B-93525, JUNE 28, 1950, 29 COMP. GEN. 520

B-93525: Jun 28, 1950

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PAY - RETIRED - RESERVE PERSONNEL - STATUS OF DE FACTO RETIRED OFFICERS AS AFFECTING RETENTION OF ERRONEOUS PAYMENTS WHERE CERTAIN SERVICE WAS INCLUDED ERRONEOUSLY IN DETERMINING THE ENTITLEMENT TO RETIREMENT AND IN COMPUTING THE RATE OF RETIRED PAY OF RESERVISTS OR FORMER RESERVISTS TRANSFERRED TO THE ARMY OF THE UNITED STATES RETIRED LIST UNDER TITLE III OF THE ARMY AND AIR FORCE VITALIZATION AND RETIREMENT EQUALIZATION ACT OF 1948. 1950: REFERENCE IS MADE TO LETTER OF MARCH 2. REQUESTING A DECISION ON CERTAIN QUESTIONS INVOLVING ERRONEOUS PAYMENTS OF RETIRED PAY MADE TO APPROXIMATELY 454 RESERVE OFFICERS OF THE ARMY WHO WERE PLACED ON THE ARMY OF THE UNITED STATES RETIRED LIST ESTABLISHED UNDER SECTION 301 (A).

B-93525, JUNE 28, 1950, 29 COMP. GEN. 520

PAY - RETIRED - RESERVE PERSONNEL - STATUS OF DE FACTO RETIRED OFFICERS AS AFFECTING RETENTION OF ERRONEOUS PAYMENTS WHERE CERTAIN SERVICE WAS INCLUDED ERRONEOUSLY IN DETERMINING THE ENTITLEMENT TO RETIREMENT AND IN COMPUTING THE RATE OF RETIRED PAY OF RESERVISTS OR FORMER RESERVISTS TRANSFERRED TO THE ARMY OF THE UNITED STATES RETIRED LIST UNDER TITLE III OF THE ARMY AND AIR FORCE VITALIZATION AND RETIREMENT EQUALIZATION ACT OF 1948, SUCH PERSONS MAY NOT BE CONSIDERED AS IN THE STATUS OF DE FACTO RETIRED OFFICERS AND, THEREFORE, MAY NOT RETAIN THE ERRONEOUS PAYMENTS OF RETIRED PAY MADE TO THEM.

ASSISTANT COMPTROLLER GENERAL YATES TO THE SECRETARY OF THE ARMY, JUNE 28, 1950:

REFERENCE IS MADE TO LETTER OF MARCH 2, 1950, FROM YOUR PREDECESSOR, REQUESTING A DECISION ON CERTAIN QUESTIONS INVOLVING ERRONEOUS PAYMENTS OF RETIRED PAY MADE TO APPROXIMATELY 454 RESERVE OFFICERS OF THE ARMY WHO WERE PLACED ON THE ARMY OF THE UNITED STATES RETIRED LIST ESTABLISHED UNDER SECTION 301 (A), TITLE III, OF THE ACT OF JUNE 29, 1948, 62 STAT. 1087, SUCH ERRONEOUS PAYMENTS HAVING RESULTED FROM THE CREDITING OF CERTAIN SERVICE, FOR DETERMINING ENTITLEMENT TO RETIREMENT AND FOR COMPUTING THE RATE OF RETIRED PAY, WHICH UNDER THE SAID ACT MAY NOT BE COUNTED FOR SUCH PURPOSES.

IT IS STATED THAT THE TWO CLASSES OF CASES INVOLVED ARE ILLUSTRATED BY THE FOLLOWING REPRESENTATIVE CASES:

ONE CATEGORY OF CASES IS ILLUSTRATED BY THE RETIREMENT OF LT. COL. PERCY A. WALTON, O-135485. IN THIS CASE, REPRESENTATIVE OF OTHERS, NON- FEDERALLY RECOGNIZED SERVICE IN THE NATIONAL GUARD OF A STATE WHICH WAS NOT FEDERAL SERVICE AS DEFINED IN SECTION 306 OF TITLE III OF SAID ACT, WAS INCLUDED AS SERVICE IN DETERMINING THE ELIGIBILITY OF COLONEL WALTON TO RETIREMENT. WITHOUT THIS NON-FEDERALLY RECOGNIZED NATIONAL GUARD SERVICE, THIS OFFICER HAS NOT SUFFICIENT SERVICE TO QUALIFY FOR RETIREMENT UNDER TITLE III OF THE ABOVE CITED ACT.

ANOTHER CATEGORY OF CASES IS ILLUSTRATED BY THE RETIREMENT OF MAJOR EDWARD R. THORNE, O-141951, WHO IS NOW 73 YEARS OF AGE AND A PARALYTIC. IT IS STATED HE IS ENTIRELY DEPENDENT ON THE GOVERNMENT RETIREMENT PAY FOR HIS MEANS OF LIVELIHOOD AND MEDICAL CARE. THE OVERPAYMENT OF MAJOR THORNE AMOUNTED TO $508.66. IN THIS CLASS OF CASES LIKEWISE NON-FEDERALLY RECOGNIZED SERVICE IN THE NATIONAL GUARD OF A STATE WAS SUBSEQUENTLY DETERMINED NOT TO BE SERVICE WHICH COULD BE COUNTED AS FEDERAL SERVICE UNDER SECTION 306 OF THE ACT CITED SUPRA. THE OFFICERS IN THIS CLASS OF CASES HAD SUFFICIENT SERVICE, EXCLUDING THE STATED NATIONAL GUARD INELIGIBLE SERVICE, TO QUALIFY FOR RETIREMENT, BUT THE INCLUSION OF THIS INELIGIBLE SERVICE ENTERED INTO THE COMPUTATION OF AND INCREASED THEIR RETIRED PAY WHEN PLACED ON THE ARMY OF THE UNITED STATES RETIRED LIST. THE OVERPAYMENTS TO PERSONS IN THIS CATEGORY RANGE FROM A FEW CENTS TO $808.64 IN ONE CASE.

IT IS FURTHER STATED THAT UPON DISCOVERY OF THE ADMINISTRATIVE ERROR STEPS PROMPTLY WERE TAKEN TO REVOKE THE RETIREMENT ORDER AND TO DISCONTINUE THE PAYMENT OF RETIRED PAY ENTIRELY, OR TO RECOMPUTE THE RATE OF RETIRED PAY, AS APPROPRIATE, AND THAT COLLECTION ACTION HAS BEEN INITIATED IN MANY OF THE CASES INVOLVED. IN THAT CONNECTION IT IS SUGGESTED THAT COLLECTION OF THE ERRONEOUS PAYMENTS--- WHICH WERE DUE TO ADMINISTRATIVE ERROR WITHOUT FAULT ON THE PART OF THE RESERVISTS OR FORMER RESERVISTS CONCERNED--- WILL RESULT IN A DISTINCT HARDSHIP TO MANY OF THE PERSONS INVOLVED.

DECISION IS REQUESTED AS TO WHETHER THE PERSONS WHO WERE NOT QUALIFIED TO BE PLACED ON THE RETIRED LIST WITH RETIRED PAY MAY RETAIN THE ERRONEOUS PAYMENTS AS IN THE STATUS OF DE FACTO RETIRED OFFICERS, OR WHETHER ALL THE PERSONS INVOLVED ARE AUTHORIZED TO RETAIN THE ERRONEOUS PAYMENTS UNDER AUTHORITY OF THE DECISION OF THIS OFFICE REPORTED IN 25 COMP. GEN. 802. ALSO ATTENTION WAS INVITED TO DECISIONS: A-22060 DATED APRIL 21, 1928; A- 22060 DATED SEPTEMBER 14, 928; 3 COMP. GEN. 823; 5 ID. 70; 8 ID. 73; AND 29 ID. 14.

IT IS WELL SETTLED THAT A PERSON DISCHARGING THE DUTIES OF AN OFFICE UNDER COLOR OF AUTHORITY IS ENTITLED TO RETAIN THE PAY RECEIVED BY HIM IN GOOD FAITH, AS AN OFFICER DE FACTO, AND THAT WHERE IT HAS BEEN REFUNDED TO THE GOVERNMENT HE IS ENTITLED TO RECOVER IT BACK. UNITED STATES V. ROYER, 268 U.S. 394. AN OFFICER PLACED ON THE RETIRED LIST OF THE ARMY, IN APPARENT COMPLIANCE WITH THE LAW, IS AN OFFICER DE FACTO, IF NOT DE JURE, AND HENCE MONEY PAID TO, AND RECEIVED BY, HIM IN GOOD FAITH AS RETIRED PAY CANNOT BE RECOVERED BACK BY THE GOVERNMENT. BADEAU V. UNITED STATES, 130 U.S. 439. HOWEVER, THERE CAN BE NO OFFICER, EITHER DE JURE OR DE FACTO, IF THERE BE NO OFFICE TO FILL. SEE NORTON V. SHELBY COUNTY, 118 U.S. 425, 441; 43 AM. JUR. 228, SECTION 475; ANNOTATION IN 15 L.R.A. ( N.S.) 94. IN ORDER TO BE ENTITLED TO RECEIVE RETIRED PAY UNDER TITLE III OF THE ACT OF JUNE 29, 1948, SUPRA, IT IS NOT NECESSARY THAT A PERSON BE A MEMBER OF ANY COMPONENT OF THE ARMED SERVICES, IT BEING SUFFICIENT THAT SUCH PERSON MEET THE STATUTORY REQUIREMENTS AS TO AGE AND PAST SERVICE, AND THAT HE FILE APPLICATION FOR SUCH PAY. SEE 28 COMP. GEN. 510 AND COMPARE 23 ID. 284, 286; 29 ID. 220. THE SAID ACT OF JUNE 29, 1948, MAKES PROVISION ONLY FOR THE PAYMENT OF RETIRED PAY TO RESERVISTS OR FORMER RESERVISTS WHO MEET CERTAIN REQUISITES AND IT DOES NOT PROVIDE THAT SUCH PERSONS SO RECEIVING RETIRED PAY SHALL PERFORM, OR BE SUBJECT TO ORDERS TO PERFORM, ANY SERVICE IN THE ARMED FORCES. THE STATUS OF SUCH PERSONS IS ESSENTIALLY DIFFERENT FROM THE STATUS OF AN OFFICER OR ENLISTED MAN ON THE RETIRED LIST OF THE REGULAR ARMY OR THE REGULAR NAVY. CF. 23 COMP. GEN. 102. IN DECISION DATED DECEMBER 17, 1948, 28 COMP. GEN. 367, AND DECISION DATED APRIL 19, 1949, 28 COMP. GEN. 588, IT WAS CONCLUDED THAT MEMBERS OF THE OFFICERS RESERVE CORPS AND NAVAL RESERVE TRANSFERRED TO THE RETIRED LIST PURSUANT TO TITLE III OF THE ACT OF JUNE 29, 1948, ARE NOT HOLDING OFFICES WITHIN THE MEANING OF THE ACT OF JULY 31, 1894, 28 STAT. 205, AS AMENDED, 5 U.S.C. 62. HENCE, THIS OFFICE WOULD NOT BE JUSTIFIED IN CONCLUDING THAT PERSONS TRANSFERRED TO THE RETIRED LIST ESTABLISHED BY TITLE III OF THE ACT OF JUNE 29, 1948, WITH RETIRED PAY, HOLD AN OFFICE FOR THE PURPOSES OF THE ESTABLISHED PRINCIPLES RELATING TO DE FACTO OFFICERS.

IN 25 COMP. GEN. 802, THE QUESTION CONSIDERED WAS THE EFFECT UPON PRIOR RETIREMENT PAYMENTS, MADE BY THE VETERANS ADMINISTRATION, OF A REDETERMINATION BY THE SECRETARY OF WAR AS TO THE ELIGIBILITY OF THE OFFICERS CONCERNED FOR SUCH PAYMENTS. UNDER THE PROVISIONS OF THE STATUTE THERE INVOLVED (ACT OF APRIL 3, 1939, 53 STAT. 557, AS AMENDED, 10 U.S.C. 456) AND THE EXECUTIVE REGULATIONS ISSUED PURSUANT THERETO, ELIGIBILITY FOR RETIREMENT PAY WAS DEPENDENT UPON A DETERMINATION BY THE SECRETARY OF WAR THAT THE DISABILITY WAS INCURRED "IN LINE OF DUTY" FROM DISEASE OR INJURY WHILE ON ACTIVE DUTY. THERE, UPON THE BASIS OF ADDITIONAL EVIDENCE NOT CONSIDERED AT THE TIME THE ORIGINAL DETERMINATIONS OF ELIGIBILITY WERE MADE BY THE SECRETARY OF WAR, IT SUBSEQUENTLY WAS DETERMINED THAT THE OFFICERS HAD NOT INCURRED THE DISABILITY "IN LINE OF DUTY" AND HENCE WERE NOT ENTITLED TO THE RETIREMENT PAY. IT WAS CONCLUDED THAT THE ORIGINAL DETERMINATIONS WERE IN THE NATURE OF AWARDS MADE BY COMPETENT ADMINISTRATIVE AUTHORITY ON THE BASIS OF AVAILABLE EVIDENCE AND THAT HENCE, IN VIEW OF THE ESTABLISHED PRINCIPLE THAT CORRECTION OF AN AWARD CANNOT BE MADE RETROACTIVE SO AS TO DISTURB VESTED RIGHTS UNDER A RULING OR AWARD MADE BY COMPETENT AUTHORITY, THE PROPRIETY OF THE PAYMENTS MADE PRIOR TO THE REDETERMINATION NEED NOT BE QUESTIONED.

AS INDICATED ABOVE, UNDER THE PROVISIONS OF THE STATUTE HERE INVOLVED ANY PERSON IS ENTITLED TO RECEIVE RETIRED PAY WHO, UPON ATTAINING OR HAVING ATTAINED THE AGE OF SIXTY YEARS AND HAVING PERFORMED THE REQUISITE SERVICE, FILES APPLICATION THEREFOR; THAT IS, NO DETERMINATION INVOLVING THE EXERCISE OF DISCRETION IS REQUIRED TO BE MADE BY ANY PUBLIC OFFICIAL AS A CONDITION PRECEDENT TO ELIGIBILITY TO RECEIVE THE RETIRED PAY, BUT THE RIGHT TO RETIRED PAY ACCRUES WHEN THE STATUTORY REQUISITES AS TO AGE, SERVICE, AND THE FILING OF AN APPLICATION ARE MET. HENCE, THE PRINCIPLE FOLLOWED IN DECISION 25 COMP. GEN. 802 IS NOT FOR APPLICATION IN THE CASES HERE CONSIDERED. CF. 8 COMP. GEN. 31, 33. THE ABOVE-CITED DECISIONS DATED APRIL 21 AND SEPTEMBER 14, 1928 (A-22060), PERTAINED TO WAR RISK INSURANCE AND DO NOT CONSTITUTE A PRECEDENT FOR ABANDONING ATTEMPTS TO RECOUP THE ERRONEOUS PAYMENTS HERE INVOLVED. AND WITH THE EXCEPTION OF DECISION DATED JULY 13, 1949, 29 COMP. GEN. 14, THE OTHER DECISIONS CITED IN THE SUBMISSION RELATED TO DE FACTO OFFICERS AND EMPLOYEES AND HENCE ARE NOT PERTINENT HERE. THE SAID DECISION OF JULY 13, 1949, PERTAINED TO OVERPAYMENTS OF RETIREMENT PAY (ACT OF APRIL 3, 1939, AS AMENDED, SUPRA) TO PERSONS PROPERLY ELIGIBLE TO RECEIVE THE RETIREMENT PAY. IT THERE WAS CONCLUDED THAT THE PRINCIPLE OF THE DECISION IN 25 COMP. GEN. 802 IS NOT APPLICABLE TO OVERPAYMENTS OF RETIREMENT PAY AND THAT, SINCE THE AMOUNT OF THE RETIREMENT PAY DUE IS SPECIFICALLY FIXED BY STATUTE AND IS DEPENDENT UPON THE GRADE AND LENGTH OF SERVICE OF THE INDIVIDUAL CONCERNED, COLLECTION OF THE OVERPAYMENTS WAS REQUIRED. IN THAT CONNECTION, SEE, ALSO, 29 COMP. GEN. 75.

THERE HAS NOT BEEN FOUND ANY STATUTE OR PRECEDENT WHICH WOULD FORM A PROPER BASIS FOR CONCLUDING, IN EITHER OF THE CLASSES OF CASES HERE INVOLVED, THAT THE RECIPIENTS OF THE ERRONEOUS PAYMENTS AND OVERPAYMENTS OF RETIRED PAY ARE ENTITLED TO RETAIN SUCH PAYMENTS. IT IS WELL SETTLED THAT THE UNITED STATES CAN NEVER BE BOUND OR ESTOPPED BY AN ERRONEOUS PAYMENT MADE THROUGH ADMINISTRATIVE ERROR BY ITS OFFICERS, WITH OR WITHOUT JURISDICTION, AND WHETHER MADE UNDER MISTAKE OF FACT OR MISTAKE OF LAW, AND THAT PARTIES RECEIVING SUCH ERRONEOUS PAYMENTS ACQUIRED NO RIGHT THERETO BUT ARE LIABLE EX AEQUO ET BONO TO REFUND THEM. SEE UNITED STATES V. BURCHARD, 125 U.S. 176; UNITED STATES V. WURTS, 303 U.S. 414; WISCONSIN CENTRAL RAILROAD V. UNITED STATES, 164 U.S. 190, AND THE CASES COLLECTED AND DISCUSSED IN UNITED STATES V. SUTTON CHEMICAL COMPANY, 11 F.2D 24. NOTED IN 29 COMP. GEN. 14, THIS OFFICE HAS NO AUTHORITY TO WAIVE COLLECTION OF PAYMENTS MADE IN CONTRAVENTION OF STATUTE. ACCORDINGLY, I AM CONSTRAINED TO HOLD THAT COLLECTION OF THE OVERPAYMENTS AND ERRONEOUS PAYMENTS HERE INVOLVED IS REQUIRED, THE POSSIBILITY OR PROBABILITY THAT COLLECTION OF SUCH OVERPAYMENTS AND ERRONEOUS PAYMENTS MAY RESULT IN HARDSHIP IN SOME CASES CONSTITUTING NO LEGAL BASIS FOR ANY DIFFERENT CONCLUSION. IN VIEW OF THE FOREGOING, AN ANSWER TO THE OTHER QUESTIONS PRESENTED IS UNNECESSARY.