Opinion
No. 20,387.
Decided September 30, 1963.
Action against Public Employee's Retirement Association and Employee's Credit Union for accumulated retirement fund credit to plaintiff and paid to credit union by association. Judgment for plaintiff.
Affirmed.
1. PENSIONS — State Employees — Retirement Fund — Power of Attorney — Statute. Under C.R.S. '53, 111-1-20, funds accumulated in retirement fund to credit of state employee may not be assigned, or subjected to execution, attachment, garnishment or other legal process; hence power of attorney cannot vest any interest in the fund and is revocable; thus payment to credit union out of fund after power was revoked is contrary to law and void.
2. Public Employees' Retirement Fund — Termination of Employment — Accumulation — Payment — Statute. Under C.R.S. '53, 111-1-9 (1), when any member of the retirement association ceases to be a state employee for any reason, he shall be paid on demand the full amount of the accumulated deductions standing to the credit of his individual account.
Error to the County of the City and County of Denver, Hon. David Brofman, Judge.
Mr. DUKE W. DUNBAR, Attorney General, Mr. FRANK E. HICKEY, Deputy, Mr. RICHARD W. BANGERT, Assistant, for plaintiff in error Public Employees' Retirement Association of Colorado.
Mr. JACK E. KENNEDY, for plaintiff in error Colorado State Employee's Credit Union.
Mr. RICHARD M. KRANZLER, Mr. JACK I. SCHEIMAN, for defendant in error.
WE will refer to the plaintiff in error Public Employees' Retirement Association of Colorado as the "Association"; to the other plaintiff in error as "Credit Union," and to the defendant in error as "Johnson." The parties appeared in reverse order in the trial court where Johnson brought suit to recover monies paid by him into the Association Pursuant to the statute which provides for the retirement of state employees.
The facts were stipulated. Johnson was employed by the State of Colorado from April, 1955, until he resigned on May 2, 1961. Through payroll deductions there was paid into the Association fund during this period the amounts required by statute as employee's share in the retirement plan, and there had been accumulated to Johnson's credit the sum of $1,211.78. Through a series of transactions Johnson borrowed from the Credit Union the sum of $1,659.00, the last item having been $150.00 borrowed the day before his resignation. On the same day he signed and delivered to the Association an agreement appointing the Credit Union his "attorney-in-fact." This "appointment" was apparently substituted for similar documents signed at the time of the prior borrowing transactions because the agreed statement of facts recites that "In accordance with procedure adopted by the Credit Union, Johnson was required as a condition of his loan to sign the document." It reads as follows:
"So long as this note remains unpaid, I hereby appoint and constitute The Colorado State Employees Credit Union to be my attorney-in-fact and in case I should cease to be employed by the State of Colorado to demand and receive any moneys or credits payable to me from the State of Colorado, or from any bank, employees retirement fund, or other depository or trustee with power to act as such, as fully and effectually as I might or could do in my own proper person if personally present, and hereby ratify all that my said attorney-in-fact shall lawfully do or cause to be done hereunder." (Italics supplied.)
On May 2, 1961, Johnson terminated his public employment. Then ensued the following chronology of events: Johnson made formal demand upon the Association for refund of the monies deposited to his credit in the fund; on the same day the Credit Union filed the "power of attorney" signed by Johnson with the Association; on May 9th Johnson executed a revocation of the "power of attorney," and this was stamped "received" by the Credit Union, the following day, May 10th; on May 11th Johnson made a formal request to the Association that his retirement funds be retained by the Association on deposit for later payment as a deferred annuity; on the same day the Association paid over the funds to the Credit Union; on the same date the Credit Union credited Johnson's loan account in an identical amount and carried forward a loan balance of $447.22. On August 24, 1961, Johnson filed with the Association a request to cancel his application for a deferred annuity and demanded cash payment of the full amount of his retirement account. When this demand was refused by the Association he commenced suit in the county court in Denver.
Trial on the agreed statement resulted in entry of a judgment in favor of Johnson and against both the Credit Union and the Association in the amount claimed, and to this judgment the writ of error is directed.
The trial court found that the document purporting to appoint the Credit Union as "attorney-in-fact" was an equitable assignment coupled with an interest and void as in violation of C.R.S. '53, 111-1-20, which provides:
" Funds not subject to process. — None of the moneys, annuities or other benefits mentioned in this article shall be assigned either in law or equity or be subject to execution, levy, attachment, garnishment or other legal process, and shall be exempt from any state income tax."
This reasoning of the trial court is assigned as error. Under the cases setting forth the necessary requisites of an equitable assignment, we agree that the document referred to is not such an assignment. This, however, avails the Credit Union nothing. Notwithstanding the reason assigned by the trial court was erroneous, the judgment is correct. The payment by the Association of the fund to the Credit Union, the acquisition of the money and its use by the Credit Union to reduce the indebtedness of Johnson to it are contrary to law and void. The judgment of the trial court being correct although on an erroneous ground, will nevertheless be affirmed. Denver Transport v. Galligan, 145 Colo. 71, 358 P.2d 28; Lawyers Corp. v. Frieder, 147 Colo. 44, 362 P.2d 555.
If as contended by the Credit Union the document signed by Johnson did not assign or transfer any interest in the fund to the Credit Union, then the appointment of it as an agent to demand and receive the moneys and credits was revocable. 2 Am.Jur. (Agency) 65, § 80. Any other construction would brand the instrument as being in plain violation of 111-1-20 and void. The power does not assign the interest in the fund, does not purport to be security by any words used, and does not give the Credit Union any authority except to demand and receive the money as could Johnson in his own proper person.
Under the agreed chronology of facts, the Association was served on May 4, 1961, with a written demand in which Johnson asks for a refund "pursuant to law" of "the full amount of the accumulated deductions standing to the credit of his individual account." The hour of the receipt of this demand is not noted on the receipt stamp of the Public Employees' Retirement Association. The stipulation states that the "power of attorney" was received by the Association on the same day although there was no receipt stamp or notation of any kind showing that the power was filed in the Association office. The stipulation does not reveal which came into the office first, but it would make no difference. If Johnson's personal demand for the funds came in first, the Association was on notice that the authority of the Credit Union to receive the funds had been withdrawn. If the power of attorney came in first, the demand by Johnson for the full amount of the fund to be paid directly to him would supersede the power of attorney and put the Association on notice of the revocation of the power. All of this took place before any money had been paid out by the Association, and disbursement of the fund can only be made upon approval of the Retirement Board and a finding by the Board that the disbursement was "for the purpose of * * * refundment to a member." C.R.S. '53, 111-1-4. The stipulation also shows that in apt time and before the Association actually paid out any moneys another election was filed by the employee, altering his demand for refund and electing to take one of the options which provides for the money to be retained on deposit for later payment as a deferred annuity. This document also constitutes notice to the Association that the power of attorney was no longer valid.
In addition to the notice to the Association, Johnson executed a written revocation of the appointment of the Credit Union as his "attorney-in-fact" and filed the revocation in its office a full day in advance of receipt of the funds from the Association. The money thus came into the hands of the Credit Union at a time when it had no authority to receive the same. Receiving the money and failing to turn it back to the Association, the Credit Union holds it in trust for return to Johnson.
We hold under C.R.S. '53, 111-1-9 (1) when any member of the Association shall cease to be a state employee for any reason he shall be paid on demand the full amount of the accumulated deductions standing to the credit of his individual account. Such demand was made in apt time here.
The judgment is affirmed.
MR. JUSTICE HALL and MR. JUSTICE PRINGLE specially concur.