A-76223, JULY 23, 1936, 16 COMP. GEN. 57

A-76223: Jul 23, 1936

Additional Materials:

Contact:

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

 

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

A CHECK IS DRAWN BY A DISBURSING OFFICER. AS FOLLOWS: THERE IS QUOTED HEREWITH A LETTER RECEIVED FROM THE TREASURY DEPARTMENT RELATIVE TO THE SETTLEMENT TO BE MADE UPON ADJUSTED-SERVICE CERTIFICATE NO. 3700712. WHICH WAS ISSUED TO CECIL LEROY HOWE. A-70009: "REFERENCE IS MADE TO ADJUSTED-SERVICE CERTIFICATE NO. 3700712. WHICH WAS ISSUED BY THE VETERANS' ADMINISTRATION TO VETERAN CECIL LEROY HOWE UNDER APPLICATION NUMBER A-70009. THE ADJUSTED-SERVICE CERTIFICATE WAS SUBMITTED BY THE BANK TO THE VETERANS' ADMINISTRATION FOR REDEMPTION. A PROPER VOUCHER WAS PREPARED AND PRESENTED TO THE DIVISION OF DISBURSEMENT FOR PAYMENT. THE CHECK WAS INADVERTENTLY DRAWN IN FAVOR OF THE VETERAN INSTEAD OF THE BANK.

A-76223, JULY 23, 1936, 16 COMP. GEN. 57

ADJUSTED SERVICE CERTIFICATES - BANK LOANS - INTEREST ON DELAYED REPAYMENTS - DISBURSING OFFICER'S LIABILITY FOR CHARGES IN EXCESS OF ADJUSTED SERVICE CERTIFICATE AMOUNT WHERE, IN CONNECTION WITH A LOAN OBTAINED BY A VETERAN FROM A BANK ON THE SECURITY OF HIS ADJUSTED SERVICE CERTIFICATE, A CHECK IS DRAWN BY A DISBURSING OFFICER, IN REPAYMENT OF THE LOAN, PAYABLE TO THE VETERAN RATHER THAN THE BANK, PAYMENT TO THE BANK, UPON FAILURE OF THE VETERAN TO MAKE REIMBURSEMENT OR PAYMENT TO THE BANK, MAY BE MADE IN THE AMOUNT OF THE LOAN WITH INTEREST TO DATE OF ISSUANCE OF THE CHECK, THE VETERAN'S CERTIFICATE TO BE CHARGED WITH THE AMOUNT OF THE CHECK UNLAWFULLY ISSUED AND NEGOTIATED BY HIM, PLUS THE AMOUNT OF HIS UNPAID LOAN, WITH INTEREST TO SEPTEMBER 30, 1931, AS PRESCRIBED BY SECTION 2 OF THE ADJUSTED COMPENSATION PAYMENT ACT, 1936, 49 STAT. 1100, THE DISBURSING OFFICER ISSUING THE UNLAWFUL CHECK TO BE HELD FOR SUCH CHARGES IN EXCESS OF THE AMOUNT OF THE ADJUSTED SERVICE CERTIFICATE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, JULY 23, 1936:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF JUNE 2, 1936, AS FOLLOWS:

THERE IS QUOTED HEREWITH A LETTER RECEIVED FROM THE TREASURY DEPARTMENT RELATIVE TO THE SETTLEMENT TO BE MADE UPON ADJUSTED-SERVICE CERTIFICATE NO. 3700712, DATED APRIL 1, 1931, IN THE AMOUNT OF $1,570, WHICH WAS ISSUED TO CECIL LEROY HOWE, A-70009:

"REFERENCE IS MADE TO ADJUSTED-SERVICE CERTIFICATE NO. 3700712, DATED APRIL 1, 1931, IN THE AMOUNT OF $1,570.00, WHICH WAS ISSUED BY THE VETERANS' ADMINISTRATION TO VETERAN CECIL LEROY HOWE UNDER APPLICATION NUMBER A-70009, AND TO THE LOAN OBTAINED ON THE SECURITY THEREOF BY THE VETERAN FROM THE NATIONAL BANK OF COMMERCE, SEATTLE, WASHINGTON. THE ADJUSTED-SERVICE CERTIFICATE WAS SUBMITTED BY THE BANK TO THE VETERANS' ADMINISTRATION FOR REDEMPTION, AND A PROPER VOUCHER WAS PREPARED AND PRESENTED TO THE DIVISION OF DISBURSEMENT FOR PAYMENT. SINCE THE NAME OF THE VETERAN ALSO APPEARED ON THE VOUCHER, THE CHECK WAS INADVERTENTLY DRAWN IN FAVOR OF THE VETERAN INSTEAD OF THE BANK, MAILED TO HIM, AND PAID BY THE TREASURER OF THE UNITED STATES ON JUNE 29, 1935.

"THE MARINE BAN CORPORATION OF SEATTLE, WASHINGTON, OF WHICH THE NATIONAL BANK OF COMMERCE IS A BRANCH, WROTE TO THE VETERANS' ADMINISTRATION ON DECEMBER 3, 1935, IN REPLY TO A LETTER OF NOVEMBER 29, 1935, REPORTING THE NONRECEIPT OF CHECK NO. 17787, DATED JUNE 17, 1935, SYMBOL NO. 99240, FOR $864.29, AND UPON INVESTIGATION THE CIRCUMSTANCES STATED ABOVE WERE DISCLOSED.

"MR. HOWE WAS REQUESTED TO MAKE REFUND OF THE FULL AMOUNT OF $864.29, ERRONEOUSLY PAID TO HIM, AND IN REPLY HE STATED THAT WHEN THE CHECK IN QUESTION WAS RECEIVED HE THOUGHT IT REPRESENTED THE LAST HALF OF THE BONUS, AND FURTHER STATED THAT HE COULD MAKE NO REPAYMENT AS HE WAS WITHOUT FUNDS AND UNEMPLOYED. THE BANK HAD BEEN INFORMED THAT AS SOON AS REFUND WAS OBTAINED FROM MR. HOWE, SETTLEMENT WOULD BE MADE.

"ON JANUARY 25, 1936, IN A LETTER TO THE VETERANS' ADMINISTRATION, IT WAS REQUESTED THAT A CHARGE BE PLACED AGAINST THIS VETERANS' ADJUSTED-SERVICE CERTIFICATE, IN ORDER THAT ANY AMOUNT TO BE PAID TO THIS VETERAN UNDER EXISTING LEGISLATION OR UNDER NEW LEGISLATION THEN BEING CONSIDERED FOR IMMEDIATE FULL PAYMENT OF ADJUSTED-SERVICE CERTIFICATES, MAY BE APPLIED TO THE OVERPAYMENT. ON FEBRUARY 25, 1936, THE DIVISION OF DISBURSEMENT WAS ADVISED THAT THE RECORDS OF THE VETERANS' ADMINISTRATION HAD BEEN FLASHED TO PREVENT FURTHER PAYMENTS TO THE VETERAN IN THE EVENT OF RECEIPT OF AN APPLICATION FOR FULL PAYMENT OF BENEFITS PROVIDED IN THE ADJUSTED COMPENSATION PAYMENT ACT, 1936.

"THE ENTIRE MATTER WAS REFERRED TO THE SECRET SERVICE DIVISION, TREASURY DEPARTMENT, ON FEBRUARY 27, 1936, REQUESTING THAT THE VETERAN BE CONTACTED FOR THE PURPOSE OF OBTAINING FULL REPAYMENT OF THE OVERPAYMENT OR ANY PART THEREOF, AND TO DETERMINE FACTS CONCERNING HIS FINANCIAL STATUS WITH A VIEW TO DETERMINING WHETHER OR NOT HE WILL BE ABLE TO REPAY AT SOME FUTURE TIME. ALSO, IT WAS REQUESTED THAT IF THE OPERATIVE FAILED TO OBTAIN ANY REFUND OR DEFINITE ARRANGEMENTS FOR REFUND, THAT HE OBTAIN AN EXECUTED VETERANS' ADMINISTRATION ADJUSTED COMPENSATION FORM 1701, APPLICATION FOR SETTLEMENT OF ANY AMOUNT DUE AND PAYABLE ON HIS ADJUSTED SERVICE CERTIFICATE NO. 3700712. AS IT WAS NOT POSSIBLE TO OBTAIN REFUND, THE APPLICATION, FORM 1701, WAS EXECUTED BY CECIL LEROY HOWE, WHO ALSO STATED VERBALLY THAT IF, AT SOME FUTURE TIME, HE IS IN A POSITION TO DO SO, HE WILL MAKE SOME SORT OF RESTITUTION.

"THERE IS ATTACHED COPY OF LETTER DATED MAY 4, 1936, FROM KERR, MCCORD AND CAREY, ATTORNEYS, SEATTLE, WASHINGTON, TOGETHER WITH COPIES OF OTHER COMMUNICATIONS CONCERNING THIS MATTER. YOU WILL NOTE THAT FORMAL DEMAND IS MADE UPON THE UNITED STATES OF AMERICA ON BEHALF OF THE NATIONAL BANK OF COMMERCE, SEATTLE, WASHINGTON, THAT PAYMENT BE MADE AT ONCE TO THE BANK OF $864.29, PLUS INTEREST ACCRUED ON THE LOAN FROM AND AFTER JUNE 17, 1935.

"FORM 1701, EXECUTED BY VETERAN CECIL LEROY HOWE, IS ENCLOSED AND ADVICE IS REQUESTED AS TO: (1) THE MANNER IN WHICH THE AMOUNT DUE THEREUNDER MAY BE PROPERLY PAID TO THE BANK, (2) WHETHER IT IS COMPULSORY TO PAY INTEREST TO THE BANK FROM THE DATE THE CHECK WAS ERRONEOUSLY DRAWN TO THE VETERAN INSTEAD OF THE BANK, (3) THE SOURCE FROM WHICH THE AMOUNT DUE THE BANK OVER AND ABOVE THE AMOUNT WHICH MAY BE PAID FROM THE PROCEEDS OF THE ADJUSTED SERVICE CERTIFICATE WILL BE PROCURED. CONSIDERATION IN THIS CONNECTION SHOULD BE GIVEN TO THE FACT THAT THE BANK WILL NO DOUBT REFUSE TO ACCEPT ANY REMITTANCE UNLESS IT REPRESENTS FULL PAYMENT.

"IN VIEW OF THE QUESTION OF ACCRUING INTEREST IN THIS CASE, AN EARLY REPLY WILL BE PRECIATED.'

THE APPLICATION (FORM 1701) EXECUTED BY THE VETERAN IS BEING HELD IN THE FILES OF THIS ADMINISTRATION. NO ACTION WILL BE TAKEN TOWARD THE SETTLEMENT ON THE BASIS OF THIS APPLICATION UNDER THE PROVISIONS OF THE ADJUSTED COMPENSATION PAYMENT ACT, 1936, PENDING THE RECEIPT BY THIS OFFICE OF A DECISION SETTING FORTH THE ACTION TO BE TAKEN IN THE CASE.

SECTION 502 (C) OF THE WORLD WAR ADJUSTED COMPENSATION ACT OF MAY 19, 1924, 43 STAT. 126, PROVIDES AS FOLLOWS:

IF THE VETERAN DOES NOT PAY THE PRINCIPAL AND INTEREST OF THE LOAN UPON ITS MATURITY, THE BANK HOLDING THE NOTE AND CERTIFICATE MAY, AT ANY TIME AFTER MATURITY OF THE LOAN BUT NOT BEFORE THE EXPIRATION OF SIX MONTHS AFTER THE LOAN WAS MADE, PRESENT THEM TO THE DIRECTOR. THE DIRECTOR MAY, IN HIS DISCRETION, ACCEPT THE CERTIFICATE AND NOTE, CANCEL THE NOTE (BUT NOT THE CERTIFICATE), AND PAY THE BANK, IN FULL SATISFACTION OF ITS CLAIM, THE AMOUNT OF THE UNPAID PRINCIPAL DUE IT, AND THE UNPAID INTEREST ACCRUED, AT THE RATE FIXED IN THE NOTE, UP TO THE DATE OF THE CHECK ISSUED TO THE BANK. * * *

SECTION 2 OF THE ADJUSTED COMPENSATION PAYMENT ACT, 1936, DATED JANUARY 27, 1936, 49 STAT. 1100, PROVIDES AS FOLLOWS:

IN THE CASE OF EACH LOAN HERETOFORE MADE PURSUANT TO LAW BY THE ADMINISTRATOR OF VETERANS' AFFAIRS AND/OR BY ANY NATIONAL BANK, OR ANY BANK OR TRUST COMPANY INCORPORATED UNDER THE LAWS OF ANY STATE, TERRITORY, POSSESSION, OR THE DISTRICT OF COLUMBIA, UPON THE SECURITY OF AN ADJUSTED- SERVICE CERTIFICATE, ANY INTEREST UNPAID ACCRUED SUBSEQUENT TO SEPTEMBER 30, 1931, THAT HAS BEEN OR, IN CONSEQUENCE OF EXISTING LAW, WOULD BE CHARGED AGAINST THE FACE VALUE OF SUCH CERTIFICATE SHALL BE CANCELED INSOFAR AS THE VETERAN IS CONCERNED, NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY. ANY INTEREST ON ANY SUCH LOAN PAYABLE TO ANY SUCH BANK OR TRUST COMPANY SHALL BE PAID BY THE ADMINISTRATOR OF VETERANS' AFFAIRS.

IN THE CASE OF ANY SUCH LOAN WHICH IS UNPAID AND HELD BY A BANK OR TRUST COMPANY AT THE TIME OF FILING AN APPLICATION UNDER THIS ACT, THE BANK OR TRUST COMPANY HOLDING THE NOTE AND CERTIFICATE SHALL, UPON NOTICE FROM THE ADMINISTRATOR OF VETERANS' AFFAIRS, PRESENT THEM TO THE ADMINISTRATOR FOR PAYMENT TO THE BANK OR TRUST COMPANY IN FULL SATISFACTION OF ITS CLAIM FOR THE AMOUNT OF UNPAID PRINCIPAL AND UNPAID INTEREST, EXCEPT THAT IF THE BANK OR TRUST COMPANY, AFTER SUCH NOTICE, FAILS TO PRESENT THE CERTIFICATE AND NOTE TO THE ADMINISTRATOR WITHIN FIFTEEN DAYS AFTER THE MAILING OF THE NOTICE, SUCH INTEREST SHALL BE PAID ONLY UP TO THE FIFTEENTH DAY AFTER THE MAILING OF SUCH NOTICE.

SINCE THE BANK IS NOT AT FAULT IN THIS CASE, AND AS THE LOAN MADE BY THE BANK TO THE VETERAN HAS NOT BEEN PAID EITHER BY THE VETERAN OR THE UNITED STATES, AND AS THE VETERAN HAS FILED APPLICATION UNDER THE ADJUSTED COMPENSATION PAYMENT ACT, 1936, SETTLEMENT WITH THE BANK UNDER THE TERMS OF THAT STATUTE IS AUTHORIZED IRRESPECTIVE OF THE ACTION OF THE TREASURY DEPARTMENT IN ERRONEOUSLY ISSUING TO THE VETERAN THE CHECK INTENDED FOR THE BANK IN REDEMPTION OF THE LOAN. INTEREST IS PAYABLE TO THE BANK AS PROVIDED BY THE TERMS OF THE FIRST QUOTED STATUTE "UP TO THE DATE OF THE CHECK ISSUED TO THE BANK.'

THERE SHOULD BE CHARGED AGAINST THE VETERAN'S ADJUSTED SERVICE CERTIFICATE--- BEING A LIEN AUTHORIZED BY LAW AGAINST SAME--- THE AMOUNT, $864.29, OF THE CHECK UNLAWFULLY ISSUED TO, AND CASHED BY HIM, PLUS $785, THE AMOUNT OF HIS UNPAID LOAN, PLUS INTEREST ON SAID LOAN UP TO AND INCLUDING SEPTEMBER 30, 1931. THE EXCESS OF THESE CHARGES OVER THE AMOUNT OF THE ADJUSTED-SERVICE CERTIFICATE WILL BE FOR DISALLOWANCE IN THE ACCOUNTS OF THE DISBURSING OFFICER, THERE BEING LIABILITY UPON THE DISBURSING OFFICER FOR HAVING MADE PAYMENT NOT IN ACCORDANCE WITH THE ADMINISTRATIVELY CERTIFIED VOUCHER, RESULTING IN THE OVERPAYMENT. CF. 13 COMP. GEN. 469 AND AUTHORITIES THEREIN CITED.

Sep 27, 2016

Sep 22, 2016

Sep 21, 2016

Sep 20, 2016

Looking for more? Browse all our products here