A-19898, MARCH 17, 1928, 7 COMP. GEN. 581

A-19898: Mar 17, 1928

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A GOVERNMENT CHECK IS ISSUED FOR MORE THAN THE AMOUNT LEGALLY PAYABLE AND A STOP ORDER IS ENTERED AGAINST SAME. THE MATTER OF SETTLING THE CLAIM OF A BONA FIDE HOLDER FOR VALUE IS ONE FOR THE GENERAL ACCOUNTING OFFICE. TO THE EFFECT THAT IT WAS YOUR OPINION A BONA FIDE PURCHASER FOR VALUE OF A GOVERNMENT CHECK. AFTER RECEIPT OF NOTICE FROM THE HEAD OF THE OFFICE TO WHICH THE DISBURSING OFFICER DRAWING THE CHECK WAS ATTACHED THAT THE AMOUNT OF THE CHECK WAS CORRECT. IS ENTITLED TO PAYMENT UPON PRESENTATION TO THE TREASURER OF THE UNITED STATES. NOTWITHSTANDING THERE HAS BEEN A MISTAKE MADE IN DRAWING THE CHECK FOR MORE THAN WAS PROPERLY PAYABLE. WHICH WAS THE CORRECT AMOUNT. ADJUSTED COMPENSATION CERTIFICATE WAS PRESENTED TO THE BUREAU FOR PAYMENT MARCH 29.

A-19898, MARCH 17, 1928, 7 COMP. GEN. 581

CHECKS - STOP-PAYMENT ORDERS WHERE, THROUGH MISTAKE, A GOVERNMENT CHECK IS ISSUED FOR MORE THAN THE AMOUNT LEGALLY PAYABLE AND A STOP ORDER IS ENTERED AGAINST SAME, THE MATTER OF SETTLING THE CLAIM OF A BONA FIDE HOLDER FOR VALUE IS ONE FOR THE GENERAL ACCOUNTING OFFICE.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, MARCH 17, 1928:

THERE HAS BEEN RECEIVED WITH REFERENCE TO LETTER OF THIS OFFICE DATED SEPTEMBER 23, 1927, YOUR LETTER OF JANUARY 27, 1928, TO THE EFFECT THAT IT WAS YOUR OPINION A BONA FIDE PURCHASER FOR VALUE OF A GOVERNMENT CHECK, REGULAR ON ITS FACE, AFTER RECEIPT OF NOTICE FROM THE HEAD OF THE OFFICE TO WHICH THE DISBURSING OFFICER DRAWING THE CHECK WAS ATTACHED THAT THE AMOUNT OF THE CHECK WAS CORRECT, IS ENTITLED TO PAYMENT UPON PRESENTATION TO THE TREASURER OF THE UNITED STATES, NOTWITHSTANDING THERE HAS BEEN A MISTAKE MADE IN DRAWING THE CHECK FOR MORE THAN WAS PROPERLY PAYABLE. YOU REQUEST DECISION WHETHER A STOP ORDER AGAINST PAYMENT OF SUCH A CHECK MAY BE WITHDRAWN.

THE FACTS GIVING RISE TO THE CONTROVERSY APPEAR TO BE THAT ON JUNE 2, 1925, THE WAR DEPARTMENT CERTIFIED THE APPLICATION OF BENSON RAWLINGS, NOW DECEASED, FOR ADJUSTED COMPENSATION TO THE UNITED STATES VETERANS' BUREAU, SHOWING TWO PERIODS OF MILITARY SERVICE--- ONE FROM OCTOBER 27, 1917, TO FEBRUARY 18, 1918, AND ONE FROM AUGUST 1, 1918, TO FEBRUARY 12, 1919--- WHEREUPON THE BUREAU ISSUED COMPENSATION CERTIFICATE NO. 2575814, FOR $643, WHICH WAS THE CORRECT AMOUNT, BASED UPON THE SERVICE CERTIFIED BY THE WAR DEPARTMENT. THE FORMER SOLDIER DIED FEBRUARY 25, 1927, AND ADJUSTED COMPENSATION CERTIFICATE WAS PRESENTED TO THE BUREAU FOR PAYMENT MARCH 29, 1927, AND FOR WHICH CHECK NO. 10435 WAS ISSUED MAY 17, 1927, BY THE DISBURSING CLERK OF THE BUREAU IN THE SUM OF $643, IN FAVOR OF THE BENEFICIARY.

THE NEXT DAY THE BUREAU RECEIVED A LETTER FROM THE WAR DEPARTMENT DATED MAY 16, 1927, TRANSMITTING A CORRECTED SERVICE CERTIFICATE SHOWING THE SOLDIER'S ADJUSTED COMPENSATION SHOULD HAVE BEEN $150 AND NOT $643. APPARENTLY, UPON RECEIPT OF THIS LETTER, THE DISBURSING CLERK OF THE BUREAU REQUESTED THE TREASURER OF THE UNITED STATES TO STOP PAYMENT OF THE CHECK AND THE NOTICE APPEARS TO HAVE BEEN RECEIVED ON MAY 24, 1927, THE DATE ON WHICH IT WAS PRESENTED FOR PAYMENT THROUGH REGULAR BANKING CHANNELS. PAYMENT WAS REFUSED AND THE CHECK RETURNED TO THE BALTIMORE BRANCH OF THE FEDERAL RESERVE BANK OF RICHMOND, BUT THIS BANK APPEARS TO BE UNABLE TO RECOUP FROM THE PRESENTING BANK BECAUSE IT IN TURN COULD NOT RECOUP FROM THE PAYEE OF THE CHECK, WHO APPEARS TO HAVE EXPENDED THE PROCEEDS THEREOF AND IS WITHOUT ANY SUBSTANTIAL PROPERTY.

SECTION 505 OF THE ACT OF MAY 19, 1924, 43 STAT. 128, DOES NOT AUTHORIZE CHARGING THE ADJUSTED COMPENSATION FUND WITH ANY SUM IN EXCESS OF THE AMOUNT PROPERLY PAYABLE TO ANY SOLDIER OR BENEFICIARY AS ADJUSTED COMPENSATION NOR MAY ANY OTHER APPROPRIATION BE USED THEREFOR BECAUSE SECTION 3678, REVISED STATUTES, PROVIDES THAT:

ALL SUMS APPROPRIATED FOR THE VARIOUS BRANCHES OF EXPENDITURE IN THE PUBLIC SERVICE SHALL BE APPLIED SOLELY TO THE OBJECTS FOR WHICH THEY ARE RESPECTIVELY MADE, AND FOR NO OTHERS.

THE CLAIM OF A BONA FIDE HOLDER FOR VALUE OF THE CHECK IS ONE FOR CONSIDERATION BY THIS OFFICE UNDER SECTION 305 OF THE BUDGET AND ACCOUNTING ACT OF JUNE 10, 1921, 42 STAT. 24, THE CLAIM AGAINST THE GOVERNMENT BEING AS THE HOLDER OF THE CHECK UNDER THE FACTS STATED AND NOT A CLAIM FOR ANY OF THE PURPOSES FOR WHICH THE APPROPRIATION WAS PROVIDED. IT IS REQUESTED THAT THE CHECK AND ALL CORRESPONDENCE IN THE MATTER BETWEEN THE TREASURY DEPARTMENT AND THE BANKS, OR OTHERWISE, BE TRANSMITTED TO THIS OFFICE, TOGETHER WITH YOUR RECOMMENDATIONS FOR SETTLEMENT AS A CLAIM.