April 30, 1920, to the United States Shipping Board Emergency Fleet Corporation, and upon which default had been made in the payment of the principal and interest as therein agreed.

The receivers of the debtor corporation question the right of the United States to offset the said $176,496.06 in partial liquidation of the indebtedness of $1,337,000, with accrued interest, due the Government, as has been done, alleging that the items comprising the sum of $176,496.06 are assets belonging to the receivership, and they request that such moneys be paid to them.

It appears that on April 30, 1920, the Standard Shipbuilding Corporation executed to the United States Shipping Board Emergency Fleet Corporation a bond in which it acknowledged its indebtedness in the sum of $1,337,000, which it agreed to pay in five annual installments of $267,400 each, beginning on April 30, 1921, with interest at 5 per cent per annum on any unpaid amounts computed from April 30, 1920, payable semiannually on the 30th days of April and October in each year. Under the provisions of the bond, after default in the payment of interest for 60 days, or after default in the payment of any installment of the principal, the total amount of the indebtedness would become due and payable. To secure the payment of said bond a mortgage was executed by the obligor to the obligee under date of April 30, 1920, upon certain property therein described. The debtor made no payment of the principal or of the interest due thereon. By reason of such default the $1,337,000 indebtedness, with accrued interest, became due and payable on or before December 30, 1920.

On March 7, 1922, Albert Conway and William A. Young were appointed receivers of the Standard Shipbuilding Corporation by order of the United States District Court for the Eastern District of New York in the case of James Howden & Co. (Ltd.) against the Standard Shipbuilding Corporation.

Of the moneys involved, the sum of $172,574.47 represents allowances made by the Commissioner of Internal Revenue on May 13, 1924, on certain claims of the Standard Shipbuilding Corporation for refund of income taxes illegally collected for the years 1916, 1918, and 1919, as follows:

and the sum of $3,921.59 represents an allowance made by the act of March 3, 1925, 43 Stat. 1588, on the claim of the Standard Shipbuilding Corporation to cover damages sustained by its dolphin and pier, resulting from a collision of two United States vessels at Shooters Island, N. Y., on March 30, 1919.

Thus it appears that the entire indebtedness of $176,496.06 due the Standard Shipbuilding Corporation from the United States accrued more than two years prior to the appointment of the receivers for said corporation, although the allowances of the claims therefor were not made until after such appointment.

The general rule is that a receiver takes the property of which he has been appointed in the same plight and condition and subject to the same equities and liens as he finds it in the hands of the person or corporation out of whose possession it is taken. A receiver can acquire no other, greater, or better interest than the debtor had in the property; he has the same right which the insolvent would have had, and can set up no rights against claims which the debtor could not have set up; he can take no right or title which was extinguished before his appointment; and where property is conveyed or assigned to him by the party under the court's order, the receiver can claim only such rights as the grantor or assignor could have enforced. The appointment of a receiver does not affect a right of set-off then existing. Choses in action pass to him subject to the equitable right of set-off then existing, so that a debtor of the insolvent who has such right is not bound to pay what he owes and take his chances with the other creditors, but is bound to pay only the balance. See 34 "Cyc." 191 to 195.

Relative to the contention of the receivers that the United States did not acquire the $1,337,000 claim against the Standard Shipbuilding Corporation until April 16, 1923, when a written assignment of the property held by the United States Shipping Board Emergency Fleet Corporation was executed conveying same to the United States of America, and that the United States therefore had no right of set-off therefrom of the $176,496.06 involved, attention is directed to section 4 of the merchant marine act of June 5, 1920, 41 Stat. 988, which transferred to the United States Shipping Board all property held by the United States Shipping Board Emergency Fleet Corporation, with the exception of vessels in the military or naval service of the United States. It has been held that the relations between the United States Shipping Board and the United States Shipping Board Emergency Fleet Corporation are such that in the matter of property held by the corporation the ownership is that of the United States. 1 Comp. Gen. 279; 2 id. 38. The said United States Shipping Board Emergency Fleet Corporation has been held

to be an agency of the Government in the following court cases: Southern Bridge Co. v. Fleet Corp., 266 Fed. Rep. 747; Sloan Shipyards Corp. v. Fleet Corp., 268 Fed. Rep. 624; 272 Fed. Rep. 132; Astoria Marine Iron Works v. Fleet Corp., 270 Fed. Rep. 635.

It appearing that at the time of the appointment of the receivers for the Standard Shipbuilding Corporation on March 7, 1922, there was due the United States from said corporation an indebtedness of $1,337,000, with accrued interest, and that the United States was then indebted to the said corporation in the sum of $176,496.06 for income taxes illegally collected and for damages, as above set forth, the United States clearly had the right of set-off in the matter, it being well settled that the United States has always the right to set off against an amount due a claimant any sum the same person, company, or corporation owes to the Government, either under the same or other contracts or obligations. The common-law right of every creditor to apply the moneys of his debtor in his hands in the extinguishment of claims due him from the debtor is equally as applicable to the Government as to individuals. Where a claimant is both debtor and creditors of the United States in any form, the General Accounting Office, in settling the accounts within its jurisdiction not only has the authority but is required, in the proper discharge of its duties, to set off one indebtedness against the other, and allow and certify for payment or collection only the balance due. See Barry v. United States, 229 U. S. 47-53; Allen et al. v. United States, 17 Wall. 207; Taggart v. United States, 17 Ct. Cls. 322-327; 1 Comp. Gen. 605; 2 id. 479; 3 id. 1006; 4 id. 177, 522, 858.

Upon review the settlements are sustained.

(A-19346)

TRAVELING EXPENSES-WITNESSES-SECRET SERVICE
OPERATIVES

Secret Service operatives summoned as witnesses are entitled to their actual and necessary expenses of travel from the place at which the summons is received to the place of holding court, and return, if they actually return directly to that place, such expenses being payable from the appropriation "Fees of witnesses." If, however, instead of returning, they travel to other points for the performance of duty as operatives, said appropriation is chargeable as for return transportation only with the authorized expenses incurred in going to the place where the next duty is to be performed, not to exceed the cost of returning to the place from which subpoenaed, the expenses incurred after resuming their regular duties as operatives being chargeable to the appropriation "Suppressing counterfeiting and other crimes."

Comptroller General McCarl to the Secretary of the Treasury, September 7, 1927:

Consideration has been given your letter of July 21, 1927, as follows:

The appropriation for Suppressing counterfeiting and other crimes," which provides for the salary and expenses of the field operatives of the Secret Service Division, contains the following provision:

Provided, That no part of this amount be used in defraying the expenses of any person subpoenaed by the United States courts to attend any trial before a United States court or preliminary examination before any United States commissioner, which expenses shall be paid from the appropriation for 'Fees of witnesses, United States courts.'"

It is, therefore, customary for the operatives of the Secret Service to collect their expenses going to, while in attendance, and returning from court from the United States marshals.

In these

It occasionally happens that investigations under the jurisdiction of the Secret Service are necessary in the vicinity of the court to which these operatives are subpoenaed or at some point en route which in the interests of economy and efficiency they make either going to or returning from court. instances the operative presents to the marshal an account charging direct transportion and expenses from his headquarters to court and return, rendering to the Secret Service Division an account for all of the expenses incident to the part of the trip, either going or returning, devoted to the Secret Service investigation, and crediting against this actual expense account the amount drawn from the United States marshal for the straight trip.

For example, an operative attached to the Kansas City headquarters of the Secret Service is subpoenaed to court at Joplin, Missouri, and when through at court he collects from the United States marshal at Joplin his transportation, sleeper fare, subsistence, and incidental expenses from Kansas City to Joplin and return; but he does not return direct to Kansas City as certain investigations in Kansas or Missouri can be made by him before returning to his headquarters or en route, effecting a saving of time and money thereby. He therefore makes these investigations and charges all of his expenses from the time he leaves Joplin until he arrives at his headquarters in Kansas City to the Secret Service Division entering a credit against this in the amount he receives from the United States marshal at Joplin for his return expenses to Kansas City.

Objection has been made by some United States marshals to this procedure because the operative can not furnish him with the receipts for Pullinan fare to support the charge returning to his headquarters as required by the Government travel regulations.

The question, therefore, is submitted to you for determination in order that the operatives of the Secret Service Division may be appropriately instructed.

The particular case to which you refer has been identified as that of William B. Cline, who was summoned from Kansas City, Mo., and attended court at Joplin, Mo., on June 12 and 13, 1927. He submitted his voucher for expenses from Kansas City to Joplin to the United States marshal, who not only paid such expenses, but also advanced the estimated cost of returning to Kansas City. In his voucher covering the month of June as a Secret Service operative, Cline states:

I was in Joplin, Mo., on subpoena June 12 and 13, was discharged from Crt. 5.15 p. m. June 13 & resume work for this service in Joplin at that time, incurring chgs, as shown.

From the total of his June expense voucher he deducted the amount of $8.92 received from the marshal to cover the expenses of his return trip. It is evident from the foregoing that from the time this employee was excused by the court he was engaged on official duties as a Secret Service operative, and that none of his expenses incurred from that hour could be said to have been due to his attendance upon the court as a witness. All of the expenses, therefore, from the time he took up his duties as a Secret Service operative were a proper charge against the appropriation for "Suppressing counterfeiting and other crimes" and were not properly payable from the

appropriation for "Fees of witnesses." A transfer settlement will accordingly be stated charging the appropriation "Suppressing counterfeiting and other crimes" with $8.92 and crediting a like amount to the appropriation "Fees of witnesses." Proper adjustment will also be made in the accounts of the United States marshal, Asa W. Butler, at Kansas City, Mo.

If the operative in this case had not resumed duty as such at Joplin, the appropriation "Fees of witnesses" would have been chargeable with his authorized expenses to the place at which he did resume such duty not to exceed what it would have cost had he returned direct to the place from which subpoenaed, and this rule is for application generally in such cases.

(A-19098)

LEASES-RENT-HOLDING OVER

Under a lease creating a tenancy for a stated period with the right reserved to continue occupancy during the following fiscal year by the giving of one month's notice, upon the Government's failure to give the required notice and retaining possession without objection on the part of the lessor, the tenancy is continued by the holding over for a period equal to that reserved in the lease, and the Government is liable for rental during the tenancy as thus enlarged, provided the leased premises have not, in the meantime, been relet by the owners and there was nothing in the facts or circumstances of the holding over to indicate that it was to be on a month-to-month basis or was for a period less than the period covered by the original lease.

Decision by Comptroller General McCarl, September 9, 1927:

Request was made July 2, 1927, by 17 Washington Street (Inc.), for review of settlement No. 0185423, dated June 30, 1927, wherein there was disallowed its claim for $624.99 to cover rental for the second floor of the premises located at No. 17 Washington Street, Newark, N. J., from December 1, 1926, to February 28, 1927, inclusive, under lease dated October 1, 1925.

Under lease of October 1, 1925, possession of the entire second floor in the building known as 17 Washington Street (Inc.) was secured by the Government for the use of the deputy prohibition administrator of New Jersey for the term beginning on that date and ending on June 30, 1926, at a rental at the rate of $2,500 per annum, provision being made in paragraph 5 thereof for its renewal as follows:

5. This lease may, at the option of the Government, be renewed at a monthly rental of two hundred and fifty dollars for the fiscal year 1927, and two hundred ninety-one dollars, sixty-six and two-thirds cents ($291.66%) for the fiscal years 1928 and 1929, and otherwise upon the terms and conditions herein specified, provided notice be given in writing to the lessor at least one month before this lease would expire. Provided, That no renewal thereof shall extend the period of occupancy of the premises beyond the thirtieth day of June, 1929.