A-17334, FEBRUARY 14, 1927, 6 COMP. GEN. 532

A-17334: Feb 14, 1927

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CHECKS - FORGERY THERE HAS BEEN NO FORGERY OF A GOVERNMENT CHECK WHERE THE PERSON WHO INDORSED IT WAS NOT ENTITLED TO THE PROCEEDS. 1927: REFERENCE IS MADE TO YOUR COMMUNICATION (AWS-C). ADVICE IS ALSO REQUESTED AS TO WHETHER RECLAMATION PROCEEDINGS SHOULD BY ABANDONED ON CHECKS NOS. 50130572 AND 56707126. INASMUCH AS THE INDORSING BANKS ARE IN LIQUIDATION AND THE CHECKS BEAR ON THEIR FACE THE ADDRESS OF ROSA BROWN. BY WHOM THEY WERE ERRONEOUSLY RECEIVED AND NEGOTIATED. THE CHECKS WERE MADE OUT TO THE NAME AND ADDRESS OF THE PERSON WHO INDORSED THEM. IT DEVELOPED THAT ANOTHER WOMAN OF THE SAME NAME LIVING AT A DIFFERENT ADDRESS SHOULD HAVE BEEN THE PAYEE. THE ERROR WAS IN THE VETERANS' BUREAU.

A-17334, FEBRUARY 14, 1927, 6 COMP. GEN. 532

CHECKS - FORGERY THERE HAS BEEN NO FORGERY OF A GOVERNMENT CHECK WHERE THE PERSON WHO INDORSED IT WAS NOT ENTITLED TO THE PROCEEDS, BUT WHOSE NAME AND ADDRESS HAD BEEN PLACED ON THE FACE OF THE CHECK AS PAYEE THROUGH ADMINISTRATIVE ERROR, AND A BANK WHICH INDORSES AND NEGOTIATES SUCH CHECK GUARANTEES ONLY THE GENUINENESS OF THE PAYEE'S INDORSEMENT AND MAY NOT BE HELD RESPONSIBLE TO THE GOVERNMENT FOR THE PROCEEDS OF THE CHECK BECAUSE OF THE ADMINISTRATIVE ERROR.

COMPTROLLER GENERAL MCCARL TO THE TREASURER OF THE UNITED STATES, FEBRUARY 14, 1927:

REFERENCE IS MADE TO YOUR COMMUNICATION (AWS-C), DATED AUGUST 26, 1926, IN THE CASE OF MRS. ROSA BROWN, INVOLVING WAR-RISK INSURANCE CHECKS NOS. 50130572, 56707126, 50101020, 54978274, 55268049, 55448299, 55628897, 55982151; DRAWN OCTOBER 8, 1921, JANUARY 3, 1922, FEBRUARY 2, 1921, MARCH 1, 1921, MAY 2, 1921, JUNE 1, 1921, JULY 1, 1921, SEPTEMBER 1, 1921; FOR $10.06 (1), $5.03 (1), $75.28 (1), $5.03 (5); SYMBOLS 11348; PAYEE MRS. ROSA BROWN.

INASMUCH AS THE PAYEE IN AN AFFIDAVIT DATED JUNE 24, 1926, ACKNOWLEDGES RECEIPT OF CHECKS NOS. 50101020, 54978274, 55448299, 55628897, AND 55982151, RECLAMATION PROCEEDINGS THEREON SHOULD BE ABANDONED.

ADVICE IS ALSO REQUESTED AS TO WHETHER RECLAMATION PROCEEDINGS SHOULD BY ABANDONED ON CHECKS NOS. 50130572 AND 56707126, INASMUCH AS THE INDORSING BANKS ARE IN LIQUIDATION AND THE CHECKS BEAR ON THEIR FACE THE ADDRESS OF ROSA BROWN, BY WHOM THEY WERE ERRONEOUSLY RECEIVED AND NEGOTIATED.

THE CHECKS WERE MADE OUT TO THE NAME AND ADDRESS OF THE PERSON WHO INDORSED THEM. AFTER THE BANK HAD CASHED, AND THE TREASURER OF THE UNITED STATES HAD PAID, THE CHECKS, IT DEVELOPED THAT ANOTHER WOMAN OF THE SAME NAME LIVING AT A DIFFERENT ADDRESS SHOULD HAVE BEEN THE PAYEE. THE ERROR WAS IN THE VETERANS' BUREAU. WHILE THE PAYEE WHOSE NAME THUS APPEARED ON THE CHECKS WAS NOT THE PERSON ENTITLED TO THE PROCEEDS AS A BENEFICIARY OF THE VETERANS' BUREAU, THE BANKS WHICH NEGOTIATED AND INDORSED THE CHECKS GUARANTEED ONLY THAT THE PRIOR INDORSEMENT OF THE PAYEE ON THE BACK OF THE CHECK WAS THE PERSON WHOSE NAME APPEARED ON THE FACE OF THE CHECK. THERE WAS NO FORGERY INVOLVED IN THE CASE. THERE COULD BE NO RESPONSIBILITY ON THE BANKS FOR THE ERROR OF THE VETERANS' BUREAU AND, THEREFORE, THE BANKS COULD NOT BE HELD LIABLE ON THE BASIS OF HAVING NEGOTIATED AND INDORSED THE CHECKS. UNITED STATES V. CHASE NATIONAL BANK, 241 FED.REP. 535 AND CASES CITED THEREIN. THEREFORE, RECLAMATION PROCEEDINGS THEREON SHOULD BE ABANDONED.

THE ACCOUNTS OF THE TREASURER OF THE UNITED STATES WILL NOT BE CHARGED WITH THE AMOUNT OF THE CHECKS, BUT A CHARGE WILL BE RAISED AGAINST THE PAYEE AND COLLECTION ATTEMPTED AS IN OTHER CASES OF INDEBTEDNESS AGAINST THE UNITED STATES.