B-158963, MAY 4, 1966

B-158963: May 4, 1966

Additional Materials:

Contact:

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

 

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

IS MADE PAYABLE TO YOUR ORDER. THE PERTINENT FACTS GIVING RISE TO THIS MATTER ARE REPORTED HERE AS FOLLOWS. BEFORE DELIVERY TO YOUR WIFE IT WAS STOLEN FROM THE MAILS ON OCTOBER 1. INCLUDED IN THIS THEFT WERE OTHER CHECKS INCLUDING A CHECK ISSUED BY ONE LOUIS I. STUKES' NAME ALONG WITH HIS ACCOUNT NUMBER ON THE CHECK AS A SECOND INDORSEMENT AND IT WAS PRESENTED TO MR. THE SUBJECT CHECK WAS HANDLED AS AN OUTRIGHT CASH ITEM AND THE RECEIVING TELLER IS NOT IN A POSITION TO NAME. WE ARE ADVISED THAT ALL OTHER INVESTIGATION TO THIS END HAS MET WITH NO SUCCESS. IN THAT TELEGRAM YOU ADVISED THAT THE CHECK WAS MAILED BY YOU UNINDORSED. THE SUBJECT CHECK WAS IN FACT INDORSED BY YOU AS FOLLOWS: "BEN PAUL NOBLE.

B-158963, MAY 4, 1966

TO MR. BEN PAUL NOBLE:

BY LETTER DATED MARCH 31, 1966, YOU, IN EFFECT, REQUESTED RECONSIDERATION OF CLAIMS SETTLEMENT Z-2309200, MARCH 30, 1966, WHICH DENIED YOUR CLAIM TO THE PROCEEDS OF TREASURY CHECK NO. 31,677,954, SEPTEMBER 30, 1965, IN THE AMOUNT OF $438. THIS CHECK, REPRESENTING PAYMENT OF VETERAN'S COMPENSATION, IS MADE PAYABLE TO YOUR ORDER.

THE PERTINENT FACTS GIVING RISE TO THIS MATTER ARE REPORTED HERE AS FOLLOWS. UPON RECEIVING THE ABOVE-DESCRIBED CHECK YOU INDORSED IT IN BLANK AND MAILED IT TO YOUR WIFE IN JACKSONVILLE, FLORIDA. BEFORE DELIVERY TO YOUR WIFE IT WAS STOLEN FROM THE MAILS ON OCTOBER 1, 1965, IN JACKSONVILLE. INCLUDED IN THIS THEFT WERE OTHER CHECKS INCLUDING A CHECK ISSUED BY ONE LOUIS I. STUKES. SOMEONE, PRESUMABLY THE THIEF OR HIS TRANSFEREE, WROTE MR. STUKES' NAME ALONG WITH HIS ACCOUNT NUMBER ON THE CHECK AS A SECOND INDORSEMENT AND IT WAS PRESENTED TO MR. STUKES' BANK, THE ATLANTIC NATIONAL BANK, FOR PAYMENT. THE SUBJECT CHECK WAS HANDLED AS AN OUTRIGHT CASH ITEM AND THE RECEIVING TELLER IS NOT IN A POSITION TO NAME, DESCRIBE, OR IDENTIFY THE NEGOTIATOR. WE ARE ADVISED THAT ALL OTHER INVESTIGATION TO THIS END HAS MET WITH NO SUCCESS.

UPON BEING ADVISED OF THE THEFT YOU SENT A TELEGRAM ON OCTOBER 5, 1965, TO THE DIVISION OF DISBURSEMENT, TREASURY, IN CHICAGO, ILLINOIS, ORDERING STOP PAYMENT OF THE CHECK. IN THAT TELEGRAM YOU ADVISED THAT THE CHECK WAS MAILED BY YOU UNINDORSED. THE SUBJECT CHECK WAS IN FACT INDORSED BY YOU AS FOLLOWS: "BEN PAUL NOBLE," AND SUCH OPEN INDORSEMENT CONSTITUTED A BLANK INDORSEMENT. STOPPAGE OF PAYMENT WAS ENTERED AGAINST THE CHECK ON OCTOBER 13, 1965, HOWEVER, THE CHECK, BEARING YOUR BLANK INDORSEMENT, HAD BEEN PAID ON OCTOBER 12, AND THEREFORE THE TREASURY COULD NOT DECLINE PAYMENT.

IN MAKING CLAIM IT IS YOUR CONTENTION THAT YOU DID ALL YOU COULD IN ORDERING THE STOP PAYMENT AND THAT THE TREASURY DEPARTMENT'S NEGLIGENCE IN FAILING TO TIMELY STOP PAYMENT COUPLED WITH THE BANK'S NEGLIGENCE IN MAKING PAYMENT TO ONE NOT KNOWN BY IT TO BE THE PERSON PRESENTING FOR PAYMENT, OCCASIONED THE LOSS.

UNDER THE DOCTRINE OF COLLINS V. GILVERT, 94 U.S. 753 (1876) THE POSSESSION OF A NEGOTIABLE INSTRUMENT PAYABLE TO BEARER, OR INDORSED IN BLANK, IS PRIMA FACIE EVIDENCE THAT THE HOLDER IS THE PROPER OWNER AND LAWFUL POSSESSOR THEREOF, AND NOTHING SHORT OF FRAUD, NOT EVEN GROSS NEGLIGENCE, IF UNATTENDED WITH MALA FIDES, IS SUFFICIENT TO OVERCOME THE EFFECT OF THAT EVIDENCE OR TO INVALIDATE THE TITLE OF THE HOLDER BY THAT PRESUMPTION. THIS, AND OTHER CASES, IS THE FOUNDATION OF THE FOLLOWING STATEMENT OF THE LAW:

"A HOLDER IN DUE COURSE * * * TAKES GOOD TITLE EVEN FROM A THIEF; MORE STRICTLY, IF THE INSTRUMENT IS MADE PAYABLE TO BEARER, OR IS INDORSED IN BLANK, OR IS OTHERWISE NEGOTIABLE BY DELIVERY, AN INNOCENT PURCHASER FOR VALUE AND BEFORE MATURITY WHO ACQUIRES IT FROM A THIEF OR FINDER ACQUIRES A GOOD TITLE AND MAY RECOVER THEREON, AND HE MAY RETAIN IT EVEN AS AGAINST THE TRUE OWNER.' 10 C.J.S. BILLS AND NOTES, SECTION 507. SEE ALSO 11 AM.JUR. 2D SECTION 722, PP. 804, 805.

SO FAR AS THE SECOND INDORSEMENT IS CONCERNED, WHERE A NEGOTIABLE INSTRUMENT IS INDORSED IN BLANK, SUBSEQUENT BLANK INDORSEMENTS NEED NOT BE CONSIDERED SO FAR AS CONCERNS PASSING TITLE TO THE PAPER. 10 C.J.S. BILLS AND NOTES, SECTION 212 (B). SEE ALSO SECTION 48 OF THE NEGOTIABLE INSTRUMENTS LAW.

IT FOLLOWS THAT, ASSUMING THE TREASURY STOPPED PAYMENT ON THIS CHECK WHEN PRESENTED FOR COLLECTION, IN THE FINAL ANALYSIS, THE ATLANTIC NATIONAL BANK WOULD HAVE PREVAILED.

APPARENTLY THE GIST OF YOUR POSITION IS THAT HAD THE TREASURY DEPARTMENT TIMELY ACTED ON YOUR TELEGRAM OF OCTOBER 5, THE CASHING BANK WOULD HAVE BEEN NOTIFIED OF THE THEFT OF THE SUBJECT CHECK AND SO NOTIFIED COULD NOT HAVE BEEN A HOLDER IN DUE COURSE UPON PRESENTMENT. WHILE IT IS DOUBTED THAT SUCH NOTICE WOULD NECESSARILY RENDER THE ABOVE-STATED LEGAL EFFECT, IF THIS IS YOUR POSITION, THE MAGNITUDE OF SUCH AN UNDERTAKING I.E., NOTIFYING POSSIBLE CASHING BANKS, PRECLUDES ENTERTAINMENT. WE HAVE BEEN INFORMALLY ADVISED THAT THE TREASURY DEPARTMENT RECEIVES AN AVERAGE OF 1,500 REQUESTS FOR STOPPAGE OF PAYMENT EACH DAY. MANY SUCH REQUESTS INVOLVE MISPLACED CHECKS THAT ARE SUBSEQUENTLY FOUND BY THEIR PAYEES. MUST BE READILY APPARENT THAT THE TREASURY DEPARTMENT CANNOT POSSIBLE NOTIFY WOULD-BE ACCEPTORS OF SUCH CHECKS AND, IF IT COULD, THE REPERCUSSION TO ORDERLY BANKING AND COMMERCE WOULD PRECLUDE SUCH ACTION.

IN SUMMARY, WHEN YOU INDORSED THE SUBJECT CHECK IN BLANK YOU CHANGED IT TO BEARER PAPER NEGOTIABLE BY DELIVERY AND MUST SUFFER THE LOSS THAT WAS OCCASIONED BY YOUR BLANK INDORSEMENT. ACCORDINGLY, THERE IS NO BASIS FOR THE UNITED STATES TO PAY YOUR CLAIM AND OUR PREVIOUS ACTION IN THIS MATTER IS SUSTAINED.