B-134102, DEC. 10, 1957

B-134102: Dec 10, 1957

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REPRESENTING AMOUNTS WHICH HAVE BEEN WITHHELD FROM HIS RETIRED PAY FOR THE PERIOD FROM JULY 26. YOUR LETTER DISCLOSES THAT CAPTAIN KANE WAS PLACED ON THE RETIRED LIST IN THE GRADE OF MASTER SERGEANT (REGULAR ARMY) ON DECEMBER 31. HE WAS ADVANCED TO THE HIGHEST TEMPORARY COMMISSIONED GRADE SATISFACTORILY HELD BY HIM WHILE SERVING ON ACTIVE DUTY AS PROVIDED IN 10 U.S.C. 1004 (1952 ED.). CAPTAIN KANE WAS HOLDING A CIVILIAN POSITION UNDER THE DEPARTMENT OF THE ARMY AT FORT MONMOUTH. IS REPORTED TO BE $3. IT IS STATED THAT THE CLAIM WHICH HAS BEEN PRESENTED BY CAPTAIN KANE FOR THE AMOUNTS WHICH WERE WITHHELD FROM HIS RETIRED PAY FOR THE PERIOD FROM JULY 25. "IS BASED ON A DECISION RENDERED BY THE COURT OF CLAIMS IN THE CASE OF MADDEN V.

B-134102, DEC. 10, 1957

TO LIEUTENANT COLONEL N. P. HANNA, FC, DISBURSING OFFICER, DEPARTMENT OF THE ARMY:

THE OFFICE CHIEF OF FINANCE, DEPARTMENT OF THE ARMY, FORWARDED WITH INDORSEMENT DATED OCTOBER 14, 1957, YOUR LETTER OF OCTOBER 3, 1957, AND ENCLOSURES, INCLUDING A VOUCHER PRESENTED TO YOU FOR PAYMENT IN FAVOR OF CAPTAIN GEORGE C. KANE, REPRESENTING AMOUNTS WHICH HAVE BEEN WITHHELD FROM HIS RETIRED PAY FOR THE PERIOD FROM JULY 26, 1956, TO AUGUST 31, 1957, INCLUSIVE.

YOUR LETTER DISCLOSES THAT CAPTAIN KANE WAS PLACED ON THE RETIRED LIST IN THE GRADE OF MASTER SERGEANT (REGULAR ARMY) ON DECEMBER 31, 1947, PURSUANT TO THE PROVISIONS OF 10 U.S.C. 948 (1946 ED.). UPON THE COMPLETION OF 30 YEARS' SERVICE (THE SUM OF HIS ACTIVE SERVICE AND HIS SERVICE ON THE RETIRED LIST) ON JULY 25, 1956, HE WAS ADVANCED TO THE HIGHEST TEMPORARY COMMISSIONED GRADE SATISFACTORILY HELD BY HIM WHILE SERVING ON ACTIVE DUTY AS PROVIDED IN 10 U.S.C. 1004 (1952 ED.) AND BECAME ENTITLED TO "RECEIVE RETIREMENT PAY AT THE RATE PRESCRIBED BY LAW FOR HIS LENGTH OF SERVICE AT THE TIME OF RETIREMENT BUT BASED UPON SUCH HIGHER TEMPORARY RANK OR GRADE.'

IT APPEARS THAT ON JULY 25, 1956, THE DATE OF HIS ADVANCEMENT ON THE RETIRED LIST, CAPTAIN KANE WAS HOLDING A CIVILIAN POSITION UNDER THE DEPARTMENT OF THE ARMY AT FORT MONMOUTH, NEW JERSEY, WITH A SALARY OF $8,215 PER ANNUM. THE ANNUAL RATE OF RETIRED PAY PAYABLE TO CAPTAIN KANE UNDER THE PROVISIONS OF 10 U.S.C. 1004 (1952 ED.) IS REPORTED TO BE $3,144.96 PER ANNUM, OR $262.08 PER MONTH. HOWEVER, EFFECTIVE JULY 25, 1956, HE HAS BEEN PAID RETIRED PAY RESTRICTED IN AMOUNT TO $148.75 PER MONTH (A DIFFERENCE OF $113.33 PER MONTH) TO BRING THE COMBINED TOTALS OF HIS RETIRED PAY AND CIVILIAN COMPENSATION WITHIN THE $10,000 PER ANNUM LIMITATION NOW PRESCRIBED IN 5 U.S.C. 59A (1952 ED., SUPP. IV).

IT IS STATED THAT THE CLAIM WHICH HAS BEEN PRESENTED BY CAPTAIN KANE FOR THE AMOUNTS WHICH WERE WITHHELD FROM HIS RETIRED PAY FOR THE PERIOD FROM JULY 25, 1956, TO AUGUST 31, 1957, INCLUSIVE,"IS BASED ON A DECISION RENDERED BY THE COURT OF CLAIMS IN THE CASE OF MADDEN V. THE UNITED STATES," COURT OF CLAIMS PETITION NO. 454-55. THE JUDGMENT IN PLAINTIFF'S FAVOR WHICH WAS ENTERED BY THE COURT OF CLAIMS ON MAY 8, 1957, IN THE MADDEN CASE, WAS BASED ON A "STIPULATION AGREEMENT" BETWEEN THE PARTIES AND, HENCE, THAT JUDGMENT, AS SUCH, DOES NOT CONSTITUTE A FIRM JUDICIAL PRECEDENT WITH RESPECT TO THE DUAL COMPENSATION ISSUE INVOLVED IN THAT CASE. HOWEVER, THE SECRETARY OF DEFENSE WAS ADVISED IN OUR DECISION OF JUNE 11, 1957, B-123382, 36 COMP. GEN. 808, TO WHICH YOU MAKE SPECIFIC REFERENCE, THAT FOR THE REASONS STATED THEREIN, INCLUDING THE FACT THAT THE BASIC DUAL COMPENSATION ISSUE RAISED IN THE MADDEN CASE WAS DECIDED AGAINST THE UNITED STATES IN THE CASE OF UNITED STATES OF AMERICA V. DR. JOHN J. TOMA (UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF CALIFORNIA, CENTRAL DIVISION, NO. 20360-BM),"* * * WE HAVE DECIDED TO EXTEND 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, (NOW 10 U.S.C., CHAPTER 67), IN ADDITION TO THOSE ALREADY WITHIN THE RULE WHOSE RETIRED PAY IS AUTHORIZED UNDER THAT TITLE.'

THE RULE IN THE DECISION OF MARCH 2, 1956, 35 COMP. GEN. 497, IS THIS (QUOTING FROM SYLLABUS):

"FEDERAL CIVILIAN OFFICERS AND EMPLOYEES WHO HAVE BEEN OR MAY BE GRANTED RETIRED PAY UNDER TITLE III OF THE ARMY AND AIR FORCE VITALIZATION AND RETIREMENT EQUALIZATION ACT OF 1948 AND WHO, PRIOR TO JANUARY 1, 1953, WERE MEMBERS OF THE OFFICERS' RESERVE CORPS OR NATIONAL GUARD OR WHO, AFTER THAT DATE, WERE MEMBERS OF ANY OF THE RESERVE COMPONENTS, DURING THE PERIOD COVERED BY THE PAYMENT, MAY RECEIVE RETROACTIVE AND PROSPECTIVE MILITARY RETIRED PAY IN ADDITION TO CIVILIAN COMPENSATION IN ACCORDANCE WITH THE PRECEDENT IN TANNER V. UNITED STATES, 129 C.CLS. 792, WHICH EXCLUDED SUCH RESERVISTS FROM THE DUAL COMPENSATION STATUTES.'

AS POINTED OUT IN THAT DECISION, THE SCOPE OF THE RULE IN THE TANNER CASE --- WHICH WAS BASED ON THE PROVISIONS OF SECTION 1 (B), ACT OF JULY 1, 1947, 61 STAT. 239--- WAS, IN EFFECT, EXTENDED AS OF JANUARY 1, 1953, TO INCLUDE MEMBERS OF ALL RESERVE COMPONENTS OF THE ARMED FORCES, BY THE AMENDMENT MADE BY SECTION 804 (A) OF THE ARMED FORCES RESERVE ACT OF 1952,66 STAT. 506.

THE HOLDING IN OUR DECISION OF JUNE 11, 1957, MERELY SERVED TO EXTEND THE RULE BASED ON THE TANNER DECISION--- THAT IS, THE RIGHT TO RECEIVE CONCURRENTLY BOTH RETIRED PAY AS A RESERVIST UNDER TITLE III, ACT OF JUNE 29, 1948, AND COMPENSATION FOR CIVILIAN FEDERAL EMPLOYMENT -- TO THOSE INDIVIDUALS WHOSE RETIRED STATUS AS MEMBERS OF THE OFFICERS' RESERVE CORPS OR NATIONAL GUARD DURING THE PERIOD FROM JULY 1, 1947, TO DECEMBER 31, 1952, INCLUSIVE, OR WHOSE RETIRED STATUS AS MEMBERS OF ANY OF THE RESERVE COMPONENTS COMMENCING JANUARY 1, 1953, ENTITLED THEM TO RECEIVE RETIREMENT PAY UNDER OTHER PROVISIONS OF LAW.

THE DECISION OF THE COURT OF CLAIMS IN THE TANNER CASE AND THE CONCLUSION REACHED BY THE DISTRICT COURT IN THE TOMA CASE REST, NECESSARILY, ON STATUTORY PROVISIONS DEEMED TO EXEMPT SUCH RETIRED RESERVISTS FROM THE RESTRICTIONS IMPOSED BY SECTION 212 OF THE ECONOMY ACT OF 1932, 5 U.S.C. 59A. SECTION 1 (B), ACT OF JULY 1, 1947, 61 STAT. 239, AS AMENDED BY SECTION 804 (A) OF THE ARMED FORCES RESERVE ACT OF 1952, 66 STAT. 506, PROVIDED AS FOLLOWS (QUOTING FROM 10 U.S.C. 371B, 1952 ED.):

"NO EXISTING LAW SHALL BE CONSTRUED TO PREVENT ANY MEMBER OF THE RESERVE COMPONENTS OF THE ARMED FORCES FROM ACCEPTING EMPLOYMENT IN ANY CIVIL BRANCH OF THE PUBLIC SERVICE NOR FROM RECEIVING THE PAY INCIDENT TO SUCH EMPLOYMENT IN ADDITION TO ANY PAY AND ALLOWANCES TO WHICH HE MAY BE ENTITLED UNDER THE LAWS RELATING TO THE RESERVE COMPONENTS OF THE ARMED FORCES, NOR AS PROHIBITING HIM FROM PRACTICING HIS CIVILIAN PROFESSION OR OCCUPATION BEFORE OR IN CONNECTION WITH ANY DEPARTMENT OF THE FEDERAL GOVERNMENT.'

THE PROVISIONS OF 10 U.S.C. 371B (1952 ED.) WERE REPEALED EFFECTIVE AUGUST 10, 1956, BY SECTION 53, 70A STAT. 682, AND WERE REPLACED BY THE SIMILAR PROVISIONS OF SECTION 29 (C), ACT OF AUGUST 10, 1956, 70A STAT.632, 5 U.S.C. 30R (C) (1952 ED., SUPP. IV).

THE SPECIFIC EXEMPTION GRANTED IN THE ABOVE-QUOTED STATUTORY PROVISIONS CLEARLY HAS REFERENCE ONLY TO THE RECEIPT OF PAY INCIDENT TO CIVILIAN FEDERAL EMPLOYMENT CONCURRENTLY WITH ANY PAY AND ALLOWANCES TO WHICH THE PERSON CONCERNED MAY BE ENTITLED "UNDER THE LAWS RELATING TO THE RESERVE COMPONENTS OF THE ARMED FORCES.' COMPARE THE DECISION RENDERED BY THE COURT OF CLAIMS NOVEMBER 7, 1956, IN THE CASE OF GEORGE EDWARD LEONARD V. UNITED STATES, C.CLS. NO. 182-55.

THE FACTS ABOVE SET FORTH CLEARLY SHOW THAT CAPTAIN KANE WAS RETIRED AS AN ENLISTED MAN OF THE REGULAR ARMY AND THAT HE WAS ADVANCED JULY 25, 1956, ON THE RETIRED LIST TO THE HIGHEST TEMPORARY COMMISSIONED GRADE SATISFACTORILY HELD BY HIM WHILE SERVING ON ACTIVE DUTY IN THE ARMY OF THE UNITED STATES. THE ADVANCEMENT ON THE RETIRED LIST WAS MADE UNDER THE PROVISIONS OF 10 U.S.C. 1004 (1952 ED.) AUTHORIZING THE ADVANCEMENT OF ENLISTED MEN OF THE "REGULAR ARMY OR THE REGULAR AIR FORCE.' UNDER THOSE PROVISIONS CAPTAIN KANE IS ENTITLED TO RECEIVE RETIREMENT PAY AT THE RATE PRESCRIBED BY LAW FOR HIS LENGTH OF SERVICE AT THE TIME OF HIS RETIREMENT BUT BASED ON HIS HIGHER TEMPORARY GRADE. IT IS EVIDENT, THEREFORE, THAT CAPTAIN KANE IS NOT RECEIVING RETIRED PAY ,UNDER THE LAWS RELATING TO THE RESERVE COMPONENTS OF THE ARMED FORCES" SO AS TO COME WITHIN THE SCOPE OF THE EXEMPTING PROVISIONS OF 10 U.S.C. 371B. SINCE THE RETIRED PAY TO WHICH HE IS ENTITLED ACCRUES UNDER STATUTORY PROVISIONS APPLICABLE TO THE ADVANCEMENT ON THE RETIRED LIST OF REGULAR ARMY AND REGULAR AIR FORCE ENLISTED MEN, AND ACCRUES WITHOUT ANY CONNECTION WITH HIS RESERVE STATUS, AND SINCE SUCH RETIRED PAY IS BEING RECEIVED ON ACCOUNT OF HIS SERVICE AS A COMMISSIONED OFFICER, HE IS SUBJECT TO THE $10,000 PER ANNUM RESTRICTION IMPOSED BY SECTION 212 OF THE ECONOMY ACT OF 1932, AS AMENDED, 5 U.S.C. 59A (1952 ED., SUPP. IV).

PAYMENT ON THE VOUCHER PRESENTED IS NOT AUTHORIZED AND SUCH VOUCHER WITH ITS SUPPORTING PAPERS WILL BE RETAINED IN THIS OFFICE.