NOVEMBER 10, 1923, 3 COMP. GEN. 297

NOVEMBER 10, 1923, 3 COMP. GEN. 297

SHORTAGE IN ACCOUNTS OF POSTMASTER A POSTMASTER IS PRIMARILY RESPONSIBLE TO THE UNITED STATES FOR ANY SHORTAGE IN HIS ACCOUNTS, WHETHER ARISING FROM HIS OWN ACTS OR THE ACTS OF A SUBORDINATE; AND IN THE EVENT OF A SHORTAGE ARISING THROUGH THE ACT OF A SUBORDINATE, THE GOVERNMENT IS NOT REQUIRED TO PROCEED AGAINST THE SUBORDINATE OR HIS SURETY IN THE FIRST INSTANCE, BUT MAY COLLECT THE AMOUNT FROM THE POSTMASTER, AND WHEN SO COLLECTED THE ACCOUNT IS CLOSED SO FAR AS THE GOVERNMENT IS CONCERNED.

DECISION BY COMPTROLLER GENERAL MCCARL, NOVEMBER 10, 1923:

JOSEPH E. WOODS REQUESTED SEPTEMBER 13, 1923, REVIEW OF SETTLEMENT CHARGING HIM WITH $59.01, ITEMIZED AS (A) $15.45 SHORTAGE IN LISTING POSTAL MONEY ORDERS AND (B) $60 ERRONEOUS REFUND OF INTERNATIONAL MONEY ORDER PAID IN THE COUNTRY TO WHICH CERTIFIED, LESS A BALANCE DUE OF $16.44, AS POSTMASTER AT TEAGUE, TEX., TO NOVEMBER 30, 1920, WHEN HIS RESIGNATION BECAME EFFECTIVE. THE CORRECTNESS OF THE DEBIT ITEM OF $15.45 AND CREDIT ITEM OF $16.44 APPEARS TO BE ADMITTED, BUT IT IS CONTENDED THAT THE ERRONEOUS REFUND OF THE $60 INTERNATIONAL MONEY ORDER WAS MADE BY, AND SHOULD BE COLLECTED FROM, THE ASSISTANT POSTMASTER WHO WAS UNDER BOND, DATED MAY 9, 1919, TO THE UNITED STATES IN THE PENAL SUM OF $1,000 FOR THE FAITHFUL DISCHARGE OF HIS DUTIES. THE QUESTION FOR DECISION IS WHETHER COLLECTION OF THE ADMITTED INDEBTEDNESS SHOULD BE MADE FROM THE POSTMASTER OR FROM HIS SUBORDINATE.

UNDER SECTION 3843, REVISED STATUTES, A POSTMASTER IS REQUIRED TO RENDER AN "ACCOUNT OF ALL MONEYS RECEIVED OR CHARGED BY HIM, OR AT HIS OFFICE, FOR POSTAGE, RENT OF BOXES OR OTHER RECEPTACLES FOR MAIL MATTER, OR BY REASON OF KEEPING A BRANCH OFFICE, OR FOR THE DELIVERY OF MAIL MATTER IN ANY MANNER WHATEVER.' BY SECTION 4045, REVISED STATUTES, ALL MONEY RECEIVED FROM THE SALE OF MONEY ORDERS, INCLUDING FEES, IS TO BE "DEEMED AND TAKEN TO BE MONEY-ORDER FUNDS AND MONEY IN THE TREASURY OF THE UNITED STATES" FOR WHICH ALL POSTMASTERS MUST ACCOUNT. SECTION 4031, REVISED STATUTES, PROVIDES THAT THE OFFICIAL BOND GIVEN BY THE POSTMASTER SHALL BE "HELD TO COVER AND APPLY" TO THE ACCOUNTS OF MONEY-ORDER CLERKS. PARAGRAPH 317 OF POSTAL LAWS AND REGULATIONS STATES THAT---

THE TAKING OF BONDS BY THE UNITED STATES DIRECTLY FROM ASSISTANT POSTMASTERS AND CLERKS IN POST OFFICES DOES NOT IN ANY WISE AFFECT THE LIABILITY OF POSTMASTERS UPON THEIR OFFICIAL BONDS FOR THE PROPER DISCHARGE OF ALL THE DUTIES OF THEIR OFFICE AND DUE ACCOUNTING FOR ALL PUBLIC FUNDS WHICH MAY BE IN, OR COME INTO, THEIR CUSTODY AS POSTMASTERS; AND POSTMASTERS AND THEIR SURETIES ARE RESPONSIBLE ON THEIR OFFICIAL BONDS TO THE SAME EXTENT AS THERETOFORE FOR THE DEFAULTS AND DEFALCATIONS OF THEIR SUBORDINATES. THE BONDS TAKEN FROM ASSISTANTS AND CLERKS IN POST OFFICES ARE SIMPLY ADDITIONAL SECURITY OF WHICH THE UNITED STATES MAY AVAIL ITSELF IN CASE OF LOSS.

A SIMILAR QUESTION AS TO WHETHER A POSTMASTER WAS RESPONSIBLE FOR SHORTAGES OCCURRING IN HIS ACCOUNTS BY REASON OF ACTS OF A SUBORDINATE IN HIS POST OFFICE WAS BEFORE THE UNITED STATES CIRCUIT COURT IN THE CASE OF BRYAN ET AL. V. UNITED STATES, 90 FED.REP., 473, AND THERE WAS SUSTAINED A JUDGMENT IN THE LOWER COURT AGAINST THE POSTMASTER, THE COURT STATING:

THE POSTMASTER AT A MONEY-ORDER POST OFFICE IS THE OFFICIAL CUSTODIAN OF ALL MONEYS RECEIVED ON ACCOUNT OF MONEY ORDERS ISSUED THEREFROM, AND AS SUCH CUSTODIAN IT IS HIS DUTY TO ACCOUNT TO THE GOVERNMENT FOR THE SAME; AND, IN VIEW OF THIS FACT, SECTION 3834 OF THE REVISED STATUTES REQUIRES THAT THE BOND OF THE POSTMASTER AT A MONEY-ORDER POST OFFICE "SHALL CONTAIN AN ADDITIONAL CONDITION FOR THE FAITHFUL PERFORMANCE OF ALL DUTIES AND OBLIGATIONS IN CONNECTION WITH THE MONEY-ORDER BUSINESS.' THE CONDITION ABOVE QUOTED FROM THE BOND SUED ON IS THAT THE PRINCIPAL THEREIN WILL PAY THE BALANCE OF ALL MONEYS THAT SHALL "COME INTO HIS HANDS FROM POSTAGE COLLECTED * * * OR MONEY ORDERS ISSUED BY HIM.' THE WORDS "COME INTO HIS HANDS" AS HERE USED HAVE THE SAME MEANING AS THE PHRASE "COME INTO HIS OFFICIAL CUSTODY," AND THE TRUE CONSTRUCTION OF THIS CONDITION OF THE BOND IS THAT THE PRINCIPAL, BRYAN, WOULD ACCOUNT FOR AND PAY OVER THE BALANCE OF ALL SUCH MONEYS AS SHOULD COME INTO HIS OFFICIAL CUSTODY AS POSTMASTER AT SAN FRANCISCO. THE MONEY WHICH WAS RECEIVED BY KENNEDY, THE POSTAL CLERK IN CHARGE OF THE MONEY-ORDER BUSINESS IN THAT OFFICE, WAS THEREBY, IN CONTEMPLATION OF LAW, RECEIVED INTO THE OFFICIAL CUSTODY OF THE POSTMASTER; AND THE FACT ALLEGED IN THE ANSWER THAT SUCH MONEY WAS EMBEZZLED BY KENNEDY CONSTITUTES NO DEFENSE TO THIS ACTION. THE CASES SUSTAINING THIS CONCLUSION ARE SO NUMEROUS THAT NO EXTENDED DISCUSSION OF THE QUESTION IS NECESSARY. U.S. V. PRESCOTT, 3 HOW., 578; U.S. V. MORGAN, 11 HOW., 154; U.S. V. KEEHLER, 9 WALL., 83; BOYDEN V. U.S., 13 WALL., 17; U.S. V. THOMAS, 15 WALL., 337; U.S. V. ZABRISKIE, 87 FED., 714; BOSBYSHELL V. U.S., 23 C.C.A., 581, 77 FED., 944. THE FACTS THAT THE CLERK WHO EMBEZZLED THE MONEYS SUED FOR WAS NOT APPOINTED BY THE PRINCIPAL IN THE BOND, AND THAT THE TENURE OF OFFICE OF SUCH CLERK WAS HELD UNDER THE CIVIL SERVICE ACT OF JANUARY 16, 1883 (22 STAT., 403), DOES NOT AFFECT THE OBLIGATION OF THE BOND NOR RENDER INAPPLICABLE THE RULE LAID DOWN IN THE CASES ABOVE CITED. THE MONEY RECEIVED BY THIS CLERK ON ACCOUNT OF MONEY ORDERS ISSUED WAS CONSTRUCTIVELY IN THE OFFICIAL CUSTODY OF THE PRINCIPAL IN THE BOND, AND IT WAS HIS DUTY TO EXERCISE OFFICIAL SUPERVISION OVER SUCH CLERK AND TO SEE THAT THE MONEY SO RECEIVED BY HIS SUBORDINATE WAS FAITHFULLY ACCOUNTED FOR. * * *.

SEE ALSO 24 COMP. DEC., 109.

THE SETTLEMENT CHARGING CLAIMANT WITH A LOSS RESULTING FROM THE ACTION OF THE SUBORDINATE IN THE POST OFFICE WAS CORRECT; THERE WAS NO OBLIGATION ON THE UNITED STATES TO PROCEED AGAINST EITHER THE SUBORDINATE OR HIS SURETY AS A CONDITION PRECEDENT TO CERTIFYING THE SHORTAGE AGAINST THE POSTMASTER AND REQUIRING HIM TO REFUND THE AMOUNT OF THE INDEBTEDNESS. THE REFUND HAVING BEEN MADE, THE ACCOUNT IS CLOSED. 12 COMP. DEC., 158. IT WOULD APPEAR, THEREFORE, THAT THE CLAIM OF THE UNITED STATES HAVING BEEN SETTLED, IT IS NOT NOW REQUIRED TO CALL UPON THE SURETY OF THE ASSISTANT POSTMASTER TO MAKE GOOD THE SHORTAGE, ALTHOUGH SUCH DEMAND MIGHT HAVE BEEN MADE IN THE FIRST INSTANCE.