B-134330, DEC. 16, 1957

B-134330: Dec 16, 1957

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED JUNE 13. WHILE THE DEBTOR WAS ON INTERN DUTY AS A LIEUTENANT (JG). IN SUPPORT OF HIS CLAIM THAT HE IS NOT INDEBTED TO THE UNITED STATES. LIEUTENANT STEPHENS STATED THAT THERE IS NO EVIDENCE THAT ROOM AND BOARD WERE FURNISHED BY THE HOSPITAL FOR OR ON BEHALF OF THE GOVERNMENT. THAT RENTAL AND SUBSISTENCE ALLOWANCES WERE ACCEPTED BY HIM IN GOOD FAITH AS ONE OF THE INDUCEMENTS TO ENTER THE NAVY. THAT OUT OF THE MONTHLY STIPEND PAID BY THE HOSPITAL THERE WAS WITHHELD A FIXED SUM FOR ROOM AND BOARD. THE DEBTOR ALLEGES FURTHER THAT IT WAS NOT ILLEGAL FOR HIM TO ACCEPT PAYMENT FOR THE SERVICES RENDERED. THAT HE WAS RELIEVED FROM THAT DUTY ON JUNE 30.

B-134330, DEC. 16, 1957

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED JUNE 13, 1957 (PERS F22B-CAJ 497579/2105), FROM THE BUREAU OF NAVAL PERSONNEL, TRANSMITTING A COPY OF A LETTER DATED JUNE 8, 1957, FROM LIEUTENANT DAVID L. STEPHENS, MC, USNR, RELATING TO HIS INDEBTEDNESS TO THE UNITED STATES IN THE PRESENT NET AMOUNT OF $1,009.64, ARISING OUT OF THE ERRONEOUS PAYMENT TO HIM OF RENTAL AND SUBSISTENCE ALLOWANCES DURING THE PERIOD JULY 14 THROUGH SEPTEMBER 30, 1949, PLUS BASIC ALLOWANCES FOR QUARTERS AND SUBSISTENCE FROM OCTOBER 1, 1949, THROUGH JUNE 30, 1950, AND A STIPEND PAYMENT OF $10 PER MONTH MADE BY THE CHARITY HOSPITAL, NEW ORLEANS, LOUISIANA, DURING THE PERIOD FROM JULY 14, 1949, THROUGH JUNE 30, 1950, WHILE THE DEBTOR WAS ON INTERN DUTY AS A LIEUTENANT (JG).

IN SUPPORT OF HIS CLAIM THAT HE IS NOT INDEBTED TO THE UNITED STATES, LIEUTENANT STEPHENS STATED THAT THERE IS NO EVIDENCE THAT ROOM AND BOARD WERE FURNISHED BY THE HOSPITAL FOR OR ON BEHALF OF THE GOVERNMENT; THAT RENTAL AND SUBSISTENCE ALLOWANCES WERE ACCEPTED BY HIM IN GOOD FAITH AS ONE OF THE INDUCEMENTS TO ENTER THE NAVY, AND THAT OUT OF THE MONTHLY STIPEND PAID BY THE HOSPITAL THERE WAS WITHHELD A FIXED SUM FOR ROOM AND BOARD. THE DEBTOR ALLEGES FURTHER THAT IT WAS NOT ILLEGAL FOR HIM TO ACCEPT PAYMENT FOR THE SERVICES RENDERED, THE HOSPITAL BEING BOTH A STATE AND CHARITABLE INSTITUTION.

THE RECORDS SHOW THAT LIEUTENANT STEPHENS REPORTED FOR INTERN DUTY AT THE CHARITY HOSPITAL, NEW ORLEANS, LOUISIANA, ON JULY 14, 1949, AND THAT HE WAS RELIEVED FROM THAT DUTY ON JUNE 30, 1950. HIS PAY RECORDS SHOW THAT HE WAS CREDITED WITH RENTAL ALLOWANCE AT $60 PER MONTH AND SUBSISTENCE ALLOWANCE AT $0.70 PER DAY FROM JULY 14 THROUGH SEPTEMBER 30, 1949, FOR A TOTAL OF $209.30. HIS PAY RECORDS ALSO SHOW THAT HE WAS CREDITED BASIC ALLOWANCE FOR QUARTERS AT $67.50 PER MONTH AND BASIC ALLOWANCE FOR SUBSISTENCE AT $42 PER MONTH FROM OCTOBER 1, 1949, THROUGH JUNE 30, 1950, FOR A TOTAL OF $985.50.

OUR OFFICE REQUESTED A COMPLETE FINANCIAL STATEMENT FROM THE CHARITY HOSPITAL AS TO ANY AMOUNTS PAID TO LIEUTENANT STEPHENS DURING THE PERIOD OF HIS INTERNSHIP. UPON RECEIPT OF THE STATEMENT, IT WAS FOUND THAT THE OFFICER RECEIVED A MONTHLY STIPEND OF $35 DURING THE PERIOD OF INTERNSHIP OF WHICH $25 PER MONTH WAS REPAID TO THE HOSPITAL FOR ROOM AND BOARD. CERTIFICATE OF INDEBTEDNESS DATED OCTOBER 24, 1956, OUR CLAIMS DIVISION CERTIFIED THE OFFICER TO BE INDEBTED TO THE UNITED STATES IN THE NET AMOUNT OF $1,059.64, INCLUDING THE SUM OF $115.67, REPRESENTING THE DIFFERENCE BETWEEN THE AMOUNT OF THE MONTHLY STIPEND ($35) AND THE AMOUNT ($25) REPAID MONTHLY TO THE HOSPITAL FOR ROOM AND BOARD. THERE HAS BEEN CREDITED AGAINST THE INDEBTEDNESS THE SUM OF $50, REPRESENTING UNIFORM MAINTENANCE ALLOWANCE UNDER THE NAVAL RESERVE ACT OF 1938, LEAVING A NET BALANCE OF $1,009.64 DUE THE UNITED STATES.

OUR OFFICE HAS HELD THAT A RESERVE OFFICER ON ACTIVE DUTY AS AN INTERN IN A NON-FEDERAL HOSPITAL MAY NOT BE PAID RENTAL OR SUBSISTENCE ALLOWANCES BY THE GOVERNMENT WHEN FURNISHED QUARTERS AND SUBSISTENCE IN KIND BY THE HOSPITAL, AND NEITHER MAY HE RETAIN ANY CASH STIPEND RECEIVED FROM THE HOSPITAL FOR HIS SERVICES. 29 COMP. GEN. 163, 30 COMP. GEN. 246. THE BASIS FOR SUCH CONCLUSION IS THAT AN OFFICER SO SITUATED OCCUPIES A POSITION OF PUBLIC TRUST WHICH HE MAY NOT LEGALLY USE DIRECTLY OR INDIRECTLY FOR PERSONAL PROFIT, AND FURTHER, THAT IT IS CONSIDERED THAT THE HOSPITAL, WHILE RECEIVING THE BENEFITS OF THE OFFICER'S SERVICES AS AN INTERN, FURNISHES THE QUARTERS AND SUBSISTENCE AND PAYS THE STIPEND ON BEHALF OF THE GOVERNMENT, A SITUATION TANTAMOUNT TO THAT OF THE GOVERNMENT ITSELF FURNISHING THEM. SEE, IN THIS CONNECTION, DECISION OF APRIL 16, 1953, B-113776, 32 COMP. GEN. 454, IN THE CASE OF DR. EDWARD L. PINNEY, JR., AND CASES THERE CITED--- COPY TRANSMITTED TO LIEUTENANT STEPHENS WITH LETTER OF MAY 4, 1954. ALSO, SEE DECISION OF THE COURT OF CLAIMS IN THE CASE OF MORRISS V. UNITED STATES, 134 C.CLS. 720, IN WHICH IT WAS HELD THAT COMPENSATION IN THE FORM OF MEALS FURNISHED TO AN AIR FORCE MEDICAL OFFICER ON DUTY AS AN INTERN IN A PRIVATE HOSPITAL TO WHICH HE HAD BEEN ASSIGNED BY THE GOVERNMENT FOR TRAINING MUST BE CONSIDERED AS HAVING BEEN FURNISHED BY WAY OF COMPENSATION TO THE GOVERNMENT FOR FURNISHING THE INTERN'S SERVICES TO THE HOSPITAL. IN SUCH CIRCUMSTANCES, OUR OFFICE HAS HELD THAT THE GOVERNMENT'S OBLIGATION TO FURNISH QUARTERS OR SUBSISTENCE IN KIND OR ALLOWANCES IN LIEU THEREOF TO THE OFFICER IS CONSIDERED AS HAVING BEEN MET--- MAKING UNNECESSARY THE FURTHER PAYMENT TO THE OFFICER OF QUARTERS OR SUBSISTENCE ALLOWANCES--- AND THE GOVERNMENT'S FURTHER OBLIGATION FOR SALARY PAYMENTS IS REDUCED TO THE EXTENT OF THE STIPEND PAID BY THE HOSPITAL.

THE ACTUAL NET EFFECT OF THE ARRANGEMENT WHEREBY THE HOSPITAL DEDUCTED FROM LIEUTENANT STEPHEN'S MONTHLY STIPEND OF $35 THE SUM OF $25 AS A CHARGE FOR ROOM AND BOARD FURNISHED WAS THAT HE RECEIVED QUARTERS AND SUBSISTENCE FREE OF CHARGE PLUS A CASH BALANCE OF $10 PER MONTH. FOR THE REASONS SET FORTH ABOVE, IT IS OUR VIEW THAT A CLEAR LIABILITY EXISTS FOR THE REPAYMENT TO THE GOVERNMENT OF THE AMOUNT REPRESENTING THE CASH ACTUALLY RECEIVED FROM THE HOSPITAL ON THE INDICATED BASIS, PLUS THE SUMS RECEIVED FROM THE GOVERNMENT AS RENTAL AND SUBSISTENCE ALLOWANCES AND AS BASIC ALLOWANCES FOR QUARTERS AND SUBSISTENCE DURING THE PERIOD OF THE OFFICER'S INTERNSHIP AT THE CHARITY HOSPITAL, AS SET FORTH IN THE CERTIFICATE OF INDEBTEDNESS.

IN PARAGRAPH THREE OF HIS LETTER, LIEUTENANT STEPHENS APPEARS TO TAKE THE POSITION THAT HE IS NOT LIABLE IN THIS CASE SINCE THE ALLOWANCES WERE ACCEPTED BY HIM IN GOOD FAITH AS ONE OF THE INDUCEMENTS TO ENTER THE NAVY. IN THE CASE OF UNITED STATES V. NORTHWESTERN NATIONAL BANK AND TRUST COMPANY OF MINNEAPOLIS, 35 F.SUPP. 484, 486, THE COURT STATED THAT THE RECIPIENT OF AN ERRONEOUS PAYMENT RESULTING FROM A MISTAKE BY A PUBLIC OFFICIAL, MUST IN EQUITY MAKE RESTITUTION, SINCE RESTITUTION RESULTS IN NO LOSS TO HIM, HE HAVING RECEIVED SOMETHING FOR NOTHING. IN WISCONSIN CENTRAL RAILROAD V. UNITED STATES, 164 U.S. 190, IT WAS HELD THAT PERSONS WHO RECEIVE ERRONEOUS PAYMENTS FROM THE UNITED STATES THROUGH ADMINISTRATIVE ERROR OF ITS OFFICERS, ARE BOUND IN EQUITY AND GOOD CONSCIENCE TO MAKE RESTITUTION. EVEN FINANCIAL HARDSHIP WHICH MIGHT RESULT FROM COLLECTION FROM THE RECIPIENT OR THE FACT THAT THE PAYMENT MAY HAVE BEEN RECEIVED IN GOOD FAITH "CANNOT STAND AGAINST THE INJUSTICE OF KEEPING WHAT NEVER RIGHTFULLY BELONGED TO HIM AT L.' UNITED STATES V. BENTLEY, 107 F.2D 382, 384.

REGARDING THE OFFICER'S STATEMENT THAT HE FREQUENTLY INCURRED ADDITIONAL EXPENSE BY EATING OUTSIDE THE HOSPITAL, IT MAY BE SAID THAT IF THE OFFICER CAN FURNISH ACCEPTABLE EVIDENCE--- SUCH AS CERTIFICATION BY OFFICIALS OF THE CHARITY HOSPITAL--- AS TO THE EXTENT THE MEALS WERE NOT FURNISHED DURING THE PERIOD IN QUESTION, FURTHER CONSIDERATION WILL BE GIVEN THE MATTER.

WE ARE OF THE OPINION THAT LIEUTENANT STEPHENS IS CLEARLY OBLIGATED TO REFUND THE AMOUNT CERTIFIED TO BE DUE IN THIS CASE UNLESS HE CAN FURNISH THE EVIDENCE REFERRED TO IN THE PRECEDING PARAGRAPH. IT IS OUR RESPONSIBILITY UNDER THE BUDGET AND ACCOUNTING ACT OF 1921, 42 STAT. 21, TO TAKE ALL STEPS AVAILABLE TO US TO EFFECT COLLECTION IN THIS MATTER, AND IT WAS IN FULFILLMENT OF THAT RESPONSIBILITY THAT THE MATTER OF THE INDEBTEDNESS WAS REFERRED TO YOUR DEPARTMENT FOR COLLECTION FROM ANY FUNDS DUE THE OFFICER AND LEGALLY AVAILABLE FOR THAT PURPOSE.