B-132324, AUG. 12, 1957

B-132324, AUG. 12, 1957

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

THE LETTER OF MAY 9, 1957, FILE 457-REL-WJH, FROM THE SPECIAL ASSISTANT TREASURER, REQUESTS ADVICE WHETHER THE MONEYS RECOVERED THROUGH RECLAMATION PROCEEDINGS UPON CERTAIN NAVY ALLOTMENT CHECKS, DRAWN TO THE ORDER OF MARGARET (MARGRET) F. MCGLAMERY, MAY BE RETURNED TO THE ENDORSERS WHO SUSTAINED THE LOSS, AND WHETHER RECLAMATION MAY BE ABANDONED AS TO THE CHECKS UPON WHICH REFUND HAS NOT BEEN MADE.

IT APPEARS THAT ARLIE FRED MCGLAMERY, NAVY SERIAL NO. 6572729, FILED AN APPLICATION FOR BASIC ALLOWANCE FOR QUARTERS NAMING HIS WIFE, MARGARET F. MCGLAMERY, AS HIS DEPENDENT, AS A RESULT OF WHICH THE SUBJECT CHECKS WERE ISSUED. THE INVESTIGATION CONDUCTED BY THE UNITED STATES SECRET SERVICE SHOWED THAT THE PAYEE HAD NEVER BEEN DIVORCED FROM THE ALLOTTER ALTHOUGH SHE WAS SEPARATED FROM HIM IN 1944 AND REMARRIED ON NOVEMBER 9, 1947, BELIEVING THE ALLOTTER HAD OBTAINED A DIVORCE; THAT 58 OF THE CHECKS APPARENTLY WERE ENDORSED AND NEGOTIATED BY ELLA J. MCGLAMERY, THE ALLOTTOR'S SISTER, AND 3 BY PERSONS WHOSE IDENTITY HAS NOT BEEN DEFINITELY ESTABLISHED. THE ALLOTTOR'S SISTER WAS ARRESTED FOR THE OFFENSE ON SEPTEMBER 19, 1956.

UPON RECEIPT OF INFORMATION OF MARGARET F. MCGLAMERY'S BIGAMOUS MARRIAGE AND THAT THE ALLOTTOR'S SISTER NEGOTIATED CERTAIN OF THE CHECKS, THE FAMILY ALLOWANCE ACTIVITY, BUREAU OF NAVAL PERSONNEL, DISAPPROVED THE DEPENDENCE OF MARGARET F. MCGLAMERY FROM THE DATE OF THE APPLICATION FOR BASIC ALLOWANCE FOR QUARTERS. THE DISAPPROVAL WAS BASED ON THE FACT THAT THE MEMBER DID NOT COMPLY WITH THE LAW SINCE HE DID NOT HAVE AN ALLOTMENT IN EFFECT FOR AN ELIGIBLE DEPENDENT. ACCORDINGLY, THE PAYEE OF THE CHECKS IS NOT ENTITLED TO THE ALLOTMENT PAYMENTS.

RECLAMATION PROCEEDINGS WERE INSTITUTED ON NOVEMBER 27 AND 29, 1956, AND REFUND HAS BEEN RECEIVED ON 43 CHECKS, BUT THE ENDORSERS, THROUGH THEIR ATTORNEY, HAVE REQUESTED THAT THESE FUNDS BE RETURNED, STATING THAT THE CASE, IN HIS OPINION, IS GOVERNED BY THE LEGAL PRINCIPLES OF THE SO-CALLED "IMPOSTER DOCTRINE.'

THE IMPOSTER RULE HAS NOT BEEN APPLIED UNIFORMLY BY THE COURTS. THE DECISIONS HOLDING THAT THE DRAWER OF A CHECK ISSUED TO AN IMPOSTER MUST BEAR THE RESULTING LOSS ARE BASED TO A LARGE EXTENT ON THE THEORY THAT THE IMPOSTER WAS THE VERY PERSON TO WHOM THE CHECKS WERE DRAWN AND WHO THE DRAWER INTENDED SHOULD RECEIVE THEIR PROCEEDS. IN THE INSTANT CASE, THERE IS NOTHING OF RECORD TO INDICATE THAT THE GOVERNMENT EVER INTENDED THE CHECKS TO BE NEGOTIATED BY ELLA J. MCGLAMERY OR WHOEVER ENDORSED THE OTHER THREE CHECKS. IT HAS NO DEALINGS WITH ELLA J. MCGLAMERY IN THAT REGARD. IN ANY EVENT, IT IS CLEAR THAT THE CHECKS DO NOT BEAR THE GENUINE ENDORSEMENT OF THE PAYEE OR THAT OF HER AUTHORIZED AGENT. THE FORGED AND UNAUTHORIZED ENDORSEMENT OF THE PAYEE'S NAME CONFERRED ON THE ENDORSERS NO RIGHT OR TITLE THEREIN (SECTION 23, UNIFORM NEGOTIABLE INSTRUMENTS LAW), AND THE GOVERNMENT HAD THE RIGHT TO RECOVER BACK FROM THEM THE AMOUNT PAID ON THEIR IMPLIED WARRANTY OF THE GENUINENESS OF THE PAYEE'S ENDORSEMENT ON THE CHECKS. ALSO, SINCE THE PROCEEDS OF THE CHECKS ARE NOT DUE THE PAYEE, ANY ACTION ON THE PAYEE'S PART TO RATIFY THE FORGED ENDORSEMENTS--- AFTER DISCOVERY BY THE GOVERNMENT OF HER LACK OF ENTITLEMENT--- OBVIOUSLY CANNOT AFFECT THE GOVERNMENT'S RIGHTS IN THE MATTER SO AS TO PREJUDICE ITS RECOVERING THE AMOUNTS PAID ON THE SECOND AND SUBSEQUENT ENDORSERS' WARRANTY OF GENUINENESS OF THE PAYEE'S ENDORSEMENTS ON THE CHECKS. ACCORDINGLY, RECLAMATION PROCEEDINGS PROPERLY WERE INSTITUTED IN THIS MATTER.

HOWEVER, THE DEPARTMENT OF THE NAVY IS RECOUPING THE GOVERNMENT'S CONTRIBUTION TO THE CHECKS OUT OF THE ENLISTED MAN'S PAY, AT THE RATE OF $115.69 PER MONTH, AND CONSIDERS THAT THE REMAINING AMOUNTS ARE FUNDS OF THE ENLISTED MAN; THAT, THEREFORE, IT WILL TAKE NO ACTION IN THAT REGARD. THUS, THE ONLY AMOUNT THE GOVERNMENT IS INTERESTED IN RECOVERING IS THAT PORTION OF ITS CONTRIBUTION WHICH HAS NOT BEEN RECOVERED FROM THE ENLISTED MAN'S PAY.

THERE APPEARS TO HAVE BEEN RECLAIMED $5,338.40 FROM ONE BANK AND $384 FROM OTHERS, WHICH IS FAR IN EXCESS OF THE AMOUNT OF THE GOVERNMENT'S CONTRIBUTION. ACCORDINGLY, THE AMOUNT RECOVERED FROM THE BANKS IN EXCESS OF THE GOVERNMENT'S LOSS (THE GOVERNMENT'S CONTRIBUTION LESS THE AMOUNT RECOVERED BY THE DEPARTMENT OF THE NAVY FROM THE ENLISTED MAN'S PAY) MAY BE REFUNDED TO THE BANKS, AND THE DEPARTMENT OF THE NAVY MAY BE ADVISED THAT NO FURTHER ACTION NEED BE TAKEN ON THE PRESENT RECORD TO ADJUST THE MATTER FOR THE BENEFIT OF THE GOVERNMENT.