Summary
In State ex rel. Cunat v. Trustees of Cleveland Police Relief Pension Fund (1948), 149 Ohio St. 477, 481-482, 37 O.O. 143, 145, 79 N.E.2d 316, 318, however, the court acknowledged that enactment of the "vested right" statutes placed pensions granted to public servants covered by a firemens pension fund or a police relief fund in the category of unilateral contracts that, upon conditions fulfilled, ripen into a contractual right to a pension.
Summary of this case from State ex Rel. v. Retirement Bd.Opinion
Nos. 31288, 31289, 31290 and 31291
Decided May 5, 1948.
Municipal corporations — Firemen's and policemen's pensions — Suspension of payments while pensioners receiving full-time governmental salary — Statute and rules of trustees inapplicable — Pensioners retired after vested pension statute effective — And before statute effective suspending pension payments — Sections 4612-1, 4628-1, 4612-4 and 4628, General Code.
Members of the fire and police departments of the city of Cleveland, who retired in good standing from such departments and were duly awarded pensions after the effective dates of Sections 4612-1 and 4628-1, General Code (giving vested rights to pensions), and before the effective date of Sections 4612-4 and 4628, General Code, as amended (suspending the payment of pensions during the time pensioners hold "an elective or appointive full-time salaried office or position in the service of the state or any political subdivision thereof"), and prior to the effective date of rules of the trustees of the pension funds involved likewise suspending pension payments, are not affected by the latter sections or such rules, and are entitled to receive the pensions granted them even though they re-enter public service of the character described in the statutes, which service is not in the departments from which they retired.
IN MANDAMUS.
These four actions in mandamus invoke the original jurisdiction of this court. The causes are submitted upon the petitions, answers, replies and agreed statements of fact.
All the relators are former members of the fire or police departments of the city of Cleveland and retired in good standing from their respective departments after long periods of service. Those who were firemen retired and were pensioned after the effective date of Section 4612-1, General Code, and those who were policemen retired upon pension after the effective date of Section 4628-1, General Code. These enactments are commonly known as the "vested right" statutes.
Moreover, all the relators retired prior to the time the General Assembly amended Sections 4612-4 and 4628, General Code, to provide that the payment of pensions should be suspended during the time the pensioners re-engaged in public service of a described character.
In conformity with the above amendments, on September 22, 1947, the trustees of the Firemen's Relief and Pension Fund of the City of Cleveland and the trustees of the Cleveland Police Relief Pension Fund passed similar resolutions to the effect that those persons presently receiving pensions or disability benefits under the existing rules and regulations of the respective relief and pension funds, who are holding an elective or appointive full-time salaried office in the service of the state of Ohio, or any political subdivision thereof, shall not be entitled to any payments on or after September 24, 1947, while they are so employed.
Since all the relators held full-time salaried positions (one an elective office) in the service of political subdivisions of the state of Ohio at the time of and ever since September 22, 1947, their pension payments were discontinued. None of the relators, however, was re-employed in the fire or police departments of the city of Cleveland.
Each relator asks for a writ of mandamus ordering his restoration, as of September 24, 1947, to the pension rolls and the continuing payment of a pension in the amount he was receiving on such date.
Messrs. Sanborn, Brown Corlett, for relators.
Mr. Lee C. Howley, director of law, and Mr. Robert J. Selzer, for respondents.
In 1947, the General Assembly amended Section 4612-4, General Code, relating to benefits and pensions for firemen, and Section 4628, General Code, relating to benefits and pensions for policemen, the effective date of each of such amendments being September 25, 1947. Both of such sections as amended close with the following language:
"No person shall be entitled to receive pension or disability payments pursuant to the provisions of this section while he is holding an elective or appointive full time salaried office or position in the service of the state or any political subdivision thereof."
Section 4612-1, General Code, passed in 1937 (117 Ohio Laws, 30), amended in 1939 (118 Ohio, Laws, 286), and appearing under the heading "Firemen's Pension Fund," reads in part:
"The granting of relief or pension to any person or persons pursuant to the rules adopted by the trustees shall operate to vest a right in such person or persons to obtain and receive the amount fixed by the board of trustees."
Section 4628-1, General Code, enacted in 1937 and appearing under the heading "Police Relief Fund," provides:
"The granting of a pension to any person hereafter pursuant to the rules adopted by the trustees shall operate to vest a right in such person, so long as he shall remain the beneficiary of such pension fund, to receive such pension at the rate so fixed at the time of granting such pension."
In recent years this court has decided several cases with respect to pension awards to those who had been engaged in public service. See Mell et al., Trustees, v. State, ex rel. Fritz, 130 Ohio St. 306, 199 N.E. 72; State, ex rel. White, Gdn., v. City of Cleveland, 135 Ohio St. 13, 18 N.E.2d 807; State, ex rel. Carroll, v. McCarthy, 139 Ohio St. 654, 41 N.E.2d 863; State, ex rel. Lemperle, v. McIntosh et al., Trustees, 145 Ohio St. 107, 60 N.E.2d 786; State, ex rel. Hall, v. Bd. of Trustees, ante, 367.
The Mell case, decided in 1935, announced that, even where a pensioner has made compulsory contributions to a pension fund, the pension granted him by public authorities is a gratuity and does not partake of a vested or contractual right; wherefore "an existing board of trustees of a pension fund has discretionary power to modify pension awards theretofore made by it or by predecessor boards, by increasing or reducing the amount thereof, provided the same is done reasonably and not arbitrarily."
Subsequent to such decision and patently to change the rule established thereby, the General Assembly passed the "vested right", statutes.
Referring to Section 4628-1, General Code, Judge Williams spoke as follows in the Lemperle case, supra:
"A pension, granted after the statute took effect, is vested insofar as the power of the trustees is concerned. The provision deprives the trustees of power to take away or impair the right to a subsequently granted pension but does not affect the trustees' right to pass rules altering pensions previously granted."
The pivotal question in the instant cases is whether those parts of Sections 4612-4 and 4628, General Code, quoted above, operate, or can be applied by the pension-fund trustees, to deprive these relators of the pensions which were granted them after the "vested-right" statutes took effect and before the quoted language from Sections 4612-4 and 4628, General Code, and the rules adopted by the trustees pursuant thereto became effective.
Although the Mell case, supra, placed pensions granted to public servants in the category of "gratuities," a number of cases from other jurisdictions take the position that pensions awarded public employees should not be regarded as gratuities or bounties, but as a consideration for services which were not fully recompensed when rendered; and that the contributions made by governmental units to such pension funds accomplish the purposes of bringing about better and more efficient service, of improving the quality and morale of public employees, of attracting competent persons to public service and of retaining faithful and experienced employees who otherwise might seek more lucrative and promising work.
Doubtless the considerations outlined just above were responsible, in a measure at least, for the enactment of the "vested right" statutes, and the effect of those statutes is to make the engagement of public authorities to pay a pension, upon conditions fulfilled, a contractual obligation founded upon a valid consideration, giving to the pensioner a vested right in his pension which cannot afterwards be impaired or revoked.
The cases of Retirement Board of Allegheny County v. McGovern et al., Commrs., 316 Pa. 161, 169, 174 A. 400, 404 and David v. Veitscher Magnesitwerke Actien Gesellschaft, 348 Pa. 335, 346, 35 A.2d 346, 351, are authority for the proposition that, "until an employee has earned his retirement pay, or until the time arrives when he may retire, his retirement pay is but an inchoate right; but when the conditions are satisfied, at that time retirement pay becomes a vested right of which the person entitled thereto cannot be deprived; it has ripened into a full contractual obligation."
In Roddy v. Valentine, Police Commr., 268 N.Y. 228, 232, 197 N.E. 260, 262, the court said:
"Where, however, the statutory conditions for retirement existing when application is made have been met and the award of the pension or benefit has been made, or as of right should have been made, * * * the interest becomes vested and takes on the attributes of a contract, which in the absence of statutory reservations, may not legally be diminished or otherwise adversely affected by subsequent legislation."
In 162 A. L. R., annotation at page 1475, the comment is made:
"The authorities are not in accord regarding the question whether a pension granted by the public authorities is a gratuitous allowance in the continuance of which the pensioner has no vested right, or whether such pension belongs to the grantee as a matter of right which, once granted and allowed, cannot thereafter be divested. * * *
"Generally speaking, it seems that a statute creating the pension makes it a vested right in cases where the contingency upon which the pension was to be payable has happened or where all the conditions have been fulfilled entitling the person in question to a pension, so that a later law providing for a suspension of the pension during the time a retired public officer or employee re-enters public employment cannot deprive such officer or employee of his pension already granted."
Representative cases supporting the quoted text are Roddy v. Valentine, Police Commr., supra, and McBride v. Allegheny County Retirement Board, 330 Pa. 402, 199 A. 130. Compare Franklin v. Mayor, and Aldermen of Savannah, 199 Ga. 426, 34 S.E.2d 506 and State, ex rel. Carroll, v. McCarthy, supra.
Upon the basis of what has been said and the authorities cited, we have come to the conclusion that all the relators (who were awarded their pensions upon retirement after the "vested right" statutes became law and before the effective date of the statutes and rules suspending the payment of pensions to pensioners who re-enter public employment) have acquired a vested right to the pensions granted them which cannot be taken away or adversely affected by subsequent legislation or rule.
Therefore, writs are hereby issued in relators' favor restoring them to the pension rolls of the pension fund from which they were removed, with the payment to them of the amounts to which they may properly be entitled from September 24, 1947.
Writs allowed.
WEYGANDT, C.J., MATTHIAS, HART, SOHNGEN and STEWART, JJ., concur.