A-18539, JUNE 8, 1927, 6 COMP. GEN. 791

A-18539: Jun 8, 1927

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ARE NOT APPLICABLE TO RELIEVE A POSTAL CLERK FROM RESPONSIBILITY IN A CASE WHERE PAYMENT UPON DUPLICATE MONEY ORDERS WAS MADE BY HIM TO THE WRONG PARTY UPON A FORGED INDORSEMENT OF THE PAYEE THROUGH HIS FAILURE TO COMPLY WITH THE POSTAL REGULATIONS RELATING TO THE PAYMENT OF MONEY ORDERS TO PERSONS OTHER THAN THE ORIGINAL PAYEE. THE PERTINENT FACTS LEADING UP TO THE PAYMENT IN QUESTION ARE SUBSTANTIALLY AS FOLLOWS: ON MARCH 1. POSTAL MONEY ORDERS NOS. 318960-1-2-3 WERE ISSUED BY THE POSTMASTER AT OMAHA. THESE ORIGINAL MONEY ORDERS WERE LOST AND UNDER DATE OF AUGUST 15. DUPLICATES NOS. 401331-2-3-4 WERE ISSUED BY THE DEPARTMENT UPON APPLICATION THEREFOR BY THE POSTMASTER AT OMAHA. WHO WAS ALSO THE REMITTER.

A-18539, JUNE 8, 1927, 6 COMP. GEN. 791

POST OFFICE DEPARTMENT - MONEY ORDERS - FORGED INDORSEMENTS THE PROVISIONS OF SECTION 409, REVISED STATUTES, AS AMENDED, AUTHORIZING THE ALLOWANCE OF CREDIT IN THE ACCOUNTS OF POSTMASTERS UNDER CERTAIN CONDITIONS, ARE NOT APPLICABLE TO RELIEVE A POSTAL CLERK FROM RESPONSIBILITY IN A CASE WHERE PAYMENT UPON DUPLICATE MONEY ORDERS WAS MADE BY HIM TO THE WRONG PARTY UPON A FORGED INDORSEMENT OF THE PAYEE THROUGH HIS FAILURE TO COMPLY WITH THE POSTAL REGULATIONS RELATING TO THE PAYMENT OF MONEY ORDERS TO PERSONS OTHER THAN THE ORIGINAL PAYEE.

DECISION BY COMPTROLLER GENERAL MCCARL, JUNE 8, 1927:

THE POSTMASTER GENERAL, BY LETTER DATED MAY 2, 1927, SUBMITTED TO THIS OFFICE FOR CONSIDERATION UNDER SECTION 409, REVISED STATUTES, AS AMENDED, THE CLAIM OF WILLIAM E. NORTON, POSTMASTER AT KANSAS CITY, MO., FOR CREDIT IN THE AMOUNT OF $398.80, REPRESENTING OF PAYMENT IN THAT SUM MADE BY HIM TO MRS. BEN TAXMAN, NEE ANNA MILDER, APRIL 15, 1927.

THE PERTINENT FACTS LEADING UP TO THE PAYMENT IN QUESTION ARE SUBSTANTIALLY AS FOLLOWS:

ON MARCH 1, 1923, POSTAL MONEY ORDERS NOS. 318960-1-2-3 WERE ISSUED BY THE POSTMASTER AT OMAHA, NEBR., AMOUNTING TO $398.80, PAYABLE TO ANNA MILDER, 4047 WARWICK BOULEVARD, KANSAS CITY, MO., IN SETTLEMENT OF MATURED WAR-SAVINGS CERTIFICATES AGGREGATING $400. THESE ORIGINAL MONEY ORDERS WERE LOST AND UNDER DATE OF AUGUST 15, 1923, DUPLICATES NOS. 401331-2-3-4 WERE ISSUED BY THE DEPARTMENT UPON APPLICATION THEREFOR BY THE POSTMASTER AT OMAHA, WHO WAS ALSO THE REMITTER. THESE DUPLICATES WERE FORWARDED TO THE PAYEE AT THE SAME ADDRESS.

THE PAYEE HAD MARRIED ONE BEN TAXMAN IN 1918 WHILE IN OMAHA, NEBR., AND LATER MOVED TO THE KANSAS CITY ADDRESS, WHERE SHE WAS KNOWN UNDER HER MARRIED NAME. ONE MRS. LAURA WILDER RESIDED AT 4037 WARWICK BOULEVARD, AND THE LETTER CONTAINING THE DUPLICATE MONEY ORDERS ADDRESSED TO MISS MILDER WAS DELIVERED TO MRS. WILDER BY A SUBSTITUTE CARRIER, THE REASON ASSIGNED BY HIM FOR DOING SO BEING THAT THE OCCUPANTS OF 4047 WARWICK BOULEVARD WERE KNOWN TO HIM BY THE NAME OF TAXMAN.

MRS. WILDER SECURED PAYMENT ON THE DUPLICATE ORDERS IN SEPTEMBER, 1923, AT THE HARDING STATION OF THE KANSAS CITY POST OFFICE BY A FORGED INDORSEMENT OF THE NAME OF ANNA MILDER AND UPON IDENTIFICATION BY ONE W. D. LEROY, PRESIDENT OF THE KANSAS CITY TERMINAL TRUST CO. WHEN THE WRONG PAYMENT WAS DISCOVERED MRS. WILDER WAS DECEASED, LEAVING NO ESTATE.

THE ORIGINAL PAYEE OF THE MONEY ORDERS HAVING MADE AFFIDAVIT THAT HER SIGNATURE THEREON WAS A FORGERY, THE POSTMASTER AT KANSAS CITY, MO., WAS INSTRUCTED BY THE POSTMASTER GENERAL TO PAY HER THE SUM OF $398.80 OUT OF MONEY-ORDER FUNDS IN HIS HANDS.

THE ERRONEOUS PAYMENTS TO MRS. WILDER ON THE FORGED DUPLICATE MONEY ORDERS WERE MADE BY THOMAS J. GOULD, SUPERINTENDENT, HARDING STATION OF THE KANSAS CITY POST OFFICE, WHO MADE AFFIDAVIT UNDER DATE OF APRIL 24, 1924, IN PART, AS FOLLOWS:

* * * I HAD HAD GENERAL OFFICE EXPERIENCE AND WAS REASONABLY FAMILIAR WITH THE REGULATIONS GOVERNING THE PAYMENT OF MONEY ORDERS. IN REGARD TO M.O.'S 401331-2-3 AND 4 ISSUED AT OMAHA, NEBRASKA, MARCH 1, 1924, TO POSTMASTER IN THE SUM OF $398.80, PAYABLE TO ANNA MILDER, KANSAS CITY, MO. (ORIGINALS NOT PRESENTED), AND FOR SUCH DUPLICATES 318960-1-2 AND 3 WERE ISSUED, RESPECTIVELY, WILL SAY I CASHED THE SAID DUPLICATES UPON IDENTIFICATION OF W. D. LEROY, PRESIDENT OF KANSAS CITY TERMINAL TRUST CO., 31ST AND MAIN ST., KANSAS CITY, MO. HE STATED TO ME THAT MRS. LAURA WILDER WAS A CUSTOMER AND HAD AN ACCOUNT IN THEIR BANK. HE STATED HE HAD NEVER SEEN A DUPLICATE MONEY ORDER BEFORE AND DID NOT KNOW WHETHER THEY WERE GOOD OR NOT; THAT HAD THE ORIGINALS BEEN PRESENTED HE WOULD HAVE BEEN GLAD TO CASH THEM. BEING CONVINCED THAT MR. LEROY HAD IDENTIFIED MRS. WILDER, I CASHED THE ORDER. IN A FEW DAYS MRS. WILDER CAME IN WITH ANOTHER ORDER, AND SHE ASKED ME IF I WOULD CASH ANOTHER ORDER FOR HER, SAYING THAT LAURA (ANNA) MILDER HAD GIVEN IT TO HER FOR BOARD OR RENT. PAID THAT ORDER. A FEW DAYS LATER SHE CAME IN WITH TWO MORE. IT WAS ON THE STRENGTH OF THE INTRODUCTION GIVEN ME WHEN THE FIRST ORDER WAS CASHED THAT I CASHED THE OTHERS. IN THE CIRCUMSTANCES I DO NOT SEE WHY I SHOULD BE HELD LIABLE FOR THE AMOUNT INVOLVED. MRS. LAURA WILDER, I AM INFORMED, HAS SINCE DIED.

W. D. LEROY IN HIS AFFIDAVIT OF APRIL 24, 1924, STATED THAT MRS. WILDER CAME TO THE BANK OF WHICH HE WAS PRESIDENT WITH A DUPLICATE MONEY ORDER WHICH SHE DESIRED TO CASH; THAT BEING UNFAMILIAR WITH SUCH ORDERS, NEVER HAVING HANDLED ANY BEFORE, HE TOOK HER TO THE HARDING STATION AND INTRODUCED HER TO MR. GOULD, THE SUPERINTENDENT, AS MRS. LAURA WILDER, AND THAT THIS WAS ALL HE HAD TO DO WITH THE TRANSACTION.

THE POST-OFFICE INSPECTOR WHO MADE INVESTIGATION OF THE CASE STATED IN HIS REPORT:

THE REGULATIONS GOVERNING THE PAYMENT OF MONEY ORDERS ARE QUITE PLAIN, AND POSTMASTERS AND OTHERS ARE REQUIRED TO SATISFY THEMSELVES AS TO THE AUTHENTICITY OF SIGNATURES AND TO REQUIRE IDENTIFICATION IF INDORSEES ARE UNKNOWN TO THEM. IN VIEW OF THE LIMITED EXPERIENCE MR. GOULD HAD HAD UP TO THE TIME THE ORDERS IN QUESTION WERE PRESENTED, THE WISDOM OF MAKING DEMAND ON HIM FOR THE AMOUNT INVOLVED IS SERIOUSLY DOUBTED. THIS IS THE ONLY CASE OF WRONG PAYMENT IN WHICH HE HAS FIGURES SINCE TAKING CHARGE OF THE STATION. HE SHOULD HAVE REQUIRED MR. LEROY TO INDORSE THE ORDER, BUT ON ACCOUNT OF LACK OF EXPERIENCE HE SEEMS TO HAVE BECOME OVERAWED BY HIS PRESENCE AND LACKED THE COURAGE FOR THE TIME BEING TO ASK HIM QUESTIONS AS TO HIS KNOWLEDGE OF THE INDORSEMENT AND THE RELIABILITY OF MRS. LAURA WILDER. HE THOUGHT BECAUSE MR. LEROY WAS PRESIDENT OF A BANK THAT HIS VERBAL STATEMENT THAT THE WOMAN WAS MRS. LAURA WILDER WAS SUFFICIENT. HE REQUIRED TO ASSUME THE LOSS, IT WILL BE A SERIOUS HARDSHIP ON HIM.

IN CONNECTION WITH THE PAYMENT OF POSTAL MONEY ORDERS TO PERSONS OTHER THAN THE PAYEES THEREOF, SECTION 4037, REVISED STATUTES, PROVIDES AS FOLLOWS:

THE PAYEE OF A MONEY ORDER MAY, BY HIS WRITTEN INDORSEMENT THEREON, DIRECT IT TO BE PAID TO ANY OTHER PERSON, AND THE POSTMASTER ON WHOM ITIS DRAWN SHALL PAY THE SAME TO THE PERSON THUS DESIGNATED, PROVIDED HE SHALL FURNISH SUCH PROOF AS THE POSTMASTER GENERAL MAY PRESCRIBE THAT THE INDORSEMENT IS GENUINE, AND THAT HE IS THE PERSON EMPOWERED TO RECEIVE PAYMENT; BUT MORE THAN ONE INDORSEMENT SHALL RENDER AN ORDER INVALID AND NOT PAYABLE, AND THE HOLDER, TO OBTAIN PAYMENT, MUST APPLY IN WRITING TO THE POSTMASTER GENERAL FOR A NEW ORDER IN LIEU THEREOF, RETURNING THE ORIGINAL ORDER, AND MAKING SUCH PROOF OF THE GENUINENESS OF THE INDORSEMENTS AS THE POSTMASTER GENERAL MAY REQUIRE.

PURSUANT TO THIS PROVISION OF LAW, THERE HAS BEEN PROMULGATED BY THE POSTMASTER GENERAL, REGULATIONS PRESCRIBING THE MEANS OF IDENTIFICATION OF PERSONS PRESENTING MONEY ORDERS FOR PAYMENT AND THE MANNER IN WHICH THIS SHALL BE ACCOMPLISHED. IN THE POSTAL GUIDE FOR THE YEAR 1923, CONTAINING REGULATIONS IN EFFECT AT THE TIME PAYMENT UPON THE DUPLICATE MONEY ORDERS HERE IN QUESTION WAS MADE, IT WAS PROVIDED UNDER THE HEADING "IDENTIFICATION: "

* * * THE POSTMASTER WHO PAYS A MONEY ORDER UPON INDORSEMENT TO AN * * * IRRESPONSIBLE PERSON WITHOUT KNOWING THAT THE SIGNATURE TO THE INDORSEMENT IS THE GENUINE SIGNATURE OF THE PAYEE, OR WITHOUT OBTAINING THE SIGNATURE THERETO OF SOME RELIABLE PERSON EXPRESSLY GUARANTEEING THE INDORSEMENT, DOES SO AT HIS OWN RISK. * * *

IT IS EVIDENT FROM THE FACTS AS OUTLINED ABOVE THAT MR. GOULD PAID THE DUPLICATE ORDERS TO AN IRRESPONSIBLE PERSON OTHER THAN THE PAYEE NAMED IN THE ORDERS WITHOUT KNOWING THAT THE SIGNATURE TO THE INDORSEMENT WAS THE GENUINE SIGNATURE OF THE PAYEE AND WITHOUT OBTAINING THE SIGNATURE THERETO OF SOME RELIABLE PERSON EXPRESSLY GUARANTEEING THE INDORSEMENT. IN MAKING PAYMENT TO MRS. WILDER UPON THE MERE INTRODUCTION OF MR. LEROY, INSTEAD OF COMPLYING WITH THE REGULATIONS, SUPRA, CONSTITUTED NEGLIGENCE ON HIS PART; AND UNDER THE PLAIN TERMS OF THE REGULATION THE PAYMENT WAS AT HIS OWN RISK.

SECTION 409, REVISED STATUTES, UNDER WHICH IT IS PROPOSED TO ALLOW CREDIT FOR THE AMOUNT IN QUESTION, PROVIDED:

IN ALL CASES OF FINE, PENALTY, FORFEITURE, OR DISABILITY, OR ALLEGED LIABILITY FOR ANY SUM OF MONEY BY WAY OF DAMAGES OR OTHERWISE, UNDER ANY PROVISION OF LAW IN RELATION TO THE OFFICERS, EMPLOYEES, OPERATIONS, OR BUSINESS OF THE POSTAL SERVICE, THE POSTMASTER GENERAL MAY PRESCRIBE SUCH GENERAL RULES AND MODES OF PROCEEDING AS SHALL APPEAR TO BE EXPEDIENT, FOR THE GOVERNMENT OF THE SIXTH AUDITOR, IN ASCERTAINING THE FACT IN EACH CASE IN WHICH THE AUDITOR SHALL CERTIFY TO HIM THAT THE INTERESTS OF THE DEPARTMENT PROBABLY REQUIRE THE EXERCISE OF HIS POWERS OVER FINES, PENALTIES, FORFEITURES, AND LIABILITIES; AND UPON THE FACT BEING ASCERTAINED, THE AUDITOR MAY, WITH THE WRITTEN CONSENT OF THE POSTMASTER GENERAL, MITIGATE OR REMIT SUCH FINE, PENALTY, OR FORFEITURE, REMOVE SUCH DISABILITY, OR COMPROMISE, RELEASE, OR DISCHARGE SUCH CLAIM FOR SUCH SUM OF MONEY AND DAMAGES, AND ON SUCH TERMS AS THE AUDITOR SHALL DEEM JUST AND EXPEDIENT.

AND BY THE ACT OF MARCH 4, 1925, 43 STAT. 1266, IT WAS AMENDED TO--

* * * EXTEND IN ALL CASES NOW PENDING OR WHICH MAY HEREAFTER ARISE TO BALANCES DUE TO THE UNITED STATES THROUGH ACCOUNTABILITY FOR PUBLIC MONEYS UNDER ANY PROVISION OF LAW IN RELATION TO THE OFFICERS, EMPLOYEES, OPERATIONS, OR BUSINESS OF THE POSTAL SERVICE, EXCEPTING THE CLASS OF CASES COGNIZABLE UNDER THE ACT APPROVED JANUARY TWENTY FIRST, NINETEEN HUNDRED AND FOURTEEN, ENTITLED "AN ACT TO AMEND THE ACT APPROVED MAY NINTH, EIGHTEEN HUNDRED AND EIGHTY-EIGHT, AS AMENDED BY THE ACT OF JUNE ELEVENTH, EIGHTEEN HUNDRED AND NINETY-SIX," RELATING TO CLAIMS OF POSTMASTERS FOR LOSS BY BURGLARY, FIRE, OR OTHER UNAVOIDABLE CASUALTY.

IN CONSIDERING THIS AMENDMENT ON THE FLOOR OF THE HOUSE MARCH 3, 1925, IT WAS STATED BY THE SPONSORS OF THE BILL THAT IT WAS TO TAKE CARE OF CASES CHIEFLY AFFECTING EMPLOYEES, AS, FOR INSTANCE, WHERE POSTAL CLERKS "AFTER COMPLYING WITH EVERY RULE AND REGULATION OF THE DEPARTMENT PAID SOME MONEY ORDER OR SOME POSTAL SAVINGS ACCOUNT TO THE WRONG PERSON, WITHOUT FAULT OR NEGLIGENCE ON THE PART OF THE EMPLOYEES.' THE CASE HERE INVOLVED IS NOT FREE FROM NEGLIGENCE ON THE PART OF THE POSTAL CLERK, AND IT IS EVIDENT THAT HE DID NOT COMPLY WITH EVERY RULE AND REGULATION OF THE DEPARTMENT. IT, THEREFORE, DOES NOT COME WITHIN THE CLASSES OF CASES FOR RELIEF CONTEMPLATED BY THE AMENDMENT OF MARCH 4, 1925, SUPRA. NEITHER DOES IT PRESENT A MATTER FOR CONSIDERATION UNDER THE ORIGINAL PROVISIONS OF SECTION 409, REVISED STATUTES. THE ONLY GROUND SUGGESTED AS A BASIS FOR RELIEVING THE POSTAL CLERK FROM RESPONSIBILITY, AS STATED IN THE REPORT OF THE POST-OFFICE INSPECTOR, IS THE FACT THAT HE WAS INEXPERIENCED, AND THAT FACT ALONE IS NOT SUFFICIENT TO BRING THE CASE WITHIN THE PROVISIONS OF SECTION 409, REVISED STATUTES, AS AMENDED.

ACCORDINGLY, IT MUST BE HELD THAT SECTION 409, REVISED STATUTES, AS AMENDED, IS NOT APPLICABLE TO THE PRESENT MATTER.

CREDIT WILL BE ALLOWED IN THE ACCOUNTS OF WILLIAM E. MORTON, THE PRESENT POSTMASTER AT KANSAS CITY, FOR THE REASON THAT IN SEPTEMBER, 1923, WHEN THE IMPROPER PAYMENTS WERE MADE, HE WAS NOT POSTMASTER AT THAT PLACE, AND TO CHARGE HIS ACCOUNT FOR THE AMOUNT IMPROPERLY PAID WOULD RESULT IN IMPUTING TO HIM THE DELINQUENCIES OF THE EMPLOYEES OF HIS PREDECESSOR. THE PAYMENT MADE BY HIM TO THE PROPER PARTY IN APRIL, 1927, APPEARS TO HAVE BEEN PROPERLY AUTHORIZED BY THE DEPARTMENT AND MADE IN ACCORDANCE WITH THE USUAL PRACTICE WHEN PAYMENT UPON A MONEY ORDER HAS BEEN MADE TO THE WRONG PARTY. THEREFORE NO REASON APPEARS WHY HE SHOULD NOT RECEIVE CREDIT THEREFOR IN HIS ACCOUNTS.

IN SO FAR AS MR. GOULD IS CONCERNED, HOWEVER, HE BEING THE PAYING CLERK WHO MADE THE ERRONEOUS PAYMENTS UPON THE DUPLICATE MONEY ORDERS, PROPER STEPS SHOULD BE TAKEN TO RECOVER THE AMOUNT FROM HIM OR HIS SURETY, AND IN THIS CONNECTION ATTENTION IS INVITED TO THE PROVISIONS OF SECTION 1786, REVISED STATUTES.