B-39407, MARCH 25, 1944, 23 COMP. GEN. 723

B-39407, MARCH 25, 1944, 23 COMP. GEN. 723

EXCESSIVE OR ERRONEOUS POSTAGE COLLECTIONS - STATUS AS PUBLIC FUNDS; LIABILITY FOR WRONGFUL CONVERSION EXCESSIVE OR ERRONEOUS POSTAGE COLLECTIONS CONSTITUTE POSTAL REVENUES AND, AS SUCH, ARE PUBLIC FUNDS FOR THE WRONGFUL CONVERSION OF WHICH AN EMPLOYEE IS LIABLE TO THE UNITED STATES, AND, THEREFORE, ANY RETIREMENT ANNUITY DUE A FORMER POSTAL EMPLOYEE MAY BE APPLIED IN LIQUIDATION OF HIS DEBT TO THE UNITED STATES ARISING BY REASON OF HIS RETENTION OF POSTAGE OVERCHARGES TO PATRONS. 18 COMP. GEN. 524, AMPLIFIED.

COMPTROLLER GENERAL WARREN TO THE PRESIDENT, UNITED STATES CIVIL SERVICE COMMISSION, MARCH 25, 1944:

THERE HAS BEEN CONSIDERED YOUR LETTER OF NOVEMBER 3, 1943 (FILE RET:GCB:FM CSA-128452), AS FOLLOWS:

THIS HAS REFERENCE TO THE ANNUITY CLAIM OF ALFRED B. SPARKS, CSA 128452, FORMERLY EMPLOYED AS A CLERK IN THE POST OFFICE AT WICHITA FALLS, TEXAS AND OF WHOM MRS. ALFRED B. SPARKS IS GUARDIAN. THIS CLAIMANT IS ENTITLED TO ANNUITY AT THE RATE OF $888.36 COMMENCING MAY 1, 1942.

THE LETTER DATED AUGUST 6, 1943 RECEIVED FROM THE CHIEF POST OFFICE INSPECTOR IN REFERENCE TO THE ABOVE MENTIONED CLAIM STATES:

"BASED ON KNOWN OVERCHARGES, THE AMOUNT EMBEZZLED IS $1405.06. THE THIRD ASSISTANT, DIVISION OF CLASSIFICATION, REQUESTED THE GENERAL ACCOUNTING OFFICE ON NOVEMBER 17, 1942, TO CHARGE PAT HARDAGE, POSTMASTER, WICHITA FALLS, TEXAS, WITH THIS SUM. SET-OFF OF THE UNPAID SALARY OF $33.64, WHICH THE CLERK HAD ACCUMULATED PRIOR TO HIS REMOVAL, WILL LEAVE A BALANCE OF $1371.42.

"UPON APPROVAL OF ANY APPLICATION, RECEIVED FOR REFUND OF RETIREMENT DEDUCTIONS OR DISABILITY ANNUITY PAYMENTS, IT WILL BE APPRECIATED IF YOU WILL DEPOSIT IN THE TREASURY, TO THE CREDIT OF THE POSTAL ACCOUNT OF THE POSTMASTER AT WICHITA FALLS, SUCH FUNDS AS IT IS POSSIBLE TO SET OFF FROM SPARKS' CREDIT TO APPLY TOWARD LIQUIDATION OF THIS INDEBTEDNESS, AND ADVISE THIS OFFICE PROMPTLY OF ANY AMOUNT SO DEPOSITED.

"PLEASE ADVISE AS TO THE PRESENT STATUS OF THIS CASE AT THE EARLIEST PRACTICABLE DATE. A COPY OF THIS LETTER AND PERTINENT PAPERS HAVE BEEN REFERRED TO THE GENERAL ACCOUNTING OFFICE, POSTAL ACCOUNTS DIVISION.'

PLEASE ADVISE AS TO THE AMOUNT TO BE RECOVERED AND SHOW THE APPROPRIATION TO WHICH THE RECOVERY SHOULD BE CREDITED.

UNDER DATE OF AUGUST 6, 1943, THE CHIEF INSPECTOR, POST OFFICE DEPARTMENT, REPORTED TO THIS OFFICE REGARDING THE MATTER, AS FOLLOWS:

REFERENCE IS MADE TO INSPECTOR DEAM'S REPORT DATED APRIL 12, 1943, COPY OF WHICH WAS SENT TO YOU, RELATIVE TO EMBEZZLEMENT OF $1,405.06 IN POSTAGE OVERCHARGES BY ALFRED BURLLING SPARKS, CLERK IN THE POST OFFICE AT WICHITA FALLS, TEXAS.

THE POSTMASTER AT WICHITA FALLS IS WITHHOLDING PAYMENT OF $33.64 IN SALARY DUE SPARKS. IT WILL THEREFORE BE APPRECIATED IF YOU WILL DIRECT THAT THE UNPAID SALARY BE DEPOSITED WITH THE TREASURER OF THE UNITED STATES TO THE CREDIT OF THE POSTAL ACCOUNT OF PAT HARDAGE, POSTMASTER, WICHITA FALLS, TEXAS, TO BE APPLIED IN PARTIAL SETTLEMENT OF HIS ACCOUNTS. PLEASE ADVISE ME WHEN THIS HAS BEEN DONE.

THE RECORD DISCLOSES THAT ALFRED B. SPARKS WAS ASSIGNED REGULARLY TO THE PARCEL POST WINDOW AT THE WICHITA FALLS, TEXAS, POST OFFICE AND, IN THE CONDUCT OF HIS OFFICIAL DUTIES, HE OVERCHARGED NUMEROUS PATRONS FOR POSTAGE ON PARCEL POST PACKAGES. IT APPEARS FROM A REPORT OF THE POSTAL INSPECTORS WHO INVESTIGATED THE MATTER THAT SPARKS, IN ACCEPTING PARCELS FOR MAILING, MARKED THEM WITH THE AMOUNT CHARGED THE PATRONS AND LATER, AFTER THE PATRONS HAD LEFT THE WINDOW, REWEIGHED THE PARCELS AND AFFIXED THE CORRECT POSTAGE THERETO. THE AMOUNTS IN EXCESS OF THE FACE VALUE OF STAMPS ACTUALLY PLACED ON THE PARCELS APPARENTLY WERE TAKEN FROM THE CASH DRAWER BY THE EMPLOYEE AND CONVERTED TO HIS OWN USE.

IN ESTIMATING THE AMOUNT THUS OBTAINED BY SPARKS, THE POST OFFICE DEPARTMENT HAS APPLIED THE MEAN AVERAGE OF OVERCHARGES MADE BY HIM IN FOUR KNOWN INSTANCES TO THE TOTAL AMOUNT OF HIS STAMP REQUISITIONS SUBMITTED DURING THE SIX MONTHS' PERIOD IMMEDIATELY PRECEDING HIS REMOVAL FROM SERVICE. THE KNOWN INSTANCES USED AS A BASIS FOR DETERMINING THE PERCENTAGE OF OVERCHARGE COMPRISE THE FOLLOWING TRANSACTIONS: TWO COMPLAINTS MADE BY PATRONS FOR OVERCHARGES IN NOVEMBER AND DECEMBER, 1941; TWO TEST PARCELS; 47 PARCELS MAILED BY A PRIVATE CONCERN AND HANDLED BY SPARKS; AND A SELECTIVE TEST INVOLVING 12 INSURED PARCELS RECEIVED BY THE EMPLOYEE, A TOTAL OF 63 PARCELS. THE MEAN AVERAGE PERCENTAGE OF OVERCHARGE IN THOSE TRANSACTIONS WAS FOUND TO BE 21.55 PERCENT, AND APPLYING THIS PERCENTAGE TO THE AMOUNT OF STAMPS REQUISITIONED BY SPARKS DURING THE SAID SIX MONTHS' PERIOD--- REPORTED AS $6,520--- THE POST OFFICE DEPARTMENT HAS ESTIMATED THE TOTAL OVERCHARGE TO BE $1,405.06.

WHILE THE EMPLOYEE DENIED ANY WRONGDOING, A SUFFICIENT NUMBER OF INSTANCES IN WHICH HE OVERCHARGED PATRONS HAS BEEN PROVED TO FORM A REASONABLE BASIS OF THE ESTIMATE OF THE AMOUNT WRONGFULLY OBTAINED BY HIM. ACCORDINGLY, THERE HAS BEEN ESTABLISHED SUFFICIENT EVIDENCE TO SUPPORT PRIMA FACIE SHOWING OF HIS RESPONSIBILITY FOR THE AMOUNT ESTIMATED TO HAVE BEEN CONVERTED. THE RULE IS WELL ESTABLISHED THAT WHERE AN INVESTIGATION BY AN ADMINISTRATIVE OFFICE DISCLOSES SUFFICIENT FACTS TO ESTABLISH A PRIMA FACIE CASE OF LIABILITY FOR LOSSES SUSTAINED BY THE GOVERNMENT, THE BURDEN IS ON THE EMPLOYEE TO OVERCOME SUCH PRIMA FACIE CASE BY SUBMISSION OF ADDITIONAL FACTS IF HE IS UNWILLING TO BE BOUND BY THE FACTS DISCLOSED BY THE ADMINISTRATIVE OFFICE. SEE BOERNER V. UNITED STATES, 117 F./2D) 387.

IT HAS BEEN HELD CONSISTENTLY THAT, WHILE IT IS LEGAL AND PROPER FOR THE GOVERNMENT TO APPLY THE ANNUITY DUE A FORMER EMPLOYEE IN LIQUIDATION OF HIS INDEBTEDNESS TO THE UNITED STATES (21 COMP. GEN. 1000), THERE IS NO AUTHORITY TO APPLY AMOUNTS IN POSSESSION OF THE UNITED STATES IN SATISFACTION OF CLAIMS OF PRIVATE INDIVIDUALS AGAINST THE EMPLOYEE. COMP. GEN. 6, 638; 18 ID. 139, 524. HENCE, IN THE INSTANT MATTER, THE RIGHT OF THE GOVERNMENT TO PROCEED AGAINST THE ANNUITY DUE SPARKS IS DEPENDENT UPON A DETERMINATION OF THE NATURE OF THE AMOUNTS WHICH HE RETAINED, THAT IS, WHETHER THEY CONSTITUTE POSTAL REVENUES TO WHICH THE GOVERNMENT IS ENTITLED, OR PRIVATE FUNDS SUBJECT ONLY TO THE CLAIMS OF THE INDIVIDUAL PATRONS.

SECTIONS 103 AND 245 OF THE POSTAL LAWS AND REGULATIONS (1940) PROVIDE, RESPECTIVELY:

103. REVENUES FROM ALL SOURCES EXCEPT SO MUCH OF THE RECEIPTS AT POST OFFICES AS MAY BE NEEDED TO PAY THE AUTHORIZED EXPENDITURES THEREOF, SHALL BE DEPOSITED IN THE TREASURY OR DESIGNATED DEPOSITARIES FOR THE USE OF THE POST OFFICE DEPARTMENT.

245. ALL POSTAGES, BOX RENTS, AND OTHER RECEIPTS AT POST OFFICES, SHALL BE ACCOUNTED FOR AS PART OF THE POSTAL REVENUES. * * *

IT IS SIGNIFICANT THAT THE ABOVE-QUOTED SECTIONS MAKE NO DISTINCTION BETWEEN REVENUES, RECEIPTS, ETC., ACCRUING FROM POSTAGE EXACTED AT THE LEGAL RATE AND THOSE RESULTING FROM EXCESS CHARGES ASSESSED EITHER THROUGH INADVERTENCE OR DESIGN. ALL AMOUNTS RECEIVED FOR POSTAGE BY A POSTAL EMPLOYEE IN HIS OFFICIAL CAPACITY--- REGARDLESS OF THE MANNER BY WHICH THEY ARE OBTAINED--- MUST BE REMITTED OR ACCOUNTED FOR AS POSTAL REVENUES AND, AS SUCH, CONSTITUTE "PUBLIC FUNDS.'

AS A FURTHER INDICATION THAT ALL AMOUNTS RECEIVED FOR POSTAGE ARE TO BE REGARDED AS PUBLIC FUNDS, IT IS PERTINENT TO NOTE THAT 39 U.S.C. 300, PROVIDES:

REFUND OF POSTAGE PAID FOR SERVICE NOT RENDERED, OR IN EXCESS OF LEGAL RATE.

WHENEVER IT SHALL BE SHOWN TO THE SATISFACTION OF THE POSTMASTER GENERAL THAT ANY POSTAGE IS PAID ON ANY MAIL MATTER FOR WHICH SERVICE IS NOT RENDERED, OR IS COLLECTED IN EXCESS OF THE LAWFUL RATE, HE MAY, IN HIS DISCRETION, AUTHORIZE THE POSTMASTER AT THE OFFICE WHERE PAID TO REFUND THE PROPER AMOUNT OUT OF POSTAL RECEIPTS IN THE POSSESSION OF THE POSTMASTER. ( MAR. 3, 1905, CH. 1480, SEC. 2, 33 STAT. 1091.)

IN MONTGOMERY WARD AND CO. V. UNITED STATES, 94 C.1CLS. 309, IT WAS HELD THAT UNDER THE PROVISIONS OF SECTION 300, SUPRA, NO RIGHT TO SUE IS CREATED; THAT THE RIGHT OF ACTION EXISTS ONLY WHEN THE POSTMASTER GENERAL HAS BEEN SATISFIED THAT THE REQUIREMENTS OF THE SECTION HAVE BEEN MET AND THIS, UNDER THE TERMS OF THE SECTION, DEPENDS ENTIRELY UPON THE DISCRETION OF THE POSTMASTER GENERAL.

FROM THE FOREGOING, IT CLEARLY APPEARS THAT AMOUNTS REPRESENTING POSTAGE COLLECTED IN EXCESS OF THE LEGAL RATE ARE TREATED IN A MANNER WHOLLY INCONSISTENT WITH THE PROPOSITION THAT THEY ARE PRIVATE FUNDS. THEY MUST BE ACCOUNTED FOR AS PART OF THE POSTAL REVENUES; THERE IS NO RIGHT IN THE PATRON TO SUE FOR THEIR RECOVERY, AND REFUND THEREOF IS AUTHORIZED ONLY IN THE DISCRETION OF THE POSTMASTER GENERAL. ACCORDINGLY, IT MUST BE HELD THAT EXCESSIVE OR ERRONEOUS POSTAGE COLLECTIONS CONSTITUTE POSTAL REVENUES AND, AS SUCH, ARE PUBLIC FUNDS FOR THE WRONGFUL CONVERSION OF WHICH AN EMPLOYEE IS LIABLE TO THE UNITED STATES. THEREFORE, SINCE, IN THE PRESENT MATTER, THERE IS ESTABLISHED BETWEEN THE UNITED STATES AND CLERK SPARKS THE DEBTOR CREDITOR RELATIONSHIP NECESSARY TO MAINTAIN THE ACTION OF SET- OFF, THE ANNUITY DUE THE FORMER EMPLOYEE MAY BE APPLIED IN LIQUIDATION OF HIS DEBT TO THE UNITED STATES. 21 COMP. GEN. 1000.

AS HEREINBEFORE STATED, THE PECULATIONS OF THE EMPLOYEE AS ADMINISTRATIVELY COMPUTED AMOUNT TO $1,405.06. UNPAID SALARY DUE HIM FOR THE PERIOD MAY 1 TO 6, 1942--- THE LATTER DATE BEING THE DATE OF HIS REMOVAL FROM THE SERVICE--- IS REPORTED AS $33.64, LEAVING A BALANCE OF $1,371.42 TO BE DEDUCTED FROM HIS ANNUITY PAYMENTS OTHERWISE DUE. ACCORDINGLY, THE SUM OF $1,371.42 SHOULD BE DEDUCTED FROM THE ACCRUED ANNUITY DUE THE EMPLOYEE AND, IN THE EVENT IT IS INSUFFICIENT TO LIQUIDATE HIS INDEBTEDNESS IN FULL, THE BALANCE REMAINING SHOULD BE DEDUCTED FROM FUTURE ANNUITY PAYMENTS AS THEY COME DUE. A CHECK FOR ANY AMOUNT THUS WITHHELD SHOULD BE DRAWN TO THE ORDER OF THE TREASURER OF THE UNITED STATES FOR DEPOSIT INTO THE TREASURY TO THE CREDIT OF SERVICE OF THE POST OFFICE DEPARTMENT, SYMBOL 47-001, AND WITH CREDIT TO THE POSTAL ACCOUNT OF PAT HARDAGE, FORMER POSTMASTER, WICHITA FALLS, TEXAS.

ALSO, SINCE IT APPEARS FROM YOUR LETTER, SUPRA, THAT THE FORMER EMPLOYEE IS ENTITLED TO AN ANNUITY COMMENCING MAY 1, 1942, AND IT IS ADMINISTRATIVELY REPORTED THAT THERE IS DUE HIM UNPAID SALARY FOR THE PERIOD MAY 1 TO 6, 1942, THERE APPEARS FOR YOUR CONSIDERATION THE PROPER DATE ON WHICH TO COMMENCE ANNUITY PAYMENTS.