WALLACE v. CITY OF FRESNO

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District Court of Appeal, Fourth District, California.

WALLACE et ux. v. CITY OF FRESNO et al.*

Civ. 4631.

Decided: May 13, 1953

Lawrence W. Young, Fresno, for petitioners and appellants. C. M. Ozias, City Atty., Fresno, for respondents.

Petitioners appeal from a judgment in proceedings for a writ of mandate to compel the city of Fresno to pay petitioner, R. T. Wallace, a service pension in the sum of $150 per month during his lifetime and upon his death to pay said pension to his wife, Clara Wallace.

There is no dispute as to the material facts. On August 15, 1921, petitioner, R. T. Wallace, was appointed a member of the police department of the city of Fresno. He served the city as a police officer and as chief of police until July 30, 1949, when he was granted a service pension at the rate of $150 per month, to commence on that date. He then retired from the police department and thereafter received his service pension until June 4, 1952. On April 21, 1952, he was convicted in the United States District Court of a felony, upon his plea of guilty to preparing and filing false and fraudulent income tax returns. On June 4, 1952, the Policemen and Firemen's Pension Board of the city, upon being informed of this conviction, passed a resolution terminating the pension as to R. T. Wallace and ordering it paid to his wife, Clara Wallace, until such time as he should be released and discharged from imprisonment under the judgment of conviction, and further ordering that all pension payments be then terminated and ended. This resolution was approved by the city commission on June 5, 1952, and these proceedings to obtain a writ of mandate were commenced.

The trial court denied the writ as to petitioner, R. T. Wallace, and issued a peremptory writ commanding the pension board and the city commission to either (a) resolve to deny the pension as to petitioner, Clara Wallace; or (b) resolve to grant the pension to her during her lifetime and to make such a determination within thirty days.

The question here to be determined is whether the petitioners are bound by the provisions of city ordinance No. 1415, passed September 8, 1927, and ordinance No. 3116, passed March 14, 1946, particularly the provisions found in Section 11 of each of said ordinances, which section is as follows:

‘Section 11. Whenever any person who is receiving any pension from the pension fund as provided herein, shall fail to report himself as required by order of the pension board, after being notified as required by this ordinance, or shall wilfully disobey the requirements and orders of said board or shall be convicted of a felony or crime involving moral turpitude, become dissipated or become nonresident of this state except by permission of the board, then said board may, after notice to the petitioner, order that the pension allowance of said person shall immediately cease and terminate; and the pension board in its discretion may order the pension or allowance to be paid to the dependents of said petitioner, if there be any, in the order or succession as stated in Section 9 hereof.’

At the time petitioner, R. T. Wallace, was first appointed as a member of the police force in 1921, Section 26 of the Charter of the city of Fresno provided as follows:

‘Relief and Pension Funds. The City Commission shall by ordinance provide for and establish a fund, or funds for the relief and pensioning of members of the Police and Fire Departments, who have been disabled or become superannuated in the service of the city, and shall provide for the administration of such fund, or funds.’

Pursuant to this charter provision, the city commission passed an ordinance on October 11, 1923, to create, maintain and provide for the disbursement of a policemen and firemen's relief, health, life insurance and pension fund. This ordinance, No. 1021, provided, among other things, that any member of the police department of the city who had attained the age of 55 years and who had served in that department 25 years in the aggregate was as a matter of right entitled, on his application, to a retirement pension not to exceed $150 per month for life and upon his death said pension was payable to his widow during her lifetime or until she remarried. It was also provided therein that no removal of any member from the department after 25 years of service should deprive him of the benefits of the section except if such removal was for habitual drunkenness, notorious insubordination or conviction of a felony or crime involving moral turpitude and then only in the event the commission in its discretion ordered that such removal operated to deprive such member of the benefit of the provisions thereof.

Ordinance No. 1021 contained no provision for payments by members of the police department into the pension fund and the first payments made by such members began July 5, 1938, under the terms of ordinance No. 1415 at the rate of 4% of the member's monthly salary. This payment was increased to 4 1/2% by the terms of ordinance No. 3116.

Appellant argues that Section 26 of the city charter establishes two conditions upon which a pension may be given, to wit, age or disability of the employee, and that where either of these conditions occur, the officer, provided he has 25 years service with the city, is entitled to his pension as a matter of right; that the city cannot modify or supersede by ordinance any provision of the charter and that by enacting Section 11 in ordinances 1415 and 3116, the city attempted to modify the charter contrary to its provisions. We cannot agree with this argument.

Section 26 of the charter is a grant or authority to the city to establish and administer pension funds. It is specifically provided therein that this be done by ordinance. The amount of the pension benefits, the determination of disability and superannuation of employees and many other matters were to be provided for in such ordinances. In this connection it may be noted that no provision is made in the charter for payment of such funds to the dependents of members of the police department. There is then no charter provision establishing pension rights as to petitioner, Clara Wallace. The language in the charter must be interpreted in its ordinary meaning and in accordance with legislative intent. Tripp v. Board of Fire, etc., Com'rs, 94 Cal.App. 720, 723, 271 P. 795. The plain intent expressed in the charter is that the city commission is given the authority to provide by ordinance rules and regulations for the administration of pension funds. A pension law may be changed or modified and when one is placed upon the pension roll, he does not obtain a vested right to any fixed or definite benefits, but only to a substantial or reasonable pension. He has a vested right to a pension, but the amount, terms and conditions of the benefits may be altered. Kern v. City of Long Beach, 29 Cal.2d 848, 855, 179 P.2d 799.

In Brophy v. Employees Retirement System, 71 Cal.App.2d 455, 162 P.2d 939, plaintiff was appointed to the civil service position of fireman in October, 1909, under the then provisions of the San Francisco city charter. He was a member of the department until his retirement in May, 1942. In 1909 the city charter provided that a fireman, after 25 years of active service, could retire on a monthly retirement allowance equal to one-half the amount of salary attached to the rank held by him for 3 years prior to retirement. In 1932 a new charter was adopted, which contained a provision similar to the 1909 provision but added an entirely new provision, as follows: ‘Should any retired person, except persons retired for service prior to January, 1932 * * * engage in a gainful occupation prior to attaining the age of 62, the retirement board shall reduce that part of his monthly pension or retirement allowance which is provided by contributions of the city and county to an amount which, when added to the amount earned monthly by him in such occupation shall not exceed the compensation on the basis of which his pension or retirement allowance was determined.’ It was contended by plaintiff that the 1909 civil service retirement provisions, under which he was first employed, constituted a contract for wages for services rendered, and that the 1932 amendment had no application to him, and that to apply the 1932 amendment to him, would be to impair the obligation of his contract with the city and interfere with his vested rights. The court held that the contention that the right and the extent of the right of appellant became fixed and vested before 1932 was without merit; that the plaintiff's right to a pension did not become vested until May, 1942, when he retired and that the 1932 amendment to the charter was applicable to him.

In McCarthy v. City of Oakland, 60 Cal.App.2d 546, 141 P.2d 4, one J. F. McCarthy, a member of the police department, was killed in the performance of his duty, whereupon his widow, in accordance with the provisions of the city charter was granted a pension equal to one-half of the salary attached to the decedent's rank. On January 12, 1940, the widow was convicted of three felonies. At the time of her conviction, the city charter contained a provision to the effect that ‘any member of the police department receiving a pension from the Police Relief and Pension Fund, who shall become convicted of a felony, * * * shall forfeit all right to said pension’. Subsequent to plaintiff's conviction, the board passed a resolution striking her name from the pension roll and in 1941 the section of the charter containing the above quoted provision was amended by substituting the words ‘any person’ for ‘any member of the police department’. The court held that the amendment was not retroactive; that it was operative from the date of its approval; that at the time the right of plaintiff to the pension accrued, there was no contingency for forfeiture upon conviction of a felony and that the charter provision prior to its amendment prevailed.

In the instant case the provisions of Section 11 of ordinances Nos. 1415 and 3116 relative to the termination of petitioner's pension rights upon conviction of a felony became effective in 1927 and were from that time a part of his contract of employment. His right to a pension became vested upon his acceptance of employment by the city. However, as was said in Brophy v. Employees Retirement System, supra, 71 Cal.App.2d at page 459, 162 P.2d at page 941:

‘* * * the determination that a pension right becomes a part of the contract of employment and is a vested right, does not settle the question as to when the right vests and what the extent of this vested right may be. It is now too well-settled to require extended discussion that the right to a pension does not become vested until the happening of the contingency upon which the pension becomes payable, usually retirement for disability of length of service.’ (Citing cases.)

In Kern v. City of Long Beach, supra, 29 Cal.2d at page 855, 179 P.2d at page 803, the court said:

‘Thus it appears, when the cases are considered together, that an employee may acquire a vested contractual right to a pension but that this right is not rigidly fixed by the specific terms of the legislation in effect during any garticular period in which he serves. The statutory language is subject to the implied qualification that the governing body may make modifications and changes in the system. The employee does not have a right to any fixed or definite benefits, but only to a substantial or reasonable pension. There is no inconsistency therefore in holding that he has a vested right to a pension but that the amount, terms and conditions of the benefits may be altered.’

In our case, petitioner, R. T. Wallace, acquired a vested right to a pension at the time of his employment. The nature and extent of that right is to be determined from the charter and ordinances involved and such right is subject to the contingency that his pension payments might be discontinued in the event he was convicted of a felony. As was said in Estate of Lindquist, 25 Cal.2d 697, 706, 154 P.2d 879, 884:

‘While in California it has been held that upon the granting of a pension to an employee a vested right accrues to the recipient, this simply means that the vesting is subject to contingencies, which may cause a discontinuance of payment, such as conviction of a felony or an automatic decrease in amount (Douglas v. Pension Board, 75 Cal.App. 335, 242 P. 756; Klench v. Board of Pension Fd. Com'rs, 79 Cal.App. 171, 249 P. 46; Jordan v. Retirement Board, 35 Cal.App.2d 653, 96 P.2d 973) if the pension statute so provides.’

When petitioner was first employed by the city there was no ordinance setting up a pension system. The first ordinance, No. 1021, contained a provision that no removal of any member from the department after 25 years of service should operate to deprive him of the pension benefits except when such removal was for conviction of a felony or crime involving moral turpitude and in that event the commission was given power in its discretion to deprive such member of the benefits of the provisions of the ordinance. Petitioner, R. T. Wallace, accepted this provision, as well as the provisions in ordinances Nos. 1415 and 3116 relative to the discontinuance of his pension if he should be convicted of a felony, as part of his contract of employment for many years prior to his retirement and the provisions of Section 11 of these ordinances are applicable to him. The pension board was, by the provisions of Section 11 of Ordinances Nos. 1415 and 3116, granted the power in its discretion to order the pension or allowance to be paid to the dependents of the pensioner upon his conviction of a felony. In the exercise of this discretion, the board ordered the pension paid to petitioner, Clara Wallace, during the period of her husband's incarceration and ordered the payments to cease upon the termination thereof. An abuse of discretion on the part of the board in this respect does not appear. It follows that the trial court erred in issuing a peremptory writ as to petitioner, Clara Wallace.

The judgment denying the writ as to R. T. Wallace is affirmed, and that portion thereof granting the writ as to petitioner, Clara Wallace, is reversed.

Respondents to recover costs.

MUSSELL, Justice.

BARNARD, P. J., and GRIFFIN, J., concur.