B-127105, JUL. 27, 1956

B-127105, JUL. 27, 1956

TO MISS KATHERINE CODY:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 8, 1956, WRITTEN BY YOUR ATTORNEYS, AND TO SUBSEQUENT CORRESPONDENCE, REQUESTING REVIEW OF OUR SETTLEMENT DATED JANUARY 4, 1956, WHICH DISALLOWED YOUR CLAIM FOR (1) PAY AND ALLOWANCES FOR UNUSED ACCRUED LEAVE AND (2) A LUMP-SUM BONUS BELIEVED TO BE DUE IN THE CASE OF YOUR LATE BROTHER, JAMES CODY, CAPTAIN, UNITED STATES AIR FORCE RESERVE.

THE RECORDS SHOW THAT YOU HAVE BEEN ALLOWED $235.72 AS ARREARS OF PAY AND $103.32 AS TRAVEL ALLOWANCE FROM ELLINGTON AIR FORCE BASE, TEXAS, TO NEW YORK, NEW YORK. YOU NOW CLAIM SEVERAL OTHER ITEMS, INCLUDING "ANY LUMP- SUM PAYMENT" ACCRUING TO YOUR BROTHER UNDER THE PROVISIONS OF SECTION 2 OF THE ACT OF JUNE 16, 1936, 49 STAT. 1524, AS AMENDED. PAYMENT TO YOU OF AMOUNTS AUTHORIZED BY THAT ACT WAS DENIED BECAUSE THE RECORD DISCLOSED THAT YOUR BROTHER'S SERVICE COMMENCED ON JANUARY 18, 1951. IT IS NOW ALLEGED THAT HE QUALIFIED FOR PAYMENT OF THE AMOUNT CLAIMED AS HIS SERVICE RECORD GOES BACK SUBSTANTIALLY BEFORE JANUARY 18, 1951.

SECTION 2 OF THE ACT OF JUNE 16, 1936, AS AMENDED, 10 U.S.C. 300A, PROVIDES:

"WHENEVER ANY AIR CORPS RESERVE OFFICER WHO HAS NOT BEEN SELECTED FOR COMMISSION IN THE REGULAR ARMY IS RELEASED FROM ACTIVE DUTY THAT HAS BEEN CONTINUOUS FOR ONE OR MORE YEARS, HE SHALL BE PAID A LUMP SUM OF $500 FOR EACH COMPLETE YEAR OF ACTIVE SERVICE AS SUCH OFFICER, AND IF RELEASED FROM ACTIVE DUTY OTHERWISE THAN UPON HIS OWN REQUEST, OR AS A RESULT OF INEFFICIENT OR UNSATISFACTORY SERVICE AS DETERMINED BY THE SECRETARY OF THE ARMY, SUCH LUMP-SUM PAYMENT SHALL BE PRORATED FOR FRACTIONAL PARTS OF EACH YEAR OF SUCH ACTIVE SERVICE. THE LUMP-SUM PAYMENTS AUTHORIZED BY THIS SECTION SHALL BE IN ADDITION TO ANY PAY, ALLOWANCES, COMPENSATION, OR BENEFITS WHICH SUCH OFFICERS MAY OTHERWISE BE ENTITLED TO RECEIVE * * *.'

THESE PROVISIONS WERE MADE APPLICABLE TO OFFICERS OF THE UNITED STATES AIR FORCE RESERVE BY SECTION 305 OF THE NATIONAL SECURITY ACT OF 1947, 61 STAT. 495, 508. SECTION 1 OF THE ACT OF APRIL 28, 1950, 64 STAT. 90, 10 U.S.C. 300B, PROVIDES THAT NO FURTHER CREDIT SHALL BE ALLOWED FOR ANY PERIOD OF ACTIVE SERVICE PERFORMED AFTER JUNE 24, 1948, IN COMPUTING LUMP- SUM PAYMENTS TO AIR FORCE RESERVE OFFICERS OR THEIR BENEFICIARIES, UNDER SECTION 2 OF THE ACT OF JUNE 16, 1936, 49 STAT. 1524, AS AMENDED.

INSOFAR AS CONCERNS SERVICE PRIOR TO JUNE 25, 1948, AN OFFICIAL REPORT RECEIVED FROM THE DEPARTMENT OF THE AIR FORCE SHOWS THAT JAMES CODY, SERVICE NO. AO 199 7385, WAS APPOINTED SECOND LIEUTENANT, ARMY OF THE UNITED STATES, ON MAY 9, 1945, AND ACCEPTED AND ENTERED ON ACTIVE DUTY ON THE SAME DATE. HE WAS PROMOTED TO FIRST LIEUTENANT, ARMY OF THE UNITED STATES, ON NOVEMBER 12, 1946, AND HONORABLY RELEASED FROM ACTIVE DUTY ON JANUARY 1, 1947. ON NOVEMBER 12, 1946, HE WAS APPOINTED FIRST LIEUTENANT, OFFICERS' RESERVE CORPS, AND ACCEPTED ON THE SAME DATE. HE SERVED ON ACTIVE DUTY FOR TRAINING PURPOSES ONLY FROM JUNE 13 TO 30, 1949; FROM AUGUST 14 TO 28, 1949; FROM AUGUST 29 TO OCTOBER 31, 1949; AND FROM DECEMBER 16 TO 30, 1950. SINCE, AS STATED ABOVE, ONLY ACTIVE DUTY AS AN AIR CORPS RESERVE OFFICER OR AS AN AIR FORCE RESERVE OFFICER, WHICH IS PERFORMED PRIOR TO JUNE 25, 1948, IS CREDITABLE FOR RESERVE OFFICERS' LUMP -SUM BONUS, AND AS CAPTAIN CODY DID NOT HAVE SUCH SERVICE, NO ENTITLEMENT EXISTS TO THIS ITEM OF PAY.

YOU ALSO CLAIM PAYMENT FOR LEAVE AND STATE THAT THE AMOUNT INVOLVED WAS INCLUDED IN A GOVERNMENT CHECK FOUND AMONG YOUR BROTHER'S EFFECTS. THE ARMED FORCES LEAVE ACT OF 1946, 60 STAT. 963, WAS APPROVED AUGUST 9, 1946, AND WAS APPLICABLE TO OFFICERS, WARRANT OFFICERS, AND ENLISTED PERSONS. AMONG ITS OTHER PROVISIONS IT AUTHORIZED COMPENSATION IN THE CASE OF COMMISSIONED OFFICERS FOR UNUSED LEAVE IN EXCESS OF 60 DAYS (BUT NOT EXCEEDING 120 DAYS) THAT THEY HAD TO THEIR CREDIT ON AUGUST 31, 1946. SUCH LEAVE WAS TO BE COMPENSATED FOR UNDER SECTION 6 OF THE ACT, WHICH PROVIDED FOR SETTLEMENT AND COMPENSATION IN CASH IN CERTAIN INSTANCES AND IN OTHER INSTANCES FOR SETTLEMENT AND COMPENSATION IN BONDS OF THE UNITED STATES TO THE HIGHEST MULTIPLE OF $25 IN CASH TO THE FULL AMOUNT OF ANY DIFFERENCE. SECTION 2/G) OF THE ACT DEFINED THE TERM "CASH" AS INCLUDING A CHECK UPON THE TREASURER OF THE UNITED STATES--- THE USUAL METHOD OF PAYMENT OF A GOVERNMENT OBLIGATION. IT IS EVIDENT, HOWEVER, THAT THE TERM "SETTLEMENT AND COMPENSATION IN CASH" WAS USED ONLY IN CONTRADISTINCTION TO "SETTLEMENT AND COMPENSATION IN BONDS.' IN THE EVENT OF THE DEATH OF ANY HOLDER OF ANY CHECK ISSUED PURSUANT TO SECTION 6, PROVISION WAS MADE FOR THE PAYMENT OF THE CHECK BY THE SECRETARY OF THE TREASURY UPON APPLICATION BY CERTAIN DESIGNATED SURVIVORS, AND IF THERE WERE NO SUCH SURVIVORS, ANY SUCH CHECK WAS TO BE CANCELED AND THE AMOUNT THEREOF WAS TO BE COVERED INTO THE GENERAL FUND OF THE TREASURY. IT IS CLEAR, THEREFORE, THAT IT WAS NOT THE INTENT OF THE CONGRESS THAT THE AMOUNT OF ANY SUCH CHECK SHOULD BECOME AN ASSET OF THE PAYEE'S ESTATE.

PAYMENT FOR UNUSED LEAVE TO A MEMBER'S CREDIT UPON DISCHARGE AFTER AUGUST 31, 1946, THE TYPE OF LEAVE TO YOUR BROTHER'S CREDIT, WAS FIRST AUTHORIZED BY A PROVISION IN SECTION 1 OF THE ACT OF AUGUST 4, 1947, 61 STAT. 748, AMENDING SECTION 4 OF THE 1946 ACT. AS AMENDED THE SECTION PROVIDES AS FOLLOWS:

"ANY MEMBER OF THE ARMED FORCES DISCHARGED AFTER AUGUST 31, 1946, HAVING UNUSED ACCRUED LEAVE STANDING TO HIS CREDIT AT TIME OF DISCHARGE SHALL BE COMPENSATED FOR SUCH UNUSED LEAVE IN CASH * * *. SETTLEMENT AND COMPENSATION IN ACCORDANCE WITH THIS SUBSECTION SHALL BE MADE ONLY TO A LIVING MEMBER OR LIVING FORMER MEMBER OF THE ARMED FORCES.'

THE QUESTION IS WHETHER "SETTLEMENT AND COMPENSATION" FOR THE LEAVE INVOLVED HAD BEEN MADE BEFORE YOUR BROTHER'S DEATH. THE SAME QUESTION IS INVOLVED IN YOUR FURTHER CLAIM FOR MUSTERING-OUT PAY. ON THE BASIS OF ACTIVE MILITARY SERVICE FROM JANUARY 16, 1951, THROUGH MARCH 16, 1955, INCLUDING A FOREIGN SERVICE TOUR FROM FEBRUARY 16, 1951, THROUGH FEBRUARY 12, 1952, ENTITLEMENT TO A $300 MUSTERING-OUT PAY EXISTED IN YOUR BROTHER'S CASE. IN CASES WHERE ANY MEMBER OF THE ARMED FORCES, AFTER HIS DISCHARGE OR RELEASE FROM ACTIVE SERVICE, DIES BEFORE RECEIVING ANY PORTION OF OR THE FULL AMOUNT OF HIS MUSTERING-OUT PAYMENT, SECTION 504 OF THE ACT OF JULY 16, 1952, 66 STAT. 690, 38 U.S.C. 1014, HOWEVER, PROHIBITS PAYMENTS OF THE BALANCE DUE ON DATE OF DEATH OF THE FORMER SERVICE MEMBER TO ANY SURVIVOR EXCEPT SPOUSE, CHILDREN OR PARENTS.

THE DEPARTMENT OF THE AIR FORCE HAS REPORTED THAT CHECK NO. 218,984, DATED MARCH 16, 1955, FOR $818.15, WHICH REPRESENTED SETTLEMENT OF THE BALANCE CONSIDERED DUE (INCLUDING ACCRUED LEAVE AND THE INITIAL INSTALLMENT OF $100 MUSTERING-OUT PAY) WAS FOUND ON THE BODY OF CAPTAIN CODY AND THAT CHECKS NOS. 218,985 AND 218,986, DATED MARCH 16, 1955, EACH FOR $100, REPRESENTING THE SECOND AND THIRD (FINAL) INSTALLMENTS OF MUSTERING-OUT PAY, WERE TO HAVE BEEN MAILED TO THE OFFICER APPROXIMATELY 30 DAYS AND 60 DAYS AFTER HIS RELEASE FROM ACTIVE DUTY, IN ACCORDANCE WITH THE USUAL PROCEDURE. THESE THREE CHECKS WERE CANCELED AND ACCOUNTED FOR IN APRIL 1955 ACCOUNTS OF THE DISBURSING OFFICER, CAPTAIN C. E. MILLER.

GENERALLY, THE ISSUANCE AND RECEIPT OF A CHECK DOES NOT CONSTITUTE PAYMENT UNLESS AND UNTIL IT IS NEGOTIATED AND THE AMOUNT OF THE CHECK COLLECTED BY THE PAYEE. SEE 9 COMP. GEN. 144; 19 ID. 811, 814; 24 ID. 61; ID. 117, 119; AND 31 ID. 422. THE STATUTORY PROVISIONS AUTHORIZING PAYMENT FOR LEAVE SHOW BEYOND DOUBT THAT PAYMENT OF THE AMOUNTS INVOLVED IS AUTHORIZED ONLY TO A LIVING MEMBER OR A LIVING FORMER MEMBER OF THE SERVICE. IT IS AN AMOUNT INTENDED FOR HIS PERSONAL BENEFIT AND UNTIL PAYMENT IS ACTUALLY COMPLETED, IT DOES NOT BECOME A PART OF THE ASSETS OF HIS ESTATE. PAYMENT OF THE MUSTERING OUT PAY IS SIMILARLY RESTRICTED. ONLY WHEN PAYMENT OF THAT ALLOWANCE IS ACTUALLY MADE DOES IT BECOME A PART OF THE PAYEE'S ESTATE AND ONLY THOSE SURVIVORS LISTED IN THE STATUTE HAVE A RIGHT TO ANY BALANCE UNPAID. ACCORDINGLY, THE THREE CHECKS IN QUESTION WERE PROPERLY CANCELED AND YOU ARE NOT ENTITLED TO THEIR PROCEEDS.

FOR THE REASONS STATED ABOVE, THE DISALLOWANCE OF YOUR CLAIMS WAS PROPER.