A-59319, FEBRUARY 5, 1935, 14 COMP. GEN. 591

A-59319: Feb 5, 1935

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WITHDRAWAL OF POSTAL FUNDS BY POSTMASTER FROM INSOLVENT NATIONAL BANK - LIABILITY OF THE UNITED STATES WHEN A FORMER POSTMASTER HAS ACCOUNTED FOR ALL MONEYS BELONGING TO THE UNITED STATES AND HIS ACCOUNTS HAVE BEEN CLOSED. THERE IS NO LIABILITY ON THE UNITED STATES TO REIMBURSE AN INSOLVENT NATIONAL BANK FOR FEDERAL MONEYS TEMPORARILY DEPOSITED IN THE BANK AT THE RISK OF THE POSTMASTER UNDER AUTHORITY OF SECTION 3847. WHICH ARE ALLEGED TO HAVE BEEN ILLEGALLY WITHDRAWN BY THE POSTMASTER SUBSEQUENT TO THE DATE OF THE SUSPENSION OF THE BANK. 1935: THIS OFFICE IS IN RECEIPT OF A LETTER DATED NOVEMBER 30. AS FOLLOWS: YOUR ATTENTION IS DIRECTED TO CERTAIN DEPOSITS OF GOVERNMENT FUNDS CARRIED IN THE CLOSED OLD NATIONAL BANK OF WAUPACA.

A-59319, FEBRUARY 5, 1935, 14 COMP. GEN. 591

WITHDRAWAL OF POSTAL FUNDS BY POSTMASTER FROM INSOLVENT NATIONAL BANK - LIABILITY OF THE UNITED STATES WHEN A FORMER POSTMASTER HAS ACCOUNTED FOR ALL MONEYS BELONGING TO THE UNITED STATES AND HIS ACCOUNTS HAVE BEEN CLOSED, THERE IS NO LIABILITY ON THE UNITED STATES TO REIMBURSE AN INSOLVENT NATIONAL BANK FOR FEDERAL MONEYS TEMPORARILY DEPOSITED IN THE BANK AT THE RISK OF THE POSTMASTER UNDER AUTHORITY OF SECTION 3847, REVISED STATUTES, AS AMENDED BY THE ACT OF MAY 27, 1908, 35 STAT. 415, WHICH ARE ALLEGED TO HAVE BEEN ILLEGALLY WITHDRAWN BY THE POSTMASTER SUBSEQUENT TO THE DATE OF THE SUSPENSION OF THE BANK.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, FEBRUARY 5, 1935:

THIS OFFICE IS IN RECEIPT OF A LETTER DATED NOVEMBER 30, 1934, FROM THE ASSISTANT SUPERVISING RECEIVER, DIVISION OF INSOLVENT NATIONAL BANKS, OFFICE OF THE COMPTROLLER OF THE CURRENCY, HIS FILE DD-18, AS FOLLOWS:

YOUR ATTENTION IS DIRECTED TO CERTAIN DEPOSITS OF GOVERNMENT FUNDS CARRIED IN THE CLOSED OLD NATIONAL BANK OF WAUPACA, WISCONSIN, BY THE LOCAL POSTMASTER ON THE DATE OF THE SUSPENSION OF THE BANK DESCRIBED AS FOLLOWS:

CHART

W. J. NELSON, POSTMASTER, MONEY ORDER ACCOUNT ----------- $2,590.00

POST OFFICE , U.S. DEPARTMENT --------------------------- 700.15

THE ABOVE ACCOUNTS WERE NOT SECURED AND WERE INCLUDED AMONG OTHER UNSECURED LIABILITIES OF THE BANK.

THE OLD NATIONAL BANK OF WAUPACA, WISCONSIN, SUSPENDED BUSINESS ON JANUARY 27, 1933, AND NEVER THEREAFTER OPENED FOR NORMAL BANKING BUSINESS. UNDER THE FUNDAMENTAL LAW PERTAINING TO NATIONAL BANK ASSOCIATIONS ALL RIGHTS OF CREDITORS OF THE BANK ARE FIXED AS OF THE DATE OF SUSPENSION. SCOTT V. ARMSTRONG, 146 U.S. 499. WE HAVE BEEN ADVISED, HOWEVER, BY THE RECEIVER THAT SUBSEQUENT TO THE DATE OF THE SUSPENSION OF THE ABOVE BANK AND PRIOR TO HIS APPOINTMENT AS RECEIVER, THE LOCAL POSTMASTER WITHDREW THE ABOVE FUNDS, THE OFFICIALS IN CHARGE AND THE POSTMASTER APPARENTLY BEING UNDER THE IMPRESSION THAT THEY WERE EITHER SECURED OR ENTITLED TO PREFERENTIAL TREATMENT. INASMUCH AS ALL WITHDRAWALS OF FUNDS NOT AMPLY SECURED OR GIVEN A PREFERRED STATUS MADE SUBSEQUENT TO THE OFFICIAL CLOSING DATE OF THE BANK ARE CONSIDERED AS ILLEGAL PREFERENCES, THE RECEIVER WAS INSTRUCTED BY THIS OFFICE TO RESTORE THE ABOVE DEPOSITS TO THEIR ORIGINAL UNSECURED STATUS AS OF THE OFFICIAL CLOSING DATE OF THE BANK, ALLOW THE CREDITOR TO FILE A GENERAL CLAIM THEREFOR, AND TO RECOVER THE AMOUNTS OF THE ILLEGAL WITHDRAWALS IN CASH FOR THE BENEFIT OF ALL CREDITORS OF THE BANK.

WE HAVE BEEN ADVISED BY THE RECEIVER THAT A 50 PERCENT DIVIDEND HAS BEEN PAID THE CREDITORS OF THE BANK AND A PROPORTIONATE AMOUNT APPLIED ON THE RECOVERY DUE FROM THE LOCAL POSTMASTER IN CONNECTION WITH THE ABOVE WITHDRAWALS LEAVING A BALANCE OF $1,645.07 STILL DUE. WE HAVE BEEN REQUESTED BY THE DIVISION OF DEPOSITS, OFFICE OF THE SECRETARY OF THE TREASURY, TO REFER THIS MATTER TO YOUR OFFICE, AND WE REQUEST THAT YOU KINDLY GIVE SAME YOUR EARLY CONSIDERATION AND ADVISE US WHEN WE MAY EXPECT REIMBURSEMENT OF THE BALANCE DUE. YOUR EARLY ATTENTION TO THIS MATTER WILL BE GREATLY APPRECIATED.

POSTMASTERS ARE PERSONALLY RESPONSIBLE FOR ALL MONEYS OF THE UNITED STATES COMING INTO THEIR POSSESSION AND WHILE SECTION 3847, REVISED STATUTES, AS AMENDED BY THE ACT OF MAY 27, 1908, 35 STAT. 415, PERMITS THEM TO DEPOSIT SUCH MONEYS, TEMPORARILY, IN NATIONAL AND STATE BANKS, IT STIPULATES SPECIFICALLY THAT SUCH DEPOSITING SHALL BE AT THE RISK OF THE POSTMASTER. IT IS UNDERSTOOD THAT THE LETTER SUPRA THAT THE MONEYS DEPOSITED IN THE OLD NATIONAL BANK OF WAUPACA BY THE FORMER POSTMASTER WERE DEPOSITED UNDER AUTHORITY OF THE AFOREMENTIONED STATUTE AND AT HIS RISK. IT IS NOW STATED THAT AFTER THE BANK SUSPENDED BUSINESS THE OFFICERS IN CHARGE THEREOF RETURNED THE AMOUNT SO DEPOSITED TO THE POSTMASTER, THEY "APPARENTLY BEING UNDER THE IMPRESSION THAT THEY WERE EITHER SECURED OR ENTITLED TO PREFERENTIAL TREATMENT," AND APPARENTLY ON THE THEORY SUCH OFFICERS WERE MISTAKEN AS TO THE LEGAL STATUS OF SUCH MONEYS AND IN CONSEQUENCE ERRED IN SO RETURNING SAME TO THE POSTMASTER, IT IS BELIEVED THE UNITED STATES SHOULD REPLACE THE AMOUNT WITH THE RECEIVER, LESS, OF COURSE, THE AMOUNT OF THE 50 PERCENT DIVIDEND HERETOFORE DECLARED AND APPLIED.

THE RECORDS OF THIS OFFICE DISCLOSES THAT THE FORMER POSTMASTER, W. J. NELSON, HAS ACCOUNTED FOR ALL MONEYS BELONGING TO THE UNITED STATES DISCLOSED BY THE ACCOUNTS AS HAVING COME INTO HIS POSSESSION WHILE POSTMASTER AT WAUPACA, AND IN SUCH CONNECTION MADE NO CLAIM FOR CREDIT DUE TO LOSS SUSTAINED BY HIM THROUGH BANK FAILURE. THE FORMER POSTMASTER'S ACCOUNTS ARE NOT, OF COURSE, SUBJECT TO REOPENING ON THE BASIS OF A CLAIM MADE BY OR ON BEHALF OF THE RECEIVER OF THE BANK.

ON THE PRESENT RECORD THERE APPEARS NO ACTION PROPER FOR THIS OFFICE TO TAKE IN THE MATTER.