B-119013, APRIL 23, 1954, 33 COMP. GEN. 522

B-119013: Apr 23, 1954

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INTEREST - SOLDIERS' SAVINGS DEPOSITS - DEPOSITOR IN DESERTION STATUS ACCRUAL OF INTEREST ON MILITARY SAVINGS DEPOSITS IS SUSPENDED DURING PERIODS THAT ENLISTED DEPOSITOR IS IN A DESERTION STATUS AND UPON DEPOSITOR'S RETURN TO MILITARY JURISDICTION INTEREST SHOULD BE RESUMED AND COMPUTED ON THE TOTAL PRINCIPAL SUM THEN DEPOSITED AND NOT ON THE OLD PRINCIPAL PLUS THE INTEREST WHICH WOULD HAVE ACCRUED THROUGH THE DATE OF DESERTION. THE TERMINATION DATE FOR THE RUNNING OF INTEREST ON MILITARY SAVINGS DEPOSITS WHERE THE ENLISTED DEPOSITOR IS CONFINED PURSUANT TO SENTENCE OF COURT-MARTIAL. OR RETAINED IN THE SERVICE PENDING COMPLETION OF APPELLATE REVIEW PAST THE NORMAL DATE ON WHICH HIS TERM OF ENLISTMENT WOULD HAVE EXPIRED.

B-119013, APRIL 23, 1954, 33 COMP. GEN. 522

INTEREST - SOLDIERS' SAVINGS DEPOSITS - DEPOSITOR IN DESERTION STATUS ACCRUAL OF INTEREST ON MILITARY SAVINGS DEPOSITS IS SUSPENDED DURING PERIODS THAT ENLISTED DEPOSITOR IS IN A DESERTION STATUS AND UPON DEPOSITOR'S RETURN TO MILITARY JURISDICTION INTEREST SHOULD BE RESUMED AND COMPUTED ON THE TOTAL PRINCIPAL SUM THEN DEPOSITED AND NOT ON THE OLD PRINCIPAL PLUS THE INTEREST WHICH WOULD HAVE ACCRUED THROUGH THE DATE OF DESERTION, SUCH PROCEDURE BE A COMPOUNDING OF INTEREST; ALSO, THE 6-MONTH ACCRUAL PERIOD OF THE COMPUTATION OF INTEREST INCLUDES THE ACTIVE DUTY PERFORMED EITHER PRIOR TO COMMENCEMENT OR SUBSEQUENT TO TERMINATION OF DESERTION STATUS. THE TERMINATION DATE FOR THE RUNNING OF INTEREST ON MILITARY SAVINGS DEPOSITS WHERE THE ENLISTED DEPOSITOR IS CONFINED PURSUANT TO SENTENCE OF COURT-MARTIAL, OR RETAINED IN THE SERVICE PENDING COMPLETION OF APPELLATE REVIEW PAST THE NORMAL DATE ON WHICH HIS TERM OF ENLISTMENT WOULD HAVE EXPIRED, IS THE ACTUAL DATE OF DISCHARGE, WHETHER OR NOT THE ENLISTED MAN INVOLVED IS RESTORED TO DUTY. WHILE MILITARY SAVINGS DEPOSITS DO NOT ACCRUE INTEREST DURING PERIODS THAT ENLISTED DEPOSITORS ARE IN A DESERTION STATUS, AN ENLISTED DEPOSITOR WHOSE SERVICE RECORD IS SUBSEQUENTLY CORRECTED TO REMOVE A MARK OF DESERTION MAY BE CREDITED WITH INTEREST RETROACTIVELY TO INCLUDE THE PERIOD OF DESERTION INVOLVED.

ACTING COMPTROLLER GENERAL WEITZEL TO THE SECRETARY OF DEFENSE, APRIL 23, 1954:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 23, 1954, FROM THE ASSISTANT SECRETARY OF DEFENSE, REQUESTING A DECISION ON SEVERAL QUESTIONS IN CONNECTION WITH THE COMPUTATION OF INTEREST ON SAVINGS DEPOSITS OF MEMBERS OF THE ARMED FORCES DURING PERIODS THEY ARE IN A DESERTION STATUS, AS SET FORTH IN COMMITTEE ACTION NO. 89 OF THE MILITARY PAY AND ALLOWANCE COMMITTEE, DEPARTMENT OF DEFENSE, TRANSMITTED WITH THE SAID LETTER.

THE SEVERAL QUESTIONS INVOLVED WILL BE CONSIDERED IN THE ORDER IN WHICH THEY APPEAR IN THE COMMITTEE ACTION.

QUESTION NO. 1.

DO MILITARY SAVINGS DEPOSITS ACCRUE INTEREST DURING PERIODS THAT ENLISTED DEPOSITORS ARE IN A DESERTION STATUS?

AN ENLISTMENT IS A CONTRACT. IN RE GRIMLEY, 137 U.S. 147, 151, 11 S.1CT. 54, AND UNITED STATES V. MALANAPHY, 168 F.2D 503. IT IS TO BE NOTED THAT UNDER THE LAW EXISTING PRIOR TO THE ACT OF JULY 17, 1953, 67 STAT. 176, FORFEITURE OF DEPOSITS WAS REQUIRED UPON DESERTION. THE BASIS FOR THE REMOVAL OF THE FORFEITURE REQUIREMENT WAS SET FORTH IN HOUSE REPORT NO. 537 ON H.R. 4214, AS FOLLOWS:

THE BILL ALSO WOULD AMEND BOTH THE TEMPORARY AND PERMANENT LAW, NOT ONLY FOR THE ARMY AND AIR FORCE BUT FOR THE NAVY AS WELL, WHEREBY THE SAVINGS DEPOSITS MUST BE FORFEITED BY DESERTION OF THE SAVING MEMBER. THE ARGUMENT IS THAT THE SAVINGS FUND SHOULD BE CONSIDERED IN THE SAME LIGHT AS A BANK ACCOUNT AND NOT BE CONSIDERED SUBJECT TO FORFEITURE. FURTHER, IT IS ARGUED THAT THE FORFEITURE PROVISION SHOULD BE REPEALED BECAUSE SUCH PROVISION DEPRIVES THE SERVICE MEMBER'S FAMILIES OF MATERIAL THINGS AND IS NOT CONSISTENT WITH THE AMERICAN PRINCIPLE OF JUSTICE.

IT APPEARS THAT BY THE SAID ACT OF JULY 17, 1953, IT WAS THE INTENTION OF THE CONGRESS TO REMOVE ONLY THE REQUIREMENT FOR THE FORFEITURE OF THE PRINCIPAL AMOUNTS OF DEPOSITS--- THE LEGISLATIVE HISTORY IS SILENT RESPECTING THE MATTER OF THE ACCRUAL OF INTEREST ON SUCH DEPOSITS DURING A PERIOD OF DESERTION.

IN WINTHROP'S MILITARY LAW AND PRECEDENTS, SECOND EDITION, 1920 REPRINT, PAGE 637, DESERTION HAS BEEN DEFINED AS FOLLOWS:

A DESERTER IS ONE WHO ABSENTS HIMSELF FROM HIS REGIMENT, OR MILITARY STATION OR DUTY, AND FROM THE SERVICE, WITHOUT AUTHORITY, AND WITH THE INTENTION OF NOT RETURNING. THE OFFENSE OF DESERTION THUS CONSISTS OF THE MINOR OFFENSE OF ABSENCE WITHOUT LEAVE COUPLED WITH AND CHARACTERIZED BY A DELIBERATE PURPOSE NOT TO REJOIN THE MILITARY SERVICE BUT TO ABANDON THE SAME ALTOGETHER, OR AT LEAST TO TERMINATE AND DISSOLVE THE EXISTING MILITARY STATUS AND OBLIGATION, I.E. THE PENDING CONTRACT OF ENLISTMENT. IT IS THUS THE ANIMUS NON REVERTENDI, WHICH IS THE GIST AND ESSENTIAL QUALITY OF THE OFFENSE.

SUBSTANTIALLY THE SAME DEFINITION APPLIES ALSO TO DESERTERS FROM THE NAVAL SERVICE. SEE FOOTNOTE 24 AT BOTTOM OF THE SAME PAGE.

WHILE THE CITED ACT OF JULY 17, 1953, 67 STAT. 176, REMOVES THE REQUIREMENT FOR FORFEITURE OF DEPOSITS UPON DESERTION, IT BY NO MEANS FOLLOWS THAT INTEREST ACCRUES DURING A PERIOD OF DESERTION. DURING SUCH PERIOD THE DESERTER IS NOT AN ENLISTED MAN WITHIN CONTEMPLATION OF THE LAWS REGARDING INTEREST ON DEPOSITS BY ENLISTED MEN, AND WHILE IT PROBABLY IS TRUE THAT THE GOVERNMENT MAY HAVE HAD THE USE AND BENEFIT OF THE AMOUNT SO DEPOSITED DURING THE PERIOD OF DESERTION, IT APPEARS OBVIOUS THAT FOR PURPOSES OF THE ACCRUAL OF INTEREST THE COMMENCEMENT OF THE DESERTER'S STATUS CREATED BY HIS OWN ACTION IN ABSENTING HIMSELF FROM THE MILITARY OR NAVAL SERVICE WITH NO INTENTION OF RETURNING IN EFFECT WORKS A DISCHARGE UNTIL HIS ULTIMATE APPREHENSION AND DISPOSITION OF THE CASE. ACCORDINGLY, QUESTION NO. 1 IS ANSWERED IN THE NEGATIVE.

QUESTION NO. 2.

IF YOUR ANSWER TO QUESTION 1 IS IN THE AFFIRMATIVE, DOES INTEREST ACCRUE UNTIL THE NORMAL EXPIRATION OF ENLISTMENT, ADMINISTRATIVE DISCHARGE, RETURN TO DUTY STATUS OR DEATH, REGARDLESS OF LENGTH OF TIME INVOLVED?

SINCE THE ANSWER MADE TO QUESTION NO. 1 IS IN THE NEGATIVE, NO ANSWER TO THIS QUESTION IS REQUIRED.

QUESTION NO. 3.

IF YOUR ANSWER TO QUESTION 1 IS IN THE NEGATIVE, IS INTEREST RESUMED UPON THE DEPOSITOR'S RETURN TO MILITARY JURISDICTION WITH NO INTERRUPTION OF ACCRUAL DURING PERIOD OF DESERTION OR IS INTEREST SUSPENDED DURING DESERTION?

INTEREST SHOULD BE SUSPENDED DURING PERIOD OF DESERTION.

QUESTION NO. 4.

IF NO INTEREST IS ACCRUED DURING DESERTION, BUT IT IS RESUMED ON RETURN TO MILITARY JURISDICTION, IS THE INTEREST THEN CREDITED ON THE TOTAL OF EARNINGS DEPOSITED, OR IS THE RENEWED INTEREST COMPUTED ON THE TOTAL OF THE OLD PRINCIPAL PLUS THE ACCRUED INTEREST THROUGH DATE OF DESERTION (AS A NEW PRINCIPAL AMOUNT) WITH THE DATE OF RETURN TO MILITARY JURISDICTION BEING THE EFFECTIVE DATE FOR COMPUTING THE SIX MONTH ACCRUAL PERIOD?

UPON THE DEPOSITOR'S RETURN TO MILITARY JURISDICTION, THE INTEREST SHOULD BE COMPUTED ON THE TOTAL PRINCIPAL SUM THEN DEPOSITED. THERE APPEARS TO BE NO BASIS FOR CONSIDERING THE OLD PRINCIPAL PLUS THE ACCRUED INTEREST THROUGH THE DATE OF DESERTION AS A NEW PRINCIPAL AMOUNT SINCE SUCH PROCEDURE WOULD, IN EFFECT, BE COMPOUNDING INTEREST. THE 6-MONTH ACCRUAL PERIOD FOR THE COMPUTATION OF INTEREST INCLUDES THE ACTIVE DUTY, PERFORMED EITHER PRIOR TO COMMENCEMENT OR SUBSEQUENT TO TERMINATION OF DESERTION STATUS.

QUESTION NO. 5.

IF YOUR ANSWER TO QUESTION 1 IS IN THE NEGATIVE AND THE DEPOSITOR'S SERVICE RECORD IS SUBSEQUENTLY CORRECTED TO REMOVE THE MARK OF DESERTION, MAY INTEREST BE CREDITED RETROACTIVELY TO INCLUDE THE PERIOD OF DESERTION INVOLVED?

UPON REMOVAL OF THE MARK OF DESERTION AS HAVING BEEN ERRONEOUSLY ENTERED, INTEREST MAY BE CREDITED RETROACTIVELY TO INCLUDE THE PERIOD DURING WHICH THE DEPOSITOR WAS HELD TO BE IN A STATUS OF DESERTION.

QUESTION NO. 6.

WHAT IS THE TERMINATION DATE FOR THE RUNNING OF INTEREST ON SAVINGS DEPOSITS WHERE THE DEPOSITOR IS CONFINED PURSUANT TO SENTENCE OF COURT- MARTIAL, OR RETAINED IN THE SERVICE PENDING COMPLETION OF APPELLATE REVIEW, PAST THE NORMAL DATE ON WHICH HIS TERM OF ENLISTMENT WOULD HAVE EXPIRED?

UNDER THE CIRCUMSTANCES DESCRIBED IN QUESTION NO. 6, INTEREST SHOULD BE ALLOWED TO THE DATE OF ACTUAL DISCHARGE.

QUESTION NO. 7.

WOULD YOUR ANSWER TO QUESTION 6 BE DIFFERENT IF THE ENLISTED MAN INVOLVED IS RESTORED TO DUTY?