B-128793, AUG. 30, 1956

B-128793: Aug 30, 1956

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TO THE POSTMASTER GENERAL: REFERENCE IS MADE TO TWO LETTERS OF MAY 22. CONCERNING WHICH YOUR DESIGNEES HAVE CONSENTED TO THE ACTION PROPOSED AND HAVE REFERRED THE CASES FOR OUR CONSIDERATION. WAS BURGLARIZED AND A NUMBER OF BLANK MONEY ORDER FORMS. WERE STOLEN. THE CHARGES FOR WHICH REMISSION IS REQUESTED WERE THE RESULT OF THE CASHING OF FICTITIOUS MONEY ORDERS (NOS. 5-79. THAT NOTICE OF THE STOLEN FORMS WERE NOT RECEIVED AT THE POST OFFICES UNTIL AFTER THE MONEY ORDERS WERE CASHED. UNDER THESE CIRCUMSTANCES IT MAY BE CONSIDERED THAT THE PAYING CLERKS EXERCISED REASONABLE PRECAUTIONS AND THAT THE LOSSES CONNECTED WITH THESE PAYMENTS JUSTLY ARE NOT ATTRIBUTABLE TO ANY FAULT ON THE PART OF SUCH CLERKS.

B-128793, AUG. 30, 1956

TO THE POSTMASTER GENERAL:

REFERENCE IS MADE TO TWO LETTERS OF MAY 22, 1956, FROM THE ACTING ASSISTANT POSTMASTER GENERAL AND CONTROLLER, AND TWO LETTERS OF MAY 24, 1956, FROM THE ASSISTANT POSTMASTER GENERAL AND CONTROLLER, TRANSMITTING CASES NOS. 55623-K, 59247-K, 59536-K, AND 55625-K, RESPECTIVELY, FILE REFERENCE MO-WDB-OP, AS MATTERS REQUIRING THE EXERCISE OF THE POWERS OF THE POSTMASTER GENERAL OVER FINES, PENALTIES, FORFEITURES AND LIABILITIES PURSUANT TO 5 U.S.C. 383 AND 384, CONCERNING WHICH YOUR DESIGNEES HAVE CONSENTED TO THE ACTION PROPOSED AND HAVE REFERRED THE CASES FOR OUR CONSIDERATION.

IT APPEARS FROM THE INSPECTORS' REPORTS, INCLUDED IN THE FILES, THAT ON THE NIGHT OF NOVEMBER 16, 1953, THE POST OFFICE AT HIAWATHA, WEST VIRGINIA, WAS BURGLARIZED AND A NUMBER OF BLANK MONEY ORDER FORMS, TOGETHER WITH VALIDATING AND POSTMARKING STAMPS, WERE STOLEN. THE CHARGES FOR WHICH REMISSION IS REQUESTED WERE THE RESULT OF THE CASHING OF FICTITIOUS MONEY ORDERS (NOS. 5-79,440,905, 5-79,440,930, 5 79,440,904, 5- 79-440,908), IN THE AMOUNT OF $50 EACH, ISSUED ON THE STOLEN FORMS.

IN CASES NOS. 55623-K, 59536-K, AND 55625-K, THE FICTITIOUS MONEY ORDERS DESIGNATED THE PAYEE AS PERRY FOWLER, THE PERSON APPREHENDED AND SENTENCED FOR THE OFFENSE. THE RECORD DISCLOSES THAT PERRY FOWLER HAD A CONSIDERABLE AMOUNT OF IDENTIFICATION, INCLUDING HIS ARMY I.D. CARD, AND THAT NOTICE OF THE STOLEN FORMS WERE NOT RECEIVED AT THE POST OFFICES UNTIL AFTER THE MONEY ORDERS WERE CASHED. UNDER THESE CIRCUMSTANCES IT MAY BE CONSIDERED THAT THE PAYING CLERKS EXERCISED REASONABLE PRECAUTIONS AND THAT THE LOSSES CONNECTED WITH THESE PAYMENTS JUSTLY ARE NOT ATTRIBUTABLE TO ANY FAULT ON THE PART OF SUCH CLERKS. OUR OFFICE THEREFORE CONCURS IN THE VIEW OF YOUR DEPARTMENT THAT COLLECTION FROM THE PAYING CLERKS IN THESE CASES WOULD BE UNWARRANTED.

THE RECORD IN CASE NO. 59247-K, INVOLVING THE LIABILITY OF PAYING CLERK INEZ CARTER OF THE NEW TAZEWELL, TENNESSEE, POST OFFICE, SHOWS THAT MONEY ORDER NO. 5-79,440,930, DESIGNATING A FICTITIOUS PAYEE, OMER LUSK ASHURST, WAS CASHED BY PERRY FOWLER WITHOUT PROPER IDENTIFICATION. THE AMOUNT OF $50 WAS COLLECTED FROM CLERK CARTER, BUT AS INDICATED IN YOUR FINANCE OFFICER'S MEMORANDUM OF JULY 11, 1955, HIS OFFICE, UPON REVIEW OF THE EVIDENCE DID NOT AGREE THAT THE CLERK SHOULD BE HELD RESPONSIBLE AND THE AMOUNT WAS RETURNED TO HER. AMONG THE REASONS GIVEN FOR THE CONCLUSION THAT THE CLERK SHOULD NOT BE HELD RESPONSIBLE WAS THAT AS "THE SAME PERSON CASHING THIS ORDER ALSO CASHED A NUMBER OF ORDERS AT OTHER POST OFFICES AND BUSINESS HOUSES, IT IS THOUGHT THAT ADEQUATE IDENTIFICATION WAS PRESENTED.' WHEN IT IS CONSIDERED, SO FAR AS THE RECORD HERE INDICATES, THAT THE OTHER ORDERS REFERRED TO WERE MADE PAYABLE TO, AND CASHED BY PERRY FOWLER, WHO HAD CREDENTIALS AS TO HIS IDENTITY THE CONCLUSION REACHED AS TO THIS MONEY ORDER ISSUED TO A DIFFERENT PAYEE APPEARS UNWARRANTED. ACCORDINGLY, AND IN VIEW OF THE STATEMENT IN THE RECORD THAT THE ORDER WAS CASHED WITHOUT PROPER IDENTIFICATION, OUR OFFICE CANNOT AGREE, UPON THE PRESENT RECORD, THAT CLERK CARTER SHOULD BE RELIEVED OF RESPONSIBILITY FOR THE LOSS. THE FILE ON CASE NO. 59247-K IS THEREFORE RETURNED HEREWITH AND IT IS REQUESTED THAT THE MATTER BE GIVEN FURTHER CONSIDERATION BY YOUR DEPARTMENT WITH THE VIEW TO REQUIRING COLLECTION OF THE $50 INDEBTEDNESS FROM CLERK CARTER.

WHILE NO MENTION IS MADE IN THE LETTERS OF MAY 22 AND 24, 1956, RELATIVE TO THE POSSIBLE LIABILITY OF THE POSTMASTER AT HIAWATHA, WEST VIRGINIA, FROM WHOSE OFFICE THE FORMS WERE STOLEN, YOUR ATTENTION IS INVITED TO CHAPTER XVI, ARTICLE 14, OF THE POST OFFICE MANUAL, 1952 EDITION, WHICH READS AS FOLLOWS:

"POSTMASTERS WILL KEEP THEIR STOCK OF BLANK MONEY-ORDER FORMS IN THEIR OWN CUSTODY OR THAT OF A DESIGNATED SUPERVISORY EMPLOYEE, UNDER LOCK AND KEY, IN A PLACE OF SECURITY TO WHICH UNAUTHORIZED PERSONS DO NOT HAVE ACCESS. POSTMASTERS WILL BE HELD RESPONSIBLE FOR ANY LOSS ARISING THROUGH DISREGARD OF THESE INSTRUCTIONS.

"IF A POSTMASTER IS WITHOUT ADEQUATE FACILITIES TO PROTECT HIS STOCK OF MONEY-ORDER FORMS, HE MAY PLACE THEM IN A VAULT OF A LOCAL BANK OR BUSINESS HOUSE WITHOUT EXPENSE TO THE DEPARTMENT IF THEY ARE CONTAINED IN A LOCKED RECEPTACLE THAT CANNOT EASILY BE REMOVED, BUT SO DOING WILL NOT RELIEVE A POSTMASTER OF RESPONSIBILITY FOR THEIR LOSS.'

IN A REPORT OF INSPECTOR C. N. RUDOLPH, TO E. D. CLAGGETT, POST OFFICE INSPECTOR AT DAYTON, OHIO, UNDER DATE OF JANUARY 25, 1954, IT WAS STATED, IN PART, THAT:

"* * * THE POSTMASTER AT HIAWATHA WAS NEGLIGENT IN THAT SHE KEPT THE SUPPLY OF BLANK MONEY ORDER FORMS IN AN UNLOCKED DESK COMPARTMENT ALTHOUGH SHE HAD A PERSONALLY OWNED SAFE IN THE OFFICE. * * * SHE WAS NOT KEEPING THE POSTAGE STAMPS AND BLANK MONEY ORDER FORMS IN HER SAFE BECAUSE SHE WAS OF THE OPINION THAT IN THE EVENT OF A BURGLARY HER SAFE WOULD BE BROKEN OPEN THE SAME AS THE SAFE INCIDENT TO THE LAST BURGLARY OF THE COAL COMPANY STORE AT HIAWATHA.'

AN INFORMAL INQUIRY WAS MADE BY A REPRESENTATIVE OF OUR CIVIL ACCOUNTING AND AUDITING DIVISION REGARDING THE LIABILITY OF THE POSTMASTER AT HIAWATHA, AND IN RESPONSE THERETO THE FINANCE OFFICER OF YOUR DEPARTMENT, IN MEMORANDUM DATED JULY 16, 1952, STATED IN PART, AS FOLLOWS:

"THE POSTMASTER AT HIAWATHA WAS NEGLIGENT IN LEAVING THE BLANK MONEY ORDER FORMS IN AN UNLOCKED COMPARTMENT BUT THERE IS A GOOD POSSIBILITY THAT THE BURGLARS WOULD HAVE BROKEN LOCKS UNTIL THEY FOUND SOMETHING OF VALUE. THE MAIN REASONS WHY I DO NOT FEEL THE POSTMASTER CAN BE HELD RESPONSIBLE IS THAT THE AMOUNT OF THE LOSS WAS NOT DETERMINED OR DETERMINABLE AT THE TIME OF THE BURGLARY. THERE WERE 70 MONEY ORDER FORMS STOLEN BUT HER FINANCIAL RESPONSIBILITY COULD BE ZERO OR $7,000, DEPENDING UPON WHETHER THE BURGLARS WERE SUCCESSFUL IN PASSING THE STOLEN FORMS.'

THE NEGLIGENCE OF THE POSTMASTER AT HIAWATHA IS RECOGNIZED IN BOTH OF THE ABOVE STATEMENTS. SINCE ARTICLE 14, CHAPTER XVI, OF THE POST OFFICE MANUAL, QUOTED ABOVE, PLACES RESPONSIBILITY UPON THE POSTMASTER FOR ANY LOSS ARISING THROUGH DISREGARD OF THE SECURITY INSTRUCTIONS FOR BLANK MONEY-ORDER FORMS, IT IS OUR VIEW THAT FURTHER CONSIDERATION SHOULD BE GIVEN YOUR DEPARTMENT TO RAISING A CHARGE IN THE ACCOUNTS OF THE POSTMASTER AT HIAWATHA FOR THE LOSSES SUFFERED BY THE GOVERNMENT AND FOR WHICH COLLECTION FROM THE PAYING CLERKS IN CASES 55623-K, 59536-K, AND 55625-K, IS NOT WARRANTED. WHILE THERE MAY BE SOME BASIS FOR THE FINANCE OFFICER'S SUGGESTION THAT THE POSTMASTER AT HIAWATHA AT THE TIME OF THE BURGLARY COULD NOT BE HELD PECUNIARILY LIABLE BECAUSE THE AMOUNT OF THE LOSS WAS NOT THEN DETERMINABLE, SUCH SUGGESTION APPEARS TO BE WITHOUT MERIT AS TO LOSSES ACTUALLY THEREAFTER SUSTAINED BY REASON OF HER NEGLIGENCE THROUGH PAYMENT IN DUE COURSE OF THE THREE MONEY ORDERS SO PAID. SUCH AMOUNTS PAID ON THE FRAUDULENTLY ISSUED ORDERS APPEAR PRIMA FACIE PROPERLY CHARGEABLE TO THE POSTMASTER, AND IT APPEARS DEMAND MAY PROPERLY BE MADE BY YOUR DEPARTMENT UPON THE POSTMASTER FOR PAYMENT OF SUCH AMOUNTS. SEE UNITED STATES V. BARKER, 100 F. 34, 38.