B-154564, JUL. 21, 1964

B-154564: Jul 21, 1964

Additional Materials:

Contact:

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

 

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

THE RECORD DISCLOSES THAT THE CHECKS WERE FOR NATIONAL SERVICE LIFE INSURANCE BENEFITS PAYABLE TO MRS. THE VETERANS ADMINISTRATION WAS NOT INFORMED OF THIS UNTIL DECEMBER 5. THE CHECKS WERE NEGOTIATED BY COSIMO CALICCHIO. WERE USED TO PAY MEDICAL AND HOSPITAL BILLS INCURRED BY THE PAYEE BEFORE HER DEATH. HAS REFUSED TO HONOR REQUESTS FOR REFUNDS ON THE CHECKS ADVISING THAT THE CHECKS WERE DEPOSITED TO A SAVINGS ACCOUNT IN THE NAME OF THE ESTATE OF TINA CALICCHIO AND THAT THE ADMINISTRATOR HAD EXPLAINED THAT THE CHECKS REPRESENTED THE PROCEEDS OF A NATIONAL SERVICE LIFE INSURANCE POLICY TO WHICH THE ESTATE WAS ENTITLED. THE NEGOTIATOR IS 75 YEARS OLD. IT IS THE RECOMMENDATION OF THE DEPUTY TREASURER THAT RECLAMATION PROCEEDINGS BE DISCONTINUED.

B-154564, JUL. 21, 1964

TO MRS. KATHRYN O-HAY GRANAHAN, TREASURER OF THE UNITED STATES:

A LETTER DATED APRIL 30, 1964, FROM THE DEPUTY TREASURER CONCERNING RECLAMATION PROCEEDINGS ON 81 CHECKS, EACH FOR $50.80, DRAWN TO THE ORDER OF TINA CALICCHIO HAS BEEN CONSIDERED.

THE RECORD DISCLOSES THAT THE CHECKS WERE FOR NATIONAL SERVICE LIFE INSURANCE BENEFITS PAYABLE TO MRS. CALICCHIO AFTER THE DEATH OF HER SON IN THE ARMED FORCES OF THE UNITED STATES. MRS. CALICCHIO DIED ON FEBRUARY 14, 1956, BUT THE VETERANS ADMINISTRATION WAS NOT INFORMED OF THIS UNTIL DECEMBER 5, 1962, AND CHECKS CONTINUED TO BE ISSUED TO THE DECEDENT THROUGH NOVEMBER OF THAT YEAR. THE CHECKS WERE NEGOTIATED BY COSIMO CALICCHIO, HUSBAND OF THE DECEDENT AND ADMINISTRATOR OF HER ESTATE, DEPOSITED TO AN ACCOUNT IN THE NAME OF COSIMO CALICCHIO FOR ESTATE OF TINA CALICCHIO AND, ACCORDING TO THE NEGOTIATOR, WERE USED TO PAY MEDICAL AND HOSPITAL BILLS INCURRED BY THE PAYEE BEFORE HER DEATH. NO ENTITLEMENT EXISTED FOR ANY OF THE CHECKS.

THE CASHING BANK, THE NATIONAL SHAWMUT BANK OF BOSTON, HAS REFUSED TO HONOR REQUESTS FOR REFUNDS ON THE CHECKS ADVISING THAT THE CHECKS WERE DEPOSITED TO A SAVINGS ACCOUNT IN THE NAME OF THE ESTATE OF TINA CALICCHIO AND THAT THE ADMINISTRATOR HAD EXPLAINED THAT THE CHECKS REPRESENTED THE PROCEEDS OF A NATIONAL SERVICE LIFE INSURANCE POLICY TO WHICH THE ESTATE WAS ENTITLED. THE NEGOTIATOR IS 75 YEARS OLD, HAS AN INCOME OF ONLY $83 PER MONTH FROM SOCIAL SECURITY AND LITTLE OTHER ASSETS. THE STATUTE OF LIMITATIONS HAS NOT YET RUN ON 67 OF THE CHECKS WORTH A TOTAL OF $3,403.40. IT IS THE RECOMMENDATION OF THE DEPUTY TREASURER THAT RECLAMATION PROCEEDINGS BE DISCONTINUED.

THE ENDORSING BANK ACCEPTED CHECKS WHICH WERE ENDORSED BY SOMEONE OTHER THAN THE PAYEE, AND BECAUSE OF THE FORM OF THE ENDORSEMENT WAS ON NOTICE THAT THE PAYEE WAS DECEASED. THE WORD ,INSURANCE" APPEARED ON THE FRONT OF EACH OF THE CHECKS AND SHOULD HAVE PUT THE BANK ON NOTICE THAT WHEN DRAWN TO THE ORDER OF A DECEASED PAYEE IT WAS PROBABLE THAT THE ESTATE OF THE PAYEE WAS NO LONGER ENTITLED TO THE PROCEEDS OF THE CHECK. ADDITION, THE ENDORSING BANK SHOULD HAVE BEEN AWARE OF TREASURY DEPARTMENT CIRCULAR NO. 21, REVISED SEPTEMBER 5, 1946, ADDRESSED TO ALL BANKS AND BANKERS AND GOVERNING THE ENDORSEMENT AND PAYMENT OF CHECKS DRAWN ON THE TREASURER OF THE UNITED STATES. SECTION 4 (B) (31 CFR 360.4 (B) ( PROVIDES THAT INSURANCE CHECKS, AS WELL AS CERTAIN OTHER CLASSES OF CHECKS LISTED THEREIN, MUST NOT BE NEGOTIATED AFTER THE DEATH OF THE PAYEE BUT MUST BE RETURNED TO THE DRAWER OR THE ADMINISTRATIVE OFFICE WHICH AUTHORIZED ISSUANCE OF THE CHECK FOR DETERMINATION WHETHER, UNDER APPLICABLE LAWS, PAYMENT IS DUE AND TO WHOM IT SHOULD BE PAID.

EVEN THOUGH APPLICABLE STATE LAW MAY GIVE AN ADMINISTRATOR THE POWER TO CASH CHECKS THIS CANNOT EXTEND TO CHECKS WHICH ARE NOT ASSETS OF THE DECEDENT'S ESTATE. BECAUSE OF THE ABOVE FACTS A BANK WHICH GUARANTEES PRIOR ENDORSEMENTS SHOULD REASONABLY BE EXPECTED TO INQUIRE FURTHER THAN QUESTIONING OF THE NEGOTIATOR WHETHER THESE ACTUALLY WERE ASSETS OF THE ESTATE.

RECLAMATION AGAINST THE NEGOTIATOR WOULD, OF COURSE, BE FUTILE. SINCE IT APPEARS THAT THE SUBSEQUENT ENDORSER DID NOT ACQUIRE A VALID TITLE TO THE CHECKS, HOWEVER, RECLAMATION SHOULD BE CONTINUED AS TO IT. THE CHECKS AND YOUR FILE ARE RETURNED HEREWITH.