B-143612, OCT. 24, 1960

B-143612: Oct 24, 1960

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WITH REQUEST FOR ADVICE AS TO WHETHER THE PAYEE'S CLAIM IS FOR DISALLOWANCE AND WHETHER RECLAMATION PROCEEDINGS MAY BE ABANDONED. INDICATING THEREIN THAT HER MAILING ADDRESS ON THE DATES THE CHECKS WERE ISSUED WAS 11446 GLENOAKS BOULEVARD. WHICH APPARENTLY IS THE ADDRESS OF HER AUNT. RECLAMATION PROCEEDINGS WERE UNDERTAKEN BY YOUR OFFICE AND IN RESPONSE TO THE REQUEST FOR REFUND. ADVISED THAT THE CHECKS WERE DEPOSITED TO A JOINT ACCOUNT IN THE NAMES OF FRANK T. PHOTOSTATIC COPIES OF THE DEPOSIT SLIPS WERE FURNISHED AS EVIDENCE OF THAT FACT. BEARING WHAT WERE BELIEVED TO BE THE SIGNATURES OF FRANK T. WHERE HE WAS THEN STATIONED. HE READ AN ACCOUNT IN THE "AIR FORCE TIMES" MAGAZINE CONCERNING A SIMILAR CASE IN WHICH THE AIRMAN'S CONVICTION WAS REVERSED BY THE REVIEW BOARD IN WASHINGTON.

B-143612, OCT. 24, 1960

TO TREASURER OF THE UNITED STATES:

BY LETTER DATED MAY 27, 1960, FILE REFERENCE CC-455-REL/PMC, MR. W. J. HERRON, SPECIAL ASSISTANT TREASURER, FORWARDED TO US AIR FORCE ALLOTMENT CHECKS NOS. 10,536,825 AND 11,656,573, DRAWN JULY 31, AND AUGUST 31, 1959, RESPECTIVELY, OVER SYMBOL 5947, FOR $137.10 EACH TO THE ORDER OF LILLIAN H. GILMORE, AND THE RELATED FILE, WITH REQUEST FOR ADVICE AS TO WHETHER THE PAYEE'S CLAIM IS FOR DISALLOWANCE AND WHETHER RECLAMATION PROCEEDINGS MAY BE ABANDONED.

THE FILE SHOWS THAT THE ALLOTTEE, LILLIAN H. GILMORE, INITIALLY INQUIRED WITH REGARD TO HER JULY CLASS Q ALLOTMENT CHECK ON OR ABOUT AUGUST 18, 1959, BY LETTER ADDRESSED TO THE ACCOUNTING AND FINANCE CENTER, ALLOTMENT AND RETIRED PAY DIVISION, USAF, DENVER, COLORADO. ON SEPTEMBER 14, 1959, SHE AGAIN WROTE TO THAT CENTER STATING THAT SHE DID NOT RECEIVE THE JULY AND AUGUST ALLOTMENT CHECKS AND DENIED INITIATING A CHANGE OF ADDRESS REQUEST WHICH RESULTED IN THE MAILING OF THE CHECKS TO BOX 849, HEADQUARTERS, USAFSS, SAN ANTONIO, TEXAS. SHE FURTHER ADVISED THAT SHE HAD BEEN LIVING IN MARYLAND SINCE APRIL 1959, HER ADDRESS BEING SHOWN AS BOX 169A, ROUTE NO. 3, GAITHERSBURG, MARYLAND. SUBSEQUENTLY, ON NOVEMBER 17, 1959, SHE EXECUTED THE PRESCRIBED FORM FOR MAKING CLAIM AGAINST THE UNITED STATES ON ACCOUNT OF THE NONRECEIPT AND NONNEGOTIATION OF THE CHECKS, INDICATING THEREIN THAT HER MAILING ADDRESS ON THE DATES THE CHECKS WERE ISSUED WAS 11446 GLENOAKS BOULEVARD, PACOIMA, CALIFORNIA, WHICH APPARENTLY IS THE ADDRESS OF HER AUNT, AND THAT SHE CASHED HER CHECKS AT THAT TIME AT THE SECURITY SAVINGS AND LOAN OF PACOIMA.

RECLAMATION PROCEEDINGS WERE UNDERTAKEN BY YOUR OFFICE AND IN RESPONSE TO THE REQUEST FOR REFUND, THE NATIONAL BANK OF COMMERCE OF SAN ANTONIO, TEXAS, SECOND ENDORSER ON THE CHECKS, ADVISED THAT THE CHECKS WERE DEPOSITED TO A JOINT ACCOUNT IN THE NAMES OF FRANK T. GILMORE AND LILLIAN H. GILMORE. PHOTOSTATIC COPIES OF THE DEPOSIT SLIPS WERE FURNISHED AS EVIDENCE OF THAT FACT. PURSUANT TO REQUEST, THAT BANK ALSO FURNISHED PHOTOSTATIC COPIES OF THE SIGNATURE CARD DATED AUGUST 5, 1959, BEARING WHAT WERE BELIEVED TO BE THE SIGNATURES OF FRANK T. GILMORE AND LILLIAN H. GILMORE UNDER THE PORTION BEARING THE PRINTED DEPOSIT AGREEMENT WITH THE BANK.

THE FILE SHOWS FURTHER THAT THE ALLOTTER, STAFF SERGEANT FRANK T. GILMORE, HAD REGISTERED A CLASS Q ALLOTMENT IN FAVOR OF HIS WIFE,LILLIAN H. GILMORE, EFFECTIVE JULY 1, 1958. SOMETIME PRIOR TO JULY 31, 1959, SERGEANT GILMORE EXECUTED AN APPROPRIATE AIR FORCE FORM CHANGING THE ADDRESS OF THE ALLOTTEE TO BOX 849, AT HEADQUARTERS, USAFSS, SAN ANTONIO, TEXAS, WHERE HE WAS THEN STATIONED. WHEN INTERVIEWED BY AN AGENT OF THE UNITED STATES SECRET SERVICE, SERGEANT GILMORE ADMITTED FORGING HIS WIFE'S SIGNATURE AND NEGOTIATING THE CHECKS AND, IN ADDITION, FORGING HER SIGNATURE ON THE NATIONAL BANK OF COMMERCE SIGNATURE CARD WITHOUT HER PERMISSION. HE INFORMED THE AGENT THAT PRIOR TO CASHING THE CHECKS, HE READ AN ACCOUNT IN THE "AIR FORCE TIMES" MAGAZINE CONCERNING A SIMILAR CASE IN WHICH THE AIRMAN'S CONVICTION WAS REVERSED BY THE REVIEW BOARD IN WASHINGTON, D.C., AND THE AIRMAN EXONERATED. HOWEVER, ON FEBRUARY 16, 1960, SERGEANT GILMORE AGREED IN WRITING TO MAKE RESTITUTION BY MONTHLY PAYMENTS TO THE TREASURY DEPARTMENT AND PURSUANT TO SUCH AN AGREEMENT HE MADE AN INITIAL PAYMENT OF $40 BY POSTAL MONEY ORDER OF MARCH 31, 1960. YOUR OFFICE HAS PAID THAT AMOUNT TO THE ALLOTTEE. WE WERE INFORMALLY ADVISED BY YOUR OFFICE ON AUGUST 23, 1960, THAT SERGEANT GILMORE HAS MADE NO FURTHER PAYMENTS.

IT WAS REPORTED THAT PROSECUTION OF SERGEANT GILMORE FOR THE OFFENSE OF FORGERY WAS DECLINED BY THE UNITED STATES ATTORNEY AT SAN ANTONIO FOR THE REASON THAT FEDERAL JUDGE RICE, WESTERN DISTRICT OF TEXAS, HAD HELD THAT A SERVICEMAN HAS THE RIGHT TO SIGN AND CASH HIS WIFE'S ALLOTMENT CHECKS. THIS CONNECTION, THE FILE CONTAINS A COPY OF AN EXPLANATORY LETTER OF MARCH 11, 1960, FROM ARTHUR L. LUETHCKE, ASSISTANT UNITED STATES ATTORNEY, IN WHICH IT IS POINTED OUT THAT WHEN THE CASE OF UNITED STATES V. VERNON PAUL, WACO CRIMINAL NO. 4737, INVOLVING THE OFFENSE OF A HUSBAND FORGING HIS WIFE'S NAME TO HER GOVERNMENT ALLOTMENT CHECK AND CASHING IT, WAS TRIED, A MOTION BY THE DEFENDANT'S COUNSEL FOR A DIRECTED VERDICT WAS GRANTED BY THE COURT IN VIEW OF THE HOLDINGS IN THE CASES OF STERRETT V. STERRETT, 228 S.W. 2D 341, HOLT V. CITY NATIONAL BANK, 273 S.W. 2D 902, AND UNITED STATES V. ELFER, 246 F.2D 941. BOTH THE STERRETT AND ELFER CASES VIEW A SERVICEMAN'S CLASS F ALLOTMENT TO HIS WIFE AS COMMUNITY PROPERTY. THE HOLDING IN THE HOLT CASE IS THAT THE HUSBAND HAD THE RIGHT WITHOUT THE WIFE'S CONSENT TO WITHDRAW MONEY FROM A BANK ACCOUNT IN HER NAME SINCE, UNDER THE LAWS OF TEXAS, THE HUSBAND HAS THE RIGHT TO DEAL WITH AND DISPOSE OF THE COMMUNITY PROPERTY DURING COVERTURE.

THE SPECIAL ASSISTANT TREASURER REFERS TO THE CASE OF M. W. AND M. F. WALSH INVOLVING AN INCOME TAX REFUND CHECK ON WHICH THE ENDORSER DENIED LIABILITY ON THE BASIS THAT SUCH CHECK REPRESENTED COMMUNITY PROPERTY AND THE HUSBAND HAD POWER TO DISPOSE OF THE PROCEEDS.

THE DISPOSITION OF THE CRIMINAL PHASE OF A CHECK FORGERY CASE IS NOT CONTROLLING WITH RESPECT TO THE MATTER OF DETERMINING THE CIVIL LIABILITY OF THE PARTIES INVOLVED. THEREFORE, THE REFUSAL OF THE UNITED STATES ATTORNEY TO PROSECUTE SERGEANT GILMORE FOR THE FORGERY OF HIS WIFE'S SIGNATURE ON THE TWO CHECKS CONSTITUTES NO BAR TO THE RIGHT OF THE GOVERNMENT TO OBTAIN REIMBURSEMENT FOR THE AMOUNT OF THE CHECKS THROUGH CIVIL PROCEEDINGS. SEE IN THIS CONNECTION HELVERING V. MITCHELL, 303 U.S. 391, AND FULTON NATIONAL BANK V. UNITED STATES, 197 F.2D 763.

WITH REGARD TO THE PROPRIETY OF RECLAMATION PROCEEDINGS, SINCE IT IS CLEAR THAT THE CHECKS WERE NOT ENDORSED BY THE PAYEE, THE SAN ANTONIO BANK IS LIABLE UNLESS SHE AUTHORIZED HER HUSBAND TO ENDORSE THE CHECKS OR SUCH ACTION WAS OTHERWISE AUTHORIZED BY LAW. IF IT CAN BE SAID THAT THE PROCEEDS OF A SERVICEMAN'S CLASS Q ALLOTMENT TO HIS WIFE IS COMMUNITY PROPERTY UNDER THE LAWS OF TEXAS, IT DOES NOT NECESSARILY FOLLOW THAT THE ACTION TAKEN BY GILMORE FURNISHES A DEFENSE FOR THE BANK IN THIS CASE. WHILE ARTICLE 4619, VERNON'S CIVIL STATUTES OF TEXAS (VOL. 13, PAGE 775) PROVIDES THAT DURING COVERTURE THE COMMUNITY PROPERTY OF THE HUSBAND AND WIFE MAY BE DISPOSED OF BY THE HUSBAND, IT IS WELL TO REMEMBER THAT HIS RIGHT IS SUBJECT TO THE LIMITATION, THAT IT MUST NOT BE EXERCISED FOR THE PURPOSE OF DEFRAUDING THE WIFE. LOCKE V. LOCKE, 143 S.W. 2D 637; COMMISSIONER OF INTERNAL REVENUE V. CHASE MANHATTAN BANK, 259 F.2D 231. WHATEVER MAY BE SAID FOR THE COMMUNITY PROPERTY CONCEPT AS IT RELATES TO THE PROCEEDS OF A CLASS Q ALLOTMENT, WE DOUBT THAT ANY VIEW AS TO WHAT CONSTITUTES COMMUNITY PROPERTY MAY BE EXTENDED TO THE EXTENT OF QUESTIONING A DEPENDENT'S EXCLUSIVE RIGHT TO RECEIVE THE ALLOTMENT, SINCE THE DEPENDENTS ASSISTANCE ACT OF 1950, 64 STAT. 795, EXPRESSLY PROVIDES THAT THE ALLOTMENT "SHALL BE PAID TO OR ON BEHALF OF SUCH DEPENDENT OR DEPENDENTS AS MAY BE SPECIFIED BY THE ENLISTED MEMBER CONCERNED.'

A DISTINGUISHING FEATURE OF COMMUNITY PROPERTY OWNERSHIP, THAT OF THE RIGHT OF DISPOSAL BY THE HUSBAND, IS ABSENT HERE. THE PLAIN PURPOSE OF THE LAW IS TO PLACE THE ALLOTMENT MONEY (IN THE CASE OF A WIFE) IN HER POSSESSION FOR HER USE IN PROVIDING FOR HER NEEDS AND THE NEEDS OF THE FAMILY, IF ANY. AN ENLISTED MAN DOES NOT HAVE COMPLETE CONTROL OVER HIS PAY AND ALLOWANCES AS FAR AS DETERMINING WHETHER OR NOT A PORTION SHOULD BE ALLOTED FOR THE SUPPORT OF HIS DEPENDENTS SINCE THE ALLOTMENT MAY BE MADE WITHOUT HIS CONSENT BY THE SECRETARY, AND WHEN HE MAKES A CLASS Q ALLOTMENT FOR THE SUPPORT OF HIS WIFE, THE AMOUNTS INVOLVED NO LONGER ARE REGARDED AS BELONGING TO HIM TO THE SAME EXTENT AS THE REMAINDER OF SUCH PAY AND ALLOWANCES. 37 COMP. GEN. 151, 152. IN THE CIRCUMSTANCES, THE CONCLUSION APPEARS INESCAPABLE THAT THE COMMUNITY PROPERTY LAWS OF TEXAS FURNISHED NO AUTHORITY FOR SERGEANT GILMORE TO ENDORSE THE INVOLVED CHECKS. A CONTRARY HOLDING WOULD PERMIT SUCH LAWS TO TAKE PRECEDENCE OVER THE FEDERAL STATUTE UNDER WHICH THE ALLOTMENT WAS MADE. IT MAY BE ADDED THAT SINCE THE WIFE'S SIGNATURE ON THE SIGNATURE CARD SUPPORTING THE PURPORTED JOINT BANK ACCOUNT IN THE NATIONAL BANK OF COMMERCE IS NOT GENUINE, THE PROVISION IN THE DEPOSIT AGREEMENT AUTHORIZING THE DEPOSIT OF CHECKS DRAWN TO THE ORDER OF ONE OF THE CO-SIGNERS AND ENDORSED BY THE OTHER, IS WITHOUT EFFECT AND FURNISHES NO BASIS FOR PRECLUDING RECOVERY ACTION BY THE GOVERNMENT FROM THAT BANK.

MRS. GILMORE'S CLAIM CAN BE QUESTIONED ONLY IF THE ALLOTMENT IN HER FAVOR WAS LEGALLY CANCELLED. HER HUSBAND'S RIGHT TO A BASIC ALLOWANCE FOR QUARTERS WAS BASED ON SUCH ALLOTMENT. WHILE THE ALLOTMENT WAS MADE ENTIRELY FROM HIS PAY, HE CLAIMED AND WAS PAID THE BASIC ALLOWANCE ON THE BASIS THAT THE ALLOTMENT WAS MADE FOR HIS WIFE'S SUPPORT. HE WANTED TO MAINTAIN THE STATUS ENTITLING HIM TO THE ALLOWANCE WHEN HE DIRECTED THAT THE CHECKS BE MAILED TO SAN ANTONIO AND HE EXPECTED THAT IT WOULD BE CONTINUED. IN SUCH CIRCUMSTANCES, TO GIVE TO HIS ACTION THE LEGAL EFFECT OF CANCELLATION OF THE ALLOTMENT WOULD NOT ONLY BE CONTRARY TO HIS INTENT, BUT WOULD FRUSTRATE THE EVIDENT PURPOSE OF THE LAW AND WOULD AID HIM IN AVOIDING HIS OBLIGATION TO SUPPORT HER. UNDER SUCH CIRCUMSTANCES IT MAY NOT BE CONCLUDED THAT HIS ACTION EFFECTED A CANCELLATION OF HIS ALLOTMENT. SUPPORTING OUR VIEW IS THE CASE OF UNITED STATES V. RYNO, 130 F.SUPP. 685, AFFIRMED IN 232 F.2D 581, WHICH INVOLVED THE UNAUTHORIZED ENDORSEMENT BY AN AIRMAN OF HIS WIFE'S CLASS Q ALLOTMENT CHECK AND THE IMPROPER NEGOTIATION THEREOF. THE COURT STATED, IN PERTINENT PART, AS FOLLOWS:

"IT IS ALSO A FRAUD ON THE GOVERNMENT WHICH EACH YEAR PAYS MILLIONS IN EXCESS OF THE SERVICEMAN'S WAGE, ALL FOR THE SPECIAL PURPOSE OF PROVIDING CURRENT SUBSISTENCE FUNDS FOR THE INDICATED DEPENDENTS. THE GOVERNMENT AND THE DEPENDENT EACH HAVE A RIGHT TO HAVE THE INTEGRITY OF THE GOVERNMENT CHECK RESPECTED BY OMISSION THEREFROM OF FORGERIES.

"THE PARTICULAR CHECK WAS ISSUED BY THE GOVERNMENT FOR A SPECIAL PURPOSE. IT WAS NEVER THE PURPOSE OF A SERVICEMAN'S ALLOTMENT THAT HE BE THEREBY PERSONALLY ENRICHED. IT WAS FOR THE PURPOSE OF THE GOVERNMENT TO PROVIDE CURRENTLY FOR THE REGULARLY RECURRING SUBSISTENCE NEEDS OF THE SERVICEMAN'S FAMILY. WHEN DEFENDANT INTERCEPTED THE CHECK WHICH WAS PAYABLE TO HIS WIFE, AND SIGNED HER NAME AS ENDORSER WITHOUT HER AUTHORITY AND FOR THE PURPOSE OF RECEIVING THE FUNDS FOR HIS PERSONAL USE, HE THEREBY ACTED FRAUDULENTLY TOWARD THE GOVERNMENT AND THE WIFE, AS WELL AS ALL PERSONS THROUGH WHOSE HANDS THE CHECK WOULD PASS, AND HE COMMITTED THE CRIMES CHARGED IN THE INDICTMENT.'

ALSO, SEE OUR DECISION OF MAY 24, 1957, TO YOU, B-131428, IN WHICH WE CONCLUDED THAT CLASS Q ALLOTMENT CHECKS ARE NOT VOLUNTARY ALLOTMENTS SO THAT PAYMENT TO THE SERVICEMAN MAY BE CONSIDERED AS PROPER EVEN THOUGH THE CHECK IS DRAWN TO THE ORDER OF ANOTHER PERSON. IN THAT CASE, THE WIFE WAS CONSIDERED TO HAVE A VALID CLAIM IF THE PROCEEDS OF THE THREE CHECKS THERE INVOLVED WERE NOT USED BY HER SERVICEMAN HUSBAND TO PAY HER DEBTS. WITH RESPECT TO THE RIGHTS OF THE WIFE CONSIDERED IN DECISION TO YOU DATED OCTOBER 24, 1958, B 136859, THE PAYMENTS IN QUESTION WERE MADE FOR A PERIOD OF OVER FIVE YEARS WITHOUT OBJECTION BY HER. APPARENTLY, SHE REGARDED THE ALLOTMENT IN HER FAVOR AS HAVING BEEN TERMINATED AND SHE SUBMITTED NO CLAIM. IN SUCH CIRCUMSTANCES, THERE APPEARED NO REASON TO VIEW THE MATTER DIFFERENTLY.

SINCE THE RECORD FAILS TO SHOW THAT THE ALLOTTEE IN THIS CASE PARTICIPATED IN ANY PART OF THE PROCEEDS OF THE CHECKS, THERE EXISTS A LEGAL BASIS FOR THE CONTINUATION OF RECLAMATION PROCEEDINGS. HOWEVER, SINCE IT IS UNDERSTOOD THAT SERGEANT GILMORE IS STILL A MEMBER OF THE AIR FORCE, IT IS SUGGESTED THAT THE DEPARTMENT OF THE AIR FORCE BE ADVISED IN THE MATTER AND REQUESTED TO WITHHOLD FROM HIS PAY AND FORWARD TO YOUR OFFICE THE AMOUNT OF $234.20, REPRESENTING THE BALANCE DUE FROM HIM. SUCH AMOUNT, IF AND WHEN RECEIVED, SHOULD BE PAID TO THE ALLOTTEE. IN THE EVENT THAT THE WHOLE AMOUNT IS NOT COLLECTED FROM SERGEANT GILMORE WHILE HE IS STILL IN THE MILITARY SERVICE, YOUR OFFICE SHOULD RESUME RECLAMATION PROCEEDINGS FOR THE RECOVERY OF THE BALANCE FROM THE ENDORSING BANK.

WITH RESPECT TO THE CASE OF M. W. AND M. F. WALSH, MENTIONED ABOVE, OUR RECORDS SHOW THAT THE CLAIMS DIVISION OF THIS OFFICE ADDRESSED A LETTER TO THE CHECK CLAIMS DIVISION OF YOUR OFFICE ON JUNE 28, 1960, ADVISING THAT THE HUSBAND DID NOT HAVE AUTHORITY TO ENDORSE HIS WIFE'S NAME ON THE JOINT PAYEE TAX REFUND CHECK NOTWITHSTANDING THAT SUCH CHECK REPRESENTED COMMUNITY PROPERTY UNDER THE LAWS OF CALIFORNIA AND THEREFORE THAT THE SUBSEQUENT ENDORSERS DID NOT RECEIVE CLEAR TITLE TO THE CHECK. THE CHECKS AND FILE ARE RETURNED HEREWITH FOR YOUR FURTHER ACTION IN THIS MATTER.