A-34873, JANUARY 20, 1931, 10 COMP. GEN. 316

A-34873: Jan 20, 1931

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THERE IS NO AUTHORITY FOR THE PAYMENT OF INDEMNITY WITH RESPECT TO CLAIMS FOR WHICH THE CLAIMANT CAN FURNISH NO INSURANCE RECEIPT AND THE RECORDS OF THE MAILING POST OFFICE HAVE BEEN KEPT IN SUCH AN INADEQUATE MANNER THAT NO IDENTIFICATION OR CHECKING CAN BE MADE FROM THE GOVERNMENT RECORDS. AS FOLLOWS: THE EXISTING POSTAL LAWS AND REGULATIONS REQUIRE THAT WHEN A PARCEL IS ACCEPTED FOR INSURANCE THE SENDER THEREOF SHALL BE GIVEN A RECEIPT. A SPECIMEN OF WHICH IS INCLOSED. THE ACCEPTING POSTAL EMPLOYEE IS REQUIRED TO SHOW ON THE RECEIPT WHETHER THE PARCEL WAS INDORSED "FRAGILE. THE POST OFFICE OF MAILING IS REQUIRED TO MAINTAIN A RECORD OF THE MAILING OF THE PARCEL ON THE STUB OF THE INSURANCE RECEIPT.

A-34873, JANUARY 20, 1931, 10 COMP. GEN. 316

POSTAL SERVICE - PAYMENT OF INDEMNITY ON INSURED MAIL UNDER THE ACT OF AUGUST 24, 1912, 37 STAT. 557, AND REGULATIONS MADE PURSUANT THERETO WITH RESPECT TO THE PAYMENT OF INDEMNITY FOR THE LOSS OF, OR DAMAGE TO, INSURED MAIL, THERE IS NO AUTHORITY FOR THE PAYMENT OF INDEMNITY WITH RESPECT TO CLAIMS FOR WHICH THE CLAIMANT CAN FURNISH NO INSURANCE RECEIPT AND THE RECORDS OF THE MAILING POST OFFICE HAVE BEEN KEPT IN SUCH AN INADEQUATE MANNER THAT NO IDENTIFICATION OR CHECKING CAN BE MADE FROM THE GOVERNMENT RECORDS.

COMPTROLLER GENERAL MCCARL TO THE POSTMASTER GENERAL, JANUARY 20, 1931:

THERE HAS BEEN RECEIVED YOUR LETTER OF JANUARY 8, 1931, AS FOLLOWS:

THE EXISTING POSTAL LAWS AND REGULATIONS REQUIRE THAT WHEN A PARCEL IS ACCEPTED FOR INSURANCE THE SENDER THEREOF SHALL BE GIVEN A RECEIPT, A SPECIMEN OF WHICH IS INCLOSED. THE ACCEPTING POSTAL EMPLOYEE IS REQUIRED TO SHOW ON THE RECEIPT WHETHER THE PARCEL WAS INDORSED "FRAGILE," ,PERISHABLE," "EGGS," WHETHER THE SENDER HAD PAID ANY OF THE FEES FOR RENDITION OF THE SPECIAL SERVICES PROVIDED BY LAW IN CONNECTION WITH INSURED MAIL; THE NUMBER OF THE PARCEL, DATE OF MAILING, INSURANCE FEE PAID, AND TO ENTER HIS INITIALS IN THE SPACE PROVIDED THEREFOR ON THE RECEIPT.

THE POST OFFICE OF MAILING IS REQUIRED TO MAINTAIN A RECORD OF THE MAILING OF THE PARCEL ON THE STUB OF THE INSURANCE RECEIPT, A SAMPLE OF WHICH IS INCLOSED, SHOWING, IN ADDITION TO THE NAME AND ADDRESS OF THE ADDRESSEE, THE SAME PARTICULARS ENTERED ON THE RECEIPT ISSUED TO THE SENDER.

THE PURPOSE OF THE MAILING OFFICE RECORD IS TO PERMIT THE MAILING POSTMASTER TO CERTIFY TO THE INSURANCE OF THE PARCEL IN THE EVENT CLAIM FOR INDEMNITY IS FILED ON FORM 3812 (APPLICATION FOR INDEMNITY), A SPECIMEN OF WHICH IS HEREWITH. THIS RECORD ALSO IS AVAILABLE FOR REFERENCE IN THE EVENT THE SENDER OF A PARCEL ALLEGED TO HAVE BEEN INSURED WITH THE POSTAL SERVICE AND LOST, RIFLED, OR DAMAGED IN THE INSURED MAILS CAN NOT PRODUCE THE RECEIPT REQUIRED TO BE ISSUED TO HIM AT THE TIME AND PLACE OF MAILING.

DURING THE LATTER PART OF THE CALENDAR YEAR 1921 THE POSTMASTER AT MINNEAPOLIS, MINNESOTA, REQUESTED THE THIRD ASSISTANT POSTMASTER GENERAL TO GRANT AUTHORITY WHEREBY THE NAME AND ADDRESS OF THE ADDRESSEE OF EACH PARCEL ACCEPTED FOR INSURANCE DURING THE ENSUING CHRISTMAS PERIOD (DECEMBER 10 TO DECEMBER 24, 1921, INCLUSIVE) BE OMITTED FROM THE MAILING OFFICE RECORD. THE PURPOSE OF THAT REQUEST, WAS TO SAVE THE CLERICAL TIME ORDINARILY REQUIRED IN RECORDING THE NAME AND ADDRESS OF THE ADDRESSEE OF EACH INSURED PARCEL, AND CONSEQUENTLY TO EXPEDITE THE ACCEPTANCE OF THE PARCELS WITHOUT THE CONGESTION USUALLY PREVAILING AT THAT SEASON OF THE YEAR. IN THE BELIEF THAT THE PLAN COULD BE OPERATED WITHOUT ANY INCREASE IN THE EXPENDITURES MADE FROM THE APPROPRIATIONS PROVIDED BY CONGRESS FOR THE PAYMENT OF INDEMNITY COVERING INSURED PARCELS LOST, RIFLED, OR DAMAGED AND THAT IT WOULD PRODUCE THE RESULTS ANTICIPATED BY THE POSTMASTER AT MINNEAPOLIS, MINNESOTA, THE DEPARTMENT GRANTED THE DESIRED AUTHORITY WITH THE UNDERSTANDING THAT AUTHORITY MUST BE OBTAINED FROM THE DEPARTMENT FOR FOLLOWING THE SAME PROCEDURE DURING SUCCEEDING CHRISTMAS PERIODS.

AFTER THE PLAN HAD BEEN FOLLOWED DURING THE PERIOD OF DECEMBER 10 TO DECEMBER 24, 1921, THE POSTMASTER AT MINNEAPOLIS, MINNESOTA, SUBMITTED A REPORT IN WHICH HE ADVISED THAT 63,081 PARCELS WERE MAILED UNDER THE NEW PLAN; THAT FIFTEEN SECONDS OF TIME WERE SAVED IN THE ACCEPTANCE OF EACH INSURED PARCEL, RESULTING IN A SAVING OF TWO HUNDRED AND SIXTY THREE HOURS OR $157.08; AND THAT IN ADDITION TO A SAVING IN MONEY BY REASON OF THE CURTAILED MAILING OFFICE RECORD COVERING INSURED PARCELS THE PATRONS WERE BETTER ACCOMMODATED BECAUSE OF THE RELIEF OF THE CONGESTION AT THE RECEIVING WINDOWS OF THE MINNEAPOLIS, MINNESOTA, POST OFFICE USUALLY EXPERIENCED DURING FORMER CHRISTMAS SEASONS.

NOT ONLY DID THE DEPARTMENT GRANT SUBSEQUENT REQUESTS OF THE POSTMASTER AT MINNEAPOLIS, MINNESOTA, FOR THE EXTENSION OF THIS AUTHORITY COVERING THE CHRISTMAS SEASONS OF THE CALENDAR YEARS 1922 TO 1928, INCLUSIVE, BUT SIMILAR AUTHORITY WAS GRANTED DURING THAT PERIOD TO A NUMBER OF OTHER POSTMASTERS WITHOUT ANY DIFFICULTY OR UNUSUAL CONDITIONS ARISING IN CONSEQUENCE OF THE EXERCISE OF THE AUTHORITY THUS GRANTED.

FOLLOWING THE EXERCISE OF THIS AUTHORITY BY THE POSTMASTER AT MINNEAPOLIS, MINNESOTA, FOR THE CHRISTMAS PERIOD OF THE CALENDAR YEAR 1929, FIFTY-ONE (51) APPLICATIONS FOR INDEMNITY AROSE COVERING FIFTY (50) PARCELS ALLEGED TO HAVE BEEN ADDRESSED TO WESTERN DESTINATIONS AND LOST IN THE INSURED MAILS, AND ONE (1) PARCEL ALLEGED TO HAVE BEEN ADDRESSED TO AN EASTERN DESTINATION AND DAMAGED IN THE INSURED MAILS. BECAUSE OF THE INABILITY OF THE CLAIMANTS TO PRESENT THE RECEIPTS REQUIRED TO BE ISSUED TO SENDERS OF PARCELS ACCEPTED FOR INSURANCE, AND BECAUSE OF THE MAINTENANCE OF THE CURTAILED FORM OF MAILING OFFICE RECORD HEREIN DESCRIBED, IT WAS NOT PRACTICABLE TO RESORT TO THE MAILING OFFICE RECORD FOR THE PURPOSE OF ESTABLISHING WHETHER THESE PARCELS ACTUALLY HAD BEEN INSURED WITH THE POSTAL SERVICE. IN CONSEQUENCE OF THIS SITUATION, THE POSTMASTER AT MINNEAPOLIS, MINNESOTA, WAS WITHOUT ANY AUTHORITY TO CERTIFY TO THE INSURANCE OF THESE PARCELS IN HIS DECLARATION AS POSTMASTER AT THE OFFICE OF MAILING ON EACH APPLICATION FOR INDEMNITY.

IT HAS BEEN ASCERTAINED FROM THE POSTMASTER AT MINNEAPOLIS, MINNESOTA, THAT IF THE DATES OF MAILING OF THE FIFTY (50) PARCELS ADDRESSED TO WESTERN DESTINATIONS AND ALLEGED TO HAVE BEEN LOST IN THE INSURED MAILS ARE CORRECTLY INDICATED IN THE AFFIDAVITS SUBMITTED BY THE CLAIMANTS, THESE FIFTY PARCELS UNDOUBTEDLY WERE DISPATCHED IN A STORAGE CAR ATTACHED TO MINN. AND OMAHA R.P.O. TRAIN 10, WHICH WAS DESTROYED BY FIRE ON DECEMBER 18, 1929. IN THIS LATTER CONNECTION THERE IS QUOTED BELOW AN EXCERPT FROM THE REPORT OF THE POST-OFFICE INSPECTOR RELATIVE TO THAT CASUALTY:

"ON DECEMBER 18, 1929, TRAIN 10 OF THE CHICAGO GREAT WESTERN RAILROAD WAS CARRYING AN EXTRA STORAGE CAR FOR EXCLUSIVE MAIL USAGE. * * * THE STORAGE CAR WAS LOADED AT MINNEAPOLIS * * *. INVESTIGATION DISCLOSED THAT A FEW MILES BEFORE REACHING BELMOND, IOWA, EXPRESS BAGGAGE MAN F. D. STULTZ DISCOVERED FIRE * * * THE STORAGE CAR WAS BURNED TO THE TRUCKWHEELS * * *. SEVERAL HUNDRED INSURED PARCELS WERE DESTROYED IN THE CASUALTY. IT IS MY OPINION THAT THE RAILROAD COMPANY WAS IN NO WAY RESPONSIBLE FOR THE CASUALTY BECAUSE OF THE FACT THAT THE EQUIPMENT WAS IN APPARENT GOOD CONDITION AND PROPERLY MAINTAINED.'

THE ACT OF AUGUST 24, 1912 (SECTION 8, 37 STAT. 557), PROVIDES IN PART AS FOLLOWS:

"THE POSTMASTER GENERAL SHALL MAKE PROVISION BY REGULATION FOR THE INDEMNIFICATION OF SHIPPERS, FOR SHIPMENT INJURED OR LOST, BY INSURANCE OR OTHERWISE * * *.'

AMENDED SECTION 1072, PARAGRAPH 4, POSTAL LAWS AND REGULATIONS OF 1924, PROVIDES IN PART AS FOLLOWS:

"THE SENDER OF AN INSURED * * * PARCEL SHALL BE GIVEN A RECEIPT SHOWING THE OFFICE AND DATE OF MAILING, THE NUMBER OF THE PARCEL, AND, SEPARATELY, THE AMOUNT OF FEE AND POSTAGE PAID * * *; AND A RECORD SHALL BE RETAINED AT THE MAILING OFFICE SHOWING THE SAME PARTICULARS AND IN ADDITION THE NAME AND ADDRESS OF THE ADDRESSEE OF INSURED MAIL * * *.'

AMENDED SECTION 1072, PARAGRAPH 20, POSTAL LAWS AND REGULATIONS OF 1924, PROVIDES IN PART AS FOLLOWS:

"WHEN THE GENERAL METHOD PRESCRIBED BY THE REGULATIONS RELATIVE TO DOMESTIC * * * INSURED MAIL IS NOT PRACTICABLE OR ADVANTAGEOUS, THE THIRD ASSISTANT POSTMASTER GENERAL MAY AUTHORIZE EXCEPTIONAL TREATMENT.'

AMENDED SECTION 1075, PARAGRAPH 3, POSTAL LAWS AND REGULATIONS OF 1924, PROVIDES IN PART AS FOLLOWS:

"WHEN AN INSURED * * * PARCEL IS LOST, DAMAGED, OR RIFLED, AND CLAIM FOR INDEMNITY IS MADE, THE SENDER SHALL FILE AN AFFIDAVIT * * * ON FORM 3812, SHOWING CONTENTS OF PARCEL, ACTUAL VALUE, METHOD OF PACKING (IN CLAIMS INVOLVING DAMAGE), AND TO WHOM INDEMNITY SHOULD BE PAID. THE POSTMASTER AT THE MAILING OFFICE SHALL CERTIFY ON FORM 3812 AS TO THE MAILING OF THE PARCEL * * "

THE FIFTY-ONE APPLICATIONS FOR INDEMNITY AND SUPPORTING PAPERS ARE SUBMITTED HEREWITH. IT IS PERTINENT TO NOTE IN THIS CONNECTION THAT THIRTY-THREE OF THE FIFTY-ONE PARCELS INVOLVED IN THESE APPLICATIONS WERE ALLEGED TO HAVE BEEN INSURED AT THE MINIMUM FEE OF 5 CENTS AND FOR WHICH INDEMNITY IS LIMITED NOT TO EXCEED $5; THAT IN A NUMBER OF THE APPLICATIONS THE SENDERS MADE NO EFFORT TO OBTAIN INDEMNITY IN THE MAXIMUM AMOUNT PRESCRIBED BY THE INSURANCE FEE PAID; AND THAT IN NUMBER OF THE APPLICATIONS THE DECLARED VALUE OF THE CONTENTS OF THE RELATED PARCELS WAS FAR IN EXCESS OF THE MAXIMUM AMOUNT OF INDEMNITY WHICH COULD BE PAID FOR THE INSURANCE FEE ALLEGED TO HAVE BEEN PAID BY THE SENDERS. THESE FACTS, TOGETHER WITH THE REPORT OF THE DESTRUCTION OF THE STORAGE CAR IN WHICH FIFTY PARCELS MIGHT HAVE BEEN DISPATCHED, SEEMINGLY WOULD INDICATE THAT THE ELEMENT OF FRAUD IS NOT INVOLVED IN THESE APPLICATIONS FOR INDEMNITY.

SUMMARIZING THE FACTS IN THIS CASE, IT WILL BE OBSERVED THAT, HAD THE PARCELS ALLEGED TO HAVE BEEN ACCEPTED FOR INSURANCE BEEN RECORDED AT THE MAILING OFFICE IN THE MANNER PRESCRIBED IN AMENDED SECTION 1072, PARAGRAPH 4, POSTAL LAWS AND REGULATIONS OF 1924, QUOTED HEREIN, THE LOSS OF THE RECEIPTS REQUIRED TO BE ISSUED UNDER THAT AMENDED REGULATION WOULD NOT HAVE MILITATED AGAINST THE SENDERS OF THE PARCELS INVOLVED, SINCE RECOURSE COULD HAVE BEEN HAD TO THE MAILING OFFICE RECORD TO ESTABLISH WHETHER THE PARCELS ACTUALLY HAD BEEN INSURED; THAT THE PROTECTION OTHERWISE AFFORDED THE SENDERS OF INSURED PARCELS WAS REMOVED DURING THE CHRISTMAS SEASON OF THE CALENDAR YEAR 1929 AND PRIOR YEARS WITHOUT THE CONSENT OR KNOWLEDGE OF POSTAL PATRONS OF THE MINNEAPOLIS, MINNESOTA, POST OFFICE SOLELY BECAUSE THE DEPARTMENT DESIRED TO CONSERVE CLERICAL LABOR AND EXPENSE ACTUALLY INVOLVED WHEN PARCELS ACCEPTED FOR INSURANCE ARE FULLY RECORDED AT MAILING OFFICES; AND THAT THE PLAN FOLLOWED BY THE MINNEAPOLIS, MINNESOTA, POST OFFICE WAS AUTHORIZED BY VIRTUE OF THE AUTHORITY GRANTED TO THE THIRD ASSISTANT POSTMASTER GENERAL UNDER AMENDED SECTION 1072, PARAGRAPH 20, POSTAL LAWS AND REGULATIONS OF 1924, QUOTED HEREIN.

INFORMATION IS REQUESTED WHETHER PAYMENT OF THE ABOVE-MENTIONED CLAIMS FOR INDEMNITY WILL BE QUESTIONED IN AUDIT.

IT IS NOTED THAT THE SAMPLE OF THE RECEIPT FOR INSURED MAIL ATTACHED TO YOUR LETTER CONTAINS THE FOLLOWING NOTICE TO THE SENDER OF AN INSURED PARCEL:

KEEP THIS RECEIPT UNTIL PARCEL IS ACCOUNTED FOR SATISFACTORILY. REPRESENTS A PARCEL INSURED AND MUST BE PRESENTED IN THE EVENT OF APPLICATION FOR INDEMNITY. THE SENDER SHOULD WRITE THE NAME AND ADDRESS OF THE ADDRESSEE ON THE BACK.

NOTWITHSTANDING THE SPECIFIC TERMS OF THIS NOTICE IT APPEARS THAT IN GENERAL PRACTICE LITTLE, IF ANY, ATTEMPT IS MADE BY THE POSTAL SERVICE TO REQUIRE THE PRODUCTION OF THE RECEIPT IN SUPPORT OF A CLAIM FOR INDEMNITY FOR THE REASON, APPARENTLY, THAT IF A PROPER RECORD IS KEPT OF THE PARCEL BY THE MAILING OFFICE THERE IS NO DIFFICULTY IN IDENTIFYING THE SENDER AND THE ADDRESSEE AND IN TRACING THE PARCEL IN QUESTION FROM THE RECORDS IF THE CLAIMANT CAN GIVE SUFFICIENT DATA AS TO THE DATE OF MAILING, ETC. THE DIFFICULTY IN THE 51 CASES SUBMITTED WITH YOUR LETTER IS THAT NOT ONLY IS THERE NOT PRESENTED AN INSURANCE RECEIPT FOR THE PARCELS ALLEGED TO HAVE BEEN LOST BUT THE RECORDS AT THE MINNEAPOLIS MAILING OFFICE WERE KEPT IN SUCH AN INADEQUATE MANNER THAT THERE IS NO WAY THAT A PROPER CHECK CAN BE MADE AGAINST SUCH RECORDS TO TRACE OR IDENTIFY THE PARCELS. NEVERTHELESS, ALTHOUGH THE PARCELS MAY NEVER HAVE BEEN MAILED OR IF MAILED MAY NOT HAVE BEEN INSURED, IT IS PROPOSED TO PAY THE INDEMNITY UPON THE MERE STATEMENT OF CLAIMANT IN EACH CASE THAT PARCEL CONTAINING CERTAIN ARTICLES OF A STATED VALUE WAS SENT AND THAT AN INSURANCE FEE FOR ITS SAFE AND TIMELY DELIVERY WAS PAID.

IT IS NOT BELIEVED THAT THE LAW OF AUGUST 24, 1912, CITED AND QUOTED IN YOUR LETTER DIRECTING THAT THE POSTMASTER GENERAL SHALL MAKE PROVISION BY REGULATIONS FOR THE INDEMNIFICATION OF SHIPPERS FOR SHIPMENTS INSURED OR LOST, BY INSURANCE OR OTHERWISE, CONTEMPLATED THE PAYMENT OF INDEMNITY IN CASES WHERE NO REGULATIONS CAN HAVE ANY APPLICATION, OR, STATED OTHERWISE, WHERE REGULATIONS PROVIDING ADEQUATE PROTECTION FOR THE GOVERNMENT'S INTERESTS HAVE BEEN WAIVED WITH RESPECT TO THE KEEPING OF AN ADEQUATE RECORD FOR IDENTIFICATION PURPOSES. THE AUTHORITY TO ALLOW THE KEEPING OF AN INCOMPLETE RECORD AT MINNEAPOLIS FOR INSURED PARCELS IS PREDICATED UPON THE PROVISIONS OF SECTION 1072, POSTAL LAWS AND REGULATIONS OF 1924, AS AMENDED, PROVIDING IN PARAGRAPH 20 THAT WHEN THE GENERAL METHOD PRESCRIBED BY THE REGULATIONS RELATIVE TO DOMESTIC INSURED MAIL IS NOT PRACTICABLE OR ADVANTAGEOUS, THE THIRD ASSISTANT POSTMASTER GENERAL MAY AUTHORIZE EXCEPTIONAL TREATMENT. THERE HAVE BEEN FURNISHED NO WRITTEN ORDERS BY THE THIRD ASSISTANT POSTMASTER GENERAL AUTHORIZING THE PROCEDURE HERE IN QUESTION AT MINNEAPOLIS DURING DECEMBER, 1929, BUT IT IS ASSUMED FROM STATEMENTS MADE IN YOUR LETTER THAT SUCH AUTHORITY IN THAT CONNECTION WAS GRANTED. IT SHOULD BE NOTED, HOWEVER, THAT THESE PROVISIONS RELATING TO ,EXCEPTIONAL TREATMENT" ARE CONTAINED NOT IN THE LAW BUT IN THE REGULATIONS. THE LAW ITSELF CONTEMPLATES THAT ADEQUATE REGULATIONS SHALL BE MADE AND ENFORCED IN CONNECTION WITH THE PAYMENT OF INDEMNITY CLAIMS NOT THAT THE REGULATIONS MAY BE MADE AND DISREGARDED BY THE ADMINISTRATIVE OFFICERS. IT MAY BE, AS YOU STATE, THAT THE ELEMENT OF FRAUD IS NOT INVOLVED IN THE APPLICATIONS SUBMITTED, AND THAT IT IS PROBABLE SOME OF THE PARCELS FOR WHICH APPLICATION FOR INDEMNITY IS NOW SUBMITTED WERE DESTROYED IN THE FIRE WHICH DESTROYED THE MAIL CAR ON DECEMBER 18, 1929, BUT THIS IS NOT SUFFICIENT TO AUTHORIZE FAVORABLE CONSIDERATION OF CLAIMS FOR INDEMNITY AGAINST THE UNITED STATES WITHOUT RECEIPTS OR OFFICIAL RECORDS FROM WHICH THE MERITS OF THE CLAIMS CAN BE DETERMINED.

ACCORDINGLY, IN SPECIFIC ANSWER TO THE QUESTION SUBMITTED I HAVE TO ADVISE THAT THERE IS NO AUTHORITY OF LAW FOR THE PAYMENT OF THESE INDEMNITY CLAIMS ON THE RECORD AS PRESENTED.