B-125648, NOV. 3, 1955

B-125648, NOV. 3, 1955

TO MRS. IVY BAKER PRIEST, TREASURER OF THE UNITED STATES:

REFERENCE IS MADE TO LETTER OF JULY 14, 1955, CC 437 GGH, AND SUBSEQUENT CORRESPONDENCE, FROM THE SPECIAL ASSISTANT TREASURER, RELATIVE TO THE CLAIM OF TERRENCE TORPY, AN EMPLOYEE OF THE DEPARTMENT OF THE NAVY, BOSTON NAVAL SHIPYARD, BOSTON, MASSACHUSETTS, FOR THE PROCEEDS OF NAVY (PAY) CHECK NO. 9,476,434, DATED APRIL 15, 1953, FOR $63.84, DRAWN TO HIS ORDER BY M. L. MCQUISTON, SYMBOL 706.

THE RECORD SHOWS THAT PURSUANT TO THE REQUEST OF THE DRAWER, PAYMENT OF THE CHECK WAS DECLINED ON APRIL 23, 1953, THE PAYEE HAVING REPORTED THAT THE CHECK WAS LOST. SINCE THE PAYEE ADVISED THAT HE HAD ENDORSED THE CHECK IN BLANK PRIOR TO ITS LOSS, A BONA FIDE HOLDER FOR VALUE COULD ACQUIRE TITLE EVEN AGAINST THE PAYEE. 15 COMP. GEN. 370. THE RECORD FURTHER SHOWS THAT ONE LEOPLIAN JAMES GREGORY, THE SECOND ENDORSER, SUFFERED THE LOSS DUE TO DECLINATION OF PAYMENT. NO RESPONSE WAS RECEIVED TO YOUR DEPARTMENT'S LETTERS DATED OCTOBER 9, 1953, AND FEBRUARY 2, 1954, DIRECTED TO THE SECOND ENDORSER REQUESTING A STATEMENT AS TO THE CIRCUMSTANCES UNDER WHICH HE ACQUIRED THE CHECK AND WHETHER HE RECEIVED REIMBURSEMENT FROM ANY SOURCE. A THIRD LETTER DATED MAY 17, 1954, TO HIM, WAS RETURNED UNCLAIMED, AND THE POSTMASTER ADVISED THAT MR. GREGORY HAD MOVED LEAVING NO FORWARDING ADDRESS. SINCE NO CLAIM FOR PAYMENT AS A BONA FIDE HOLDER WAS THEREAFTER RECEIVED FROM MR. GREGORY, THE SPECIAL ASSISTANT TREASURER, UNDER DATE OF JULY 27, 1954, TRANSMITTED THE CHECK AND FILE TO OUR OFFICE FOR CONSIDERATION AND ADVICE AS TO WHETHER PAYMENT TO THE PAYEE OF THE CHECK COULD BE CONSIDERED UPON RECEIPT FROM HIM OF SUFFICIENT SECURITY TO PROTECT THE INTERESTS OF THE UNITED STATES. IN OUR REPLY OF OCTOBER 4, 1954, IT WAS STATED THAT IN THE ABSENCE OF EVIDENCE THAT MR. GREGORY HAD ACTUAL KNOWLEDGE THAT THE CHECK HAD BEEN FOUND AND THE PERSON FROM WHOM HE ACCEPTED IT HAD NO TITLE THERETO, HE IS PRESUMED TO BE A HOLDER IN DUE COURSE AND, UNLESS HE HAS BEEN REIMBURSED, THE PAYEE IS NOT ENTITLED TO PAYMENT. ACCORDINGLY, WE ADVISED THAT NO PAYMENT SHOULD BE MADE TO THE PAYEE UNLESS AND UNTIL A PROPERLY EXECUTED RELEASE WAS OBTAINED FROM MR. GREGORY.

IN THE ABOVE LETTER OF JULY 14, 1955, IT IS STATED THAT FURTHER EFFORTS TO LOCATE THE SECOND ENDORSER HAVE PROVEN UNSUCCESSFUL, AND WE ARE ASKED WHETHER, IN VIEW OF THE SMALL AMOUNT INVOLVED, PAYMENT NOW MAY BE AUTHORIZED TO THE PAYEE IF HE FURNISHES AN INDEMNITY BOND TO PROTECT THE UNITED STATES AGAINST LOSS.

YOU ARE ADVISED THAT THERE DOES NOT APPEAR TO BE ANY JUSTIFICATION FOR PAYMENT OF THE AMOUNT OF THE CHECK TO THE PAYEE ON THE PRESENT RECORD. DO NOT FEEL THAT WE MAY AUTHORIZE PAYMENT OF ANY AMOUNT TO A CLAIMANT WHO IS UNABLE TO ESTABLISH HIS LEGAL ENTITLEMENT THERETO, NOTWITHSTANDING THAT HE MIGHT OFFER TO FURNISH A BOND TO SAVE THE GOVERNMENT HARMLESS FROM LOSS. ACCORDINGLY, THE QUESTION IS ANSWERED IN THE NEGATIVE.

THE CHECK AND FILE TRANSMITTED WITH THE LETTER OF JULY 14, 1955, ARE RETURNED.