B-6875, MARCH 22, 1940, 19 COMP. GEN. 806

B-6875, MARCH 22, 1940, 19 COMP. GEN. 806

CHECKS - LIABILITY OF ENDORSERS WHETHER RECLAMATION PROCEEDINGS SHOULD BE INSTITUTED IN FUTURE CASES INVOLVING DEATH COMPENSATION CHECKS TO THE ORDER OF A PARTICULAR PERSON "AS UNREMARRIED WIDOW" OF A NAMED VETERAN WHERE THE PAYEE NEGOTIATE CHECK AFTER REMARRIAGE, IS TO BE DETERMINED AFTER INVESTIGATION TO ASCERTAIN WHETHER THE SUBSEQUENT ENDORSERS HAD ACTUAL KNOWLEDGE CONCERNING THE TRUE MARITAL STATUS OF THE PAYEE OR HAD REASON TO BELIEVE THAT SHE WAS NO LONGER AN UNREMARRIED WIDOW AT THE TIME THE CHECKS WERE CASHED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE TREASURY, MARCH 22, 1940:

THERE HAS BEEN CONSIDERED YOUR LETTER OF OCTOBER 21, 1939, AS FOLLOWS:

THIS DEPARTMENT IS IN RECEIPT OF A LETTER DATED SEPTEMBER 15, 1939, FROM THE HAMILTON NATIONAL BANK OF WASHINGTON, D.C., A COPY OF WHICH IS ENCLOSED, WHEREIN IT TRANSMITTED A COPY OF A LETTER DATED SEPTEMBER 14, 1939, FROM THE NISLEY COMPANY, 110 WEST LONG STREET, COLUMBUS, OHIO, A COPY OF WHICH IS ALSO ENCLOSED, RELATIVE TO THE GOVERNMENT'S REQUEST FOR REFUND OF THE AMOUNT OF A GOVERNMENT CHECK DRAWN PAYABLE TO THE ORDER OF MRS. JEANNETTE COLIN AS UNREMARRIED WIDOW OF EDMOND HENRY COLIN. IT HAS BEEN ESTABLISHED THAT THE PAYEE HAD REMARRIED PRIOR TO THE ISSUANCE AND NEGOTIATION OF SUBJECT CHECK. THE REQUEST FOR REFUND WAS AUTHORIZED IN YOUR LETTER DATED AUGUST 15, 1939, WHEREIN YOU ADVISED THAT THE AMOUNT OF THIS CHECK, AND OTHERS, WOULD BE CHARGED TO THE TREASURER'S ACCOUNT.

THE LETTER FROM THE NISLEY COMPANY AGAIN RAISES A PROBLEM WHICH, IN THE PAST, HAS BEEN THE SUBJECT OF LENGTHY CORRESPONDENCE BETWEEN YOUR OFFICE AND THIS DEPARTMENT.

BRIEFLY REVIEWING THE HISTORY OF THE LEGEND "AS UNREMARRIED WIDOW OF----- -----" ON CHECKS, IT IS NOTED THAT THIS SPECIFIC LANGUAGE WAS SUGGESTED BY YOU AFTER THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA IN A MEMORANDUM DECISION, DATED MAY 19, 1930, HELD THAT THE WORDS "UNREMARRIED WIDOW OF-------" FOLLOWING THE NAME OF THE PAYEE DID NOT REQUIRE THE COLLECTING BANK TO ASCERTAIN THE MARITAL STATUS OF THE PAYEE. UNITED STATES V. NORFOLK NATIONAL BANK OF COMMERCE AND TRUST. CONSEQUENTLY, THE WORD "AS" IS NOW USED BEFORE THE WORDS "UNREMARRIED WIDOW.' CHECKS SO DRAWN HAVE RECENTLY BEEN THE SUBJECT OF JUDICIAL PROCEEDINGS, AND THE LEGEND "AS UNREMARRIED WIDOW" HAS BEEN EXAMINED AND DISCUSSED BY THE COURTS.

SPECIFIC REFERENCE IS MADE TO THE CASES INVOLVING THE CHECKS PAYABLE TO THE ORDER OF MRS. LENA HOUK, MRS. VIOLET EDNA RICKARD, MRS. CHRISTINE GREEN, AND MRS. ERMA CURRIE, WHICH BEAR THE LEGEND ,AS UNREMARRIED WIDOW OF --------; " THE CHECKS IN ALL CASES BEING NEGOTIATED SUBSEQUENT TO THE REMARRIAGE OF THE PAYEES. YOUR FILES A 44215 A-58297, A-42836, AND B- 5012, RESPECTIVELY.

WITH REFERENCE TO THE CHECKS INVOLVED IN THE LENA HOUK CASE, YOUR OFFICE CHARGED THE TREASURER'S ACCOUNT WITH THE AMOUNTS THEREOF AND AUTHORIZED RECLAMATION. IN RESPONSE TO THE TREASURER'S REQUEST FOR REFUND, THE CASHING BANK DENIED LIABILITY AND REFUSED TO REMIT THE AMOUNT CLAIMED. THEREUPON THE MATTER WAS REFERRED TO THE DEPARTMENT OF JUSTICE AND THAT DEPARTMENT BROUGHT SUIT AGAINST THE HAMILTON NATIONAL BANK, CHATTANOOGA, TENNESSEE, WHICH CASHED THE CHECKS. THE CASE WAS TRIED IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TENNESSEE. ON APRIL 11, 1936, THE COURT RENDERED A MEMORANDUM DECISION IN FAVOR OF THE DEFENDANT. THE COURT SAID:

"THE PLAINTIFF CANNOT PLACE UPON BANKS THE BURDEN OF DETERMINING THE TRUTHFULNESS OF THE REPRESENTATION AS TO THE EXISTENCE AND STATUS OF PAYEE EXCEPT BY THE VERY CLEAREST LIMITATION OF LIABILITY. THE WORDS OF ATTEMPTED LIMITATION HERE USED ARE NO MORE THAN DESCRIPTIO PERSONAE, OR AT MOST ARE INEFFECTIVE TO BRING NOTICE TO THE DEFENDANT THAT IT WILL NOT HONOR THE DRAFT IF THE PAYEE IS NOT BOTH THE IDENTICAL PERSON AND OF THE IDENTICAL STATUS OF "UNREMARRIED WIDOW.' SHE WAS NEVER SUCH WHILE THE DRAFTS INVOLVED WERE IN EXISTENCE, YET SHE IS THE SAME PERSON AND IN THE SAME STATUS AS WHEN THE DRAFTS WERE DRAWN AND DELIVERED.'

THEREUPON, ON OCTOBER 14, 1936, THE CHECKS AND FILE WERE REFERRED TO YOU FOR CONSIDERATION AND ADVICE AS TO WHETHER CREDIT WOULD BE ALLOWED IN THE TREASURER'S ACCOUNT. IN YOUR REPLY DATED JANUARY 27, 1937, YOU STATED:

"IN VIEW OF THE COURT'S HOLDING IN THIS CASE, AND SINCE THE ATTORNEY GENERAL HAS CONCLUDED NOT TO APPEAL THEREFROM, YOU ARE ADVISED THAT CREDIT WILL NOW BE ALLOWED IN THE TREASURER'S GENERAL ACCOUNT FOR PAYMENT MADE BY HIM ON THE INVOLVED CHECKS.'

YOUR OFFICE ALSO CHARGED THE TREASURER'S ACCOUNT WITH THE AMOUNT OF THE CHECKS INVOLVED IN THE VIOLET EDNA RICKARD CASE AND AUTHORIZED RECLAMATION. UNABLE TO EFFECT RECLAMATION, THE TREASURER REFERRED THE CASE TO THE DEPARTMENT OF JUSTICE WHICH BROUGHT SUIT AGAINST THE CALIFORNIA BANK, WHICH CASHED THE CHECKS, IN THE DISTRICT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF CALIFORNIA. ON FEBRUARY 14, 1938, THE COURT HANDED DOWN A MINUTE ORDER AND DECISION IN FAVOR OF THE DEFENDANT WHEREIN IT SAID:

"THE COURT IS OF THE VIEW THAT THE WORDS "AS UNREMARRIED WIDOW OF JOSEPH RICKARD" INSERTED IN THE CHECKS BELOW THE NAME OF VIOLET EDNA RICKARD NAMED THEREIN AS PAYEE, ARE MERELY DESCRIPTIO PERSONAE. IT IS THE GENERAL RULE APPLICABLE IN ALL BRANCHES OF THE LAW OF NEGOTIABLE INSTRUMENTS THAT WHEN THE NAME OF THE PAYEE IN A BILL, NOTE, OR CHECK IS FOLLOWED BY DESCRIPTIVE WORDS SHOWING TITLE OR CAPACITY, TITLE TO THE INSTRUMENT IS IN THE PERSON NAMED IN HIS INDIVIDUAL CAPACITY, AND THE MONEY DESIGNATED IN THE INSTRUMENT IS PAYABLE TO HIM IN HIS INDIVIDUAL CAPACITY.

"AND THIS IS TRUE WHETHER THE DESCRIPTIVE WORDS ARE "EXECUTOR, AGENT," ETC. (8 CORPUS JURIS 74; BURRELL V. KERN (1899), 34 ORE. 391; 56 P 808; CENTRAL STATE BANK V. SPURLIN (1900), 111 IOWA 187; 82 N.W. 493; NATIONAL BANK OF COMMERCE V. MCLAUGHLIN ( R.I. 1929), 145 ATL. 16) OR "AS EXECUTOR," "AS AGENT," ETC. ( WOODMEN OF THE WORLD V. RUTLEDGE (1901), 133 CAL. 640; 65 P 1105; GILMAN V. HORSELEY, MARTIN'S LOUISIANA REPORTS ( N.S.) (1828) 661; GUNN V. HODGE (1856), 32 MISS. 319.) "

IN VIEW OF THIS DECISION, THIS DEPARTMENT ON JULY 26, 1938, REFERRED THE CHECKS AND FILE TO YOUR OFFICE FOR CONSIDERATION AND ADVICE AS TO WHETHER CREDIT FOR THE AMOUNT OF THE CHECKS WOULD BE ALLOWED IN THE TREASURER'S ACCOUNT. IN YOUR REPLY DATED SEPTEMBER 2, 1938, YOU QUOTED AT LENGTH FROM THE OPINION OF THE DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA ABOVE REFERRED TO AND CONCLUDED WITH THE STATEMENT THAT:

"UPON THE BASIS OF THE PRESENT RECORD YOU ARE ADVISED THAT CREDIT WILL BE ALLOWED IN THE TREASURER'S ACCOUNT FOR PAYMENT MADE BY HIM ON THE INVOLVED CHECKS.'

WITH REFERENCE TO THE CASE OF CHRISTINE GREEN, IT IS NOTED THAT IN A LETTER DATED JULY 11, 1932, ADDRESSED TO THE TREASURER OF THE UNITED STATES, YOU STATED THAT:

"THE LIABILITY OF ENDORSERS UPON CHECKS SO DRAWN ( MRS. CHRISTINE GREEN AS UNREMARRIED WIDOW OF DAN GREEN), WHEN THE PAYEE DOES NOT OCCUPY THE STATUS AS GIVEN UPON THE FACE OF THE CHECK, HAS NOT BEEN MADE THE SUBJECT OF A DECISION BY ANY COURT SO FAR AS IS KNOWN TO THIS OFFICE. THEREFORE, RECLAMATION PROCEEDINGS * * * SHOULD BE INSISTED UPON.'

THEREAFTER, IN A LETTER DATED OCTOBER 21, 1937, THIS DEPARTMENT ADVISED YOUR OFFICE THAT THE ATTORNEY GENERAL HAD ACCEPTED AN OFFER IN COMPROMISE INVOLVING SUBJECT CHECKS AND OTHERS, WHICH WERE CASHED ON FORGED ENDORSEMENTS OF THE PAYEE'S NAME, AND REQUESTED TO BE ADVISED WHETHER THE TREASURER'S ACCOUNT WOULD BE CREDITED WITH THE AMOUNT OF ALL OF THE CHECKS. IN YOUR REPLY, DATED MARCH 21, 1938, YOU STATED:

"YOU REPORT THAT THE DEPARTMENT OF JUSTICE HAS ACCEPTED A COMPROMISE OFFER * * * IN THE RECLAMATION PROCEEDINGS AGAINST THE ENDORSER, THE FIRST NATIONAL BANK OF ATLANTA, GEORGIA, WHICH REPRESENTS THE PROCEEDS OF SEVEN OF THE CHECKS UPON WHICH THE ENDORSEMENTS HAD BEEN FORGED, AND HAS FORWARDED A CHECK FOR THAT AMOUNT TO YOUR OFFICE.

"IN VIEW OF THE MEMORANDUM DECISION OF THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TENNESSEE IN THE CASE OF THE UNITED STATES V. THE HAMILTON ( NATIONAL) BANK OF CHATTANOOGA, APRIL 11, 1936, RECLAMATION UPON THE REMAINING CHECKS WHICH WERE CASHED BY THE PAYEE AFTER HER REMARRIAGE MAY BE ABANDONED AND CREDIT WILL BE ALLOWED IN YOUR ACCOUNTS THEREFOR.'

IN CONNECTION WITH THE CHECKS PAYABLE TO MRS. ERMA CURRIE, AS UNREMARRIED WIDOW OF LEON ELMOND CURRIE, IT WILL BE NOTED THAT ON NOVEMBER 3, 1938, YOU CHARGED THE ACCOUNT OF THE TREASURER WITH THE AMOUNTS OF THESE CHECKS AND AUTHORIZED RECLAMATION. ON MAY 24, 1939, THE TREASURER REQUESTED THAT CREDIT FOR THE SUBJECT CHECKS BE ALLOWED IN HIS ACCOUNT IN VIEW OF THE POSITION TAKEN BY THE ENDORSING BANKS IN RESPONSE TO REQUESTS FOR REFUNDS. IN YOUR REPLY, DATED AUGUST 12, 1939, YOU REVIEWED THE POSITION TAKEN BY THE ENDORSING BANKS AND OBSERVED THAT THEIR REASONS FOR DENYING LIABILITY

"* * * ARE SUBSTANTIALLY THE SAME AS THOSE INVOLVED IN THE CASE OF THE UNITED STATES V. THE HAMILTON NATIONAL BANK OF CHATTANOOGA, WHICH HELD, IN EFFECT, THAT THE LEGEND "AS UNREMARRIED WIDOW" OF A NAMED INDIVIDUAL APPEARING ON A GOVERNMENT CHECK IS NO MORE THAN DESCRIPTIO PERSONAE OR AT MOST IS INEFFECTIVE TO BRING NOTICE TO A CASHING ENDORSER THAT IT WILL NOT HONOR THE CHECK IF THE PAYEE IS NOT BOTH THE IDENTICAL PERSON AND OF THE IDENTICAL STATUS "OF UNREMARRIED WIDOW.'

YOU CONCLUDED:

"ACCORDINGLY, YOU ARE AUTHORIZED TO ABANDON RECLAMATION ON ALL OF THE CHECKS ON WHICH APPEAR THE WORDS "AS UNREMARRIED WIDOW FOLLOWING THE PAYEE'S NAME. 16 COMP. GEN. 692.'

YOUR PUBLISHED DECISION OF JANUARY 28, 1937 (16 COMP. GEN. 692),INVOLVED CERTAIN CHECKS DRAWN PAYABLE TO THE ORDER OF MRS. BESSIE MAE WARNER, AS UNREMARRIED WIDOW OF ALFONSO/1ALPHONSO E. WARNER, WHICH WAS NEGOTIATED SUBSEQUENT TO HER REMARRIAGE. THIS DECISION, WHILE NOT OVERRULING YOUR OPINION OF NOVEMBER 12, 1934 (14 COMP. GEN. 379), GREATLY MODIFIES IT. YOUR DECISION OF JANUARY 28, 1937, IS IN RESPONSE TO THE TREASURER'S REQUEST THAT HE BE AUTHORIZED TO ABANDON RECLAMATION PROCEEDINGS ON SUCH CHECKS IN VIEW OF THE DENIAL OF ANY LIABILITY BY THE ENDORSING BANKS. YOU AUTHORIZED THE ABANDONMENT OF RECLAMATION PROCEEDINGS AND CITED WITH APPARENT APPROVAL THE CASE OF UNITED STATES V. THE HAMILTON NATIONAL BANK OF CHATTANOOGA, SUPRA. HOWEVER, YOU LIMITED YOUR DECISION BY HOLDING THAT THE RULE IN THAT CASE WAS FOR CONSIDERATION ONLY (1) WHEN THE CASHING ENDORSERS INVOKE IT IN RECLAMATION PROCEEDINGS AND (2) WHERE THE NEGOTIATION OF SUCH CHECKS MAY TAKE PLACE IN THE TERRITORY EMBRACED IN THAT COURT'S JURISDICTION.

IF THE GOVERNMENT HAS NO RIGHT TO RECOVER ON ANY OF THE INSTRUMENTS, IT WOULD SEEM THAT ALL ENDORSERS SHOULD BE PROTECTED FROM UNWARRANTED DEMANDS FOR RESTITUTION. THE OPERATION OF THE PROCEDURE SUGGESTED IN THE PRECEDING PARAGRAPH WOULD WORK A HARDSHIP UPON SMALL BANKS WHICH RESPOND TO THE GOVERNMENT'S DEMAND SIMPLY BECAUSE THEY CANNOT AFFORD TO RETAIN COUNSEL TO DETERMINE CURRENT BANKING PROBLEMS. THE LIMITATION IN (2) ABOVE DOES NOT APPEAR TO HAVE BEEN FOLLOWED IN EVERY CASE.

IN VIEW OF THE RECENT COURT DECISIONS MENTIONED ABOVE AND IN VIEW OF YOUR RECENT PROCEDURE IN CREDITING THE ACCOUNT OF THE TREASURER OF THE UNITED STATES IN THE CASES CITED, THIS DEPARTMENT RESPECTFULLY REQUESTS THAT YOU RECONSIDER YOUR PREVIOUS DECISIONS WITH A VIEW TO AUTHORIZING THE ABANDONMENT OF RECLAMATION PROCEEDINGS IN THE PRESENT CASE AND A DEFINITE FORMAL RULING THAT RECLAMATION PROCEEDINGS NEED NOT BE INSTITUTED IN FUTURE CASES INVOLVING CHECKS PAYABLE TO PAYEES, AS UNREMARRIED WIDOWS, WHERE THE PAYEE IMPROPERLY NEGOTIATES THE CHECK AFTER A CHANGE IN STATUS; I.E., AFTER A REMARRIAGE.

THE 50 CHECKS INVOLVED IN THE INSTANT CASE, IN THE AMOUNT OF $30 EACH, APPEAR TO HAVE BEEN DRAWN TO THE ORDER OF MRS. JEANNETTE COLIN, AS UNREMARRIED WIDOW OF EDMOND HENRY COLIN, TO COVER DEATH COMPENSATION GRANTED TO THE PAYEE BY THE VETERANS' ADMINISTRATION COVERING THE PERIOD FROM JUNE 1, 1934, TO JULY 31, 1938, AS THE UNREMARRIED WIDOW OF EDMOND HENRY COLIN, XC-559,335, PURSUANT TO SECTION 201 (A) OF THE WORLD WAR VETERANS' ACT, AS AMENDED, 43 STAT. 1305.

UPON RECEIPT OF EVIDENCE SHOWING THAT THE PAYEE HAD REMARRIED ON JUNE 6, 1934, WHICH ACT TERMINATED HER RIGHT TO RECEIVE DEATH COMPENSATION, AND THAT THE CHECKS HAD BEEN IMPROPERLY NEGOTIATED BY HER SUBSEQUENT TO THAT DATE, THIS OFFICE, UNDER DATE OF AUGUST 15, 1939, REQUESTED THAT THE TREASURER OF THE UNITED STATES RECLAIM THE AMOUNT OF THE CHECKS AND DEPOSIT SAME TO THE CREDIT OF THE APPROPRIATIONS AGAINST WHICH THE PAYMENTS HAD BEEN CHARGED.

THE PROCEDURE WHICH HAS BEEN FOLLOWED OF DRAWING DEATH COMPENSATION CHECKS TO THE ORDER OF A PARTICULAR PERSON "AS UNREMARRIED WIDOW" OF A NAMED VETERAN WAS SUGGESTED BY THIS OFFICE AT THE TIME STATED BY YOU, IN THE HOPE THAT CHECKS SO DRAWN WOULD NOT BE CASHED IN CASES WHERE THE WIDOW NAMED THEREIN HAD REMARRIED. AT THAT TIME AND, ALSO, AT THE TIME THE DECISION OF NOVEMBER 12, 1934, OF THE FORMER COMPTROLLER GENERAL, 14 COMP. GEN. 379, REFERRED TO BY YOU, WAS RENDERED THERE HAD BEEN NO JUDICIAL DETERMINATION WITH RESPECT TO THE LIABILITY TO THE UNITED STATES OF SECOND AND SUBSEQUENT ENDORSERS OF A CHECK BEARING SUCH LEGEND IMPROPERLY NEGOTIATED BY THE PAYEE AFTER HER REMARRIAGE. HOWEVER, CASES IN WHICH THE QUESTION WAS INVOLVED SINCE HAVE BEEN PRESENTED FOR DETERMINATION IN THREE DISTRICT COURTS OF THE UNITED STATES AND THE DECISION RENDERED IN EACH OF THESE CASES WAS UNFAVORABLE TO THE GOVERNMENT. BUT IT IS TO BE NOTED THAT IN THE CASE OF UNITED STATES V. HAMILTON NATIONAL BANK, CHATTANOOGA, TENN., REFERRED TO BY YOU, IN WHICH THE DEFENDANT BANK HAD CASHED THE CHECKS THERE INVOLVED FOR THE PAYEE AFTER SHE HAD REMARRIED, THE DISTRICT COURT FOR THE EASTERN DISTRICT OF TENNESSEE SPECIFICALLY MENTIONED IN ITS MEMORANDUM OPINION THAT THE SAID BANK DID NOT KNOW OF THE PAYEE'S REMARRIAGE AND THERE IS NOTHING APPEARING IN THE RECORDS OF THIS OFFICE TO INDICATE THAT THE BANKS WHICH WERE NAMED AS DEFENDANTS IN THE OTHER LITIGATED CASES HAD ANY KNOWLEDGE AS TO THE CHANGED STATUS OF THE PAYEE OF THE CHECKS ENDORSED BY THEM. ALSO, THERE WOULD SEEM TO BE SUBSTANTIAL BASIS FOR THE BELIEF THAT THE SMALL BANKS REFERRED TO BY YOU, PRESUMABLY LOCATED IN SMALL COMMUNITIES WHERE THE MARITAL STATUS OF INDIVIDUALS RESIDING THEREIN IS ORDINARILY WELL KNOWN, AS WELL AS OTHER ENDORSERS, WHICH RESPOND TO THE GOVERNMENT'S DEMAND FOR REIMBURSEMENT, DO SO BECAUSE OF THEIR RECOGNITION OF THE FACT THAT THEIR ACTION IN CASHING THE CHECKS WITH KNOWLEDGE OF THE PAYEE'S CHANGED MARITAL STATUS SUBJECTS THEM TO A LIABILITY TO THE UNITED STATES IN THE MATTER, RATHER THAN FOR THE REASON ASCRIBED BY YOU FOR SUCH ACTION.

SECTION 201 (F) (2) OF THE WORLD WAR VETERANS' ACT, AS AMENDED, 43 STAT. 1306, PROVIDES IN PERTINENT PART:

THE PAYMENT OF COMPENSATION TO A WIDOW SHALL CONTINUE UNTIL HER DEATH OR REMARRIAGE * * *

IT WOULD SEEM TO BE CLEAR THAT THE SECOND ENDORSER OF A CHECK BEARING THE QUALIFYING LEGEND "AS UNREMARRIED WIDOW" AND SHOWING ON ITS FACE THE OBJECT FOR WHICH IT WAS DRAWN IS CHARGEABLE WITH KNOWLEDGE OF THE PUBLIC LAW TERMINATING A WIDOW'S RIGHT TO COMPENSATION UPON HER REMARRIAGE, AND, ASIDE FROM THE QUESTION AS TO WHETHER RECLAMATION SHOULD BE SOUGHT IN ALL CASES WHERE SUCH CHECKS ARE IMPROPERLY NEGOTIATED BY REMARRIED PAYEES, THERE WOULD SEEM TO BE LITTLE OR NO DOUBT BUT WHAT AN ENDORSER WHO CASHES OR PARTICIPATES IN THE NEGOTIATION OF SUCH A CHECK, KNOWING OR HAVING REASON TO BELIEVE THAT THE PAYEE HAD REMARRIED, MUST BE CONSIDERED TO HAVE HAD NOTICE OF THE DEFECT IN THE PAYEE'S TITLE THERETO AND TO BE UNDER NO LESS A DUTY TO REIMBURSE THE UNITED STATES FOR THE PROCEEDS OF THE CHECK THAN THE PAYEE HERSELF.

HENCE, IT APPEARS THAT THE RIGHT OF THE GOVERNMENT TO OBTAIN REIMBURSEMENT FROM SUCH ENDORSERS SHOULD NOT BE FORECLOSED BY FOLLOWING THE PROCEDURE SUGGESTED BY YOU. ACCORDINGLY, BEFORE A DETERMINATION IS MADE AS TO WHETHER RECLAMATION PROCEEDINGS SHOULD BE INSTITUTED IN A PARTICULAR CASE AN INVESTIGATION SHOULD BE CONDUCTED FOR THE PURPOSE OF ASCERTAINING WHETHER THE ENDORSERS OF THE CHECKS IN QUESTION HAD ACTUAL KNOWLEDGE CONCERNING THE TRUE MARITAL STATUS OF THE PAYEE OR HAD REASON TO BELIEVE THAT SHE WAS NO LONGER AN UNREMARRIED WIDOW AT THE TIME THE CHECKS WERE CASHED.

THEREFORE, YOU ARE ADVISED THAT THE PROCEDURE HERETOFORE FOLLOWED IN CASES INVOLVING THE IMPROPER NEGOTIATION OF CHECKS ISSUED TO THE PAYEES AS UNREMARRIED WIDOWS WILL NO LONGER BE FOLLOWED, AND THAT HEREAFTER THE PROCEDURE IN SUCH CASES WILL BE SUBSTANTIALLY AS FOLLOWS:

(1) REPORTS OF INVESTIGATIONS BY THE SECRET SERVICE DIVISION WILL BE REQUESTED.

(2) PROMPT NOTICE OF THE IMPROPER NEGOTIATION OF THE CHECKS WILL BE GIVEN TO THE SECOND ENDORSERS AND TO THE TREASURER OF THE UNITED STATES.

(3) IF, UPON INVESTIGATION, IT IS FOUND THAT REIMBURSEMENT SHOULD BE OBTAINED FROM THE ENDORSERS, THE MATTER WILL BE REFERRED TO THE TREASURER OF THE UNITED STATES FOR RECOVERY OF THE AMOUNTS INVOLVED THROUGH THE USUAL RECLAMATION PROCEEDINGS.

WITH RESPECT TO THE INSTANT CASE, AS WELL AS OTHER CASES IN WHICH RECLAMATION PROCEEDINGS NOW ARE PENDING, YOU ARE ADVISED THAT THE QUESTION OF THE ABANDONMENT OF SUCH PROCEEDINGS WILL BE CONSIDERED BY THIS OFFICE UPON RECEIPT OF A REPORT OF THE INVESTIGATION CONDUCTED BY THE SECRET SERVICE DIVISION RELATIVE TO THE CHECKS INVOLVED.