A-88759, NOVEMBER 10, 1937, 17 COMP. GEN. 391

A-88759: Nov 10, 1937

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IN THE PROPER DISCHARGE OF THEIR DUTIES IN SETTLING ACCOUNTS WITH PERSONS WHO ARE BOTH DEBTORS AND CREDITORS OF THE UNITED STATES. IS AS FOLLOWS: IN REPLY TO YOUR LETTER OF THE 2ND INST. PLEASE BE ADVISED THAT I HAVE NOT AUTHORIZED DEDUCTION OF FINE FROM RETIREMENT FUND DUE ME. THE FINE WILL BE TAKEN CARE OF WHEN I AM RELEASED FROM PRISON. OWES SAID DEBTOR" IS DEFEATED BY SEC. 702A. WHICH I THINK STATES CONCLUSIVELY THAT THIS MONEY IS ALL DUE AND PAYABLE TO ME. THE STATUTE TO WHICH YOU APPARENTLY REFER IS SECTION 12 OF THE ACT OF JULY 3. HELD AS FOLLOWS: WHERE A PERSON IS BOTH DEBTOR AND CREDITOR OF THE UNITED STATES. NOT ONLY HAVE THE POWER. ARE REQUIRED IN THE PROPER DISCHARGE OF THEIR DUTIES.

A-88759, NOVEMBER 10, 1937, 17 COMP. GEN. 391

SET-OFF - RETIREMENT DEDUCTIONS - UNPAID FINE OF FORMER GOVERNMENT EMPLOYEE IT BEING THE RIGHT AND DUTY OF THE GOVERNMENT ACCOUNTING OFFICERS, IN THE PROPER DISCHARGE OF THEIR DUTIES IN SETTLING ACCOUNTS WITH PERSONS WHO ARE BOTH DEBTORS AND CREDITORS OF THE UNITED STATES, TO SET OFF THE AMOUNT OF THE INDEBTEDNESS, AN AMOUNT TO A FORMER CIVILIAN EMPLOYEE'S CREDIT IN THE RETIREMENT FUND MAY BE USED IN LIQUIDATION OF AN UNPAID FEDERAL FINE NOTWITHSTANDING THE PROVISIONS OF SECTION 12 OF THE ACT OF JULY 3, 1926, 44 STAT. 911, RELATIVE TO THE RETURNING OF RETIREMENT DEDUCTIONS TO AN EMPLOYEE WHO BECOMES ABSOLUTELY SEPARATED FROM THE SERVICE BEFORE BECOMING ELIGIBLE FOR RETIREMENT ON ANNUITY.

ACTING COMPTROLLER GENERAL ELLIOTT TO CHARLES F. GROW, NOVEMBER 10, 1937:

YOUR UNDATED LETTER RECEIVED IN THIS OFFICE ON OCTOBER 14, 1937, IS AS FOLLOWS:

IN REPLY TO YOUR LETTER OF THE 2ND INST., PLEASE BE ADVISED THAT I HAVE NOT AUTHORIZED DEDUCTION OF FINE FROM RETIREMENT FUND DUE ME.

THE FINE WILL BE TAKEN CARE OF WHEN I AM RELEASED FROM PRISON.

I BELIEVE THE LAW ENTITLES ME TO THE FULL AMOUNT DUE ME AND ANY PURPORTED "ESTABLISHED PRINCIPLE OF LAW PERMITTING THE U.S. TO SET OFF ANY AMOUNT DUE FROM A DEBTOR ANY AMOUNT THE U.S. OWES SAID DEBTOR" IS DEFEATED BY SEC. 702A, TITLE 5, U.S. CODE, WHICH I THINK STATES CONCLUSIVELY THAT THIS MONEY IS ALL DUE AND PAYABLE TO ME.

THE STATUTE TO WHICH YOU APPARENTLY REFER IS SECTION 12 OF THE ACT OF JULY 3, 1926, 44 STAT. 911 (SEC. 724 (D), TITLE 5, U.S.C.), IN PART, AS FOLLOWS:

IN THE CASE OF ANY EMPLOYEE TO WHOM THIS ACT APPLIES WHO SHALL * * * BECOME ABSOLUTELY SEPARATED FROM THE SERVICE BEFORE BECOMING ELIGIBLE FOR RETIREMENT ON ANNUITY, THE TOTAL AMOUNT OF DEDUCTIONS OF SALARY, PAY, OR COMPENSATION HERETOFORE OR HEREAFTER MADE WITH ACCRUED INTEREST COMPUTED AT THE RATE OF 4 PERCENTUM PER ANNUM, COMPOUNDED ON JUNE 30 OF EACH FISCAL YEAR, SHALL BE RETURNED TO SUCH EMPLOYEE: * * *

THE UNITED STATES COURT OF CLAIMS IN THE CASE OF TAGGARD V. UNITED STATES, 17 CT.CLS. 322, AT PAGE 327, HELD AS FOLLOWS:

WHERE A PERSON IS BOTH DEBTOR AND CREDITOR OF THE UNITED STATES, IN ANY FORM, THE OFFICERS OF THE TREASURY DEPARTMENT, IN SETTLING THE ACCOUNTS, NOT ONLY HAVE THE POWER, BUT ARE REQUIRED IN THE PROPER DISCHARGE OF THEIR DUTIES, TO SET OFF THE ONE INDEBTEDNESS AGAINST THE OTHER, AND TO ALLOW AND CERTIFY FOR PAYMENT ONLY THE BALANCE FOUND DUE ON ONE SIDE OR THE OTHER. SECTION 1766 OF THE REVISED STATUTES SO PROVIDES, AND SPECIAL PROVISIONS ON THE SUBJECT, TO MEET THE CASE OF JUDGMENTS RECOVERED AGAINST THE UNITED STATES "OR OTHER CLAIM DULY ALLOWED BY LEGAL AUTHORITY," ARE MADE BY THE ACT OF MARCH 3, 1875, CH. 149 (1 SUPPLMT. TO R.S., O. 185). BUT THE RIGHT OF SET-OFF IN SUCH CASES EXISTS INDEPENDENTLY OF THOSE SPECIAL ENACTMENTS AND IS FOUNDED UPON WHAT IS NOW SECTION 236 OF THE REVISED STATUTES, AS FOLLOWS:

"SEC. 236. ALL CLAIMS AND DEMANDS WHATEVER, BY THE UNITED STATES OR AGAINST THEM, AND ALL ACCOUNTS WHATEVER IN WHICH THE UNITED STATES ARE CONCERNED, EITHER AS DEBTORS OR CREDITORS, SHALL BE SETTLED AND ADJUSTED IN THE DEPARTMENT OF THE TREASURY.'

THE DUTY OF THE ACCOUNTING OFFICERS IN MATTERS OF SET-OFF HAS FREQUENTLY BEEN RECOGNIZED BY THE COURTS. (MCKNIGHT'S CASE, 13 C.CLS.R. 306, AFFIRMED ON APPEAL; DONNAFON'S CASE, 14 C.CLS.R., 489.) * * *

THE SAID SECTION 236, REVISED STATUTES, AS QUOTED ABOVE, WAS AMENDED BY SECTION 305 OF THE ACT OF JUNE 10, 1921, 42 STAT. 24, TO READ AS FOLLOWS:

ALL CLAIMS AND DEMANDS WHATEVER BY THE GOVERNMENT OF THE UNITED STATES OR AGAINST IT, AND ALL ACCOUNTS WHATEVER IN WHICH THE GOVERNMENT OF THE UNITED STATES IS CONCERNED, EITHER AS DEBTOR OR CREDITOR, SHALL BE SETTLED AND ADJUSTED IN THE GENERAL ACCOUNTING OFFICE.

AND IN THE CASE OF O-LEARY V. UNITED STATES, DECIDED JANUARY 6, 1936, 82 CT.CLS. 305, THE COURT OF CLAIMS SUSTAINED THE ACTION OF THIS OFFICE IN DEDUCTING THE AMOUNT OF AN UNPAID FINE OF $500 AGAINST O-LEARY FROM THE AMOUNT OTHERWISE PAYABLE TO HIM FROM THE RETIREMENT FUND.