Case ID: us-ct-cl_126/html/0902-01.html
Source: Caselaw Access Project
Author: {"author": "Jones, Chief Judge, Whitaker, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

EMIL BORDEN v. THE UNITED STATES
    No. 49855.
    Decided December 1, 1953.
    
      Mr. Edward A. Lifton for plaintiff.
    
      Mr. Donald D. Webster, with whom was Mr. Assistant Attorney General Warren E. Burger, for defendant.
   Jones, Chief Judge,

delivered the opinion of the court:

This is a suit for salary withheld from plaintiff on account of loss of payroll funds for which defendant claims plaintiff was responsible.

Plaintiff contracted with the Army Exchange Service, European Theater, to serve as senior accountant for a period of two years beginning January 12,1948.

The contract stipulated that the employer might terminate the contract if it regarded the services of the employee as unsatisfactory, and might withhold salary for all claims against employee for fraud, breach of contract or negligence.

The plaintiff was assigned to the Post Exchange at Bremer-haven, Germany, as chief accountant.

The personnel section was charged with the duty of handling the German payroll. In each of the two months prior to the loss in question a suitcase containing the payroll had been deposited overnight in plaintiff’s safe with the knowledge and consent of the plaintiff.

On the occasion in question the plaintiff, as chief accountant, caused his acting cashier to go with the paymaster of the personnel section to the financial office where they obtained Deutsche Marks in the equivalent of $24,588.64 to be used for payroll purposes. The money was carried to the plaintiff’s accounting office on the second floor of the Post Exchange building. After counting the funds, the money was delivered to the personnel officer on the third floor. Richard S. Proctor, personnel manager, had the money counted by the paymaster and gave the plaintiff a receipt for the full amount.

The same day plaintiff was required to attend an official investigation at the staging area of the Bremerhaven Port of Embarkation and was necessarily absent from his office from about 1:00 p. m. to 5:25 p. m., the closing time of the office being 5:30 p. m. At about 4: 00 p. m. of that day the paymaster locked the Deutsche Marks in a wooden strongbox and delivered the box from the personnel office to the acting cashier in the plaintiff’s office for safekeeping until the next morning. It was deposited in plaintiff’s safe, but plaintiff was not advised of the delivery of the box and its deposit in the safe.

Upon his return to his office at 5:25 p. m. the plaintiff witnessed his cashier lock the safe and the door to the cashier’s cage, inserted the two keys in an envelope, placed the envelope in the left-hand drawer of his desk and locked the desk. This was customary procedure on the part of the plaintiff.

The safe key was about 5% inches long. Plaintiff had a conference with the other chiefs, including the general manager, following which a directive was issued which provided that the plaintiff was responsible for the safekeeping of the safe key, and that currency was to be deposited in accordance with existing directives at the earliest possible time. The plaintiff decided that the safest place to keep the key would be in his desk, and, after talking with the chief of security requisitioned through that official new locks for his desk and for his office doors. There is testimony to the effect that this was in accordance with the conference of chief s held on April 28,1949.

The building was enclosed by a fence and a military guard was maintained at the gate at all hours of the day and night. It was located within a large compound which was also fenced, with a 24-hour guard at its gate.

Between 5:30 p. m. August 10 and 8: 05 August 11,1949, an unknown person or persons broke into plaintiff’s accounting office, forced open the drawer of plaintiff’s desk, obtained the keys, opened the cashier’s cage and the safe, broke open the wooden box, took out the Deutsche Marks, placed the wooden box back in the safe, locked the safe and the cashier’s cage and returned the keys to the envelope in plaintiff’s desk drawer.

The major portion of the funds was recovered, concealed in a sack of cement in the attic, but the equivalent of $1,677.14 was never recovered. The commanding general of the Bremerhaven Port of Embarkation appointed a board of officers to investigate. During the investigation the board inspected the plaintiff’s office and heard the testimony of 12 witnesses. The board found that plaintiff was negligent in habitually keeping the keys to the cashier’s cage and to the safe in his desk. It recommended that the plaintiff, the chief accountant, be held pecuniarily responsible. Accordingly, the amount of the loss was withheld from plaintiff’s salary.

The facts are set out more in detail in our findings.

Plaintiff sues to recover the amount thus withheld from his salary. The defendant resists recovery on the ground that plaintiff was negligent, and that the contract of employment provided that salary might be withheld in the event of negligence. Plaintiff denies that he was negligent and the issue is thus drawn.

However, at the threshhold we are met with the plea on the part of the defendant that the United States cannot be sued on a contract of employment between the plaintiff as employee and the Army Exchange Service, European Theater, a nonappropriated funds instrumentality, as employer. The contract was signed Employer, Army Exchange Service, European Theater, by George C. Long, Lt. Colonel, SpS, Chief, Personnel Branch.

As set out in AB, 210-50, issued on December 13,1945, and effective during the period here involved, under the title “Basic Plan for Nonappropriated Funds” it is stipulated that certain revenue producing, welfare and sundry activities are necessary adjuncts to the Army and are designed to supplement activities supplied by the Government from appropriated funds and are designed to contribute to the comfort, pleasure, contentment, and mental and physical improvement of military personnel; the funds are to be dispersed solely for the benefit of military personnel; that such funds are not provided by the Congress; that they are termed non-appropriated funds and are under the control of the Secretary of the Army and the Secretary of the Air Force. It is also provided in the Army regulations, however, that the activities pertaining thereto are Government instrumentalities and, except as otherwise prescribed by competent authority, are entitled to the immunities and privileges of such instrumentalities. It is further provided that the Army Exchange Service has jurisdiction over them and provides .staff supervision of all Army Exchanges and consists of officers and enlisted men and civilian personnel, and that as far as practicable Exchanges will be operated by civilian employees, with army officers in executive control. It is further stipulated in the regulations that Exchange contracts are solely the obligation of the Exchange; that they are not Government contracts and the distinction between Exchange contracts and Government contracts will be observed and clearly indicated at all times. It is further provided by the regulations that the funds accumulated will be dispersed solely for the benefit of military personnel.

In the case of Standard Oil Company of California v. Johnson, Treasurer of California, 316 U. S. 481, 484, the Court uses the following language:

The commanding officer of an Army Post, subject to the regulations and the commands of his own superior officers, has complete authority to establish and maintain an exchange. He details a post exchange officer to manage its affairs. This officer and the commanding officers of the various company units make up a council which supervises exchange activities. None of these officers receives any compensation other than his regular salary. The object of the exchanges is to provide convenient and reliable sources where soldiers can obtain their ordinary needs at the lowest possible prices. _ Soldiers, their families, and civilians employed on military posts here and abroad can buy at exchanges. The Government assumes none of the financial obligations of the exchange. But government officers, under government regulations, handle and are responsible for all funds of the exchange which are obtained from the companies or detachments composing its membership. Profits, if any, do not go to individuals. They are used to improve the soldiers’ mess, to provide various types of recreation, and in general to add to the pleasure and comfort of the troops. [Italics supplied.]

Under the plan of operation these supplies are sold to officers, enlisted men and civilians operating the exchange at a figure slightly above cost and the expenses of operation are paid out of the profits from the operation of the exchange.

In a somewhat similar case, Bleuer v. United States, the District Court of the United States for the Eastern District of South Carolina on December 21,1950, held that the plaintiff had no cause of action against the United States.

In the recent case of Edelstein v. South Post Officers' Club, decided April 5,1951, the District Court of the United States for the Eastern District of Virginia held that the United States has not waived its sovereign immunity as to contract obligations of the club, and that contracts made by the club are not obligations of the United States but solely liabilities of the club.

See also Kenney v. United States, 62 C. Cls. 328. In Kyle v. United States, 46 C. Cls. 197, 199, the court in dismissing a suit commented on the post fund as follows:

* * * This sum is systematically expended in the betterment of post conditions, such as dish towels, powder for destroying objectionable insects, the establishment of an amusement room, etc., the whole matter being under the strict supervision of the proper military authorities. It is a commendable arrangement, tolerated by military authority for the sole benefit of the men in barracks.' The United States Treasury received none of the funds. They are paid out without an appropriation. The auditing thereof is not done at the Treasury, but by the council of administration. The United States is in nowise responsible to officers and enlisted men making contributions to the fund, the transaction being between the persons making the same and the authorities receiving it. The defendants are neither parties to nor privity with the transaction in the sense of legal responsibility to respond in damages for its collection or disbursement.

The instant case presents a strange anomaly. The officers of the army have complete supervision of the post exchange, though in operation civilians are usually employed. The officers serve, however, without pay other than their regular pay as officers of the United States Army. The Army personnel receives the advantages and benefits of the organization. The activities of the post exchanges and their objectives are so woven into the pattern of the Army and. are so closely linked to its major objective that it is difficult to separate the one from the other.

According to some of the decisions, the Exchange Service may not be sued because, being an agency of the Government, it has a privileged status and consent to be sued has not been given. The defendant, however, takes the position that it, the defendant, may not be sued because not a party to the contract. If its position is correct, the citizen is left without a remedy for breach of a contract which he may have with the Army Exchange Service.

Clearly under the decision in Standard Oil Co. v. Johnson, supra, he may not sue the Exchange Service, because consent has not been granted.

May he sue the defendant? He may do so only if the defendant is obligated under an Exchange contract.

The Army officers are given complete supervision of these Post Exchanges. They handle the money. They have control of the funds. The funds are used to make the Army more effective. In other words the officers run the show. The Exchanges are established and maintained for the benefit of Army personnel. That is their major, in fact their sole purpose. Even the civilian employees are subject to the Articles of War.

For the Army to contend and to provide by regulation that it is not liable since it did not act in its official capacity would be like a man charged with extra-marital activity pleading that whatever he may have done was done in his individual capacity and not in his capacity as a husband.

This, however, is not primarily a question of the reasonableness of regulations, nor whether the regulations were within the framework of the authorizing statute. It is a question of liability under a contract signed by a post exchange.

The contracts are actually made by the post exchange and the operating expenses are apparently paid out of profits on the various articles that are supplied by these exchanges, and any surplus funds thus accumulated are used for other activities of the same character or for recreation and are not expended for the maintenance of the Army as such.

It is true that occasionally the Army has furnished facilities for the use of a post exchange, but this would not make it liable for the operative contracts of the exchange. In the instances in which the profits of a post exchange were deposited in the Treasury, they were not placed in the general fund, but in a special fund for the use of other post exchanges.

Paragraph 35 (h) (1) of AS, 210-65, in effect at the time of the transactions involved herein, is as follows:

Exchange contracts are solely the obligation of the exchange. They are not Government contracts and the distinction between exchange contracts and Government contracts will be observed and clearly indicated at all times.

If this were a case of first impression we might be inclined to hold that the entire activity is so much an integral part of the Army’s actual operational structure as to make it a direct agency of the Government, notwithstanding the funds are not ordinarily appropriated for the operation of the exchanges. But in the light of the decision of the Supreme Court cited above, and those of other courts to which we have referred, we- reluctantly reach the conclusion that plaintiff cannot sue the United States on a contract of employment which is signed by the Army Exchange Service, European Theater.

This disposition makes it unnecessary to pass upon the question of whether the evidence shows that plaintiff was guilty of negligence in connection with the incident in question. However, in order that the entire case may be disposed of at one time, regardless of what rule of law may be applied, we have found that the facts as disclosed by the record are not sufficient to show negligence on the part of the plaintiff. What should he have done with a key that was 5 y2 inches long and weighed 5 ounces? It was too big to carry in a pocket. Plaintiff no doubt thought there was graver danger of his living quarters being broken into, or of the key’s being lost in carrying it back and forth than if it were kept in a guarded inclosure.

We think it is proper that this situation should be called to the attention of the Congress. It seems fair that either the Post Exchanges or the Government should be subject to suit and liable for any breach of a contract that had been duly signed by the Army Exchange Service.

The petition is dismissed. It is so ordered.

Madden, Judge; and Littleton, Judge, concur.

Whitaker, Judge,

concurring in part and dissenting in part:

I agree that under all the circumstances this plaintiff was not guilty of negligence and, therefore, that the amount he •claims should not have been deducted from his pay; but I do not agree that he has no right of action to recover it.

The majority recognize that he should have a right of action, but they feel compelled to hold that he has not by the decision of the Supreme Court in Standard Oil Co. v. Johnson, 316 U. S. 481, and by previous decisions of our own court and of other courts. I do not feel so compelled.

This man sues on a contract he had with the Army Exchange Service. This Service was established by the Army under Army regulations promulgated under congressional authority; it was run by the Army and for the benefit of the Army. No individual and no organization other than the Army was entitled to any part of its profits; and no individual nor any organization other than the Army exercised any dominion and control over it. All of its activities were under the direction and control of the Army.

Of the status of Army exchanges the Supreme Court in Standard Oil Co. v. Johnson, supra, said, in conclusion:

From all of this, we conclude that post exchanges as now operated are arms of the Government deemed by it essential for the performance of governmental functions. They are integral parts of the War Department, share in fulfilling the duties entrusted to it, and partake of whatever immunities it may have under the Constitution and federal statutes. * * *

The business of the Army Exchange Service is a business of tremendous magnitude; its contracts run into millions of dollars a year, and yet it is said that no contractor has a right of action against it or any one else on any of these contracts.

That just cannot be.

I agree that the Army Exchange Service is not a separate entity capable of suing or being sued. It is a part of the Army, and, hence, it is the Army that is liable on contracts entered into by it. But of course the Army is not a separate entity; it is a part of the Government of the United States; and, hence, it is the United States that is liable.

The United States is liable because the contracts of the Army Exchange Service were made for the benefit of the United States. They were made to promote the welfare of the members of its military forces, to improve the Army mess, to contribute to the mental and physical improvement of the military personnel, and to aid in the enforcement of good order and discipline and to increase the efficiency of the Army by providing entertainment and pleasure for its members.

Not only were its contracts made for the benefit of the United States, they were authorized by the Congress of the United States. The Supreme Court in Standard Oil Co. v. Johnson, supra, said:

On July 25, 1895, the Secretary of War, under authority of Congressional enactments (16 Stat. 315, 319; 18 Stat. 337) promulgated regulations providing for the establishment of post exchanges (G. O. 46, Hdqrs. of the Army). These regulations have since been amended from time to time and the exchange has become a regular feature of Army posts. That the establishment and control of post exchanges have been in accordance with regulations rather than specific statutory directions does not alter their status, for authorized War Department regulations have the force of law (United States v. Eliason, 16 Pet. 291, 302; Gratiot v. United States, 4 How. 80, 117-118).
Congressional recognition that the activities of post exchanges are governmental has been frequent. Since 1903 (32 Stat. 927, 938), Congress has repeatedly made substantial appropriations to be expended v/nder the direction of the Secretary of War for construction, equipment, and maintenance of suitable buildings for post exchanges. In 1933 and 1934, Congress ordered certain moneys derived from disbanded exchanges to be handed over to the Federal Treasury (47 Stat. 1571, 1573 ; 48 Stat. 1224, 1229. See Hearings, House, War Department Appropriation Bill, 1934, 72d Cong., 2d Sess.,

The contracts having been made for and on behalf of the United States and under regulations authorized by Congress, how can it be doubted that the United States is liable on them, since long ago Congress authorized suits against the United States on express or implied contracts? (Sec. 1491 of 28 U. S. C.)

The only possible excuse for saying the United States is not liable on these contracts is the following provision in the Army Regulations, AR 210-65, as issued on June 12, 1945:

Exchange contracts are solely the obligation of the exchange. They are not Government contracts and the distinction between exchange contracts and Government contracts will be observed and clearly indicated at (iw“ * * *[Army E"’ s“a°" * 35 h’

Army regulations say exchange contracts are not government contracts, and, yet, the Supreme Court says that exchanges are “arms of the government,” as, indeed, it must be said, especially since Congress makes appropriations for their support and maintenance, and exercises control over their funds, as the Supreme Court pointed out in the case cited.

By what authority does the Army say that their contracts are not government contracts ? Congress has not authorized it to do so. It authorized it to set up exchanges, but Congress did not authorize it to set aside a prior Act of Congress making the Government liable to suit on its contracts, express or implied. The quoted Army regulation is in derogation of the Act of Congress giving consent to suit on its contracts. It is, therefore, invalid. The Army cannot set aside an Act of Congress.

I must confess that the italicized portion of the quotation from the cited case in the opinion of the majority lends some support to the assertion of validity of the Army regulation, but I point out that the question presented to us here was not present in Standard Oil Co. v. Johnson, supra, where this language was used. The question there was whether or not a post exchange was a department of the Government of the United States. The State of California had levied a tax on gasoline sold to United States Army post exchanges in California. The Supreme Court held that the tax was invalid because the Act made the tax inapplicable to fuel sold “to the Government of the United States or any department thereof,” and because a post exchange was a department of the Government. The question of the liability of the United States on the contracts of post exchanges was not presented to the Supreme Court in that case.

The italicized portion of the quotation was said only incidentally, in the course of describing the operations of the exchange. The Court did not mean to pass on the question of whether or not fhe Government was liable on the obligations of the exchange. That is the question with which we are confronted in this case. When that case is presented to the Supreme Court, I am satisfied that it will not hold that the Government is not liable.

The situation today under the Army Exchange Service is not at all comparable with the situation presented to this court in Kyle v. United States, 46 C. Cls. 197. Indeed, a post exchange was not there involved at all. What was there involved was a “post or company fund.” The opinion shows that the accumulations in this fund arose “principally from an economical administration of post domestic affairs, voluntary contributions, and an inconsequential tax upon the post trader.” A great many military organizations, if not all, maintain a company or post fund, which is something entirely separate and distinct from a post exchange. I do not think that case and the one presented to us here are at all comparable.

In the case of Bleuer v. United States, U. S. D. C., E. D. S. C., Civ. No. 2543, decided December 21, 1950, the court had before it an officers’ mess. The court’s opinion shows Congress had expressly prohibited officers’ messes from paying civilian employees out of appropriated funds. In ■other words, if the officers wanted service over and above what was provided by Congress for their mess, they had to pay for it individually. The court of necessity held that the United States was not liable in that case.

Judge Bryan in Edelstein v. South Post Officers Club, U. S. D. C., E. D. Va., Civ. No. 567, decided April 25,1951, in a one-page memorandum opinion, held the United States was immune from suit for obligations of an officers’ club. He relied, on the Army Regulations, but, as I have pointed out •above, I do not think the Army Regulations are controlling. • We all agree- somebody owes this plaintiff the money he .claims.,' he worked for it and he is due it. The Army Exchange Service says it cannot be sued, and that is right. If the United States is successful in maintaining its claim that it also cárinot be sued, the plaintiff is wholly without a remedy. The money is owing to him, but nobody can be made to pay it. Congress did not mean for this to happen. It said so' when it gave its consent to be sued on its contracts.

I respectfully dissent.

FINDINGS OF FACT

The court, having considered the evidence, the briefs and argument of counsel and the report of Commissioner Roald A. Hogenson, makes findings of fact as follows: ■

.1. The plaintiff is a citizen of the United States and a resident of Elmhurst, Long Island, State of New York.

. 2. Effective January 12, 1948, the Army Exchange Service, European Theater, as employer, entered into a contract of employment with the plaintiff, as employee, whereby the plaintiff was retained as a senior accountant in the European Theater, at a salary of $396 per month for a period of two years. In the occupied zones of Germany, the employee was to be furnished with living quarters, or paid $15 per month in lieu thereof, at the option of the employer. The contract contained among others,.the following provisions:

6. Employee will be granted annual leave with pay accruing at the rate of two and one-sixth (2%) work days per month. * * *
9. * * * This contract may be terminated prior to its expiration by Employer by giving thirty (30) days’ notice in writing. Employer may terminate this contract at any time without notice if the conduct or services of Employee are regarded as unsatisfactory. Employee agrees that the determination of Employer as to whether the conduct or.services of Employee are satisfactory or -unsatisfactory shall be final and conclusive upon Employee for all purposes under this contract.
11. Employee will be provided with free transportation, or the costs thereof, at Employer’s option, by train, boat or aircraft from New York to the post of duty and therefrom back to New York upon the expiration of the contract.
14. Employee will bear the costs of the return transportation to New York, including subsistence, if the contract is terminated prior to its expiration for any of the following reasons: * * * b. Unsatisfactory conduct, unsatisfactory services, or other cause attributable to the Employee. * * *
15. Employee will be provided with transportation, or the cost thereof, at Employer’s option, from his present residence to New York City. During the period of this journey and his stay in New York while awaiting transportation facilities, he will receive a daily allowance of $6.00 per day. Employee'will receive the same benefits on his return journey from the time of his arrival at New York until his arrival at the place of residence, provided that he shall, without delay, accept the transportation offered by Employer or the United States Government, and that this contract was not terminated for reasons stated in Article 14 hereof.
16. No per diem allowance will be granted Employee while aboard ship or aircraft en route to destination. Any expenses incurred en route to or from duty station for subsistence charges will be paid upon presentation of certified receipts; in offices at Frankfurt, Germany, or New York, N. Y., provided that no expenses will be refunded to Employee for the period during which he is entitled to a daily allowance m accordance with Article 15 of this contract.
18. Employer may withhold salary or other compensation due to Employee for all claims against Employee for fraud, breach of contract, or negligence, and for the payment of the return costs when such costs are to be borne by Employee as provided in Article 14 hereof.
19. As a person serving with, the Armies of the United States without the territorial jurisdiction of the United States, Employee is and shall be-subject to the provisions of the Articles of War and to the directives of the Theater Commander.

3. The pertinent portions of Alt 210-65, as issued on 12 June 1945, which were in force when the plaintiff entered into his contract with the Army Exchange Service, European Theater, are as follows:

1. Applicability of regulations. — These regulations will govern the operation of all exchanges established within the Army.
2. Definitions. — a. An Army Exchange, as an adjunct of the Army, supplies merchandise and services to specified persons and organizations and is financed by nonap-propriated funds, as defined in Alt 210-50.
11. Army Exchange Service. — a. The Army Exchange Service- has jurisdiction over and provides staff supervision of the operation of all Army exchanges, and consists of such officers, enlisted men, and civilian personnel as are necessary.
17.. General. — a.
(1) So far as practicable, exchanges will be operated by civilian employees, with Army officers in executive control.
35. Contracts. * * *
(h) (1) Exchange contracts are solely the obligation of the exchange. They are not Government contracts and the distinction between exchange contracts and Government contracts will be observed and clearly indicated at all times.

AE 210-50 referred to in the above-quoted regulation deals with posts, camps and stations under the head of “Nonappro-priated Funds.”

4. In December 1948, during the performance of the contract, the plaintiff was assigned in Germany as the chief accountant of the Post Exchange of the Bremerhaven Port of" Embarkation, at a salary of $5,850 per year.

5. At 11:00 a. m., August 10, 1949, the plaintiff , in the performance of his duties as chief accountant caused his acting cashier, Mr. Hans Pletz, to go with one Walter Roloff, the paymaster of the personnel section, to the finance office of the Bremerhaven Port of Embarkation, where they obtained 81,962.12 Deutsche Marks, equivalent to $24,588.64, to be used for payroll purposes. They carried the money to the plaintiff’s accounting office on the second floor of the Post Exchange building; After counting the funds, the' plaintiff had his acting cashier deliver the payroll money to the personnel office, located on the third floor of the same building. ■ Richard S. Proctor, personnel manager, had the money counted, by the paymaster, and gave the plaintiff a receipt for the full amount. The money had been obtained to pay the wages of various German employees, earned during July 1949 and scheduled to be paid Monday, August 15,1949. It was necessary that funds be drawn at least two days before payday in order, that the individual pay. envelopes could be prepared. • On this occasion, the payroll, money was obtained four days in advance because of the intervening non-work days of Saturday and Sunday.

6. On the same day, August 10,1949, the plaintiff was required to attend an official investigation at the staging area of the Bremerhaven Port of Embarkation, and was necessarily absent from his office from about 1: 00 p. m. to 5:25 p. m. The closing time of his office was 5:30 p. m.

At about 4:00 p. m. of that day, the paymaster locked the 81,962.12 Deutsche Marks in a wooden strong box, and delivered the box from the personnel office to the acting cashier in the plaintiff’s office for safekeeping until the next morning. Upon the paymaster’s request, the cashier placed the box in the safe located in the cashier’s cage. Mr. Pletz was the acting cashier during the absence of the regular cashier on vacation. The paymaster kept the key for the box, but did not obtain a receipt. The cashier assumed that, there was payroll money in the wooden box, but was not told what the contents were. Neither the plaintiff nor his supervisor of German employees, who was left in charge during the plaintiff’s absence, was advised of the delivery of the box and its deposit in the safe.

The personnel section had been charged with the duty of handling the German payroll for only the past two months, and on the preparation of the previous payroll, funds had been enclosed in a small suitcase and deposited overnight in the plaintiff’s safe, with the knowledge and consent of the plaintiff.

7. Upon his return to his office at 5:25 p. m., on August 10,1949, the plaintiff witnessed his cashier lock the safe and the door to the cashier’s cage, inserted the two keys, which were attached by a short cord, in an envelope, placed the envelope in a left-hand drawer of his office desk, and locked up his desk. This was customary procedure on the part of the plaintiff. Twelve persons were employed in his office. The plaintiff knew that at least three of them had actual knowledge of this practice, and it is reasonable to conclude that his entire staff was aware of where the safe key was kept. The safe key was about 5% inches long and weighed about 5 ounces.

After locking his desk and observing that all personnel were out of the office, the plaintiff locked the two corridor doors and departed for home in the company of the cashier and the supervisor.

There were 182 Germans and Displaced Persons regularly employed in the building, in addition to an undefined number of American and Allied personnel.

8. The plaintiff’s office consisted of two adjoining rooms partitioned one from the other but with an unlocked door between them. Each room was about 30 feet long and 20 feet wide, and each had a doorway to the corridor. The rooms were numbered 201 and 202. The cashier’s cage was located in the rear corner of room 202 adjacent to the partition between the rooms, and the safe was situated therein. The plaintiff’s desk was located at the far end of room 201 from the partition.

■ The Post Exchange was located in the building, and also a snack bar and a beer hall. The beer hall was usually open until about 10:00 p. m., and the snack bar remained open all night.

The building had a basement, three floors, and an attic, with access between the floors by means of staircases.

The building was enclosed by a fence, and a military guard was maintained at the gate at all hours of the day and night. It was located within a large compound area which was also fenced, with a 24-hour guard at its gate. Passes were required for persons to be admitted into the compound area and also through the gate into the Post Exchange building.

9. At some time between 5: 30 p. m., August 10, 1949, and 8:05 a. m., August 11, 1949, a person or persons unknown, broke into plaintiff’s accounting office through the door to room 201, forced open the drawer to the plaintiff’s desk, obtained the keys, opened the cashier’s cage and the safe, broke open the wooden box, took out 80,579.90 Deutsche Marks, placed the wooden box, still containing 1,382.22 Deutsche Marks, back in the safe, locked the safe and the cashier’s cage, returned the keys to the envelope in the plaintiff’s desk drawer, and left with the funds, after partially relocking the door through which admission had been gained.

10. When the plaintiff was assigned as chief accountant of the Post Exchange in December 1948, the safe key was being carried home at night by a German cashier, who on one occasion temporarily lost the key. The key was found and returned, and thereafter the plaintiff retained it in his possession.

Under date of April 28, 1949, after a conference with the various chiefs, a directive was issued by Lieutenant Colonel Richard G. Lyne, commanding officer of the Post Exchange, Bremerhaven Port of Embarkation, directed to the plaintiff in his position as Chief of the Accounting Section, which provided that the plaintiff was responsible for the safekeeping of the safe key, and further that currency was to be deposited in accordance with existing directives at the earliest possible convenience.

Because he feared that the key might be lost, stolen, or taken from him by force, if he carried it away from the building, the plaintiff decided to keep the key in his desk and requested the security officer of the Post Exchange to provide him with adequate locks for his office desk and doors. It is reasonable to conclude that the security officer knew the plaintiff intended to keep the safe key in his desk. Each of the corridor doors was provided with a padlock and a double-turn lock encased in the door. The plaintiff’s desk was also provided with a lock on the drawer in which the safe key was kept. These keys were requisitioned by plaintiff through the chief of security.

The plaintiff was under orders not to leave sums of money in excess of $20,000 overnight in his safe. Accordingly, on previous occasions he had deposited large amounts with the American Express Company, which was open for business one-half hour after the closing of plaintiff’s office. The amounts usually kept overnight in the safe varied from $500 to $5,000, depending on the receipts during the course of the day. On the night of August 10-11,1949, the payroll funds contained in the wooden box and other monies in the safe exceeded the total sum of $28,000.

The plaintiff, upon his return to his office just before closing time on the afternoon of August 10,1949, made no inquiry as to what had been placed in the safe by the acting cashier during his absence.

11. Upon the discovery of the theft at about 8:30 a. m., August 11, 1949, it was found that the padlock on the door to room 201 had been pried off, and replaced so that the hasp screws were loose. This door, the desk drawer, and the wooden strong box bore markings of the application of a prying instrument.

The building was immediately sealed off and searched by the security officer and a detail of military police, resulting in the recovery of 73,535.90 of the stolen Deutsche Marks concealed in a sack of cement in the attic. The balance taken from the wooden box amounted to 7,044 Deutsche Marks, equivalent to the sum of $1,677.14, which funds were never recovered. Other monies in the safe were unmolested.

12. On August 11, 1949, soon after the theft was discovered, the Commanding General of the Bremerhaven Port of Embarkation appointed a Board of Officers to investigate and determine the facts and circumstances and fix the responsibility for the loss of the payroll funds. The investigation commenced the same day, and during the course thereof, the Board inspected the plaintiff’s office and heard the testimony of twelve witnesses. The Board’s report, a copy of which was received in evidence as Defendant’s Exhibit No. 7, includes a transcript of the testimony heard and the written findings of fact and determinations made. The plaintiff and all other witnesses appeared and were examined without counsel, but were advised of their rights under the 24th Article of War.

The Board’s conclusions of fact were as follows:

1. That there was gross negligence by Mr. Emil Borden, Chief Accountant, in habitually keeping the keys to the cashier’s cage and to the safe in his desk, knowing that certain persons were aware of that repository and knowing that a considerable number of other persons were physically situated within the office in such a manner that they also could easily have been aware of it.
2. That there was negligence to a limited degree by Mr. Daniel F. O’Keefe, Security Officer, in failing to check sufficiently the safekeeping of the key to the safe, by the custodian. There was no other negligence on the part of Mr. O’Keefe.
8. Though not contributing directly to the theft of EES payroll funds investigated by this board, there were found certain negligent practices in the handling of funds in the EES offices. These were:
a. The Personnel Director signed for payroll funds without counting them.
b. Actual custody of payroll funds was transferred between persons of the Personnel Section and the Accounting Section without receipt.
c. An amount greatly in excess of the authorized limit was kept in the Accounting section safe and no steps were taken to avoid the necessity of keeping the payroll funds in that safe for an excessive time.
Additional conclusions were made as follows:
1. The loss was caused by the dishonesty of an employee or employees of the European Command Exchange System through either:
a. The dishonest employee or dishonest employees themselves committing the theft, or
b. The dishonest employee or dishonest employees informing the thieves of the location of the safe key and of the fact that a large sum was in the safe.
2. It is not possible to identify such person or persons by name.
The recommendations of the Board were as follows:
1. That Mr. Emil Borden, Chief Accountant, be held primarily responsible for the circumstances making possible the theft of EES payroll funds in Deutsche Marks at Branch Post Exchange #1, Marine Barracks, on or about 11 August 1949.
2. That Mr. Daniel F. O’Keefe, Security Officer, be considered negligent to a limited degree in failing to check the éxecution by the Chief Accountant of the latter’s responsibility in safekeeping the key to the safe.
3. That Lt. Col. H. Lyne, Post Exchange Officer, and Mr. P. Fischer, General Manager, be considered as having been lax in their general supervision of the handling of funds.
An additional recommendation was made as follows:
That Mr. Emil Borden, Chief ■ Accountant, be held pecuniarily responsible for the sum of 7,044 Deutsche Marks remaining still unrecovered from the total sum of 80,579.90 Deutsche Marks stolen from the Chief Accountant’s safe on or about 11 August 1949.

13. By written Notice of Contract Termination, dated October 26, 1949, the Post Exchange Officer advised the plaintiff as follows:

1. You are hereby notified that as of 1 November 1949 you will be relieved of your duties as Chief Accountant of the Bremerhaven Post Exchange. You are instructed to arrange the affairs of the Accounting Section to enable your successor to assume his duties as Chief Accountant on or about 7 November 1949.
2. This letter constitutes a thirty days’ notice as stipulated in the employment contract, at the end of which time your services with the EUCOM Exchange System will be terminated for the convenience of the employer. Arrangements are presently being made to provide army surface transportation for yourself and wife to the Zone of Interior. Seventeen (17) days’ travel time allowance will run concurrently with this thirty days’ notice.
3. You are further advised, commencing 1 November 1949, to keep the Personnel Office, this Exchange, informed as to your whereabouts so that arrangements relative to separation processing can be effected.

14. On November 1, 1949, the plaintiff was transferred from his position as chief accountant to a position designated as Casual, Personnel Division, Bremerhaven Post Exchange, at the same salary of $5,850. In such position, the plaintiff continued to report to the accounting office and performed the duties requested of him. He received official travel orders on December 6, 1949, and pursuant thereto reported on December 8,1949, to the staging area to await the arrival of the steamship. He departed on December 16 on the first available ship and arrived at New York Harbor on December 29,1949, thirteen days prior to the expiration of the two-year employment period provided in the contract.

The plaintiff was at all times ready, willing, and able to perform the duties and discharge the obligations required of him under the contract.

15. By letter dated November 21, 1949, the plaintiff requested the Judge Advocate General, Headquarters European Command, to review the findings of the Board in order that his future employment status would not be endangered, and asked for a release with full pay rights restored.

On December 30, 1949, the Judge Advocate General ruled that the evidence contained in the Board’s report was sufficient to sustain the imposition of pecuniary responsibility on the plaintiff. His written opinion on the review of the case stated in part, as follows:

5. Evidently the theft was committed by an employee of the Exchange as there is no indication that the building was forcibly entered and the thief apparently knew where the key to the safe was kept in Borden’s desk. Moreover, the loot was found cached in a hiding placein the building from which it may be surmised the thief planned to remove it at his convenience. Borden either lmew, or should have known that his careless practice afforded easy access to the safe and its valuable contents, thereby presenting to the German employees of the Exchange an attractive temptation, if not an inducement to steal. Many of these employees must have known that the safe often contained more money than they could reasonably expect to earn in a lifetime. Surely, it cannot be reasonably contended that Borden’s failure to safeguard the key was not negligence. On the contrary, it appears that his conduct may have induced the theft of the funds. Such conduct fell far below the standard of care reasonably to be expected of him.

16. On April 19, 1950, the plaintiff made a further request for review of the case to the War Department Special Staff, Office of the Inspector General, Washington, D. C., which, upon a review of the record of the Board’s proceedings, advised the plaintiff by letter dated June 20, 1950, that the record proved conclusively that the plaintiff was grossly negligent by habitually keeping the keys in question in his desk drawer, knowing that other persons were aware of that repository or could gain knowledge thereof.

17. The plaintiff claims salary at the rate of $5,850 per annum, payable on a monthly basis from October 1, 1949, to the termination of the contract period on January 11,1950. He also asks for payment of accrued annual leave, the billet allowance only for November 1949, and for travel allowances for the trip from Bremerhaven to New York Harbor.

18. The plaintiff’s active service continued through December 8, 1949, and thereafter to December 25, 1949, he was allowed an estimated travel period of 17 calendar days. A termination accounting statement, received in evidence as Defendant’s Exhibit No. 9, was prepared by the European Command Exchange System, and is summarized as follows:

Salary for October and November 1949 and for Dec. 1 through Dec. 8, 1949_$1,105.00

Salary for estimated 17 days of travel, December 9 through December 25, 1949_ 276.25

Annual leave accrued through December 8, 1949, 196% • hours @ $2.557_ 501.81

Annual leave to accrue during travel period December 9 through December 25,1949, 9% hours @ $2.557- 24.93

Gross amount accrued through Dec. 25,1949_ 1, 907.99

Less charges to the plaintiff:

Advances:

Nov. 4, 1949_$200.00

Dec. 2, 1949_ 307.50

-$507.50

Income tax, by credits on W-2 form_ 212.10

Insurance for Oct. and Nov. 1949- 8.50

Billet for October 1949___ 15.00

-- 743.10

Net amount due___ 1,164.89

No part of the foregoing balance was paid to the plaintiff, but was withheld to offset, in part, the loss of $1,677.14, attributed to negligence on the part of the plaintiff.

19. There is no evidence with respect to subsistence expenses incurred by the plaintiff on his return voyage. The plaintiff claims per diem travel allowances, over and above salary, in the sum of $276.25, on the basis that he was informed by a subordinate employee of the personnel section, Bremenhaven Post Exchange, that the travel allowance would be 17 calendar days @ $16.25, or $276.25. Such an allowance would be equivalent to the plaintiff’s salary rate.

The plaintiff’s official travel orders provided that per diem allowances were authorized in accordance with current European Command Exchange Service directives. The terms of any such directives are not in the record, and there is no reliable evidence upon which a reasonable finding can be made with respect to what amount of travel expenses were allowable.

It is reasonable to conclude that the European Command Exchange System considered the travel period as an extension of the plaintiff’s time of employment, as the accounting statement, summarized in Finding No. 18, allowed the plaintiff his salary for the estimated 17 days of travel but contained no mention of travel allowance as such.

20. Because of the heavy passenger traffic on ships, the plaintiff was required to wait at Bremerhaven from December 8 to December 16,1949, when he was afforded ship accommodations and departed for New York Harbor. The voyage was completed on December 29, 1949, four days later than the estimated time of arrival.

The plaintiff’s salary from October 1 through December 29, 1949, would be $1,446.25, with annual leave accrued for 208% hours @ $2,557, or $532.70. With the allowance of the November billet in the sum of $15, the gross amount to which plaintiff would be entitled would be $1,993.95.

During this period, the plaintiff was advanced sums totaling $507.50, and was credited in the sum of $212.10 for his Federal income tax and in the sum of $8.50 for personal insurance, all of which totaled $728.10.

The net amount to which the plaintiff was entitled upon the ultimate separation of his services as of December 29, 1949, was $1,265.85.

21. Had the plaintiff continued in his employment by the Army Exchange Service through January 11,1950, the end of the contract period, he would have been entitled from an accounting standpoint to additional salary after December 29,1949, for 12 days @ $16.25, or $195.

22. The facts as disclosed by the record are not sufficient to show negligence on the part of the plaintiff.

CONCLUSION OE LAW

Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes that as. a matter of law the plaintiff is not entitled to recover and the petition is therefore dismissed. 
      
       Among other things, the majority opinion says: “For the Army to contend and to provide by regulation that it is not liable since it did not act in its official capacity would be like a man charged with extra-marital activity pleading that whatever he may have done was done in his Individual capacity and not in his capacity as a husband.”