B-140628, SEP. 24, 1959

B-140628: Sep 24, 1959

Additional Materials:

Contact:

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

 

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

THIS CHECK WAS CASHED BY THE PAYEE UPON HIS INDORSEMENT IN FAVOR OF THE UNITED AFRICA COMPANY LIMITED. SUBSEQUENTLY THE CHECK WAS LOST IN TRANSIT. AN INDEMNITY BOND WAS EXECUTED BY THE BANK ON MAY 4. WAS DRAWN PAYABLE TO THE UNITED AFRICA COMPANY LIMITED. THAT SINCE IT APPEARED EVIDENT THAT THE ORIGINAL CHECK WAS DEFINITELY LOST NO FURTHER RESPONSIBILITY WOULD REST UPON THE TREASURY DEPARTMENT IN CONNECTION THEREWITH AND. IN THIS CONNECTION YOUR ATTENTION IS INVITED TO PERTINENT PROVISIONS OF THE ACT OF AUGUST 28. HAS CONSISTENTLY HELD THAT THE LIABILITY OF A SURETY IS FIXED BY THE TERMS OF ITS BOND AND THE LAW AND NO OFFICIAL OF THE GOVERNMENT IS AUTHORIZED TO CANCEL THAT LIABILITY. THERE WILL BE.

B-140628, SEP. 24, 1959

TO MR. C. R. HARDING:

YOUR LETTERS OF JULY 27, AND AUGUST 27, 1959, REQUEST THAT THE BANK OF WEST AFRICA LIMITED BE RELEASED FROM ITS OBLIGATION ON THE BOND EXECUTED BY THE BANK ON BEHALF OF THE UNITED AFRICA COMPANY LIMITED INDEMNIFYING THE UNITED STATES AGAINST ANY AND ALL CLAIMS ARISING ON UNITED STATES TREASURY CHECK NO. 31,716, ISSUED SEPTEMBER 1, 1942, IN THE AMOUNT OF $532.60, DRAWN TO THE ORDER OF REX E. KELLER. THIS CHECK WAS CASHED BY THE PAYEE UPON HIS INDORSEMENT IN FAVOR OF THE UNITED AFRICA COMPANY LIMITED, LAGOS, NIGERIA. SUBSEQUENTLY THE CHECK WAS LOST IN TRANSIT, PRESUMABLY THROUGH ENEMY ACTION.

AN INDEMNITY BOND WAS EXECUTED BY THE BANK ON MAY 4, 1944, IN FAVOR OF THE UNITED STATES TREASURY PURSUANT TO WHICH TREASURY CHECK NO. 43,031,452, DATED JANUARY 24, 1947, WAS DRAWN PAYABLE TO THE UNITED AFRICA COMPANY LIMITED.

YOU SAY THAT IN VIEW OF THE LENGTH OF THE PERIOD DURING WHICH THE BOND HAS BEEN OUTSTANDING THE BANK SHOULD BE RELEASED FROM ITS OBLIGATION. YOU CONTENDED, IN YOUR LETTER OF JULY 17, 1951, TO THE AMERICAN CONSUL GENERAL AT LAGOS, NIGERIA, THAT SINCE IT APPEARED EVIDENT THAT THE ORIGINAL CHECK WAS DEFINITELY LOST NO FURTHER RESPONSIBILITY WOULD REST UPON THE TREASURY DEPARTMENT IN CONNECTION THEREWITH AND, THEREFORE, YOUR INDEMNITY COULD BE CANCELLED AND WITHDRAWN.

IN THIS CONNECTION YOUR ATTENTION IS INVITED TO PERTINENT PROVISIONS OF THE ACT OF AUGUST 28, 57, 71 STAT. 464, 31 U.S.C. 132 (A) AND (C) WHICH PROVIDE IN PART AS FOLLOWS:

"/A) ALL CHECKS HERETOFORE OR HEREAFTER DRAWN ON THE TREASURER OF THE UNITED STATES, INCLUDING THOSE DRAWN BY WHOLLY OWNED AND MIXED OWNERSHIP GOVERNMENT CORPORATIONS, SHALL BE PAYABLE WITHOUT LIMITATION OF TIME: * *

"/C) THE LIMITATION IMPOSED IN RESPECT TO CERTAIN CLAIMS OR DEMANDS AGAINST THE UNITED STATES BY SECTIONS 71A AND 237 OF THIS TITLE, SHALL NOT BE DEEMED TO APPLY TO ORIGINAL OR SUBSTITUTE CHECKS HERETOFORE OR HEREAFTER DRAWN ON THE TREASURER OF THE UNITED STATES, INCLUDING THOSE DRAWN BY WHOLLY OWNED AND MIXED-OWNERSHIP GOVERNMENT CORPORATIONS, OR DRAWN BY AUTHORIZED OFFICERS OF THE UNITED STATES ON DESIGNATED DEPOSITARIES. (AS AMENDED AUG. 28, 1957, PUB.L. 85-183, SEC. 1, 71 STAT. 464.)

HENCE, IT CAN READILY BE SEEN THAT THE RIGHT TO PAYMENT ON THE ORIGINAL CHECK HAS NOT BEEN ENTIRELY EXTINGUISHED.

FURTHERMORE, OUR OFFICE, AS WELL AS THE COURTS OF THE UNITED STATES, HAS CONSISTENTLY HELD THAT THE LIABILITY OF A SURETY IS FIXED BY THE TERMS OF ITS BOND AND THE LAW AND NO OFFICIAL OF THE GOVERNMENT IS AUTHORIZED TO CANCEL THAT LIABILITY; A-56950, MARCH 25, 1938, SMITH V. UNITED STATES, 14 C.CLS. 114, AND MOSES V. UNITED STATES, 166 U.S. 571.

IF NO LIABILITY SHOULD ARISE UNDER THE BOND, THERE WILL BE, OF COURSE, NO AFFIRMATIVE ACTION TAKEN IN THE MATTER. HOWEVER, SINCE THE BOND IN QUESTION IS IRREVOCABLE, ANY LIABILITY ARISING THEREUNDER WILL BE ENFORCED IN ACCORDANCE WITH THE TERMS OF THE BOND.