A-64305, SEPTEMBER 11, 1935, 15 COMP. GEN. 191

A-64305: Sep 11, 1935

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LATER THE SUBROGEE'S SUCCESSORS ARE TO BE INDEMNIFIED FOR THE FULL AMOUNT PAID THE INSURED. PLUS ACCRUED INTEREST AT THE RATE SPECIFIED IN THE BOND FROM THE DATE OF SAID PAYMENT BY THE DEPARTMENT TO THE DATE TO WHICH INTEREST IS ALLOWED THE SUBROGEE'S SUCCESSORS BY THE TREASURY DEPARTMENT. THE BOND CONTAINED IN THE REGISTERED LETTER WHICH WAS STOLEN WHILE IN THE CUSTODY OF THE POSTAL SERVICE WAS INSURED BY THE MAIL INSURANCE OFFICE FOR $1. SUBSEQUENTLY CLAIM WAS FILED BY DE LANOY. SUCCESSORS TO THE MAIL INSURANCE OFFICE WITH THE UNITED STATES TREASURY DEPARTMENT FOR RELIEF ON ACCOUNT OF THE LOSS OF THE BOND AND THE DEPARTMENT HAS BEEN ADVISED THAT THE TREASURY DEPARTMENT IS PREPARED TO GRANT RELIEF AS SOON AS THE POST OFFICE DEPARTMENT HAS OBTAINED A PROPER REFUND OF THE POSTAL INDEMNITY ALLOWED.

A-64305, SEPTEMBER 11, 1935, 15 COMP. GEN. 191

POST OFFICE DEPARTMENT - LOSS OF INSURED REGISTERED LETTER - INSURANCE COMPANY INDEMNIFIED WHERE THE POST OFFICE DEPARTMENT HAS PAID TO THE SUBROGEE OF THE SENDER OF A REGISTERED LETTER CONTAINING A UNITED STATES REGISTERED VICTORY BOND A PORTION OF THE TOTAL LOSS SUSTAINED BY IT, AND LATER THE SUBROGEE'S SUCCESSORS ARE TO BE INDEMNIFIED FOR THE FULL AMOUNT PAID THE INSURED, PURSUANT TO THE ACT OF APRIL 9, 1934, 48 STAT. 571, AMENDING SECTION 3702, REVISED STATUTES, THE POST OFFICE DEPARTMENT SHOULD CLAIM REFUND OF THE AMOUNT PAID THE SUBROGEE, PLUS ACCRUED INTEREST AT THE RATE SPECIFIED IN THE BOND FROM THE DATE OF SAID PAYMENT BY THE DEPARTMENT TO THE DATE TO WHICH INTEREST IS ALLOWED THE SUBROGEE'S SUCCESSORS BY THE TREASURY DEPARTMENT, LESS THE PRO RATA SHARE OF THE EXPENSES, EXCLUSIVE OF ATTORNEY FEES INVOLVED IN ESTABLISHING THE CLAIM FOR RELIEF.

COMPTROLLER GENERAL MCCARL TO THE POSTMASTER GENERAL, SEPTEMBER 11, 1935:

CONSIDERATION HAS BEEN GIVEN YOUR LETTER OF JULY 31, 1935, AS FOLLOWS:

ON JANUARY 9, 1922, THE POST OFFICE DEPARTMENT PAID INDEMNITY IN THE SUM OF $50.00 TO THE MAIL INSURANCE OFFICE, SUBROGEE OF THE SENDER OF A REGISTERED LETTER CONTAINING A UNITED STATES REGISTERED VICTORY BOND WITH A FACE VALUE OF $1,000.00. THE BOND CONTAINED IN THE REGISTERED LETTER WHICH WAS STOLEN WHILE IN THE CUSTODY OF THE POSTAL SERVICE WAS INSURED BY THE MAIL INSURANCE OFFICE FOR $1,000.00. THE COMPANY PAID INDEMNITY IN THE SUM OF $1,000.00 TO THE OWNER OF THE BOND. SUBSEQUENTLY CLAIM WAS FILED BY DE LANOY, KIPP AND SWAN, INC., SUCCESSORS TO THE MAIL INSURANCE OFFICE WITH THE UNITED STATES TREASURY DEPARTMENT FOR RELIEF ON ACCOUNT OF THE LOSS OF THE BOND AND THE DEPARTMENT HAS BEEN ADVISED THAT THE TREASURY DEPARTMENT IS PREPARED TO GRANT RELIEF AS SOON AS THE POST OFFICE DEPARTMENT HAS OBTAINED A PROPER REFUND OF THE POSTAL INDEMNITY ALLOWED.

IT WILL BE NOTED THAT THE CASE IS ANALOGOUS TO THAT WHICH FORMED THE BASIS OF YOUR DECISION OF JULY 20, 1933, INVOLVING A LETTER CONTAINING LIBERTY BONDS MAILED BY THE FIRST NATIONAL BANK OF FORESTVILLE, NEW YORK.

IT IS UNDERSTOOD THAT THIS DEPARTMENT IS ENTITLED TO A REFUND OF THE POSTAL INDEMNITY ALLOWED, MINUS ITS PRO RATA SHARE OF THE COST OF OBTAINING RELIEF THROUGH THE TREASURY DEPARTMENT, BUT QUESTION HAS BEEN RAISED WHETHER THE DEPARTMENT IS NOT ALSO ENTITLED TO THE INTEREST ON $50.00 AT THE RATE SPECIFIED IN THE BOND, VIZ., 4 3/4 PERCENT FROM JANUARY 9, 1922, UNTIL THE DATE RELIEF IS GRANTED BY THE TREASURY DEPARTMENT. THIS QUESTION IS, OF COURSE, PREDICATED UPON THE UNDERSTANDING THAT DE LANOY, KIPP AND SWAN, INC., WILL RECEIVE INTEREST FOR THE PERIOD IN QUESTION ON THE ENTIRE $1,000.00 WHEREAS ITS ACTUAL EXPENDITURE AMOUNTED TO ONLY $950.00.

AN EXPRESSION OF YOUR VIEWS AS TO THE PROPRIETY OF INCLUDING INTEREST IN THE DEPARTMENT'S CLAIM FOR A REFUND IS REQUESTED. AN EARLY REPLY WILL BE APPRECIATED.

THE RECORDS INDICATE THAT THE POSTAL INDEMNITY OF $50 WAS PAID TO THE MAIL INSURANCE OFFICE UPON THE SHOWING THAT SAID OFFICE HAD REIMBURSED THE OWNER OF THE STOLEN BOND IN THE FULL AMOUNT OF $1,000, AND WAS UNABLE TO OBTAIN A DUPLICATE THEREOF FROM THE TREASURY DEPARTMENT FOR THE REASON THAT THE FORM OF THE ASSIGNMENT ON THE BOND REMOVED THE PROTECTION WHICH REGISTRATION AFFORDED. IT APPEARS THAT PURSUANT TO THE PROVISIONS OF THE ACT OF APRIL 9, 1934, 48 STAT. 571, AMENDING SECTION 3702, REVISED STATUTES, RELIEF IS NOW AVAILABLE IN THE FORM OF PAYMENT OF THE AMOUNT OF THE BOND, INCLUDING ACCRUED UNPAID INTEREST.

IN CASES WHERE COMMERCIAL INSURANCE IS CARRIED ON REGISTERED MAIL MATTER THE DEPARTMENT WOULD APPEAR TO STAND IN THE POSITION OF COINSURER WITH THE INSURANCE COMPANY. THIS POSITION IS RECOGNIZED IN THE ACT OF JUNE 28, 1932, 47 STAT. 338, CHANGING THE FORMER ADMINISTRATIVE PRACTICE OF INDEMNIFYING INSURANCE COMPANIES FOR LOSSES ON POLICIES COVERING REGISTERED MAIL, BY PROVIDING THAT CLAIMS FOR INDEMNITY INVOLVING REGISTERED MAIL, WHICH IS ALSO INSURED WITH COMMERCIAL INSURANCE COMPANIES OR OTHER INSURING AGENCIES, SHALL BE ADJUSTED BY THE POST OFFICE DEPARTMENT ON A PRO RATA BASIS AS A COINSURER WITH SUCH COMPANIES OR AGENCIES.

IN THE PRESENT CASE THE POST OFFICE DEPARTMENT HAS PAID $50 OF A TOTAL LOSS OF $1,000, AND IF THE INSURANCE COMPANY IS ALLOWED TO RETAIN THE INTEREST ACCRUING ON THE ENTIRE AMOUNT OF $1,000 AFTER THE DATE OF PAYMENT OF THE POSTAL INDEMNITY, IT WILL PROFIT AT THE EXPENSE OF THE POST OFFICE DEPARTMENT TO THE EXTENT OF THE INTEREST ON THE LATTER'S CONTRIBUTION OF $50 CONTRARY TO THE WELL-SETTLED PRINCIPLE OF THE EQUITABLE DOCTRINE OF SUBROGATION.

ACCORDINGLY I HAVE TO ADVISE THAT THE POST OFFICE DEPARTMENT SHOULD CLAIM REFUND OF THE $50 INDEMNITY, PLUS ACCRUED INTEREST ON $50 AT 4 3/4 PERCENT FROM JANUARY 9, 1922, TO THE DATE TO WHICH INTEREST IS ALLOWED BY THE TREASURY DEPARTMENT ON THE $1,000 BOND, LESS YOUR DEPARTMENT'S PRO RATA SHARE OF THE EXPENSES, EXCLUSIVE OF ATTORNEY FEES, INVOLVED IN ESTABLISHING THE CLAIM FOR RELIEF. SEE MY DECISION OF APRIL 27, 1934, A- 49330, A-54200, TO YOU.