B-156913, JUN. 24, 1968

B-156913, JUN. 24, 1968

TO LIEUTENANT COLONEL FRANK BERRISH:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 7, 1967, REQUESTING AN ADVANCE DECISION AS TO WHETHER IT WOULD BE PROPER FOR YOU TO MAKE PAYMENT ON A VOUCHER (CONSISTING OF FCUSA FORMS 20-41 AND 20-43, INCLOSURES 1 AND 2 RESPECTIVELY, RECEIVED WITH YOUR LETTER), COVERING THE AMOUNTS OF RETIRED PAY WITHHELD PURSUANT TO THE PROVISIONS OF 38 U.S.C. 3203 (A) (1), IN THE CASES OF TWO MENTALLY INCOMPETENT RETIRED ENLISTED MEMBERS OF THE ARMY, BOTH OF WHOM ARE NOW DECEASED. YOUR REQUEST FOR DECISION WAS ALLOCATED D. O. NUMBER A986 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE AND WAS RECEIVED HERE FROM THE OFFICE OF THE COMPTROLLER OF THE ARMY WITH TRANSMITTAL LETTER DATED FEBRUARY 7, 1968.

THE FIRST OF THE ENLISTED MEN CONCERNED, STAFF SERGEANT ADD SHIVERS, WAS PLACED ON THE RETIRED LIST OF THE ARMY AUGUST 31, 1946. ON AUGUST 26, 1953, LETTERS OF GUARDIANSHIP WERE ISSUED TO B. E. WALKER AS GUARDIAN OF ADD SHIVERS, INCOMPETENT, BY THE COUNTY COURT OF MADISON COUNTY, TENNESSEE.

IT APPEARS THAT IN APRIL 1964 THE DEPARTMENT OF THE ARMY DISCOVERED THAT SHIVERS, WHO HAD NO WIFE, CHILD, OR DEPENDENT PARENT, WAS RECEIVING HOSPITAL CARE AT THE EXPENSE OF THE VETERANS ADMINISTRATION AND THAT ONE- HALF OF HIS RETIRED PAY SHOULD HAVE BEEN WITHHELD EFFECTIVE FROM JUNE 1, 1962, AS PROVIDED IN 38 U.S.C. 3203 (A) (1) AND (B) (1). IT IS REPORTED THAT SHIVERS' GUARDIAN REFUNDED ONE-HALF OF THE RETIRED PAY WHICH HAD BEEN PAID TO HIM FOR THE PERIOD JUNE 1, 1962, TO MARCH 31, 1965, INCLUSIVE, AND THAT RETIRED PAY AT THE REDUCED ONE-HALF RATE WAS IN EFFECT FROM APRIL 1, 1965, TO MARCH 28, 1966, INCLUSIVE, THE DATE OF SHIVERS' DEATH.

IT FURTHER APPEARS THAT THE AMOUNT OF RETIRED PAY DUE SHIVERS FOR THE PERIOD MARCH 1 TO 28, 1966, WAS PAID TO H. T. ETHERIDGE, JR., UPON HIS APPLICATION AS EXECUTOR OF THE ESTATE OF ADD SHIVERS (LETTERS TESTAMENTARY WERE ISSUED TO MR. ETHERIDGE ON APRIL 2, 1966, BY THE COUNTY COURT OF MADISON COUNTY, TENNESSEE). IT IS STATED THAT THERE IS NO RECORD OF THE DISPOSITION MADE BY THE EXECUTOR OF THE ASSETS IN THE DECEDENT'S ESTATE.

THE OTHER ENLISTED MEMBER, STAFF SERGEANT JOHN S. TIPTON, WAS PLACED ON THE RETIRED LIST OF THE ARMY ON FEBRUARY 15, 1926. ON APRIL 16, 1951, THE BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, LOS ANGELES, CALIFORNIA, WAS APPOINTED GUARDIAN OF THE ESTATE OF JOHN S. TIPTON, AN INCOMPETENT PERSON. TIPTON DIED ON NOVEMBER 18, 1964, AND IT APPEARS THAT UNTIL NOTICE OF HIS DEATH WAS RECEIVED THE DEPARTMENT OF THE ARMY HAD NO KNOWLEDGE OF THE FACT THAT TIPTON WHO, LIKE SHIVERS, HAD NO WIFE, CHILD, OR DEPENDENT PARENT, HAD BEEN RECEIVING HOSPITAL CARE AT THE EXPENSE OF THE VETERANS ADMINISTRATION. THE FAILURE TO WITHHOLD ONE-HALF OF TIPTON'S RETIRED PAY AS REQUIRED BY THE PROVISIONS OF 38 U.S.C. 3203 (A) (1) AND (B) (1) RESULTED IN AN OVERPAYMENT EXTENDING FROM SEPTEMBER 1, 1958, TO OCTOBER 31, 1964, THE PERIOD WHEN HE HAD NO DEPENDENTS. HOWEVER, THE AMOUNT SO OVERPAID WAS REFUNDED ON MAY 24, 1967, BY BALDO M. KRISTOVICH, AS PUBLIC ADMINISTRATOR OF THE DECENDENT'S ESTATE (UNDER APPOINTMENT ISSUED JUNE 25, 1965, BY THE SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES). THERE APPEARS TO BE NO RECORD OF THE DISPOSITION MADE BY THE PUBLIC ADMINISTRATOR OF THE ASSETS IN THIS DECEDENT'S ESTATE.

THE FIRST TWO SENTENCES IN THE FOURTH PARAGRAPH OF YOUR LETTER ARE AS FOLLOWS:

"4. IN BOTH CASES, THE ONE-HALF RATE OF RETIRED PAY REFUNDED AND WITHHELD APPEARS NOW TO BE PAYABLE IN ACCORDANCE WITH THE RULING OF THE COMPTROLLER GENERAL OF THE UNITED STATES IN DECISION B-156913, DATED 14 JULY 1967. WAS DECIDED THAT RETIRED PAY SO WITHHELD IN THE CASE OF DECEASED RETIRED MEMBERS WHO WERE INCOMPETENT WAS FOR DISTRIBUTION UNDER THE PROVISIONS OF 10 U.S. CODE 2771, ON THE SAME BASIS AS FOR COMPETENT MEMBERS, PREVIOUSLY DECIDED IN 40 COMP. GEN. 666.'

YOU POINT OUT THAT SINCE THE RETIRED PAY WITHHELD WHERE THE MEMBER CONCERNED REMAINS INCOMPETENT DOES NOT BECOME PAYABLE UNTIL DEATH, THERE OFTEN ACCUMULATES A SUBSTANTIAL AMOUNT OF WITHHELD AND UNPAID RETIRED PAY. THE AMOUNT OF $4,724.50 HAS BEEN WITHHELD AND ACCUMULATED IN THE CASE OF ADD SHIVERS AND $7,704.94 IN THE CASE OF JOHN S. TIPTON. SPECIFIC CLAIM FOR THE AMOUNT OF THE RETIRED PAY SO WITHHELD AND ACCUMULATED HAS BEEN RECEIVED IN EITHER CASE. IT IS ADDED THAT NO ADMINISTRATIVE ACTION HAS BEEN TAKEN TO REOPEN THE FINAL SETTLEMENTS OF RETIRED PAY WHICH HAVE BEEN MADE IN THESE TWO CASES SINCE IT SEEMS LIKELY THAT BY NOW THE EXECUTOR IN THE ONE CASE AND THE PUBLIC ADMINISTRATOR IN THE OTHER CASE HAVE BEEN DULY DISCHARGED FROM THEIR RESPONSIBILITIES IN THE MATTER OF ADMINISTERING THESE TWO ESTATES.

IN VIEW OF CLAUSES (5) AND (6) OF SECTION 2771 (A), TITLE 10, U.S. CODE, THE FIRST QUESTION PRESENTED IS "WHETHER EFFORT SHOULD BE MADE TO DETERMINE IN WHOSE INTEREST THE LETTERS OF ADMINISTRATION WERE TAKEN OUT" AND THE SECOND QUESTION IS "WHETHER PAYMENT SHOULD BE LIMITED, TO PREVENT ESCHEAT TO A STATE OF RETIRED PAY FUNDS WHEN THERE IS NOT EVEN REMOTE OR COLLATERAL KIN TO WHICH SUCH FUNDS COULD PASS.' IN CONNECTION WITH THESE TWO QUESTIONS THE OBSERVATION IS MADE THAT THERE DOES NOT APPEAR TO BE ANY REQUIREMENT TO PREVENT ESCHEAT IN A CASE WHERE THE FULL RATE OF RETIRED PAY PROPERLY HAS BEEN PAID TO THE GUARDIAN OF AN INCOMPETENT VETERAN AND THE ENTIRE AMOUNT THEREOF SUBSEQUENTLY IS DISTRIBUTED BY THE ADMINISTRATOR OR EXECUTOR OF THE DECEASED MEMBER'S ESTATE.

FOUR ADDITIONAL QUESTIONS ARISING FROM THE STATUTORY PROVISIONS WHICH BECAME EFFECTIVE DECEMBER 1, 1959, BARRING A LUMP-SUM PAYMENT OF ACCUMULATED VETERAN'S COMPENSATION OR RETIREMENT PAY WITHHELD IN THE CASE OF A DECEASED INCOMPETENT RETIRED MEMBER WHO HAS NEITHER WIFE, CHILD, NOR DEPENDENT PARENT ARE SET FORTH IN THE SIXTH PARAGRAPH OF YOUR LETTER AS FOLLOWS:

"SINCE SECTION 2 OF THE AMENDING ACT OF 7 AUGUST 1959, FIRST INSERTING THE PROHIBITION AGAINST PAYMENT OF THE LUMP SUM SO WITHHELD AT THE DEATH OF AN INCOMPETENT MEMBER, HAS BEEN IN EFFECT FROM 1 DECEMBER 1959 "/A) DOUBT EXISTS AS TO WHETHER THE DECISION OF 14 JULY 1967 IS FOR APPLICATION RETROACTIVE TO 1 DECEMBER 1959 OR IS PROSPECTIVE IN NATURE ONLY FOR THOSE MEMBERS DECEASED ON OR AFTER 14 JULY 1967. "/B) IF RETROACTIVE, MAY SETTLED CASES BE REOPENED ON THE BASIS OF CLAIMS FOR UNPAID RETIRED PAY SUBMITTED AT TIME OF DEATH, NOTWITHSTANDING THAT IN CASES SUCH AS THESE IN QUESTION THE ADMINISTRATOR'S APPOINTMENT MAY HAVE SINCE BEEN TERMINATED; "/C) OR, ON THE BASIS OF NEW CLAIMS SUBMITTED ON THE CLAIMANT'S OWN COGNIZANCE OF AMOUNTS NOW PAYABLE? "/D) AND, SHOULD PAYMENT IN ALL CASES BE MADE WITHOUT LIMITATIONS TO GIVE THE GOVERNMENT A GOOD ACQUITTANCE OF THE AMOUNT INVOLVED?

THE STATUTORY PROVISIONS GIVING RISE TO THE ADMINISTRATIVE PROBLEMS OUTLINED ABOVE ARE CONTAINED IN SECTION 3203 (RELATING TO HOSPITALIZED VETERANS AND ESTATES OF INCOMPETENT INSTITUTIONALIZED VETERANS), TITLE 38, U.S. CODE, AND IN SECTION 2771 (FINAL SETTLEMENTS OF ACCOUNTS; DECEASED MEMBERS), TITLE 10, U.S.C.

SUBSECTION (B) (1) OF SECTION 3203, TITLE 38, U.S.C. (PUBLIC LAW 85 857, SEPTEMBER 2, 1958, 72 STAT. 1235), WAS AMENDED BY SECTION 2, PUBLIC LAW 86 -146, AUGUST 7, 1959, 73 STAT. 298, TO PROVIDE AS FOLLOWS:

"WHERE ANY VETERAN HAVING NEITHER WIFE, CHILD, NOR DEPENDENT PARENT IS BEING FURNISHED HOSPITAL TREATMENT, INSTITUTIONAL OR DOMICILIARY CARE BY THE VETERANS' ADMINISTRATION, AND IS RATED BY THE VETERANS' ADMINISTRATION IN ACCORDANCE WITH REGULATIONS AS BEING INCOMPETENT BY REASON OF MENTAL ILLNESS, THE PENSION, COMPENSATION, OR RETIREMENT PAY OF SUCH VETERAN SHALL BE SUBJECT TO THE PROVISIONS OF SUBSECTION (A) OF THIS SECTION; HOWEVER, NO PAYMENT OF A LUMP SUM HEREIN AUTHORIZED SHALL BE MADE TO THE VETERAN UNTIL AFTER THE EXPIRATION OF SIX MONTHS FOLLOWING A FINDING OF COMPETENCY AND IN THE EVENT OF THE VETERAN'S DEATH BEFORE PAYMENT OF SUCH LUMP SUM NO PART THEREOF SHALL BE PAYABLE.'

SUBSECTION (B) (1) AS THUS AMENDED BECAME EFFECTIVE ON DECEMBER 1, 1959, AND THE LANGUAGE ABOVE UNDERSCORED (NOT PREVIOUSLY CONTAINED IN THAT PROVISION OF LAW) REFLECTS THE CONGRESSIONAL INTENT TO DENY A LUMP SUM PAYMENT TO ANYONE OF THE ACCUMULATED PENSION, COMPENSATION, OR RETIREMENT PAY IN THE CASE OF A MENTALLY INCOMPETENT VETERAN WHOSE STATUS COMES WITHIN THE PURVIEW OF THE QUOTED STATUTORY PROVISIONS AND WHO DIES BEFORE SUCH LUMP SUM PAYMENT HAS BEEN MADE TO HIM. COMPARE THE SIMILAR LANGUAGE (HAVING A SIMILAR PURPOSE) WHICH WAS RETAINED WITHOUT SUBSTANTIVE CHANGE IN SUBSECTION (B) (2) OF SECTION 3203 AS AMENDED BY THE SAME ACT, PUBLIC LAW 86-146. SECTION 6 OF PUBLIC LAW 86-211, AUGUST 29, 1959, 73 STAT. 435, WHICH BECAME EFFECTIVE JULY 1, 1960, REMOVED THE TERM "PENSION" FROM THE LANGUAGE OF SUBSECTIONS (A) (1) AND (B) (1) OF SECTION 3203 AND HENCE AFTER JUNE 30, 1960, ONLY VETERANS' COMPENSATION AND RETIREMENT PAY REMAINED SUBJECT TO THOSE PROVISIONS OF LAW.

ON JUNE 10, 1966, THE COURT OF CLAIMS RENDERED ITS DECISION IN THE CASE OF CHARLES M. BERKEY V. UNITED STATES, 176 CT. CL. 1, A CASE DIRECTLY INVOLVING THE LEGAL EFFECT OF THE PROHIBITION CONTAINED IN 38 U.S.C. 3203 (B) (1). THE COURT HELD THAT PAYMENT TO THE PLAINTIFF OF THE RETIREMENT PAY WHICH HAD BEEN WITHHELD FROM HIS FATHER, A RETIRED MENTALLY INCOMPETENT MEMBER OF THE ARMY WHOSE STATUS AT DATE OF DEATH WAS WITHIN THE SCOPE OF SECTION 3203 (B) (1), WAS PROPER NOTWITHSTANDING THE SPECIFIC LANGUAGE TO THE CONTRARY CONTAINED IN THE CITED STATUTORY PROVISIONS. THE COURT EXPRESSED THE VIEW THAT IT COULD NOT HAVE BEEN THE INTENT OF CONGRESS TO DISCRIMINATE AGAINST DECEASED RETIRED MENTALLY INCOMPETENT MEMBERS OF THE ARMED FORCES BY BARRING PAYMENT OF WITHHELD RETIREMENT PAY TO THE SURVIVING SON IN SUCH A SITUATION EVEN THOUGH THE PLAIN AND SPECIFIC LANGUAGE OF SECTION 3203 (B) (1) PRESCRIBES EXACTLY SUCH A RESULT.

RECENTLY OUR ATTENTION HAS BEEN CALLED TO THE FACT THAT THE PROPER LEGAL FORCE AND EFFECT TO BE ACCORDED TO THE PHRASE "AND IN THE EVENT OF THE VETERAN'S DEATH BEFORE PAYMENT OF SUCH LUMP SUM NO PART THEREOF SHALL BE PAYABLE" CONTAINED IN 38 U.S.C. 3203 (B) (1) IS ONCE AGAIN A MATTER UNDER JUDICIAL CONSIDERATION. SEE THE CASE OF UNITED STATES OF AMERICA V. ESTATE OF JOHN NICHOLAS LORIMER, DECEASED, NOW PENDING IN THE DISTRICT COURT OF THE UNITED STATES FOR THE DISTRICT OF COLUMBIA, CIVIL ACTION NO. 206-67, JANNA FILANDER WIRE, ADMINISTRATRIX.

IN SUCH CIRCUMSTANCES, IT HAS BEEN CONCLUDED THAT UNTIL FINAL JUDICIAL ACTION BASED ON THE MERITS OF THE MATTER HAS BEEN COMPLETED IN THE LORIMER CASE NO ATTEMPT SHOULD BE MADE EITHER IN THE SHIVERS OR TIPTON CASES OR IN ANY OTHER SIMILAR CASE INVOLVING THE PROVISIONS OF 38 U.S.C. 3203 (B) (1), TO SECURE THE ADDITIONAL INFORMATION OUTLINED IN QUESTION 1. SINCE THE LORIMER CASE PRESENTS FOR JUDICIAL DETERMINATION BY THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA THE SAME LEGAL ISSUE WITH RESPECT TO THE PROVISIONS OF SECTION 3203 (B) (1) AS WAS RULED ON BY THE COURT OF CLAIMS IN THE BERKEY CASE, IT DOES NOT APPEAR APPROPRIATE AT THIS TIME TO ENDEAVOR TO RESPOND TO QUESTION 2 OR TO THE ADDITIONAL QUESTIONS (A), (B), (C) AND (D).

ENCLOSED IS A COPY OF LETTER OF TODAY, B-156913, TO THE SECRETARY OF DEFENSE SUGGESTING THAT ALL ADMINISTRATIVE ACTION BASED ON THE CONCLUSIONS REACHED IN THE DECISION OF JULY 14, 1967, 47 COMP. GEN. 25, BE SUSPENDED UNTIL THE JUDICIAL PROCEEDINGS IN THE LORIMER CASE ARE FINALLY SETTLED.