B-170637, JUN 1, 1972

B-170637: Jun 1, 1972

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SINCE THE RECORD INDICATES THAT THE ACTIONS OF THESE EMPLOYEES WERE NOT THOSE OF A REASONABLY PRUDENT PERSON. THERE IS NO BASIS FOR GRANTING THE REQUESTED RELIEF. WAS TAKEN IN PAYMENT FOR POSTAGE STAMPS DELIVERED UPON RECEIPT OF THE CHECK. THE CHECKS WERE DRAWN ON THE FIRST NATIONAL CITY BANK OF NEW YORK AND ALLEGEDLY WERE PURCHASED BY THE ALLISON MAILING LIST CORPORATION. RELIEF TO THE POSTAL EMPLOYEES INVOLVED WAS DENIED BY OUR OFFICE ON THE GROUND THAT REASONABLE AND PRUDENT JUDGMENT WAS NOT EXERCISED BY THOSE EMPLOYEES IN ACCEPTING THE CHECKS. THE FACT THAT THE CHECK WAS DRAWN ON AN OUT-OF TOWN BANK SHOULD HAVE RAISED A QUESTION AS TO WHETHER THE CHECK WAS NEGOTIABLE. THE ASSISTANT GENERAL COUNSEL NOW REQUESTS RELIEF ON THE BASIS THAT THE PERSONS PRESENTING THE CHECKS WERE SKILLED "CONFIDENCE MEN.

B-170637, JUN 1, 1972

CIVILIAN EMPLOYEES - RELIEF FROM LIABILITY DECISION DENYING RECONSIDERATION OF A PRIOR DECISION BY CLAIMS DIVISION WHICH DENIED RELIEF FOR DEFICIENCIES IN THE ACCOUNTS OF CERTAIN POSTAL EMPLOYEES AT HARRISON, MAMARONECK, LARCHMONT, RYE, AND MOUNT VERNON, N.Y. SINCE THE RECORD INDICATES THAT THE ACTIONS OF THESE EMPLOYEES WERE NOT THOSE OF A REASONABLY PRUDENT PERSON, CONSIDERING THE SIZE OF THE CHECK AND THE CIRCUMSTANCES, THERE IS NO BASIS FOR GRANTING THE REQUESTED RELIEF.

TO MR. POSTMASTER GENERAL:

BY LETTER OF JANUARY 18, 1972, THE ASSISTANT GENERAL COUNSEL, CLAIMS DIVISION, UNITED STATES POSTAL SERVICE, REQUESTED RECONSIDERATION OF THE LETTERS OF SEPTEMBER 3, 1970, FROM OUR FORMER CIVIL DIVISION WHICH DENIED RELIEF FOR DEFICIENCIES IN THE ACCOUNTS OF CERTAIN POSTAL EMPLOYEES AT HARRISON, MARMARONECK, LARCHMONT, RYE, AND MOUNT VERNON, NEW YORK.

THE DEFICIENCIES AROSE UPON THE ACCEPTANCE OF A FORGED BANK CASHIER'S CHECK AT EACH OF THE ABOVE POST OFFICES. EACH CHECK, IN THE AMOUNT OF $5,000 WITH THE POSTMASTER AS PAYEE, WAS TAKEN IN PAYMENT FOR POSTAGE STAMPS DELIVERED UPON RECEIPT OF THE CHECK. THE CHECKS WERE DRAWN ON THE FIRST NATIONAL CITY BANK OF NEW YORK AND ALLEGEDLY WERE PURCHASED BY THE ALLISON MAILING LIST CORPORATION.

RELIEF TO THE POSTAL EMPLOYEES INVOLVED WAS DENIED BY OUR OFFICE ON THE GROUND THAT REASONABLE AND PRUDENT JUDGMENT WAS NOT EXERCISED BY THOSE EMPLOYEES IN ACCEPTING THE CHECKS. OUR CIVIL DIVISION'S LETTERS STATED THAT THE PURCHASE OF SUCH A LARGE AMOUNT OF POSTAGE STAMPS BY A PATRON WHO HAD NOT PREVIOUSLY DONE BUSINESS WITH THE POST OFFICE, THE AMOUNT OF THE CHECK, AND THE FACT THAT THE CHECK WAS DRAWN ON AN OUT-OF TOWN BANK SHOULD HAVE RAISED A QUESTION AS TO WHETHER THE CHECK WAS NEGOTIABLE.

THE ASSISTANT GENERAL COUNSEL NOW REQUESTS RELIEF ON THE BASIS THAT THE PERSONS PRESENTING THE CHECKS WERE SKILLED "CONFIDENCE MEN," THAT THE PUBLIC IN GENERAL AND THE REASONABLY PRUDENT MAN ARE HIGHLY SUSCEPTIBLE TO THE CONFIDENCE GAME, AND THAT THE GENERAL PUBLIC AND THE REASONABLY PRUDENT MAN LOOK AT A CASHIER'S CHECK AS BEING ON THE SAME FOOTING AS CASH.

UNLESS THE IDENTITY AND AUTHORITY OF THE PERSON PRESENTING THE CHECK ARE WELL KNOWN, IT IS NOT - AS WE UNDERSTAND IT - GENERAL COMMERCIAL PRACTICE TO ACCEPT A $5,000 BANK CASHIER'S CHECK IN EXCHANGE FOR DELIVERED MERCHANDISE WITHOUT VERIFYING THE VALIDITY OF THE CHECK BY CONTACTING EITHER THE BANK ISSUING THE CHECK OR, IF IT IS A WELL-KNOWN FIRM, THE PURCHASER INDICATED ON THE FACE OF THE CHECK. NO ATTEMPT WAS MADE TO VERIFY THE CHECKS IN THESE CASES, AND THE PERSONS PRESENTING THE CHECKS WERE UNKNOWN TO THE POSTAL EMPLOYEES INVOLVED. THUS, CONSIDERING THE AMOUNT OF THE CHECKS IT APPEARS THAT REASONABLE AND PRUDENT JUDGMENT WAS NOT EXERCISED BY THE EMPLOYEES ACCEPTING THESE CHECKS. IT IS SIGNIFICANT TO NOTE THAT IN A SIMILAR SITUATION THE POSTMASTER AT PORT CHESTER, NEW YORK, REFUSED TO FILL A STAMP ORDER FOR THE PERSON PRESENTING A $5,000 CASHIER'S CHECK (SAME BANK AND COMPANY AS ON THE CHECKS INVOLVED HERE) BECAUSE "THE BANKS WERE CLOSED AT THAT TIME AND HE COULD NOT VERIFY THE VALIDITY OF THE CASHIER'S CHECK."

FURTHER, WE NOTE THAT AT THE TIME THE CHECKS IN QUESTION WERE ACCEPTED SECTION 441.221 OF THE POSTAL MANUAL PERMITTED THE ACCEPTANCE OF CASHIER'S CHECKS "PROVIDED PAYMENT IS GUARANTEED BY THE POSTMASTER AND THE CHECKS CAN BE NEGOTIATED WITHOUT EXPENSE."

IN LIGHT OF THE FOREGOING THE ACTION TAKEN BY OUR FORMER CIVIL DIVISION IN THE LETTERS OF SEPTEMBER 3, 1970, DENYING RELIEF MUST BE SUSTAINED.

RETURNED HEREWITH AS REQUESTED ARE THE FIVE CHECKS SUBMITTED TO US BY THE ASSISTANT GENERAL COUNSEL ON MARCH 29, 1972.