DISPOSITION BY TREASURY DEPARTMENT OF FOUND The Fifty Dollar Temporary Coupon Bond of the Third 44's which was found by Miss Katie L. Winters in an apartment at Chicago, Illinois, and submitted to the Treasury Department for payment, and the One Hundred Dollar Coupon Note of the Victory 44's which was left in a sack or box by a guest in a hotel operated by Mrs. Elnora Stewart at South Bend, Washington, and presented by her for collection to the United States National Bank of Portland, Oregon, should be retained by the Treasury Department subject to claim by the true owner or the States of Illinois and Washington, respectively. DEPARTMENT OF JUSTICE, August 10, 1932. SIR: I have the honor to refer to your letter of February 2, 1932, requesting my opinion as to the proper disposition to be made of a Fifty Dollar ($50.00) Temporary Coupon Bond of the Third 44's, No. 1,013,172, which was presented in a mutilated condition by Miss Katie L. Winters, of 34 West 42nd Street, Indianapolis, Indiana, with a letter stating it was found in a handkerchief between the sections of a radiator in an apartment at 5719 Prairie Avenue, Chicago, Illinois; and a One Hundred Dollar ($100.00) Coupon Note of the Victory 434's, which was forwarded to the Treasury Department under date of September 12, 1929, by the United States National Bank of Portland, Oregon, for collection on behalf of Mrs. Elnora Stewart, who states she found it in a sack or box containing certain War Savings Certificates registered in the name of John A. Johnson at the post office at Raymond, Washington, and other personal effects left in the storeroom of a hotel conducted by her at South Bend, Washington, by Johnson or some one using that name. It appears that the Solicitor of the Treasury Department has expressed an opinion that under the law of Illinois, Miss Winters can not acquire any right to the Fifty Dollar Temporary Coupon Bond and that the bond should be retained by the Treasury Department subject to claim by the State of Illinois or the true owner. The Solicitor expresses no opinion as to the right of Mrs. Stewart to the One Hundred Dollar Coupon Note but suggests that my opinion be requested in both cases in view of two opinions of my predecessors (32 Op. 80; 33 id. 59), which, he intimates, were based upon the belief that there were no statutes in Colorado and Illinois regulating the disposition of lost property, whereas it now appears that both States had such laws at the time of those opinions. In the first opinion referred to by your Solicitor (32 Op. 80), Acting Attorney General King held that where a Coupon Bond of the First Liberty Loan had been found in a post-office building at Denver, Colorado, by a post-office employee, and forwarded to the Treasury Department, it was the duty of the Treasury Department to hold the bond until it was claimed by the true owner. In support of this conclusion he said: "The maker of a negotiable instrument is not protected if he makes payment to the person presenting it with knowledge that he has no right to receive payment. (Chappelear v. Martin, 45 Ohio St. 126; Wheeler v. Guild, 20 Pickering, 545, 552.) In the case of The Emblem (2 Ware 67, 8 Fed. Cases, No. 4434), the court said: "The finder of a check or promissory note or other chose in action acquires no property in the note and has no right to demand the payment of it; and if the promisor pays it, after notice that it came into the possession of the holder by finding, he would not be protected against a demand by the owner.' (Citing McLaughlin v. Waite, 5 Wendell 404.) "Conceding that the finder of the bond in question would have been entitled to retain possession of it as against everyone but the true owner, and receive payment of the bond and coupons at maturity, if the Government had had no notice that he was not the true owner, it does not follow that possession should be restored to him now. Under existing conditions, he is not entitled to the payment of either the interest or the principal of the bond, and I do not believe that the Treasury Department is justified in returning it to him, thereby giving him an opportunity to sell it to a bona fide purchaser who would be entitled to collect the interest and the principal." This language recognizes that under the law of Colorado (section 6992 of Mills Annotated Statutes of Colorado makes the common law of England applicable in Colorado until repealed by legislative authority) the finder of lost property is entitled to ownership and possession of it against all others except the true owner; but indicates that the finder of a check or promissory note or other chose in action acquires no property in the note and has no right to demand the payment of it (the Coupon Bond), and if the promisor (the Government) paid it after notice that it came into the possession of the holder by finding, it (the Government) would not be protected againts a demand by the owner. The second opinion referred to by your Solicitor (33 Op. 59) involved certain certificates of indebtedness alleged to have been found by a Mrs. Jaggar, which had been presented for payment to the Federal Reserve National Bank of Chicago as fiscal agent of the United States. Attorney General Daugherty held this case was indistinguishable from the case involved in the opinion rendered by Acting Attorney General King (32 Op. 80), and, therefore, the Secretary of the Treasury should follow the latter opinion. As your Solicitor points out, there are in Illinois and were at the time of the second opinion (33 Op. 59) laws regulating the disposition of lost property. (Sections 26-28, c. 50 Smith-Hurd, Illinois Revised Statutes, 1931.) Such laws require the finder, among other things, if the property be not reclaimed within a certain period, to deliver it to the Clerk of the County Court. The owner is then allowed a specified time within which to redeem it, and if he does not appear and claim the property within that time it becomes the property of the county. In view of these Illinois statutes regulating the disposition of lost property, it is my judgment that the opinion of my predecessor in 33 Op. 59, should be modified so as to hold that where, as here, a coupon bond is found in Illinois and submitted to the Treasury Department for payment, it is the duty of that Department to hold the bond subject to claim by the true owner or the State of Illinois. The same rule should be followed where, as here, a sack or box containing, among other things, a coupon note is left by a guest at a tavern in the State of Washington, since the laws of that State provide that if property left at a tavern is not reclaimed by the owner within a specified time, it shall be sold and the proceeds thereof applied to the school funds of the county in which the property is found. (Secs. 8416-8427, Remington's Compiled Statutes of Washington, 1922; Supplement of 1927, sec. 8999–1–4.) It is my opinion, therefore, that the Fifty Dollar Temporary Coupon Bond of the Third 44's which was found by one Katie L. Winters and submitted to the Treasury Department for payment, and the One Hundred Dollar Coupon Note of the Victory 434's which was left in a sack or box by a guest in a hotel operated by Mrs. Elnora Stewart at South Bend, Washington, and presented by her for collection to the United States National Bank of Portland, Oregon, should be retained by the Treasury Department subject to claim by the true owner or the States of Illinois and Washington, respectively. Respectfully, WILLIAM D. MITCHELL. To the SECRETARY OF THE TREASURY. FORFEITURE OF RIGHTS UNDER SECTION 504 OF THE WORLD WAR VETERANS' ACT, AS AMENDED The forfeiture of rights imposed by section 504 of the World War Veterans' Act (43 Stat. 629), as amended, when determined by the administrative officer charged with its enforcement, is not affected by the fact that a prosecution to enforce the other penalties imposed by section 504, supra, is not instituted. DEPARTMENT OF JUSTICE, SIR: I have the honor to reply to your letter of July 11, 1932, requesting my opinion in connection with certain cases which are before you for consideration upon the following question: "Is an administrative finding of forfeiture of rights under section 504 of the World War Veterans Act dependent upon a judicial determination in the Federal Courts, and in the event there is a failure of a grand jury to indict or failure of a jury or court to convict, is the Administrator warranted in continuing a forfeiture previously effected? It appears from your letter, and from the copy of an enclosed opinion rendered by the Solicitor of the Veterans' Administration in connection with the cases mentioned in your letter, that in such cases there has been an administrative finding of forfeiture of the rights of the particular veterans under section 504 of the World War Veterans Act, and that no criminal prosecution of such veterans has been instituted. Following the established practice of the Attorneys General, I shall limit my opinion to a consideration of your question in so far as it is involved in the particular cases mentioned in your letter. Section 504 of the World War Veterans Act (Act of June 7, 1924, c. 320, 43 Stat. 629, as amended by the Act of March 4, 1925, c. 553, Sec. 19, 43 Stat. 1312; U. S. C., Title 38, sec 555) provides as follows: "Any person who shall knowingly make or cause to be made, or conspire, combine, aid, or assist in, agree to, arrange for, or in any wise procure the making or presentation of a false or fraudulent affidavit, declaration, certificate, statement, voucher, or paper, or writing purporting to be such, concerning any claim or the approval of any claim for compensation or maintenance and support allowance, or the payment of any money, for himself or for any other person, under Titles II or IV hereof, shall forfeit all rights, claims, and benefits under said titles, and, in addition to any and all other penalties imposed by law, shall be guilty of a misdemeanor and upon conviction thereof shall be punished by a fine of not more than $1,000 or imprisonment for not more than one year, or by both such fine and imprisonment, for each such offense." The plain purpose of this statute, as indicated by its language, is to impose a penalty for the commission of the offense described. The penalty includes not only the forfeiture of rights under Titles II and IV of the World War Veterans Act, but also, upon conviction of the offense, punishment by fine or imprisonment. By the express provisions of the statute, however, forfeiture, unlike fine and imprisonment, is not dependent upon conviction. The statute itself declares the forfeiture, leaving for administrative determination whether the particular veteran has committed the proscribed acts and is thus subject to the forfeiture imposed by the statute. |