B-10655, JULY 5, 1940, 20 COMP. GEN. 9

B-10655, JULY 5, 1940, 20 COMP. GEN. 9

RESIGNATION AND APPOINTMENT OF SUCCESSOR PRIOR TO EXPIRATION OF RESIGNED EMPLOYEE'S ANNUAL LEAVE WHERE AN OFFICER OR EMPLOYEE TENDERS HIS RESIGNATION TO TAKE EFFECT UPON THE TERMINATION OF THE ACCRUED ANNUAL LEAVE TO HIS CREDIT AND THE RESIGNATION IS ACCEPTED AS PRESENTED, THE OFFICE OR POSITION DOES NOT BECOME VACANT UNTIL THE LEAVE HAS EXPIRED AND THE EMPLOYEE IS FINALLY SEPARATED PURSUANT TO THE TERMS OF HIS ACCEPTED RESIGNATION. WHERE AN EMPLOYEE RESIGNS TO TAKE EFFECT AT TERMINATION OF HIS ANNUAL LEAVE GRANTED UNDER ACT OF MARCH 14, 1936, AND HIS RESIGNATION IS ACCEPTED ON THAT BASIS, ATTEMPTED APPOINTMENT OF ANOTHER PERSON TO SAME POSITION, PRIOR TO TERMINATION OF THE LEAVE, PARTICULARLY WITHOUT NOTICE TO THE EMPLOYEE WHO HAS RESIGNED, DOES NOT AUTOMATICALLY SEPARATE THE FIRST INCUMBENT FROM THE POSITION AND HE, AND NOT HIS SUCCESSOR, IS THE ONE ENTITLED TO THE SALARY THEREOF THROUGH DATE OF TERMINATION OF THE LEAVE. SECTION 201 (E) OF THE MERCHANT MARINE ACT, 1936, 49 STAT. 1986, PROVIDING FOR APPOINTMENT BY UNITED STATES MARITIME COMMISSION OF "A DIRECTOR FOR EACH OF NOT TO EXCEED FIVE DIVISIONS," PROHIBITS CONCURRENT EMPLOYMENT OF TWO DIRECTORS OF THE SAME DIVISION OF THE SAID COMMISSION EVEN IF ONE OF THEM SHOULD BE ON LEAVE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE CHAIRMAN, UNITED STATES MARITIME COMMISSION, JULY 5, 1940:

I HAVE YOUR LETTER OF JUNE 3, 1940, AS FOLLOWS:

THIS REFERS TO THE EXCEPTION TAKEN BY THE GENERAL ACCOUNTING OFFICE UNDER DATE OF APRIL 3, 1940, TO THE PAYMENT OF SALARY MADE TO MR. GERALD H. HELMBOLD AS DIRECTOR, DIVISION OF OPERATIONS AND TRAFFIC OF THE UNITED STATES MARITIME COMMISSION FOR THE PERIOD APRIL 16TH TO APRIL 30TH, 1939, INCLUSIVE ( VOUCHER NO. 1640194).

PURSUANT TO THE PROVISIONS OF SECTION 201 (E) OF THE MERCHANT MARINE ACT, 1936, AS AMENDED, UNDER WHICH THE COMMISSION IS AUTHORIZED TO APPOINT A DIRECTOR FOR EACH OF NOT TO EXCEED FIVE DIVISIONS WITHOUT REGARD TO THE PROVISIONS OF THE CIVIL-SERVICE LAWS OR THE CLASSIFICATION ACT OF 1923, MR. GERALD H. HELMBOLD WAS APPOINTED ON APRIL 6, 1939, DIRECTOR, DIVISION OF OPERATIONS AND TRAFFIC AT A SALARY OF $8,000 PER ANNUM. THE PRIOR INCUMBENT OF THIS OFFICE, MR. M. L. WILCOX, HAD RESIGNED WITH HIS LAST DAY OF ACTIVE SERVICE APRIL 8, 1939, BUT REMAINED ON ANNUAL LEAVE UNTIL MAY 29, 1939. IT WOULD THEREFORE APPEAR THAT THE EXCEPTION IS TAKEN ON THE GROUNDS THAT THE COMMISSION WAS WITHOUT AUTHORITY TO APPOINT MR. HELMBOLD UNTIL THE EXPIRATION OF MR. WILCOX'S LEAVE.

THE FACT THAT AN EMPLOYEE WHOSE RESIGNATION HAS BEEN ACCEPTED AND WHOSE ACTIVE DUTY STATUS HAS BEEN TERMINATED PURSUANT TO THE PROVISIONS OF SUCH RESIGNATION IS RECEIVING PAY ON ACCOUNT OF ANNUAL LEAVE WOULD NOT APPEAR TO REQUIRE A HOLDING THAT THE OFFICE IN QUESTION HAD NOT BEEN VACATED. FACT, AT THE TIME MR. HELMBOLD WAS APPOINTED, YOUR OFFICE HAD RENDERED A DECISION WHICH APPEARED TO HAVE ACCEPTED THIS VIEW BY INDICATING THAT AN EMPLOYEE WHOSE RESIGNATION HAD BEEN ACCEPTED AND WHOSE ACTIVE DUTY STATUS HAD THEREBY BEEN TERMINATED WOULD NOT BE CONSIDERED AS HOLDING A FEDERAL OFFICE ALTHOUGH HE WAS RECEIVING PAYMENT FOR HIS ANNUAL LEAVE. SEE 16 COMP. GEN. 776. IN THIS CONNECTION ATTENTION IS CALLED TO THE STATEMENT OF THE COURT OF CLAIMS THAT THE ACCEPTANCE OF A RESIGNATION IN ACCORDANCE WITH ITS TERMS IS COMPLETE, FINAL, AND BINDING ON THE PARTIES. SEE MIMMACK V. UNITED STATES, 10 CT.CL. 584, 596. THEREFORE, WHERE ACTIVE DUTY STATUS IS TERMINATED BY THE ACCEPTANCE OF A RESIGNATION, THE GOVERNMENT IS PRECLUDED FROM AVAILING ITSELF FURTHER OF THE EMPLOYEE'S SERVICES, AND INSOFAR AS THE ADMINISTRATIVE AGENCY AFFECTED IS CONCERNED, IT IS IMMATERIAL THAT THE RESIGNED EMPLOYEE CONTINUES TO RECEIVE PAYMENT ON ACCOUNT OF ANNUAL LEAVE.

IN VIEW OF THE FOREGOING, IT IS URGED THAT CONSIDERATION BE GIVEN TO THE ADVISABILITY OF OVERRULING THE DECISION REPORTED IN 19 COMP. GEN. 501 OR LIMITING ITS APPLICATION TO OFFICES CREATED AND THE SALARY OF WHICH IS FIXED BY STATUTE RATHER THAN EXTENDING IT TO SITUATIONS SUCH AS THE ONE INVOLVED HERE WHERE THE OFFICE IS CREATED BY ADMINISTRATIVE ACTION UNDER AUTHORITY OF STATUTE.

EVEN IF IT IS HELD THAT THE EMPLOYEE, WHOSE RESIGNATION HAS BEEN ACCEPTED BUT WHO IS RECEIVING PAYMENT FOR ANNUAL LEAVE, STILL OCCUPIES THE OFFICE, THE ACTION OF THE COMMISSION IN APPOINTING MR. HELMBOLD WOULD BE AUTHORIZED. THIS ARISES FROM THE FACT THAT SUCH APPOINTMENT WOULD HAVE THE EFFECT OF AUTOMATICALLY TERMINATING MR. WILCOX'S LEAVE IF SUCH RESULT WERE NECESSARY FOR ITS VALIDITY. 13 COMP. GEN. 170. THE COMMISSION UNDOUBTEDLY HAS DISCRETIONARY AUTHORITY TO TERMINATE APPOINTMENTS MADE UNDER THE PROVISIONS OF SECTION 201 (E) OF THE MERCHANT MARINE ACT, 1936, AS AMENDED. SUCH AUTHORITY SHOULD NOT BE HELD TO BE CURTAILED OR RESTRICTED BY THE PROVISIONS OF THE ACT OF MARCH 14, 1936 (49 STAT. 1161) AND THE REGULATIONS ISSUED PURSUANT THERETO. NOTWITHSTANDING THE MANDATORY CHARACTER OF THE LEAVE PROVIDED FOR IN SUCH ACT, ADMINISTRATIVE OFFICERS MAY EXERCISE DISCRETION AS TO WHEN LEAVE MAY BE GRANTED. SEE 16 COMP. GEN. 74; ID. 899; 17 COMP. GEN. 48. TO HOLD THAT AN EMPLOYEE, BY SPECIFYING IN HIS RESIGNATION THAT ACCRUED LEAVE SHALL BE GRANTED TO HIM, THEREBY DEPRIVES AN ADMINISTRATIVE OFFICER OF HIS DISCRETION IN RESPECT TO THE GRANTING OF SUCH LEAVE WOULD UNDOUBTEDLY IN MANY CASES GIVE RISE TO SERIOUS ADMINISTRATIVE DIFFICULTIES SINCE AN AGENCY MIGHT BE UNABLE TO SECURE THE SERVICES OF PERSONS POSSESSING THE ABILITY NECESSARY TO FILL KEY POSITIONS FOR PERIODS OF AS LONG AS THREE CALENDAR MONTHS. IRRESPECTIVE, THEN, OF ANY RIGHTS WHICH AN INDIVIDUAL EMPLOYEE MAY HAVE AGAINST THE GOVERNMENT ON ACCOUNT OF HIS ANNUAL LEAVE, IT SHOULD NOT BE HELD THAT IT IS MANDATORY UPON THE AGENCY TO GRANT SUCH LEAVE UPON RESIGNATION OF THE EMPLOYEE.

IN VIEW OF THE FOREGOING, IT IS REQUESTED THAT THE AFOREMENTIONED EXCEPTION TO THE PAYMENT MADE TO MR. HELMBOLD BE REMOVED.

ON PAGE 25, LINE 3, OF D.O. VOUCHER NO. 1640194 OF THE APRIL 1939 ACCOUNT OF G. F. ALLEN ( UNITED STATES MARITIME COMMISSION BUREAU VOUCHER NO. OAP- C39-4389, APRIL 25, 1939), MARSHALL L. WILCOX WAS PAID AS DIRECTOR OF OPERATIONS AND TRAFFIC FOR THE PERIOD APRIL 16 TO 30, 1939, ON PAGE 25, LINE 4, OF THE SAME VOUCHER, GERALD H. HELMBOLD ALSO WAS PAID AS DIRECTOR OF OPERATIONS AND TRAFFIC FOR THE SAME PERIOD, PLUS A SUM EQUAL TO THE DIFFERENCE BETWEEN THE SALARY OF ASSISTANT DIRECTOR AT $5,600 PER ANNUM AND DIRECTOR AT $8,000 PER ANNUM FOR THE PERIOD APRIL 10 TO 15, 1939, INCLUSIVE. THE NOTE IN THE REMARKS COLUMN ON PAGE 26, IN EXPLANATION OF THE PAYMENT TO GERALD H. HELMBOLD, READS:

REASSIGNED 4-10-39 FROM EXEC. ASST. TO DIRECTOR CAF-13, $5,600 P.A. APP-D BY M.C. 4-6-39. DIFFERENCE DUE FOR 4/10-4/15 INCLUDED HERE.

UNDER DATE OF NOVEMBER 1, 1939, AN AUDIT EXCEPTION WAS STATED AGAINST THIS VOUCHER (1640194, APRIL 1939) AS FOLLOWS:

MR. GERALD H. HELMBOLD PAID AS DIRECTOR OF OPERATIONS AND TRAFFIC; MR. M. L. WILCOX ALSO PAID AS DIRECTOR OF OPERATIONS AND TRAFFIC, FOR THE SAME PERIOD. AN EXPLANATION IS REQUESTED.

SIMILAR EXCEPTIONS WERE STATED AGAINST THE PAY ROLL FOR MAY 1-15, 1939 ( D.O. VOUCHER NO. 1723478, MAY 1939), AND THE PAY ROLL FOR MAY 16 31, 1939 ( D.O. VOUCHER NO. 1824193, MAY 1939).

REPLIES TO THE AUDIT EXCEPTIONS HAVING BEEN DEEMED INSUFFICIENT TO ALLOW CREDIT FOR THE PAYMENTS AS MADE, UNDER DATE OF APRIL 3, 1940, A DISALLOWANCE WAS STATED AGAINST THE SUBJECT VOUCHER AS FOLLOWS:

REPLIES OF DECEMBER 21, 1939, AND FEBRUARY 21, 1940, ARE NOT SATISFACTORY.

THE MERCHANT MARINE ACT 1936 PROVIDES:

"/E) WITHOUT REGARD TO THE CIVIL SERVICE LAWS OR THE CLASSIFICATION ACT OF 1923, AS AMENDED, THE COMMISSION MAY APPOINT AND PRESCRIBE THE DUTIES AND FIX THE SALARIES OF * * * A DIRECTOR FOR EACH OF NOT TO EXCEED FIVE DIVISIONS. * * *"

SINCE THERE WERE ALREADY FIVE EXEMPT DIRECTORS OF DIVISIONS ON THE PAY ROLL, THE ADDITION OF MR. HELMBOLD'S NAME EXCEEDS THE LIMIT. ALSO, THE PAYMENT TO MR. HELMBOLD RESULTS IN TWO EMPLOYEES BEING PAID FOR THE SAME POSITION, COVERING THE SAME PERIOD, WHICH IS CONTRARY TO LAW. THE PAYMENT IS THEREFORE DISALLOWED. SEE 19 COMP. GEN. 501.

THE CONTROLLING STATUTE QUOTED IN THE NOTICE OF DISALLOWANCE IS FOUND IN SECTION 1111 (E), TITLE 46, U.S.C. IT IS UNDERSTOOD THAT NEITHER OF THE INCUMBENTS OF THE POSITION IN QUESTION WAS EMPLOYED UNDER THE CIVIL SERVICE LAWS OR THAT THEIR SALARIES WERE FIXED IN ACCORDANCE WITH THE CLASSIFICATION ACT. THE CLEAR PURPOSE AND INTENT OF THE CONTROLLING STATUTE IS TO LIMIT THE APPOINTMENT OR EMPLOYMENT OF DIRECTORS OF DIVISIONS WITHOUT REGARD TO THE CIVIL SERVICE LAWS AND THE CLASSIFICATION ACT, TO ONE DIRECTOR FOR EACH OF FIVE DIVISIONS, OR A TOTAL OF FIVE DIRECTORS OF DIVISIONS, DURING THE SAME PERIOD OF TIME. THE PAY ROLLS SHOW THAT SIX WERE THUS APPOINTED OR EMPLOYED FOR THE PERIOD FROM APRIL 10 TO MAY 30, 1939, IN CONTRAVENTION OF THE EXPRESS TERMS OF THE STATUTE. THE FACT THAT THE DIRECTOR OF ONE OF THE FIVE DIVISIONS WAS ON LEAVE OF ABSENCE WITH PAY FOR THE INVOLVED PERIOD AFFORDS NO BASIS FOR INCREASING THE NUMBER AUTHORIZED BY THE STATUTE TO SIX DIRECTORS OF DIVISIONS, THAT IS, TWO FOR ONE OF THE FIVE DIVISIONS FOR THE SAME PERIOD OF TIME. THE PAY ROLLS PRESENTED TO THIS OFFICE FOR AUDIT ARE NOT REQUIRED TO SHOW WHEN AN EMPLOYEE IS ON ANNUAL LEAVE OF ABSENCE FOR THE REASON THAT HE IS IN A LEAVE WITH PAY STATUS AUTHORIZED BY LAW, WHICH IS SYNONYMOUS FOR PAY PURPOSES WITH A WORK OR DUTY STATUS. 13 COMP. GEN. 295; ID. 370; 17 ID. 641, 643; 18 ID. 637, 639; 19 ID. 501, 503. CONTRARY TO THE VIEW EXPRESSED IN REPLIES TO EXCEPTIONS, THIS RULE IS THE SAME WHETHER THE LEAVE IS GRANTED BETWEEN TWO PERIODS OF ACTIVE DUTY OR AT THE END OF ACTIVE DUTY AND PRIOR TO SEPARATION.

AS STATED IN THE THIRD PARAGRAPH OF YOUR LETTER "THE ACCEPTANCE OF A RESIGNATION IN ACCORDANCE WITH ITS TERMS IS COMPLETE, FINAL, AND BINDING ON THE PARTIES. SEE MIMMACH V. UNITED STATES, 10 CT.CL. 584, 596.' THAT IS TO SAY, WHEN AN OFFICER OR EMPLOYEE TENDERS HIS RESIGNATION TO TAKE EFFECT UPON THE TERMINATION OF THE ACCRUED ANNUAL LEAVE TO HIS CREDIT (AS IS UNDERSTOOD TO BE THE SITUATION HERE) AND THE RESIGNATION IS ACCEPTED AS PRESENTED, NO VACANCY OCCURS IN THE OFFICE OR POSITION HELD BY THE OFFICER OR EMPLOYEE AT THE TIME HE DISCONTINUES ACTIVE DUTY AND GOES ON AUTHORIZED ANNUAL LEAVE, AS APPEARS TO BE THE VIEW EXPRESSED IN YOUR LETTER. RATHER, THE VACANCY OCCURS WHEN THE LEAVE HAS EXPIRED AND THE EMPLOYEE IS FINALLY SEPARATED PURSUANT TO THE TERMS OF HIS RESIGNATION. 19 COMP. GEN. 501. THERE IS NO LEGAL BASIS FOR LIMITING THE APPLICATION OF THIS GENERAL RULE "TO OFFICES CREATED AND THE SALARY OF WHICH IS FIXED BY STATUTE" AS SUGGESTED IN YOUR LETTER. FURTHERMORE, THE POSITION OF DIRECTOR OF DIVISION HERE INVOLVED IS NAMED IN THE STATUTE AND A LIMITATION HAS BEEN PLACED BY THE STATUTE UPON THE NUMBER OF PERSONS THAT MAY BE EMPLOYED IN SUCH POSITIONS WITHOUT REGARD TO THE CIVIL SERVICE LAWS AND THE CLASSIFICATION ACT. IF THERE WERE NOT INVOLVED HERE A STATUTORY LIMITATION UPON THE NUMBER OF POSITIONS IN WHICH EMPLOYMENT AND PAYMENT OF SALARY WITHOUT REGARD TO THE CIVIL SERVICE LAWS AND THE CLASSIFICATION ACT IS AUTHORIZED, A DIFFERENT QUESTION WOULD PRESENT ITSELF. IN SUCH CIRCUMSTANCES THERE WOULD BE NO LEGAL OBJECTION TO THE APPOINTMENT OF TWO DIRECTORS OF THE SAME DIVISION--- THE APPOINTMENTS BEING MADE TO TWO SEPARATE AND DISTINCT POSITIONS--- FOR THE SAME PERIOD OF TIME UNDER A LUMP SUM APPROPRIATION AVAILABLE FOR SALARIES. BUT THE STATUTE IN THIS INSTANCE CLEARLY PROVIDES THAT THERE MAY BE ONLY "A DIRECTOR FOR EACH OF NOT TO EXCEED FIVE DIVISIONS" THUS EMPLOYED AND PAID FOR THE SAME PERIOD OF TIME.

THE DECISION OF FEBRUARY 19, 1937, 16 COMP. GEN. 776, TO WHICH YOU REFER IN THE THIRD PARAGRAPH OF YOUR LETTER, IS NOT IN POINT HERE. IN THAT DECISION THERE WAS CONSIDERED THE CASE OF AN EMPLOYEE WHO HAD RESIGNED TO ACCEPT STATE EMPLOYMENT INVOLVING NO FEDERAL STATUTE PROHIBITING THE PAYMENT OF THE SALARY OF THE FEDERAL POSITION WHILE ON LEAVE AT THE TERMINATION OF HIS ACTIVE DUTY AND AFTER HE HAD ACCEPTED STATE EMPLOYMENT, THE CONTROLLING EXECUTIVE ORDER REQUIRING ONLY THAT THE EMPLOYEE RESIGN HIS FEDERAL POSITION IF HE ELECTS TO ACCEPT OR CONTINUE TO HOLD STATE EMPLOYMENT, WHICH HE HAD DONE.

IT IS NOTED, IN THE PENULTIMATE PARAGRAPH OF YOUR LETTER, THAT YOU RELY UPON 13 COMP. GEN. 170, IN SUPPORT OF YOUR VIEW THAT THE APPOINTMENT OF MR. HELMBOLD, AS MADE IN THIS CASE,"WOULD HAVE THE EFFECT OF AUTOMATICALLY TERMINATING MR. WILCOX'S LEAVE IF SUCH RESULT WERE NECESSARY FOR ITS VALIDITY.' THAT DECISION HELD THAT:

THE APPOINTMENT OF ANOTHER PERSON, EITHER ON A TEMPORARY OR PERMANENT BASIS, TO A POSITION OCCUPIED BY AN EMPLOYEE ON LEAVE OF ABSENCE AUTOMATICALLY TERMINATES THE APPOINTMENT OF THE PRIOR INCUMBENT AND NO COMPENSATION COULD BE PAID TO HIM FOR THE LEAVE OF ABSENCE AFTER THE NEW APPOINTEE HAD QUALIFIED AND ENTERED UPON THE DUTIES OF THAT POSITION.

THE RULE THERE STATED WAS PREDICATED UPON THE FACTS THEREIN CONSIDERED, WHICH FACTS ARE IN NOWISE SIMILAR TO THOSE INVOLVED HERE. OBVIOUSLY, THE HOLDING THERE MADE HAS NO APPLICATION HERE. FURTHERMORE, THAT DECISION WAS RENDERED PRIOR TO THE ANNUAL LEAVE ACT OF MARCH 14, 1936, WHICH ACT MADE THE GRANTING OF LEAVE AN ABSOLUTE RIGHT AS DISTINGUISHED FROM A PRIVILEGE. 16 COMP. GEN. 481; THOMAS V. UNITED STATES, 87 CT.CLS. 573. IT IS TRUE, AS YOU STATE, THAT THE COMMISSION HAS DISCRETIONARY AUTHORITY TO TERMINATE APPOINTMENTS AND, ALSO, HAS DISCRETIONARY AUTHORITY AS TO WHEN LEAVE MAY BE GRANTED. BUT WHERE AN EMPLOYEE RESIGNS TO TAKE EFFECT AT THE TERMINATION OF HIS LEAVE, WHICH, AS ABOVE STATED, IS A STATUTORY RIGHT (SEE, ALSO, SECTION 8 OF THE ANNUAL LEAVE REGULATIONS), AND HIS RESIGNATION IS ACCEPTED UPON THAT BASIS, THE ATTEMPTED APPOINTMENT OF ANOTHER PERSON TO THE SAME POSITION, AS DISTINGUISHED FROM AN APPOINTMENT TO A DIFFERENT POSITION TO PERFORM THE SAME DUTIES, PRIOR TO THE TERMINATION OF THE LEAVE, PARTICULARLY WITHOUT NOTICE TO THE EMPLOYEE WHO HAS RESIGNED, DOES NOT AUTOMATICALLY SEPARATE THE FIRST INCUMBENT FROM THE POSITION. THE RIGHT TO THE SALARY FOR THE POSITION HERE INVOLVED FOR THE PERIOD OF AUTHORIZED LEAVE AND PRIOR TO HIS FINAL SEPARATION IS UNQUESTIONABLY IN MR. M. L. WILCOX, THE LEGAL INCUMBENT AT THE TIME, AND NOT IN HIS SUCCESSOR, MR. HELMBOLD. YOUR ARE ADVISED, THEREFORE, THAT THE AUDIT ACTION WAS CORRECT AND IS HEREBY AFFIRMED.