A-63141, NOVEMBER 6, 1939, 19 COMP. GEN. 496

A-63141: Nov 6, 1939

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IS SUBJECT TO THE QUALIFICATION THAT THE PAYEE MUST BE FREE OF ANY RESPONSIBILITY FOR THE ERRONEOUS PAYMENT AND THAT IT RESULTED FROM SOME ADMINISTRATIVE ERROR. WHERE A CHECK REPRESENTING A LOAN ON AN ADJUSTED SERVICE CERTIFICATE WAS MAILED TO THE VETERAN AT THE ADDRESS GIVEN BY HIM AND DELIVERED TO THAT ADDRESS BUT WAS OBTAINED AND NEGOTIATED BY AN IMPOSTOR. PAYMENT OF THE UNRECOVERED BALANCE OF THE PROCEEDS OF THE CHECK TO THE RIGHTFUL PAYEE IS NOT AUTHORIZED UNLESS AND UNTIL SUCH BALANCE IS RECOVERED FROM THE IMPOSTOR OR SUBSEQUENT ENDORSERS. 3 COMP. 1939: I HAVE YOUR LETTER OF SEPTEMBER 29. AS FOLLOWS: REFERENCE IS MADE TO A LETTER. YOU ARE ADVISED THAT THE INFORMATION CONTAINED IN PARAGRAPH 4 OF DECISION A-63141 DATED APRIL 5.

A-63141, NOVEMBER 6, 1939, 19 COMP. GEN. 496

PAYMENTS - ERRONEOUS - PAYMENT TO RIGHTFUL PAYEE PRIOR TO REFUND - ADJUSTED COMPENSATION LOANS - CHECK DELIVERY TO ADDRESS GIVEN BY VETERAN THE RULE THAT A CLAIM BY A RIGHTFUL PAYEE OF A GOVERNMENT CHECK WHICH HAS BEEN CASHED BY ANOTHER UNDER A FORGED ENDORSEMENT MAY BE ALLOWED WITHOUT AWAITING RECOVERY OF THE ERRONEOUS PAYMENT, IS SUBJECT TO THE QUALIFICATION THAT THE PAYEE MUST BE FREE OF ANY RESPONSIBILITY FOR THE ERRONEOUS PAYMENT AND THAT IT RESULTED FROM SOME ADMINISTRATIVE ERROR, AND WHERE A CHECK REPRESENTING A LOAN ON AN ADJUSTED SERVICE CERTIFICATE WAS MAILED TO THE VETERAN AT THE ADDRESS GIVEN BY HIM AND DELIVERED TO THAT ADDRESS BUT WAS OBTAINED AND NEGOTIATED BY AN IMPOSTOR, PAYMENT OF THE UNRECOVERED BALANCE OF THE PROCEEDS OF THE CHECK TO THE RIGHTFUL PAYEE IS NOT AUTHORIZED UNLESS AND UNTIL SUCH BALANCE IS RECOVERED FROM THE IMPOSTOR OR SUBSEQUENT ENDORSERS. 3 COMP. GEN. 453 DISTINGUISHED.

COMPTROLLER GENERAL BROWN TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, NOVEMBER 6, 1939:

I HAVE YOUR LETTER OF SEPTEMBER 29, 1939, AS FOLLOWS:

REFERENCE IS MADE TO A LETTER, A-63141, DATED SEPTEMBER 7, 1939, FROM THE ACTING COMPTROLLER GENERAL, RELATING TO THE MATTER OF PAYING TO JOHN BORTKEWICZ, A-1,780,363, THE SUM OF $146.22, THE UNRECOVERED AMOUNT OF CHECK NO. 1,148,312 DRAWN FOR $205.22 IN HIS FAVOR ON AUGUST 25, 1931 BY J. B. SCHOMMER, SYMBOL 99-220.

IN CONNECTION WITH THE LAST PARAGRAPH OF THE LETTER, YOU ARE ADVISED THAT THE INFORMATION CONTAINED IN PARAGRAPH 4 OF DECISION A-63141 DATED APRIL 5, 1939, WAS NOT OVERLOOKED, BUT AS IT WAS BELIEVED THAT THIS ADMINISTRATION HAD NO AUTHORITY TO CERTIFY A SECOND PAYMENT, THE MATTER WAS REFERRED TO THE TREASURY DEPARTMENT FOR APPROPRIATE ACTION AS HAS BEEN THE PROCEDURE IN ALL SIMILAR CASES. THIS VIEW THAT THE VETERANS' ADMINISTRATION IS WITHOUT AUTHORITY TO DRAW A VOUCHER FOR A CHECK COVERING SUCH PAYMENT APPEARS TO BE CONFIRMED BY THE ACTING COMPTROLLER GENERAL'S DECISION A-91318, ADDRESSED TO THE SECRETARY OF THE TREASURY ON JUNE 8, 1938, THE PRINCIPLE OF WHICH, AS IT RELATES TO DUPLICATE PAYMENT FROM PUBLIC FUNDS, SEEMS TO BE APPLICABLE IN THE INSTANT CASE. THE PERTINENT PART OF THAT DECISION IS QUOTED FOR YOUR REFERENCE AS FOLLOWS:

"NEITHER THE ADJUSTED COMPENSATION PAYMENT ACT, 1936, NOR ANY OTHER ACT AUTHORIZES THE VETERANS' ADMINISTRATION TO AGAIN CONSIDER THE SAME APPLICATION OF THE TRUE VETERAN FOR THE PURPOSE OF AGAIN CERTIFYING THE AMOUNT DUE ON THE CANCELED ADJUSTED SERVICE CERTIFICATE TO THE TREASURY DEPARTMENT FOR A DUPLICATE PAYMENT FROM PUBLIC FUNDS. SINCE, APPARENTLY, NO FUNDS ARE AVAILABLE IN THE PUBLIC DEBT SERVICE ACCOUNT FOR THE ISSUANCE OF A NEW CHECK TO THE RIGHTFUL PAYEE, PAYMENT MAY NOT BE MADE TO HIM UNTIL RECOVERY IS HAD EITHER FROM THE POSTMASTER OR FROM THE WRONGFUL NEGOTIATOR * * * OR UNTIL FUNDS ARE MADE SPECIFICALLY AVAILABLE BY LAW FOR THE PURPOSE.'

ANOTHER CASE INVOLVING THE QUESTION OF DUPLICATE PAYMENT FROM PUBLIC FUNDS WAS BROUGHT TO THE ACTING COMPTROLLER GENERAL'S ATTENTION IN A LETTER DATED OCTOBER 6, 1938, CONCERNING UNDERPAYMENT OF $88.25 TO JUAN VAZQUEZ A-1,756,853 AND CONSEQUENT OVERPAYMENT OF THAT AMOUNT TO JUAN VAZQUEZ, A-2,335,398, DUE TO THE FACT THAT THE PACKAGES CONTAINING THE BONDS AND CHECKS ISSUED TO THESE VETERANS WERE INTERCHANGED IN DELIVERY TO THE VETERANS. REPLY WAS MADE IN DECISION A-97792 DATED OCTOBER 18, 1938 THAT "* * * THE RULE STATED IN THE DECISION OF JUNE 8, 1938, A 91318, 17 COMP. GEN. 1059, IS APPLICABLE TO THIS CASE TO PRECLUDE ISSUANCE OF A SUPPLEMENTAL ADJUSTED SERVICE CERTIFICATE. HOWEVER, THERE IS NO LEGAL OBJECTION TO THE PAYMENT TO THE TRUE VETERAN OF $60, CHARGEABLE TO THE ADJUSTED SERVICE CERTIFICATE FUND, AND $28.25 CHARGEABLE TO THE SPECIAL DEPOSIT ACCOUNT, TO THE CREDIT OF WHICH IT IS UNDERSTOOD THE AMOUNT RECOVERED FROM THE OTHER VETERAN HAS BEEN DEPOSITED.' THE VETERANS' ADMINISTRATION'S AUTHORITY FOR CERTIFYING THE AMOUNT OF $88.25IN FAVOR OF THE UNDERPAID VETERAN IN THAT CASE APPEARS TO REST IN THE FACT THAT THAT AMOUNT HAD BEEN RECOVERED AND DEPOSITED TO THE CREDIT OF THE FUND FROM WHICH THE SUM WAS PAYABLE TO THE RIGHTFUL VETERAN, A CIRCUMSTANCE NOT EXISTENT IN THE INSTANT CASE.

IN THE INSTANT CASE THE VOUCHER FOR ISSUANCE OF THE CHECK WAS CORRECTLY DRAWN; THE PAYMENT OF THE CHECK WAS WRONGFULLY OBTAINED BY FORGERY, AND THE AMOUNT OF $146.22 REMAINS UNRECOVERED. IT APPEARED THEREFORE THAT A REISSUANCE OF THE VOUCHER BY THE VETERANS' ADMINISTRATION WAS PRECLUDED SINCE, AS STATED IN DECISION A-91318, DATED JUNE 8, 1938," NEITHER THE ADJUSTED COMPENSATION PAYMENT ACT, 1936, NOR ANY OTHER ACT AUTHORIZES THE VETERANS' ADMINISTRATION TO AGAIN CONSIDER THE SAME APPLICATION OF THE TRUE VETERAN FOR THE PURPOSE OF AGAIN CERTIFYING THE AMOUNT DUE ON THE CANCELED ADJUSTED SERVICE CERTIFICATE TO THE TREASURY DEPARTMENT FOR A DUPLICATE PAYMENT FROM PUBLIC FUNDS.' IT WAS ASSUMED THAT THIS PROHIBITORY REGULATION APPLIED AGAINST RECERTIFICATION FOR A DUPLICATE PAYMENT FROM PUBLIC FUNDS ON A PAID LOAN CHECK AS WELL AS ON A CANCELED ADJUSTED SERVICE CERTIFICATE, THE REGULATION IN EITHER CASE RESTING ON THE FACT THAT THERE IS NO APPROPRIATION AVAILABLE FOR SUCH DUPLICATE PAYMENTS.

IN VIEW OF THE ABOVE QUOTED DECISIONS, IT IS REQUESTED THAT THIS ADMINISTRATION BE INFORMED WHETHER DUPLICATE PAYMENT MAY BE MADE IN THIS CASE ON A NOTE ( FORM 1185) WHICH WAS PROPERLY EXECUTED AND SIGNED BY THE VETERAN AND CORRECTLY CERTIFIED TO THE TREASURY DEPARTMENT. IF YOUR DECISION IS IN THE AFFIRMATIVE, INFORMATION IS ALSO REQUESTED AS TO WHETHER IN THE FUTURE, THE APPROPRIATION, ADJUSTED SERVICE CERTIFICATE FUND, V.A., IS AVAILABLE FOR MAKING DUPLICATE PAYMENTS ON ALL FORGED CHECKS.

THE CASE CONSIDERED IN A-91318, JUNE 8, 1938, DID NOT INVOLVE A PAYMENT BY THE VETERANS' ADMINISTRATION DIRECTLY TO THE VETERAN, THE CHECK IN THAT CASE HAVING BEEN ISSUED BY A FEDERAL RESERVE BANK IN PAYMENT OF BONDS ISSUED TO THE VETERAN UPON SURRENDER OF HIS ADJUSTED SERVICE CERTIFICATE FOR PAYMENT UNDER THE ADJUSTED COMPENSATION PAYMENT ACT, 1936, 49 STAT. 1099, THAT IS TO SAY, THERE WAS INVOLVED IN THAT CASE A CHARGE AGAINST THE PUBLIC DEBT FUND AND NOT A CHARGE AGAINST APPROPRIATIONS UNDER YOUR CONTROL. CONSEQUENTLY, IT WAS HELD IN THAT DECISION THAT YOUR ADMINISTRATION HAD NO FURTHER CONTROL OVER THE SUBJECT MATTER. YOU MAY BE ADVISED, HOWEVER, THAT BY DECISION OF MAY 11, 1939, IN THE SAME CASE, THE SECRETARY OF THE TREASURY WAS AUTHORIZED TO ISSUE A NEW CHECK TO THE VETERAN FOR THE AMOUNT INVOLVED, IT HAVING BEEN ESTABLISHED THAT THE PAYEE WAS IN NO WAY AT FAULT IN THE MATTER. SEE ALSO, DECISION A-93037, DATED MARCH 11, 1938. IT CAN THUS BE SEEN THAT THE DECISION CITED IN YOUR LETTER--- RELATING TO BOND PAYMENT CASES--- HAS NO APPLICATION IN THE INSTANT MATTER.

THE CHECK IN THE CASE OF JOHN BORTKEWICZ WAS A DIRECT CHARGE AGAINST THE ADJUSTED SERVICE CERTIFICATE FUND, VETERANS' ADMINISTRATION, REPRESENTING A LOAN OBTAINED UPON SECURITY OF HIS ADJUSTED SERVICE CERTIFICATE AS DISTINGUISHED FROM A PAYMENT OF BONDS ISSUED TO THE VETERAN UNDER THE ADJUSTED COMPENSATION PAYMENT ACT, 1936. IN 3 COMP. GEN. 453, CITED IN THE DECISION OF APRIL 5, 1939, IT WAS HELD:

IN VIEW OF THE LONG-CONTINUED AND GENERALLY RECOGNIZED PRACTICE WHICH IS NOT PROHIBITED BY ANY LAW ENACTED BY CONGRESS, CLAIMS BY THE RIGHTFUL PAYEE OF A GOVERNMENT CHECK WHICH HAS BEEN CASHED BY ANOTHER UNDER A FORGED ENDORSEMENT, MAY CONTINUE TO BE ALLOWED BY THE GENERAL ACCOUNTING OFFICE, IF DRAWN AGAINST A LUMP-SUM APPROPRIATION, WITHOUT AWAITING THE RECLAMATION OF THE AMOUNT.

WHILE THE RULE SO SET FORTH HAS SINCE BEEN CONSISTENTLY FOLLOWED IT IS SUBJECT TO THE QUALIFICATION, OF COURSE, THAT THE PAYEE MUST BE FREE OF ANY RESPONSIBILITY FOR THE ERRONEOUS PAYMENT AND THAT THE ERRONEOUS PAYMENT RESULTED FROM SOME ADMINISTRATIVE ERROR.

IN DECISION A-53895, MARCH 2, 1934, IT WAS HELD:

IT THUS APPEARS CLEAR THAT THE NAVY DEPARTMENT MAILED THE SUBJECT CHECK TO THE ADDRESS SPECIFICALLY GIVEN BY YOU AND THAT IT WAS DELIVERED AT SAID PLACE. THE FACT THAT THE CHECK WAS INTERCEPTED AT THE PLACE TO WHICH IT WAS SO ADDRESSED AND DELIVERED AND THAT IT WAS FORGED AND NEGOTIATED AT THE BANK WHICH HAS SINCE CLOSED ITS DOORS, AND THAT THERE IS DELAY IN RECOVERING THE AMOUNT FROM SAID BANK DUE TO THE LIQUIDATION THEREOF NOW IN PROGRESS AND THAT THERE IS SOME ELEMENT OF UNCERTAINTY AS TO WHETHER THE ENTIRE AMOUNT OF THE CHECK MAY BE RECOVERED, AFFORD NO LEGAL BASIS FOR A SECOND PAYMENT TO YOU OF THE AMOUNT YET TO BE RECLAIMED. THIS CASE IS TO BE DISTINGUISHED FROM ONE WHERE THROUGH NEGLIGENCE ORLACK OF PROPER CARE ON THE PART OF THE UNITED STATES A CHECK IS MAILED TO A WRONG ADDRESS IN COMPLIANCE WITH A REQUEST OF AN IMPOSTOR OR ARISING FROM A CONFUSION OF FILES IN THE ADMINISTRATIVE OFFICE, AND SUCH LIKE--- A SECOND PAYMENT IN THE LATTER CLASS USUALLY BEING ALLOWABLE UPON A SHOWING THAT THE RIGHTFUL PAYEE WAS IN NOWISE AT FAULT IN THE MATTER. COMPARE 16 COMP. GEN. 533.

THE RECORD IN THE PRESENT CASE HAS BEEN REEXAMINED AND I FIND THAT THERE WAS APPARENTLY OVERLOOKED IN THE DECISION OF APRIL 5, 1939--- IN WHICH THERE WAS AUTHORIZED THE ISSUANCE OF A NEW CHECK FOR THE UNRECOVERED AMOUNT OF THE LOAN CHECK--- THE FACT THAT THE CHECK WAS MAILED TO MR. BORTKEWICZ AT THE ADDRESS GIVEN BY HIM AND DELIVERED TO THAT ADDRESS, THUS DISTINGUISHING THAT CASE FROM THE ONE CONSIDERED IN THE DECISION REPORTED IN 3 COMP. GEN. 453, SUPRA, IN WHICH THE CHECK WAS MAILED TO AN ADDRESS GIVEN BY AN IMPOSTOR, AND BRINGING THE INSTANT CASE WITHIN THE RULE STATED IN THE DECISION OF MARCH 2, 1934, A-53895, SUPRA. IN THE CIRCUMSTANCES THE PAYMENT OF THE BALANCE OF THE PROCEEDS OF THE INVOLVED CHECK TO MR. BORTKEWICZ IS NOT AUTHORIZED UNLESS AND UNTIL SUCH BALANCE SHALL HAVE BEEN RECOVERED FROM THE IMPOSTOR OR SUBSEQUENT ENDORSERS. MR. BORTKEWICZ IS BEING ADVISED TO THAT EFFECT BY LETTER TODAY.