B-140582, SEP. 28, 1959

B-140582: Sep 28, 1959

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REQUESTS RECONSIDERATION OF YOUR CLAIM FOR OVERTIME COMPENSATION AS AN EMPLOYEE OF THE ALASKA RAILROAD WHICH WAS DISALLOWED IN OUR SETTLEMENT CERTIFICATE. IS THAT YOU WORKED SIX DAYS PER WEEK AS A BRAKEMAN FROM FEBRUARY 1952 TO NOVEMBER 1953. THAT YOU WERE PAID AT "REGULAR TIME. IN THE SETTLEMENT YOU WERE ADVISED THAT. YOU ARE NOT SATISFIED THAT IT WOULD BE PROPER TO CONSTRUE SUCH ITEMS AS A CREDIT. THE DEBTOR- CREDITOR RIGHT OF SETOFF ALSO EXISTS IN FAVOR OF THE UNITED STATES AND IS COMMONLY USED IN SETTLING OR ADJUSTING ACCOUNTS WITH PERSONS OR FIRMS HAVING CLAIMS AGAINST THE UNITED STATES. THE UNITED STATES MAY SET UP AS A COUNTERCLAIM THE AMOUNT PAID HIM OVER WHAT HE WAS ENTITLED TO BYLAW.

B-140582, SEP. 28, 1959

TO MR. JAMES S. FARRIS:

YOUR LETTER OF AUGUST 11, 1959, REQUESTS RECONSIDERATION OF YOUR CLAIM FOR OVERTIME COMPENSATION AS AN EMPLOYEE OF THE ALASKA RAILROAD WHICH WAS DISALLOWED IN OUR SETTLEMENT CERTIFICATE, DATED MAY 27, 1959, FOR THE REASONS STATED THEREIN.

YOUR CLAIM, DATED FEBRUARY 2, 1958, IS THAT YOU WORKED SIX DAYS PER WEEK AS A BRAKEMAN FROM FEBRUARY 1952 TO NOVEMBER 1953, AND THAT YOU WERE PAID AT "REGULAR TIME; " HENCE, YOU CLAIM ,OVERTIME FOR THE SIXTH DAY.' IN THE SETTLEMENT YOU WERE ADVISED THAT--- CONTRARY TO THE VIEW OF THE COURT OF CLAIMS IN THE CASES THERE CITED, 135 C.CLS. 548--- IN THE SETTLEMENT AND ADJUSTMENT OF CLAIMS PRESENTED TO US FOR CONSIDERATION, THE "ARBITRARIES OR CONSTRUCTIVE ALLOWANCES" PREVIOUSLY PAID UNDER THE RAILROAD'S DUAL SYSTEM OF COMPENSATION MUST NECESSARILY BE TAKEN AS A CREDIT IN COMPUTING AN OPERATING (TRAIN AND ENGINE SERVICE) EMPLOYEE'S PAY UNDER THE 40-HOUR WEEK STATUTE, 48 STAT. 522. HOWEVER, YOU ARE NOT SATISFIED THAT IT WOULD BE PROPER TO CONSTRUE SUCH ITEMS AS A CREDIT, IN PART OR AS A WHOLE, AGAINST THE OVERTIME CLAIMED.

IN THAT REGARD, THE WELL ESTABLISHED RULE OF LAW IN THE COURTS, KNOWN AS "SETOFF AND COUNTERCLAIM" (AMERICAN JURISPRUDENCE, VOL. 47, PAGES 759 TO 761, SECTIONS 65 TO 67) APTLY SUPPORTS OUR SETTLEMENT ACTION. THE DEBTOR- CREDITOR RIGHT OF SETOFF ALSO EXISTS IN FAVOR OF THE UNITED STATES AND IS COMMONLY USED IN SETTLING OR ADJUSTING ACCOUNTS WITH PERSONS OR FIRMS HAVING CLAIMS AGAINST THE UNITED STATES, EVEN TO SETOFF AGAINST A CLAIM THE AMOUNT DUE IT BY THE CLAIMANT UPON ANOTHER OBLIGATION. WHILE THE COURT OF CLAIMS, IN THE CASES CITED IN OUR SETTLEMENT, DID NOT AFFIRM THE GOVERNMENT'S CLAIM OF SETOFF IN THAT CASE, SUCH ACTION BY THE COURT WOULD NOT, AS A MATTER OF LAW, BIND THE GOVERNMENT IN A SEPARATE MATTER, AS HERE INVOLVED. IN THE CASES OF UNITED STATES V. ETHAL, 151 U.S. 366; UNITED STATES V. EURCHARD, 125 U.S. 176; AND MCKIRATH V. UNITED STATES, 102 U.S. 426, THE SUPREME COURT HELD THAT, IN A SUIT TO RECOVER THE BALANCE CLAIMED BY AN OFFICER, THE UNITED STATES MAY SET UP AS A COUNTERCLAIM THE AMOUNT PAID HIM OVER WHAT HE WAS ENTITLED TO BYLAW; AND THAT AFTER SETTLEMENT WITH THE GOVERNMENT, WHERE AN OFFICER SUES IN THE COURT OF CLAIMS FOR BACK PAY, THE GOVERNMENT MAY RECOVER AGAINST HIM MONEYS PAID TO HIM BEFORE THE SETTLEMENT WHICH IT HAS PLEADED AS A SETOFF. NOT ONLY HAS THE GOVERNMENT THE SAME RIGHT OF SETOFF AS ANY OTHER CREDITOR, BUT OUR OFFICE IS REQUIRED IN THE PROPER DISCHARGE OF ITS DUTIES TO SET OFF ONE INDEBTEDNESS AGAINST THE OTHER. UNITED STATES V. MUNSEY TRUST CO., 332 U.S. 234; 36 COMP. GEN. 413, 417.

IN ANY EVENT, THE RECORD IN WHAT IS UNDERSTOOD TO BE A REPRESENTATIVE CASE, SHOWS THAT UNDER THE DUAL SYSTEM OF PAY THE OPERATING EMPLOYEES OF THE ALASKA RAILROAD RECEIVED SUBSTANTIALLY GREATER PAY (BECAUSE OF THE ARBITRARIES AND CONSTRUCTIVE ALLOWANCES) THAN THEY WOULD HAVE RECEIVED HAD THEIR PAY, REGULAR TIME AND OVERTIME WORK, BEEN COMPUTED SOLELY UNDER THE 40-HOUR RULES OF SECTION 23 OF THE ACT OF 1934, 48 STAT. 522, 5 U.S.C. 673C. YOU HAVE NOT FURNISHED US EVIDENCE IN YOUR CASE SHOWING THAT AFTER SETOFF OF THE CREDITS FOR THE "ARBITRARIES AND CONSTRUCTIVE ALLOWANCES" AN ADDITIONAL SUM IS DUE YOU.

IN THE CIRCUMSTANCES, THE DISALLOWANCE OF YOUR CLAIM MUST BE AND IS SUSTAINED.