Lins v. United States

4 Cl. Ct. 772, 1984 U.S. Claims LEXIS 1456
CourtUnited States Court of Claims
DecidedMarch 22, 1984
DocketNo. 522-82C
StatusPublished
Cited by14 cases

This text of 4 Cl. Ct. 772 (Lins v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lins v. United States, 4 Cl. Ct. 772, 1984 U.S. Claims LEXIS 1456 (cc 1984).

Opinion

OPINION

YOCK, Judge.

This ease involves claims for damages arising out of allegedly fraudulent activities of United States Treasury Department officials regarding the plaintiff’s attempted redemption of a $1,000,000 U.S. Treasury Bill. In a prior case involving the same parties, the U.S. Court of Claims determined that the plaintiff’s suit concerning the same Treasury bill was barred by the statute of limitations. Lins v. United States, 231 Ct.Cl.-, 688 F.2d 784 (1982), cert. denied, — U.S.-, 103 S.Ct. 788, 74 L.Ed.2d 995 (1983).

[774]*774In this action, the plaintiff contends that the defendant fraudulently misled him into complying with unnecessary regulations to establish his ownership of the Treasury bill, which misrepresentation also resulted in his filing the prior action too late to avoid the Government’s statute of limitations defense. The defendant in this action filed a motion to dismiss and argues that the claim is barred by the doctrine of res judicata. In the alternative, the defendant asserts that even if not barred by res judicata, the claim sounds in tort and, therefore, the U.S. Claims Court lacks jurisdiction. As indicated in the following discussion, the Court grants the defendant’s motion to dismiss.

I.

The previous ease involving the same parties to this action began in February 1981, when the plaintiff sued the Government (U.S. Treasury Department) in the United States District Court for the District of Columbia for a declaratory judgment that he owned the $1,000,000 Treasury bill. In September 1981, the District Court transferred the case to the U.S. Court of Claims under 28 U.S.C. § 1406(c) (1976), because the plaintiff was seeking money damages in an amount beyond the District Court’s jurisdiction. 28 U.S.C. § 1346(a)(2) (Supp. IV 1980).

The $1,000,000 U.S. Treasury Bill at issue in the previous case was a bearer bill redeemable on July 30,1974. It is one of a number of securities which disappeared from the vaults of Chase Manhattan Bank (Chase) in New York during November 1973. Chase notified the Treasury Department, which issued warning notices about the bills and also issued replacements to Chase. In return for the replacements, Chase had to acquire indemnification coverage for the United States in case the Treasury had to redeem both the original and replacement bills. See 31 U.S.C. § 738a(b) (1976); 31 C.F.R. §§ 306.110, 309.12(a) (1981).

The plaintiff, appearing pro se in the previous case as now, is or was a Swiss banker who acquired possession of the bill in November or December 1973 in Switzerland. In December, the plaintiff checked, with the Swiss office of Merrill, Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch) to see if the bill was valid. Merrill Lynch gave only a “neutral” answer, saying it had to check with its protection service in New York. In January 1974, Merrill Lynch told the plaintiff the bill was stolen.

In July 1974, when the bill became due, the plaintiff was in' Thailand, fighting extradition proceedings to Switzerland. Through various agents, the last of which was Irving Trust Company, the plaintiff eventually presented the bill to the Federal Reserve Bank of New York on September 5, 1974.

United States securities issued for a term of one year or less are overdue if presented a month or more after maturity. 31 C.F.R. § 306.25(b)(1) (1981). Section 306.25(b) provides that: “If a bearer security * * * is presented and surrendered for redemption after it has become overdue, the Secretary of the Treasury will ordinarily require satisfactory proof of ownership. (Form PD 1071 may be used).” Accordingly, the Federal Reserve Bank refused to redeem the bill until Form PD 1071 was completed. An employee of Irving Trust took the bill and the form back to the office, intending to complete the form and present the bill again shortly. The next day, however, the Federal Bureau of Investigation, which had discovered the bill was stolen, subpoenaed it from Irving Trust.

A long investigation followed to determine how the bill had gotten to Switzerland and whether the plaintiff had received stolen goods. In 1978, the Swiss prosecutor decided there was not enough evidence to prosecute the plaintiff. In February 1979, the plaintiff finally presented his Form PD 1071, known also as a certificate of ownership. This form requires proof that the bearer acquired the bill for value, before the maturity date, and without notice of any defect in title. The Treasury Department requires this proof to avoid the possi[775]*775bility of double liability, because an insurer might not indemnify it if the United States redeems an overdue bond from an illegitimate bearer.

In a February 26,1980 letter to the plaintiff, the Treasury refused again to pay the plaintiff. It said that the plaintiff’s certificate of ownership showed he acquired the bill before maturity, but that “it does not show firmly and unequivocally that you purchased the bill in good faith, without any notice of defect in title or that you paid value for the bill.” The letter went on to state in pertinent part:

According to Departmental regulations, a person claiming ownership to an overdue security must prove that he is a holder in due course before payment may be made. A holder in due course is one who acquires the security in good faith, before maturity for value, without notice of any defect in title. The degree of evidence necessary to establish such a claim with the Department of the Treasury is, clear and conclusive evidence that firmly establishes proper title and leaves no reasonable questions concerning the propriety of the security’s acquisition. In lieu of this type of evidence, the Department will recognize a court decree that affirmatively establishes rights and entitlement to the security in question. This decree must be from a court having jurisdiction over the subject matter and the affected parties.
# * * * * *
Before further consideration can be given to your claim you must submit satisfactory evidence of purchase of the bill for value, in good faith, without any notice of defect in title. If you decide to pursue your claim further with the Department of the Treasury rather than obtaining a valid court decree, the evidence you submit must be sufficiently strong and independent to remove any reasonable questions concerning your status as a holder in due course. As we do not know the type of evidence you might have, it is difficult for us to advise you whether the information is sufficient for use in the case.

It is clear that both before and after the plaintiff presented his certificate of ownership, the Treasury indicated that a valid court decree establishing the plaintiff’s ownership would be accepted in lieu of a proper certificate of ownership.

As indicated earlier, plaintiff commenced his action in the previous suit on February 25, 1981.

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Bluebook (online)
4 Cl. Ct. 772, 1984 U.S. Claims LEXIS 1456, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lins-v-united-states-cc-1984.