A-58297, NOVEMBER 12, 1934, 14 COMP. GEN. 379

A-58297: Nov 12, 1934

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WHICH WERE DRAWN TO THE ORDER OF MRS. YOU WERE AUTHORIZED IN LETTER OF THIS OFFICE. TO RECLAIM THE FULL AMOUNT OF THE CHECKS AND DEPOSIT SAME TO THE CREDIT OF THE APPROPRIATIONS AGAINST WHICH THE CHECKS WERE CHARGED. IN YOUR LETTER YOU REPORT THAT THE PAYEE HAS REFUNDED IN SEVERAL INSTALLMENTS THE TOTAL SUM OF $50 AND THAT YOU ARE ENCOUNTERING DIFFICULTY IN EFFECTING RECOVERY FROM THE ENDORSING BANKS. IT APPEARS THAT RECLAMATION PROCEEDINGS ON THE CHECKS ARE BEING RESISTED BY THE CASHING BANKS IN THE STATE OF CALIFORNIA ON THE GROUND THAT THE NEGOTIABLE- INSTRUMENTS LAW OF THAT STATE. IN VIEW OF WHICH IT IS CONTENDED THAT IN ISSUING THE CHECKS HERE IN QUESTION. THE UNITED STATES WARRANTED THAT THE PAYEE WAS THEN UNREMARRIED AND.

A-58297, NOVEMBER 12, 1934, 14 COMP. GEN. 379

CHECKS - LIABILITY OF INDORSERS AS TO LEGENDS THE LEGEND "AS UNREMARRIED WIDOW" ON A COMPENSATION CHECK ISSUED TO THE WIDOW OF A WORLD WAR VETERAN UNDER THE TERMS OF SECTION 201 (2) OF THE WORLD WAR VETERANS' ACT, AS AMENDED BY THE ACT OF MARCH 4, 1925, 43 STAT. 1306, PROVIDING THAT SUCH PAYMENTS SHALL CONTINUE ONLY UNTIL THE REMARRIAGE OF THE WIDOW, CHARGES THE BANK CASHING THE CHECK WITH KNOWLEDGE OF THE STATUTORY LIMITATION, AND RENDERS IT LIABLE TO THE UNITED STATES ON ITS CONTRACT OF INDORSEMENT AND ATTENDANT WARRANTIES IN EVENT OF PAYMENT BY THE BANK TO THE PAYEE AFTER HER REMARRIAGE.

COMPTROLLER GENERAL MCCARL TO THE TREASURER OF THE UNITED STATES, NOVEMBER 12, 1934:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF SEPTEMBER 27, 1934, AWS-C, REQUESTING DECISION WHETHER RECLAMATION PROCEEDINGS SHOULD BE PRESSED WITH RESPECT TO SEVEN VETERANS' ADMINISTRATION CHECKS, EACH IN THE AMOUNT OF $30, WHICH WERE DRAWN TO THE ORDER OF MRS. VIOLET RICKARD, AS UNREMARRIED WIDOW OF JOSEPH RICKARD, AND NEGOTIATED BY HER SUBSEQUENT TO HER REMARRIAGE WHICH OCCURRED ON MAY 19, 1931.

THE CHECKS IN QUESTION COVER DEATH COMPENSATION GRANTED TO THE PAYEE OVER THE PERIOD MAY 1, 1931, TO NOVEMBER 30, 1931, AS THE UNREMARRIED WIDOW OF JOSEPH RICKARD, XC-316369, PURSUANT TO SECTION 201 (A) OF THE WORLD WAR VETERANS' ACT, AS AMENDED, 43 STAT. 1305, THE AMOUNT OF EACH CHECK ($30) BEING THAT ALLOWED FOR A WIDOW WITH NO CHILD.

BASED UPON EVIDENCE SHOWING THAT THE PAYEE HAD REMARRIED ON MAY 19, 1931, WHICH ACT TERMINATED HER RIGHTS TO RECEIVE DEATH COMPENSATION, AND THAT THE CHECKS HAD BEEN NEGOTIATED BY HER SUBSEQUENT TO THIS DATE, YOU WERE AUTHORIZED IN LETTER OF THIS OFFICE, DATED NOVEMBER 7, 1933, TO RECLAIM THE FULL AMOUNT OF THE CHECKS AND DEPOSIT SAME TO THE CREDIT OF THE APPROPRIATIONS AGAINST WHICH THE CHECKS WERE CHARGED.

IN YOUR LETTER YOU REPORT THAT THE PAYEE HAS REFUNDED IN SEVERAL INSTALLMENTS THE TOTAL SUM OF $50 AND THAT YOU ARE ENCOUNTERING DIFFICULTY IN EFFECTING RECOVERY FROM THE ENDORSING BANKS. IT APPEARS THAT RECLAMATION PROCEEDINGS ON THE CHECKS ARE BEING RESISTED BY THE CASHING BANKS IN THE STATE OF CALIFORNIA ON THE GROUND THAT THE NEGOTIABLE- INSTRUMENTS LAW OF THAT STATE, SO FAR AS HERE APPLICABLE, PROVIDES IN EFFECT THAT THE MAKER OF A NEGOTIABLE INSTRUMENT ADMITS THE EXISTENCE OF THE PAYEE AND HIS THEN CAPACITY TO INDORSE, IN VIEW OF WHICH IT IS CONTENDED THAT IN ISSUING THE CHECKS HERE IN QUESTION, THE UNITED STATES WARRANTED THAT THE PAYEE WAS THEN UNREMARRIED AND, THEREFORE, HAD CAPACITY TO ENDORSE.

THE CONGRESS OF THE UNITED STATES HAS NEVER ENACTED LEGISLATION ADOPTING THE SO-CALLED "UNIFORM NEGOTIABLE-INSTRUMENT LAW" AS THE LAW OF THE UNITED STATES GOVERNMENT. THEREFORE, WHILE THE GOVERNMENT IN TRANSACTING ITS BUSINESS HAS FOLLOWED GENERALLY THE UNDERLYING PRINCIPLES OF WHAT IS KNOWN AS THE "UNIFORM NEGOTIABLE-INSTRUMENT LAW," THE FEDERAL GOVERNMENT HAS NOT SUBJECTED ITSELF TO THE STATUTES IN ANY PARTICULAR STATE (14 COMP. GEN. 212). HAVING IN VIEW THE FACT THAT THE GOVERNMENT IS NOT ALWAYS IMMEDIATELY NOTIFIED OF A PERSON'S REMARRIAGE IN A CASE OF THIS KIND, IT READILY BECOMES APPARENT THAT THERE FREQUENTLY ARISE CASES WHERE CHECKS MAY BE DRAWN TO A WOMAN AS UNREMARRIED WIDOW OF A PARTICULAR VETERAN WHEN THE PAYEE MAY IN FACT BE REMARRIED BUT NO EVIDENCE THEREOF IS BEFORE THE DEPARTMENT AT THE TIME OF THE ISSUANCE OF THE CHECK. HENCE, IT IS AT ONCE APPARENT THAT THE GOVERNMENT MAY NOT UNDERTAKE IN ALL EVENTS TO WARRANT THE EXISTENCE OF THE PAYEE IN THE MANNER IMPOSED BY THE STATE NEGOTIABLE INSTRUMENT LAW HERETOFORE REFERRED TO, AND IN THIS CONNECTION, IT MAY BE STATED PROPER NOTICE IS GIVEN THE BANK BY THE CHECK BEING MADE PAYABLE "AS UNREMARRIED WIDOW.'

SECTION 201 (2) OF THE WORLD WAR VETERANS' ACT, AS AMENDED, 43 STAT. 1306, PROVIDES THAT:

THE PAYMENT OF COMPENSATION TO A WIDOW SHALL CONTINUE UNTIL HER DEATH OR REMARRIAGE * * *.

IN CONSIDERING THE EFFECT OF THIS STATUTE IN RELATION TO A CASHING BANK'S LIABILITY ON A CHECK DRAWN TO THE ORDER OF A PARTICULAR PERSON "AS UNREMARRIED WIDOW" OF A CERTAIN VETERAN, THE FOLLOWING WAS STATED IN MY DECISION TO HON. CLARK W. THOMPSON, HOUSE OF REPRESENTATIVES, DATED JANUARY 4, 1934, A-47977:

* * * THE CROCKETT STATE BANK OF CROCKETT, TEXAS, WAS CHARGED WITH KNOWLEDGE OF THIS PUBLIC LAW TERMINATING THE RIGHT OF A WIDOW TO COMPENSATION UPON HER REMARRIAGE. IT IS TO BE REMEMBERED THAT THE LEGEND ON THE CHECKS "AS UNREMARRIED WIDOW OF JOHN HENRY CATRON" IS MORE THAN MERE DESCRIPTIO PERSONAE. IT CONNOTES THE LEGAL STATUS OF THE PAYEE'S TITLE TO THE CHECK. IN OTHER WORDS, IT IS THE EQUIVALENT OF SAYING THAT THE PAYEE HAS TITLE TO THE CHECK SO LONG AS SHE IS THE UNREMARRIED WIDOW OF THE VETERAN, BUT NOT OTHERWISE. HAVING IN MIND THE VAST NUMBER OF CHECKS MAILED MONTHLY BY THE VETERANS' ADMINISTRATION IN CASES SUCH AS HERE, IT READILY BECOMES APPARENT THAT IT IS IMPOSSIBLE FOR THE VETERANS' ADMINISTRATION TO DETERMINE IN EACH CASE BEFORE ISSUING THE CHECKS WHETHER THE MARITAL STATUS OF A WIDOW HAS CHANGED SINCE THE DATE OF THE LAST PAYMENT . BY OPERATION OF THE LEGAL WARRANTY OF TITLE TO THE CHECKS IT MAY BE SAID IN CASES SUCH AS HERE THAT THE FACTS WHICH DISENTITLE A PERSON TO RECEIVE MONEY ON CHECKS PRESENTED TO A BANK FOR PAYMENT ARE PRESUMED TO BE WITHIN THE KNOWLEDGE OF THE CASHING BANK AND NOT OF THE GOVERNMENT. THEREFORE SEEMS TO BE THE VIEW OF ADMINISTRATIVE OFFICERS CONCERNED THAT IT IS NOT UNREASONABLE TO REQUIRE A BANK TO WHICH SUCH CHECKS ARE PRESENTED FOR CASHING, TO MAKE INQUIRY WITH RESPECT TO WHETHER THE PERSON PRESENTING THE CHECK HAS TITLE THERETO BEFORE ACCEPTING SUCH CHECKS AND, PARTICULARLY, BEFORE PRESENTING THEM TO THE TREASURER OF THE UNITED STATES FOR PAYMENT. SEE IN THIS CONNECTION UNITED STATES V. NATIONAL EXCHANGE BANK OF PROVIDENCE, 214 U.S. 302.

THEREFORE, SINCE EACH OF THE CHECKS HERE CONTAINED INFORMATION ON ITS FACE THAT IT WAS DRAWN TO COVER COMPENSATION, THAT PAYMENT THEREON WAS DUE THE PAYEE "AS UNREMARRIED WIDOW OF JOHN HENRY CATRON," AND THAT THE CASHING BANK WAS CHARGEABLE WITH KNOWLEDGE OF THE PUBLIC LAW TERMINATING A WIDOW'S RIGHT TO COMPENSATION UPON HER REMARRIAGE, I AM CONSTRAINED TO HOLD THAT THE CASHING BANK IS LIABLE ON ITS CONTRACT OF INDORSEMENT AND THE ATTENDANT WARRANTIES WITH RESPECT TO THE SUBJECT CHECKS, AND THAT RECLAMATION OF THE PROCEEDS THEREOF, AS DIRECTED IN MY LETTER TO THE TREASURER OF THE UNITED STATES, DATED APRIL 14, 1933, A 47977, AS MODIFIED IN MY LETTER TO HIM OF EVEN DATE, SHOULD BE EFFECTED.

WHAT WAS STATED IN THE QUOTED PORTION OF MY DECISION, SUPRA, IS FOR APPLICATION HERE. RECLAMATION, THEREFORE, OF THE AMOUNT OF THE INVOLVED CHECKS SHOULD BE PRESSED--- THE AMOUNT OF $50 THUS FAR RECOVERED FROM THE PAYEE, TOGETHER WITH THE SUM OF $17.42 OF THE MAY 1931 CHECK, THE AMOUNT TO WHICH THE PAYEE WAS ENTITLED AT THE TIME OF HER REMARRIAGE (18/31 OF $30), TO BE TAKEN INTO CONSIDERATION IN THE ADJUSTMENT OF THE ACCOUNT UPON TERMINATION OF THE RECLAMATION PROCEEDINGS.