B-126111, FEB. 16, 1956

B-126111, FEB. 16, 1956

TO HONORABLE POSTMASTER GENERAL:

REFERENCE IS MADE TO LETTER DATED NOVEMBER 17, 1955, AND ENCLOSURES, FROM THE DEPUTY POSTMASTER GENERAL, REQUESTING OUR DECISION AS TO WHETHER FROM THE DEPUTY POSTMASTER GENERAL, REQUESTING OUR DECISION AS TO WHETHER THE POST OFFICE DEPARTMENT EXCEEDED ITS AUTHORITY IN REFUSING PAYMENT OF 95 MONEY ORDERS TOTALING $8,334 IN THE HANDS OF MR. TED LEWIN ISSUED IN MARCH, APRIL, AND MAY OF 1953.

THE FACTS IN THE CASE AS REPORTED IN THE CORRESPONDENCE ACCOMPANYING THE LETTER AND ADDUCED FROM CORRESPONDENCE SUBSEQUENTLY RECEIVED FROM AND A PERSONAL INTERVIEW WITH MR. MURRAY M. CHOTINER, ATTORNEY FOR MR. TED LEWIN, ARE AS FOLLOWS. THE MONEY ORDERS IN QUESTION WERE ACQUIRED BY MR. LEWIN IN THE COURSE OF A BUSINESS VENTURE IN MANILA, PHILIPPINE ISLANDS, AND HE HAS STATED IN AN AFFIDAVIT THAT HE ACQUIRED EACH OF THE MONEY ORDERS FOR VALUE RECEIVED. THROUGH A MISUNDERSTANDING, THE MONEY ORDERS WERE ENDORSED BY EACH OF THE PAYEES IN THE PLACE PROVIDED, AND, IN THE BLANK PROVIDING FOR HIS ENDORSEMENT TO AN ENDORSEE DESIGNATED "PAY TO ---- -------- ," THE PAYEE ALSO SIGNED HIS NAME. THEREAFTER, A RUBBER STAMP SECOND ENDORSEMENT WAS PLACED ON THE ORDERS READING "PAY TO THE FIRST NATIONAL BANK, RENO, NEVADA, MAIN BRANCH, TO THE ACCOUNT OF LARRY SEMENZA.' AN AFFIDAVIT IN THE FILE EXECUTED BY MR. SEMENZA DISCLAIMS ANY PERSONAL INTEREST IN THE MONEY ORDERS AND STATES THAT THE ACCOUNT IN THE FIRST NATIONAL BANK, RENO, NEVADA, WAS MAINTAINED BY MR. TED LEWIN. IT IS THE CONTENTION OF THE CLAIMANT THAT OVER A PERIOD OF YEARS THE POST OFFICE DEPARTMENT HAS RECOGNIZED THE CUSTOM OF HAVING MONEY ORDERS CASHED BY MERCHANTS WHO IN TURN DEPOSIT THE MONEY TO THEIR BANK ACCOUNTS FOR CREDIT.

THE LETTER OF NOVEMBER 17 MAKES REFERENCE TO POSTMASTER GENERAL'S ORDER NO. 51872, NOW COVERED BY SECTION 171.32 OF THE POSTAL MANUAL, WHICH REQUIRES THE ENCASHMENT BY AN ENDORSEE OF MONEY ORDERS ISSUED AT MILITARY POST OFFICES ONLY AT MILITARY POST OFFICES OR POST OFFICES LOCATED IN THE UNITED STATES, ITS POSSESSIONS, OR TERRITORIES. SINCE THE GREATER PORTION OF THE POSTAL MONEY ORDERS HELD BY MR. LEWIN WERE ISSUED FROM MILITARY POST OFFICES, THE PRACTICE OF CASHING ANY MONEY ORDERS AT BANKS BY ENDORSEES AS SET OUT BY THE CLAIMANT WOULD NOT BE PERMITTED.

SECTION 723, TITLE 39, U.S.C. PROVIDES AS FOLLOWS:

"THE PAYEE OF A MONEY ORDER MAY, BY HIS WRITTEN INDORSEMENT THEREON, DIRECT IT TO BE PAID TO ANY OTHER PERSON, AND THE POSTMASTER ON WHOM IT IS DRAWN SHALL PAY THE SAME TO THE PERSON THUS DESIGNATED, PROVIDED HE SHALL FURNISH SUCH PROOF AS THE POSTMASTER GENERAL MAY PRESCRIBE THAT THE INDORSEMENT IS GENUINE, AND THAT HE IS THE PERSON EMPOWERED TO RECEIVE PAYMENT; BUT MORE THAN ONE INDORSEMENT SHALL RENDER AN ORDER INVALID AND NOT PAYABLE, AND THE HOLDER, TO OBTAIN PAYMENT, MUST APPLY IN WRITING TO THE POSTMASTER GENERAL FOR A NEW ORDER IN LIEU THEREOF, RETURNING THE ORIGINAL ORDER, AND MAKING SUCH PROOF OF THE GENUINENESS OF THE INDORSEMENTS AS THE POSTMASTER GENERAL MAY REQUIRE.'

INASMUCH AS THE MONEY ORDERS CONTAINED MORE THAN ONE ENDORSEMENT, THEY WERE INVALID AS TO THE HOLDER WHO IS REQUIRED UNDER THE ABOVE QUOTED SECTION TO APPLY IN WRITING TO THE POSTMASTER GENERAL FOR A NEW ORDER MAKING SUCH PROOF OF THE GENUINENESS OF THE ENDORSEMENT AS THE POSTMASTER GENERAL MAY REQUIRE. MR. LEWIN HAS BEEN UNABLE TO LOCATE THE PAYEES OF THE MONEY ORDERS IN QUESTION AND APPARENTLY ON THE BASIS OF THESE FACTS YOUR DEPARTMENT HAS REFUSED PAYMENT OF THE MONEY ORDERS UNTIL PROOF IS PRESENTED THAT THE ENDORSEMENTS ARE GENUINE. REFERENCE IS MADE TO OUR DECISION B-119497, DATED JUNE 3, 1955, AND IT IS STATED THAT IT MAY BE PERTINENT TO THIS MATTER. THE FACTS IN THE CASE AT HAND MAY BE DISTINGUISHED FROM THOSE CONSIDERED BY US IN THE DECISION CITED IN THAT IN THE CASE INVOLVED THEREIN THE MONEY ORDERS WERE CONFISCATED BY THE PHILIPPINE GOVERNMENT AND NO CONSIDERATION WAS PAID BY THAT GOVERNMENT FOR THE MONEY ORDERS. HERE MR. LEWIN IN HIS AFFIDAVIT AVERS THAT HE PAID VALUE FOR THE MONEY ORDERS AND THE DEPARTMENT'S LETTER OF NOVEMBER 17 STATES THAT THE FACTUAL STATEMENTS ARE BELIEVED TO BE CORRECT.

SINCE THE MONEY ORDERS BEAR MORE THAN ONE ENDORSEMENT, THE CLAIMANT, MR. LEWIN, UNDER THE LAW QUOTED ABOVE, MUST SATISFY YOUR DEPARTMENT INSOFAR AS ESTABLISHING PROOF OF THE GENUINENESS OF THE ENDORSEMENTS. THE MANNER IN WHICH SUCH PROOF MUST BE ESTABLISHED IS A MATTER TO BE DECIDED BY THE POSTMASTER GENERAL. IT HAS BEEN ASCERTAINED INFORMALLY THAT YOUR DEPARTMENT REQUIRES CORROBORATION OF THE ENDORSEMENTS BY THE PAYEES. THE CLAIMANT HAS BEEN UNABLE TO MEET THE REQUIREMENTS OF YOUR DEPARTMENT. THE CIRCUMSTANCES, WE FAIL TO SEE THAT THE POST OFFICE DEPARTMENT HAS EXCEEDED ITS AUTHORITY IN REFUSING TO PAY THE CLAIM INVOLVED.