Tony J. ADLER et al., Plaintiffs and Respondents, v. CITY OF PASADENA, a municipal corporation et al., Defendants and Appellants.
Mary D. BOUSLOG et al., Plaintiffs and Respondents, v. CITY OF PASADENA, a municipal corporation et al., Defendants and Appellants. *
Two cases are before this court on appeal. Since they were tried together in the superior court and since the anture of the question presented on appeal in each case is the same, they will be considered together in this opinion.
In the Adler case, the trial court determined the pension rights of 86 retired employees of the Police and Fire Departments of the City of Pasadena. Those persons had been employed prior to certain changes which were made in the pension system. One of the provisions of the judgment was that ‘the defendant City and the other defendants herein named in their representative capacities are under a continuing contractual and statutory obligation and duty to pay or cause to be paid to each party plaintiff from the City Treasury of said City of Pasadena and the Retirement Fund of said City as presently provided for that purpose, the retirement benefits to which each is legally entitled as aforesaid * * * in accordance with the provisions of Article 6, Section 11 of the City Charter as adopted in 1919, and that insofar as any existing amendment to said Article 6, Section 11 of said City Charter or any ordinance adopted pursuant thereto purports to take away the right of any party plaintiff or that of his dependents to receive the fluctuating retirement or death benefit pension or any other benefits provided by the terms of Article 6 of the Pasadena City Charter as the same existed immediately prior to January 17, 1935, or to substitute therefor a fixed monthly pension which has no relation to the changing value of the dollar or the current cost of living or to otherwise reduce any of said benefits or to authorize the making of any deductions from the salary of any party plaintiff for the purpose of payment into any pension fund, the same is and was unreasonable and void as applied to plaintiffs and each of them and is in conflict with the provisions of Article 1, Sections 1o and 16, of the Constitution of the State of California, and Article 1, Section 10 of the Constitution of the United States of America.’ It was adjudged that each plaintiff should recover from the defendant city a certain amount representing ‘the unpaid pension benefits, unauthorized salary deductions, and interest earned thereon as herein determined that became legally payable to each such party plaintiff up to June 1, 1960, or to the date of the prior demise of any party plaintiff who is now deceased.’ In the Adler case, the recovery awarded each plaintiff was for all salary deductions and for the unpaid monthly pension amounts for the period commencing three years prior to the filing of the claim.
The Bouslog case involved the rights of 23 widows of deceased employees of the police and fire departments of the city. The judgment in that case was in substance the same as that in the Adler case except that there was no provision therein relating to salary deductions.
In each case, the appeal is from that part of the judgment which awards certain amounts ‘to plaintiffs respectively’ and ‘which adjudges thereby that the limitations imposed by the provisions of Article 11 of the Charter of the City of Pasadena are not applicable to the claims presented herein by plaintiffs and each of them.’ Pertinent portions of Article 11 are set forth in the margin of this opinion.1
The appellants' contentions are: Under the claims provisions of article 11 of the city charter of Pasadena any recovery of past due pension payments is limited to those which accrued within six months prior to the presentation of the claims of respondents, and the recovery of salary deductions is limited to deductions, if any, which were made within six months prior to the presentation of the claims with respect thereto.2
In considering the respective arguments of the parties it is necessary to have in mind the pension provisions of the city charter both before and after the changes made therein in 1935. In 1919, a new section was added to article 6 of the charter (Stats.1919, pp. 1502–1511). Pertinent provisions thereof are set forth in the margin of this opinion.3 No provision is found therein for payment into the pension fund of any amount to be deducted from the salary of a fireman or policeman. Moreover, the benefits thereunder were of a fluctuating rather than of a fixed nature. Thereafter, article 6 of the city charter was amended, the changes becoming effective in 1935. (Stats.1935, pp. 2320–2336.) Section 7 thereof is in part as follows: ‘In order to continue in force, with such modifications as are set forth in this Article, provisions already existing for retirement and death benefits for members of the Fire and Police Departments of the City, the Pasadena Fire and Police Retirement System, hereinafter referred to as the Retirement System or the System, is hereby established. * * * The legislative body by a vote of not less than five (5) of its members, is hereby empowered to enact any and all ordinances necessary to carry into effect the provisions of this Article * * *.’ In section 8 it is provided that the retirement system is to be managed by a retirement board which shall be the successor to and have the powers and duties of the Fire and Police Pension Board established under the prior charter provision. In section 9 are found provisions as to contributions by the city to the retirement fund.4 Section 14 contains a provision that persons ‘who shall be members of the Fire of Police Departments on the effective date hereof shall become members of the Retirement System upon such date.’ Subdivision (d) of section 14 is in part as follows: ‘The normal contributions which shall be required as a deduction from the compensation of each member throughout his membership shall be such as, on the average for such member, if his service on full salary be uninterrupted and when accumulated with interest, added to the equal accumulated contributions of the city and applied according to the tables and rates recommended by the actuary and approved by the Retirement Board as hereinbefore provided, will provide a retirement allowance upon retirement for service at the age of fifty-seven years if he be a member of the Fire Department of sixty years if he be a member of the Police Department, or upon completion of twenty years of service at an age higher than fifty-seven years if he be a member of the Fire Department or sixty years if he be a member of the Police Department, equal to one-half of his final compensation, less that part of the retirement allowance set forth in the first sentence of subsection (b) of this Section 14, which is to be provided by contributions of the city on account of service rendered prior to the effective date hereof.’
In 1935 ordinance No. 3225, known as the Retirement Ordinance, was adopted for the purpose of carrying into effect sections 7 to 15, inclusive, of article 6 of the charter. Section 6(c) thereof is in part as follows: ‘The Retirement Board shall prepare a form or forms necessary for the administration of the Retirement System pursuant to Article 6 of the Charter * * *.’ In subdivision (d) of the same section it is stated: ‘Procedure for the collection of the benefits provided by Article 6 of the Charter must be commenced within six (6) months from the date of the injury or illness or the date the right accrued * * * except as hereinafter provided * * *.’ Subdivision (e) is as follows: ‘Proceedings for the collection of benefits provided for in Article 6 of the Charter shall be initiated by the filing of an application therefor with the Secretary of the Retirement Board; provided, that no application shall be filed with the Retirement Board until a copy thereof has been served on the City Attorney.’
There is no dispute with respect to the facts as to the filing of claims by the respondents. Their respective claims were filed in 1959 with the city controller and with the retirement board. Payment thereof was refused by the board and by the board of directors of the city.
Certain findings of fact of the trial court are to be noted. In each case it was found that no cause of action was barred ‘by the provisions of Sections 338 subdivision 1, 343, 337 subdivision 1, 338 subdivision 4, or 339 subdivision 1 of the Code of Civil Procedure or by the provisions of Article 11 of the Charter of the City of Pasadena, California, as amended.’ In the Alder case, the court further found as follows: ‘In this respect the court further finds that at all times prior to the month of June, 1958, each and all of the plaintiffs relied upon the defendants and their predecessors in title and authority to keep them informed concerning their pension rights and that on numerous occasions the defendant Board and its employees represented to plaintiffs and each of them that they were receiving the full amount of pension benefits to which each was legally entitled, and that no party plaintiff had any reason to suspect that he was not receiving the full amount of pension benefits to which each was legally entitled until so informed by his present attorneys shortly prior to the filing of the complaint herein. Tht all times prior to June of 1958, the Retirement Board of the defendant City and its employees adopted a paternalistic attitude toward the plaintiffs and each of them in the matter of assisting them in obtaining their pension rights and keeping them informed with respect thereto, and that plaintiffs and each of them had implicit confidence in the integrity of said pension board and had a right to assume that each was receiving the full amount of pension benefits to which each was legally entitled. That at all times prior to the filing of defendants' answer herein, the Retirement Board of the defendant City had assumed the responsibility of administering the pension fund and of paying such sums as were legally due to all retired members of the Police and Fire Departments of the City of Pasadena including those members who retired before and after July 1, 1935, and that said defendant Board had adopted and provided a complete set of printed forms for the use of all members including each party plaintiff in applying for pension benefits, and that defendants customarily paid and made adjustments in the pension accounts of the various retired members without requiring the filing of any further claim or demand or otherwise requiring any pensioner to comply with any of the provisions of Article 11 of the Pasadena City Charter. It is true that none of the plaintiffs filed any claim or demand for a fluctuating pension until the filing of the claims referred to in the complaint on file herein, and that said claims were filed shortly after plaintiffs and each of them were informed by their attorneys that none of them were being paid the full amount of pension benefits to which each was legally entitled, and that the defendants had no legal right to make deductions from their respective salaries pursuant to the 1935 amendment to Article 6 of the Pasadena City Charter.’ A similar finding of fact was made in the Bouslog case with respect to the rights of the widows therein involved.
Each claim in the present cases is founded on the theory that the charter changes which became effective in 1935 had no validity insofar as any rights flowing from employment prior thereto were concerned. The recovery in the court below was not awarded in conformity with the new charter provisions but, rather, in harmony with the previous provisions. Accordingly, such claims cannot be asserted to be made under the present article 6 of the charter or pursuant to the provisions of ordinance No. 3225 which was enacted to carry out the provisions of that article. In the light of the law hereinafter discussed, the conclusion seems inescapable that the claims with respect to past pension installments are subject to the provisions of article 11 of the charter, noted in footnote 1 of this opinion, relating to claims against the city.
In Abbott v. City of Los Angeles, 50 Cal.2d 438, at pages 463–464, 326 P.2d 484, at page 499, the Supreme Court said: ‘Here, as we have seen, the statutory time limitation upon the right to sue for each pension installment commences to run from the time when the installment falls due. It follows that even though plaintiffs might have earlier brought suit for declaratory relief similar to that filed by the active members of the Long Beach Police and Fire Departments in the Allen case (Allen v. City of Long Beach, 1955, supra, 45 Cal.2d 128, 287 P.2d 765), their failure to do so does not operate to bar their right to declaratory relief with respect to future pension payments as well as to a monetary judgment for the difference, for three years (insofar as the subject statute is concerned) prior to the filing of these actions, between the amount of the fixed and the fluctuating pensions.’ The court then went on to consider the six-months claim provisions of the Los Angeles City Charter, stating, 50 Cal.2d at pages 464–465, 326 P.2d at page 499: ‘Defendants further urge that under the claim provisions of section 376 of the city charter any recovery by plaintiffs for past due pension payments must be limited to those which accrued within six months prior to the times plaintiffs presented claims therefor. This point is meritorious. * * * Section 376 of the charter requires that all claims against the city other than for damages ‘shall be presented within six (6) months after the last item of the account or claim accrued.'5 * * * From the foregoing discussion it appears that plaintiffs, in addition to payments which have accrued since their claims have been filed, and which will in the future come due, may likewise recover only those past due payments which accrued within six months prior to the times they presented claims therefor.’
That a prior routine application for pension payments cannot serve as a claim under such circumstances as are found in the cases now before the court was made clear by the following language in the Abbott case (50 Cal.2d at page 466, 326 P.2d at page 500): ‘Plaintiffs also contend that their various applications for retirement made at or about the time their right to a pensionable status was recognized by the board constituted a sufficient compliance with section 376 under the specific holding of this court in Skaggs v. City of Los Angeles, 1954, supra, 43 Cal.2d 497, 504–505, 275 P.2d 9, which in turn relied upon the Dryden [Dryden v. Board of Pension Com'rs, 6 Cal.2d 575, 59 P.2d 104] and the Dillon [Dillon v. Board of Pension Com'rs, 18 Cal.2d 427, 116 P.2d 37, 136 A.L.R. 800] cases. The Skaggs case, however, involved status or right to any pension at all, and we believe the better view, and one in harmony with the purpose of limitations provisions is that where, as in these cases, status as a pensioner is established, then the pensioner who asserts a right to larger payments than those received must put the defendants upon notice by presentation of a claim to that specific effect.’
The respondents seek to avoid the force of the Abbott case by contending that the claim provisions of the charter of the city of Pasadena are limited in their effect because of the reference in the first paragraph of section 12 of article 11 to ‘any claim for money or damages, whether founded on tort or contract’ (emphasis added), whereas, they say, an action to recover an amount due as a pension payment is based upon an obligation created by statute. There is no merit in such contention. In the first place, what each respondent primarily seeks to enforce is a contractual obligation on the part of the city. As said by the Supreme Court in Kern v. City of Long Beach, 29 Cal.2d 848, at pages 852–853, 179 P.2d 799, at page 801: ‘This court has stated in two recent decisions that the right to a pension vests upon acceptance of employment. * * * Although there may be no right to tenure, public employment gives rise to certain obligations which are protected by the contract clause of the Constitution, including the right to the payment of salary, which has been earned. Since a pension right is ‘an integral portion of contemplated compensation’ (Dryden v. Board of Pension Com'rs, 6 Cal.2d at page 579, 59 P.2d 104), it cannot be destroyed, once it has vested, without impairing a contractual obligation.' See also Wisley v. City of San Diego, 188 Cal.App.2d 482, 10 Cal.Rptr. 765; City of Long Beach v. Allen, 143 Cal.App.2d 24, 27–28, 300 P.2d 349. In Abbott v. City of San Diego, 165 Cal.App.2d 511, at page 517, 332 P.2d 324, at page 328, it is succinctly stated: ‘The pension provisions of a city charter are an indispensable part of the contract of employment between a city and its employees, creating a right to pension benefits as an integral part of compensation payable under such contract, which vests upon acceptance of employment.’ Hence, while such an obligation is of statutory origin (see Abbott v. City of Los Angeles, supra, 50 Cal.2d 438, 460, 326 P.2d 484; Hermanson v. Board of Pension Com'rs, 219 Cal. 622, 624–625, 28 P.2d 21), the duty thereby brought into being is of a contractual nature. (See 12 Cal.Jur.2d, Contracts, § 7.)
But aside from the nature of each obligation asserted by the respondents, the reference to claims ‘founded on tort or contract’ leads to the conclusion that the intention was to make the claim provision comprehensive rather than limited. ‘Although the distinctions in forms of actions have been abolished, the obligation upon which a cause of action is founded may be either contractual or delictual in nature. * * * For the designation of actions as contractual or delictual, it is to be noted that a contract is defined as an agreement to do or not to do a certain thing, and a tort as any wrong, not consisting in mere breach of contract, for which the law undertakes to give the injured party some appropriate remedy against the wrongdoer.’ 1 Cal.Jur.2d, Actions, § 29; see also L. B. Laboratories, Inc. v. Mitchell, 39 Cal.2d 56, 62–63, 244 P.2d 385; 1 C.J.S. Actions § 1. The language of the second paragraph of section 12 of article 11 of the charter clearly shows such comprehensive nature. That paragraph is: ‘Except in those cases where a shorter period of time is otherwise specified by law, all claims for damages against the city, or any department thereof, must be presented within six months after the occurrence, event or transaction upon which any such claim is founded. All other claims or demands, except for payment of principal and/or interest on bonds, shall be presented within six months after the last item of the account of claim accrued.’ The conclusion stated above finds support in First Trust & Savings Bank of Pasadena v. City of Pasadena, 21 Cal.2d 220, 130 P.2d 702, wherein the plaintiffs sought to recover a portion of the taxes paid by them to the city for a particular tax year. There had not been compliance with the claims provision of the charter. The Supreme Court said, 21 Cal.2d at page 221, 130 P.2d at page 703: ‘The above mentioned-claims provision of the Pasadena charter is found in article 11 thereof. Said article requires the presentation of ‘all claims' within six months and further provides that unless a claim has been so presented, ‘No suit shall be brought upon any claim for money or damages' against the city of Pasadena.’ In holding that failure to file claim precluded precovery, the Supreme Court said, 21 Cal.2d at pages 222–223, 130 P.2d at page 703: ‘In our opinion, there is no essential ground for distinction between the Farmers Bank case [Farmers and Merchants Bank of Los Angeles v. City of Los Angeles, 151 Cal. 655, 91 P. 795] and the instant case. Here as there the claims provision of the charter contained a ‘sweeping requirement’ (Brill v. County of Los Angeles, 16 Cal.2d 726, page 741, 108 P.2d 443) which covered ‘all claims' against the city.’
Under the facts before the court, there is no sound basis for a contention on the part of the respondents that the city is estopped to assert any limitation on their rights to pursue their claims. The respondents place reliance on Tyra v. Board of Police and Fire Pension Com'rs, 32 Cal.2d 666, 197 P.2d 710, wherein the defendants and their attorneys had advised the plaintiff, a disabled fireman, that as long as he was receiving workmen's compensation benefits he was not entitled to a pension. By reason of their conduct the plaintiff was persuaded not to apply for a pension until a later date. In holding that there was an estoppel to interpose the bar of the statute of limitations, the Supreme Court said, 32 Cal.2d at pages 670–671, 197 P.2d at page 712: ‘The day charged to the plaintiff was induced by the erroneous position and advice of the defendants and their attorneys. They may not therefore now properly interpose the defense as a bar to the plaintiff's delayed course of action.’ But in the cases presently before the court there is no evidence of any action on the part of the city or the board which caused any respondent to delay in taking at an earlier date any contemplated course of action for the enforcement of a claim now asserted.6 Under the circumstances herein involved, such a mutual mistake did not give rise to an estoppel. As said in First Trust & Savings Bank of Pasadena v. City of Pasadena, supra, 21 Cal.2d 220, at page 223, 130 P.2d 702, at page 704: ‘It is only in rare cases that the doctrine of estoppel may be invoked against a municipal corporation (Times-Mirror Co. v. Superior Court, 3 Cal.2d 309, 44 P.2d 547; City of Los Angeles v. County of Los Angeles, 9 Cal.2d 624, 72 P.2d 138, 113 A.L.R. 370; 10 Cal.Jur. 651) and we do not believe this case to be one of them.’
Aside from the discussion hereinabove of the applicable law relating to the time within which claims must be asserted, there remain for consideration certain aspects of the problem concerning the recovery of the improper deductions from payments of salary. The respondents in the Adler case assert that a trust relationship exists as between each of them and the defendants with respect to such salary deductions. It is stated in their brief that: ‘The rule is equally well settled in this state that the statute of limitations does not begin to run in favor of the trustee of a resulting trust which arises as the result of a failure of an express trust until there has been an express repudiation on the part of the trustee which has been communicated to the beneficiary.’ To determine the merits of respondents' position, it is necessary to discuss the true nature of the cause of action for the return of the amounts so deducted.
While under subdivisions (e) and (f) of section 14 of article 6 of the charter, contributions made are credited to the individual account of the member of the retirement system from whose compensation they were deducted and such member is entitled to a refund thereof, with interest, if he be separated from the service of the city through any cause other than death or retirement, it cannot be said that a separate trust was created with respect to each member's contributions to the retirement fund. The fact that a separate account is kept for each member is not, in and of itself, any more significant than in the case of a bank account. The provisions of section 9 and of subdivision (d) of section 14 of article 6, relating respectively to contributions by the city and by a member of the retirement system, which have been set forth hereinabove, make it clear that it was not intended that the obligation of the city with respect to the payment of a pension to an employee should be limited by the amount credited to his individual account. Apropos is the reasoning of the court in Goodwin v. Board of Trustees, 72 Cal.App.2d 445, at page 450, 164 P.2d 512, at page 515: ‘This retirement system, unlike some such systems, was not based on the theory that contributions paid by each employee were to be paid into a separate individual fund or account for him, and upon reaching retirement age, matched by the governmental body involved, and that fund then used to pay that retirement allowance. Here the contributions of the firemen were paid into a fund designated as the Firemen's Relief and Pension Fund. The city expressly assumed the liability to keep such fund solvent. Such a plan does not limit the retirement allowance to the fund, but the obligation to pay the retirement allowance, once it vests, becomes a general obligation of the governmental agency involved. (England v. City of Long Beach, Cal. [27 Cal.2d 343] 163 P.2d 865.)’ While in the Adler case, unlike the situation which existed in the Goodwin case, there is a contractual obligation to repay to the employee the deductions where his service ceases for a cause other than death or retirement, such fact does not support a conclusion that his contributions give rise to an express trust of which he is the specific beneficiary.
The circumstances under which a resulting trust will arise are succinctly stated in Bainbridge v. Stoner, 16 Cal.2d 423, at page 428, 106 P.2d 423, at page 427: ‘Nor did he become a resulting trustee when he acquired the title to the corporation's property. That relattionship arises only where one has in good faith, acquired title to property belonging to another. Under such circumstances, the law implies an obligation on the part of the one in whom title has vested to hold the property for the benefit of the owner, and eventually to convey to the owner. Cummings v. Commings, 55 Cal.App. 433, 203 P. 452. A resulting trust is created when, because of some invalidity such as lack of a definite purpose or legality, an express trust fails, or where property is purchased and title taken in the name of one person but the consideration is paid by another, or where after a trust is fully performed, there is property remaining in the hands of the trustee. It is one implied by law to carry out the intention of the parties and the trustee has no duties to perform, no trust to administer, and no purpose to carry out except the single one of holding or conveying to the beneficiary. Fulton v. Jansen, 99 Cal. 587, 34 P. 331; Restatement of the Law of Trusts, sec. 404; Bogert on Trusts and Trustees, § 451.’ But in the present case, as has been pointed out, there was no express trust which failed upon which to predicate a resulting trust. In fact, the proceeds of the contributions are being used for the very purpose for which such contributions were made.
What the respondents actually seek to recover are deductions from payments of salary made under a mistake of law as to the effect of the charter changes upon their rights which had their foundation in the prior pension provisions.7 What constitutes a mistake of law is clearly illustrated in the case of People v. Union Oil Co., 48 Cal.2d 476, at pages 482–483, 310 P.2d 409, at page 412, wherein the Supreme Court said: ‘The record here indicates without dispute that after the effective date of the 1947 amendment, the employees of the franchise tax office believed that authority still existed to continue interest payments on prior overpayments of tax that were not the result of error or mistake on the part of the taxpayer, and that they continued to administer tax refunds on that basis unil advised to the contrary by the attorney general following the decision rendered in 1948 in Gregory v. State of Calif., supra, 32 Cal.2d 700, 197 P.2d 728 [4 A.L.R.2d 924]. Clearly a mistake of law was involved.’
Assuming that a mistake of law may give rise to a cause of action for the recovery of deductions from payments of salary under a pension system (cf. Wisley v. City of San Diego, supra, 188 Cal.App.2d 482, 10 Cal.Rptr. 765),8 there remains the question of the effect of the statute of limitations and of the claim provisions of the city charter on the claims asserted in the Adler case. In People v. Union Oil Co., supra, 48 Cal.2d 476, 310 P.2d 409, the Supreme Court held that the proper statute of limitations was the three-year period governing an action for relief on the ground of mistake, as embodied in subdivision 4 of section 338 of the Code of Civil Procedure. In that provision of the code it is stated: ‘The cause of action in such case not to be deemed to have accrued until the discovery, by the be such a case.’ Cf. Klinker v. Guarantee the fraud or mistake.' In Shain v. Sresovich, 104 Cal. 402, at page 405, 38 P. 51, at page 52, where the mistake was one of fact, the court said: ‘The rule is well established that the means of knowledge is equivalent to knowledge * * *. Applying the above rule to the present case, we are of the opinion that the plaintiff's assignors had, at all times after the payment to the defendant such means of information with reference to the account between them and him, and of the mistake in the payment, that their failure to avail themselves of it charged them with the same result as though they had actual knowledge thereof.’ See also Edgar Rice Burroughs, Inc. v. Commodore Productions and Artists, Inc., 167 Cal.App.2d 463, 475–478, 334 P.2d 922. But, since ‘ignorance of the law is no excuse’ (see People v. Union oil Co., supra, 48 Cal.2d 476, at page 483, 310 P.2d 409, at page 413), where the mistake is one of law it is difficult to justify a conclusion other than that the period of limitation ordinarily begins to run from the date of the mistake. The sound view appears to be that expressed in Morgan v. Jasper County, 223 Iowa 1044, 274 N.W. 310, 111 A.L.R. 634, in which the court said (274 N.W. at pages 311–312): ‘The second ground of the defendant's motion to dismiss the plaintiff's petition is based upon the claim that the cause of action, if any, is barred by the statute of limitations. It appears from plaintiff's petition that the sheriff's sales, upon which the commissions were paid, were held on the 29th day of March, 1923; that the alleged mistake was not discovered as to one of the sales until January, 1934, and as to the other sale until July, 1935. This action was commenced on January 3, 1936, and the petition alleges that it is brought under section 11010 of the Code of 1935, which provides that, in actions for relief on the ground of fraud or mistake, the cause of action shall not be deemed to have accrued until the fraud or mistake is discovered by the party aggrieved. Appellant contends that, the petition having stated that the action is brought to recover money paid by mistake, and that the mistake as to one payment was not discovered until January, 1934, and, as to the other, until July, 1935, the statute of limitations did not begin to run until the discovery of the mistake in each instance. Appellee, on the other hand, contends that the provision of the statute, in regard to a cause of action for mistake not accruing until the mistake is discovered, does not apply to a mistake of law, but only to a mistake of fact. We are inclined to agree with the appellee's contention in this regard. Unless we are to set aside entirely the well-recognized principle of public policy, that every one is presumed to know the law, and that ignorance of the law will excuse no one, and unless we are prepared to say that one may be guilty of all sorts of mistakes, but, so long as they are mistakes of law, and so long as he remains in blissful ignorance of the law, the statute of limitations will never run against him, we see no escape from this conclusion. Conceding that the sheriff had no right to demand or accept the payments that were made by appellant's assignors, and that neither he nor the county had any right to retain such payments after they had been received, the appellant's assignors had a right to demand the return of such payments at any time after they had been made. They are presumed to know the law, and we know of no good reason why an exception should be made in their favor and the running of the statute tolled until this presumption is supplanted by actual knowledge.
‘This is not a case where the sheriff deceived the appellant's assignors into paying him money for the benefit of the county, with knowledge that he had no right to collect the fees charged. So far as the petition shows, the sheriff was just as ignorant of the law as the appellant's assignors, and there is nothing in the nature of any concealment or of any act done by him or by the county officers which would have misled the plaintiff's assignors, or delayed or prevented them from discovering the mistake. * * *
‘Appellant has not cited, and, although we have made a diligent search, we have been unable to find, any authority sustaining his contention that a party may toll the running of the statute of limitations by his own ignorance of the law.’
A similar problem was presented in Klinker v. Guarantee Title Co., 98 Cal.App. 469, 277 P. 177, in which the plaintiffs sought to recover money paid on or about April 24, 1923, for shares of stock. The action was filed on December 30, 1926. The court said, 98 Cal.App. at pages 476–477, 277 P. at page 180: ‘It follows, therefore, that, regardless of what anyone may have believed as to the validity of the issue, the stock issued, while apparently regular in form, was, in fact, void, spurious, and worthless, and that L. W. Klinker received nothing of value for his money; with the payment of the money for valid stock to the defendant corporation the liability and obligation eo instanti arose upon the part of both the corporation and the stockholders either to issue, if it could, value in the shape of valid certificates or to return the money. Therefore the statute of limitations, under the authorities cited, would act as a bar, beyond question, after the lapse of three years from the date of payment.’ At pages 478–479 of 98 Cal.App., at page 180 of 277 P., the court further stated: ‘The closer and more important question herein is whether or not as to the corporation defendant the action is one for relief on the ground of mistake, wherein the cause would not be barred by subdivision four of section 338 of the Code of Civil Procedure until the lapse of three years after the discovery of the facts constituting the mistake.
‘It will be observed from the complaint, paragraph VI, supra, that it is alleged that the mistake relied upon is alleged to have been the payment of the said $50,000 to the defendant corporation for said stock, ‘under and by virtue of a mistake of fact, to-wit, under the belief that said stock was valid,’ and in paragraph VII it is alleged that plaintiffs discovered said mistake on or about the 1st day of November, 1926, the date on which the judgment canceling the said stock was rendered, and that plaintiffs ‘were without means of knowing that said stock was worthless and invalid until the filing of said judgment and findings as aforesaid.’
‘It appears to us in view of the findings made a part of the complaint that appellants knew every fact connected with the payment of the money and the issuance of the invalid stock, including the terms of the permit of the corporation commissioner; and that the only mistake was a mistake of opinion or belief which would make it rather a mistake of law than a mistake of fact. * * *
‘It seems obvious to us that no facts were stated sufficient to have tolled the statute of limitations so as to have extended the period of limitation longer than three years from the date the liability of the corporation accrued, and, if the appellants saw fit after April, 1923, to delay action to protect themselves and thus slept on their rights for more than three years, they have themselves only to blame.’
In view of what has been stated, the respondents in the Adler case cannot successfully contend that the statute of limitations did not run against their claims until their discovery of their mistake of law after the determination of litigation involving related questions of law. With respect to a similar problem it was stated in Bainbridge v. County of Riverside, 167 Cal.App.2d 418, at page 422, 334 P.2d 625, at page 627: ‘A cause of action accrues at the moment when the party who owns it is entitled to bring and prosecute an action thereon. [Citations.] Thus the causes of action in this case were not dependent upon the outcome of other litigation pending in the Supreme Court even though such litigation pertained to the same ordinance. * * * In this action the right to commence proceedings to collect the tax illegally assessed and fine illegally imposed accrued upon payment of the last item in each instance.’
Aside from the impact of the statute of limitations upon the claims for deductions from the payments of salary, the claim provisions of the city charter applied to such claims of respondents in the Adler case for the reasons stated earlier in this opinion. Recovery could not properly be had for any such deduction made more than six months prior to the filing of a claim therefor on behalf of a particular respondent. Cf. Gamble v. City of Sacramento, 43 Cal.App.2d 200, 201–202, 110 P.2d 530. The respondents acknowledge that all deductions involved in the Adler case were made at times prior to such six months period.
For the reasons above stated, that portion of each judgment which grants recovery to each respondent of past due pension installments accruing more than six months prior to the filing of the specific claim therefor and that portion of the judgment in the Adler case which grants recovery to each respondent therein of deductions from payments of salary made more than six months prior to the filing of the specific claim therefor are reversed with directions to the trial court to recompute the amounts due the plaintiffs respectively in accordance with the views herein expressed; if the court finds that such recomputation cannot be fully made upon the basis of the present record, the court is directed to take such further evidence as may be necessary to recompute the amount due to each plaintiff and thereupon to make such computations and enter judgments accordingly; in all other respects the judgments are affirmed. Each party shall bear his or its costs on appeal.
1. Article 11 of the city charter of Pasadena (Stats.1933, pp. 2781–2783) is in part as follows: ‘Section 1. All claims and demands whatever against the City of Pasadena, except interest and/or principal on bonds and regular compensation of city officers and employees fixed by ordinance, shall be paid only on demands as herein provided.’ ‘Section 2. Every demand shall be presented to the City Controller. * * *’ ‘Section 10. Except as herein otherwise provided, the legislative body of the city may prescribe by ordinance the manner in which claims against the city shall be presented, audited and paid.’ ‘Section 12. No suit shall be brought upon any claim for money or damages, whether founded on tort or contract, against the City of Pasadena, or any department thereof, until a demand for the same has been presented as provided herein or in any ordinance herein authorized, and rejected in whole or in part. ‘Except in those cases where a shorter period of time is otherwise specified by law, all claims for damages against the city, or any department thereof, must be presented within six months after the occurrence, event or transaction upon which any such claim is founded. All other claims or demands, except for payment of principal and/or interest on bonds, shall be presented within six months after the last item of the account or claim accrued. ‘Any claim rejected in whole or in part by the City Controller or other officer except the legislative body of the city whose approval may be required, may be presented to the legislative body of the city within thirty (30) days after such rejection, and must be so presented before the bringing of any suit against said city or any officer, board or department thereof in his or its official capacity, and suit on any claim shall be brought within six months after the rejection of such claim in whole or in part by such legislative body. When any claim is in part allowed and in part rejected by said legislative body, the claimant may refuse to accept such partial allowance and bring suit for the entire amount of such claim, but if any such partial allowance is accepted, no suit shall be brought or maintained upon such claim.’
2. All the plaintiffs in the Adler case retired from active service more than six months before the filing of their respective claims. Hence, if the appellants' contention as to the matter of salary deductions is sound, no recovery for any of such deductions could stand.
3. ‘Section 11. (a) There is hereby created a Fire and Police Pension Board of the City of Pasadena. The Chief of the Fire Department, the Chief of the Police Department, and three others, elected annually by secret written or printed ballots from the qualified members of said departments, shall constitute said Fire and Police Pension Board, and shall have charge and shall administer the Fire and Police Pension Fund and provide for the disbursement of the same and designate the beneficiaries thereof, as hereinafter provided. * * * (d) Whenever any member of either Department * * * shall have served twenty (20) years or more in the aggregate in any capacity or rank whatever therein, and shall have attained the age of fifty-five (55) years, said Board may, * * * order and direct that such member be retired from further service in the department. * * * [S]uch member so retired shall thereafter during his lifetime, be paid a yearly pension equal to one-half the amount of the salary attached to the rank or position which he may have held in said department for the period of one year next preceding the date of such retirement. Such pension shall be payable in equal monthly installments. If any such person receiving such pension shall die leaving a widow or child, or children, a pension in a sum equal to one-third of the salary upon which the pension of said deceased pensioner was based shall be paid in equal portions to such widow during her lifetime, and to such child or children until such child or children have attained the age of sixteen. * * * (l) Said Fire and Police Pension Board * * * shall issue demands upon the City Treasurer, signed by its President and Secretary payable to the persons entitled thereto, on forms prescribed by the City Auditor, for the amount of money ordered paid to such persons as pensions. * * * (q) That for the purpose of providing and maintaining a fund to meet payments of demands drawn for the payment of pensions and the expenses of said Board as herein provided, a fund is hereby created to be known as Fire and Police Pension Fund. There shall be paid unto said Fire and Police pension Fund the following money, to-wit: First: The officer or officers of the City charged with the duty of assessing, levying and collecting taxes shall annually hereafter assess, levy and collect against the general assessment roll of taxable property in said city a sum equal to four per centum of the total amount of salaries and wages of the members of said departments entitled to pensions * * *; and provided further until said amount is first paid into said fund and at any time when said fund shall be less than four hundred (400) dollars, demands of the Fire and Police Pension Board, signed by its President and Secretary shall be paid out of the general fund of the city. * * * (t) The intent hereof is to provide a sure, certain and reasonable pension for every fireman and policeman who shall give faithful service to the City of Pasadena * * *.’
4. Section 9, prior to its amendment in 1955 (see Stats.1955, pp. 3812–3813), was as follows: ‘The mortality, service and other tables and the rates of contribution for members as recommended from time to time by the actuary and the valuations determined by him from time to time and approved by the Retirement Board shall be final and conclusive and the Retirement System shall be based thereon. The total amount, as determined by the actuary and approved by the Retirement Board, of the contributions required during any fiscal year of the city under the Retirement System, shall be paid into the Retirement Fund by the city during such year. Liabilities accruing under the Retirement System because of service rendered to the city prior to the effective date hereof, and administrative costs under the System, shall be met by contributions to the Retirement Fund by the city, in addition to any amounts contributed to meet liabilities accruing because of service rendered by persons after becoming members of the System, provided that such prior service liabilities may be met by annual appropriations instead of by one appropriation for the total amount of the liabilities; and provided further, that such appropriation for any one year shall be not less than the amount disbursed during that year on account of prior service. ‘In addition to other contributions required of the city under the System, the city shall contribute to the Retirement Fund during each fiscal year a sum which, together with the members' contributions provided for in Section 14 of this Article, shall be equal to the liabilities accruing under the System because of service rendered during such year by all members of the System. ‘Periodically, at periods fixed by the legislative body, the Retirement Board shall make an actuarial investigation into the mortality, service and other experience under the System, and, further, shall make an actuarial valuation of the assets and liabilities of the System, and upon the basis of such investigation and valuation as interpreted by the actuary, any necessary revisions of the table of rates being used under the System shall be made by the Retirement Board.’ (Stats.1935, p. 2325.)
5. Similar language is found in section 12 of article 11 of the city charter of Pasadena as set forth in footnote 1 of the present opinion.
6. The portions of the transcript of evidence upon which the respondents place reliance are included in the following excerpts. Charles J. Hildebrand, one of the plaintiffs and a retired captain of the fire department, testified that he served on the retirement board from about 1947 until 1955. He further testified follows: ‘Q. Did you later discuss this question with the City Attorney, as to whether or not the existing [prior to 1935] system could be repealed? A. Yes, and—— ‘Q. What did he tell you? A. And he advised me that it could. ‘Q. Did he tell you that the members didn't have any vested rights at all under the existing system? A. He and City Attorneys that came after him all told me that, that we had no vested rights. * * * ‘Q. When, if at all, were you first informed that you had a vested right to received a fluctuating pension? * * * ‘The Witness: The first time that I was advised that the former members of the Fire and Police Departments of the City of Pasadena and their widows might have had some vested rights was when the results of the Abbott case broke in the newspapers, which was a year ago last June. * * * June of 1958, yes, sir. * * * ‘Q. Prior to that time did you as a member of that Board receive opinions from the City Attorney of the City of Pasadena with respect to whether or not any of the members had any right to receive this fluctuating pension that was previously provided for? A. Yes. ‘Q. On how many different occasions? A. Well, I would say at least three different occasions * * *. Upon two occasions they were in writing. ‘Mr. Sperry: Do you happen to have any of those with you, Counsel? ‘Mr. Thompson: I don't believe we brought any down, Mr. Sperry. You can get them if there are any. ‘Q. By Mr. Sperry: Now, as a member of the Board, were you frequently called upon to give advice to members of the Fire Department with respect to their pension rights? A. Yes. ‘Q. And did you relay this information that you were given by the City Attorney to various members? A. Whenever the subject arose in any discussions, or upon direct queries, I gave that information that had been obtained from the City Attorney's—— ‘Q. You told them that they had no vested rights of any kind under the old system though they were employed prior to the 1935 amendment? A. Yes. ‘Q. Prior to June of 1958, were you of the firm opinion and belief that the only pension rights you had were those provided by the 1935 Charter amendment? A. Yes.’ Donald C. McCoy testified that he had been a member of the retirement board from the time of its establishment in 1935, with the exception of four years while he was in the military service. He testified as follows: ‘Q. During the entire time you have been a member of the Board, has it been your understanding and belief that the Board has granted and paid pensions to the existing pensioners in the full amount that they're legally entitled to? A. Yes. * * * ‘Q. There has never been any intention on your part as a Board member to deprive them of any rights that they're legally entitled to? A. None. ‘Q. And as these questions came up, they're customarily submitted to the City Attorney, were they not, questions of what pension benefits of various members are legally entitled to? A. You mean on retirement? ‘Q. Yes. A. Well, the City Attorney draws the papers, the findings. ‘Q. And conclusions for you? A. And the pension contained in the findings, as I understand it, Mr. Nelson decides that. ‘Q. The amount? A. And the amount. ‘Q. And copies of the applications for pension are customarily served on the City Attorney, are they not, under your present system? A. I believe they're served on the controller. They are presented at our regular meeting and the City Attorney is there and the controller is there as secretary. * * * ‘Q. The City Attorney sits in on all your meetings? A. He or his representative, yes.’ George C. Heaney testified as follows: ‘Q. Mr. Heaney, you were formerly a member of the Pasadena Fire Department, were you? A. I was. ‘Q. When did you retire? A. April 1st, 1950. ‘Q. And what was your rank at the time of retirement? A. Engineer. ‘Q. You filed an application for retirement, did you? A. Yes. ‘Q. Did anyone help you fill out the form? A. Just, Counsel, Charlie Hildebrand from the department assisted me with it. ‘Q. The form was provided by the Pension Board. A. That is right. ‘Q. You were granted a fixed pension in a certain amount, were you? A. Yes. ‘Q. You have been paid that amount ever since? A. Yes. ‘Q. When, if at all, did you first learn than you might not be receiving the total amount of pension benefits to which you were legally entitled? A. Well, a little less than a year—two years ago, a year, whatever—when it was first brought in the papers. I lived up in the desert, and I came down; they were telling me about it. I didn't read it, personally, in the paper. ‘Q. Some of the other members told you about reading about this Abbott case? A. Yes, that's the first I heard of it. ‘Q. Did you discuss the matter with Mr. Goldman? A. Yes, I did talk to him. ‘Q. Prior to that time, did you understand and believe that you were receiving the full amount of pension benefits that you were legally entitled to? A. Yes, I did. ‘Q. And, as a result of what you learned after this Abbott case came down, you retained present counsel to file a claim for you, is that right? A. That is right.’ Thereafter, it was stipulated that certain persons, if called as witnesses, would testify substantially as had Mr. Heaney.
7. If a trust arises under such circumstances, it is a constructive rather than resulting trust. A constructive trust may be imposed when a party has acquired property to which such party is not justly entitled where such acquisition was the result of mistake. See Mazzera v. Wolf, 30 Cal.2d 531, 535, 183 P.2d 649. ‘An involuntary trust is one created by operation of law (Section 22178 Civil Code). Section 2224 defining a constructive trust provides: ‘One who gains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act, is, unless he has some other and better right thereto, an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it.’ A constructive trust is a remedial device primarily created to prevent unjust enrichment (Fleishman v. Blechman, 148 Cal.App.2d 88, 306 P.2d 548). The theory upon which it is based was adopted by equity to compel the restoration to another of property to which the holder thereof is not justly entitled, and a constructive trust is imposed not because of the intention of the parties, but cecause the person holding the property would profit by his wrong (Monica v. Pelicas, 131 Cal.App.2d 700, 281 P.2d 269).' Clark v. Pullins, 171 Cal.App.2d 703, at page 708, 341 P.2d 73, at page 76; see also Bainbridge v. Stoner, supra, 16 Cal.2d 423, 428–429, 106 P.2d 423; Sampson v. Bruder, 47 Cal.App.2d 431, 435, 118 P.2d 28; 4 Scott on Trusts (2d ed.), §§ 462.2, 462.3. The applicable statute of limitations where there is a basis for a constructive trust because of fraud or mistake is found in section 338, subdivision 4, of the Code of Civil Procedure. See Unkel v. Robinson, 163 Cal. 648, 650, 126 P. 485; Schaefer v. Berinstein, 180 Cal.App.2d 107, 131, 4 Cal.Rptr. 236; Douglas v. Douglas, 103 Cal.App.2d 29, 32, 228 P.2d 603; Pacific Nat. Bank of San Francisco v. Corona Nat. Bank, 113 Cal.App. 366, 374, 298 P. 144. That limitation is hereinafter discussed in this opinion. No repudiation of a constructive trust is necessary to set the statute of limitations in motion. Bainbridge v. Stoner, supra, 16 Cal.2d 423, 429, 106 P.2d 423.
8. It is to be noted that in the Wisley case, in which the plaintiffs recovered excess salary deductions, the court states (188 Cal.App.2d at page 485, 10 Cal.Rptr. at page 767): ‘The defendants have appealed from the entire judgment. However, the only point raised in the briefs is whether or not the increases in the percentage of salary deductions were reasonable and constitutional.’ The primary problem involved on the present appeals was not before the court in the Wisley case. In People v. Union Oil Co., supra, 48 Cal.2d 476, at pages 483–484, 310 P.2d 409, at page 413, the Supreme Court said: ‘While as a general rule a mistake of law is of no legal consequence, just as ignorance of the law is no excuse, it has been said that the recovery of public moneys paid out through mistake by the state or any agency of government should be permitted ‘in many instances where, if paid out by an individual or by a private corporation [they] could not be.’ Aebli v. Board of Education, 62 Cal.App.2d 706, 725, 145 P.2d 601; see also 70 C.J.S. Payment § 156, p. 365. This appears to be such a case.' Cf. Klinker v. Guaranatee Title Co., 98 Cal.App. 469, 478–479, 277 P. 177.
SHINN, P. J., and VALLEÉ, J., concur.