B-116918, NOV. 16, 1955

B-116918, NOV. 16, 1955

TO THE HONORABLE POSTMASTER GENERAL:

REFERENCE IS MADE TO LETTER DATED APRIL 25, 1955, FROM THE ACTING POSTMASTER GENERAL, IN WHICH THE DECISION OF OUR OFFICE IS REQUESTED ON A PROPOSED METHOD OF SETTLING ACCOUNTS OF POSTAL SAVINGS DEPOSITORS DYING INTESTATE.

UNDER THE CURRENT REGULATIONS OF YOUR DEPARTMENT, PAYMENTS OF SUCH ACCOUNTS ARE MADE TO THE PERSONAL REPRESENTATIVE OR, IN THE ABSENCE OF ADMINISTRATION, TO PERSONS IN THE ORDER OF DISTRIBUTION PROVIDED UNDER THE SUCCESSION LAWS OF THE STATE IN WHICH THE ACCOUNT IS LOCATED. ACCOUNTS OF $20 OR LESS ARE SETTLED IN A FIXED ORDER OF PREFERENCE IN THE ABSENCE OF ADMINISTRATION.

YOUR DEPARTMENT NOW PROPOSES TO ISSUE REGULATIONS PROVIDING FOR THE DISPOSITION OF POSTAL SAVINGS DEPOSITS OF DEPOSITORS DYING INTESTATE IN THE FOLLOWING ORDER OF DISTRIBUTION:

1. TO THE DECEDENT'S LEGAL REPRESENTATIVE. IF ONE WILL NOT BE APPOINTED, THEN---

2. TO THE SURVIVING SPOUSE,

3. TO THE CHILD OR CHILDREN OF THE DEPOSITOR AND DESCENDANTS OF DECEASED CHILDREN BY REPRESENTATION,

4. TO THE PARENTS OF THE DEPOSITOR OR SURVIVOR OF THEM.

5. IF THERE BE NONE OF THE ABOVE, THEN TO THE PERSON OR PERSONS DETERMINED TO BE ENTITLED TO THE DEPOSITS UNDER THE LAWS OF THE SEVERAL STATES.

IT IS STATED THAT UNDER THE PLAN THE DEPOSITS, WHICH VARY IN AMOUNT BETWEEN $1 AND $2,500, DUE DECEDENTS WOULD BE SETTLED UPON APPLICATIONS SUPPORTED BY A STATEMENT VERIFYING THE IDENTITY AND RELATIONSHIP OF THE APPLICANT OR APPLICANTS TO THE DEPOSITOR, SIGNED BY TWO DISINTERESTED REPUTABLE PERSONS IN THE COMMUNITY, A CERTIFICATE OF DEATH, AND EITHER THE FULLY RECEIPTED BILL OR CONSENT TO THE PAYMENT SIGNED BY EACH UNDERTAKER EMPLOYED IN THE BURIAL OF THE DEPOSITOR. IT IS REPORTED THAT ADMINISTRATIVE SAVINGS, ESTIMATED AT $25,000 PER YEAR, CAN BE REALIZED IN SETTLING DECEDENTS' ACCOUNTS IN THE MANNER PROPOSED AND THAT, FROM THE STANDPOINT OF THE DEPOSITOR, IT WOULD BE BENEFICIAL IN THAT IT WOULD PROVIDE A MEANS FOR THE NEXT OF KIN TO OBTAIN THE FUNDS WITHOUT ADMINISTRATION.

IT IS CONTENDED THAT CONGRESS COULD HAVE PROVIDED FOR A FIXED ORDER OF SUCCESSION FOR POSTAL SAVINGS ACCOUNTS AS IT HAS DONE IN OTHER LAWS AND THAT, IN VIEW OF THE AUTHORITY CONFERRED BY THE CONGRESS ON THE BOARD OF TRUSTEES AND THE POSTMASTER GENERAL TO MAKE RULES AND REGULATIONS, UNDER THE POSTAL SAVINGS ACT OF JUNE 25, 1910, 39 U.S.C. 751, AND FOLLOWING SECTIONS, THE SAME RESULT MAY BE ACHIEVED BY ADMINISTRATIVE REGULATIONS SO LONG AS THERE IS NO BREACH OF CONTRACT WITH THE DEPOSITOR. IT IS REPORTED THAT POSTAL SAVINGS DEPOSITORS IN OPENING ACCOUNTS ACKNOWLEDGE THAT THEIR ACCOUNTS ARE SUBJECT TO THE DEPARTMENT'S RULES AND REGULATIONS ON THE APPLICATION FORM EXECUTED BY THEM AND IT IS STATED, IF THE PROPOSED REGULATIONS ARE PLACED IN EFFECT AFTER THE APPROPRIATE NOTICE TO THE DEPOSITOR, THAT THE REGULATIONS WOULD BECOME PART OF THE AGREEMENT OF THE DEPOSIT AND, AS SUCH, EFFECTIVE AGAINST THE DEPOSITOR AND HIS ESTATE.

AS INDICATED IN THE LETTER OF THE ACTING POSTMASTER GENERAL, SEVERAL FEDERAL STATUTES HAVE BEEN ENACTED PROVIDING FOR THE PAYMENT OF AMOUNTS OWING AT THE TIME OF DEATH IN FIXED ORDER OF PRECEDENCE FOR SUCH ITEMS AS PAY OF DECEASED OFFICERS AND ENLISTED MEN OF THE ARMY (10 U.S.C. 868), COMPENSATION AND RETIREMENT DEDUCTIONS FROM COMPENSATION OF DECEASED FEDERAL CIVILIAN EMPLOYEES (5 U.S.C. 61F, AND 5 U.S.C. 724). HOWEVER, NO SIMILAR STATUTE HAS BEEN ENACTED AS TO THE INVOLVED FUNDS WHICH ARE NOT DISSIMILAR TO GENERAL DEPOSITS IN A BANKING INSTITUTION OVER WHICH THE DEPOSITOR HAS COMPLETE CONTROL WITH THE RIGHT OF WITHDRAWAL AT ANY TIME. WHILE IT IS TRUE THAT UNDER THE PROVISIONS OF THE ACT OF JUNE 25, 1910, SUPRA, CERTAIN AUTHORITY IS VESTED IN THE BOARD OF TRUSTEES TO MAKE NECESSARY REGULATIONS CONCERNING THE DEPOSIT AND REPAYMENT OF FUNDS IN THE POSTAL SAVINGS SYSTEM, THERE IS NO SPECIFIC PROVISION AUTHORIZING THE BOARD OF TRUSTEES OR THE POSTMASTER GENERAL TO FIX AN ORDER OF SUCCESSION WITH RESPECT TO AMOUNTS IN THE POSTAL SAVINGS ACCOUNT OF A DEPOSITOR WHO DIES INTESTATE. ALSO, IT HAS NOT BEEN SHOWN THAT THE CONGRESS IN AUTHORIZING THE MAKING OF REGULATIONS FOR THE RETURN OF DEPOSITS INTENDED ANYTHING OTHER THAN TO AUTHORIZE THE MAKING OF REASONABLE REGULATIONS AS TO THE TIME OF MAKING WITHDRAWALS, NOTICE REQUIRED THEREFOR, AND OTHER USUAL PROCEDURAL MATTERS, NOT IN CONTRAVENTION OF APPLICABLE LAW. CERTAINLY IF IT WAS INTENDED TO AUTHORIZE THE PROMULGATION OF REGULATIONS ESTABLISHING, AS TO THE DEPOSITS, A STATUTE OF DESCENT AND DISTRIBUTION--- A MATTER ORDINARILY WITHIN THE CONTROL OF THE SEVERAL STATES--- THE CONGRESS COULD AND WOULD HAVE USED MORE SPECIFIC LANGUAGE IN THIS REGARD. ALSO, THE FACT THAT IT WAS SPECIFICALLY PROVIDED THAT THE POSTAL SAVINGS WOULD BE DEPOSITED IN BANKS IN THE PARTICULAR LOCALITY INVOLVED WOULD SEEM TO INDICATE THAT THE CONGRESS INTENDED LOCAL LAWS TO APPLY WHERE NOT IN DEROGATION OF THE APPLICABLE PROVISIONS OF FEDERAL LAW.

NOR WOULD IT APPEAR PROPER TO SO DISPOSE OF DEPOSITS ON THE BASIS THAT THE DEPOSITOR AGREES TO THE SAID DISPOSITION MERELY BY THE PUBLICATION OF THE REGULATION SINCE SERIOUS DOUBT EXISTS AS TO THE LEGALITY OF SUCH A CONTRACT WHICH MUST BE VIEWED AS A DISPOSITION OF PROPERTY UPON DEATH. CLEARLY THIS ARRANGEMENT HAS NONE OF THE REQUIREMENTS OF A TESTAMENTARY DISPOSITION AND TESTAMENTARY DISPOSITIONS GENERALLY HAVE BEEN HELD NOT TO BE POSSIBLE OF ACCOMPLISHMENT BY CONTRACT. SEE 57 AM.JUR., WILLS, SECTION 40.

THE APPROVAL GIVEN IN OUR DECISION B-116918 OF JANUARY 21, 1954, WAS WITH RESPECT TO ACCOUNTS LESS THAN $20 WHERE THE SUGGESTED DISPOSITION WAS IN ACCORDANCE GENERALLY WITH STATE SUCCESSION LAWS AND WHERE NO USEFUL PURPOSE WOULD BE SERVED BY REQUIRING ADHERENCE TO STATE LAWS IN THE SETTLEMENT OF SUCH ACCOUNTS. THE PROPOSAL SUBMITTED BY YOUR DEPARTMENT OF SETTLING ACCOUNTS OF POSTAL SAVINGS DEPOSITORS WHO DIE INTESTATE SIMILARLY ARE GENERALLY IN ACCORDANCE WITH THE STATE SUCCESSION LAWS AND MAY RESULT IN A SAVINGS TO THE DEPARTMENT. HOWEVER, FOR THE REASONS APPEARING ABOVE, THERE IS TOO MUCH DOUBT AS TO THE LEGALITY OF SUCH A PROPOSAL AS TO THE LARGER AMOUNTS HERE INVOLVED TO WARRANT THIS OFFICE, IN THE ABSENCE OF A SPECIFIC PROVISION BY THE CONGRESS AUTHORIZING SUCH SYSTEM OF DISPOSING OF THE DEPOSITS, IN APPROVING THE PROPOSAL.