GENERAL COUNSEL'S OPINION NUMBER 55-34, DATED 15 FEBRUARY 1955

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• Collection: General CIA Records
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• Document Creation Date: December 12, 2016
• Document Release Date: December 6, 2001
• Sequence Number: 64
• Publication Date: February 15, 1955
• Content Type: MISC

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GENERAL COUNSEL'S OPINION NUMBER 55-34, DATED 15 FEBRUARY 1955
A_review of some of the rights, obligations and limitations arising
out of Federal employment.
TO THE INSPECTOR GENERAL,
1. We harbor the thought that the contentions which are often
advanced in support of the recommendations for relief of Government
officers, employees, and agents, arising out of alleged mistake or
error, are in part based on a misconception of (a) the employer-
employee relationship where the Government acts as the employer;
(b) the nature of public office and trust; (c) public funds; and (d)
the consequential rights, obligations and limitations that flow from
the aforesaid. Some reference thereto may be helpful.
i
\) 2. It has been frequently stated that Government employment
W involves the surrender of certain rights, and this is properly so, for
0 when the sovereign acts in the field of civil service, it may do so on
a, 0 such terms and conditions as it sees fit to impose. It goes without
saying that there is little opportunity for judicial review of adminis-
..;,' 0 trative discretion when applied to the executive administration of
? Government business in which the public interest predominates. When
the legislative body creates rights in individuals against the Govern-
" N
ment, it may do so on its own terms and may even limit those individuals
L to administrative remedies. Obviously, if a right is conferred by statute,
then there is a right in the normally understood statutory sense, e.g.,
the Lloyd-LaFollette and Veterans' Preference Acts. In matters concern-
; ing the executive administration of Government business. the employee
employment. Other examples come to mind. Under the Taft-Hartley Law,
while Government employees may belong to unions, participation in strikes
is unlawful and such employees are subject to immediate discharge and
forfeiture of civil service status. Under the Hatch Act, Federal employees
are precluded from active participation in political management or politi-
to certain statutory and regulatory standards. In the absence of a
subject to dismissal if investigation reveals a failure to measure up
ecognizew.ie right, the statutes and implementing regulations as adminis-
tered by the appropriate Government agency are the inevitable standards
Yfa " of legal impropriety on the
part of the administering or regulatory agency,
,:U the officer or employee is bound to accept the decision with finality as
part of his condition of employment.
C
to which the propriety of disbursements must be related. In the absence
3. Three examples are illustrative. Others will undoubtedly occur
to the reader. 14 Comp. Gen. 179 involved the appointment of a retired
Naval officer retired for length of service to the position of Assistant
Deputy Commissioner, Bureau of Internal Revenue, a permanent full-time
position. The Comptroller General ruled that the appointment was void
ab initio, that there was no authority whereby the civilian position
might be retained and an election made to receive either the retired pay
or the compensation of the civilian position and, finally, that there was
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no entitlement to compensation for services already rendered. In 322
Comp. Gen. 539, an employee received a travel advance and expended
the funds in reporting to his first duty station. The advance was
granted under apparent administrative authority. The Comptroller
General referred to the long-established rule that an employee must
bear the expense of reporting to his first duty station where his com-
pensation is fixed by law or regulation. The Comptroller General
acknowledged that the advance of funds was erroneous but emphasized
that such action did not preclude recovery by the Government since it
was a well-settled. principle that the United States was not bound or
estopped by an erroneous payment made by its officers, with or with-
out jurisdiction, and whether made under mistake of fact or of law.
In Johnson v. United States, 175 F 2nd 612, an Army officer was granted
a per diem of 5.00 from NRA funds to absorb the high cost of living
in Washington, D. C. Although the District Court found that a verbal
ruling had been secured from the Comptroller General to the effect
that the NRA funds could be lawfully used for said purpose, the Comp-
troller General disallowed the payments upon the submission of the
voucher and sought collection in the aggregate sum of $3.,355. The
matter was taken to the Court of Appeals by the officer where he
received an adverse decision. One of the arguments advanced by the
appellant, which we believe to be of interest, was that a great in-
justice would be done when military officers were being called upon
to serve their country in various civilian fields and could only lay
claim upon the entitlements of military office. The Court acknowledged
that the military pay of an officer might be wholly inadequate when
called upon to discharge the duties of a civilian office requiring
greater expenditures. However, the Court held that this was a matter
of legislative concern and, in the absence of an expression by the
legislative body, the payment must be held to have been improper and
therefore for collection with no apparent regard as to whether it had
been expended.
4. We believe that a basic philosophy attaches to these
cases which, we repeat, are merely illustrative of what can and does
happen in the executive administration of Government business. A
quick reference to the decisions of the Comptroller General and the
Court of Claims will document this statement a thousandfold. We
believe that the risks and burdens which appear to affect employees
can be better understood if some consideration is given to the basic
concepts of public office, the position of the Government as a sover-
eign, the charaete:ristics of public funds, the status of improper
payments of public funds, and the immunity of the Government from
certain defenses which are normally available in the arena of private
litigation. As previously indicated, the position of the Government
in the field of civil service is a matter of privilege. The employee
enters upon his employment upon such terms and conditions as the
sovereign prescribes. If a right is granted, it may be granted with
qualifications or no qualifications. There is considerable law on the
subject that a public office is not property within the Constitutional
guarantee, that the emoluments thereof are subject to legislative
modifications and control, and, generally speaking, that the nature
of the relation of a public officer to the public is inconsistent with
either a property or a contract right. Taylor and Marshall v. Beckham
p rove or a ease 2002 - 8-05 8 0 -
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(No. 1), 178 U.S. 548, 20 S. Ct. 390, 44 Lawyers' Edition 1187.
5. The Courts have had the occasion to comment upon the refusal
by an executive establishment to grant annual leave to its employees,
the refusal of which involved a loss of such leave. The language of
the Court in Field v. Giegengack (73 F. 2nd 945, 947) is considered
interesting.
"... Under these statutes, leave of absence tentatively accrues
to a beneficiary by virtue of his service, yet is not earned in
the sense that his wage is earned, which becomes absolutely due
and inevitably payable upon his performance of his work. But
the leave must be specially sought, granted, and used, under
certain conditions and within certain times, determined within
the statutory maximum and regulations, by the public printer, with
due regard to the needs of the service and justice to the individ-
ual. The nature of this leave is well described by the Court of
Claims in Harrison v. United States, 26 Ct. Cl. 259, 270: 'The
law imposes both the duty and the responsibility of granting or
refusing leaves of absence exclusively upon the Public Printer.
It is his duty to administer the statute according to its spirit
and intent and with a proper regard to the just interests of both
parties. He is authorized to administer it by 'regulations,' and
may prescribe general rules which would -practically exclude indi-
vidual applications. He may make the leave of absence dependent
upon good conduct, and in the exigency of pressing work, when
other employees could not be procured, he would be justified in
refusing it altogether. The employee has no legal right to a
leave of absence until it be granted, and can no more dictate
when he will take his vacation than a student in college or a
boy in school. The Public Printer must determine the times and
seasons and periods of absences as the needs or exigencies of his
department may permit. "
In Wetzel McNutt, 4 F. Supp. 233, the Court commented upon the properties
of a public office. Again, we believe the language to be pertinent.
"... It has been repeatedly held that public office is not an
inherent property right within the protection of the Fourteenth
Amendment to the Federal Constitution. The regulation of a
salary or the curtailment of appointment to an office are not
within the import of the term 'contract', or within the vested
private personal rights protected by the amendments to the
Constitution. As the Supreme Court says in Butler et al. v.
Pennsylvania, 10 How. (51 U.S.) 402, at page 417, 13 L. Ed.
472: 'They are functions appropriate to that class of powers
and obligations by which governments are enabled, and are called
upon, to foster and promote the general good; functions, there-
fore, which governments car-not be presumed to have surrendered,
if indeed they can under any circumstances be justified in sur-
rendering them.'
"(2) Public offices are mere agencies or trusts and
not property as such. The nature of the relation of a public
officer to the public is inconsistent with either property or
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contract rights. The establishment of a contrary principle
would arrest everything like progress or improvement in
government, and the latter would become one great pension
establishment on which to quarter a 'host of sinecures.'
Butler v. Pennsylvania, supra; Taylor & Marshall v. Beckham,
178 U.S. 548, 20 S. Ct. 1009, 44 L. Ed. 1167."
6. It goes without saying, for reasons of public policy,
that the sovereign cannot be sued in its own courts or in any other,
without its consent and permission. This principle has been uniformly
recognized and enforced both by the Federal and the state courts since
the foundation of the Government. Only when the sovereign has volun-
tarily placed itself in the position of a litigant, whether in its
own courts or otherwise, will it be held to have laid aside its sover-
eignty and to have assumed the garb of an ordinary litigant. It is
also a principle of public policy that the public interests should not
be prejudiced by the mistake or negligence of its officers or employees
to whose care they are confided and, consequently, we have the rule
that the sovereign when asserting rights is not bound by statutes of
limitations, lathes, estoppel, or any other affirmative defenses unless
the legislative body has clearly manifested an intention to the con-
trary. This is the almost universally stated rule in the courts where
the Government sues as a plaintiff. The aforesaid principles have
evolved in most instances out of the non-employee relationship and it
would follow as a matter of logic, a fortiori, that a lesser amount
of actionable right is possessed by the sovereign's aggrieved em-
ployees. Hence, this office has stated upon occasion that it would
interpose no objection to disputed payments where the litigative pro-
spects of the employee arising out of statute or regulation are favor-
able but there is security objection to seeking redress. Again, where
the legislative history, in the area of private bills of relief, has
been favorable on the application of employees and again security
considerations create a bar for the application of relief, this office
has interposed no objection. In short, where an actual or prospective
right is incapable of fruition because of Agency requirements, then
the grant has been considered appropriate on a substitutive basis.
However, absent the actual or prospective right, there can be no obli-
gation on the part of the Government and, as has frequently been
stated, obligation under ordinary circumstances is the sine qua non
of an authorized expenditure.
7. Generally stated, the mature of public moneys requires
authority of law prior to an expenditure of public funds and that
public funds can be used only for public purposes and not for the
advantage of private individuals. The expressions of the courts in
this area are enlightening. It is frequently stated that the Gov-
ernment is not bound or estopped by the erroneous payments made by
its officers, with or without jurisdiction, and whether made under
mistake of fact or of law. In Barnes v. the District of Columbia,
22 Court of Claims 366, 394, the reasons for this general principle
are clearly stated.
"... the doctrine that money paid can be recovered back
when ?paid in mistake of fact and not of law does not have
so general application to public officers using the funds
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of the people as to individuals dealing with their own
money where nobody but themselves suffer for their igno-
rance, carelessness, or indiscretion, because in the former
case the elements of agency and the authority and duty of
officers, and their obligations to the public, of which
all persons dealing with them are bound to take notice,
are always involved."
In Wisconsin Central Eailroad v. United States, 164 U.S. 190, the court
concurre in a seen t- s gay cp e as follows:
"... We concur in these views, and are of opinion that
there is nothing on this record to take the case out of
the scope of the principle that parties receiving moneys
illegally paid. by a public officer are liable ex aequo et
Bono to refund them..
"As a general rule, and on grounds of public policy,
the goverment cannot be bound by the action of its officers,
who must be held to the performance of their duties within
the strict limits of their legal authority, where, by mis-
construction of the law under which they have assumed to
act, unauthorized payments are made.
Whiteside v. United
States, 93 U.S. 2147 (23:882): Hawkins v. United States,
97U.a. 689 (24: 607), aznd cases before cited. The question
is not presented as between the government and its officer,
or between the officer and the recipient of such payments,
but as between the goer n and the recipient, and is then
a question whether the latte. can be allowed to retain the
fruits of action not au thio.r ized by law, resulting from an
erroneous conclusion by the agent of the government as to
the legal effect off the particular statutory law under or in
reference to which he is proceeding."
As you will note from the above language, the Government is not interested
as to how the improper payment cam about,; it is merely interested in the
fact that an improper payment has been de and the issue is therefore drawn
between the Govern nt and the recipient of the improper funds. We should
like to add at this juncture that the receipt of improper payments does
not cAcasion dat-mge in the normal sense. There is no deprivation of property
or injury to person. What is involv?e~. in the usual cases which have come
to the attention of this office is the overpay nt of funds to which the
individual had no, and ay nearer h,a se, any right. The sense of the Judicial
reasoning is that the individuals concerned have received more than they
were lawfully entitled to, and that, since the funds involved are the public
funds, such funds, in good conscience and equity, ought to be returned to
the public from whence they originated.
8. United States v. Sutton (;'iiemical Co~.ipany. 11 F. 2nd 24, contains
an interesting collection andand discussion of cases. Some of the language
is offered for pertinency:
"The government 4 s contention, briefly, is that, as a
general proposition of law, established by a long line of
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decisions, it may always recover back moneys improperly
paid by its officers to persons not entitled thereto; that
it is immaterial whether such payments are made under a mis-
take of law or of fact; whether because in excess of author=
ity, or based upon an erroneous interpretation of a contract
later found to be incorrect, or because of the reliance
upon facts found subsequently not to exist; that in all such
cases, when it can be shown that the money was paid out ttith-
out legal liability therefor, a refund can be lawfully en-
forced; and that the rules as to the binding effect of an
account stated, or a compromise, or a settlement in accord
and satisfaction, between private persons, are not applicable
to the government. The government further claims that actions
on the part of its agents, charged with the paying out of
moneys, are not final determinations, and do not preclude or
estop it from subsequently securing the return of an ove:L-
payment. 'Authorities to sustain these general propositions
are cited by the government. Sutton v. United States 41 S.
ft-. 563, 2'6 U.S. 575, 65 L. Ed. 1099, 19 A. L. R. 03; Pine
Logging Co. v. United States, 22 S. Ct. 920, 186 U.S. 279,
L. Ed. TIM; Wisconsin Central Railroad v. United States
17 S. Ct. 45, 164 U.S. 190, 171 L. ff.-579-
. 9>
The court concurred with this contention. As we have previously stated,
if these principles are applicable in the arena of private litigation,
much more so does it follow that they are applicable in the executive
administration of Government business in the area of civil service.
9. With respect to the recovery of public moneys improperly paid
out by its officers, employees, and agents, it may be generally stated
that the Government is not bound by such action because of misinterpre-
tation of facts or misconstruction of law under which such officers,
employees, or agents assume, to act, and parties receiving such public
moneys are held liable ex aequo et bono to refund them. United States
v. Hagen, Cushing Co., 29 F. Supp. 564. This principle finds restate-
ment throughout the decisions of the courts. A few citations are
noted: United States v. Paddock, 178 F. 2nd 394; United States v.
Wurts, 303 U.S. Ems; Heist v. United States, 287 U.S. 601; Grand Trunk
Western RY Co. ^r. United States, 252 U.S. 112. Before departing from
this subject of the recovery of public funds resulting from improper
payments, the language contained in Heist, v. United States, supra,
at p. 560 is considered to be a good summs,ry.
"One contention is that by long continuance of the
payments with knowledge of the faca,s the United States
is estopped to recover. A voluntary payment made by an
individual under no mistake of fact is ordinarijv not
recoverable, because he may do what he will--with ais own
money. Bift the rule is quite otherwise in payments of
public money made by public officers. Norfolk Count v.
Cook, 211 Mass. 390, 97 N. E. 778, Ann. Cas. 1913B, 650
and note. They have no right of disposal of the money,
but must act according to law, the law operating as a
limitation on their authority to pay. United States v.
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Burchard, 125 U.S. 176, 8 S. Ct. 832, 31 L. Ed. 662. The long
continuance of overpayments illegally made does not prevent
their recovery, even when contractual. relations are involved.
Grand Trunk Western Ry. Co. v. U.S., 252 U.S. 112, 40 S. Ct.
309, L. Ed. 484. Much less where, as here, no contract has
been made on the faith of them, for a soldier's services and
pay are regulated wholly by law. Emphasis supplied) While
there is hardship in recalling money which has probably been
spent, there is no basis for an estoppel because of a change
of condition on the faith of the conduct or representations
of another."
10. With respect to the availability of affirmative defenses, such
as estoppel, laches, statute of limitations, on the part of aggrieved
employees, assuming they possess an actionable right, and private parties,
it may be simply stated that the Government, acting in its governmental
capacity, that is, in the executive administration of Government business,
cannot be bound or estopped by the unsanctioned acts of its agents, and
more so, by the acts of its officers and employees. As is frequently
stated, knowledge of Government law and regulations is imputable to off i-
cers and employees. The corollary proposition in the area of private
litigation is that the authority of an officer or agent to act in behalf
of the Government must stem from the Constitution or from a Federal statute.
Such persons possess only such authority as is given to them either express-
ly or by necessary implication and it is generally held that the risk of
lack of authority falls on those dealing with the Government.
LAWRENCE R. HOUSTON
General Counsel
STATINTL
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