A-51524, MAY 29, 1934, 13 COMP. GEN. 397

A-51524: May 29, 1934

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WHEN THE MAN'S SERVICES ARE TERMINATED BY HIS DISCHARGE PURSUANT TO SENTENCE OF GENERAL COURT MARTIAL AND TRANSMIT THE ACCOUNT TO THE GENERAL ACCOUNTING OFFICE. 1934: THIS OFFICE IS IN RECEIPT OF A LETTER DATED AUGUST 31. IT IS REQUESTED THAT A SETTLEMENT BE EFFECTED BY THE GENERAL ACCOUNTING OFFICE WHEREBY THE NAVY APPROPRIATION ABOVE NAMED IS CHARGED AND "POSTAL FUNDS" OR THE PROPER POST OFFICE DEPARTMENT APPROPRIATION CREDITED. WHO WAS SENTENCED BY GENERAL COURT MARTIAL APPROVED MAY 31. WHICH DRAFT WAS FORWARDED TO THE POSTMASTER BY THE INSPECTOR UNDER DATE OF JULY 8. THERE IS NOTHING TO INDICATE BUT WHAT THE DRAFT WAS PAID WHEN PRESENTED AND THAT THE PROPER POST OFFICE DEPARTMENT ACCOUNT WAS CREDITED THEREWITH.

A-51524, MAY 29, 1934, 13 COMP. GEN. 397

POSTAL DEPARTMENT - EMBEZZLEMENT - NAVY MAIL CLERKS WHERE NAVY MAIL CLERKS EMBEZZLE POSTAL FUNDS DEMAND SHOULD BE MADE FORTHWITH ON THE SURETY OF SUCH POSTAL CLERKS FOR THE SHORTAGES AND THE APPROPRIATE NAVY DISBURSING OFFICER SHOULD STATE THE SUM DUE THE EMBEZZLER FOR PAY, ETC., WHEN THE MAN'S SERVICES ARE TERMINATED BY HIS DISCHARGE PURSUANT TO SENTENCE OF GENERAL COURT MARTIAL AND TRANSMIT THE ACCOUNT TO THE GENERAL ACCOUNTING OFFICE. PAYMENTS MADE BY SURETIES OF THE SHORTAGES WHEN CREDITED TO POSTAL FUNDS MAY NOT BE AUGMENTED BY TRANSFER FROM THE NAVY APPROPRIATIONS TO POSTAL FUNDS OF THE AMOUNTS DUE THE EMBEZZLER.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE NAVY, MAY 29, 1934:

THIS OFFICE IS IN RECEIPT OF A LETTER DATED AUGUST 31, 1933, FROM THE PAYMASTER GENERAL OF THE NAVY, AS FOLLOWS:

IN THE ACCOUNTS OF C. A. COOK, LIEUTENANT (SC) U.S.N., AT THE NAVAL HOSPITAL, MARE ISLAND, CALIF., FOR THE FOURTH QUARTER, 1933, AN AMOUNT OF $711 APPEARS ON THE MILITARY ROLL SUMMARY AS A CREDIT REPRESENTING POSTAL FUNDS EMBEZZLED. IN SCHEDULING THIS ACCOUNT (NAVY SCHEDULE NO. 245) THIS ITEM HAS BEEN SETTLED AS A CREDIT TO NAVY APPROPRIATION 73703, PAY, SUBSISTENCE, AND TRANSPORTATION, NAVY, 1933.

IT IS REQUESTED THAT A SETTLEMENT BE EFFECTED BY THE GENERAL ACCOUNTING OFFICE WHEREBY THE NAVY APPROPRIATION ABOVE NAMED IS CHARGED AND "POSTAL FUNDS" OR THE PROPER POST OFFICE DEPARTMENT APPROPRIATION CREDITED.

IT APPEARS THAT THE MATTERS REFERRED TO BY THE PAYMASTER GENERAL GREW OUT OF EMBEZZLEMENT OF $711 IN POSTAL FUNDS BY FRED ERMERT, NAVY MAIL CLERK ON THE U.S.S. SARATOGA, WHO WAS SENTENCED BY GENERAL COURT MARTIAL APPROVED MAY 31, 1933, TO BE REDUCED TO THE RATING OF APPRENTICE SEAMAN, TO BE CONFINED AT THE NAVAL PRISON, NAVY YARD, MARE ISLAND, CALIF., FOR A PERIOD OF 24 MONTHS, THEN TO BE DISHONORABLY DISCHARGED FROM THE UNITED STATES NAVAL SERVICE AND TO SUFFER ALL OTHER ACCESSORIES OF SAID SENTENCE AS PRESCRIBED BY SECTION 883, NAVAL COURTS AND BOARDS.

IT FURTHER APPEARS THAT THE FIDELITY AND CASUALTY CO. OF NEW YORK, THE SURETY ON ERMERT'S BOND, AT THE REQUEST OF THE POSTAL INSPECTOR WHO INVESTIGATED THE MATTER, TRANSMITTED UNDER DATE OF JULY 5, 1933, A DRAFT PAYABLE TO THE POSTMASTER AT NEW YORK, N.Y., IN THE SUM OF $711, WHICH DRAFT WAS FORWARDED TO THE POSTMASTER BY THE INSPECTOR UNDER DATE OF JULY 8, 1933. THERE IS NOTHING TO INDICATE BUT WHAT THE DRAFT WAS PAID WHEN PRESENTED AND THAT THE PROPER POST OFFICE DEPARTMENT ACCOUNT WAS CREDITED THEREWITH. UNDER SUCH CIRCUMSTANCES THERE IS NO BASIS FOR FURTHER CREDITING THE POST OFFICE ACCOUNTS WITH THE TRANSFER OF FUNDS REQUESTED BY THE PAYMASTER GENERAL OF THE NAVY FROM THE APPROPRIATION "PAY, SUBSISTENCE, AND TRANSPORTATION, NAVY, 1933.'

ERMERT IS NOT ENTITLED TO ANY AMOUNT WHICH HAD ACCRUED AT THE TIME OF HIS TRIAL, CONVICTION, AND SENTENCE OR WHICH MAY THEREAFTER ACCRUE DURING THE PERIOD OF HIS CONFINEMENT AND PRIOR TO DISHONORABLE DISCHARGE UNTIL HIS INDEBTEDNESS TO THE UNITED STATES, INCLUDING THE INDEBTEDNESS GROWING OUT OF HIS EMBEZZLEMENT, HAS BEEN LIQUIDATED. THERE MAY BE A QUESTION WHETHER THE SURETY HAVING PAID THE AMOUNT OF THE SHORTAGE IN THE ACCOUNTS OF ERMERT IS ENTITLED BY REASON OF SUBROGATION TO SUCH AMOUNTS AS MAY HAVE ACCRUED AS PAY AND ALLOWANCES TO ERMERT, BUT NO SUCH CLAIM HAS BEEN PRESENTED TO THIS OFFICE, AND IF IT SHOULD BE PRESENTED, IT WILL BE GIVEN SUCH CONSIDERATION AS MAY BE WARRANTED BY THE LAW AND THE FACTS.

IT MAY BE STATED GENERALLY THAT WHEN SHORTAGES IN THE ACCOUNTS OF NAVY MAIL CLERKS OR ASSISTANT NAVY MAIL CLERKS ARE REPORTED TO OR ASCERTAINED BY OFFICERS OF THE POSTAL OR NAVAL SERVICE IT WOULD SEEM PROPER FOR THE APPROPRIATE NAVY DISBURSING OFFICER TO STATE THE SUM DUE THE EMBEZZLER FOR PAY, ETC., WHEN THE MAN'S SERVICES ARE TERMINATED BY HIS DISCHARGE PURSUANT TO SENTENCE AND TRANSMIT THE ACCOUNT TO THIS OFFICE. DISBURSING OFFICERS ARE AUTHORIZED ONLY TO PAY CURRENT AND ACCRUING PAY AND ALLOWANCES AND ONLY TO THE PERSONS TO WHOM THEY ACCRUE. CLAIMS BY OTHERS WHO MAY BE LEGALLY ENTITLED TO SUCH AMOUNT RATHER THAN THE PERSON TO WHOM THE CREDIT ACCRUED--- WHETHER BY THE POST OFFICE DEPARTMENT FOR REIMBURSEMENT OF POSTAL FUNDS OR BY SURETIES--- ARE EXCLUSIVELY FOR SETTLEMENT IN THIS OFFICE. SEE THE CASE OF KAUFFMAN, A-24346, JANUARY 10, 1929, AND FEBRUARY 5, 1929, IN WHICH IT WAS HELD, IN EFFECT, THAT AMOUNTS DUE CLAIMANT AT THE TIME OF HIS DEFALCATION AND NOT APPLIED IN REDUCTION OF HIS DEBT, THE DEBT HAVING BEEN SETTLED BY THE SURETY, ARE REQUIRED UNDER SECTION 3468, REVISED STATUTES, TO BE HELD IN STATUS QUO, SUBJECT TO THE CONSIDERATION OF ANY FUTURE CLAIMS WHICH MAY BE SUBMITTED BY THE SURETY UNDER THE PRINCIPLES OF SUBROGATION.

THAT IS TO SAY, ANY CREDITS WHICH MAY HAVE ACCRUED TO ERMERT ARE NOT TO BE TRANSFERRED AT THIS TIME TO THE CREDIT OF POST OFFICE DEPARTMENT FUNDS AS THESE FUNDS HAVE BEEN REIMBURSED BY COLLECTIONS FROM THE SURETY. THE BALANCE MAY NOT BE TRANSFERRED FROM THE NAVY APPROPRIATION AND IS TO REMAIN IN SUCH APPROPRIATION PENDING THE CONSIDERATION OF A CLAIM, IF ANY, OF THE SURETY UNDER THE PRINCIPLES OF SUBROGATION TO THE RIGHTS OF THE UNITED STATES TO SUCH SUM NOT EXCEEDING THE AMOUNT PAID BY THE SURETY.

ALSO, WHEN SHORTAGES ARE DISCOVERED IN THE ACCOUNTS OF NAVY MAIL CLERKS OR OTHERS, PROMPT DEMAND FOR THE PAYMENT OF SUCH SHORTAGE SHOULD CONTINUE TO BE MADE ON THE SURETIES BECAUSE THE DISCHARGE OF LIABILITY UNDER THE BOND DOES NOT DEPEND UPON THE DETERMINATION OF SUCH PAY AS MAY BECOME DUE THE PRINCIPAL AT SOME FUTURE DATE AFTER HE SHALL HAVE BEEN TRIED, CONVICTED, AND SENTENCED BY A COURT MARTIAL FOR THE EMBEZZLEMENT OR LOSS OF THE FUNDS.