B-119497, JUNE 3, 1955, 34 COMP. GEN. 653

B-119497, JUNE 3, 1955, 34 COMP. GEN. 653

POST OFFICE DEPARTMENT - MONEY ORDERS - CONFISCATION - REPUBLIC OF THE PHILIPPINES THE CENTRAL BANK OF THE PHILIPPINES WHICH, AS THE RESULT OF CONFISCATION PROCEEDINGS, HOLDS NUMEROUS U.S. POSTAL MONEY ORDERS ISSUED TO RESIDENTS OF THE PHILIPPINES WHICH ORDERS WERE NOT ENDORSED IN ACCORDANCE WITH U.S. POSTAL LAWS AND REGULATIONS, IS NOT ENTITLED TO THE PROCEEDS OF SUCH MONEY ORDERS IN THE ABSENCE OF A SHOWING OF THE EXACT TERMS OF THE PHILIPPINE LAWS WITH REGARD TO THE CONFISCATION OF MONEY ORDERS WHICH ARE TO BE RECOGNIZED BY THE U.S. IN DEROGATION OF ITS OWN LAWS.

COMPTROLLER GENERAL CAMPBELL TO THE CENTRAL BANK OF THE PHILIPPINES, JUNE 3, 1955:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 11, 1954, REQUESTING RECONSIDERATION OF OFFICE SETTLEMENT DATED JUNE 28, 1954, CLAIM NO. Z 21 (19), DISALLOWING YOUR CLAIM FOR THE PROCEEDS OF THE 486 UNITED STATES POSTAL MONEY ORDERS, DRAWN TO VARIOUS PAYEES AND TOTALING $32,780.50.

THE POSTAL MONEY ORDERS WERE ISSUED BY NUMEROUS POST OFFICES IN THE UNITED STATES AND ITS POSSESSIONS IN FAVOR OF NUMEROUS PAYEES FOR THE MOST PART RESIDENTS OF THE PHILIPPINES. THE ORDERS EACH BEAR THE FOLLOWING LEGEND:

TO TRANSFER OWNERSHIP THE PERSON IN WHOSE FAVOR THIS ORDER IS DRAWN MUST SIGN ON LOWER LINE, WRITING THE ENDORSEE'S NAME ON THE TOP LINE. MORE THAN ONE ENDORSEMENT IS PROHIBITED BY LAW. BANK STAMPS ARE NOT REGARDED AS ENDORSEMENTS.

PAY TO.............................................................. ................................................................. PAYEE EACH OF THE MONEY ORDERS BEARS WHAT PURPORTS TO BE THE ENDORSEMENT OF THE PAYEE BUT NONE OF THE ORDERS SHOW THE NAME OF THE PERSON TO WHOM THE AMOUNT IS TO BE PAID.

IT IS INDICATED IN YOUR CLAIM THAT THESE MONEY ORDERS SO ENDORSED WERE INCLUDED IN A BUNDLE OF NEGOTIABLE PAPER AND UNITED STATES CURRENCY TOTALING $73,316.93 WHICH WAS DISCOVERED ON JANUARY 9, 1951, BY PHILIPPINE CUSTOMS AUTHORITIES IN THE MANILA INTERNATIONAL AIRPORT, CONCEALED IN A BOX OF MANGOES DESTINED FOR HONG/KONG VIA CATHAY PACIFIC AIRWAYS PLANE; THAT SINCE THE OBVIOUS PURPOSE OF SUCH CONCEALMENT WAS TO SMUGGLE THE NEGOTIABLE PAPER AND CURRENCY OUT OF THE PHILIPPINES WITHOUT AN EXPORT LICENSE FROM THE CENTRAL BANK OF THE PHILIPPINES AS REQUIRED BY PHILIPPINE REPUBLIC ACT NO. 265 ( CENTRAL BANK ACT) AND CENTRAL BANK CIRCULAR NO. 20, THEY WERE SEIZED AS PROPERTY SUBJECT TO FORFEITURE AND DEPOSITED IN THE CASH DIVISION OF THE PHILIPPINE BUREAU OF CUSTOMS FOR SAFEKEEPING. HEARING WAS SET FOR FEBRUARY 20, 1951, AND IN THE ABSENCE OF A KNOWN OWNER, NOTICE THEREOF WAS POSTED ON THE BULLETIN BOARD OF THE BUREAU OF CUSTOMS PURSUANT TO THE PROVISIONS OF SECTION 1376 OF THE REVISED ADMINISTRATIVE CODE. NO ONE APPEARED ON THE HEARING DATE TO CLAIM THE PROPERTY AND, HENCE, A DECISION WAS RENDERED ON FEBRUARY 27, 1951, ORDERING THAT THE SUBJECT MATTER OF SEIZURE PROCEEDINGS NO. 1013 BE DECLARED FORFEITED TO THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES. SUBSEQUENTLY, ON MARCH 9, 1951, ONE MR. RUBEN SANTIAGO APPEARED THROUGH COUNSEL AND REQUESTED A NEW HEARING, WHICH REQUEST WAS GRANTED BY THE PHILIPPINE COLLECTOR OF CUSTOMS. DURING SUCH HEARING, ON MAY 3, 1951, MR. SANTIAGO PRODUCED EVIDENCE PURPORTING TO PROVE HIS OWNERSHIP OF THE PROPERTY. THE COLLECTOR OF CUSTOMS DID NOT BELIEVE THE EVIDENCE SUBMITTED SUFFICIENT TO ESTABLISH THE CLAIM AND, MOREOVER, CONSIDERED THAT MERE OWNERSHIP UNDER THE CIRCUMSTANCES WOULD BE NO BAR TO FORFEITURE AND, HENCE, REITERATED THE FORFEITURE ORDER. THE COMMISSIONER OF CUSTOMS OF THE PHILIPPINES, ON REVIEW, AFFIRMED THE DECISION OF THE COLLECTOR. THE BOARD OF TAX APPEALS, REPUBLIC OF THE PHILIPPINES, TO WHOM MR. SANTIAGO APPEALED THE COMMISSIONER'S DECISION, LIKEWISE RULED THAT THE PROPERTY SHOULD BE CONFISCATED IN FAVOR OF THE REPUBLIC OF THE PHILIPPINES. PURSUANT THERETO, YOU PRESENTED THE MONEY ORDERS HERE IN QUESTION TO THE UNITED STATES POST OFFICE DEPARTMENT FOR PAYMENT. SINCE THAT DEPARTMENT WAS IN DOUBT AS TO THE VALIDITY OF YOUR TITLE TO THE MONEY ORDERS, THE CLAIM WAS REFERRED TO THIS OFFICE AND, AFTER DUE CONSIDERATION, WAS DISALLOWED BY THE SETTLEMENT OF JUNE 28, 1954, SUPRA.

POSTAL MONEY ORDERS ARE ISSUED PURSUANT TO TITLE 39, U.S.C. CHAPTER 19, TO PROMOTE PUBLIC CONVENIENCE AND TO INSURE GREATER SECURITY IN THE TRANSFER OF MONEY THROUGH THE MAIL. 39 U.S.C. 711. THE POSTMASTER GENERAL IS AUTHORIZED THEREUNDER TO ESTABLISH THE SYSTEM UNDER SUCH RULES AND REGULATIONS AS HE DEEMS EXPEDIENT. POSTAL MONEY ORDERS ARE NOT NEGOTIABLE INSTRUMENTS. BOLOGNESI V. UNITED STATES, 169 F. 1013; 189 F. 335; CERTIORARI DENIED, 223 U.S. 726. THEY MAY BE PAID AND OWNERSHIP THEREOF TRANSFERRED ONLY IN ACCORDANCE WITH RULES AND REGULATIONS OF THE POSTMASTER GENERAL AND APPLICABLE LAWS OF THE UNITED STATES.

TITLE 39 U.S.C. 723 PROVIDES:

THE PAYEE OF A MONEY ORDER MAY, BY HIS WRITTEN ENDORSEMENT THEREON, DIRECT IT TO BE PAID TO ANY OTHER PERSON, AND THE POSTMASTER ON WHOM IT IS DRAWN SHALL PAY THE SAME TO THE PERSON THUS DESIGNATED, PROVIDED HE SHALL FURNISH SUCH PROOF AS THE POSTMASTER GENERAL MAY PRESCRIBE THAT INDORSEMENT IS GENUINE, AND THAT HE IS THE PERSON EMPOWERED TO RECEIVE PAYMENT; * * *

SECTION 72.11 OF THE POSTAL LAWS AND REGULATIONS 1948 PROVIDES INSOFAR AS MATERIAL:

* * * A MONEY ORDER SHALL NOT BE PAID TO A SECOND PERSON WITHOUT WRITTEN * * * ENDORSEMENT OF THE SAME TO SUCH PERSON BY THE PAYEE, IN THE PRESCRIBED FORM PROVIDED ON THE ORDER, EXCEPT IN THE FOLLOWING CASES:

(1) ON POWER OF ATTORNEY. * * *

(2) ON WRITTEN ORDER OF PAYEE. * * *

(3) ON ASSIGNMENT. WHEN A PERSON OR FIRM MAKES AN ASSIGNMENT, AND THE ASSIGNOR INTENDS THAT MONEY ORDERS PAYABLE TO HIM SHALL BE PAID TO THE ASSIGNEE, HE SHOULD EXECUTE A POWER OF ATTORNEY, OR GIVE SUCH WRITTEN ORDER SEPARATE FROM THE INSTRUMENT OF ASSIGNMENT, TO BE FILED IN THE POST OFFICE. THE PERSON RECEIVING PAYMENT AS ATTORNEY, OR AS AGENT DESIGNATED IN SEPARATE WRITTEN ORDER, SHOULD RECEIPT THE MONEY ORDER AS SUCH, INDICATING BENEATH HIS SIGNATURE THE CAPACITY IN WHICH HE ACTS.

(4) ON DEATH OF PAYEE. * * *

(5) TO GUARDIAN. * * *

IT WILL THUS BE SEEN THAT THE POSTAL LAWS AND REGULATIONS MAKE NO PROVISION FOR PAYMENT TO A HOLDER SUCH AS YOUR BANK WHICH ASSERTS TITLE BY CONFISCATION UNDER THE LAWS OF A FOREIGN COUNTRY. NOR DO THE MONEY ORDERS APPEAR TO BE PROPERLY ENDORSED TO A DEFINITE PERSON IN ACCORDANCE WITH THE APPLICABLE POSTAL LAWS AND REGULATIONS SO AS TO DEPRIVE THE REMITTERS OR PAYEES OF THEIR RIGHTS IN THE MATTER. IN THIS CONNECTION IT HAS BEEN HELD THAT EFFECT WILL NOT BE GIVEN TO FOREIGN LAWS IN DEROGATION OF CONTRACTS OR PREJUDICIAL TO THE RIGHTS OF CITIZENS. SEE GLYNN V. UNITED STEEL WORKS CORP. 289 N.Y.S. 1037, 1039; FINN V. BROWN, 7 N.Y.S.2D 115, 117; CENTRAL HANOVER BANK AND T. CO. V. STEMENS AND HALSKE G., 15 F.1SUPP. 927.

ACCORDINGLY, AND IN THE ABSENCE OF A SHOWING AS TO THE EXACT TERMS OF THE LAWS AND REGULATIONS UNDER WHICH YOU ASSERT TITLE, THAT SUCH LAWS AUTHORIZE CONFISCATION OF THE PROCEEDS OF MONEY ORDERS SUCH AS HERE INVOLVED AND LEGALLY MUST BE RECOGNIZED BY THE UNITED STATES IN DEROGATION OF ITS OWN LAWS AND REGULATIONS AND ITS IMPLIED AGREEMENT TO PAY THE AMOUNT OF THE MONEY ORDERS TO THE PAYEE, THE PERSON DESIGNATED BY HIM OR THE REMITTER, THE ACTION TAKEN IN DISALLOWING YOUR CLAIM IS SUSTAINED.

THE FACT THAT SOME FEW POSTAL MONEY ORDERS SEIZED FOR VIOLATION OF THE PHILIPPINES CURRENCY CONTROLS MAY HAVE BEEN PAID BY THE POST OFFICE DEPARTMENT APPEARS TO HAVE BEEN DUE TO A FAILURE TO DISTINGUISH BETWEEN THE BASIS FOR YOUR CLAIM AND THAT OF AN ORDINARY COMMERCIAL BANK WHICH PAID VALUE TO THE PAYEE FOR THE MONEY ORDER AND HAD A RIGHT TO THE AMOUNT BY VIRTUE OF SUCH PAYMENT AND DOES NOT CONSTITUTE ANY PROPER BASIS FOR THE ALLOWANCE OF THIS OR SIMILAR CLAIMS.