B-131079, JUL. 29, 1957

B-131079: Jul 29, 1957

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THE FACTS IN THIS CASE ARE SET OUT FULLY IN PRIOR CORRESPONDENCE AND NEED NOT BE REPEATED HERE. REPRESENTING FAMILY ALLOWANCE PAYMENTS TO WHICH THE PAYEE WAS NOT ENTITLED. WERE RECEIVED. OVER A PERIOD OF TIME DURING WHICH THE PAYEE WAS RESIDING IN WASHINGTON. THERE ARE IN THE FILE AFFIDAVITS DATED AUGUST 21. THE AFFIDAVIT FROM DEAN PHILLIPS IS ESSENTIALLY A SELF SERVING DECLARATION. MAY BE CONSIDERED SELF-SERVING SINCE THEY ARE THE PROPRIETORS OF TWO GROCERY STORES WHICH CASHED A NUMBER OF THE CHECKS IN QUESTION. SINCE FRED PETTY IS THE NEPHEW OF DEAN PHILLIPS. HIS AFFIDAVIT IS OF QUESTIONABLE VALUE. IT IS EXTREMELY DOUBTFUL THAT THE INCIDENTS RELATED THEREIN WOULD CONSTITUTE AUTHORITY FOR NEGOTIATION OF THE CHECKS HERE INVOLVED.

B-131079, JUL. 29, 1957

TO MRS. IVY BAKER PRIEST, TREASURER OF THE UNITED STATES:

ON MAY 28, 1957, THE SPECIAL ASSISTANT TREASURER RETURNED TO US 17 CHECKS FOR $42 EACH DRAWN BY S. H. SMITH, SYMBOL 293, TO THE ORDER OF SADIE PHILLIPS, AND THE RELATED FILE (CC-457 REL WJH), FOR OUR FURTHER CONSIDERATION AND REVIEW OF OUR INSTRUCTIONS OF MAY 2, 1957, (PA-Z 1408971 -RDH) REQUIRING CONTINUATION OF RECLAMATION.

THE FACTS IN THIS CASE ARE SET OUT FULLY IN PRIOR CORRESPONDENCE AND NEED NOT BE REPEATED HERE. BRIEFLY, THE CHECKS IN QUESTION, REPRESENTING FAMILY ALLOWANCE PAYMENTS TO WHICH THE PAYEE WAS NOT ENTITLED, WERE RECEIVED, ENDORSED, AND NEGOTIATED BY THE MOTHER OF THE PAYEE IN HENRIETTA, NORTH CAROLINA, OVER A PERIOD OF TIME DURING WHICH THE PAYEE WAS RESIDING IN WASHINGTON, D.C. THE PROPRIETY OF RECLAMATION RESTS ENTIRELY UPON THE QUESTION OF THE SUFFICIENCY OF EVIDENCE AS TO WHETHER THE PAYEE DID OR DID NOT AUTHORIZE HER MOTHER TO NEGOTIATE THE CHECKS HERE INVOLVED. THE FILE CONTAINS AN AFFIDAVIT SIGNED BY THE PAYEE ON DECEMBER 21, 1953, EMPHATICALLY DENYING SUCH AUTHORIZATION. UNFORTUNATELY, THE RECORD ALSO CONTAINS AN AFFIDAVIT DATED OCTOBER 9, 1953, FROM DEAN PHILLIPS, THE MOTHER OF THE PAYEE, ALLEGING THAT HER DAUGHTER HAD VERBALLY AUTHORIZED HER TO NEGOTIATE HER FAMILY ALLOWANCE CHECKS. IN ADDITION, THERE ARE IN THE FILE AFFIDAVITS DATED AUGUST 21, 1956, FROM R. W. PHILLIPS AND HIS WIFE, EMILY PHILLIPS, AND AN AFFIDAVIT DATED AUGUST 22, 1956, FROM HOWARD L. PHILLIPS STATING THAT PAYEE TOLD THEM HER MOTHER COULD CASH HER ALLOWANCE CHECKS, AS WELL AS AN AFFIDAVIT DATED AUGUST 22, 1956, FROM FRED PETTY STATING THAT HE HEARD PAYEE TELL HER MOTHER SHE COULD CASH SUCH CHECKS.

HOWEVER, THE AFFIDAVIT FROM DEAN PHILLIPS IS ESSENTIALLY A SELF SERVING DECLARATION, SINCE IT WOULD TEND TO CLEAR HER OF A POSSIBLE CHARGE OF FORGERY. LIKEWISE, THE AFFIDAVITS FROM R. W. AND EMILY PHILLIPS AND HOWARD L. PHILLIPS, MAY BE CONSIDERED SELF-SERVING SINCE THEY ARE THE PROPRIETORS OF TWO GROCERY STORES WHICH CASHED A NUMBER OF THE CHECKS IN QUESTION. ALSO, SINCE FRED PETTY IS THE NEPHEW OF DEAN PHILLIPS, HIS AFFIDAVIT IS OF QUESTIONABLE VALUE. EVEN CONCEDING THE VERACITY OF THESE AFFIDAVITS, IT IS EXTREMELY DOUBTFUL THAT THE INCIDENTS RELATED THEREIN WOULD CONSTITUTE AUTHORITY FOR NEGOTIATION OF THE CHECKS HERE INVOLVED. ALL THE AFFIDAVITS SPEAK IN GENERALITIES, AND WHILE THEY MENTION NO SPECIFIC DATE FOR THE ALLEGED AUTHORIZATION, IT IS APPARENT THAT THE TIME THEREOF MUST HAVE BEEN SHORTLY PRIOR TO PAYEE'S DEPARTURE FOR WASHINGTON, SUBSEQUENT TO HER HUSBAND'S DISCHARGE FROM THE ARMY. PAYEE'S HUSBAND WAS DISCHARGED FROM THE ARMY ON NOVEMBER 13, 1945, AND HER ENTITLEMENT TO FAMILY ALLOWANCE CEASED AS OF NOVEMBER 30, 1945. OBVIOUSLY, AT THAT TIME THE PAYEE HAD NO KNOWLEDGE THAT THE CHECKS WOULD CONTINUE TO ARRIVE AFTER HER HUSBAND'S DISCHARGE, AND SHE CLEARLY WOULD NOT AND COULD NOT AUTHORIZE HER MOTHER TO NEGOTIATE CHECKS WHICH BUT FOR AN UNFORESEEABLE MISTAKE BY THE ARMY NEVER WOULD HAVE BEEN ISSUED OR RECEIVED. IT SEEMS CLEAR THAT IF THE PAYEE DID AUTHORIZE HER MOTHER TO NEGOTIATE ANY FAMILY ALLOWANCE CHECKS AS ALLEGED IN THESE AFFIDAVITS SHE MUST HAVE INTENDED TO MEAN ONE OR MORE OF THE LAST OF THE CHECKS PROPERLY DUE, AND NOT THE CHECKS HERE IN QUESTION, RECEIVED THROUGH ERROR LONG AFTER HER HUSBAND'S DISCHARGE.

THEREFORE, OUR OPINION IS THAT THE EVIDENCE OF RECORD DOES NOT WARRANT RETURNING TO THE ENDORSERS THE MONEY ALREADY RECOVERED OR ABANDONING RECLAMATION ON THE REMAINING CHECKS. SHOULD THE ENDORSERS CONTINUE TO RESIST RECLAMATION AFTER THE WEAKNESSES OF THEIR POSITION HAVE BEEN POINTED OUT, WE SUGGEST REFERRING THE MATTER TO THE DEPARTMENT OF JUSTICE FOR CONSIDERATION OF THE ADVISABILITY OF INSTITUTING SUIT. PLEASE KEEP US ADVISED OF FURTHER DEVELOPMENTS.

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