B-145589, JUL. 7, 1961

B-145589, JUL. 7, 1961

TO CAPTAIN LAWRENCE B. PARSONS, AUS, RETIRED:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 31, 1961, REQUESTING REVIEW OF OUR SETTLEMENT OF OCTOBER 17, 1960, WHICH ALLOWED YOU THE SUM OF $7,027.86 AS ADJUSTMENT OF RETIRED PAY FOR THE PERIOD FROM SEPTEMBER 1, 1944, TO JUNE 30, 1960. YOU EXPRESS THE OPINION THAT THE "RETROACTIVE PORTION" OF YOUR PAY SHOULD HAVE BEEN EXCEPTED FROM REDUCTION UNDER THE ECONOMY ACT BY APPLICATION OF THE PROVISIONS OF OUR DECISION OF MAY 29, 1952, B-108117, 31 COMP. GEN. 619.

IT APPEARS THAT WHILE SERVING ON ACTIVE DUTY AS A FIRST LIEUTENANT, OFFICERS' RESERVE CORPS, YOU WERE APPOINTED CAPTAIN, OFFICERS' RESERVE CORPS, ON JUNE 12, 1941, AND THAT YOU ACCEPTED THE APPOINTMENT ON JUNE 14, 1941. YOU CONTINUED TO SERVE UNDER THAT APPOINTMENT UNTIL DECEMBER 30, 1943, WHEN YOU WERE RELIEVED FROM ACTIVE DUTY DUE TO PHYSICAL DISABILITY. YOUR CASE WAS CONSIDERED BY A RETIRING BOARD, WHICH DENIED RETIREMENT PAY ON THE BASIS THAT YOUR PHYSICAL DISABILITY WAS NOT A RESULT OF AN INCIDENT OF YOUR COMMISSIONED SERVICE BUT WAS THE RESULT OF AN INCIDENT OF YOUR PRIOR SERVICE AS AN ENLISTED MAN. YOU REENLISTED IN THE REGULAR ARMY ON DECEMBER 31, 1943, AND SERVED IN THE GRADE OF FIRST SERGEANT UNTIL AUGUST 31, 1944, WHEN YOU WERE RETIRED, UNDER THE PROVISIONS OF THE ACT OF JUNE 30, 1941, 55 STAT. 394, ON ACCOUNT OF PHYSICAL DISABILITY INCURRED IN LINE OF DUTY, WITH OVER 21 YEARS OF SERVICE AND A PERMANENT DISABILITY RATING OF 30 PERCENT.

IT IS REPORTED THAT THEREAFTER YOU RECEIVED MONTHLY PAYMENTS OF RETIREMENT PAY AS FOLLOWS: SEPTEMBER 1, 1944, TO JUNE 30, 1946, $138.81; JULY 1, 1946, TO APRIL 30, 1952, $165.97; MAY 1, 1952, TO MARCH 31, 1955, $172.61; APRIL 1, 1955, TO MAY 31, 1958, $182.97; AND JUNE 1, 1958, TO JUNE 30, 1960, $193.95. IT IS ALSO REPORTED THAT YOU WERE EMPLOYED IN A CIVILIAN CAPACITY BY THE WAR DEPARTMENT FROM APRIL 20, 1945, TO NOVEMBER 3, 1946, AND BY THE VETERANS ADMINISTRATION FROM NOVEMBER 4, 1946, TO NOVEMBER 11, 1960.

ON MARCH 8, 1960, THE SECRETARY OF THE ARMY, ACTING UNDER AUTHORITY OF EXECUTIVE ORDER NO. 10122, DATED APRIL 14, 1950, AND UPON THE RECOMMENDED FINDINGS AND RECOMMENDATION OF THE ADJUTANT GENERAL, FOUND THAT YOU WERE PERMANENTLY INCAPACITATED FOR FURTHER ACTIVE MILITARY SERVICE AS THE RESULT OF A DISABILITY CONTRACTED IN LINE OF DUTY WHILE ON ACTIVE DUTY SUBSEQUENT TO APRIL 3, 939; THAT YOUR RELIEF FROM ACTIVE DUTY ON DECEMBER 30, 1943, WAS BY REASON OF PHYSICAL DISABILITY; AND THAT YOU WERE ELIGIBLE FOR THE BENEFITS PROVIDED IN THE ACT OF APRIL 3, 1939, 53 STAT. 557, BASED ON THE GRADE OF A CAPTAIN, EFFECTIVE DECEMBER 31, 1943.

VARIOUS STATUTES, COURT CASES AND DECISIONS WERE FOR CONSIDERATION IN CONNECTION WITH YOUR CLAIM FOR ADJUSTMENT OF RETIRED PAY. SECTION 212 OF THE ECONOMY ACT OF 1932 PROVIDED THAT NO CIVILIAN EMPLOYEE OF THE UNITED STATES SHOULD BE ENTITLED TO RETIRED PAY AS A COMMISSIONED MILITARY OFFICER EXCEPT TO THE EXTENT THAT THE CIVILIAN PAY AND RETIRED PAY COMBINED DID NOT EXCEED $3,000 A YEAR. IN 1955 THE $3,000 LIMITATION WAS INCREASED TO $10,000. 69 STAT. 498. SECTION 1 (B) OF THE ACT OF JULY 1, 1947, 61 STAT. 239, AS AMENDED BY THE ACT OF JULY 9, 1952, 66 STAT. 506, PROVIDED THAT NO EXISTING LAW SHOULD BE CONSTRUED TO PREVENT ANY MEMBER OF THE RESERVE COMPONENTS OF THE ARMED FORCES FROM RECEIVING CIVILIAN PAY FROM THE GOVERNMENT AND ALSO THE PAY AND ALLOWANCES TO WHICH HE IS ENTITLED UNDER THE LAWS RELATING TO THE RESERVE COMPONENTS OF THE ARMED FORCES. SECTION 1 OF THE ACT OF JULY 1, 1947, CONTAINED NO RETROACTIVE PROVISIONS, BUT WAS EFFECTIVE AS OF THE DATE OF ENACTMENT.

YOU MENTION THE CASE OF SARLES V. UNITED STATES, 141 CT.CL. 709, DECIDED MARCH 5, 1958. IN THAT CASE THE PLAINTIFF, A MEMBER OF THE NATIONAL GUARD, WAS RETIRED FOR LENGTH OF SERVICE UNDER THE PROVISIONS OF SECTION 302 OF THE ACT OF JUNE 29, 1948, 62 STAT. 1081, 1087. IN THE DECISION RENDERED ON JANUARY 14, 1959, BY THE COURT OF CLAIMS IN THE CASE OF BOWMAN, ET AL. V. UNITED STATES, CT.CL.NO. 108-58, IN FAVOR OF NATHAN R. WARTHEN, PLAINTIFF NO. 5, THE COURT (REFERRING TO ITS EARLIER DECISION IN THE SARLES CASE) STATED THAT THE 1947 ACT, PROPERLY INTERPRETED, COVERS ANY PERSON WHO HAS BECOME ENTITLED TO RETIRED PAY "BY REASON OF SERVICE IN A RESERVE COMPONENT.' HOWEVER, IN THE CASE OF PALMER V. UNITED STATES, CT.CL.NO. 356-58, DECIDED JANUARY 20, 1960, THE COURT HELD THAT THE PLAINTIFF, A FORMER OFFICER OF THE ARMY OF THE UNITED STATES WHO WAS RETIRED FOR PHYSICAL DISABILITY UNDER THE ACT OF APRIL 3, 1939, HAD NO STATUS IN THE RESERVE COMPONENTS OF THE ARMED FORCES AND THAT HE DID NOT RECEIVE HIS RETIREMENT PAY FROM LAWS RELATING THERETO. SINCE THAT DECISION CAST DOUBT ON THE CORRECTNESS OF OUR VIEW THAT THE 1939 ACT WAS A LAW RELATING TO THE RESERVE COMPONENTS OF THE ARMED FORCES WITHIN THE MEANING OF SECTION 1 (B) OF THE ACT OF JULY 1, 1947, 61 STAT. 239, NOW AMENDED AND CODIFIED AS 5 U.S.C. 30R (C) (1958 EDITION), IN OUR DECISION OF AUGUST 26, 1960, B 123382, 40 COMP. GEN. 136, WE STATED THAT FURTHER PAYMENT OF RETIRED PAY UNDER THE 1939 ACT IN EXCESS OF THE LIMITATION OF THE ECONOMY ACT SHOULD NOT BE MADE AFTER NOVEMBER 1, 1960, UNTIL THE POSITION OF THE COURT WAS CLARIFIED.

YOUR CLAIM FOR ADJUSTMENT OF RETIRED PAY FOR THE PERIOD INVOLVED WAS SETTLED IN ACCORDANCE WITH 40 COMP. GEN. 136. THERE WERE ALSO FOR APPLICATION, HOWEVER, OUR DECISION OF MARCH 31, 1947, B-62748, 26 COMP. GEN. 711, AND OUR DECISION OF MAY 29, 1952, B-108117, 31 COMP. GEN. 619. IT WAS HELD IN 26 COMP. GEN. 711 (QUOTING THE SYLLABUS) THAT:

"WHERE DISABILITY RETIREMENT PAY FOR A PERIOD OF COMMISSIONED SERVICE WAS RETROACTIVELY AWARDED UNDER THE ACT OF APRIL 3, 1939, AS AMENDED, TO A PERSON WHO HAD BEEN IN RECEIPT OF CIVILIAN COMPENSATION AND RETIRED PAY AS AN ARMY ENLISTED MAN, ONLY THE DIFFERENCE BETWEEN HIS ENLISTED RETIRED PAY AND THE TOTAL AMOUNT WHICH COULD HAVE ACCRUED AS RETIREMENT PAY IS TO BE CONSIDERED AS RETIRED PAY "FOR OR ON ACCOUNT OF SERVICES AS A COMMISSIONED OFFICER" IN APPLYING, OVER A PERIOD PRIOR TO THE AWARD, THE LIMITATION IN SECTION 212 OF THE ACT OF JUNE 30, 1932, AS AMENDED, ON THE COMBINED AMOUNT OF CIVILIAN COMPENSATION AND RETIRED PAY WHICH MAY BE RECEIVED.'

IT WAS HELD IN 31 COMP. GEN. 619 THAT, SINCE SECTION 212 OF THE ECONOMY ACT OF 1932 DID NOT PLACE ANY RESTRICTION ON THE CONCURRENT RECEIPT OF RETIRED PAY FOR OR ON ACCOUNT OF SERVICES AS AN ENLISTED MAN AND THE COMPENSATION OF A CIVILIAN POSITION UNDER THE GOVERNMENT, A PERSON WHO WAS PAID RETIRED PAY IN SUCH CIRCUMSTANCES WAS ENTITLED TO RETAIN THE RETIRED PAY SO PAID ALTHOUGH HE SUBSEQUENTLY WAS ADVANCED ON THE RETIRED LIST, RETROACTIVELY TO THE DATE OF HIS RETIREMENT, TO COMMISSIONED RANK. SUCH BASIS AND CONTRARY TO YOUR APPARENT BELIEF, NO DEDUCTIONS WERE MADE IN THE SETTLEMENT OF OCTOBER 17, 1960, ON ACCOUNT OF THE RETIRED PAY RECEIVED BY YOU AS AN ENLISTED MAN.

IN THE CASE OF WATMAN V. UNITED STATES, CT.CL.NO. 189-59, DECIDED MARCH 1, 1961, THE COURT OF CLAIMS OVERRULED THE PALMER CASE AND REAFFIRMED ITS DECISION IN THE SARLES CASE, WHERE IT HAD HELD THAT THE 1947 ACT, PROPERLY INTERPRETED, COVERS ANY PERSON WHO HAS BECOME ENTITLED TO RETIRED PAY "BY REASON OF SERVICE IN A RESERVE COMPONENT.' THE COURT SPECIFIED FURTHER, HOWEVER, THAT ,MEMBERSHIP IN THE REQUIRED UNIT AT THE TIME OF RETIREMENT IS THE DECISIVE FACT AND THAT RIGHTS ACQUIRED AT THAT TIME WERE NOT INTENDED TO BE TAKEN AWAY BY THE SUBSEQUENT LOSS OF SUCH EMBERSHIP" AND HELD THAT THE EXEMPTION GRANTED BY THE 1947 ACT APPLIES TO RETIRED PAY RECEIVE BY AN OFFICER PURSUANT TO THE 1939 ACT.

YOUR CASE WILL BE RECONSIDERED BY OUR CLAIMS DIVISION ON THE BASIS OF THE DECISION OF THE COURT OF CLAIMS IN THE WATMAN CASE AND A SETTLEMENT WILL ISSUE ALLOWING YOU THE ADDITIONAL AMOUNT FOUND DUE FOR THE PERIOD FROM JULY 1, 1947, TO JUNE 30, 1960.