A-57931, NOVEMBER 15, 1934, 14 COMP. GEN. 394

A-57931: Nov 15, 1934

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

IS NOT. REQUESTING DECISION WHETHER IN VIEW OF THE FACTS AND CIRCUMSTANCES HEREINAFTER STATED THE ACCEPTANCE OF AN OFFER IN "COMPROMISE" WILL OPERATE TO RELIEVE THE TREASURER OF THE UNITED STATES FROM LIABILITY FOR HAVING PAID 49 CHECKS (AMOUNTING TO$2. WITH RESPECT TO WHICH RECLAMATION PROCEEDINGS WERE AUTHORIZED IN LETTER OF THIS OFFICE DATED JULY 11. THE LETTER FROM YOUR DEPARTMENT REPORTS THE STATUS OF RECLAMATION PROCEEDINGS TO BE AS FOLLOWS: INASMUCH AS THE TREASURER WAS UNABLE TO PROCURE REFUND FROM THE ENDORSERS. THE MATTER WAS REFERRED ON JANUARY 12. WAS TRANSFERRED ON AUGUST 11. ADVISING THAT SUIT WAS INSTITUTED FOR $2. RELIEVES THE GOVERNMENT OF ANY CLAIMS WHICH SHE MAY HAVE AGAINST IT BY VIRTUE OF THE FORGERY OF HER ENDORSEMENT ON THE FORTY-NINE CHECKS IN QUESTION.

A-57931, NOVEMBER 15, 1934, 14 COMP. GEN. 394

CHECKS - FORGED ENDORSEMENTS - COMPROMISE SETTLEMENT AS BASIS FOR DISCONTINUANCE OF RECLAMATION PROCEEDINGS WHILE A PRIVATE SETTLEMENT BETWEEN AN ENDORSING BANK AND THE RIGHTFUL PAYEE OF GOVERNMENT CHECKS NEGOTIATED ON THE FORGED ENDORSEMENT OF THE PAYEE'S NAME, IS NOT, STRICTLY SPEAKING, A COMPROMISE BETWEEN THE GOVERNMENT AND THE ENDORSER AGAINST WHICH SUIT HAD BEEN BROUGHT, IT MAY BE REGARDED AS RENDERING UNNECESSARY ANY FURTHER RECLAMATION PROCEEDINGS, IF THE RIGHTFUL PAYEE EXECUTES RELEASE IN FULL OF ALL CLAIMS AGAINST THE UNITED STATES.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, NOVEMBER 15, 1934:

CONSIDERATION HAS BEEN GIVEN TO THE LETTERS OF YOUR DEPARTMENT DATED SEPTEMBER 6 AND SEPTEMBER 25, 1934, REQUESTING DECISION WHETHER IN VIEW OF THE FACTS AND CIRCUMSTANCES HEREINAFTER STATED THE ACCEPTANCE OF AN OFFER IN "COMPROMISE" WILL OPERATE TO RELIEVE THE TREASURER OF THE UNITED STATES FROM LIABILITY FOR HAVING PAID 49 CHECKS (AMOUNTING TO$2,202.51) DRAWN TO THE ORDER OF MRS. EVALINE NEWSOME, ON FORGED ENDORSEMENTS OF THE PAYEE'S NAME, WITH RESPECT TO WHICH RECLAMATION PROCEEDINGS WERE AUTHORIZED IN LETTER OF THIS OFFICE DATED JULY 11, 1932.

THE LETTER FROM YOUR DEPARTMENT REPORTS THE STATUS OF RECLAMATION PROCEEDINGS TO BE AS FOLLOWS:

INASMUCH AS THE TREASURER WAS UNABLE TO PROCURE REFUND FROM THE ENDORSERS, THE MATTER WAS REFERRED ON JANUARY 12, 1933, TO THE SOLICITOR OF THE TREASURY FOR THE PURPOSE OF BRINGING SUIT, IF NECESSARY, TO RECOVER THE AMOUNTS INVOLVED, AND WAS TRANSFERRED ON AUGUST 11, 1933, BY THAT OFFICER TO THE ATTORNEY GENERAL.

THE DEPARTMENT HAS NOW RECEIVED ASSISTANT ATTORNEY GENERAL SWEENEY'S LETTER OF AUGUST 2, 1934, ADVISING THAT SUIT WAS INSTITUTED FOR $2,202.51 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF GEORGIA AGAINST THE CITIZENS AND SOUTHERN NATIONAL BANK AND THE ESTATE OF JULIUS HORNSTEIN; THAT THERE HAD BEEN RECEIVED A CHECK FOR $500.00 AS AN OFFER IN COMPROMISE OF THE GOVERNMENT'S SUIT; AND THAT THE UNITED STATES ATTORNEY AT SAVANNAH, GEORGIA, HAD OBTAINED A RELEASE FROM THE PAYEE WHEREIN MRS. NEWSOME, IN CONSIDERATION OF THE PAYMENT OF THE SUM OF $500.00, RELIEVES THE GOVERNMENT OF ANY CLAIMS WHICH SHE MAY HAVE AGAINST IT BY VIRTUE OF THE FORGERY OF HER ENDORSEMENT ON THE FORTY-NINE CHECKS IN QUESTION.

IT APPEARS THAT SUIT WAS FILED BY THE ATTORNEY GENERAL TO RECOVER FROM THE ENDORSERS ON THE INVOLVED CHECKS, AND IN THAT CONNECTION THE DEPARTMENT OF JUSTICE IN LETTER OF AUGUST 2, 1934, TO THE ASSISTANT TREASURER OF THE UNITED STATES, REPORTED THE STATUS OF THE SUIT TO BE AS FOLLOWS:

ON JUNE 9, 1934, THERE WAS RECEIVED A CHECK FOR $500 AS AN OFFER IN COMPROMISE OF THE GOVERNMENT'S SUIT. THIS CHECK WAS FORWARDED ON JUNE 18, 1934, TO THE DISBURSING CLERK, DIVISION OF DISBURSEMENTS, TREASURY DEPARTMENT, FOR COLLECTION AND DEPOSIT IN HIS SPECIAL DEPOSIT ACCOUNT, PENDING CONSIDERATION OF THE OFFER.

AT THE REQUEST OF THIS DEPARTMENT, THE UNITED STATES ATTORNEY AT SAVANNAH, GEORGIA, OBTAINED A RELEASE, EXECUTED IN TRIPLICATE (ONE OF WHICH IS ENCLOSED), BY MRS. NEWSOME AND HER ATTORNEY, WHEREIN MRS. NEWSOME, IN CONSIDERATION OF THE PAYMENT OF THE SUM OF $500 RELIEVES THE GOVERNMENT OF ANY CLAIMS WHICH SHE MAY HAVE AGAINST IT BY VIRTUE OF THE FORGERY OF HER ENDORSEMENT ON THE 49 CHECKS ABOVE MENTIONED.

THE RELEASE REFERRED TO ABOVE, WHICH WAS EXECUTED BY MRS. NEWSOME ON JULY 23, 1934, READS AS FOLLOWS:

FOR AND IN CONSIDERATION OF THE SUM OF $500.00, THIS DAY PAID TO ME, THE RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, I HEREBY RELEASE THE UNITED STATES OF AMERICA OF ALL RIGHT, CLAIM, OR DEMANDS THAT I HAVE AGAINST THE UNITED STATES ON THE FORTY-NINE (49) CHECKS DRAWN ON THE TREASURER OF THE UNITED STATES, AND PAYABLE TO MRS. EVELYN NEWSOME, BEING THE FORTY-NINE CHECKS NAMED AND DESCRIBED IN THE SUIT OF THE UNITED STATES AGAINST CITIZENS AND SOUTHERN NATIONAL BANK, ET AL., PENDING IN THE DISTRICT COURT OF THE UNITED STATES, SOUTHERN DISTRICT OF GEORGIA, AND I FURTHER AGREE THAT THE SAID $500.00 IN FULL AND FINAL SETTLEMENT OF ALL CLAIMS FOR WHICH SAID 49 CHECKS WERE GIVEN.

THERE IS NOT INVOLVED HERE A COMPROMISE STRICTLY OF THE PENDING SUIT BY THE UNITED STATES AGAINST THE BANK AND OTHER DEFENDANTS, HEREINAFTER REFERRED TO AS THE BANK; I.E., A COMPROMISE OF THE SUIT WITH COLLECTION BY THE UNITED STATES OF ONLY A PORTION OF THE TRUE AMOUNT INVOLVED AND PAYMENT OF SUCH AMOUNT BY THE UNITED STATES TO MRS. NEWSOME, BUT RATHER, THERE IS PROPOSED A SETTLEMENT BY THE BANK WITH MRS. EVALINE NEWSOME AS RIGHTFUL OWNER OF THE PROCEEDS OF THE CHECKS IN QUESTION AND WHICH CHECKS THE BANK CASHED ON FORGED ENDORSEMENTS, WHICH SETTLEMENT, INCLUDING A RELEASE OF THE UNITED STATES FROM ALL CLAIM BY MRS. NEWSOME ARISING UNDER OR IN CONNECTION WITH SAID CHECKS, WOULD RENDER UNNECESSARY ANY FURTHER PROSECUTION OF THE SUIT AGAINST THE SAID BANK--- THE BANK, AS IT WERE, HAVING SATISFIED THE DEMANDS OF MRS. NEWSOME UNDER SAID CHECKS.

IN THE CIRCUMSTANCES THUS APPEARING THERE IS SUGGESTED THAT THE PENDING SUIT BE DISMISSED AT DEFENDANT'S COSTS ON THE BASIS OF (1) A PROPER SHOWING THAT THE BANK HAS SATISFIED THE DEMANDS OF MRS. NEWSOME UNDER THE INVOLVED CHECKS, A SUITABLE STATEMENT BY MRS. NEWSOME TO THAT EFFECT TO BE DELIVERED TO THE UNITED STATES ATTORNEY FOR FILING IN THE PROCEEDINGS, AND (2) THAT MRS. NEWSOME HAS RELEASED THE UNITED STATES FROM ANY AND ALL CLAIMS AND DEMANDS ARISING UNDER OR IN CONSEQUENCE OF THE SUBJECT CHECKS-- - SAID RELEASE TO BE FOR FILING IN THE ADMINISTRATIVE OFFICE CONCERNED.

UPON RECEIPT OF EVIDENCE THAT THE FOREGOING SUGGESTION SHALL HAVE BEEN COMPLIED WITH, CREDIT WILL BE ALLOWED IN THE ACCOUNTS OF THE TREASURER OF THE UNITED STATES FOR THE AMOUNT OF THE CHECKS INVOLVED.