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United States v. Duncan

decided as amended march 5 1976.: December 23, 1975.

UNITED STATES OF AMERICA, APPELLANT
v.
SARAH ELIZABETH DUNCAN, EXECUTRIX OF THE ESTATE OF EDNA SMITH



ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY (TRENTON) D.C. Civil Action No. 74-1107.

Van Dusen, Adams and Rosenn, Circuit Judges.

Author: Adams

Opinion OF THE COURT

ADAMS, Circuit Judge.

This action was instituted by the United States against Sarah Elizabeth Duncan, the Executrix of the Edna C. Smith Estate, to recover monies that had been paid to Edna C. Smith. Mrs. Smith had signed the name of her deceased mother on government checks that had been issued to the mother, negotiated the checks at a bank, and then appropriated the money to her own use.

The sole defense of the Executrix was the six-year statute of limitations set forth in 31 U.S.C. §§ 129 and 131.

I.

The named payee of the checks in question was the widow of a Civil War veteran who was receiving benefits under 38 U.S.C. § 532. In 1939, the payee died. The Veterans Administration was unaware of the payee's death and continued to issue checks in her name until July 31, 1968, when the government learned that the payee was no longer living.

Prior to the payee's death, the daughter negotiated the checks by signing the payee's name and then added her own name. From the time of the payee's death in 1939, until the government stopped issuing the checks, the payee's daughter continued to negotiate the checks by signing them with her mother's name and then adding her own name. She appropriated the funds to her own use. The daughter died on May 5, 1973, and Sarah Elizabeth Duncan was named the Executrix of her estate.

The checks received from 1939 to 1968 totaled $18,387.63. When the government learned of the invalid payments in 1968 it recovered $4,460, representing six years' worth of the checks, from the depository bank where the daughter had cashed them.*fn1 On July 22, 1974, the present suit was filed against the Executrix, seeking recovery of $13,547.63. The district court granted summary judgment in favor of the Executrix on February 18, 1975, and the government appealed. We vacate and remand.

II.

This case turns primarily on the meaning of section 129. That section applies to limit, for a period of six years, actions by the government against "any endorser, transferor, or depository, or financial agent. . . ."*fn2 The Executrix insists that in protecting "any endorser" Congress expressed no intent to exclude improper endorsers, and that it would have taken no effort for Congress to have drafted the language necessary to restrict the benefits of section 129 to bona fide endorsers.

A statutory term, however, assumes meaning from the context in which it is used and from the backdrop of the congressional purpose in enacting the statute in question. United States v. Bishop, 412 U.S. 346, 356, 36 L. Ed. 2d 941, 93 S. Ct. 2008 (1973); United States v. Budzanoski, 462 F.2d 443, 452 (C.A. 3, 1972), cert. denied, 409 U.S. 949, 34 L. Ed. 2d 220, 93 S. Ct. 271 (1972).

The Supreme Court, in Cass v. United States, 417 U.S. 72, 78-79, 40 L. Ed. 2d 668, 94 S. Ct. 2167 (1974), rejected the notion that it is improper to refer to legislative history when ...


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