A-3003, JULY 11, 1924, 4 COMP. GEN. 43

A-3003: Jul 11, 1924

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THE RETIREMENT AGE FOR WHICH IS FIXED AT 70 YEARS. OF AN EMPLOYEE WHO HAD BEEN RETIRED FROM A POSITION FOR WHICH THE RETIREMENT AGE IS FIXED AT 65 YEARS. IS UNAUTHORIZED AND CAN NOT FORM THE BASIS FOR A LEGAL CLAIM AGAINST THE GOVERNMENT. 1924: I HAVE YOUR LETTER OF MAY 22. JOHNSON WAS FORMERLY EMPLOYED AS A MECHANIC IN A CLASSIFIED POSITION AT THE NAVY YARD. HE WAS RETIRED OCTOBER 23. ANNUITY CERTIFICATE WAS ISSUED NOVEMBER 26. THE REGULAR MONTHLY ANNUITY PAYMENTS WERE MADE UNTIL AND INCLUDING FEBRUARY. ADJUSTMENT OF THE ERRONEOUS PAYMENTS WAS ALSO REQUIRED. WERE IT NOT FOR YOUR RECENT DECISION OF MAY 2. WHICH APPEARS TO HAVE THE EFFECT OF OVERRULING THE PREVIOUS PRACTICE IN THIS REGARD.

A-3003, JULY 11, 1924, 4 COMP. GEN. 43

REEMPLOYMENT OF CIVILIAN EMPLOYEE AFTER RETIREMENT THE MAKING AND ACCEPTANCE OF AN APPOINTMENT TO A POSITION, THE RETIREMENT AGE FOR WHICH IS FIXED AT 70 YEARS, OF AN EMPLOYEE WHO HAD BEEN RETIRED FROM A POSITION FOR WHICH THE RETIREMENT AGE IS FIXED AT 65 YEARS, IS UNAUTHORIZED AND CAN NOT FORM THE BASIS FOR A LEGAL CLAIM AGAINST THE GOVERNMENT, BUT WHERE MADE AND ACCEPTED IN GOOD FAITH IN THE BELIEF OF ITS LEGALITY THE EMPLOYEE OCCUPIES A DE FACTO STATUS AND MAY RETAIN THE COMPENSATION OF THE POSITION ALREADY RECEIVED BY HIM IF NOT IN EXCESS OF THE REASONABLE VALUE OF THE SERVICES RENDERED; HE MAY NOT, HOWEVER, RETAIN THE ANNUITY PAID TO HIM WHILE HOLDING THE UNAUTHORIZED POSITION.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE INTERIOR, JULY 11, 1924:

I HAVE YOUR LETTER OF MAY 22, 1924, REQUESTING DECISION OF A QUESTION PRESENTED AS FOLLOWS:

I AM HEREBY SUBMITTING FOR YOUR CONSIDERATION AND DECISION A STATEMENT RELATING TO THE CASE OF STARKES W. JOHNSON, ARISING UNDER THE CIVIL SERVICE RETIREMENT ACT.

JOHNSON WAS FORMERLY EMPLOYED AS A MECHANIC IN A CLASSIFIED POSITION AT THE NAVY YARD, WASHINGTON, D.C. UPON REACHING RETIREMENT AGE, 65 YEARS, HE WAS RETIRED OCTOBER 23, 1923. ANNUITY CERTIFICATE WAS ISSUED NOVEMBER 26, 1923, EFFECTIVE OCTOBER 24, 1923, AT THE RATE OF $502.92 PER ANNUM. THE REGULAR MONTHLY ANNUITY PAYMENTS WERE MADE UNTIL AND INCLUDING FEBRUARY, 1924. UPON NOTICE THAT THE ANNUITANT HAD BEEN REEMPLOYED IN THE BUREAU OF ENGRAVING AND PRINTING AS A LABORER, DECEMBER 18, 1923, AT THE RATE OF $540 PER ANNUM AND BONUS, THE COMMISSIONER OF PENSIONS SUSPENDED PAYMENT ON THE ANNUITY. UPON APPEAL FROM THAT ACTION THIS DEPARTMENT, BY DECISION OF MAY 17, 1924 (COPY HEREWITH), AFFIRMED THE SUSPENSION AND DIRECTED CANCELLATION OF THE ANNUITY CERTIFICATE UNLESS THE REEMPLOYMENT BE DISCONTINUED. ADJUSTMENT OF THE ERRONEOUS PAYMENTS WAS ALSO REQUIRED.

HERETOFORE IT HAS BEEN THE PRACTICE OF THIS DEPARTMENT, IN CASE OF REEMPLOYMENT AFTER RETIREMENT ON ACCOUNT OF AGE OR WHERE THE EMPLOYMENT HAS BEEN CONTINUED AFTER THE RETIREMENT AGE HAS BEEN REACHED, WITHOUT CERTIFICATION FOR CONTINUANCE, TO TREAT SUCH SUBSEQUENT EMPLOYMENT AS ILLEGAL AND TO SATISFY THE ERRONEOUS SALARY PAYMENTS OUT OF THE ANNUITY. THIS PRACTICE ORIGINATED UNDER AUTHORITY OF DECISIONS BY THE COMPTROLLER OF THE TREASURY (27 COMP. DEC. 524, 858) * * *.

THIS DEPARTMENT WOULD PROCEED IN THE JOHNSON CASE TO HOLD THE ANNUITY AS AN OFFSET AGAINST THE ERRONEOUS SALARY PAYMENTS UNDER THE REEMPLOYMENT, WERE IT NOT FOR YOUR RECENT DECISION OF MAY 2, 1924, IN THE CASE OF JOSEPH S. HARLAN, WHICH APPEARS TO HAVE THE EFFECT OF OVERRULING THE PREVIOUS PRACTICE IN THIS REGARD. IN THAT CASE THE DEPARTMENT HAD, BY DECISION OF AUGUST 23, 1923 (COPY HEREWITH), AFFIRMED THE ACTION OF THE COMMISSIONER OF PENSIONS, SUSPENDING THE ANNUITY TO OFFSET ERRONEOUS SALARY PAYMENT IN THE AMOUNT OF $463.16 FROM SEPTEMBER 22, 1922, TO JANUARY 20, 1923. YOUR DECISION REFERRED TO ABOVE IT WAS HELD THAT THE ANNUITY COULD NOT BE APPLIED TO RECOVER THE SALARY THUS ILLEGALLY PAID. IF THIS DECISION IS TO STAND, THEN JOHNSON WILL BE PERMITTED TO RETAIN THE SALARY PAID HIM UNDER THE ERRONEOUS REEMPLOYMENT. BUT A FURTHER QUESTION ARISES AS TO RECOVERY OF THE AMOUNT OF THE ANNUITY PAID HIM FROM DECEMBER 18, 1923, TO MARCH 1, 1924, WHEN HE RECEIVED BOTH ANNUITY AND SALARY. IF DOES NOT APPEAR PROPER TO ALLOW HIM TO RETAIN BOTH. FOR YOUR FURTHER INFORMATION THERE IS INCLOSED HEREWITH A COMMUNICATION FROM THE COMMISSIONER OF PENSIONS IN RESPECT TO THE QUESTION INVOLVED. YOUR DECISION IN THE PREMISES IS RESPECTFULLY REQUESTED.

THE DECISIONS PUBLISHED IN 27 COMP. DEC. 524 AND 858, WERE TO THE EFFECT THAT THE APPOINTMENT TO, OR CONTINUED EMPLOYMENT IN, A POSITION SUBJECT TO THE PROVISIONS OF THE CIVIL SERVICE RETIREMENT ACT OF MAY 22, 1920, 41 STAT. 614, OF A PERSON WHO HAD ATTAINED THE RETIREMENT AGE AS FIXED IN SAID ACT, WAS UNAUTHORIZED AND ILLEGAL, BUT IN NEITHER OF SAID DECISIONS WAS IT HELD THAT THE SALARY ERRONEOUSLY PAID TO AN EMPLOYEE UNDER SUCH CIRCUMSTANCES FOR SERVICES ACTUALLY PERFORMED UNDER COLOR OF RIGHT TO THE POSITION HELD COULD BE RECOVERED FROM THE EMPLOYEE IF NOT IN EXCESS OF THE REASONABLE VALUE OF THE SERVICES ACTUALLY RENDERED. THERE IS NO INCONSISTENCY BETWEEN SAID DECISIONS AND MY DECISION OF MAY 2, 1924, 3 COMP. GEN. 823, IN THE CASE OF JOSEPH S. HARLAN, AND SAID LATTER DECISION MUST BE, AND IS, AFFIRMED.

IN THE CASE WHICH YOU NOW PRESENT THE REEMPLOYMENT OF THE ANNUITANT, JOHNSON, ON DECEMBER 18, 1923, WAS UNAUTHORIZED AND ILLEGAL AND SERVICE UNDER SUCH EMPLOYMENT CAN NOT FORM THE BASIS OF ANY LEGAL CLAIM AGAINST THE UNITED STATES. THEREFORE, THE ACTION OF THE COMMISSIONER OF PENSIONS IN SUSPENDING PAYMENT OF THE ANNUITY UPON RECEIPT OF NOTICE OF THE ANNUITANT'S REEMPLOYMENT WAS JUSTIFIED AND PROPER; AND SHOULD THE EMPLOYEE AGAIN BECOME ENTITLED TO RETIREMENT ANNUITY THERE SHOULD BE WITHHELD FROM THE AMOUNT OTHERWISE DUE ON ACCOUNT OF SUCH ANNUITY AN AMOUNT SUFFICIENT TO OFFSET THE AMOUNT OF ANNUITY HERETOFORE PAID TO HIM FOR THE PERIOD FROM DECEMBER 18, 1923, TO FEBRUARY 29, 1924, DURING WHICH PERIOD THE EMPLOYEE WAS ALSO PAID A SALARY FOR SERVICES RENDERED.

IT APPEARS THAT JOHNSON, PRIOR TO HIS RETIREMENT AND BEFORE ATTAINING RETIREMENT AGE, FILED WITH THE CIVIL SERVICE COMMISSION AN APPLICATION FOR A POSITION AS UNSKILLED LABORER AND THAT AT THE TIME OF HIS APPOINTMENT TO SUCH POSITION ON DECEMBER 18, 1923, THE FACT OF HIS RETIREMENT WAS NOT KNOWN TO THE DEPARTMENT IN WHICH THE APPOINTMENT WAS MADE. THE POSITION FROM WHICH HE WAS RETIRED WAS A POSITION AS MECHANIC AT A NAVY YARD THE RETIREMENT AGE FOR WHICH WAS 65 YEARS. AS THE RETIREMENT AGE OF AN UNSKILLED LABORER IS 70 YEARS, HIS APPOINTMENT AT THE AGE OF 65 YEARS EVIDENTLY WAS ASSUMED TO BE LEGAL AND PROPER. WHILE THERE WAS SOME JUSTIFICATION FOR THIS ASSUMPTION ON THE PART OF THE APPOINTING OFFICER AND THE EMPLOYEE, I AM CONSTRAINED TO HOLD THAT SUCH EMPLOYMENTS ARE CONTRARY TO THE SPIRIT AND INTENT OF THE RETIREMENT ACT AND THEREFORE ARE UNAUTHORIZED AND ILLEGAL. ACCORDINGLY, CREDIT WILL NOT BE ALLOWED FOR ANY PAYMENTS HEREAFTER MADE FOR SERVICE RENDERED BY SAID EMPLOYEE UNDER SUCH EMPLOYMENT. BUT SINCE THE APPOINTMENT APPEARS TO HAVE BEEN MADE AND ACCEPTED IN GOOD FAITH UNDER AN ERRONEOUS ASSUMPTION AS TO ITS LEGALITY THE POSITION WAS HELD UNDER A COLOR OF RIGHT DURING THE PERIOD FOR WHICH SERVICE WAS ACTUALLY RENDERED, AND, IN ACCORDANCE WITH THE RULE ANNOUNCED IN THE DECISION OF MAY 2, 1924, SUPRA, FOLLOWING THE PRINCIPLE APPLICABLE TO DE FACTO OFFICERS, IT MUST BE HELD THAT THE AMOUNT HERETOFORE PAID FOR THE SERVICES ACTUALLY RENDERED, IF NOT IN EXCESS OF THE REASONABLE VALUE OF SAID SERVICES, CAN NOT BE RECOVERED FROM THE EMPLOYEE NOR CHARGED AGAINST THE AMOUNT OF ANNUITY OTHERWISE DUE FOR A PRIOR OR SUBSEQUENT PERIOD.