B-118944, OCT. 3, 1955

B-118944, OCT. 3, 1955

TO MR. LINTON M. COLLINS:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF JUNE 21 AND 24, 1955, ACKNOWLEDGED JULY 21, REQUESTING RECONSIDERATION OF DECISION OF MAY 27, 1955, RELATIVE TO THE CLAIM OF MR. ALLEN CLAIBORNE FOR THE PROCEEDS OF UNITED STATES TREASURY CHECK NO. 13,566,001, DATED SEPTEMBER 7, 1951, FOR $1,801 DRAWN TO THE ORDER OF CATHERINE BOBADILLA DEL ROSARIO BY PAUL D. BANNING, SYMBOL 300.

THE FACTS IN THE MATTER AS SHOWN BY THE RECORD HERE ARE SET FORTH IN THE DECISION. IT APPEARED THAT BOTH MR. CLAIBORNE AND THE NATIONAL CITY BANK OF NEW YORK, MANILA BRANCH, CLAIMED TO BE THE HOLDER IN DUE COURSE OF THE CHECK AND IT WAS HELD THAT, IN VIEW OF THE CONFLICTING EVIDENCE AS SUBMITTED AND THE UNUSUAL CIRCUMSTANCES DISCLOSED BY THE RECORD, NO FURTHER ACTION WOULD BE TAKEN ON MR. CLAIBORNE'S CLAIM IN THE ABSENCE OF A JUDICIAL DETERMINATION OF THE RIGHTS OF THE CLAIMANTS OR A WRITTEN AGREEMENT BETWEEN THEM AS TO THE DISTRIBUTION OF THE AMOUNT INVOLVED, ACCOMPANIED BY A RELEASE OF ALL AND ANY CLAIMS AGAINST THE UNITED STATES FOR THE PROCEEDS OF THE CHECK.

IN YOUR LETTER OF JUNE 21, YOU CONTEND THAT THE ERASURE OF THE ENDORSEMENT FOR DEPOSIT PREVIOUSLY PLACED ON THE CHECK BY MR. CLAIBORNE CONSTITUTED AN IRREGULARITY WHICH PUT THE BANK ON INQUIRY, BUT THAT THE BANK FAILED TO INVESTIGATE THE ERASURE SUFFICIENTLY AND THAT A PROPER INVESTIGATION WOULD HAVE DISCLOSED THE NATURE OF THE ERASED ENDORSEMENT. YOU FURTHER CONTEND THAT, THEREFORE, THE BANK SHOULD NOT BE REGARDED AS A BONA FIDE HOLDER OF THE CHECK.

AS YOU WERE ADVISED IN OUR LETTER OF JUNE 21, A LETTER WAS THEN ADDRESSED TO THE BANK REQUESTING FURTHER INFORMATION IN THE MATTER. IN ITS REPLY, THE BANK PRESENTS NO NEW MATERIAL FACTS RELATIVE TO THE EXTENT OF ITS INQUIRY AT THE TIME IT ACCEPTED THE CHECK FROM MR. LLAVE. HOWEVER, IT ADHERES TO ITS PREVIOUS CONTENTION THAT ON THE FACTS SHOWN IT IS AN INNOCENT HOLDER FOR VALUE WITH FULL RIGHTS TO RECOVER.

THE MATTER HAS BEEN FULLY REVIEWED. ON THE RECORD HERE THE QUESTION OF WHETHER THE BANK IS A HOLDER IN DUE COURSE APPEARS TO BE OPEN TO SUFFICIENT DOUBT AS NOT TO REQUIRE OR JUSTIFY THIS OFFICE IN ATTEMPTING TO HOLD THAT THE BANK IS OR IS NOT SUCH A HOLDER. IT IS WELL ESTABLISHED THAT THE ACCOUNTING OFFICERS OF THE GOVERNMENT ARE NOT REQUIRED OR AUTHORIZED TO CERTIFY FOR PAYMENT CLAIMS OF DOUBTFUL VALIDITY. SEE LONGWILL V. THE UNITED STATES, 17 C.CLS. 288; CHARLES V. THE UNITED STATES, 19 ID. 316; 18 COMP. GEN. 199; 26 ID. 778. SINCE THE MATTER IS OPEN TO TOO MUCH DOUBT TO DETERMINE THAT THE BANK MAY NOT BE A HOLDER IN DUE COURSE, WE WOULD, OF COURSE, NOT BE JUSTIFIED IN ALLOWING MR. CLAIBORNE'S CLAIM FOR THE FULL AMOUNT OF THE CHECK.

HOWEVER, IT APPEARS THAT THE CHECK WAS CASHED BY THE BANK FOR A MR. LLAVE IN PHILIPPINE PESOS AT THE RATE OF 200.375 PESOS FOR EVERY $100,OR 3608.75 PESOS, AND THAT MR. LLAVE SUBSEQUENTLY REIMBURSED THE BANK TO THE EXTENT OF 2450 PESOS. THUS, THERE APPEARS NO REASON WHY MR. CLAIBORNE MAY NOT NOW BE ALLOWED AN AMOUNT EQUIVALENT TO THE AMOUNT MR. LLAVE REIMBURSED THE BANK.

ACCORDINGLY, THE CLAIM OF MR. CLAIBORNE WILL BE ALLOWED TO THE EXTENT THAT MR. LLAVE REIMBURSED THE BANK ON THE CHECK, AND NO FURTHER ACTION WILL BE TAKEN BY THIS OFFICE WITH RESPECT TO THE BALANCE OF THE AMOUNT INVOLVED IN THE ABSENCE OF A JUDICIAL DETERMINATION OF THE RIGHTS OF MR. CLAIBORNE AND THE BANK, OR A WRITTEN AGREEMENT BETWEEN THEM AS TO THE DISTRIBUTION OF THE BALANCE ACCOMPANIED BY A RELEASE AS HERETOFORE INDICATED.

THE HONORABLE PAUL G. ROGERS, MEMBER OF CONGRESS, WHO INQUIRED RELATIVE TO MR. CLAIBORNE'S CLAIM, IS BEING ADVISED BY LETTER OF TODAY OF THE CONCLUSION REACHED.