B-43018, AUGUST 1, 1944, 24 COMP. GEN. 61

B-43018: Aug 1, 1944

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A CHECK WAS ISSUED AND DELIVERED TO THE PAYEE PRIOR TO HIS DEATH BUT WAS NOT NEGOTIATED. 1944: THERE WAS RECEIVED FROM YOUR ATTORNEY. THE SECRETARY OF THE NAVY WAS AUTHORIZED AND DIRECTED TO PAY TO P. NO PROVISION WAS MADE THEREIN FOR PAYMENT TO ANY PERSON OTHER THAN SAID DES GARENNES. THAT IS TO SAY. NO PROVISION WAS MADE FOR PAYMENT TO PERSONAL REPRESENTATIVES OF AMOUNT ACCRUED AND UNPAID AT THE TIME OF HIS DEATH. IS FOR THE AMOUNT OF THE CHECK. THE CLAIM WAS DISALLOWED BECAUSE IT HAD NO FOUNDATION IN LAW. IT WAS A REWARD GRANTED BY CONGRESS FOR FAITHFUL SERVICE. IT WAS RECOGNITION OF A CLAIM WHICH COULD NOT HAVE BEEN ENFORCED AGAINST THE GOVERNMENT. IT IS A GRATUITY WHICH DOES NOT GO TO THE ADMINISTRATOR OR EXECUTOR AS AN ASSET OF THE ESTATE.

B-43018, AUGUST 1, 1944, 24 COMP. GEN. 61

DECEDENTS' ESTATES - PRIVATE ACT PAYMENTS; CHECKS RECEIVED BUT NOT NEGOTIATED AN AMOUNT ACCRUED AND UNPAID AT THE TIME OF THE DEATH OF THE BENEFICIARY UNDER A PRIVATE ACT DIRECTING PAYMENT OF A MONTHLY SUM TO HIM FOR THE REMAINDER OF HIS LIFE--- WHICH PAYMENTS CONSTITUTE A GRATUITY NOT GOING TO THE ADMINISTRATOR OR EXECUTOR NOR DESCENDING TO THE HEIRS--- MAY NOT BE PAID TO THE EXECUTOR OF THE DECEDENT'S ESTATE. WHERE, PURSUANT TO A PRIVATE ACT PROVIDING FOR THE MONTHLY PAYMENT OF A STIPULATED SUM TO A DESIGNATED PERSON FOR THE REMAINDER OF HIS LIFE, A CHECK WAS ISSUED AND DELIVERED TO THE PAYEE PRIOR TO HIS DEATH BUT WAS NOT NEGOTIATED, RECEIPT OF THE CHECK DID NOT CONSTITUTE A PAYMENT UNDER THE ACT SO AS TO VEST IN THE EXECUTOR OF THE DECEDENT'S ESTATE A RIGHT TO RECEIVE PAYMENT OF THE AMOUNT OF THE CHECK.

COMPTROLLER GENERAL WARREN TO HENRI P. DES GARENNES, AUGUST 1, 1944:

THERE WAS RECEIVED FROM YOUR ATTORNEY, VINCENT A. TUBMAN, A LETTER DATED MARCH 31, 1944, REQUESTING REVIEW OF SETTLEMENT DATED FEBRUARY 8, 1944, WHICH DISALLOWED YOUR CLAIM FOR THE PROCEEDS OF NAVY DEPARTMENT ( SUPPLY CORPS) CHECK NO. 22,641, FOR $50, DRAWN NOVEMBER 2, 1943, BY W. M. DUGDALE, SYMBOL 56, 799, TO THE ORDER OF P. JEAN DES GARENNES, REPRESENTING A MONTHLY PAYMENT UNDER PRIVATE LAW 88, 73RD CONGRESS, 48 STAT. 1330.

BY THE TERMS OF THE ACT, THE SECRETARY OF THE NAVY WAS AUTHORIZED AND DIRECTED TO PAY TO P. JEAN DES GARENNES, THE SUM OF $50 PER MONTH FOR THE REMAINDER OF HIS LIFE. NO PROVISION WAS MADE THEREIN FOR PAYMENT TO ANY PERSON OTHER THAN SAID DES GARENNES. THAT IS TO SAY, NO PROVISION WAS MADE FOR PAYMENT TO PERSONAL REPRESENTATIVES OF AMOUNT ACCRUED AND UNPAID AT THE TIME OF HIS DEATH. MR. DES GARENNES DIED NOVEMBER 5, 1943. AT THE TIME OF HIS DEATH HE HAD RECEIVED AND HAD IN HIS POSSESSION THE CHECK FOR $50. YOUR CLAIM, AS EXECUTOR, IS FOR THE AMOUNT OF THE CHECK.

THE CLAIM WAS DISALLOWED BECAUSE IT HAD NO FOUNDATION IN LAW, BUT DEPENDED ENTIRELY UPON THE GENEROSITY OF THE GOVERNMENT. THE BENEFITS PROVIDED BY THE ACT CONSTITUTED A GRATUITY. IT WAS A REWARD GRANTED BY CONGRESS FOR FAITHFUL SERVICE. IT WAS RECOGNITION OF A CLAIM WHICH COULD NOT HAVE BEEN ENFORCED AGAINST THE GOVERNMENT. IT IS A GRATUITY WHICH DOES NOT GO TO THE ADMINISTRATOR OR EXECUTOR AS AN ASSET OF THE ESTATE. THE BENEFIT DID NOT DESCEND TO THE HEIRS. SEE HEIRS OF EMERSON V. HALL, 13 PET. 409, 413.

REVIEW OF THE DISALLOWANCE IS REQUESTED FOR THE REASON THAT THE CHECK HAD BEEN ISSUED AND DELIVERED TO THE PAYEE DURING HIS LIFETIME; THAT DELIVERY OF THE CHECK CONSTITUTED PAYMENT UNDER THE ACT; AND THAT YOUR CLAIM IS FOR THE AMOUNT OF THE CHECK WHICH HAD BECOME THE PROPERTY OF DECEDENT PRIOR TO HIS DEATH AND IS NOT A CLAIM UNDER PROVISIONS OF THE ACT OF MAY 3, 1934. THE QUESTION FOR DETERMINATION IS WHETHER RECEIPT OF A CHECK CONSTITUTES PAYMENT WHERE THE PAYEE DIES WITHOUT NEGOTIATING IT.

IN DECISION OF MAY 28, 1941, B-13686, TO THE FEDERAL SECURITY ADMINISTRATOR, FEDERAL SECURITY AGENCY, THE COMPTROLLER GENERAL STATED AS FOLLOWS:

THE ACCOUNTING OFFICERS HAVE CONSISTENTLY APPLIED THE RULE THAT THE RECEIPT OF A CHECK DOES NOT CONSTITUTE PAYMENT WHERE IT IS NOT NEGOTIATED BY THE PAYEE PRIOR TO HIS DEATH. IN DECISION OF MARCH 22, 1940, 19 COMP. GEN. 811, ADDRESSED TO THE CHAIRMAN, RAILROAD RETIREMENT BOARD, IT WAS SAID.

"IT IS WELL SETTLED THAT IN THE ABSENCE OF A SPECIAL AGREEMENT TO THAT EFFECT, THE DELIVERY AND ACCEPTANCE OF A CHECK DOES NOT OPERATE AS PAYMENT OF A DEBT UNLESS THE CHECK IS PAID. CLEVE V. CRAVEN CHEMICAL CO., 18 FED. (2D) 711, 712; DOW V. COWAN, 23 FED. (2D) 646, 647; JEFFERSON STANDARD LIFE INSURANCE CO. V. WISDOM, 58 FED. (2D) 565, 566; CARCABA V. MCNAIR, 68 FED. (2D) 795, 796; MITTRY BROTHERS CONSTRUCTION CO. V. UNITED STATES, 75 FED. (2D) 79, 82; STANDARD INVESTMENT CO. V. TOWN OF SNOWHILL, NORTH CAROLINA, 78 FED. (2D) 33, 35-6; MANUFACTURERS FINANCE CO. V. ARMSTRONG, 78 FED. (2D) 289, 290; HAMILTON V. R. S. DICKSON AND CO., 85 FED. (2D) 107. COMPARE 26 COMP. DEC. 1038; AND 9 COMP. GEN. 144. THIS GENERAL RULE APPEARS TO BE THE RULE IN NORTH CAROLINA WHERE THE CHECKS IN QUESTION WERE DELIVERED AND NEGOTIATED. THOMAS V. PRUDENTIAL INSURANCE COMPANY OF AMERICA, 104 FED. (2D) 480, 481. IT IS NOT BELIEVED THERE COULD BE SUCCESSFULLY ASSERTED THAT A DIFFERENT RULE IS FOR APPLICATION IN THE PRESENT CASE BECAUSE UNITED STATES TREASURY CHECKS ARE INVOLVED. IT IS WELL SETTLED THAT "AS AGAINST THE UNITED STATES, THE RIGHTS OF THE HOLDER OF ITS CHECKS DRAWN UPON THE TREASURER ARE THE SAME AS THOSE ACCORDED BY COMMERCIAL PRACTICE TO THE CHECKS OF PRIVATE INDIVIDUALS.' UNITED STATES V. GUARANTY TRUST COMPANY, 293 U.S. 340, 350, AND CASES THERE CITED. SEE, ALSO, 12 COMP. GEN. 492.'

IN 19 OP. ATTY. GEN. 1, IT WAS SAID:

* * * THE QUESTION IS THUS REDUCED TO, WHAT IS A PAYMENT TO A PENSIONER IN HIS LIFE-TIME? IN THE ABSENCE OF SPECIAL CONTRACT THE PRESUMPTION IS THAT THE PAYMENT OF AN OBLIGATION SHALL BE MADE IN MONEY. THE PRESUMPTION APPLIES TO A PENSIONER AS WELL AS TO ANY ONE ELSE. TILL HE GETS HIS MONEY OR THAT WHICH IN LAW IS ITS EQUIVALENT, HE IS NOT PAID NOR IS THE GOVERNMENT DISCHARGED. IF HE RECEIVES A CHECK BUT NEVER TRANSFERS IT NOR GETS THE CHECK CASHED HE HAS NOT RECEIVED HIS MONEY * * *.

THE ATTORNEY GENERAL CITED A NUMBER OF COURT DECISIONS IN SUPPORT OF THAT OPINION. THE ABOVE STATEMENT WAS QUOTED AND FOLLOWED BY THE COMPTROLLER OF THE TREASURY IN DECISION OF MARCH 13, 1909, 15 COMP. DEC. 543.

APPLICATION OF THE ESTABLISHED RULE REQUIRED CANCELLATION OF THE CHECK, LEAVING THE AMOUNT IN THE APPROPRIATION AGAINST WHICH THE CHECK WAS DRAWN. ACCORDINGLY, UPON REVIEW, THE SETTLEMENT OF FEBRUARY 8, 1944, IS FOUND CORRECT AND MUST BE AND IS SUSTAINED.