B-143960, FEB. 14, 1961

B-143960, FEB. 14, 1961

TO CAPTAIN LORAN W. MACY, USAF, RETIRED:

REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 18, 1960, WHEREIN YOU HAVE INQUIRED AS TO WHETHER RETIRED PAY RECEIVED BY YOU PURSUANT TO THE PROVISIONS OF SECTION 5 OF THE ACT OF APRIL 3, 1939, AS AMENDED, 10 U.S.C. 456 (1946 ED.) FOR THE PERIOD APRIL 19, 1959, THROUGH JANUARY 31, 1960, MAY BE CONSIDERED UNDER OUR DECISION OF AUGUST 26, 1960, B-123382, 40 COMP. GEN. 136, AS HAVING BEEN MADE IN GOOD FAITH. YOU HAVE INDICATED THAT SUCH RETIRED PAY IS CURRENTLY BEING REPAID BY YOU.

BY OUR LETTER OF OCTOBER 17, 1960, B-143960, FOR REASONS THEREIN GIVEN, WE SUSTAINED THE DISALLOWANCE BY OUR CLAIMS DIVISION OF YOUR CLAIM FOR RETIRED PAY WHICH HAD BEEN AND IS BEING WITHHELD FROM PAYMENTS TO YOU BY VIRTUE OF YOUR EMPLOYMENT IN A CIVILIAN CAPACITY WITH THE FEDERAL GOVERNMENT. A COPY OF THE ABOVE DECISION OF AUGUST 26, 1960, WHICH SHOWS OUR POSITION WITH REGARD TO THE CASE OF PALMER V. UNITED STATES, CT.CL. NO. 356-58, DECIDED JANUARY 21, 1960, INVOLVING A FACTUAL SITUATION WHICH IN OUR OPINION PARALLELS YOUR CASE, WAS ENCLOSED WITH OUR LETTER OF OCTOBER 17, 1960. THE DECISION OF AUGUST 26, 1960, CONCLUDED WITH THE STATEMENT THAT, WHILE NO PAYMENTS OF RETIRED PAY KNOWN TO BE INCONSISTENT THEREWITH ARE AUTHORIZED TO BE MADE, OTHERWISE PROPER PAYMENTS MADE IN GOOD FAITH PRIOR TO NOVEMBER 1, 1960, AND PRIOR TO RECEIPT OF INFORMATION THAT SUCH PAYMENTS WOULD BE INCONSISTENT WITH THAT DECISION WOULD NOT BE QUESTIONED IN THE AUDIT OF DISBURSING OFFICERS' ACCOUNTS.

THE PAYMENTS REFERRED TO IN THE ABOVE DECISION OF AUGUST 26, 1960, ARE THOSE WHICH HAVE BEEN MADE TO RETIRED OFFICERS EMPLOYED AS CIVILIANS IN THE FEDERAL GOVERNMENT WHO ARE RECEIVING RETIREMENT PAY PURSUANT TO THE ACT OF APRIL 3, 1939, AND (1) WHO SERVED ON ACTIVE DUTY IN RESERVE COMPONENTS OF THE UNIFORMED SERVICES AS RESERVISTS OR IN THE NATIONAL GUARD OF THE UNITED STATES OR (2) WHO SERVED ON ACTIVE MILITARY DUTY UNDER TEMPORARY COMMISSIONS IN THE ARMY OF THE UNITED STATES, REGARDLESS OF WHETHER THEY HELD COMMISSIONS IN THE OFFICERS' RESERVE CORPS, PROVIDED THEY HAD A STATUS IN THE ARMY OF THE UNITED STATES AT THE TIME OF THEIR FEDERAL CIVILIAN EMPLOYMENT. IN OTHER WORDS, NONE OF OUR EARLIER DECISIONS OR THOSE OF THE COURTS EXTENDED THE RULE IN THE CASE OF TANNER V. UNITED STATES, 129 CT.CL. 792, TO RETIRED OFFICERS WHO, LIKE YOU, WHILE HOLDING COMMISSIONS IN THE OFFICER'S RESERVE CORPS, SERVED ON ACTIVE MILITARY DUTY UNDER TEMPORARY COMMISSIONS IN THE ARMY OF THE UNITED STATES (NOT AS RESERVE OFFICER) IMMEDIATELY BEFORE THEIR RETIREMENT UNDER THE ACT OF APRIL 3, 1939, AND WHO DID NOT HAVE A STATUS IN THE ARMY OF THE UNITED STATES (WITHOUT COMPONENT) AT THE TIME OF THEIR FEDERAL EMPLOYMENT.

YOUR STATUS AS A TEMPORARY COMMISSIONED OFFICER IN THE ARMY OF THE UNITED STATES TERMINATED PRIOR TO YOUR EMPLOYMENT BY THE FEDERAL GOVERNMENT IN A CIVILIAN CAPACITY BEGINNING APRIL 19, 1959. THUS, THERE WAS AT NO TIME ANY RULING OR DECISION OF THIS OFFICE OR THE COURTS WHICH WOULD SERVE TO EXEMPT YOU FROM THE RESTRICTION CONTAINED IN SECTION 212 OF THE ECONOMY ACT OF 1932, AS AMENDED, 5 U.S.C. 59A, AND UNDER SUCH CIRCUMSTANCE WE MUST HOLD THAT THE CONCLUDING PARAGRAPH OF OUR DECISION OF AUGUST 26, 1960, WITH REGARD TO "OTHERWISE PROPER PAYMENTS" DOES NOT ENCOMPASS YOUR CASE.

THE AIR FORCE ACCOUNTING AND FINANCE CENTER, DENVER, COLORADO, REPORTED BY LETTER OF FEBRUARY 29, 1960, THAT YOUR RETIRED PAY WAS REDUCED TO $139.16 PER MONTH EFFECTIVE JULY 1, 1959, AND THAT COLLECTION WAS MADE OF THE OVERPAYMENT OF $198.18 FOR THE PERIOD APRIL 19 THROUGH JUNE 30, 1959. IT IS ALSO REPORTED THAT SUBSEQUENTLY ALL AMOUNTS WITHHELD WERE REFUNDED TO YOU AND THE REDUCTION IN RETIRED PAY WAS MADE EFFECTIVE AS OF FEBRUARY 1, 1960. ON THE BASIS OF THE ABOVE, THE ACTION OF THE UNITED STATES AIR FORCE IN MAKING THE REDUCTION EFFECTIVE AS OF FEBRUARY 1, 1960, RATHER THAN APRIL 19, 1959, MUST BE VIEWED AS HAVING BEEN MADE UNDER AN INCORRECT INTERPRETATION AND APPLICATION OF THE THEN EXISTING CONTROLLING RULINGS AND DECISIONS AND, THEREFORE, THEIR PRESENT ACTION IN REQUIRING REPAYMENT OF THE AMOUNT INVOLVED IS JUSTIFIED AND PROPER.