B-163475, MAR. 1, 1968

B-163475: Mar 1, 1968

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EMPLOYEE WHO INCIDENT TO HOME LEAVE WAS AUTHORIZED TO CONVERT FIRST CLASS AIRFARE TICKETS TO CHEAPER CLASS FOR ROUND-WORLD TRIP AND WHO BECAUSE AN AIRLINE CEASED OPERATIONS HAD TO PAY RETURN TRAVEL WAS ALLOWED ALL THAT GOVT. MCNUTT'S CLAIM IS AS FOLLOWS: "* * * IN DECEMBER 1959 THE TT PAID $4458.80 TO DEAK AND CO. TICKETS WERE ISSUED TO HIM OVER AN INDIRECT ROUTE (AROUND THE WORLD). MCNUTT AND FAMILY WERE IN THE UNITED STATES ON LEAVE. THE FORMER HIGH COMMISSIONER IS REPORTED TO HAVE SAID: "-THE GOVERNMENT EXTENDED FIRST-CLASS AIR TRANSPORTATION FOR MR. NO OBJECTION WAS MADE TO SUCH A CONVERSION OF TICKETS. WHICH WAS HANDLED BY DEAKS TRAVEL AGENCY OF GUAM. THE RETURN TRANSPORTATION WAS TICKETED ON TRANS-OCEAN AIRLINES FROM SAN FRANCISCO TO GUAM.

B-163475, MAR. 1, 1968

TRAVEL EXPENSES - CIRCUITOUS ROUTES DECISION TO SECRETARY OF THE INTERIOR DISALLOWING CLAIM OF EMPLOYEE FOR ADDITIONAL TRAVEL AND TRANSPORTATION EXPENSES INCIDENT TO ROUND TRIP HOME LEAVE TRAVEL OF EMPLOYEE FROM GUAM AND IDAHO AND RETURN. EMPLOYEE WHO INCIDENT TO HOME LEAVE WAS AUTHORIZED TO CONVERT FIRST CLASS AIRFARE TICKETS TO CHEAPER CLASS FOR ROUND-WORLD TRIP AND WHO BECAUSE AN AIRLINE CEASED OPERATIONS HAD TO PAY RETURN TRAVEL WAS ALLOWED ALL THAT GOVT. COULD PERMIT; NAMELY, FIRST-CLASS ROUND TRIP BY USUALLY TRAVELED ROUTE. FACT THAT FAILURE OF TRANSPORTATION OCCURRED WITH RESPECT TO PART OF ROUTE FOR WHICH GOVERNMENT PAID COSTS DOES NOT ENTITLE EMPLOYEE TO ADDITIONAL REIMBURSEMENT.

TO MR. SECRETARY:

WE REFER TO LETTER OF FEBRUARY 1, 1968, FROM THE DEPUTY ASSISTANT SECRETARY FOR ADMINISTRATION IN WHICH HE REQUESTS OUR DECISION WHETHER MR. PAUL T. MCNUTT, A FORMER EMPLOYEE OF THE TRUST TERRITORY OF THE PACIFIC ISLANDS, MAY BE REIMBURSED $1,308, REPRESENTING TRAVEL AND TRANSPORTATION EXPENSES INCURRED BY HIM AS AN INCIDENT TO ROUND TRIP HOME LEAVE TRAVEL PERFORMED BY HIM FROM AGANA, GUAM, TO IDAHO AND RETURN IN 1959.

IN THE LIGHT OF THE MATTERS PRESENTED BY THE DEPUTY ASSISTANT SECRETARY'S LETTER THERE WOULD APPEAR TO BE NO QUESTION CONCERNING MR. MCNUTT'S ELIGIBILITY FOR THE HOME LEAVE TRAVEL AND TRANSPORTATION AS THEN AUTHORIZED BY PUBLIC LAW 737, APPROVED AUGUST 31, 1954, 5 U.S.C. 73B-3 (A) (1964 EDITION).

AS RELATED IN THE DEPUTY ASSISTANT SECRETARY'S LETTER, THE SUMMARY OF THE FACTS GIVING RISE TO MR. MCNUTT'S CLAIM IS AS FOLLOWS: "* * * IN DECEMBER 1959 THE TT PAID $4458.80 TO DEAK AND CO. (GUAM), INC., FOR TRAVEL SERVICES FOR MR. MCNUTT AND FAMILY FROM AGANA, GUAM, TO SEATTLE, WASHINGTON, AND RETURN, IN CONJUNCTION WITH HOME LEAVE TRAVEL. AT THE REQUEST OF MR. MCNUTT, TICKETS WERE ISSUED TO HIM OVER AN INDIRECT ROUTE (AROUND THE WORLD), A PORTION OF TRAVEL TO BE ON TRANSOCEAN AIRLINES, A CARRIER SERVING, AT THAT TIME, GUAN AND THE TT. WHILE MR. MCNUTT AND FAMILY WERE IN THE UNITED STATES ON LEAVE, TRANSOCEAN CEASED OPERATIONS AND THEREAFTER FILED A PETITION IN BANKRUPTCY. UPON LEARNING THAT TRANSOCEAN WOULD NOT HONOR THE TICKETS, MR. MCNUTT PAID FROM HIS OWN RESOURCES THE AMOUNT OF$1414.50 TO PAN AMERICAN AIRLINES FOR AIR TRAVEL FOR HIMSELF AND FAMILY FROM THE WEST COAST TO GUAM. MR. MCNUTT ASSERTS THAT OF THIS AMOUNT THE COMPTROLLER, TRUST TERRITORY, REIMBURSED $86 AND THAT $1308 REMAINS UNPAID. HE INDICATES THAT $1308 REPRESENTS THE ALLOWABLE COST OF THREE ADULT AND TWO CHILDREN FARES FROM SAN FRANCISCO TO GUAM, THE EXACT AMOUNT THE TRUST TERRITORY PAID DEAKS FOR THAT PORTION OF TRAVEL ABOARD TRANSOCEAN. * * *"

IN REGARD TO THE SPECIFIC EVENTS SURROUNDING THE PROCUREMENT OF THE ROUND -THE-WORLD TICKETS BY MR. MCNUTT, THE FORMER HIGH COMMISSIONER IS REPORTED TO HAVE SAID:

"-THE GOVERNMENT EXTENDED FIRST-CLASS AIR TRANSPORTATION FOR MR. MCNUTT AND HIS FAMILY, FROM GUAM TO SEATTLE, AND RETURN, ON PAN AMERICAN AIRWAYS. MR. MCNUTT REQUESTED AUTHORITY TO CONVERT THIS FIRST-CLASS AIRFARE TICKET TO A CHEAPER CLASS OF TRAVEL IN ORDER TO COVER AS MUCH AS POSSIBLE THE COST OF AN EXTENDED TRIP AROUND THE WORLD FOR HIMSELF AND HIS FAMILY. NO OBJECTION WAS MADE TO SUCH A CONVERSION OF TICKETS, WHICH WAS HANDLED BY DEAKS TRAVEL AGENCY OF GUAM. IN THIS ARRANGEMENT, THE RETURN TRANSPORTATION WAS TICKETED ON TRANS-OCEAN AIRLINES FROM SAN FRANCISCO TO GUAM. UNFORTUNATELY, TRANS OCEAN AIRLINES CEASED OPERATIONS PRIOR TO THE RETURN OF MR. MCNUTT AND HIS FAMILY AND COULD NOT OR WOULD NOT REFUND TO HIM THE FARE FOR THE CANCELLED FLIGHT FROM SAN FRANCISCO TO GUAM. MR. MCNUTT THEN RETURNED TO GUAM ON A DIFFERENT CARRIER, PAYING HIS OWN FARE, WHICH IS THE AMOUNT HE IS CLAIMING AS BEING DUE HIM FROM THE TRUST TERRITORY. WHEN THE TRUST TERRITORY CONTACTED DEAKS TRAVEL AGENCY IN AN ATTEMPT TO RECOVER FOR MR. MCNUTT THE DEFAULTED FARE FROM SAN FRANCISCO TO GUAM, DEAK'S ATTORNEY ADVISED THAT DEAKS MERELY SERVED AS AN AGENT FOR THE AIRLINE AND REFUSED REFUND, CONTENDING THAT HIS CASE WAS AGAINST TRANS OCEAN AIRLINES, BY THEN A BANKRUPT CORPORATION.-"

MR. MCNUTT, HOWEVER, INDICATES THAT ON SEPTEMBER 23, 1959, HE SUBMITTED TO THE PERSONNEL OFFICER OF THE TRUST TERRITORY HIS PROPOSED ITINERARY FOR INDIRECT TRAVEL AND SAYS: "-* * * PERSONNEL ANSWERED BY LETTER AND ENCLOSED MY RENEWAL EMPLOYMENT AGREEMENT AND TRAVEL AUTHORIZATION. THEY STATED THAT THE ITINERARY COMPLIED WITH PL 737 AND HAD BEEN APPROVED. AUTHORIZATION HAD BEEN SENT TO THE DEAKS TRAVEL AGENCY AUTHORIZING THEM TO BILL THE TT A ROUND TRIP DIRECT FIRST CLASS FARE FROM GUAM TO IDAHO. THE DIFFERENCE TO BE PAID BY ME DIRECTLY TO DEAKS.-"

THE LEGAL ISSUE RAISED BY THE FOREGOING IS WHETHER THE GOVERNMENT HAS FULLY MET ITS OBLIGATION TO MR. MCNUTT UNDER 5 U.S.C. 73B-3.

THERE WOULD APPEAR TO BE NO QUESTION BUT THAT THE UNITED STATES DISBURSED ON MR. MCNUTT'S ACCOUNT AT HIS REQUEST, UNDER HIS INSTRUCTION AND FOR REASONS PERSONAL TO HIM AN AMOUNT EQUAL TO THE VALUE OF FIRST CLASS ROUND TRIP AIR TRANSPORTATION BY A USUALLY TRAVELED ROUTE BETWEEN GUAM AND IDAHO. LIKEWISE, IT SEEMS CLEAR THAT MR. MCNUTT HAS PAID FROM PERSONAL FUNDS THE DIFFERENCE BETWEEN THE ROUND TRIP COSTS TO IDAHO AND THE INDIRECT TRAVEL COSTS.

THE STATUTORY PROVISIONS CONTAINED IN 5 U.S.C. 73B-3 WERE REQUIRED BY LAW TO BE IMPLEMENTED BY REGULATIONS PRESCRIBED BY THE PRESIDENT. UNDER AN APPROPRIATE DELEGATION OF AUTHORITY FROM THE PRESIDENT THE DIRECTOR, BUREAU OF THE BUDGET, PROMULGATED THE REQUIRED REGULATIONS IN BUREAU OF THE BUDGET CIRCULAR NO. A-4, MAY 2, 1955.

SECTION 27 (B) OF THAT CIRCULAR READS IN PERTINENT PART AS FOLLOWS:

"TRAVEL ALLOWANCE. AN ELIGIBLE EMPLOYEE SHALL BE ALLOWED TRAVEL EXPENSES, INCLUDING PER DIEM IN LIEU OF SUBSISTENCE, FOR HIMSELF AND TRANSPORTATION EXPENSES FOR HIS IMMEDIATE FAMILY FROM HIS POST OF DUTY OUTSIDE THE CONTINENTAL UNITED STATES TO THE PLACE OF HIS ACTUAL RESIDENCE AT THE TIME OF HIS APPOINTMENT OR TRANSFER TO A POST OF DUTY OUTSIDE THE CONTINENTAL UNITED STATES (HEREINAFTER REFERRED TO IN THIS SECTION AS - PLACE OF ACTUAL RESIDENCE-), AND FROM SUCH PLACE OF ACTUAL RESIDENCE TO THE SAME OR ANOTHER POST OF DUTY OUTSIDE THE CONTINENTAL UNITED STATES. SUCH EXPENSES SHALL BE SUBJECT TO THE PROVISIONS OF THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS. * * *"

SECTION 3.3 OF THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS IN EFFECT AT THE TIME OF THE TRAVEL PROVIDED:

"INDIRECT-ROUTE OR INTERRUPTED TRAVEL. -- IN CASE A PERSON FOR HIS OWN CONVENIENCE TRAVELS BY AN INDIRECT ROUTE OR INTERRUPTS TRAVEL BY DIRECT ROUTE, THE EXTRA EXPENSE WILL BE BORNE BY HIMSELF. REIMBURSEMENT FOR EXPENSES SHALL BE BASED ONLY ON SUCH CHARGES AS WOULD HAVE BEEN INCURRED BY A USUALLY TRAVELED ROUTE. WHEN TRANSPORTATION REQUESTS ARE USED, THEY SHOULD BE ISSUED ONLY FOR THAT PORTION OF THE EXPENSE PROPERLY CHARGEABLE TO THE GOVERNMENT, AND THE EMPLOYEE SHOULD PAY THE ADDITIONAL PERSONAL EXPENSE TO THE CARRIER IN CASH, INCLUDING THE FEDERAL TRANSPORTATION TAX.'

IN VIEW OF THE PROVISIONS OF THE STATUTE AND THE REGULATIONS QUOTED AND NOTWITHSTANDING THE ACTUAL DETAILS OF THE TRANSACTION BY WHICH THE ROUND- THE-WORLD TICKETS WERE PROCURED, NO OFFICER OR EMPLOYEE OF THE TRUST TERRITORY WAS CLOTHED WITH AUTHORITY TO OBLIGATE THE GOVERNMENT TO FURNISH TRANSPORTATION AT A COST IN EXCESS OF THAT REQUIRED FOR TRAVEL BY "A USUALLY TRAVELED ROUTE.'

IT IS ASSUMED THAT THE ROUND-THE-WORLD TRANSPORTATION TICKETS FURNISHED BY DEAK AND CO. TO MR. MCNUTT WAS A PACKAGE TRANSACTION AND CALLED FOR TRANSPORTATION TO BE FURNISHED BY VARIOUS CARRIERS OVER DIFFERENT SEGMENTS OF THE ROUND-THE-WORLD TRIP. IT WAS ONLY A COINCIDENCE THAT THE FAILURE OF MR. MCNUTT'S TRANSPORTATION OCCURRED WITH RESPECT TO A SEGMENT OF HIS CONTINUOUS JOURNEY WHICH OTHERWISE CORRESPONDED TO A PART OF A USUALLY TRAVELED ROUTE FOR WHICH THE GOVERNMENT PAID THE TRANSPORTATION COSTS. BELIEVE THAT THE FALLACY OF MR. MCNUTT'S CONTENTION MAY BE ILLUSTRATED BY AN ASSUMED HYPOTHETICAL SITUATION, E.G., THAT THE CARRIER TICKETED TO FURNISH MR. MCNUTT AND HIS FAMILY TRANSPORTATION FROM LONDON TO NEW YORK HAD FAILED TO OPERATE. WE CANNOT PERCEIVE THAT THE HAPPENING OF THAT HYPOTHETICAL EVENT WOULD HAVE CREATED ANY LEGAL LIABILITY ON THE PART OF THE GOVERNMENT TO REIMBURSE HIM FOR OUT-OF-POCKET EXPENSES INCURRED BY HIM TO PURCHASE OTHER TRANSPORTATION AND WE CANNOT DISTINGUISH IN LAW BETWEEN THE ASSUMED AND THE ACTUAL EVENT. THE FACT REMAINS THAT HAD IT NOT BEEN FOR THE REQUEST OF THE EMPLOYEE FOR INDIRECT TRAVEL FOR PERSONAL REASONS THE EXCESS COSTS WOULD NOT HAVE BEEN INCURRED.

THUS, ON THE RECORD BEFORE US IT APPEARS THAT THE GOVERNMENT HAS FULLY DISCHARGED ITS OBLIGATION TO MR. MCNUTT UNDER 5 U.S.C. 73B-3 AND WE FIND NO LAWFUL BASIS FOR PAYING THE ADDITIONAL AMOUNT NOW CLAIMED BY HIM. THEREFORE, THE QUESTION PRESENTED BY THE DEPUTY ASSISTANT SECRETARY'S LETTER MUST BE ANSWERED IN THE NEGATIVE.

IN THE MATTER OF TRANSOCEAN AIRLINES, INC., BANKRUPT, IN BANKRUPTCY NO. 58240, STILL PENDING BEFORE THE UNITED STATES DISTRICT FOR NORTHERN DISTRICT OF CALIFORNIA, OUR UNDERSTANDING IS THAT THERE HAS BEEN NO DISTRIBUTION OF ASSETS OR RECOVERY BY THE GOVERNMENT ON ITS PROOF OF CLAIM.

IF ANY AMOUNT IN THAT PROCEEDING IS CLAIMED BY THE GOVERNMENT ON ACCOUNT OF MR. MCNUTT'S LOSS, HIS ENTITLEMENT, IF ANY, TO PARTICIPATE IN THE PROCEEDS OF ANY RECOVERY WOULD BE FOR ADJUDICATION IF AND WHEN SUCH RECOVERY IS MADE.