A-91318, JUNE 8, 1938, 17 COMP. GEN. 1059

A-91318: Jun 8, 1938

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WAS DELIVERED TO AND NEGOTIATED BY A WHITE PERSON OF SAME NAME UNDER CIRCUMSTANCES JUSTIFYING THE ABANDONMENT OF RECLAMATION PROCEEDINGS AND CHARGE WAS RAISED AGAINST THE POSTMASTER WHO MADE THE WRONGFUL DELIVERY OF THE CHECK AND THE WRONGFUL NEGOTIATOR. PAYMENT MAY NOT BE MADE TO THE RIGHTFUL PAYEE UNTIL RECOVERY IS HAD FROM EITHER THE POSTMASTER OR THE WRONGFUL NEGOTIATOR. OR UNTIL FUNDS ARE MADE SPECIFICALLY AVAILABLE THEREFOR. IS AS FOLLOWS: REFERENCE IS MADE TO YOUR DECISION A-91318. THE CASE WAS REFERRED TO YOU BY A LETTER DATED SEPTEMBER 30. STATING IN PART: "NONRECEIPT OF THE CHECK WAS REPORTED BY THE PAYEE AND IT WAS SHOWN BY THE INVESTIGATION THAT THE ITEM WAS RECEIVED AND NEGOTIATED BY A PERSON OF SIMILAR NAME.

A-91318, JUNE 8, 1938, 17 COMP. GEN. 1059

VETERANS' ADMINISTRATION - ADJUSTED COMPENSATION - CHECK FORGERY RECLAMATION ABANDONMENT - PAYMENT TO RIGHTFUL PAYEE WHERE CHECK, ISSUED UNDER THE ADJUSTED COMPENSATION PAYMENT ACT, 1936, 49 STAT. 1099, IN FAVOR AND ON THE APPLICATION OF A COLORED VETERAN IN PAYMENT OF ADJUSTED-SERVICE BONDS, WAS DELIVERED TO AND NEGOTIATED BY A WHITE PERSON OF SAME NAME UNDER CIRCUMSTANCES JUSTIFYING THE ABANDONMENT OF RECLAMATION PROCEEDINGS AND CHARGE WAS RAISED AGAINST THE POSTMASTER WHO MADE THE WRONGFUL DELIVERY OF THE CHECK AND THE WRONGFUL NEGOTIATOR, PAYMENT MAY NOT BE MADE TO THE RIGHTFUL PAYEE UNTIL RECOVERY IS HAD FROM EITHER THE POSTMASTER OR THE WRONGFUL NEGOTIATOR, OR UNTIL FUNDS ARE MADE SPECIFICALLY AVAILABLE THEREFOR, AS NEITHER THE ADJUSTED COMPENSATION PAYMENT ACT, 1936, NOR ANY OTHER ACT AUTHORIZES THE VETERANS' ADMINISTRATION TO AGAIN CONSIDER THE SAME APPLICATION OF THE VETERAN FOR CERTIFYING AN AMOUNT DUE TO THE TREASURY DEPARTMENT FOR A DUPLICATE PAYMENT ON THE CANCELED ADJUSTED SERVICE CERTIFICATE AFTER COMPLETE AND FINAL ACTION HAS BEEN TAKEN THEREON BY SAID ADMINISTRATION. A-84421, MARCH 19, 1937, DISTINGUISHED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE TREASURY, JUNE 8, 1938:

YOUR LETTER DATED APRIL 1, 1938, IS AS FOLLOWS:

REFERENCE IS MADE TO YOUR DECISION A-91318, DATED JANUARY 14, 1938, RELATIVE TO CHECK NO. 1,635, DATED JANUARY 30, 1937, FOR $250.00, DRAWN ON THE TREASURER OF THE UNITED STATES BY THE FEDERAL RESERVE BANK OF DALLAS, SYMBOL 16-881, TO THE ORDER OF WALTER S. SMITH.

THE CASE WAS REFERRED TO YOU BY A LETTER DATED SEPTEMBER 30, 1937, FROM THE TREASURER OF THE UNITED STATES, STATING IN PART:

"NONRECEIPT OF THE CHECK WAS REPORTED BY THE PAYEE AND IT WAS SHOWN BY THE INVESTIGATION THAT THE ITEM WAS RECEIVED AND NEGOTIATED BY A PERSON OF SIMILAR NAME, WHO FORMERLY RESIDED AT THE ADDRESS GIVEN ON THE CHECK AND WHOSE IDENTITY WAS PROPERLY ESTABLISHED AT THE BANK. THE BANK IS THEREFORE OBJECTING TO MAKING REFUND AND BECAUSE OF THE FINANCIAL STATUS OF THE NEGOTIATOR REIMBURSEMENT FROM THAT SOURCE APPEARS TO BE IMPROBABLE.

"IN VIEW OF THE ABOVE THE CHECK AND FILE ARE TRANSMITTED HEREWITH FOR APPROPRIATE ACTION WITH ADVICE TO THIS OFFICE.'

YOUR DECISION REFERRED TO, AFTER REVIEWING THE CASE, STATES:

"THE PROXIMATE CAUSE OF THE LOSS HERE COMPLAINED OF AND THE RESULTING FRAUD UPON THE GOVERNMENT WAS DUE TO THE APPARENT NEGLIGENCE ON THE PART OF THE MARSHALL, TEXAS, POSTMASTER IN FORWARDING AND DELIVERING THE CHECK TO SOMEONE OTHER THAN THE ADDRESSEE, WHO, IT IS SHOWN WAS WELL KNOWN TO THE POSTMASTER JUST ONE MONTH PRIOR TO THE RECEIPT OF THE CHECK WHEN THE BONDS WERE RECEIVED BY THE POSTMASTER AND DELIVERED TO THE PROPER ADDRESSEE IN PERSON, ALTHOUGH BOTH THE BONDS AND CHECK WERE ADDRESSED TO WALTER S. SMITH, ROUTE 6, MARSHALL, TEXAS. ACCORDINGLY, A CHARGE WILL BE RAISED AGAINST BOTH THE POSTMASTER AND THE WRONGFUL NEGOTIATOR AND ACTION TAKEN WITH A VIEW TO COLLECTION AS IN OTHER CASES.

"THE CASHING BANK HAS RESISTED THE EFFORTS MADE TO RECOVER THE AMOUNT INVOLVED INSISTING THAT IT REQUIRED PROPER IDENTIFICATION BEFORE CASHING THE CHECK FOR WALTER S. SMITH, WHITE, AND, IN THE CIRCUMSTANCES RECLAMATION PROCEEDINGS MAY BE ABANDONED. HOWEVER, IT DOES NOT APPEAR THAT THE RIGHTFUL PAYEE WAS IN ANY WAY AT FAULT IN THE WRONGFUL DELIVERY AND NEGOTIATION OF THE ORIGINAL CHECK AND, ACCORDINGLY, THIS OFFICE WILL NOT INTERPOSE OBJECTION TO THE DRAWING OF A NEW CHECK IN HIS FAVOR FOR THE AMOUNT INVOLVED, IF OTHERWISE PROPER.'

RECLAMATION PROCEEDINGS HAVING BEEN ABANDONED, NO FUNDS ARE AVAILABLE TO THE TREASURER FOR THE DRAWING OF THE NEW CHECK AS SUGGESTED BY YOU. THE MATTER IS THEREFORE SUBMITTED FOR CONSIDERATION AS TO WHETHER, IN VIEW OF YOUR DECISION IN THE CASE OF SAM WILSON, A 84421, DATED MARCH 19, 1937, THE CIRCUMSTANCES WARRANT SETTLEMENT BY THE ADMINISTRATOR OF VETERANS' AFFAIRS FROM THE APPROPRIATION,"ADJUSTED SERVICE CERTIFICATE FUND, VETERANS' ADMINISTRATION (OT873)," IN THE AMOUNT OF $250.00 IN FAVOR OF WALTER S. SMITH, THE RIGHTFUL PAYEE.

AS STATED IN MY LETTER OF JANUARY 14, 1938, THE RECORDS SHOW THAT ON DECEMBER 23, 1936, WALTER S. SMITH, A COLORED VETERAN, EXECUTED VETERANS' ADMINISTRATION APPLICATION FORM NO. 1701 BEFORE THE ASSISTANT POSTMASTER, MARSHALL, TEX., WHO IDENTIFIED THE APPLICANT AS THE VETERAN NAMED AND REFERRED TO THEREIN AS APPLYING FOR SETTLEMENT OF AMOUNTS DUE UNDER "THE ADJUSTED COMPENSATION PAYMENT ACT, 1936," 49 STAT. 1099.

THE RECORDS FURTHER SHOW, AS INDICATED BY VOUCHER NO. 9-10341, JANUARY 1937 ACCOUNTS OF G. F. ALLEN, UNDER SYMBOL NO. 99-280, THAT THE VETERANS' ADMINISTRATION CERTIFIED THE AMOUNT DUE THE VETERAN ON HIS ADJUSTED- SERVICE CERTIFICATE NO. 3,990,107, A-4,731,542, AS $264, UNDER ADMINISTRATIVE NO. 787,524. CHECK NO. 944,824, DATED JANUARY 9, 1937, FOR $14, DRAWN TO THE ORDER OF WALTER S. SMITH BY G. F. ALLEN, UNDERSYMBOL NO. 99-280, WAS ISSUED PURSUANT TO THIS VOUCHER IN PAYMENT OF PART OF THE AMOUNT DUE ON THE ADJUSTED-SERVICE CERTIFICATE AND THE BALANCE OF $250 WAS TRANSFERRED FROM THE VETERANS' ADMINISTRATION APPROPRIATION ACCOUNT "OT873 --- ADJUSTED SERVICE CERTIFICATE FUND, VETERANS' ADMINISTRATION" TO THE PUBLIC DEBT SERVICE ACCOUNT "3 PERCENT ADJUSTED-SERVICE BONDS OF 1945" TO COVER THE FIVE ADJUSTED SERVICE BONDS NOS. 26,395,362 TO 26,395,366, INCLUSIVE.

UPON REDEMPTION OF THE BONDS PAYMENT WAS MADE BY CHECK NO. 1,635 DATED JANUARY 30, 1937, FOR $250, DRAWN TO THE ORDER OF WALTER S. SMITH BY THE FEDERAL RESERVE BANK OF DALLAS, FISCAL AGENT OF THE UNITED STATES, UNDER SYMBOL 16-881, FROM FUNDS PREVIOUSLY PLACED TO THE CREDIT OF THE PUBLIC DEBT SERVICE ACCOUNT "3 PERCENT ADJUSTED SERVICE BONDS OF 1945.' IT THUS APPEARS THAT FUNDS TO COVER THESE PARTICULAR BONDS HAVE BEEN DRAWN FROM THE TREASURY AND PAID TO A PARTY NOT ENTITLED AND YOU NOW SUGGEST THAT THE AMOUNT OF THE REDEEMED BONDS BE AGAIN CERTIFIED FOR PAYMENT BY THE VETERANS' ADMINISTRATION FROM THE APPROPRIATION ACCOUNT "OT873--- ADJUSTED SERVICE CERTIFICATE FUND, VETERANS' ADMINISTRATION" CITING APPARENTLY AS AUTHORITY THE DECISION OF THIS OFFICE IN THE SAM WILSON CASE, A-84421 OF MARCH 19, 1937.

THE MATERIAL FACTS AND CIRCUMSTANCES OF THE TWO CASES ARE ENTIRELY DIFFERENT. IN THE WILSON CASE THE ADJUSTED-SERVICE CREDIT WAS FIRST CERTIFIED UPON AN APPLICATION SIGNED BY AN IMPOSTOR AND NOT BY THE VETERAN, SAM WILSON. CONSEQUENTLY, UNTIL AFTER THE DECISION OF MARCH 19, 1937, CERTIFICATION OF THE VETERAN'S ADJUSTED-SERVICE CREDIT WAS NOT MADE UNDER AND PURSUANT TO APPLICATION OF THE VETERAN, AS PROVIDED BY THE ADJUSTED COMPENSATION PAYMENT ACT, 1936. IN THE WALTER S. SMITH CASE THE RECORD CLEARLY SHOWS THAT ADMINISTRATIVE ACTION BY THE VETERANS' ADMINISTRATION WAS COMPLETE AND FINAL UPON THE DRAWING OF THE $14 CHECK AND THE TRANSFER OF $250 TO THE PUBLIC DEBT SERVICE ACCOUNT TO COVER REDEMPTION OF THE FIVE $50 BONDS. THEREAFTER ANY PAYMENT ON ACCOUNT OF THESE BONDS WAS PURELY A MATTER INVOLVING THE PUBLIC DEBT SERVICE, TREASURY DEPARTMENT, AND DID NOT, AS SEEMS TO BE SUGGESTED BY YOUR LETTER OF APRIL 1, 1938, AGAIN BECOME AN ADMINISTRATIVE MATTER FOR CONSIDERATION BY THE VETERANS' ADMINISTRATION.

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 AGAINST BOTH OF WHOM CHARGES HAVE BEEN RAISED BY THIS OFFICE, OR UNTIL FUNDS ARE MADE SPECIFICALLY AVAILABLE BY LAW FOR THE PURPOSE.

A COPY OF THIS LETTER IS BEING FURNISHED THE POSTMASTER GENERAL FOR HIS INFORMATION.