B-141050, NOV. 10, 1959

B-141050, NOV. 10, 1959

TO COMMANDER EDWARD D. REDINGTON, USNR:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 7, 1959, REQUESTING RECONSIDERATION OF OUR SETTLEMENT DATED SEPTEMBER 30, 1959, WHICH DISALLOWED YOUR CLAIM FOR REIMBURSEMENT OF $50 REFUNDED BY YOU AS A UNIFORM MAINTENANCE ALLOWANCE PAYMENT MADE TO YOU INCIDENT TO YOUR SERVICE AS A MEMBER OF THE UNITED STATES NAVAL RESERVE.

THE RECORDS INDICATE THAT YOU WERE PAID A $50 UNIFORM MAINTENANCE ALLOWANCE UNDER REGULATIONS ISSUED PURSUANT TO THE PROVISIONS OF THE NAVAL RESERVE ACT OF 1938, 52 STAT. 1175, AS AMENDED, ON THE BASIS OF A CLAIM FILED ON AUGUST 30, 1956. OUR SETTLEMENT OF SEPTEMBER 30, 1959, EXPLAINED THE EFFECT OF SECTION 243 OF THE ARMED FORCES RESERVE ACT OF 1952, 66 STAT. 492, REENACTED AS SECTION 305 OF THE CAREER COMPENSATION ACT OF 1949, 37 U.S.C. 255, BY SECTION 20 (D) OF THE ACT OF AUGUST 10, 1956, 70A STAT. 628. IT WAS POINTED OUT THAT SECTION 302 OF THE NAVAL RESERVE ACT OF 1938, AS AMENDED, AND SECTION 11 OF THE ACT OF AUGUST 4, 1942, AS AMENDED, WERE REPEALED EFFECTIVE JANUARY 1, 1953, BY THE 1952 ACT (SECTIONS 802 AND 803 OF THE ARMED FORCES RESERVE ACT OF 1952, 66 STAT. 505), BUT THE THIRD PROVISO IN SUBSECTION (B) OF SECTION 243 CONSTITUTED A SAVINGS PROVISION WHICH BY ITS OWN TERMS PERMITTED OFFICERS FOR A PERIOD OF FOUR YEARS AFTER JULY 9, 1952, THE DATE OF ENACTMENT OF THE 1952 ACT, TO ELECT TO RECEIVE A $50 UNIFORM ALLOWANCE TO WHICH THEY WERE ENTITLED UNDER EXISTING REGULATIONS ISSUED PURSUANT TO THE PRIOR LAWS. YOU WERE ALSO INFORMED THAT, SINCE THE RIGHT OF ELECTION DID NOT EXIST AFTER JULY 9, 1956, AND SINCE PRIOR LAWS AUTHORIZING PAYMENT OF THE ALLOWANCE TO AN OFFICER OTHERWISE QUALIFIED HAD BEEN REPEALED, THERE WAS NO AUTHORITY FOR PAYMENT OF THE ALLOWANCE TO A MEMBER WHO DID NOT MAKE THE ELECTION WITHIN THE SPECIFIED FOUR-YEAR PERIOD. CONSEQUENTLY, YOUR CLAIM WAS DENIED.

YOU STATE THAT YOU WERE NOT INFORMED OF YOUR RIGHT OF ELECTION AND THAT YOU ARE CONVINCED THAT THE NAVY, AS YOUR EMPLOYER, HAD AN OBLIGATION TO INFORM YOU OF THAT RIGHT, AND ALSO THAT THE ERROR IN PAYMENT, IF ANY, WAS MADE BY THE NAVY FOR WHICH YOU SHOULD NOT BE HELD RESPONSIBLE.

BUREAU OF NAVAL PERSONNEL INSTRUCTION NO. 1030.13 OF MAY 10, 1954, FOR DISTRIBUTION TO ALL SHIPS AND STATIONS AS WELL AS NAVAL RESERVE DISTRIBUTION LIST, PARTS A AND B, IN PARAGRAPH 2, STATED, WITH RESPECT TO UNIFORM MAINTENANCE ALLOWANCES, THAT:

"* * * PRIOR TO 9 JULY 1956, A NAVAL RESERVE OFFICER MAY ELECT TO RECEIVE PAYMENT UNDER THE PROVISIONS OF EITHER THE NAVAL RESERVE ACT OF 1938 OR THE ARMED FORCES RESERVE ACT OF 1952.'

INSTRUCTION NO. 1030.13 WAS SUPERSEDED BY BUREAU OF NAVAL PERSONNEL INSTRUCTION NO. 7220.14, DATED APRIL 21, 1955, WITH THE SAME DISTRIBUTION, WHICH AGAIN POINTED OUT THE TERMINATION DATE OF YOUR ELECTION RIGHT. VOLUME 4 OF THE NAVY COMPTROLLER'S MANUAL, IN PORTIONS IN EFFECT PRIOR TO JULY 9, 1956, AT PARAGRAPHS 044145 (2) (D) AND 044146 (1) (B) ALSO INDICATES THE RIGHT OF ELECTION AND ITS TERMINATION DATE. IT IS CLEAR THAT BOTH THE 1952 STATUTE NOTED ABOVE AND THESE INSTRUCTIONS CONTEMPLATED A TERMINATION OF THE RIGHT OF ELECTION NOT LATER THAN JULY 9, 1956.

IN ANSWER TO YOUR CONTENTION THAT, SINCE THE NAVY DISBURSING OFFICERS PAID YOUR CLAIM AS CORRECT, THE MISTAKE SHOULD BE CONSIDERED TO BE SOLELY THAT OF THE NAVY, FOR WHICH YOU ARE NOT RESPONSIBLE, IT MAY BE STATED THAT YOUR CLAIM, FILED ON AUGUST 30, 1956, WAS ERRONEOUSLY APPROVED AND PAID BY THE NAVY, CONTRARY TO THE CLEAR PROVISIONS OF THAT STATUTE, AT A TIME WHEN NO LEGAL RIGHT EXISTED TO SUCH PAYMENT.

THE JUDICIAL PRECEDENTS ARE CLEAR IN ESTABLISHING THE RIGHT OF THE GOVERNMENT TO RECOVER PAYMENTS ERRONEOUSLY MADE. IN WISCONSIN CENTRAL RAILROAD CO. V. UNITED STATES, 164 U.S. 190, IT WAS HELD THAT PERSONS WHO RECEIVED ERRONEOUS PAYMENTS FROM THE UNITED STATES THROUGH ADMINISTRATIVE ERROR OF ITS OFFICERS ARE BOUND IN EQUITY AND GOOD CONSCIENCE TO MAKE RESTITUTION. EVEN FINANCIAL HARDSHIPS WHICH MIGHT RESULT FROM COLLECTION FROM THE RECIPIENT OR THE FACT THAT PAYMENT MAY HAVE BEEN RECEIVED IN GOOD FAITH "CANNOT STAND AGAINST THE INJUSTICE OF KEEPING WHAT NEVER RIGHTFULLY BELONGED TO HIM AT ALL.' UNITED STATES V. BENTLEY, 107 F.2D 382, 384. THEREFORE, SINCE KNOWLEDGE OF THE STATUTES MUST BE PRESUMED IN ALL PERSONS AND SINCE THE NAVY MADE REASONABLE EFFORTS TO POINT OUT MEMBERS' ELECTION RIGHTS UNDER SECTION 243 OF THE 1952 ACT, ALTHOUGH PAYMENT WAS MADE THROUGH AN ERROR OF THE NAVY, YOU MUST BE CONSIDERED TO HAVE HAD CONSTRUCTIVE KNOWLEDGE OF YOUR RIGHTS PRIOR TO THEIR TERMINATION.

ACCORDINGLY, THE PERIOD PROVIDED FOR ELECTION UNDER THE SAVINGS PROVISION OF SECTION 243 HAVING RUN, NO RIGHT TO PAYMENT OF UNIFORM MAINTENANCE ALLOWANCE UNDER THE REGULATIONS ISSUED PURSUANT TO THE NAVAL RESERVE ACT OF 1938, AS AMENDED, EXISTED ON AUGUST 30, 1956, WHEN YOUR CLAIM WAS FILED. THE SETTLEMENT OF SEPTEMBER 30, 1959, IS SUSTAINED AS CORRECT.