B-88094, AUGUST 22, 1949, 29 COMP. GEN. 88

B-88094: Aug 22, 1949

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MAY BE ACCEPTED WHERE THE CHECKS OR DRAFTS ARE IN THE AMOUNT DETERMINED BY THE RAILROAD RETIREMENT BOARD TO BE DUE IN EACH CASE. 1949: REFERENCE IS MADE TO YOUR LETTER OF JULY 22. RELATIVE TO THE ACCEPTANCE OF CERTAIN CHECKS AND DRAFTS REPRESENTING PAYMENT TO THE RAILROAD RETIREMENT BOARD UNDER THE RAILROAD UNEMPLOYMENT INSURANCE ACT WHICH ARE RECEIVED AND SCHEDULED FOR COLLECTION BY THE BOARD. THE CHECKS AND DRAFTS ARE STATED TO BE THOSE RECEIVED BY THE RAILROAD RETIREMENT BOARD FROM INDIVIDUALS OR INSURANCE COMPANIES UNDER THE PROVISIONS OF SECTIONS 2 (F) AND 12 (O) OF THE RAILROAD UNEMPLOYMENT INSURANCE ACT. IT APPEARS THAT THE CHECKS AND DRAFTS ARE RECEIVED BY THE BOARD ON ACCOUNT OF ITS RIGHT OF REIMBURSEMENT FOR SICKNESS BENEFITS PAID BY IT TO SUCH EMPLOYEES.

B-88094, AUGUST 22, 1949, 29 COMP. GEN. 88

CHECKS - INDORSEMENTS - CONDITIONAL - ACCEPTANCE CHECKS OR DRAFTS REPRESENTING COLLECTIONS OF REIMBURSABLE SICKNESS BENEFIT PAYMENTS UNDER SECTIONS 2 (F) AND 12 (O) OF THE RAILROAD UNEMPLOYMENT INSURANCE ACT, AS AMENDED, WHICH BEAR CONDITIONAL INDORSEMENTS PURPORTING TO RELEASE THE DRAWER FROM FURTHER CLAIMS IN CONNECTION WITH THE INJURY, MAY BE ACCEPTED WHERE THE CHECKS OR DRAFTS ARE IN THE AMOUNT DETERMINED BY THE RAILROAD RETIREMENT BOARD TO BE DUE IN EACH CASE, THERE BEING NO ELEMENT OF COMPROMISE INVOLVED IN ACCEPTING SUCH REMITTANCES. COMPARE 15 COMP. GEN. 1072.

COMPTROLLER GENERAL WARREN TO THE CHAIRMAN, RAILROAD RETIREMENT BOARD, AUGUST 22, 1949:

REFERENCE IS MADE TO YOUR LETTER OF JULY 22, 1949, RELATIVE TO THE ACCEPTANCE OF CERTAIN CHECKS AND DRAFTS REPRESENTING PAYMENT TO THE RAILROAD RETIREMENT BOARD UNDER THE RAILROAD UNEMPLOYMENT INSURANCE ACT WHICH ARE RECEIVED AND SCHEDULED FOR COLLECTION BY THE BOARD.

THE CHECKS AND DRAFTS ARE STATED TO BE THOSE RECEIVED BY THE RAILROAD RETIREMENT BOARD FROM INDIVIDUALS OR INSURANCE COMPANIES UNDER THE PROVISIONS OF SECTIONS 2 (F) AND 12 (O) OF THE RAILROAD UNEMPLOYMENT INSURANCE ACT, AS AMENDED, 54 STAT. 1096, 60 STAT. 737, 741, 45 U.S.C. 352 (F), 362 (O), ON CLAIMS FILED BY EMPLOYEES OF RAILROADS FOR PERSONAL INJURIES. IT APPEARS THAT THE CHECKS AND DRAFTS ARE RECEIVED BY THE BOARD ON ACCOUNT OF ITS RIGHT OF REIMBURSEMENT FOR SICKNESS BENEFITS PAID BY IT TO SUCH EMPLOYEES--- THE ADMINISTRATIVE PROCEDURE WITH RESPECT TO SUCH MATTERS BEING MORE PARTICULARLY SET FORTH IN YOUR LETTER.

YOU STATE THAT PRACTICALLY ALL REMITTANCES IN CONNECTION WITH PERSONAL INJURY CASES IN SUCH MATTERS ARE RECEIVED FROM RAILROAD COMPANIES, OTHER EMPLOYERS UNDER THE RAILROAD UNEMPLOYMENT INSURANCE ACT, AND INSURANCE COMPANIES; THAT THE REMITTANCES ARE ISSUED BY CLAIMS DEPARTMENTS OF THE COMPANIES IN ACCORDANCE WITH THEIR ORDINARY PROCEDURES FOR THE SETTLEMENT OF PERSONAL INJURY CLAIMS; AND THAT THE CHECKS AND DRAFTS FREQUENTLY CONTAIN LANGUAGE, EXAMPLES OF WHICH ARE SET FORTH IN YOUR LETTER, PURPORTING TO RELEASE THE PAYING COMPANY FROM ALL FURTHER CLAIMS IN CONNECTION WITH THE INJURY TO THE INDIVIDUAL NAMED ON THE CHECK OR DRAFT.

YOU FURTHER STATE THAT, WHEN THE BOARD RECEIVES A REMITTANCE, IT DETERMINES THAT IT IS IN THE AMOUNT TO WHICH THE BOARD IS ENTITLED, AFTER WHICH IT IS SCHEDULED AND TRANSMITTED TO THE LOCAL REGIONAL DISBURSING OFFICER OF THE TREASURY DEPARTMENT FOR DEPOSIT. IT APPEARS FROM YOUR LETTER THAT THE MAJORITY OF CHECKS AND DRAFTS ARE MADE PAYABLE TO THE TREASURER OF THE UNITED STATES AND ARE TRANSMITTED WITHOUT ENDORSEMENT, BUT THAT IF THE REMITTANCE IS MADE PAYABLE TO THE BOARD, IT IS ENDORSED FOR PAYMENT TO THE TREASURER.

YOU STATE FURTHER THAT THAT PROCEDURE HAS BEEN FOLLOWED SINCE THE INCEPTION, ON JULY 1, 1947, OF THE SICKNESS INSURANCE PROGRAM OF THE RAILROAD UNEMPLOYMENT INSURANCE ACT, BUT THAT IN ITS RDO LETTER 507, SUPPLEMENT 10, DATED JULY 1, 1949, THE DIVISION OF DISBURSEMENT, TREASURY DEPARTMENT, CALLED THE ATTENTION OF THE REGIONAL DISBURSING OFFICERS TO THE DECISION OF THIS OFFICE REPORTED IN 15 COMP. GEN. 1072 (A-74922, DATED JUNE 9, 1936), RELATING TO THE ABSENCE OF AUTHORITY OF LAW TO ACCEPT, IN CONNECTION WITH DEBTS DUE TO THE GOVERNMENT, CHECKS BEARING CONDITIONAL ENDORSEMENTS THAT THEY CONSTITUTE FULL PAYMENT, AS THE RESULT OF WHICH NOTICE THE REGIONAL DISBURSING OFFICER AT CLEVELAND, OHIO, HAS REFUSED TO ACCEPT A NUMBER OF SUCH REMITTANCES WHICH WERE TRANSMITTED TO HIM BY THE BOARD'S REGIONAL OFFICE IN THAT CITY.

YOU URGE THAT, WHILE A STRICT INTERPRETATION OF THE PERTINENT SECTIONS OF THE RAILROAD UNEMPLOYMENT INSURANCE ACT ESTABLISHES THE CLAIM OF THE BOARD FOR REIMBURSEMENT IN SUCH MATTERS, UPON PROPER NOTICE, AS A LIEN UPON ANY RELATED SUMS PAID OR PAYABLE AS SETTLEMENT OR DAMAGES, THE PRESENT COOPERATIVE ARRANGEMENT WITH THE RAILROAD AND INSURANCE COMPANIES HAS OPERATED ENTIRELY SATISFACTORILY WITHOUT RESORT TO LITIGATION; THAT THE DIFFICULTIES OF OBTAINING COOPERATION FROM EMPLOYERS AND INSURANCE COMPANIES WOULD BE GREATLY INCREASED IF THE BOARD MAY NOT ACCEPT THEIR ORDINARY FORMS OF REMITTANCE; AND THAT THE REFUSAL TO ACCEPT THE LATTER MIGHT RAISE SUBSTANTIALLY THE COST OF COLLECTING THE AMOUNTS DUE.

YOU EXPRESS THE VIEW THAT THE DECISION IN 15 COMP. GEN. 1072 IS NOT IN POINT IN THE PRESENT MATTER BECAUSE THE REMITTANCE IN EACH CASE IS IN AN AMOUNT SPECIFIED BY THE BOARD, THE CORRECTNESS OF WHICH IS VERIFIED BEFORE SCHEDULING AND TRANSMITTAL. HOWEVER, BECAUSE OF THE QUESTION RAISED, YOU ASK (1) WHETHER SAID DECISION APPLIES TO THE ACCEPTANCE OF CHECKS AND DRAFTS BEARING THE CONDITIONS REFERRED TO AS TO FULL SETTLEMENT AND RELEASE, WHEN THE AMOUNTS THEREOF HAVE BEEN DETERMINED BY THE BOARD TO BE CORRECT, AND (2) IF THE DECISION DOES APPLY, WHETHER THE OBJECTION CAN BE REMOVED BY PLACING ON THE REVERSE SIDE OF SUCH DRAFTS AND CHECKS A PRELIMINARY CERTIFICATION OR ENDORSEMENT TO THE EFFECT THAT THE AMOUNT HAS BEEN DETERMINED TO BE CORRECT BY THE RAILROAD RETIREMENT BOARD.

IN THE DECISION IN 15 COMP. GEN. 1072, ADDRESSED TO THE ADMINISTRATOR OF VETERANS AFFAIRS, IT WAS HELD, AS INDICATED IN YOUR LETTER, THAT THERE WAS NO AUTHORITY OF LAW TO ACCEPT, IN CONNECTION WITH DEBTS DUE THE GOVERNMENT, CHECKS BEARING CONDITIONAL ENDORSEMENTS THAT THEY CONSTITUTE FULL PAYMENT. HOWEVER, THAT DECISION WAS SUBSEQUENTLY MODIFIED BY DECISION OF OCTOBER 6, 1936, IN THE SAME CASE- - NAMELY, A-74922--- WHEREIN, UPON REQUEST BY THE ADMINISTRATOR OF VETERANS AFFAIRS FOR REVIEW OF THE MATTER, IT WAS HELD, WITH REFERENCE TO CHECKS RECEIVED FROM SURETY COMPANIES IN PAYMENT OF CLAIMS IN FAVOR OF THE UNITED STATES, THAT IN CASES WHERE THE CHECK IS IN THE FULL AMOUNT OF THE BOND OF THE SURETY BUT, HOWEVER, BEARS A CONDITIONAL ENDORSEMENT RELATING TO FULL PAYMENT, ETC., THIS OFFICE WOULD NOT BE REQUIRED TO OBJECT TO THE ACCEPTANCE OF SUCH CHECKS EVEN THOUGH THEY MAY BEAR SUCH CONDITIONAL ENDORSEMENT, SINCE SUCH CHECKS WERE IN THE FULL AMOUNT PAYABLE BY THE DRAWER--- THE SURETY--- AND DID NOT RELEASE OTHERS WHO MIGHT ALSO BE LIABLE AND DID NOT INVOLVE A COMPROMISE.

IN THE PRESENT CASE, AS STATED ABOVE, IT APPEARS THAT THE CHECKS OR DRAFTS ARE IN THE AMOUNT DETERMINED BY THE RAILROAD RETIREMENT BOARD TO BE DUE IN EACH CASE--- WHICH IS UNDERSTOOD FROM YOUR LETTER TO BE THE FULL AMOUNT DUE. THUS, THERE IS NOT INVOLVED THE ACCEPTANCE OF A CHECK OR DRAFT IN AN AMOUNT LESS THAN THE FULL AMOUNT DETERMINED TO BE DUE. ACCORDINGLY, IN SUCH CASES, SINCE IT APPEARS FROM YOUR LETTER THAT THEY REPRESENT THE FULL AMOUNT DUE BY THE PARTY MAKING THE PAYMENT AND THUS THAT THERE IS NO ELEMENT OF COMPROMISE INVOLVED, THIS OFFICE WILL INTERPOSE NO OBJECTION TO THE ACCEPTANCE OF CHECKS OR DRAFTS BEARING CONDITIONAL ENDORSEMENTS AS TO FULL PAYMENT, ETC., SUCH AS REFERRED TO IN YOUR LETTER.