
    ERNEST COLE ADAMS, ET AL. v. THE UNITED STATES [IN CASE OF JOHN EDWARD BIRNEY v. THE UNITED STATES]
    [No. 50338.
    Decided July 13, 1959]
    
      
      Mr. Thomas M. Gittings, Jr. for tlie plaintiff. Mr. Fred W. Shields and Messrs. King <& King were on the briefs.
    
      Mr. Arthur E. Fay, with whom, was Mr. Assistant Attorney General George Ooohran Doui, for the defendant. Mr. Kendall M. Barnes was on the brief.
   Madden, Judge,

delivered the, opinion of the court:

The plaintiff, John Edward Birney, is plaintiff No. 17 in the above-entitled case. The word “plaintiff” as used hereinafter will refer only to him.

The plaintiff, an enlisted man in the Navy, transferred to the Fleet Reserve on November 22,1920, with credit for exactly sixteen years’ service. As a member of the Fleet Reserve he received retainer pay of one-third of his active duty pay, which retainer pay was appropriate to his sixteen years of active service. He was recalled to active duty on September 2,1941, and served more than 5 years after that date, being released to inactive duty on December 9,1946. He was again paid retainer pay of one-third of his active duty pay as a chief petty officer, the rank in which he had served during his recalled tour of duty, his retainer pay still being computed as if he were a man with only sixteen years of service.

The Career Compensation Act of 1949, 63 Stat. 802, 829, 37 U.S.C. § 311, in its section 511, provides, so far as here relevant:

On and after October 1, 1949, (1) members of the uniformed services heretofore retired for reasons other than for physical disability, (2) members heretofore transferred to the Fleet Reserve or the Fleet Marine Corps Reserve * * * shall be entitled to receive retired pay, retirement pay, retainer pay, or equivalent pay, in the amount whichever is the greater, computed by one of the following methods: (a) The monthly retired pay, retainer pay, or equivalent pay in the amount authorized for such members and former members by provisions of law; in effect on the day immediately preceding October 12, 1949, or (b) monthly retired pay, retirement pay, retainer pay, or equivalent pay equal to 2y2 per centum of the monthly basic pay of the highest federally recognized rank, grade, or rating, whether under a permanent or temporary appointment, satisfactorily held, by such member or former member, as determined by the Secretary concerned, and which such member, former member, or person would be entitled to receive if serving on active duty in such rank, grade, or rating, multiplied by the number of years of active service creditable to him: * * *.

Effective October 1, 1949, the Navy Department paid the plaintiff retainer and retired pay computed by method (b) of section 511. This pay, $138.92 per month, was larger than the amount which the plaintiff would have received under a computation made according to method (a) of section 511. The (a) method of computation was based upon the rate of pay received by the man at the time of his active service, and the laws antedating the 1949 Act. The (b) method of computation was based upon the new rate of pay prescribed by the 1949 Act for the rank formerly held by the man when he was in active service. Both methods had additional “fringe” provisions which affected the retired pay.

The rates of basic pay prescribed by the Career Compensation Act were increased by four percent by section 1(a) of the Act of May 19, 1952, 66 Stat. 79, and section 2(a) made this percentage increase applicable to retired and retainer pay. Section 2(b) also increased by four percent the retired and retainer pay of those whose retired and retainer pay was being computed under method (a) of section 511. The plaintiff’s pay was, as we have seen, being computed under method (b) of section 511, and it was increased by four percent, and $138.92 to $144.48 per month. He was paid at this rate until March 31,1955.

On March 31,1955, Congress enacted the Career Incentive Act of 1955, 69 Stat. 18, which again increased the rates of pay set by the Career Compensation Act of 1949. Sections 5 and 6 of that Act, 69 Stat. 22-23, provided:

Sec. 5. Any person now or hereafter entitled to retired pay, retirement pay, retainer pay, or equivalent pay * * * computed at the rates prescribed in section 201(a) of the Career Compensation Act of 1949 shall be entitled to have his pay computed at the rates prescribed by that section, as amended by this Act. * * *
Sec. 6. Members and former members of the uniformed services who are entitled to receive retired pay, retirement pay, retainer pay, or equivalent pay under laws in effect prior to October 1, 1949, shall be entitled to an increase of 6 per centum of the retired pay, retirement pay, retainer pay, or equivalent pay, to which they are now entitled.

The plaintiff’s pay was then computed according to section 5 of the 1955 Act, and was set at $159.71, because the active duty pay of a chief petty officer had been raised to $304.20 by the 1955 Act, and the plaintiff, under method (b) of section 511 of the Career Compensation Act, was paid 2% percent of that increased amount, multiplied by his years of active service.

On January 9, 1951, in Sanders v. United States, 120 C. Cls. 501, this court held that under the statutes existing prior to the Career Compensation Act of 1949, men originally transferred to the Fleet Eeserve with more than 16 but less than 20 years of service, but later recalled and serving sufficient further time to make their aggregate service 20 years or more, were entitled to receive, as retainer pay, the half pay of 20-year men and were not limited to the one-third pay of 16-year men. But this decision was of no advantage to the plaintiff because on July 9, 1951, in Liberty v. United States, 120 C. Cls. 274, this court held that men who had originally transferred to the Fleet Eeserve with exactly 16 years of service, not “more than 16 years,” were not covered by the Sanders doctrine. However, on October 2, 1956, this court in Abad, et al. v. United States, 136 C. Cls. 404, 144 F. Supp. 951, held that men with exactly 16 years of service prior to their original transfer to the Fleet Eeserve were covered by the Sanders doctrine.

The plaintiff was, as we have seen, one of those with exactly 16 years of service prior to his original transfer to the Fleet Eeserve. After our Abad decision in 1956, the Navy Department was requested to compute the amount of additional retainer and retired pay due the plaintiff. It did so, back to December 9, 1946, the date of his last release to inactive duty. His half pay, as distinguished from the one-third pay which he received under the laws existing before the enactment of the Career Compensation Act of 1949, was $27.50 a month larger, entitling him to $926.76 more for the period prior to the effective date, October 1, 1949, of the Career Compensation Act.

Of importance is the fact that his half-pay as recomputed, $140.25 per month, was $1.33 per month larger than the $138.92 which he had received under method (b) of section 511 of the Career Compensation Act. That Act, quoted above, said that he should be paid according to method (a) or method (b), whichever produced the larger pay. In the recomputation the Navy Department used method (a) because that produced the larger pay. Then came the 1952 Act, increasing the retired pay, by whichever method computed, by four percent. That, of course, did not affect the relation of the two methods of computation, the (a), method still producing the larger sum.

Next came the Career Incentive Act of 1955, of which sections 5 and 6 are quoted above. It differed from the 1952 Act in that it increased basic active duty pay, on which retired and retainer pay computed by method (b) of the 1949 Act and section 5 of the 1955 Act would be proportioned, not by a flat percentage, but by setting specific dollar amounts. But as to those paid under method (a) of the 1949 Act, section 6 of the 1955 Act simply increased the retired and retainer pay by six percent. Under this Act the plaintiff would have received $5.10 more per month by using the (b) method of computation.

The plaintiff’s retired and retainer pay, under the statutes antedating the Career Compensation Act of 1949, as those statutes were interpreted by this court in Sanders in 1951 and in Abad in 1956, was larger than the pay to which he would have been entitled under the new method of computation provided, as an alternative, but not as an elective, in the 1949 Act. Under that Act, as we have seen, the man was to receive whichever was the larger of the sums produced by the computations under methods (a) and (b). Leaving aside, for the moment, the fact that the Navy Department in 1949 erroneously interpreted the pre-1949 statutes, if a man had at that time foreseen that in 1955 a statute would be passed which would make it advantageous to him, in the lifetime run, to choose the method (b) category, though it produced a smaller immediate pay, he could not, under the terms of the statute, have done so.

Since, as matters stood in 1949, viewed in the light of our 1951 and 1956 decisions, the plaintiff’s retired and retainer pay was $1.33 per month larger when computed on the basis of the pre-1949 statutes, i.e. by method (a) of section 511 of the Career Compensation Act, the Government says that the plaintiff was fixed in the method (a) category, and must remain there, even though the 1955 statute made that disadvantageous to him, after 1955. The plaintiff urges that, the Navy Department having, by its erroneous interpretation of the statutes, placed him in the wrong category from 1949 to 1955, and thereby underpaid him in the amount of $89.53 for that period, he should be allowed to waive the $89.53 and to continue to occupy the position in which he was erroneously placed in 1949, but which now, because of the 1955 statute, has become the more comfortable position.

We think the plaintiff’s contention cannot be sustained. He has sought a recomputation of his pay on the basis of the statutes, as interpreted. The recomputation, as made, must be consistent, and must not depend upon where the advantages and disadvantages resulting from it fall. The 1949 Act required the plaintiff’s retired and retainer pay to be computed by method (a) and he was given no privilege of electing himself out of that category.

For the period April 1, 1955, to March 31, 1957, the Navy Department overpaid the plaintiff $5.10 per month, a total of $122.40. This overpayment resulted from the error of interpretation which is the basis of this entire case. The Government says the $122.40 should be deducted from the $1,016.29 which is otherwise due the plaintiff. The plaintiff says he should be allowed to keep the $122.40 because it was paid to him under a mistake of law. We have, in a recent case, discussed a similar contention by the Government. See Sprague Steamship Company v. United States, 145 C. Cls. 642.

The plaintiff may have a judgment for $893.89.

It is so ordered.

Faht, Circuit Judge, sitting by designation; Laeamoee, Judge; Whitakeb, Judge, and Jones, Chief Judge, concur.

FINDINGS OF FACT

The court makes findings of fact, based upon the stipulation of the parties, and the 'briefs and argument of counsel, as follows:

1. The plaintiff is a citizen of the United States and resides in Villas, New Jersey.

2. The plaintiff first enlisted in the United States Navy on May 14, 1904, and after serving through four terms of enlistment, was transferred to the Fleet Reserve on November 22,1920, with credit for exactly 16 years’ service for transfer purposes. Following his release to inactive duty, the plaintiff received retainer pay under the formula established by the Act of August 29, 1916, ch. 417, 39 Stat. 556, 590.

3. The plaintiff was recalled to active duty on September 2, 1941, and served through December 9, 1946, or a total of five years, three months, and eight days. At the time of his release to inactive duty the plaintiff’s total service for transfer purposes was twenty-one years, three months, and eight days.

4. For the period from December 10, 1946, through September 30, 1949, the Navy Department paid the plaintiff retainer pay at the rate of $112.75 per month which was computed on the basis of one-third of the $165 per month base pay of a chief petty officer, permanent appointment, or $55, plus a longevity increase of 35 percent, or $57.75, as prescribed by the Act of June 29, 1946, 60 Stat. 343, amending § 9 of the Pay Readjustment Act of 1942, 56 Stat. 359.

5. Effective October 1, 1949, the Navy Department increased the plaintiff’s retainer and retired pay to $138.92 per month in accordance with the provisions of § 201 (a) and method (¡b) of § 511 of the Career Compensation Act of October 12, 1949, ch. 681, titles II and V, 63 Stat. 804-805, 829, 37 U.S.C. §§ 232(a) and 511. Under this Act his retainer and retired pay was computed on the basis of 2% percent of $264.60, which was the monthly basic pay of a chief petty officer with over 18 years’ service, multiplied by 21 years’ active service with which the plaintiff was credited. The plaintiff received retainer and retired pay at this rate through April 30, 1952.

6. On January 9,1951, this Court held in Sanders v. United States, 120 C. Cls. 501, that under § 208 of the Naval Reserve Act of June 25, 1938, 52 Stat. 1175, as added by the Act of August 10, 1946, 60 Stat. 994-995, 34 U.S.C. § 854g, men originally transferred to the Fleet Reserve after more than 16 years’ active service, i.e., after at least 16 years and one day of active service, were entitled to receive retainer or retired pay computed on the basis of one-half of their base pay, in lieu of the one-third of base pay they had been receiving, plus their longevity increase, plus 10 percent of these two figures for good conduct, provided they subsequently performed sufficient additional active duty to give them credit for 20 years’ active service. Subsequently, on July 9,1951, in Liberty v. United States, 120 C. Cls. 274, this court ruled that men originally transferred to the Fleet Reserve with exactly 16 years’ active service for transfer purposes were not entitled to receive increased retainer or retired pay under the provisions of § 208 of the Naval Reserve Act, supra, irrespective of the amount of additional active service they subsequently performed.

7. Pursuant to the Liberty decision, the Navy Department, in a report dated March 27, 1953, refused to increase the plaintiff’s retainer and retired pay retroactively to December 10,1946, to include the difference between one-third and one-half of his base pay. This refusal was predicated upon the fact that the plaintiff had originally transferred to the Fleet Reserve after the completion of exactly 16 years’ active service for transfer purposes.

8. Tbe rates of basic pay prescribed in § 201(a) of the Career Compensation Act, supra, were increased four percent by § 1(a) of the Act of May 19, 1952, ch. 310, 66 Stat. 79, effective retroactively to May 1, 1952. Section 2 of this Act provided as follows:

(a) Members and former members of the uniformed services entitled to receive retired pay, retirement pay, retainer pay, or equivalent pay computed on the rates prescribed in section 201(a) of the Career Compensation Act of 1949 shall 'be entitled to have such pay computed on the rates as prescribed by this Act.
(b) Members or former members who are entitled to receive retired pay, retirement pay, retainer pay, or equivalent pay under laws in effect prior to October 1, 1949, shall be entitled to an increase of 4 per centum of such retired pay, retirement pay, retainer pay, or equivalent pay.

Pursuant to §2(a) the Navy Department increased the plaintiff’s retired pay to $144.48 per month effective May 1, 1952, which rate remained in effect through March 31, 1955.

9. On March 31, 1955, Congress enacted the Career Incentive Act of 1955, ch. 20, 69 Stat. 18, which became effective April 1, 1955. Section 2(1) substituted increased rates of pay for those previously provided in § 201(a) of the Career Compensation Act, supra, as amended. In addition, §§ 5 and 6 of this Act provided as follows:

Sec. 5. Any person now or hereafter entitled to retired pay, retirement pay, retainer pay, or equivalent pay * * * computed at the rates prescribed in section 201(a) of the Career Compensation Act of 1949 shall be entitled to have his pay computed at the rates prescribed by that section, as amended by this Act. * * *
Sec. 6. Members and former members • of the uniformed services who are entitled to receive retired pay, retirement pay, retainer pay, or equivalent pay under laws in effect prior to October 1, 1949, shall be entitled to an increase of 6 per centum of the retired pay, retirement pay, retainer pay, or equivalent pay, to which they are now entitled.

10. Since on March 31, 1955, the plaintiff was receiving retired pay computed under §§ 201(a) and 511 of the Career Compensation Act, supra, as increased by the Act of May 19, 1952, supra, tbe Navy Department determined that effective April 1,1955, be was entitled to receive retired pay computed on tbe higher rates of basic pay prescribed in § 2 of the Career Incentive Act, supra. For the period from April 1, 1955, through March 31,1957, the Navy Department paid the plaintiff retired pay of $159.71 per month, which was computed upon the basis of 2y2 percent of $304.20, the monthly basic pay of a chief petty officer with over 18 years’ service, multiplied by 21 years’ active service with which the plaintiff was credited.

11. On October 2, 1956, this Court reversed its holding in the Liberty case and concluded in Abad, et al. (Mary Agnes Bracher, Administratrix of the Estate of Walter Evans Bracher, Deceased, Plaintiff No. 43) v. United States, 136 C. Cls. 404, that men such as this plaintiff were entitled to recover the difference between one-third and one-half of their base pay even though they had transferred to the Fleet Reserve with exactly 16 years’ active service. As a result of this decision, the Navy Department was requested to compute the amount of additional pay due the plaintiff.

12. Under date of April 11, 1957, the Navy Department furnished plaintiff and defendant with a report indicating that for the period from December 10, 1946, through September 30, 1949, the plaintiff was entitled to receive the difference between $140.25 per month and $112.75 per month, or $926.76; for the period from October 1,1949, through April 30,1952, the difference between $140.25 per month and $138.92 per month, or $41.23; and for the period from May 1, 1952, through March 31, 1955, the difference between $145.86 per month and $144.48 per month, or $48.30. The total amount shown to be due the plaintiff for these periods was $1,016.29.

13. Although for the period from April 1, 1955, through March 31,1957, the Navy Department actually paid the plaintiff retired pay of $159.71 per month under the provisions of §§2 and 5 of the Career Incentive Act, supra, in the course of the preparation of the aforementioned report the Navy Department concluded that a nunc pro tunc redetermination should be made of the rate of pay the plaintiff was receiving on March. 31,1955. On this basis the Navy Department concluded that under § 6 of the Career Incentive Act, sufra, the plaintiff should have been paid retired pay at the monthly rate of only $154.61 for the period from April 1, 1955, through March 31, 1957, and thus had been overpaid a total of $122.40. The plaintiff was requested to consent to the offset of this sum against the amount otherwise shown due him on the report. Also, the plaintiff’s current retired pay was reduced to $154.61 per month effective April 1, 1957.

14. A summary of the pay shown to be due the plaintiff, and the pay actually received by the plaintiff is as follows:

15. Upon receipt of this report the plaintiff requested permission to waive his claim for increased retired pay for the period subsequent to October 1,1949, amounting to $89.53 in order that he might retain the higher rate of current retired pay he had been receiving since April 1, 1955, under §§ 2 and 5 of the Career Incentive Act, supra. This request was rejected on the ground that the provisions of the Career Incentive Act were mandatory and vested no discretion in the Navy Department to accept such a waiver.

CONCLUSION OE LAW

Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes as a matter of law that the plaintiff, John Edward Birney (17) is entitled to recover, and it is therefore adjudged and ordered that he recover of and from the United States eight hundred ninety-three dollars and eighty-nine cents ($893.89). 
      
       In Hulse v. United States, 133 C. Cls. 848, cert. den. 353 U.S. 916, this Court reversed that portion of the Sanders decision which had awarded the good conduct increase to members of the 16-year class of the Fleet Reserve.
     