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B-144258, NOV. 25, 1960

B-144258 Nov 25, 1960
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RETIRED: WE HAVE. IT APPEARS THAT YOU WERE CERTIFIED FOR RETIRED PAY EFFECTIVE JUNE 30. WHO SUFFER DISABILITY OR DEATH IN LINE OF DUTY FROM DISEASE OR INJURY WHILE SO EMPLOYED SHALL BE DEEMED TO HAVE BEEN IN THE ACTIVE SERVICE DURING SUCH PERIOD AND SHALL BE IN ALL RESPECTS ENTITLED TO RECEIVE THE SAME PENSIONS. HOSPITAL BENEFITS AS ARE NOW OR MAY HEREAFTER BE PROVIDED BY LAW OR REGULATION FOR OFFICERS AND ENLISTED MEN OF CORRESPONDING GRADES AND LENGTH OF SERVICE OF THE REGULAR ARMY. THE MAJORITY OF THE STOCK WHICH IS OWNED BY THE UNITED STATES. AS YOU WILL NOTE FROM THE ENCLOSED DECISION OF AUGUST 26. IT WAS FURTHER CONCLUDED. 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.

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B-144258, NOV. 25, 1960

TO LIEUTENANT COLONEL FRED L. MCGINN, RETIRED:

WE HAVE, BY REFERENCE FROM THE ASSISTANT TO THE PRESIDENT, A LETTER DATED OCTOBER 22, 1960, WRITTEN ON YOUR BEHALF BY MRS. SARA H. MCGINN, CONCERNING THE APPLICATION OF OUR DECISION OF AUGUST 26, 1960, B 123382, COPY ENCLOSED, TO YOUR RETIRED PAY SITUATION.

IT APPEARS THAT YOU WERE CERTIFIED FOR RETIRED PAY EFFECTIVE JUNE 30, 1947, UNDER THE PROVISIONS OF SECTION 5 OF THE ACT OF APRIL 3, 1939, 53 STAT. 557, AS AMENDED. THAT SECTION PROVIDES AS FOLLOWS (QUOTING FROM 10 U.S.C. 456, 1946 ED.):

"ALL OFFICERS, WARRANT OFFICERS, AND ENLISTED MEN OF THE ARMY OF THE UNITED STATES, OTHER THAN THE OFFICERS AND ENLISTED MEN OF THE REGULAR ARMY, IF CALLED OR ORDERED INTO THE ACTIVE MILITARY SERVICE BY THE FEDERAL GOVERNMENT FOR EXTENDED MILITARY SERVICE IN EXCESS OF THIRTY DAYS, OTHER THAN FOR SERVICE WITH THE CIVILIAN CONSERVATION CORPS, AND WHO SUFFER DISABILITY OR DEATH IN LINE OF DUTY FROM DISEASE OR INJURY WHILE SO EMPLOYED SHALL BE DEEMED TO HAVE BEEN IN THE ACTIVE SERVICE DURING SUCH PERIOD AND SHALL BE IN ALL RESPECTS ENTITLED TO RECEIVE THE SAME PENSIONS, COMPENSATION, RETIREMENT PAY, AND HOSPITAL BENEFITS AS ARE NOW OR MAY HEREAFTER BE PROVIDED BY LAW OR REGULATION FOR OFFICERS AND ENLISTED MEN OF CORRESPONDING GRADES AND LENGTH OF SERVICE OF THE REGULAR ARMY, INCLUDING FOR THEIR DEPENDENTS THE BENEFITS OF SECTION 903 OF THIS TITLE.'

SECTION 202 (A) OF THE ECONOMY ACT OF JUNE 30, 1932, AS AMENDED, 5 U.S.C. 59A, CONCERNING RECEIPT OF RETIRED PAY AND CIVILIAN COMPENSATION, PROVIDES AS FOLLOWS:

"/A) AFTER JUNE 30, 1932, NO PERSON HOLDING A CIVILIAN OFFICE OR POSITION, APPOINTIVE OR ELECTIVE, UNDER THE UNITED STATES GOVERNMENT OR THE MUNICIPAL GOVERNMENT OF THE DISTRICT OF COLUMBIA OR UNDER ANY CORPORATION, THE MAJORITY OF THE STOCK WHICH IS OWNED BY THE UNITED STATES, SHALL BE ENTITLED, DURING THE PERIOD OF SUCH INCUMBENCY, TO RETIRED PAY FROM THE UNITED STATES FOR OR ON ACCOUNT OF SERVICES AS A COMMISSIONED OFFICER IN ANY OF THE SERVICES MENTIONED IN TITLE 37, AT A RATE IN EXCESS OF AN AMOUNT WHICH WHEN COMBINED WITH THE ANNUAL RATE OF COMPENSATION FROM SUCH CIVILIAN OFFICE OR POSITION, MAKES THE TOTAL RATE FROM BOTH SOURCES MORE THAN $10,000; AND WHEN THE RETIRED PAY AMOUNTS TO OR EXCEEDS THE RATE OF $10,000 PER ANNUM SUCH PERSON SHALL BE ENTITLED TO THE PAY OF THE CIVILIAN OFFICE OR POSITION OR THE RETIRED PAY, WHICHEVER HE MAY ELECT. AS USED IN THIS SECTION, THE TERM "RETIRED PAY" SHALL BE CONSTRUED TO INCLUDE CREDITS FOR ALL SERVICE THAT LAWFULLY MAY ENTER INTO THE COMPUTATION THEREOF.'

AS YOU WILL NOTE FROM THE ENCLOSED DECISION OF AUGUST 26, 1960, B 123382, IT HAS BEEN CONCLUDED 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 MADDEN V. UNITED STATES, 138 CT.CL. 873 (ENTERED ON STIPULATION BETWEEN THE PARTIES) 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 ECONOMY ACT. 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, DECIDED 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.

THE RECORD SHOWS THAT WHILE YOU HELD THE RANK OF SECOND LIEUTENANT IN THE OFFICERS' RESERVE CORPS ON JANUARY 31, 1942, YOU SERVED ON ACTIVE DUTY AS A MEMBER OF THE ARMY OF THE UNITED STATES WITHOUT COMPONENT AFTER THAT DATE UNTIL YOUR RETIREMENT IN JUNE 1947. WHILE YOUR APPOINTMENT IN THE ARMY OF THE UNITED STATES WITHOUT COMPONENT DID NOT AUTOMATICALLY TERMINATE YOUR RESERVE STATUS SUCH STATUS COULD NOT HAVE CONTINUED BEYOND APRIL 1, 1953, SINCE IT WAS NOT EXTENDED FOR AN INDEFINITE PERIOD UNDER SECTION 224 OF THE ARMED FORCES RESERVE ACT OF 1952, 66 STAT. 487. SEE 35 COMP. GEN. 504. IN ANY EVENT, IT APPEARS CLEAR THAT YOU WERE NOT RETIRED AS A MEMBER OF THE OFFICERS' RESERVE CORPS, BUT AS A MEMBER OF THE ARMY OF THE UNITED STATES WITHOUT COMPONENT, AND THAT YOU ARE RECEIVING RETIRED PAY AWARDED AS A RESULT OF A DISABILITY INCURRED WHILE SERVING IN THE LATTER CAPACITY AND NOT BY REASON OF YOUR STATUS AS A MEMBER OF THE OFFICERS' RESERVE CORPS. IT IS INDICATED THAT YOUR ARMY OF THE UNITED STATES STATUS WAS TERMINATED AT THE TIME OF YOUR RELEASE FROM ACTIVE DUTY IN 1947.

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 WHO, LIKE YOURSELF, WAS 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. 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 SECTION 212 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.

IN 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, LIKE YOURSELF, WAS APPOINTED AND COMMISSIONED IN THE ARMY OF THE UNITED STATES WITHOUT COMPONENT PURSUANT TO THE PROVISIONS OF THE ACT OF SEPTEMBER 22, 1941. 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 DECIDING THE PALMER CASE, THE COURT STATED THAT THE PLAINTIFF HAD NO STATUS IN A RESERVE COMPONENT OF THE ARMED FORCES AND THAT HE "DID NOT RECEIVE HIS RETIREMENT PAY FROM LAWS RELATING THERETO.' THE COURT CONCLUDED THAT HIS 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 MAINLY TO THE RIGHTS OF RESERVE OFFICERS. IT IS OUR VIEW THAT THE DECISION OF THE COURT IN THE PALMER 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. THE DECISION IN THE PALMER CASE CREATES DOUBT AS TO THE PROPRIETY OF PAYING RETIREMENT PAY UNDER THE 1939 ACT, AS AMENDED (NOW CODIFIED IN 10 U.S.C. 3687 AND 8687), TO RESERVISTS WHERE SUCH PERSONS ARE OTHERWISE WITHIN THE DUAL COMPENSATION RESTRICTIONS OF SECTION 212 OF THE ECONOMY ACT. WE FIND NO BASIS FOR DISTINGUISHING BETWEEN A MEMBER OF THE ARMY OF THE UNITED STATES, OR SIMILAR PERSONNEL OF THE AIR FORCE, PAID RETIREMENT PAY UNDER THE PROVISIONS OF THE 1939 ACT, AND A RESERVIST PAID UNDER THE SAME LAW. 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.

IT HAS BEEN REPORTED THAT YOU BECAME A MEMBER OF THE AIR FORCE RESERVE ON JANUARY 7, 1959, AND THAT YOU WERE PLACED ON THE RESERVE RETIRED LIST EFFECTIVE JANUARY 31, 1959. IF YOU PROPERLY MAY BE REGARDED AS A MEMBER OF A RESERVE COMPONENT AT THE PRESENT TIME, THE RETIRED PAY YOU ARE ENTITLED TO RECEIVE IS BEING PAID TO YOU UNDER THE 1939 ACT. AS STATED ABOVE, THE COURT OF CLAIMS HAS HELD THAT SUCH ACT IS NOT AN ACT RELATING TO RESERVE COMPONENTS INSOFAR AS SECTION 212 OF THE ECONOMY ACT IS CONCERNED. HENCE, IT SEEMS CLEAR THAT YOU ARE NOT WITHIN THE EXEMPTION OF SECTION 1 (B) OF THE ACT OF JULY 1, 1947, AS NOW CODIFIED IN SECTION 29 (C) OF THE ACT OF AUGUST 10, 1956, 5 U.S.C. 3OR (C). PAYMENTS OF THIS TYPE TO FORMER MEMBERS OF THE ARMY OF THE UNITED STATES HAVE ALWAYS BEEN REGARDED AS ERRONEOUS BY US AND THE LEONARD AND PALMER CASES SUPPORT THAT VIEW. HAVING BEEN CERTIFIED FOR RETIREMENT PAY UNDER THE PROVISIONS OF THE 1939 ACT, WHILE SERVING AS A MEMBER OF THE ARMY OF THE UNITED STATES, IT APPEARS THAT YOU ARE SUBJECT TO THE DUAL COMPENSATION RESTRICTIONS OF SECTION 212 OF THE ECONOMY ACT, AS AMENDED, AND IT APPEARS THAT YOU HAVE BEEN SO ADVISED BY THE DEPARTMENT OF THE AIR FORCE.

FOR YOUR INFORMATION, THERE ARE CASES NOW PENDING BEFORE THE COURT OF CLAIMS IN WHICH THE PLAINTIFFS ARE SEEKING JUDGMENT FOR MILITARY RETIREMENT PAY WITHHELD FROM THEM UNDER THE DUAL COMPENSATION RESTRICTIONS OF SECTION 212 OF THE ECONOMY ACT, THE BASIS FOR SUCH CLAIMS BEING THAT THE PLAINTIFFS HAD AN INACTIVE DUTY STATUS IN THE OFFICERS' RESERVE CORPS AT THE TIME OF RETIREMENT. SEE, FOR EXAMPLE, THE CASE OF WATMAN V. UNITED STATES, CT.CL. NO. 189-59, IN WHICH THE PLAINTIFF HAD AN INACTIVE STATUS AS A MEMBER OF THE OFFICERS' RESERVE CORPS AT THE TIME HE WAS CERTIFIED FOR RETIREMENT PAY UNDER THE 1939 ACT WHILE SERVING ON ACTIVE DUTY AS A MEMBER OF THE ARMY OF THE UNITED STATES WITHOUT COMPONENT. NO COLLECTION ACTION WILL BE TAKEN WITH RESPECT TO THE PAYMENTS YOU HAVE RECEIVED, PENDING THE FURTHER DECISION BY THE COURT OF CLAIMS.

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