Reporter's Statement of the Case 92 C. Cls. WILLIAM GEORGE SULLIVAN v. THE UNITED STATES [No. 45012. Decided November 12, 1940] On the Proofs Pay and allowances; retired Navy officer a civilian employe under the Economy Act.-Where plaintiff, a retired officer of the United States Navy, receiving retired pay of his rank, $2,160 per year, was employed as chief laundryman at the United States Naval Academy, drawing a salary of $2,000 per year, which salary was paid from the Naval Academy laundry fund, said fund being made up from amounts received from officers, instructors, and midshipmen, and not from appropriated moneys, and where the said Naval Academy laundry had been built, equipped and maintained by the United States Government, and was a facility owned and operated by the Government, it is held that the plaintiff, although not paid from appropriated funds, was paid from a fund belonging to the United States Government, derived from money collected for services rendered by the said facility of the Government, and plaintiff accordingly was a "person holding a civilian office or position under the United States Government" within the meaning of the Economy Act of June 30, 1932. * * The Reporter's statement of the case: Mr. Arthur Callahan for the plaintiff. Mr. L. R. Mehlinger, with whom was Mr. Assistant Attorney General Francis M. Shea, for the defendant. The court made special findings of fact as follows, upon the basis of an agreed statement of facts, which is all the evidence introduced in the case: 1. On December 27, 1921, plaintiff was transferred to the retired list of officers of the United States Navy for physical disability due to an incident of the service, with the rank of lieutenant, junior grade, with retired pay at the rate of $2,160 a year. Said disability was not incurred in combat with an enemy of the United States. 2. On December 24, 1924, after having passed a civil service examination, plaintiff entered the service at the Naval Academy under a probational appointment as assistant chief laundryman at $4.24 a day. On August 16, 1929, 154 Reporter's Statement of the Case he was appointed chief laundryman at $2,000 a year, and was holding that position on June 30, 1932. He was placed on indefinite furlough, effective July 1, 1932. 3. Prior to 1921 the position of chief laundryman was financed from the midshipmen's mess fund. During that year it was brought within the classified civil service and the employee holding that position was paid from appropriated funds. 4. In 1933 the appropriation for the operation of the laundry was reduced and it became necessary to reduce the number of civil service employees paid from such funds. On April 21, 1933, plaintiff was advised by the Secretary of the Navy as follows: On account of lack of funds you are hereby discharged without prejudice as Chief Laundryman, Group IV (a) at a salary of $2,000 per annum (eighthour employee), appropriation "Pay Naval Academy," to take effect at the close of business April 30, 1933, but he was subsequently reemployed as manager of the laundry and was paid from midshipmen's funds. 5. These funds were made up of checkages against the accounts of midshipmen and from monies received from officers and civilian instructors at the Naval Academy. These checkages were made quarterly for laundry, tailor, and barber services, and payment for the total amount so checked was made at the same time in the form of an exchange for cash check endorsed to the order of the activities concerned. The Government checks for laundry checkages and the funds received from officers and instructors for laundry services were deposited in a bank to the credit of the Naval Academy laundry. The Naval Academy laundry fund was not created by statute. No specific request was made by the General Accounting Office for an accounting to it of the accounts of the Naval Academy laundry fund and said fund was not audited by the General Accounting Office. During the period in question plaintiff was paid from these funds. 6. On October 31, 1935, the Superintendent of the Naval Academy stated in his report that non-civil service employees of the laundry were not protected by the United States Compensation Law but that they were protected by Reporter's Statement of the Case 92 C. Cls. the direct purchase of workmen's compensation from the Travelers' Insurance Company, the entire annual premium for which was paid from the laundry fund. Said employees were not, according to said report, entitled to civil service retirement, but retirement for them was provided by a contract with the Aetna Life Insurance Company, and 45 per cent of the annual premium for this insurance was paid by the laundry fund and the balance from the pay of said employees. 7. In a decision rendered March 29, 1938, the Comptroller General advised the Civil Service Commission that the midshipmen's laundry fund was equivalent to an appropriated fund and that the employees of the laundry paid therefrom were employees of the Government. On the same day the Comptroller General forwarded a copy of his decision to the Navy Department and advised that the position of manager of the Naval Academy Laundry appeared to be a civilian position "under the United States Government" within the meaning of section 212 of the Economy Act of June 30, 1932 (47 Stat. 406), and that unless plaintiff came within the exception, proper administrative action should be taken to limit his combined rate of retired pay and civilian compensation to $3,000 a year. On May 13, 1939, the Chief of the Bureau of Navigation advised the Secretary of the Navy that it was the understanding of the bureau that since the practice has been discontinued of checking midshipmen's accounts in payment of their laundry charges, no civilian employees at the Naval Academy are paid directly from midshipmen's funds but only by settlement of individual bills by the midshipmen just as officers and other naval personnel pay for services and material received. 8. By the Act of August 5, 1939, U. S. C., Title 34, sections 1106 and 1107 (53 Stat. 1210), it was provided that funds collected from the operation of the laundry at the Naval Academy should thereafter be accounted for as public monies and that all employees of said laundry, whether previously paid from appropriated monies or from receipts of the laundry, should thereafter be deemed to be Government employees. 154 Opinion of the Court 9. From July 1, 1939, to September 15, 1939, there were deducted and withheld from plaintiff's retired pay sums aggregating $2,645.83, representing amounts credited to plaintiff from April 1, 1938, to September 15, 1939, in excess of the $3,000 a year limitation prescribed by section 212 of the Economy Act. 10. If the combined rate of plaintiff's retired pay and civilian compensation was not subject to the provisions of section 212 of the Economy Act, there would be due plaintiff the sum of $2,645.83. The court decided that the plaintiff was not entitled to recover. WHITAKER, Judge, delivered the opinion of the court: On June 30, 1932, the plaintiff was a retired officer of the United States Navy entitled to retired pay at the rate of $2,160 a year. He was also a civil service employee, holding the position of chief laundryman at the United States Naval Academy, and drawing a salary of $2,000 a year. On this date Congress passed the Economy Act (47 Stat. 382). Section 212 (a) thereof provides: After the date of the enactment of this Act, 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 of 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 the Pay Adjustment Act of 1922 (U. S. C., 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 $3,000; Immediately after the passage of this Act, on July 1, 1932, the plaintiff was placed on indefinite furlough. Subsequently he was reemployed as manager of the laundry, but was paid not from appropriations to defray the expenses of the laundry, but from a fund known as the Naval Academy Laundry Fund. This fund was made up from amounts received from officers and instructors for laundry service Opinion of the Court 92 C. Cls. rendered by the Naval Academy laundry and from deductions from the pay and allowances of midshipmen for laundry service furnished. The question presented is whether or not the plaintiff after the date of his employment as manager of the laundry to be paid from this Naval Academy Laundry Fund was a "person holding a civilian office or position, * under the United States Government." * It was admitted on the argument that the Naval Academy laundry had been built and equipped by the United States Government for the purpose of furnishing laundry service to the officers, midshipmen, and employees at the Naval Academy. It was supported in part by appropriated funds, and in part from funds derived from charges made for laundry service furnished officers, midshipmen, and employees. It was a government facility owned and operated by the United States Government, and the plaintiff, although not paid from appropriated funds, was paid from a fund belonging to the United States Government, derived from money collected for services rendered by this facility of the United States Government. Under such facts we think there can be no doubt that plaintiff was a "person holding a civilian office or position under the United States Government." The fact that the Superintendent of the Naval Academy stated that non-civil-service employees of the laundry, of which plaintiff was one, were not protected by the United States Compensation Law and that they were not entitled to the civil service retirement benefits and the fact that the General Accounting Office had not asked for an accounting to it of the accounts of the Naval Academy Laundry Fund is not controlling. We think it clear that the funds were funds of the United States and that the plaintiff having been paid therefrom was a person holding a civilian position under the United States Government. It results that plaintiff is not entitled to recover. His petition will, therefore, be dismissed. It is so ordered. LITTLETON, Judge; GREEN, Judge; and WHALEY, Chief Justice, concur. |