B-126399, DEC. 20, 1960

B-126399, DEC. 20, 1960

TO LIEUTENANT COLONEL R. H. MACPHERSON, FC:

YOUR LETTER OF OCTOBER 31, 1960, FORWARDED HERE BY THE OFFICE OF CHIEF OF FINANCE UNDER DO NO. 540, ALLOCATED BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE, REQUESTS AN ADVANCE DECISION ON THE PROPRIETY OF PAYMENT ON A VOUCHER IN FAVOR OF LIEUTENANT COLONEL JOSEPH L. MADDEN, O 275 184, IN THE AMOUNT OF $365.53, REPRESENTING RETIRED PAY WITHHELD FROM HIM FOR THE MONTH OF NOVEMBER 1960, BECAUSE OF THE PROVISIONS OF SECTION 212 (A) OF THE ECONOMY ACT OF JUNE 30, 1932, AS AMENDED, 5 U.S.C. 59A.

IT APPEARS THAT COLONEL MADDEN WAS CERTIFIED FOR PAYMENT OF DISABILITY RETIREMENT PAY EFFECTIVE SEPTEMBER 28, 1946, UNDER THE PROVISIONS OF SECTION 5 OF THE ACT OF APRIL 3, 1939, 53 STAT. 557. IT FURTHER APPEARS THAT THE OFFICER HAS MAINTAINED A DE JURE STATUS IN A RESERVE COMPONENT OF THE ARMED FORCES WHICH WAS EXTENDED FOR AN INDEFINITE PERIOD UNDER THE ARMED FORCES RESERVE ACT OF 1952, 66 STAT. 481. THE RECORDS SHOW THAT ON MAY 8, 1957, THE UNITED STATES COURT OF CLAIMS ENTERED A JUDGMENT IN HIS FAVOR IN THE CASE OF JOSEPH L. MADDEN V. UNITED STATES, NO. 454-55 (138 CT.CL. 873), IN THE AMOUNT OF $26,535.29, REPRESENTING RETIRED PAY FOR THE PERIOD NOVEMBER 30, 1949, TO JANUARY 31, 1957. THAT JUDGMENT WAS ENTERED ON A STIPULATION BETWEEN THE PARTIES ON THE BASIS OF THE COURT OF CLAIMS DECISION IN THE CASE OF TANNER V. UNITED STATES, 129 CT.CL. 792, CERTIORARI DENIED, 350 U.S. 842.

IT IS REPORTED THAT LIEUTENANT COLONEL MADDEN IS PRESENTLY EMPLOYED BY THE GENERAL SERVICES ADMINISTRATION AT AN ANNUAL SALARY OF $11,935, IN VIEW OF WHICH RETIREMENT PAY PAYMENTS HAVE BEEN DISCONTINUED OCTOBER 31, 1960, DUE TO THE LIMITATIONS IMPOSED BY SECTION 212 OF THE ACT OF JUNE 30, 1932, AS AMENDED. IT IS FURTHER REPORTED THAT THE MEMBER HAS MADE CLAIM THAT HIS RETIRED PAY IS NOT SUBJECT TO REDUCTION AND THAT THE DOCTRINE OF "RES JUDICATA" IS APPLICABLE IN HIS CASE.

ON THE BASIS OF THE DECISIONS IN THE CASE OF TANNER V. UNITED STATES, 129 CT.CL. 792, AND THE RELATED CASES OF THE UNITED STATES V. TOMA, 148 F.SUPP. 489, IN THE UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF CALIFORNIA, CENTRAL DIVISION, AND THE MADDEN CASE (138 CT.CL. 873), IT WAS CONCLUDED BY OUR OFFICE THAT THE LANGUAGE CONTAINED IN THE ACT OF JULY 1, 1947, 61 STAT. 239, COVERING "ANY MEMBER OF THE OFFICERS' RESERVE CORPS" ENTITLED TO RETIRED PAY "UNDER THE LAWS RELATING TO THE OFFICERS' RESERVE CORPS," EXEMPTS MEMBERS OF THAT ORGANIZATION RETIRED UNDER CERTAIN LAWS, INCLUDING THE ACT OF APRIL 3, 1939, FROM THE DUAL COMPENSATION RESTRICTIONS OF SECTION 212 OF THE ACT OF JUNE 30, 1932, AS AMENDED. SEE 35 COMP. GEN. 497 AND 36 ID. 808. IT WAS FURTHER CONCLUDED AS A RESULT OF THE DECISION IN THE CASES OF SARLES V. UNITED STATES, 141 CT.CL. 709, AND BOWMAN V. UNITED STATES, CT.CL.NO. 108-58, JANUARY 14, 1959 (NATHAN REED WARTHEN, PLAINTIFF NO. 5), THAT FORMER MEMBERS OF THAT ORGANIZATION WHO BECAME ENTITLED TO RETIRED PAY "BY REASON OF SERVICE IN A RESERVE COMPONENT" ARE EXEMPT FROM SUCH DUAL COMPENSATION RESTRICTIONS. SEE 38 COMP. GEN. 741.

ON NOVEMBER 7, 1956, IN THE CASE OF LEONARD V. UNITED STATES, 136 CT.CL. 686, CERTIORARI DENIED, 353 U.S. 976, A CASE IN WHICH EXEMPTION FROM SECTION 212 OF THE ECONOMY ACT WAS CLAIMED, THE COURT OF CLAIMS HELD THAT THE PLAINTIFF, A MEMBER OF THE ARMY OF THE UNITED STATES WITHOUT COMPONENT WHO HAD BEEN AWARDED RETIREMENT PAY UNDER THE 1939 ACT, WAS NOT ENTITLED TO SUCH EXEMPTION, STATING THAT "BECAUSE OF HIS (LEONARD-S) ABSOLUTE DISCHARGE FROM THE ARMED SERVICES BY REASON OF PHYSICAL DISABILITY PLAINTIFF IS NOT A MEMBER OF THE OFFICERS' RESERVE CORPS.' THE COURT FURTHER STATED THAT THE "PLAINTIFF, UNLIKE TANNER, HAS NOT SINCE HIS DISCHARGE BEEN A MEMBER OF A RESERVE COMPONENT.' THUS, THE COURT HAS HELD THAT WHILE FORMER MEMBERSHIP IN THE OFFICERS' RESERVE CORPS IS A BASIS FOR EXEMPTION UNDER THE ACT OF JULY 1, 1947, FROM THE RESTRICTIONS OF THE ECONOMY ACT IF ENTITLEMENT TO RETIRED PAY IS BASED ON SERVICE IN A RESERVE COMPONENT, IT HAS ALSO HELD THAT FORMER MEMBERSHIP IN THE ARMY OF THE UNITED STATES WITHOUT COMPONENT FURNISHES NO BASIS FOR SUCH EXEMPTION. OUR DECISION OF MAY 1, 1959, B-135719, 38 COMP. GEN. 741, WE HELD (QUOTING FROM THE SYLLABUS) THAT:

"THE HOLDING IN THE CASE OF HENRY L. BOWMAN, ET AL. V. UNITED STATES, C.CLS.NO. 108-58 (REFERRED TO AS THE WARTHEN CASE), WHICH FURTHER EXTENDED THE RULE IN THE TANNER CASE, 129 C.CLS. 792, TO EXEMPT FORMER RESERVE OFFICERS OF RESERVE COMPONENTS OF THE UNIFORMED SERVICES AS DISTINGUISHED FROM DE JURE RESERVE OFFICERS FROM THE DUAL COMPENSATION RESTRICTIONS IN SECTION 212 OF THE ECONOMY ACT OF 1932, 5 U.S.C. 59A, WILL BE FOLLOWED IN THE SETTLEMENT OF SIMILAR CLAIMS FOR RETIRED PAY UNDER TITLE III OF THE ARMY AND AIR FORCE VITALIZATION AND RETIREMENT EQUALIZATION ACT OF 1948 BY FORMER RESERVE MEMBERS FOR PERIODS WHILE THEY WERE CONCURRENTLY EMPLOYED BY THE FEDERAL GOVERNMENT, HOWEVER, PENDING FURTHER LITIGATION OF THE ISSUE IN THE LEONARD CASE, 136 C.CLS. 686, WHICH DEALS WITH A DISCHARGED FORMER OFFICER OF THE ARMY OF THE UNITED STATES ENTITLED TO RECEIVE DISABILITY RETIRED PAY UNDER THE ACT OF APRIL 3, 1939, 10 U.S.C. 456 (1946 EDITION), SUCH CLAIMS WILL NOT BE ALLOWED.'

THE COURT OF CLAIMS AGAIN CONSIDERED THE APPLICATION OF SECTION 212 OF THE ECONOMY ACT IN THE CASE OF PALMER V. UNITED STATES, CT.CL.NO. 356-58, DECIDED JANUARY 20, 1960. THE OFFICER THERE INVOLVED WAS APPOINTED AND COMMISSIONED IN THE ARMY OF THE UNITED STATES WITHOUT COMPONENT PURSUANT TO THE PROVISIONS OF THE ACT OF SEPTEMBER 22, 1941. ON JULY 12, 1946, HE WAS RELIEVED FROM ACTIVE DUTY AND RETIRED FOR PHYSICAL DISABILITY UNDER SECTION 5 OF THE ACT OF APRIL 3, 1939. IN ACCORDANCE WITH THE RULES OF OUR OFFICE IN EFFECT AT THE TIME, HE WAS ALLOWED THE RETIREMENT PAY FOR THAT PART OF HIS PERIOD OF EMPLOYMENT DURING WHICH HE HAD A STATUS IN THE ARMY OF THE UNITED STATES, BUT, ON THE BASIS OF THE RULE IN THE LEONARD CASE, HE WAS DENIED RETIREMENT PAY FOR THE REMAINING PERIOD COVERED BY HIS CLAIM. IN DECIDING THE PALMER CASE THE COURT STATED THAT THE PLAINTIFF HAD NO STATUS IN THE RESERVE COMPONENTS OF THE ARMED FORCES AND THAT HE "DID NOT RECEIVE HIS RETIREMENT PAY FROM LAWS RELATING THERETO.' THE COURT CONCLUDED THAT THE PLAINTIFF'S POSITION DID NOT PLACE HIM WITHIN THE EXEMPTION TO SECTION 212 OF THE ECONOMY ACT, AS AMENDED, UNDER THE RULE OF THE TANNER CASE AND LIKE CASES.

OUR DECISION OF AUGUST 26, 1960, B-123382, IS BASED ON THE DECISION OF THE COURT OF CLAIMS IN THE PALMER CASE AND RELATES PRIMARILY TO THE RIGHTS OF RESERVE OFFICERS. IT IS OUR VIEW THAT THE DECISION OF THE COURT IN THAT CASE IS TANTAMOUNT TO A CONCLUSION, AT LEAST IN THE CIRCUMSTANCES IN THAT CASE, THAT THE ACT OF APRIL 3, 1939, IS NOT A LAW RELATING TO THE RESERVE COMPONENTS OF THE ARMED FORCES WITHIN THE MEANING OF THE RULE IN THE TANNER CASE. SEE, ALSO, THE CONCURRING OPINION IN THAT CASE WRITTEN BY JUDGE MADDEN. THE DECISION IN THE PALMER CASE CREATES DOUBT AS TO THE PROPRIETY OF PAYING RETIREMENT PAY UNDER THE 1939 ACT, AS AMENDED, TO A RESERVIST WHERE SUCH PERSON IS OTHERWISE WITHIN THE DUAL COMPENSATION RESTRICTIONS OF SECTION 212 OF THE ACT OF JUNE 30, 1932. AS STATED, WE FIND NO BASIS FOR DISTINGUISHING BETWEEN A MEMBER OF THE ARMY OF THE UNITED STATES SUCH AS THE PLAINTIFF IN THAT CASE, AND A RESERVIST PAID RETIREMENT PAY UNDER THE PROVISIONS OF THE 1939 ACT.

THEREFORE, WE CONCLUDED IN OUR DECISION OF AUGUST 26, 1960, THAT, UNTIL SUCH TIME AS THE POSITION OF THE COURT IS CLARIFIED, FURTHER PAYMENTS OF THIS TYPE SHOULD NOT BE MADE TO RESERVISTS UNDER THE 1939 ACT. SINCE LIEUTENANT COLONEL MADDEN WAS CERTIFIED FOR RETIREMENT PAY UNDER THE PROVISIONS OF THE 1939 ACT, IT APPEARS THAT HIS CASE IS GOVERNED BY OUR DECISION OF AUGUST 26, 1960, AND THE DUAL COMPENSATION RESTRICTIONS OF SECTION 212 OF THE ECONOMY ACT OF JUNE 30, 1932, AS AMENDED, SHOULD BE APPLIED TO HIM.

IT SEEMS CLEAR THAT THE DOCTRINE OF RES JUDICATA OR ESTOPPEL BY JUDGMENT DOES NOT APPLY SO AS TO FIX THE OFFICER'S RIGHTS TO RETIRED PAY FOR THE PERIOD AFTER JUDGMENT, SINCE THAT JUDGMENT WAS BASED ON A STIPULATION OF THE PARTIES. IN OTHER WORDS, SINCE IN SUCH A CASE THE COURT HAS NOT CONSIDERED THE MATTER ON ITS MERITS, THE JUDGMENT IS NOT RES JUDICATA FOR A PERIOD SUBSEQUENT TO ITS DATE. SEE 35 COMP. GEN. 339, 341; ABARR V. UNITED STATES, 139 CT.CL. 748; JOHN J. AMSDEN ET AL. V. UNITED STATES, CT.CL.NO. 134-54, OPINION OF JULY 15, 1959, IN THE CASE OF FRANK M. MONDEAU (PLAINTIFF NO. 19), AND OPINION OF JUNE 8, 1960, IN THE CASE OF JAMES B. MCCARTHY, (PLAINTIFF NO. 17); ROBERT CLARK ET AL. V. UNITED STATES, CT.CL.NO. 45-55, DECIDED JUNE 8, 1960. COMPARE 36 COMP. GEN. 501, AND 39 COMP. GEN. 797. IN VIEW OF THE DECISION OF JANUARY 20, 1960, BY THE COURT OF CLAIMS IN THE CASE OF PALMER V. UNITED STATES, CT.CL.NO. 356- 58, WE FEEL THAT WE CANNOT AUTHORIZE SETTLEMENT OF CLAIMS OF THE TYPE HERE INVOLVED UNTIL THERE HAS BEEN FURTHER JUDICIAL CLARIFICATION OF THE MATTER.

ACCORDINGLY, PAYMENT ON THE VOUCHER RECEIVED WITH YOUR LETTER IS NOT PROPER AND SUCH VOUCHER, WITH RELATED PAPERS, WILL BE RETAINED HERE.