B-123382, AUGUST 26, 1960, 40 COMP. GEN. 136

B-123382, AUGUST 26, 1960, 40 COMP. GEN. 136

MILITARY PERSONNEL - DUAL COMPENSATION - RETIRED PAY UNDER THE ACT OF APRIL 3, 1939 - PALMER CASE - APPLICATION THE HOLDING IN PALMER V. UNITED STATES, CT. CL. NO. 356-58, DECIDED JANUARY 20, 1960, THAT A FORMER OFFICER OF THE ARMY OF THE UNITED STATES, WHO WAS RETIRED FOR PHYSICAL DISABILITY UNDER THE ACT OF APRIL 3, 1939, HAD NO STATUS IN THE RESERVE COMPONENTS OF THE ARMED FORCES AND THAT HE DID NOT RECEIVE HIS RETIRED PAY FROM LAWS RELATING TO RESERVE COMPONENTS WITHIN THE MEANING OF 10 U.S.C. 371B TO EXEMPT HIM FROM THE DUAL COMPENSATION RESTRICTIONS IN SECTION 212 OF THE ECONOMY ACT OF 1932, 5 U.S.C. 59A, IS TANTAMOUNT TO A CONCLUSION THAT THE 1939 ACT IS NOT A LAW RELATING TO RESERVE COMPONENTS UNDER THE RULE OF TANNER V. UNITED STATES, 129 CT. CL. 792, AND CREATES DOUBT AS TO THE PROPRIETY OF PAYING RETIRED PAY UNDER THE 1939 ACT TO RESERVISTS AND ARMY OF THE UNITED STATES PERSONNEL AND SIMILAR PERSONNEL OF THE AIR FORCE, WHERE SUCH PERSONS ARE OTHERWISE WITHIN THE DUAL COMPENSATION RESTRICTIONS; ACCORDINGLY, UNTIL THE POSITION OF THE COURT IS CLARIFIED, FURTHER PAYMENTS OF RETIRED PAY UNDER THE 1939 ACT DURING PERIODS OF FEDERAL EMPLOYMENT SHOULD NOT BE MADE; HOWEVER, PAYMENTS MADE IN GOOD FAITH PRIOR TO NOVEMBER 1, 1960, WILL NOT BE QUESTIONED. 35 COMP. GEN. 497; 36 ID. 808; 38 ID. 741; AND OTHER DECISIONS IN CONFLICT WITH THIS DECISION ARE MODIFIED. A MEMBER OF THE UNIFORMED SERVICES WHO, WHILE SERVING AS A RESERVE OFFICER, IS RETIRED FOR PHYSICAL DISABILITY OR OTHERWISE AND BECOMES ENTITLED TO RETIRED PAY BY REASON OF SERVICE IN A RESERVE COMPONENT, UNDER STATUTORY PROVISIONS OTHER THAN THE ACT OF APRIL 3, 1939, AS AMENDED, 10 U.S.C. 3687 AND 8687, IS NOT SUBJECT TO THE DUAL COMPENSATION RESTRICTIONS OF SECTION 212 OF THE ECONOMY ACT OF 1932, 5 U.S.C. 59A, EVEN THOUGH HIS MEMBERSHIP IN THE OFFICERS' RESERVE CORPS OR THE NATIONAL GUARD HAS TERMINATED.

TO THE SECRETARY OF DEFENSE, AUGUST 26, 1960:

REFERENCE IS MADE TO LETTER OF JULY 8, 1960, FROM THE DEPUTY ASSISTANT SECRETARY OF DEFENSE (1COMPTROLLER), REQUESTING DECISION AS TO WHETHER THE RULE STATED IN 36 COMP. GEN. 808, RELATING TO THE PROPER APPLICATION OF THE DUAL COMPENSATION STATUTES TO RESERVE OFFICERS RETIRED UNDER STATUTES OTHER THAN CHAPTER 67 OF TITLE 10 OF THE U.S. CODE, SHOULD CONTINUE TO BE FOLLOWED IN VIEW OF THE DECISION OF JANUARY 20, 1960, OF THE COURT OF CLAIMS IN THE CASE OF PALMER V. UNITED STATES, CT. CL. NO. 356-58, DECIDED JANUARY 20, 1960.

FOUR SPECIFIC QUESTIONS UPON WHICH DECISION IS REQUESTED ARE SET OUT AND DISCUSSED IN COMMITTEE ACTION NO. 268 OF THE MILITARY PAY AND ALLOWANCE COMMITTEE, DEPARTMENT OF DEFENSE, A COPY OF WHICH WAS TRANSMITTED WITH THE LETTER OF JULY 8, 1960. THE QUESTIONS ARE AS FOLLOWS:

1. DO THE DUAL COMPENSATION STATUTES APPLY TO RESERVE OFFICERS RETIRED FOR PHYSICAL DISABILITY UNDER THE PROVISIONS OF ANY LAW PROVIDING FOR SUCH RETIREMENT?

2. IS A RESERVE OFFICER RETIRED PURSUANT TO TITLE II OF THE ACT OF 29 JUNE 1948 (62 STAT. 1087 (1084), 10 U.S.C. 3911 AND 8911) SUBJECT TO THE PROVISIONS OF SECTION 212 OF THE ACT OF 30 JUNE 1932, 5 U.S.C. 59A?

3. IS A RESERVE RETIRED OFFICER EXEMPT FROM THE DUAL COMPENSATION LIMITATIONS, REGARDLESS OF THE LAW UNDER WHICH HE WAS AWARDED RETIRED PAY, IF HE ONCE HELD MEMBERSHIP IN THE OFFICERS' RESERVE CORPS OR NATIONAL GUARD, AS DISTINGUISHED FROM AUS, EVEN THOUGH SUCH MEMBERSHIP HAS BEEN TERMINATED AND HE NOW HAS NO DE JURE MEMBERSHIP STATUS WITHIN THE MEANING OF 36 COMP. GEN. 808?

4. IN THE EVENT OF A NEGATIVE REPLY MAY THE DECISION BE APPLIED ON A PROSPECTIVE BASIS IN CASES WHERE THE RULING CONTAINED IN 36 COMP. GEN. 808 HAS BEEN FOLLOWED?

THE COURT OF CLAIMS, IN ITS OPINION OF NOVEMBER 2, 1954, IN THE CASE OF TANNER V. UNITED STATES, 129 CT.1CL. 792, HELD THAT TANNER, A RESERVE OFFICER WHO WAS RECEIVING RETIRED PAY UNDER AUTHORITY CONTAINED IN TITLE III OF THE ACT OF JUNE 29, 1948, 62 STAT. 1087, 10 U.S.C. 1036, WAS NOT SUBJECT TO THE DUAL COMPENSATION PROVISIONS OF SECTION 212 OF THE ECONOMY ACT OF JUNE 30, 1932, AS AMENDED, 5 U.S.C. 59A, BECAUSE HE HAD THE BENEFIT OF THE PROVISIONS OF SECTION 1 (B) OF THE ACT OF JULY 1, 1947, 10 U.S.C. 371B, WHICH PROVIDED THAT MEMBERS OF RESERVE COMPONENTS COULD HOLD CIVILIAN EMPLOYMENT WITH THE GOVERNMENT AND RECEIVE THEIR COMPENSATION INCIDENT TO THAT EMPLOYMENT "IN ADDITION TO ANY PAY AND ALLOWANCES TO WHICH HE MAY BE ENTITLED UNDER THE LAWS RELATING TO THE OFFICERS' RESERVE CORPS.' WE HAVE BEEN FOLLOWING THAT CASE. SEE 35 COMP. GEN. 497.

AFTER THE TANNER CASE WAS DECIDED BY THE COURT OF CLAIMS, THE CASE OF MADDEN V. UNITED STATES, 138 CT. CL. 873, CAME BEFORE THAT COURT. MADDEN WAS A MEMBER OF THE OFFICERS' RESERVE CORPS OF THE ARMY BUT WAS RETIRED FOR PHYSICAL DISABILITY UNDER THE PROVISIONS OF SECTION 5 OF THE ACT OF APRIL 3, 1939, 53 STAT. 557, 10 U.S.C. 456, WHICH PROVIDED, AMONG OTHER THINGS, THAT ALL OFFICERS OF THE ARMY OF THE UNITED STATES (OTHER THAN THE REGULAR ARMY), IF THEY SUFFERED DISABILITY IN LINE OF DUTY WHILE IN ACTIVE MILITARY SERVICE FOR MORE THAN 30 DAYS, SHOULD RECEIVE THE SAME RETIRED PAY AS OFFICERS OF THE REGULAR ARMY OF CORRESPONDING GRADES AND LENGTH OF SERVICE RETIRED FOR PHYSICAL DISABILITY. BEFORE THAT CASE WAS DECIDED, A DECISION WAS RENDERED ON FEBRUARY 14, 1957 IN THE CASE OF UNITED STATES V. TOMA 148 F.1SUPP. 489, IN THE UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF CALIFORNIA, CENTRAL DIVISION. TOMA WAS A MEMBER OF THE OFFICERS' RESERVE CORPS OF THE ARMY BUT RECEIVED RETIRED PAY FOR DISABILITY UNDER THE PROVISIONS OF SECTION 5 OF THE ACT OF APRIL 3, 1939. THE COURT HELD, ON THE BASIS OF THE TANNER CASE, THAT THE GOVERNMENT COULD NOT RECOVER FROM HIM THE COMPENSATION WHICH HE RECEIVED INCIDENT TO HIS CIVILIAN EMPLOYMENT WITH THE VETERANS ADMINISTRATION. A JUDGMENT WITHOUT OPINION WAS RENDERED ON MAY 8, 1957, IN THE CASE OF MADDEN V. UNITED STATES (138 CT. CL. 873) IN THE PLAINTIFF'S FAVOR ON A STIPULATION BY THE PARTIES. WE DECIDED TO FOLLOW THE VIEW OF THE COURT IN THE TOMA CASE AND IN OUR DECISION OF JUNE 11, 1957, 36 COMP. GEN. 808, WE EXTENDED THE RULE STATED IN 35 COMP. GEN. 497, TO MAKE IT APPLY TO CASES OF RESERVISTS WHOSE RETIRED PAY IS AUTHORIZED UNDER STATUTORY PROVISIONS OTHER THAN THOSE OF TITLE III OF THE ACT OF JUNE 29, 1948, IN ADDITION TO THOSE ALREADY WITHIN THE RULE WHOSE RETIRED PAY IS AUTHORIZED UNDER THAT TITLE. THUS, WE DECIDED THAT THE RULE ANNOUNCED IN THE TANNER CASE WOULD APPLY IN CASES LIKE THE TOMA CASE WHERE RETIRED PAY WAS RECEIVED UNDER THE ACT OF APRIL 3, 1939, FOR ANY PERIOD OF EMPLOYMENT DURING WHICH THE CLAIMANT ACTUALLY HELD A DE JURE STATUS IN THE RESERVES.

IN THE DECISION RENDERED ON JANUARY 14, 1959, BY THE COURT OF CLAIMS IN THE CASE OF BOWMAN, ET AL. V. UNITED STATES, CT. CL. NO. 108-58, IN FAVOR OF NATHAN REED WARTHEN, PLAINTIFF NO. 5, THE COURT STATED (REFERRING TO ITS EARLIER DECISION IN SARLES V. UNITED STATES, CT. CL. NO. 353-56, DECIDED MARCH 5, 1958), THAT THE 1947 ACT, PROPERLY INTERPRETED, COVERS ANY PERSON WHO HAS BECOME ENTITLED TO RETIRED PAY "BY REASON OF SERVICE IN A RESERVE COMPONENT.' IN OUR DECISION OF MAY 1, 1959, 38 COMP. GEN. 741, WE HELD (QUOTING THE SYLLABUS) THAT---

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 FROM THE DUAL COMPENSATION RESTRICTIONS IN SECTION 212 OF THE ECONOMY ACT OF 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.

IN OTHER WORDS, SINCE THAT TIME WE HAVE REGARDED THE ACT OF APRIL 3, 1939, AS BEING A LAW RELATING TO THE RESERVE COMPONENTS WITHIN THE MEANING OF SECTION 1 (B) OF THE ACT OF JULY 1, 1947. WE HAVE CONSIDERED THAT THE RULES TO BE FOLLOWED WITH RESPECT TO MEMBERS OF THE ARMY OF THE UNITED STATES WITHOUT COMPONENT WERE DIFFERENT, HOWEVER, AND THAT SUCH MEMBERS ENTITLED TO RETIRED PAY COULD RECEIVE THAT PAY, IRRESPECTIVE OF THE DUAL COMPENSATION RESTRICTIONS OF THE 1932 ECONOMY ACT, DURING A PERIOD OF EMPLOYMENT, ONLY AS LONG AS THEY CONTINUED TO HAVE A STATUS IN THE ARMY OF THE UNITED STATES. THAT CONCLUSION WAS BASED ON THE PROVISIONS OF THE ACT OF SEPTEMBER 22, 1941, 55 STAT. 728, 10 U.S.C. 484, 506 (D) NOTE, WHICH PROVIDED:

THAT ANY PERSON APPOINTED AS AN OFFICER IN THE ARMY OF THE UNITED STATES UNDER THE PROVISIONS OF THIS ACT SHALL RECEIVE THE SAME PAY AND ALLOWANCES AND BE ENTITLED TO THE SAME RIGHTS, PRIVILEGES, AND BENEFITS AS MEMBERS OF THE OFFICERS' RESERVE CORPS OF THE SAME GRADE AND LENGTH OF SERVICE: * *

PAYMENT OF RETIRED PAY DURING A PERIOD OF EMPLOYMENT WHEN NO ARMY OF THE UNITED STATES STATUS EXISTED, WAS DENIED ON THE BASIS OF THE DECISION OF NOVEMBER 7, 1956, OF THE COURT OF CLAIMS IN THE CASE OF LEONARD V. UNITED STATES, 136 CT. CL. 686, CERTIORARI DENIED, 353 U.S. 976.

THE OFFICER WHOSE STATUS WAS CONSIDERED IN THE PALMER CASE WAS APPOINTED AND COMMISSIONED IN THE ARMY OF THE UNITED STATES WITHOUT COMPONENT PURSUANT TO THE PROVISIONS OF THE ACT OF SEPTEMBER 22, 1941, MENTIONED ABOVE. ON JULY 12, 1946, HE WAS RELIEVED FROM ACTIVE DUTY AND RETIRED FOR PHYSICAL DISABILITY UNDER THE ACT OF APRIL 3, 1939. IN ACCORDANCE WITH THE RULES STATED ABOVE, HE WAS ALLOWED RETIRED PAY FOR THAT PART OF HIS PERIOD OF EMPLOYMENT DURING WHICH HE HAD A STATUS IN THE ARMY OF THE UNITED STATES BUT, ON THE BASIS OF THE LEONARD CASE, WAS DENIED SUCH PAY FOR THE REMAINDER OF THAT PERIOD. THE COURT STATED THAT PALMER HAD NO STATUS IN THE RESERVE COMPONENTS OF THE ARMED FORCES AND THAT HE DID NOT RECEIVE HIS RETIREMENT PAY FROM LAWS RELATING THERETO. HENCE, IT WAS CONCLUDED THAT HIS POSITION DID NOT PLACE HIM WITHIN THE EXEMPTION TO THE ECONOMY ACT AS PERMITTED UNDER THE TANNER CASE AND LIKE CASES.

IT IS OUR VIEW THAT THE DECISION OF THE COURT OF CLAIMS IN THE PALMER CASE IS TANTAMOUNT TO A CONCLUSION, AT LEAST IN THE CIRCUMSTANCES IN THAT CASE, THAT THE ACT OF APRIL 3, 1939, IS NOT A LAW RELATING TO THE RESERVE COMPONENTS WITHIN THE MEANING OF THE RULE IN THE TANNER CASE. THE DECISION IN THE PALMER CASE CREATES DOUBT, THEREFORE, AS TO THE PROPRIETY OF PAYING RETIRED PAY UNDER THE 1939 ACT, AS AMENDED (NOW CODIFIED AS 10 U.S.C. 3687 AND 8687), TO RESERVISTS AND ARMY OF THE UNITED STATES PERSONNEL AND SIMILAR PERSONNEL OF THE AIR FORCE, WHERE SUCH PERSONS ARE OTHERWISE WITHIN THE DUAL COMPENSATION RESTRICTIONS OF THE ECONOMY ACT. WE FIND NO BASIS UNDER THE LANGUAGE USED BY THE COURT IN THE PALMER CASE (AND IN THE CONCURRING OPINION) FOR DISTINGUISHING BETWEEN A MEMBER OF THE ARMY OF THE UNITED STATES PAID RETIREMENT PAY UNDER THE PROVISIONS OF THE 1939 ACT AND A RESERVIST PAID UNDER THE SAME LAW. ACCORDINGLY, WE MUST CONCLUDE THAT, UNTIL SUCH TIME AS THE POSITION OF THE COURT IS CLARIFIED, FURTHER PAYMENTS OF THIS TYPE SHOULD NOT BE MADE UNDER THOSE STATUTORY PROVISIONS.

IN CONSONANCE WITH THE VIEW EXPRESSED ABOVE, YOU ARE ADVISED THAT IF A RESERVE OFFICER IS RETIRED FOR PHYSICAL DISABILITY OR OTHERWISE, AND BECOMES ENTITLED TO RETIRED PAY BY REASON OF SERVICE IN A RESERVE COMPONENT, UNDER STATUTORY PROVISIONS OTHER THAN THE 1939 ACT, AS AMENDED, 10 U.S.C. 3687 AND 8687, HE IS NOT SUBJECT TO THE DUAL COMPENSATION RESTRICTIONS OF SECTION 212 OF THE ACT OF JUNE 30, 1932, 5 U.S.C. 59A, EVEN THOUGH HIS MEMBERSHIP IN THE OFFICERS' RESERVE CORPS OR THE NATIONAL GUARD HAS TERMINATED. COMPARE 39 COMP. GEN. 280. QUESTIONS 1, 2, AND 3 ARE ANSWERED ACCORDINGLY.

TO THE EXTENT THAT ANY OF OUR PRIOR DECISIONS ARE IN CONFLICT WITH THE VIEWS EXPRESSED HEREIN, SUCH DECISIONS NO LONGER WILL BE FOLLOWED. IT IS UNDERSTOOD, HOWEVER, THAT INFORMATION AS TO THE RETIRED PERSONNEL CONCERNED WHO MIGHT BE EMPLOYED BY THE GOVERNMENT MAY NOT BE ON FILE IN THE ADMINISTRATIVE OFFICES AND THAT SUCH PERSONNEL MAY HAVE TO BE CONTACTED BEFORE IT CAN BE DETERMINED WHOSE RETIRED PAY SHOULD BE STOPPED OR REDUCED ON THE BASIS OF THIS DECISION. WHILE NO PAYMENTS OF RETIRED PAY KNOWN TO BE INCONSISTENT WITH THIS DECISION ARE AUTHORIZED TO BE MADE, OTHERWISE PROPER PAYMENTS MADE IN GOOD FAITH PRIOR TO NOVEMBER 1, 1960, AND PRIOR TO RECEIPT OF INFORMATION THAT SUCH PAYMENTS WOULD BE INCONSISTENT WITH THIS DECISION WILL NOT BE QUESTIONED IN THE AUDIT OF DISBURSING OFFICERS' ACCOUNTS. QUESTION 4 IS ANSWERED ACCORDINGLY.