CASSERLY v. CITY OF OAKLAND

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District Court of Appeal, First District, Division 1, California.

CASSERLY v. CITY OF OAKLAND et al.*

ERNY v. SAME.

SHERRY v. SAME.

Civ. 9485-9487.

Decided: July 11, 1935

Decoto & St. Sure and John D. Martin, all of Oakland, for appellants. C. Stanley Wood, former City Atty., F. Bert Fernhoff, City Atty., and John W. Collier, Asst. City Atty., all of Oakland, for respondents.

This is a consolidated appeal from the judgments in three separate actions denying to the respective petitioners and appellants a peremptory writ of mandamus. The principal question involved in each appeal is practically the same.

The appellant Nora Casserly is the widow of William Casserly who, for nineteen years and continuously up to the time of his death on December 21, 1930, had been a member of the fire department of the city of Oakland. At the time of his death he held the rank of hoseman, and received an annual salary of $2,400. Section 104 of the charter of the city of Oakland provides that the board of trustees of the Firemen's Relief and Pension Fund shall, out of said fund, provide for the family of a member of the department who may be killed while in the performance of his duty, as follows: “(a) Should the decedent be married, his widow shall, as long as she shall remain unmarried, be paid a pension equal to one-half of the salary attached to the rank held by the decedent at the time of his death, which pension shall be payable in equal monthly installments.” On August 9, 1932, said board of trustees granted to said appellant a widow's pension of $1200 per year.

The appellant A. E. Erny was, on June 8, 1933, retired for disability as a member of the police department of the city of Oakland. He had held the rank of patrolman for a year prior to the date of his retirement. His disability resulted from injuries received while in the performance of his duties, which injuries necessitated the amputation of one leg and prevented future active duty as a police officer. At the time of his retirement, he was awarded an annual pension of $1200, being one-half of his salary as a patrolman. Section 95 of the Oakland charter provides for the retirement, for disability resulting from bodily injuries sustained in the performance of duty, upon a pension equal to one-half of the amount of salary attached to the rank which the member of the department, so retired, held one year prior to the date of such retirement, such payment to be paid to him during his life, and to cease at his death. In case disability should cease, his pension should cease, and he would be restored to the service in the rank he occupied at the time of his retirement.

Appellant J. J. Sherry was a member of the police department of the city of Oakland from April 7, 1896, until May 27, 1932, at which time he was 63 years of age, and was retired under the provisions of section 94 of the Oakland charter, which provide, in substance, that the board of trustees of the Police Relief and Pension Fund may retire and relieve from service any aged, infirm, or disabled member of the police department who has arrived at the age of 60 years, upon a monthly pension equal to one-half of the salary attached to the rank held by him one year prior to the date of his retirement. Such person must have been an active member of the department for 20 years. Appellant Sherry had held the rank of sergeant for more than one year prior to the date of his retirement at a salary of $220 per month, and was accordingly awarded a pension of $110 per month for the remainder of his life.

In July, 1933, certain amendments to sections 91 and 97 of the Oakland charter became effective; these amendments providing, in substance, that no compensation or salary less than that specified in the respective sections of the charter shall be paid; provided, however, that when it shall be found by the city council of the city of Oakland, by ordinance adopted by not less than six affirmative votes, that an economic emergency confronts the Oakland city government due to extraordinary conditions beyond the control of said city government, said council may, by ordinance, provide for and effect a reduction of not to exceed 10 per cent. of the annual salaries fixed by each section. In accordance with the authority granted under said sections, the Oakland city council on July 31, 1933, enacted an ordinance reducing the salaries of the members of the fire and police departments. Later, the board of trustees of the Firemen's Relief and Pension Fund reduced all fire department pensions, including that of appellant Casserly, to one-half of the amount fixed as salaries by the city council, by its ordinance, and a pension reduced by 10 per cent. of the amount originally awarded was allowed to the appellant Casserly. The board of trustees of the Police Pension Fund took similar action by resolution dated August 30, 1933, and awarded pensions based upon the salaries as fixed by the city council for active ranks, and this reduction amounted to 10 per cent. of the monthly pension originally awarded to appellants Erny and Sherry. The charter of Oakland also contains provisions, both as to police and fire departments, that there shall be deducted from each monthly installment of salary, a sum equal to 5 per cent. of such salary, which sum so deducted shall be retained by the city treasurer, and forthwith paid by him into the police or firemen's relief and pension fund (as the case may be), and the city shall contribute the balance necessary to maintain said fund pursuant to the provisions of the charter, and no other or further deductions shall be made from the pay of any officer or member of the respective departments for any fund or purpose, unless the same is authorized by the charter. Respondents point out that salaries in all ranks in the police and fire departments were increased in 1919, 1923, and 1925, but it should be noted that no increase occurred after the award of the respective pensions involved in this appeal.

It is contended by respondents that the amount of money received monthly as a pension is reduced proportionately upon the reduction of the salary attached to the active ranks in the police and fire departments, while appellants urge that the right to the pensions awarded respectively to them vested in them immediately, and constitutes a minimum below which the original award may not be decreased. While we have some dicta in the decisions of the California courts which might be interpreted as tending to support the principle that the basic pension originally awarded may be reduced, the statements of the courts seem to be confined to and properly applied to the state of facts then before them, and we have been able to find no case in which the question directly involved in this appeal has been brought to the attention of, or decided by, any court of this jurisdiction.

The state of California has for a long number of years adopted a liberal attitude in regard to pensions awarded to persons employed in the hazardous duties of the police and fire departments of its various municipalities. It has often been held that pension statutes are to be liberally construed. O'Dea v. Cook, 176 Cal. 659, 169 P. 366, 367; Aitken v. Roche, 48 Cal. App. 753, 192 P. 464; Klench v. Board of Pension Fund Commissioners, etc., 79 Cal. App. 171, 249 P. 46, 49.

The policy and purpose of pension statutes have been admirably stated by Mr. Justice Hart in Douglas v. Pension Board, 75 Cal. App. 335, 242 P. 756, 757, and in Klench v. Board of Pension Fund Commissioners, etc., supra. In Hurley v. Sykes, 69 Cal. App. 310, 231 P. 748, 751, the court said: “The spirit of these provisions is to protect all members of the fire department in the benefits which the fund insures, and they should not be narrowed by any strict or technical construction, but should be interpreted on broad principles. Any other construction would result in a limitation of the beneficial provisions of the act, and render nugatory the manifest intention of the law-making power, and do violence to its apparent purpose.”

While many jurisdictions have adopted the view that a pension is merely a bounty or gratuity, that principle has never obtained in California. “A pension is a gratuity only where it is granted for services previously rendered, and which at the time they were rendered gave rise to no legal obligation. * * * But where, as here, services are rendered under such a pension statute, the pension provisions become a part of the contemplated compensation for those services, and so in a sense a part of the contract of employment itself.” O'Dea v. Cook, supra; Aitkin v. Roche, supra; Jackson v. Otis, 66 Cal. App. 357, 225 P. 890; Klench v. Board of Pension Commissioners, etc., supra.

Upon the happening of the event or contingency which is fixed as the occasion for the allowance of a pension, the right to such pension becomes vested and cannot be taken away or impaired by the amendment of the charter, ordinance, or statute under authority of which the pension was originally granted, and it is not competent for the Legislature or any other authority to deprive the pensioner of his vested right. Kavanagh v. Board of Police P. F. Commissioners, 134 Cal. 50, 66 P. 36; Sheehan v. Board of Police Commissioners, 47 Cal. App. 29, 190 P. 51. In Klench v. Board of Pension Commissioners, supra, the court said: “* * * while no public officer or employee of the government is entitled as of right to a pension (Douglas v. Pension Board of the City of Sacramento [75 Cal. App. 335], 242 P. 756), still, when once the government establishes a retirement pension system for its officers and employees and provides the funds and means for administering it according to its design, any such officer or employee, when the conditions arise or occur upon which, under the rules and regulations of the system, he becomes eligible to be retired and placed upon the pension roll, and he having met all the requirements entitling him to be so retired has in fact been retired and enrolled upon the pension list, has then acquired a vested right to draw his pension and to receive as such whatever sum or sums of money may be provided for such purpose for officers or employees of the class to which he belongs. The petitioner here, as the admitted averments of the petition disclose, had become eligible, under the terms of the Pension Act of 1889, to be retired. All the conditions upon which his retirement on a pension could be effected had occurred, and he was accordingly legitimately retired and placed upon the pension roll. His right to be paid the money provided for police officers of his class or rank had become vested, and hence it does not lie within the power of the city council by ordinance, or by inaction with respect to the enforcement of such ordinance, in effect to destroy that right, until the conditions upon which he was retired and placed upon the pension roll have ceased to exist. * * * It is to be conceded, however, that it is within the power of the Legislature, state or local, to repeal, change, or modify a pension law passed for the benefit of its officers or employees, yet, until that is done, and there is a pension system duly established by law, either by direct action of the Legislature or by a local political subdivision under its charter, and the conditions or contingency happen upon which an officer or employee of the government becomes eligible to be placed upon the pension rolls and is actually so placed, such officer or employee then acquires a right to be paid the money provided for his relief under such law of which he cannot legally be divested.”

How consistently the courts of this state have recognized the vested right of the pensioner is illustrated by the following cases: In Jackson v. Otis, supra, a police officer of the city of Alameda was retired for disability and placed upon the pension list. Later, he was elected constable, and it was sought to restrain the payment of his police pension. The court held that he could continue to draw his pension. The court quoted from O'Dea v. Cook, supra, to the effect that, when services are rendered under a pension statute, the pension provisions become a part of the contemplated compensation for those services and so in a sense a part of the contract itself. In the case of Douglas v. Pension Board, supra, the charter of the city of Sacramento provides that all employees of the city who have served the city continuously for 20 years in any capacity, except as an elective officer or city manager, should be eligible to relief and pension, and that certain employees who have passed the age of 60 years and shall be found unfit for the performance of their duties shall receive an annual pension equal to one-half of the salary paid them one year prior to their retirement. The plaintiff had been employed continuously by the city of Sacramento for more than 20 years at a daily wage. During the last year of his employment he was unable to work during a period of approximately three months because of illness, and actually received a much smaller total compensation for that year than the preceding years. The court held that the intent of the charter was that a per diem employee, upon his retirement at the end of his twentieth year of continuous employment in the service of the city, should receive a pension in an amount equal to one-half of what his compensation would total in the twentieth year, counting every working day, regardless of whether or not he was actually working on every such day. The court, in the course of its opinion, spoke as follows:

“The effect of laws providing for the payment of retirement pensions to public officers or employees is to increase the compensations of such officers and employees, and they are so intended. This proposition has particular force as to public officers who perform services as such subsequent to the passage of the law granting such pensions. * * * While, of course, no public officer or employee is entitled as of right to be granted a pension, still, when a government has adopted a retirement pension system, it should be so administered as to bring about the efficacious results which it is intended to produce. It should not be so construed and administered as to confer its benefits upon those not actually entitled thereto, nor so that those so entitled should be denied their just rights thereunder.

“By the provisions of the charter of the city of Sacramento establishing a retirement pension system it was intended, of course, that every officer or employee of said city who has performed services for the city for the specified number of years, based either upon the age limit or disability, shall, upon his retirement, receive the compensation or pension specified in the instrument, and that intention should be carried out in all proper cases, and never set at naught in any particular instance, except it is plainly apparent that the conditions upon which pensions are to be granted do not exist.”

In Watkins v. Pension Board, 91 Cal. App. 542, 267 P. 323, the plaintiff had been for over 21 years continuously employed as a member of the fire department of the city of Sacramento in the capacity of “Superintendent of the Fire Alarm System.” He was relieved because of disability, upon a pension equivalent to one-half of his salary. Later, the city of Sacramento adopted a new charter by which the position formerly held by plaintiff was discontinued, and the position of “City Electrician” was created. That position provided for additional duties and more technical knowledge, and was combined with duties of other officers. A larger salary was provided for the new position, and plaintiff sought an increased pension upon the theory that the city electrician was an officer of the same rank as the superintendent of the fire alarm system. The court held that the two positions were not the same and plaintiff was not entitled to the increased pension, but it was conceded by counsel for both parties that petitioner had a vested right to a pension in the original sum awarded to him, and the court accepted that concession.

The pension being a part of the compensation of the employee to whom it has been awarded, and therefore a part of the contract itself, it must be something capable of exact definition. The pensioner must have assurance that the consideration as in any other contract will be paid when he has done his part, and the contingency upon which the pension is based has arrived. If the pension can on one occasion be decreased because of an economic emergency or by reason of some other amendment to the charter of the city, there is no assurance that other changes will not be made which will further encroach upon the vested right of the pensioner and destroy the safeguards which the law intends, and which it has been the policy of the state to carry out.

The Oakland charter purports only to reduce salaries, and there is no direct authority or direction in the charter itself for the reduction of pensions. The right to a pension contemplated by the law is not a phantom right, but one of substance. To offer anything else to the pensioner who may be a widow, or a person who has been so seriously injured, or has become so infirm, that he cannot expect to return to active service, would be to defeat the purpose of the law, as suggested in the cases which have been cited.

For the reasons stated, we must conclude that the pension involved in each of the cases represented in this appeal cannot be reduced below the amount of the basic pension originally awarded, and in which the respective appellants and petitioners have acquired a vested right. The petition for a peremptory writ of mandamus in each case should have been granted. The judgments are reversed.

PER CURIAM.

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