of the following circumstances: First. When such private property so lost, damaged, or destroyed was shipped on board an unseaworthy vessel by order of an officer authorized to give such order or direct such shipment. Second. When it appears that such private property was so lost, damaged, or destroyed in consequence of its owner having given his attention to the saving of human life or property belonging to the United States which was in danger at the same time and under similar circumstances, or while, at the time of such loss, damage, or destruction, the claimant was engaged in authorized military duties in connection therewith. Third. When during travel under orders such private property, including the regulating allowance of baggage, transferred by a common carrier, or otherwise transported by the proper agent or agency of the United States Government, is lost, damaged, or destroyed; but replacement, recoupment, or commutation in these circumstances, where the property was or shall be transported by a common carrier, shall be limited to the extent of such loss, damage, or destruction over and above the amount recoverable from said carrier. Fourth. When such private property is destroyed or captured by the enemy, or is destroyed to prevent its falling into the hands. of the enemy, or is abandoned on account of lack of transportation or by reason of military emergency requiring its abandonment, or is otherwise lost in the field during campaign. (23 Stat. 350. 40 Stat. 880. 41 Stat. 1436.) This section, and the five sections next following, are a part of an act entitled "An Act to amend an Act entitled 'An Act to provide for the settlement of the claims of officers and enlisted men of the Army for the loss of private property destroyed in the military service of the United States,' approved March 3, 1885, as amended by the Act of July 9, 1918, and for other purposes." cited above. The act amended is Act March 3, 1885, c. 335, 23 Stat. 350 (U. S. Comp. St. 1916, § 6403), which was amended by Act July 9, 1918, c. 143, subchapter VI, 40 Stat. 880. Section 7 of said Act March 3, 1885, c. 335, as added by amendment by Act March 4, 1921, c. 163, 41 Stat. 1437, repeals so much of Act March 28, 1918, c. 28, § 1, 40 Stat. 479, 480, "as makes provision for the presentation, adjustment, and payment of claims of officers and enlisted men for loss of private property destroyed in the military service." See post, note to § 6403b. 1 |