6.
United States Attorney General Opinion, May 8, 1929
36 U.S. Op. Atty. Gen. 40
AUTHORITY OF SECRETARY OF THE TREASURY TO COMPROMISE FINAL
JUDGMENTS
[40] The Secretary of the Treasury has no authority under
section 3469 of
the Revised Statutes to accept the offer of the Great American
Indemnity Company
is compromise of certain final judgments recovered by the United
States against
the surety company upon forfeited bail recognizances, there being
no doubt as to
the entire collectibility of these judgments.
To the SECRETARY OF THE TREASURY.
[41] SIRS:
Your letter of March 16, 1929, submits for my opinion the
question whether
you have authority under section 3469 of the Revised Statutes to
compromise
certain judgments recovered by the United States upon forfeited
bail
recognizances. The circumstances giving rise to your inquiry
appear to be as
follows:
On September 14, 1927, each of five defendants held upon a
charge of having
conspired to violate the National Prohibition Act and the Tariff
Act of 1922
entered into a bond, in the sum of $5,000, with the Great American
Indemnity
Company as surety, conditioned upon the appearance of the principal
at the
November Term, 1927, of the United States District Court at
Norfolk, Virginia.
The criminal case was set for trial on December 5, 1927, and on
December 20,
1927, none of the defendants having appeared, the court declared
each of the
bonds forfeited. Scire facias proceedings thereafter brought
resulted in the
recovery by the United States of a separate judgment upon each
bond. On June 1,
1928, one day after the entry of these judgments, four of the
defendants
surrendered, and they were subsequently tried, convicted and
sentenced. The
fifth defendant, Joseph Dally, has neither surrendered nor been
apprehended, and
the judgment upon the bond given by him, together with interest and
costs, has been paid by the surety company.
Petitions by that company, under section 1020 of the Revised
Statutes, for
remission of the amounts of the remaining four judgments having
been denied by
the court, the company, by letter dated December 17, 1928,
submitted to you an
offer of $1,000 in compromise of these unsatisfied judgments, which
total
$20,000. As reasons why the offer should be accepted, the letter
referred to the
fact that the company had already paid in excess of $5,000 in
satisfaction of the
judgment upon the bond given by the defendant Dally, and stated
that, owing to
its lack of experience in such matters, the company had not entered
into any
separate indemnity agreements with the principals at the time it
became surety
upon these bonds, and that any loss resulting therefrom would,
therefore, fall
entirely upon it; that it [42] had expended considerable sums of
money in
endeavoring to apprehend the said defendants, whose surrender was
due largely to
its efforts, and that by virtue of such surrender on th
e day following the entry of the scire facias judgments and of the
trial and
convictions which followed, the United States had lost none of its
rights, the
ends of justice were properly served, and the United States should
not demand the
full amount of the penalty for the default, but should accept the
offered
compromise, which would reimburse it for its expenses incurred in
seeking the
apprehension of these defendants.
Pursuant to the practice in such cases, the compromise offer
was referred
to the United States Attorney for his recommendation in the
premises. Estimating
that the Government had expended between $1,500 and $2,000 by
reason of the
failure of the said defendants to appear as required by their
bonds, that officer
recommended that if the surety company should submit an offer of
$2,000 in
settlement of these judgments, the offer should be accepted, if
cognizable under
section 3469 of the Revised Statutes.
The surety company thereupon submitted a new offer in the sum
of $2,000,
and the Solicitor of the Treasury recommended that it be accepted.
In making
such recommendation, the Solicitor referred to conflicting opinions
of the
Attorney General upon the question of the authority of the
Secretary of the
Treasury, under section 3469, to compromise final judgments
recovered by the
United States the full amounts of which could be collected, and
based his
conclusion that such authority existed upon an opinion by Attorney
General
Wickersham (29 Op. 217), wherein the previous opinions of the
Attorney General
upon the subject were reviewed and the opinion expressed that, in
passing upon
offers to compromise final judgments, the Secretary of the Treasury
was not
restricted to a determination of whether the judgments could be
collected, but
was authorized to determine, upon considerations of justice,
equity, and sound
public policy, whether their collection in full should be insisted
upon by
the Government.
In view of the matters stated and because of a doubt
engendered by the
divergent views expressed by my predecessors, you ask to be advised
whether you
have authority [43] under section 3469 to accept the offer of the
Great American
Indemnity Company in compromise of the aforesaid judgments, as to
which you say
no appeal has been taken and no showing or claim made that they
cannot be
collected in full.
Section 3469 of the Revised Statutes, which has been carried
without change
into the United States Code as section 194 of Title 31, reads as
follows:
'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.'
Except for the final provision regarding claims arising under
the postal
laws, section 3469 reenacted, word for word, the provisions of
section 10 of the
Act of March 3, 1863 (c. 76, 12 Stat. 737). Construing the latter
statute in 12
Op. 543, Attorney General Evarts, in response to an inquiry by the
Postmaster
General whether it authorized a compromise by the Secretary of the
Treasury of
a claim against a surety upon a forfeited recognizance given for
the appearance
in court of a person charged with robbing the mail, said:
'The statute was not intended to vest in the
Secretary of the
Treasury any authority, or impose upon him any duty touching the
administration
of the criminal laws of the United States. Its purpose simply was
to enable the
Government to realize the largest amounts from money claims which
might be of
doubtful recovery or enforcement, and to accomplish this object the
Secretary of
the Treasury was empowered to compromise such claims upon the
recommendation of
the counsel having charge of them and of the Solicitor of the
Treasury. This
power is strictly, therefore, a fiscal one, and is to be exercised
in each case
upon fiscal considerations alone.
[44] '* * *But if it was made to appear to the Secretary of
the Treasury
that the United States could not realize by judgment and execution
the full
amount of the debt, by reason of the insolvency of the surety or
other
impediment, the Secretary was authorized, upon the concurring
recommendations of
the district attorney and the Solicitor of the Teasury to effect a
compromise of
the claim upon the best terms that could be obtained.'
Similar views were expressed by Attorney General Devens in 16
Op. 259. The
question there propounded by the Secretary of the Treasury was
whether an offer
of compromise could be accepted under section 3469 where the
proponent is able
to pay the full amount claimed by the United States, but the United
States
Attorney recommends acceptance of the compromise offer because he
doubts his
ability to obtain a judgment. In reply, Mr. Devens said (p. 260):
'Section 3469 is a general section, relating to all
claims in
favor of the United States not elsewhere specifically provided for.
The former
letter from this Department expressed the opinion that under that
section, where
the defendant was entirely solvent, it was not the duty of the
Solicitor of the
Treasury to recommend a compromise upon the ground that
circumstances of hardship
existed affecting the defendant. It assumed that the United States
was able
fully to prove its claim, and merely determined that compromise
ought not to be
recommended because it was hard to enforce the claim.
'The present inquiry, however, presents the additional fact
that it is
uncretain whether or not the Government can prove its case. There
is therefore
this distinct element in the case upon which a compromise can
properly be made,
resulting from the uncertainty in which the Government is placed as
to its
ability to obtain a verdict; and in such case it seems to me that
a compromise
may properly be recommended, not upon the ground that the case is
a hard one as
against the defendant, but upon the same ground upon which
contested claims are
often compromised by parties, in view of the uncertainty as to
their obtaining
a judgment.'
In 16 Op. 617, Solicitor General Phillips, in an opinion
approved by
Attorney General Devens, advised the Solicitor of the Treasury that
section 3469
conferred no authority [45] upon that officer to recommend for
compromise by the
Secretary of the Treasury cases in which the claim is entirely
solvent, but where
circumstances of hardship, etc., exist. The opinion was based, not
only upon a
construction of the language of section 3469, but upon an analysis
of the
provisions of the Act of 1863 from which that section was derived.
It was
therein said:
'The purport of the section is that, as to certain
claims in
favor of the United States in the hands of district and other
attorneys for
collection, such attorneys may make reports showing the condition
thereof, 'and
the terms upon which the same may be compromised,' and recommending
the
acceptance of such terms, whereupon, if the same be also
recommended by the
Solicitor of the Treasury, the Secretary of the Treasury is
authorized to
compromise accordingly.
'It seems to me that the phrases condition of the claim and
may be
compromised both indicate the circumstances which alone authorize
the
recommendation. The first denotes doubtful claims, and the second
directs the
attorney to report the most that can be had by compromise.
'The title and structure of the act of 1863, from which this
section was
copied, is to the like effect. That title is, 'An act to prevent
and punish
frauds upon the revenue, to provide for the more certain and speedy
collection
of claims in favor of the United States, and for other purposes'
(12 Stat., 737).
The act consists of fourteen sections, the first eight of which
plainly concern
frauds upon the customs; the ninth directs the Solicitor of the
Treasury to
dispose of unproductive property acquired by the United States
under judicial
proceedings or otherwise; the tenth is that in question; the
eleventh gives to
district attorneys a commission of 2 per cent, upon all moneys
collected under
the revenue laws; the twelfth and thirteenth provide for the
defense of
collectors, &c., by district attorneys; and the fourteenth is a
repealing
section. The first eight, then, come under the first clause of the
title, the
next three under the second, and the last three under the third.
The ni
nth is a means for turning the fruits of former judgments and
executions into
money; the tenth for the better ascertainment and realization of
the value of
claims in the course of [46] collection; while the eleventh is
intended to
increase the diligence of the district attorneys, upon whom,
mainly, devolves the
duty of carrying out the policy of the section immediately before.
The amount
of their compensation is made to depend upon the amount of what
they secure by
the compromise which they recommend.
'The relation between the body of this act and its title is
the more relied
upon because it appears from the Globe that its main outlines and
its title, as
introduced, were preserved during its passage through Congress.
'These are some of the reasons which have led me to conclude
that the
section in question confers no authority in regard to cases merely
hard.
'If the language and general purview of the act were more
doubtful than
they seem, it would have to be borne in mind that the grace of the
Government,
as regards its debtors, is vested in Congress; that hard cases are
proverbially
quicksands; and, therefore, it would require clear and specific
words to show
that the legislature had devolved upon another department so broad
and indefinite
a prerogative over the public purse.'
In 17 Op. 213, Attorney General MacVeagh expressed views which
to some
extent conflicted with the prior opinions of the Attorney General
above noted.
Replying to a request by the Secretary of the Treasury for an
opinion as to the
correctness of a memorandum prepared by Assistant Secretary French
upon the
extent of the Secretary's authority to compromise cases, Mr.
MacVeagh said (p.
214):
'I beg now to state that I have very carefully
considered the
subject, and I regret to say that I do not find myself able to
agree entirely
with the former opinions of this Department referred to in the
memorandum of
Judge French. Those opinions appear to hold that the only
consideration that the
Secretary of the Treasury is at liberty to take into account in
deciding upon the
advisability of any proposed compromise, either of a claim not in
suit, or of a
suit pending, is whether the Government can realize more money by
its prosecution
than by accepting the settlement proposed.'
[47] Declaring that he was unable to discover a sufficient
basis for such
construction in section 3469 of the Revised Statutes, Mr. MacVeagh
referred to
the requirement of that section, that the district attorney, or
other officer
having charge of the claim, shall report in detail 'the condition
of such claim'
and 'the terms upon which the same may be compromised,' and
remarked that he did
not see that any special import was to be attached to the
expressions quoted, and
that he thought they left the question of the Secretary's authority
open to
general considerations. Following further statements to the effect
that the
grant of authority was general and comprehensive in its language;
that the
requirement of the concurrence of the several officers mentioned in
the statute
placed ample safeguards around the exercise of the authority
conferred, and that
if Congress had desired to impose any limit upon the considerations
which the
Secretary might entertain in reaching his conclusion,
it could easily have done so, Mr. MacVeagh observed (p. 215-216):
'I am also unable to imply from the provisions of
the law under
review any intention on the part of Congress that the Secretary of
the Treasury
should be compelled to pursue litigations out of which the United
States might
undoubtedly realize smaller or greater sums of money, but which in
his judgment
ought not to be further prosecuted. As an illustration, if a person
has been
guilty of a technical violation of the internal revenue laws, and
upon being
informed of it, offers to compromise the case by the payment of the
costs and of
any other sum justly due the Government, I sec no evidence in these
sections of
the Revised Statutes, or in the laws from which they were
draughted, that
Congress intended to require that a suit shall be commenced and
prosecuted to
extort the penalty intended only for willful violators of the law,
and the same
considerations would apply to a great variety of cases, some of
which must be of
frequent occurrence in the administration of the Treasur
y Department, where the rigid enforcement of the technical legal
rights of the
Government would work manifest and plain injustice by taking from
citizens money
which, in the forum of conscience and good morals, they did not owe
to [48] it.
It is not necessary to hold that the Secretary of the Treasury is
in the matter
of compromise a fountain of the compassion of the Government or an
almoner of its
charity. Those are considerations which do not belong to the
administration of
a business departments. But, on the other hand, it is to my mind
as clearly
unnecessary to hold that the Secretary is bound to be an instrument
of manifest
injustice, and to ask himself only in every case this question,
Will the
prosecution of the claim in question probably bring to the Treasury
more money
than its compromise upon the terms proposed?
'I have, therefore, to advise you that while, in considering
any compromise
submitted to your judgment, you are not at liberty to act from
motives merely of
compassion or charity, you are at liberty, until Congress sees fit
to limit your
authority, to consider not only the pecuniary interests of the
Treasury, but also
general considerations of justice and equity and of public
policy.'
It will be noted that the foregoing opinion differed from the
opinions of
the Attorney General theretofore rendered in that it held that the
Secretary of
the Treasury was not confined, in the matter of compromising claims
in favor of
the United States, to the purely fiscal consideration of whether
such claims
could be collected, but was authorized to take into account
considerations of
justice, equity and public policy. The only compromises therein
referred to,
however, were those arising for consideration prior to, or pending,
suit. As
reasons might readily be conceived which would render doubtful the
collectibility
of a claim prior to suit, or the obtaining of a judgment thereon
pending suit,
Attorney General MacVeagh's opinion is manifestly not a precedent
upon the
question here under discussion, viz, whether the statute confers
authority to
compromise a final judgment where there is no doubt of its
collectibility.
In 21 Op. 50, the question was whether, upon the
recommendation of the
United States Attorney and the Solicitor of the Treasury, the
Secretary of the
Treasury was authorized by section 3469 to accept an offer by the
International
Cotton Press Company of $50 in consideration of the release of a
lien held by the
United States upon real estate owned by that company. It appeared
that the real
estate [49] in question was purchased by the company from one
Snyder after
certain internal revenue taxes adjudged by the Supreme Court to be
owing by
Snyder had accrued. In an opinion approved by Attorney General
Olney, Solicitor
General Maxwell concluded that section 3469 conferred no such
authority, saying
(p. 51):
'The petition for settlement and the recommendations
in support
thereof are not based upon doubts as to the possibility of
realizing the amount
of the tax out of the property, but upon the ground of the hardship
to the
company supposed to be involved in enforcing against it the laws of
the United
States as interpreted by the Supreme Court in a proceeding to which
the company
was a party.
'I am of the opinion that section 3469 has no application to
such a case.
* * *
'The section does not authorize the Secretary of the Treasury
to remit or
release moneys due to the United States and clearly recoverable,
but to
'compromise,' which implies a claim of doubtful recovery or
enforcement.
'In the case which you submit there is nothing to
'compromise,' for the
right of recovery and the amount hav been finally adjudged by the
court of last
resort, and the property is said to be sufficient to satisfy the
debt.'
In 21 Op. 264, the foregoing opinion was reconsidered and the
same
conclusion reached by Attorney General Harmon, who said (p. 265):
'The petitioner seeks to be relieved from this
adjudged lien
on its property on the ground of hardship, because, being protected
by no
recording act, it bought in ignorance of the Government's claim.
This is a
hardship shared with all persons who, without sufficient inquiry,
buy property
subject to claims which the law does not require to be recorded,
such as dower
rights in estates. The petitioner also claims that the full amount
could have
been collected from Snyder if the Government had proceeded promptly
against him
individually instead of relying (as it had a right to do) upon its
lien on his
property; and that Snyder has since become insolvent, so that, if
petitioner's
land were sold, it could have no recourse against him.
'Upon taking up this claim for consideration you were
confronted with the
question, whether it is within your [50] power to release, in whole
or in part,
a judgment recovered by the United States, from which there is no
appeal and of
whose collectibility in full there is no doubt.'
After quoting from the previous opinion of Solicitor General
Maxwell, Mr.
Harmon continued (p. 266):
'I am, however, clearly of the opinion that the
opinion already
given is correct. The construction given to the statute accorded
with that of
Mr. Evarts (12 Opin., 543), and with that of Mr. Devens and Mr.
Phillips (16
Opin., 617). If the opinion of Mr. MacVeagh (17 Opin., 213) is to
be construed
as holding that a claim may be compromised when there is no doubt
of its entire
and ready collectibility, I am unable to concur with it. It appears
to ignore the
clear distinction between the compromise of a doubtful case and the
remission of
a penalty, forfeiture, or disability. (Rev. Stat., secs. 3461,
5292.) The
former power, as said by Mr. Evarts in the opinion above cited, is
strictly a
fiscal one. The latter is in the nature of a pardoning power.
(The Laura, 114
U. S., 411, 413-414.)' (Emphasis supplied.)
In 23 Op. 18, the Secretary of the Treasury was advised that
he had no
authority to accept an offer in compromise of a judgment recovered
by the United
States upon the official bond of a receiver of public moneys in
Arizona and
affirmed by the Supreme Court. In the opinion, which was prepared
by Solicitor
General Richards and approved by Attorney General Griggs, it was
said (p. 19):
'It is conceded that this final judgment can be
collected from
the sureties, but a so-called compromise offer is submitted and
urged on the
ground that it would work a hardship to enforce the collection of
the entire
amount of the judgment. The grounds of hardship were presented to
the courts as
a defense to the suit, and are set forth in the statement and
opinion of the
Supreme Court (170 U. S. 372). The only question presented to me
is whether a
final judgment in favor of the United States, which is collectible,
can be
'compromised' under section 3469 of the Revised Statutes, * *
*'
Following a reference to the opinion of Solicitor General
Maxwell, approved
by Attorney General Olney (21 Op. 50), [51] and to the opinion of
Attorney
General Harmon, reaffirming it (21 Op. 264), the opinion stated (p.
20):
'No reasons have been advanced or suggest themselves
justifying
a change of the construction placed upon this section by my
predecessors. A
compromise is an adjustment or settlement by mutual concessions.
The claim must
in some way be doubtful. There must be room for the 'play of give
and take.' For
this reason the statement from the attorney in charge 'showing in
detail the
condition of such claim, and the terms upon which the same may be
compromised,'
is required. In the case of a collectible judgment there is no
room for 'give
and take,' no basis for a compromise; the concession is all on the
one side, the
side of the Government, which remits in place of
compromising.'
In 23 Op. 631, Attorney General Knox approved an opinion
prepared by
Solicitor General Richards containing like views regarding the
effect of section
3469. The question there was whether the Secretary of the Treasury
had power
under that section to accept an offer to compromise a claim of the
United States
for interest upon unpaid tax, bonus and rental due under a contract
for taking
fur seals in Alaska. Advising that section 3469 conferred such
authority,
Solicitor General Richards said (p. 633):
'In an opinion given January 17, 1900, I held,
following
Solicitor General Maxwell (21 Opin., 51), and Attorney General
Harmon (21 Opin.,
264, 266), that this section does not authorize the Secretary of
the Treasury to
compromise a claim which has been reduced to judgment, affirmed by
the highest
court, and is clearly collectible, because a compromise is an
adjustment or
settlement by mutual concession. The claim must in some way be
doubtful. There
must be room for the 'play of give and take.' In the case of a
collectible
judgment, which has been affirmed by the highest court, there is no
room for
'give and take,' no basis for a compromise; the concession is all
on the one
side, the side of the Government, which remits in place of
compromising.
'But in the case of this claim for interest, there are
involved disputed
questions of fact and of law, which if put in litigation might be
decided the one
way or the other. [52] The claim, therefore, is clearly one
subject to
compromise under this section.'
In 27 Op. 241, Attorney General Wickersham held that the
Secretary of the
Treasury had no authority under section 3469 to compromise a suit
for a penalty
incurred for violation of the Alien Contract Labor Law. Many
previous opinions
of the Attorney General were cited as distinguishing between the
purely fiscal
authority conferred by section 3469 to compromise 'claims' in favor
of the United
States, and the authority conferred by other statutes to remit or
mitigate fines,
penalties and forfeitures. Reaffirming the views expressed by
Attorney General
Evarts (12 Op. 543), that in enacting section 10 of the Act of 1863
(later
incorporated in the Revised Statutes as section 3469), it was the
purpose of
Congress 'to enable the Government to realize the largest amount
from money
claims which might be of doubtful recovery or enforcement,' the
opinion quoted
the following remarks made on the floor of the Senate by Mr.
Fessenden, who had
introduced in that body the bill which subsequently
became the Act of 1863, and who, in support of section 11 of the
bill
(afterwards section 10 of the Act), said (p. 244):
'Section 11 merely authorizes the Secretary of the
Treasury,
upon the report of the district attorney, or any special attorney,
approved by
the Solicitor of the Treasury, to compromise a claim. There are
three several
officers to act upon it. There must be a power to compromise
claims somewhere.
You can not bring every one of them to Congress. That is out of
the question.
There are a great many claims in favor of the United States which
are like claims
in favor of individuals, better compromised than left to stand;
because it was
a remark made by one of the shrewdest merchants I ever knew in our
section of the
country, that if a man who failed offered him anything, he always
took his first
offer; because, said he, you never get so good an offer afterwards,
and he will
live out of what he has in his hands as long as you put off
compromising. I
think it is so in a great degree with claims in favor of the United
States.
There is no power to compromise them now, and they
lie for years. Here are three officers: first, the district
attorney, or the
special agent, if we have one; then [53] his recommendation has to
be approved
by the Solicitor of the Treasury; and third, by the Secretary of
the Treasury.
I see no possible way in which it could be fixed better, if you
allow a
compromise at all; and this shadowy idea of danger to the
Government from
compromising its old debts through three successive steps strikes
me as rather
imaginary; but, so far as these special agencies are concerned, I
explained this
morning what is the object of them.'
And as an additional reason why the penalty in question could
not be
compromised under section 3469, Mr. Wickersham stated (p. 251):
'It may be said, in this connection, that the papers
accompanying your communication show that the arguments made in
support of the
offer of compromise are based upon the ignorance of the offending
party as to the
criminality of his act in prepaying the transportation of the alien
laborers
referred to, and not upon any real inability to pay the full amount
of the
penalty incurred, although the offender claims to be a poor man and
that the
infliction of the extreme penalty would be a great hardship and
injustice to him.
'There are manifestly considerations to be addressed to the
department of
the Government charged with the administration of the criminal laws
of the
nation, and not to the department charged only, so far as section
3469, Revised
Statutes, is concerned, with the collection of revenue, and whose
duty, under
that section, is to be exercised upon fiscal considerations
alone.'
In 29 Op. 217, Attorney General Wickersham approved an opinion
by Solicitor
General Lehman wherein section 3469 was construed as having the
effect given it
by Attorney General MacVeagh in 17 Op. 213, supra. The questions
there considered
were (1) whether corporations having an annual net income of $5,000
or less were
required by the Revenue Act of August 5, 1909, to file a tax
return, and (2)
whether the Commissioner of Internal Revenue had authority to
accept an offer in
compromise of the 50 per cent addition to the tax which the Act
directed the
Commissioner to assess in the event of a failure to file a return
required by the
Act. Answering the first question in the affirmative, Solicitor
General Lehman
concluded that the [54] Act required a tax return regardless of the
amount of net
income received by the corporation. As to the right to compromise
the 50 per cent
additional assessment, he held that authority to effect such a
compromise was
conferred upon the Secretary of the T
reasury by section 3469 of the Revised Statutes. The latter
conclusion was
supported by little, if any, independent reasoning, but was based
almost wholly
upon the views of Attorney General MacVeagh hereinbefore quoted and
upon the
following language of the Supreme Court in Dorsheimer v. United
States, 7 Wall.
166, 174-175:
'The power intrusted by law to the secretary was not
a judicial
one, but one of merecy, to mitigate the severity of the law. It
admitted of no
appeal to the Court of Claims, or to any other court. It was the
exercise of his
discretion in a matter intrusted to him alone, and from which there
could be no
appeal.'
As appears above, however, Mr. MacVeagh's opinion, if
construed as holding
that section 3469 authorized the compromise of a claim where there
was no doubt
of its entire and ready collectibility, was expressly overruled by
Attorney
General Harmon in 21 Op. 264, on the ground that it ignored the
clear distinction
between the compromise of a doubtful case and the remission of a
penalty,
forfeiture or disability; and an examination of the Dorsheimer case
shows that
the above quoted remarks of the Supreme Court were addressed to a
statute which
conferred upon the Secretary of the Treasury authority to mitigate
or remit a
fine, penalty or forfeiture, rather than to compromise a claim in
favor of the
United States.
The foregoing review of the opinions of my predecessors
foreshadows the
reply I must make to the question you propound. As repeatedly
stated in those
opinions, the word 'compromise' has a clear and well defined
meaning and implies
the making of mutual concessions in the settlement of claims of
doubtful
recovery. The authority to 'compromise' conferred by section 3469
can have no
application, therefore, to a situation such as that here involved,
where the
claim has been judicially and finally determined and no doubt has
been suggested
of its entire collectibility. Any [55] uncertainty which might
remain in that
regard is fully dispelled by the analysis made by Solicitor General
Phillips (16
Op. 617) of the Act of 1863, from which section 3469 was derived,
as well as by
the statement quoted by Attorney General Wickersham (27 Op. 241)
from remarks on
the floor of the Senate by the proponent of the bill which became
the Act of
1863, regarding the purpose and scope of the original s
tatute. The analysis and statement referred to unmistakably show
that, in
enacting the provisions here in question, Congress was concerned
only with the
interests of the United States and sought to provide a means for
recovering as
large a part as possible of moneys claimed by the Government which
were of
doubtful collectibility.
The contrary view taken in the opinion of Attorney General
MacVeagh (17 Op.
213), and followed in the opinion of Solicitor General Lehman,
approved by
Attorney General Wickersham (29 Op. 217), manifestly disregards,
not only the
plain meaning of the text, but the legislative history, of the
statute. It
proceeds on the theory that the statute was enacted for the benefit
of those
against whom money claims are asserted by the United States, and
was designed to
relieve them of the payment of such part of the claims as the
Secretary of the
Treasury might determine, upon grounds of justice, equity and sound
public
policy, should not be exacted. While considerations of this
character may
doubtless be taken into account in determining whether a fine,
penalty, or
forfeiture shall be remitted or mitigated, as authorized, for
example, by section
618 of the Tariff Act of 1922 (42 Stat. 987), or by section 709 of
the Revenue
Act of 1928 (45 Stat. 882), they have, in my opinion, no place in
th
e determination of whether claims in favor of the United States
shall be
compromised under section 3469.
In answer to your inqury, therefore, I have the honor to
advise that you
have no authority under section 3469 of the Revised Statutes to
accept the offer
of compromise made by the Great American Indemnity Company.
Respectfully,
WILLIAM D. MITCHELL.
| | |