B-135719, MAY 1, 1959, 38 COMP. GEN. 741

B-135719, MAY 1, 1959, 38 COMP. GEN. 741

MILITARY PERSONNEL - DOUBLE COMPENSATION - FORMER RESERVE OFFICERS - WARTHEN CASE THE HOLDING IN THE CASE OF HENRY L. BOWMAN, ET AL. V. UNITED STATES, C.1CLS. NO. 108-58 (REFERRED TO AS THE WARTHEN CASE), WHICH FURTHER EXTENDED THE RULE IN THE TANNER CASE, 129 C.1CLS. 792, TO EXEMPT FORMER RESERVE OFFICERS OF RESERVE COMPONENTS OF THE UNIFORMED SERVICES AS DISTINGUISHED FROM DE JURE RESERVE OFFICERS 1932, 5 U.S.C. 59A, WILL BE FOLLOWED IN THE SETTLEMENT OF SIMILAR CLAIMS FOR RETIRED PAY UNDER TITLE III OF THE ARMY AND AIR FORCE VITALIZATION AND RETIREMENT EQUALIZATION ACT OF 1948 BY FORMER RESERVE MEMBERS FOR PERIODS WHILE THEY WERE CONCURRENTLY EMPLOYED BY THE FEDERAL GOVERNMENT; HOWEVER, PENDING FURTHER LITIGATION OF THE ISSUE IN THE LEONARD CASE, 136 C.1CLS. 686, WHICH DEALS WITH A DISCHARGED FORMER OFFICER OF THE ARMY OF THE UNITED STATES ENTITLED TO RECEIVE DISABILITY RETIRED PAY UNDER THE ACT OF APRIL 3, 1939, 10 U.S.C. 456 (1946 EDITION), SUCH CLAIMS WILL NOT BE ALLOWED.

TO THE SECRETARY OF DEFENSE, MAY 1, 1959:

THIS HAS REFERENCE TO THE DECISION RENDERED ON JANUARY 14, 1959, BY THE COURT OF CLAIMS IN THE CASE OF HENRY L. BOWMAN ET AL. V. UNITED STATES, C.1CLS. NO. 108-58, IN FAVOR OF NATHAN REED WARTHEN, PLAINTIFF NO. 5, FURTHER EXTENDING THE AREA OF OPERATION OF THE RULE OF THE TANNER CASE, 129 C.1CLS. 792, SO AS TO EXEMPT FORMER RESERVE OFFICERS, AS DISTINGUISHED FROM DE JURE OFFICERS OF THE RESERVE COMPONENTS OF THE UNIFORMED SERVICES, FROM THE DUAL COMPENSATION RESTRICTIONS PRESCRIBED IN SECTION 212 OF THE ECONOMY ACT OF 1932, AS AMENDED, 5 U.S.C. 59A.

THE OPINION OF NOVEMBER 2, 1954, IN THE TANNER CASE HELD THAT THE PLAINTIFFS--- EACH OF WHOM HAD THE REQUISITE MEMBERSHIP IN THE OFFICERS' RESERVE CORPS DURING THE PERIODS COVERED BY THEIR CLAIMS--- WERE ENTITLED TO RECEIVE RETIRED PAY UNDER AUTHORITY OF TITLE III OF THE ACT OF JUNE 29, 1948, 62 STAT. 1087-1091, 10 U.S.C. 1036 (1952 USED.), WHILE EMPLOYED CONCURRENTLY BY THE FEDERAL GOVERNMENT AS CIVILIANS AT SALARIES IN EXCESS OF THE AMOUNT PRESCRIBED IN THE 1932 LAW. THAT DECISION CLEARLY RESTED ON THE PREMISE THAT THE PROVISIONS OF SECTION 1 (B) OF THE ACT OF JULY 1, 1947, 61 STAT. 239, 10 U.S.C. 371B (1952 USED.), RELATING TO "ANY MEMBER OF THE OFFICERS' RESERVE CORPS OR THE ENLISTED RESERVE CORPS," EXEMPTED THE PLAINTIFFS FROM THE DUAL COMPENSATION RESTRICTIONS OF SECTION 212. UPON RECEIVING ADVICE FROM THE DEPARTMENT OF JUSTICE THAT NO FURTHER ACTION WOULD BE TAKEN TO AGAIN LITIGATE THE ISSUES INVOLVED IN THE TANNER CASE, WE DECIDED IN DECISION OF MARCH 2, 1956, 35 COMP. GEN. 497, AS MODIFIED IN DECISION OF JUNE 11, 1957, 36 COMP. GEN. 808, TO FOLLOW THE COURT'S DECISION IN THE TANNER CASE AS A PRECEDENT, TO THE EXTENT THERE INDICATED, IN CASES WHERE THE CLAIMANT WAS A DE JURE MEMBER OF A RESERVE COMPONENT OF THE ARMED FORCES DURING THE PERIOD OF HIS CLAIM.

ON NOVEMBER 7, 1956, THE COURT OF CLAIMS DECIDED THE LEONARD V. UNITED STATES CASE, 136 C.1CLS. 686, IN FAVOR OF THE GOVERNMENT ON THE BASIS THAT "BECAUSE OF HIS ( LEONARD-S) ABSOLUTE DISCHARGE FROM THE ARMED SERVICES BY REASON OF PHYSICAL DISABILITY PLAINTIFF IS NOT A MEMBER OF THE OFFICERS' RESERVE CORPS.' THE COURT FURTHER STATED THAT "PLAINTIFF, UNLIKE TANNER, HAS NOT SINCE HIS DISCHARGE BEEN A MEMBER OF A RESERVE COMPONENT.' THUS, IT IS CLEAR THAT THE DECISION IN THE LEONARD CASE IS FOUNDED ON THE FACT THAT THE PLAINTIFF WAS NOT A MEMBER OF THE OFFICERS' RESERVE CORPS DURING THE PERIOD FOR WHICH HE CLAIMED EXEMPTION, UNDER THE 1947 ACT, FROM THE RESTRICTIONS IMPOSED BY SECTION 212 OF THE 1932 LAW.

IN THE SARLES CASE, C.1CLS. NO. 353-56, DECIDED ON MARCH 5, 1958, THE SOLE ISSUE PRESENTED WAS WHETHER UNDER THE RULE OF THE TANNER DECISION, THE PLAINTIFF CONTINUED TO BE EXEMPT, SUBSEQUENT TO THE TERMINATION OF HIS COMMISSION IN THE NATIONAL GUARD, FROM THE DUAL COMPENSATION RESTRICTIONS OF SECTION 212. THE COURT HELD THAT HAVING "ACQUIRED A RIGHT TO RETIRED PAY (UNDER TITLE III, ACT OF JUNE 29, 1948), OR TO PAY AND ALLOWANCES, BY REASON OF HIS MEMBERSHIP IN THE NATIONAL GUARD" SARLES CONTINUED TO BE ENTITLED TO THE BENEFITS OF SECTION 2 OF THE ACT OF JULY 1, 1947, 61 STAT. 239, 32 U.S.C. 75 (1952 USED.), NOTWITHSTANDING THE FACT THAT HE HAD BEEN HONORABLY DISCHARGED JULY 27, 1951, FROM HIS COMMISSION IN THE NATIONAL GUARD OF THE UNITED STATES.

THE INCONSISTENCY IN THE HOLDINGS IN THE LEONARD AND SARLES DECISIONS SEEMS APPARENT. HOWEVER, SINCE THE LEONARD DECISION IS NOT MENTIONED IN THE COURT'S OPINION IN THE SARLES CASE, THE QUESTION AROSE AS TO WHETHER THE COURT MEANT TO OVERRULE THE LEONARD DECISION (WHICH HAD BEEN EXPRESSLY CALLED TO ITS ATTENTION IN DEFENDANT'S BRIEF FILED ON SEPTEMBER 12, 1957), OR HAD PERCEIVED SOME MATERIAL DISTINCTION BETWEEN THESE TWO CASES NOT APPARENT TO US. IN SUCH CIRCUMSTANCES, NO PROPER BASIS WAS PRESENTED ON WHICH THE SARLES DECISION COULD BE APPLIED HERE AS A PRECEDENT IN THE SETTLEMENT OF OTHER SIMILAR CASES.

THE DECISION IN FAVOR OF NATHAN REED WARTHEN, PLAINTIFF NO. 5, IN THE CASE OF HENRY L. BOWMAN, ET AL. V. UNITED STATES, C.1CLS. NO. 108 58, WAS RENDERED ON JANUARY 14, 1959. WARTHEN RESIGNED HIS COMMISSION IN THE OFFICERS' RESERVE CORPS ON OCTOBER 1, 1943, AND SINCE THAT DATE HE HAS NOT HAD ANY STATUS IN ANY BRANCH OF THE ARMED FORCES. THE COURT STATED:

IN TANNER, THERE WAS NO REASON TO SUPPOSE THAT CONGRESS, IT HAD FORESEEN RETIRED PAY FOR RESERVE OFFICERS, WOULD NOT HAVE WANTED TO EXEMPT THAT PAY FROM THE RESTRICTIONS OF THE ECONOMY ACT. IN THE INSTANT SITUATION, ON THE OTHER HAND, THE PURPOSE OF BOTH THE 1947 AND 1948 ACTS WOULD BE, TO A CONSIDERABLE DEGREE, FRUSTRATED BY A LITERAL INTERPRETATION OF THE 1947 ACT. THIS COURT IN SARLES V. UNITED STATES, NO. 353-56 DECIDED MARCH 5, 1958, DEALT WITH SUBSTANTIALLY THE SAME PROBLEM AND HELD THAT THE 1947 ACT, PROPERLY INTERPRETED, MEANT THAT ANY PERSON WHO HAD BECOME ENTITLED TO PAY AND ALLOWANCES, INCLUDING RETIRED PAY, BY REASONS OF SERVICE IN A RESERVE COMPONENT, WAS NOT SUBJECT TO THE RESTRICTIONS OF THE ECONOMY ACT. WE ADHERE TO THE REASONING OF THE SARLES DECISION.

IT IS TO BE NOTED THAT AGAIN THE COURT OF CLAIMS MADE NO REFERENCE TO ITS PRIOR INCONSISTENT HOLDING IN THE LEONARD DECISION WHICH WAS CITED BY THE DEFENDANT IN BRIEFS FILED ON JULY 25 AND OCTOBER 17, 1958, IN OPPOSITION TO THE PLAINTIFF'S CLAIM. THE COURT ADHERED TO THE REASONING OF THE SARLES DECISION AND ENTERED A JUDGMENT FOR THE PLAINTIFF, WARTHEN.

ALTHOUGH THE FACTS IN THE SARLES AND WARTHEN CASES ARE NOT PRECISELY ALIKE, THE CLOSE SIMILARITY OF THE RESPECTIVE SITUATIONS IS SUCH AS TO WARRANT THE CONCLUSION THAT IN OTHER SIMILAR CASES THE COURT OF CLAIMS WILL CONTINUE TO IGNORE THE HOLDING OF THE LEONARD DECISION OF NOVEMBER 7, 1956, AND, IN ACCORDANCE WITH ITS CONCLUSIONS IN THE WARTHEN CASE WILL APPLY THE RULE OF THE SARLES DECISION. IN THAT CONNECTION, WE HAVE BEEN ADVISED BY THE DEPARTMENT OF JUSTICE THAT SINCE THE COURT HAS REJECTED ALL OF THE DEFENDANT'S ARGUMENTS ADVANCED IN AN ATTEMPT TO LIMIT APPLICATION OF THE RULE OF THE SARLES CASE, THE DEPARTMENT OF JUSTICE WILL, IN THE FUTURE, ADMIT LIABILITY IN SARLES AND WARTHEN TYPE CASES. IN THESE CIRCUMSTANCES, WE HAVE CONCLUDED THAT WE WILL FOLLOW THE RULE ESTABLISHED IN THE SARLES AND WARTHEN CASES IN THE SETTLEMENT OF OTHER SIMILAR CASES.

HOWEVER, THE LEONARD DECISION WHICH DEALS WITH A DISCHARGED FORMER OFFICER OF THE ARMY OF THE UNITED STATES ENTITLED TO RECEIVE DISABILITY PAY UNDER AUTHORITY OF THE ACT OF APRIL 3, 1939, 53 STAT. 557, 10 U.S.C. 456, 1946 USED., WAS NOT MENTIONED BY THE COURT IN EITHER THE SARLES OR WARTHEN CASES. IT APPEARS REASONABLE TO CONCLUDE, THEREFORE, THAT THE HOLDINGS IN THE LATTER TWO CASES WERE NOT INTENDED TO REVERSE OR MODIFY THE RULE IN THE LEONARD CASE. FURTHERMORE, THE CASE OF GATTAS V. UNITED STATES, C.1CLS. NO. 540-58, WHICH IS NOW PENDING IN THE COURT OF CLAIMS RAISES IDENTICAL ISSUES TO THOSE PRESENTED IN THE LEONARD CASE. CONSEQUENTLY, PENDING THE COURT'S DECISION IN THE GATTAS CASE, NO CLAIM OF THE LEONARD OR GATTAS TYPE PROPERLY MAY BE ALLOWED. ACCORDINGLY, IT WOULD APPEAR DESIRABLE, IN VIEW OF ALL THE CIRCUMSTANCES, THAT THOSE CASES IN WHICH THE FACTS ARE DEEMED BY THE DEPARTMENT CONCERNED TO BE SIMILAR TO THOSE IN THE SARLES AND WARTHEN DECISIONS, BE SUBMITTED TO THE CLAIMS DIVISION OF THE GENERAL ACCOUNTING OFFICE FOR CERTIFICATION PRIOR TO PAYMENT.

YOU WILL NOTE FROM THE ENCLOSED COPY OF OUR LETTER OF TODAY, B 135719, ADDRESSED TO MAJ. GEN. H. W. CRANDALL, CHIEF OF FINANCE, UNITED STATES ARMY, THAT ON THE BASIS OF THE RECORD BEFORE THIS OFFICE NATHAN REED WARTHEN WAS PLACED ON THE TITLE III RETIRED LIST WITHOUT AUTHORITY OF LAW AS A RESULT OF ERRONEOUSLY RECEIVING CREDIT FOR NATIONAL GUARD RESERVE SERVICE. THAT FACT, HOWEVER, DOES NOT AFFECT THE PRINCIPLE OR THE RULE OF THE WARTHEN DECISION, AS SUCH, WHICH THIS OFFICE HENCEFORTH WILL FOLLOW, AS ABOVE STATED.