
    ALBERT C. DALTON v. THE UNITED STATES
    [No. K-317.
    Decided January 12, 1931]
    
      
      Mr. Samuel T. Ansell for the plaintiff. Messrs. B. Tracy Ansell and Q. M. IVilmeth were on the Brief.
    
      Mr. M. G. Masterson, with whom was Mr. Assistant Attorney General Charles B. Rugg, for the defendant.
   Littleton, Judge,

delivered the opinion:

The question presented in this case is whether the plaintiff is entitled to his pay as a retired brigadier general of the United States Army during the time he was employed by the United States Shipping Board Emergency Fleet Corporation as trustee and president, and vice president and general manager, when he was receiving compensation from the Emergency Fleet Corporation.

The finance officer of the Army declined to pay the plaintiff his retired pay on the ground that such pay was prohibited by section 2 of the act of July 31, 1894, 28 Stat. 205, which provides that “No person who holds an office the salary or annual compensation attached to which amounts to the sum of two thousand five hundred dollars shall be appointed to or hold any other office to which compensation is attached unless specially * * * authorized thereto by law; * * Plaintiff insists that the provisions of this section are directed only against offices of the United States and that as president of the Emergency Fleet Corporation he was not holding an office of the United States within the meaning of the act. On the other hand, the defendant, relying upon Emergency Fleet Corporation v. Western Union Telegraph, Co., 275 U. S. 415, in which, it was held that the Fleet Corporation is a department of the United States within the meaning of the post roads act, insists that plaintiff is not entitled to judgment for his pay as a retired brigadier general during the time he was employed by the Emergency Fleet Corporation. Plaintiff’s compensation as trustee and president, and later as vice president and general manager, of the Emergency Fleet Corporation was fixed at $18,000 per annum and such amount was paid to him during the period involved in this suit.

There is no reason for assuming that the “ office ” referred to in the act of July 31, 1894, extends beyond the usual legal meaning of the word, United States v. Hartwell, 6 Wall. 385; Donovan v. United States, 21 C. Cls. 120; nor that it includes all kinds of employment. The “ office ” must be an office of the United States, a public station or employment established or authorized by Congress and conferred by appointment of the Government. The prohibition of dual office holding is directed at offices of the United States. Dual employment is controlled by other statutes operating directly on salaries. U. S. Code, section 58, Title 5, 44 Stat. 31, provides that “Unless otherwise specifically authorized by law, no money appropriated by any act shall be available for payment to any person receiving more than one salary when the combined amount of said salaries exceeds the sum of $2,000 per annum. (R. S., sec. 1763; May 10, 1916, c. 117, sec. 6, 39 Stat. 120; Aug. 29, 1916, c. 417, 39 Stat. 582.)” But section 59 of the Code provides that the above-mentioned section is not applicable to retired officers or enlisted men of the Army, Navy, Marine Corps, etc.

The Emergency Fleet Corporation was formed by the Shipping Board under authority conferred by the original Shipping Board act of September 7, 1916, 39 Stat. 728, U. S. Code, section 810, Title 46. It was organized April 16, 1917, under the general laws of the District of Columbia, as a private corporation with power to purchase, construct, and operate merchant vessels. The corporation is an entity distinct from the United States and from any of its departments and boards; the purpose was to enable this business of national importance to be transacted for, but not by, the Government, as such a business would be conducted by a person or private corporation having full power and the utmost freedom of action unhampered by the numerous restrictions relating to the conduct of Government business. The corporation, although the United States owned its stock, had the power and liberty of action of other corporations, including the power to employ and discharge at will all operating officials and employees. No limitation has ever been placed upon the number of employees of the Fleet Corporation or the salary or compensation thereof except, beginning with the appropriation act for 1923, 42 Stat. 648, and repeated with slight modifications in the subsequent appropriation acts, it was provided that “No officer or employee of the United States Shipping Board or the United States Shipping Board Emergency Fleet Corporation shall be paid a salary or compensation at a rate per annum in excess of $10,000 except the following: One at not to exceed $25,000 and seven not to exceed $18,000 each.”

The courts have held that the United States Shipping Board Emergency Fleet Corporation is a private corporation and not a part of the Government. United States v. Strang, 254 U. S. 491, 65 L. ed. 368; Sloan Shipyards Corp. v. United States Shipping Board Emergency Fleet Corporation., 258 U. S. 549, 66 L. ed. 762; Astoria Marine Iron Works v. U. S. Shipping Board Emergency Fleet Corp., 258 U. S. 549, 66 L. ed. 762; U. S. ex rel. Skinner & Eddy Corp. v. McCarl, 275 U. S. 1, 72 L. ed. 133; Commonwealth Finance Corp. v. Landis, 261 Fed. 440; Gould Coupler Co. v. U. S. Shipping Board Emergency Fleet Corp., 261 Fed. 716; Eichberg v. U. S. Shipping Board Emergency Fleet Corp., 273 Fed. 886; Traylor Engineering & Mfg. Co. v. U. S. Shipping Board Emergency Fleet Corp., 277 Fed. 248; United States v. Matthews, 282 Fed. 266; Buffalo Union Furnace Co. v. U. S. Shipping Board Emergency Fleet Corp., 291 Fed. 23; Shooters Island Shipyard Co. v. Standard Shipbuilding Corp., 293 Fed. 706; Puget Sound Machinery Depot v. U. S. Shipping Board Emergency Fleet Corp., 293 Fed. 768; Providence Engineering Corp. v. Downey Shipbuilding Corp., 294 Fed. 641; Manufacturers’ Land & Improvement Co. v. U. S. Shipping Board Emergency Fleet Corp., 284 Fed. 231, 264 U. S. 250; Anderson v. United States Fidelity & Guaranty Co., 8 Fed. (2d) 428; U. S. Shipping Board Emergency Fleet Corp. v. Texas Star Flour Mills, 12 Fed. (2d) 9; Fidelity Trust Co. of New York v. U. S. Shipping Board Emergency Fleet Corp., 15 Fed. (2d) 600; U. S. Shipping Board Emergency Fleet Corp. v. Greenwald, 16 Fed. (2d) 948; U. S. Shipping Board Emergency Fleet Corp. v. Tabas, 22 Fed. (2d) 398.

In United States Shipping Board Emergency Fleet Corporation v. Western Union Telegraph Co., supra, the court held that for the purpose of reduced rates on telegrams the Emergency Fleet Corporation was a department of the United States within the meaning of the post roads act of July 24, 1866, c. 230, 14 Stat. 221; R. S., sec. 5263-5266, but, in our opinion, that case does not go to the extent of holding that persons employed by the Emergency Fleet Corporation thereby become officers or employees of the United States within the meaning of the act of July 31, 1894, nor do we think that the holding of the court in the Western Union Telegraph Company case is inconsistent with United States v. Strang, supra, in which the court held that an employee holding the position of an inspector of the Emergency Fleet Corporation was not an officer or agent of the United States within the meaning of section 41, Criminal Code, making it an offense for an officer or agent of any corporation, joint-stock company, or association, or agent of any firm, or person directly or indirectly interested in the pecuniary profits or contracts of such corporation, joint-stock company, association, or firm, to act as an officer or agent of the United States for the transaction of business with such corporation, joint-stock company, association, or firm. In the Strang case the court said: “ The corporation was controlled and managed by its own officers and appointed its own servants and agents who became directly responsible to it. Notwithstanding all its stock was owned by the United States, it must be regarded as a separate entity. Its inspectors were not appointed by the President, nor by any officer designated by Congress; they were subject to removal by the corporation only and could contract only for it. In such circumstances we think they were not agents of the United States within the true intendment of section 41.”

The acts of the Emergency Fleet Corporation are not subject to supervision, control, or audit by the Comptroller General of the United States.

We are of opinion that plaintiff’s employment by the United States Shipping Board Emergency Fleet Corporation was not an office of the United States within the true intendment of section 2 of the act of July 31, 1894. In United States v. Mouat, 124 U. S. 303, 307, the court said:

“ What is necessary to constitute a person an officer of the United States, in any of the various branches of its service, has been very fully considered by this court in United States v. Germaine, 99 U. S. 508. In that case it was distinctly pointed out that under the Constitution of the United States all its officers were appointed by the President, by and with the consent of the Senate, or by a court of law, or the head of a department; and the heads of the departments were defined in that opinion to be what are now called the members of the Cabinet. Unless a person in the service of the Government, therefore, holds his place by virtue of an appointment by the President, or of one of the courts of justice or heads of departments authorized by law to ¿make such an appointment, he is not, strictly speaking, an officer of the United States.”

Plaintiff is entitled to recover and judgment in his favor for $11,900 will be entered. It is so ordered.

Whaley, Judge;' Williams, Judge; and Booth, Chief Justice, concur.

Green, Judge,

dissenting:

I am unable to concur in the foregoing opinion, and think that the word “ office ” as used in the act of July 31, 1894, the material provisions of which are set out therein, applies to such a position as the plaintiff held as president of the Emergency Fleet Corporation.

As the statute does not specify what office ” is meant, or to what office it is intended to apply; it is ambiguous in its provisions, and in order to determine its proper construetion we must resort to the intention of Congress, if that can be deduced from the nature of the act and the conditions to which it might apply. One purpose of the statute, at least, was to prevent the Federal Government from paying or being to the expense of two salaries. Under the pressing needs of war many persons already receiving some sort of pay or salary from the Government would be called upon to render services in a capacity quite different from the one for which they were already receiving a salary, and it was highly desirable that a provision should be made in the law to prevent the Government from being subjected to expense thereby “ unless specially * * * authorized thereto by law.”

The majority opinion holds in effect that the plaintiff was not an officer of the United States and did not hold a United States office. This may be conceded, but I think it does not follow that the plaintiff was exempt from the provisions of the act which, as we have seen, does not specify that the office must be one of that class. It is clear that the plaintiff held an office, and the question, as I view it, is not whether he was an official of the Federal Government but whether he held such an office as was contemplated by the act.

It was well understood that the Emergency Fleet Corporation would not be able to meet its expenses from its ordinary receipts and that the Federal Government would have to make up the difference. In other words, plaintiff’s salary would in the long run have to be paid by the Government. The case therefore seems to me to belong to a class which was intended to be reached by the statute. This matter is mentioned particularly because it is referred to in a case hereinafter cited.

It is said in the majority opinion that the Emergency Fleet Corporation was an entity distinct from the United States. Technically this is correct, but I do not think it prevents the application of the statute, and in this connection the language of the Supreme Court in the case of Emergency Fleet Corporation v. Western Union Telegraph Co., 275 U. S. 415, 422, is in point.

In the case above cited, the question to be determined was whether the Government was entitled to a special rate under the provisions of section 2 of the post roads act, reading as follows:

That telegraphic communications between the several departments of the Government of the United States and their officers and agents shall in their transmission over the lines of any of said companies, have priority over all other business, and shall be sent at rates to be annually fixed by the Postmaster General.’*

In the opinion it was said, with reference to the Fleet Corporation:

“ These services of the Fleet Corporation were obviously of a public nature. It has never done any business, or conducted any operation, except on behalf of the United States.”

When it was argued that the Fleet Corporation was a private corporation, the Supreme Court said, “ In form, it is such,” but attention was called to the fact that all of its capital was subscribed on behalf of the United States, that the United States alone had a financial interest in its capital stock, and that to hold that the commercial rate for messages should be paid by it or its officers in transacting the public business would necessarily increase the charges on the public treasury to the same extent as if the business had been “ done for it by some other department of the Government.”

It was finally held that the Fleet Corporation “ is a department of the United States within the meaning of the post roads act,” and the plain inference from the opinion of the court is that, although “ in form ” the Fleet Corporation was a private corporation, it was not such in substance and effect. When applied to the case at bar such a construction does not appear to me to be in conflict with the holding in United States v. Mouat, 124 U. S. 303, 301, cited in the majority opinion and in which the court said:

“ Unless a person in the service of the Government, therefore, holds his place by virtue of an appointment by the President, or of one or the courts of justice or heads, of departments authorized by law to make such an appointment, he is not, strictly speaking, an officer of the United States.” (Italics mine.)

Nor do I think this construction conflicts with the holding In United States v. Strang, 254 U. S. 491. In that case, as in the case at bar, the question to be determined was the proper construction of the case in the light of the evident purpose of Congress, as expressed by the act and other acts of that body with reference to similar matters. The act in question in that case was one creating a criminal offense, punishable by fine and imprisonment, and in such cases the rule of construction is different than in those governed by the rules of civil law like the case at bar, for if the act be doubtful in its meaning the act must be strictly construed in favor of the defendant, and when so construed would not apply to the officers of the Fleet Corporation.

If the officers of the Fleet Corporation can be, as was held in the Western Union Telegraph Co. case, supra, officers of a “department of the Government of the United States ” within the meaning of the post-office statute construed in that case, I am unable to see why they should not also be considered to hold an office within the meaning of the act under consideration in the instant case.

Section 2 of the act of July 31, 1894, directly following the language quoted in the original opinion, reads:

“ * * * but this shall not apply to retired officers of the Army or Navy whenever they may be elected to public office or whenever the President shall appoint them to office by and with the advice and consent of the Senate.”

The fact that Congress considered that the word office ” applied to offices to which officers of the United States might be elected and chose to except retired officers of the Army or Navy when so elected seems to me to indicate that Congress intended that the word “ office,” as used in the preceding clause, should not be limited to offices of the United States. The elective offices under the United States Government are few, and the probability of a retired Army or Navy officer being elected to any of them is so remote that it might well be ignored. Technically, a Congressman is not an officer of the United States within the meaning of the word as used in the Constitution. On the other hand, it might well be expected that there would be instances of retired officers of the Army or Navy being elected to a State office where the pay is not high, and Congress may well have considered that in such event they should not be deprived of their retired pay. It is not necessary, however, that we should determine whether the word “ office ” as used in the act referred to State as well as Federal offices, but only as to whether it included the office of president of the Emergency Fleet Corporation.

While the facts in the Western Union Telegraph Go. ease, supra, are different from those of the case' at bar, I am of the opinion that the same principle applies. Indeed, it would seem to me that the case now before the court is somewhat stronger, because in the case cited the act applied to “ departments of the Government,” but in the act under consideration the term “ office ” is not limited to offices “ of the Government.” If Congress had intended that it should be strictly limited it would seem that they would have added after the word “ office ” the words “ of the United States,” or some language to the same effect. In the case at bar, following the general principles of the Western Union Telegraph Co. case, supra, I think we should seek for the meaning and intent of Congress and to carry out such intent,, construe the act liberally and not strictly. Also I think it should especially be considered that the act of July 31, 1894, did not limit the application of the word office ” to-those of the United States, and that the general purpose and object of the act could not be accomplished if the act was so construed. In the light of these matters and the principles laid down in the Western Union Telegraph Co. case, supra, I am of the opinion that the petition of plaintiff should be dismissed.  