307 N.Y. 349 | NY | 1954
This appeal concerns the status of petitioner as a member of the police pension fund of the City of Buffalo. He entered the police department as a patrolman on June 5, 1930, became a member of the police pension fund on that date making his regular contributions at the rate of 4% and 5% of his salary, and applied for retirement September 22,1952, effective October 1,1952. Thus it appeared that he served as patrolman for a period of twenty-two years. After a hearing before the board of police pensions, his application for a service pension was rejected on October 24,1952, and he is still serving as patrolman in the Buffalo Police Department.
At the time of his employment as patrolman in 1930, section 464 (subd. [2]) of the Charter of the City of Buffalo provided that members of the police department were entitled to pensions “ after twenty years of actual service in said department or a combined service of twenty years in the police and fire departments of the city.” Said provision was repealed by Local Law No. 8 adopted June 30, 1940, and in substitution therefor it was enacted that any member who had completed thirty years of actual service should be entitled to a pension. This thirty years was reduced to twenty-five years by Local Law No. 1 of 1945.
Other contingencies are covered in these provisions of the charter, which it is not necessary to specify inasmuch as they do not apply to petitioner’s situation. He had, for example, not served twenty years as patrolman at the time when section 464 was amended in 1940, nor is it a compulsory retirement.
Petitioner’s right to the relief which he has demanded depends upon whether the twenty-year clause as it existed in section 464 of the Buffalo City Charter in 1930 when he entered the police department as patrolman, constituted a vested interest
Section 7 of article V was added to the Constitution of the State of New York in 1938. The amendment took effect except as otherwise provided on January 1, 1939 (art. XX, § 1). The effective date of section 7 of article Y was postponed for one and one-half years, however, until July 1, 1940, presumably to enable the State and its civil divisions to review their pension systems and to adjust, amend, modify or supplement the provisions of existing systems in the light of the fact that after such effective date such systems were no longer gratuitous, but by virtue of the new amendment became contracts and the members of pension systems thereby acquired vested interests which could not thereafter be diminished or impaired. Excerpts from the proceedings of the Convention appear to bear out this conclusion. The text of this amendment to the State Constitution is as follows: “ [Membership in retirement systems; benefits not tobe diminished or impaired.] § 7. After July 1,1940, membership in any pension or retirement system of the state or of a civil division thereof shall be a contractual relationship, the benefits of which shall not be diminished or impaired. ’ ’
Theretofore it had been held that members of pension and retirement systems generally had no vested interest therein •until the right to retirement matured. The leading case was Roddy v. Valentine (268 N. Y. 228, 231-232). It was there held,
“ Where the statutory scheme creates a fund wholly or largely out of public moneys, the interest of the member down to the point where there has been compliance with all precedent conditions and the award has been or as of right should have been made, can hardly be deemed contractual. There has been a suggestion that it is quasi-contr actual. (40 Harvard Law Review, 504, 505.) In Pennie v. Reis (132 U. S. 464, 471) it is called ‘ a mere expectancy created, by the law. ’ But whatever its legal nature may be, there seems to be no doubt that it is subject to change or even to revocation at the will of the Legislature. (People ex rel. Devery v. Coler, 173 N. Y. 103; Pennie v. Reis, supra; Matter of Friel, 101 App. Div. 155; affd., 181 N. Y. 558.)
“ 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 (Matter of O’Brien v. New York State Teachers’ Retirement Board, 215 App. Div. 220; affd., 244 N. Y. 530), 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. (Pennie v. Reis, supra; People ex rel. Mulvey v. York, 41 App. Div. 419; Klench v. Board of Pension Fund Comrs., 79 Cal. App. 171, and cases therein cited.) ”
The same appears to have been held in Matter of Friel v. McAdoo (101 App. Div. 155, affd. 181 N. Y. 558), where the question arose concerning the pension rights of a member of the police force of the City of Brooklyn, after Brooklyn had become part of Greater New York. It was held that he had no contractual vested right in the Charter of the former City of Brooklyn, the opinion stating that “ The relator had no vested right in an act of the Legislature; the State, in the exercise of its sovereign authority, might have repealed absolutely the statute of 1888 under which he claims, and it might have abolished the
This is also the holding of the Supreme Court of the United States (Pennie v. Reis, 132 U. S. 464; Dodge v. Board of Educ., 302 U. S. 74).
Petitioner-appellant has endeavored to draw a distinction between the rule outlined by this court in Roddy v. Valentine (supra) and the present case, by calling attention to part of the language which has been quoted above, viz., ‘ ‘ Where the statutory scheme creates a fund wholly or largely out of public moneys,” the interest of the member may be altered by statute and can hardly be deemed to be contractual. Appellant’s brief points out that, during the two years immediately prior to the change in the law in 1940, the members of the Buffalo police pension fund contributed approximately $100,000 and that the city’s contribution was approximately $200,000. Although the city has indicated that the amounts contributed by members during the years 1947-1952 are much less than one third, and ranged from 13.002% to 14.286%, petitioner counters by pointing out that since 1940 most of the members of the old police pension fund have transferred to the State Betirement System or their employment has begun since 1940 and they have gone into the State Betirement System at the inception of their membership in the police department. These statements of fact are probably true, and must be accepted as true for the purposes of this
The language in the opinion in Roddy v. Valentine (supra) on which petitioner-appellant relies, was dictum that the interest of the member is noncontractual “ Where the statutory scheme creates a fund wholly or largely out of public moneys ”. The object of the careful opinion written by Judge Crouch was to insure that the Bench and the Bar did not mistake the effect of the decision holding that a member had a contractual right from and after the time of his retirement to receive the pension or retirement allowance to which he was then entitled by statute, and to guard against confusion of that situation with the acquirement of a vested right in the statute as it existed at the time when the applicant became a member of the pension system but before his retirement from the service. So long as that broad distinction was pointed out, there was no need in the Roddy case to define its precise boundary inasmuch as it was clear that in any event Roddy fell on the other side of the line. He had a vested right since he had already retired. It was consequently not necessary to define precisely under what other circumstances a policeman or other public employee might obtain a contractual right if the particular statutory retirement plan differed from the customary and purported to grant such a right. It appears to have been the thought that if the member purchased a retirement allowance or annuity out of his own money in substantial part, situations might arise where the scheme or retirement plan was in such form that it could not later be altered by statute. Using this language which was inserted in the Roddy opinion as a precaution, appellant attempts to place a precise construction upon the words 6 ‘ wholly or largely out of public moneys ’ ’. It is contended that where a policeman or all of the policemen who are members of this fund have contributed at the rate of one third of the annual receipts, and the city has subscribed the remaining two thirds, it can no longer be considered that the fund is created “ largely ” out of public moneys. Of course, if these words be regarded as fur-, nishing an exact criterion, it might still be contended with force
• It might be necessary to consider more carefully the constitutional question of whether property of petitioner would have been taken without due process of law, if the refunding of his own contributions were regarded as being subject exclusively to the discretion either of the municipal authorities or of the Legislature. It is not necessary to meet that issue, however, inasmuch as section 462 of the Buffalo City Charter as amended provides that each member of the police pension fund shall continue to be a member until death, resignation from the department, or removal therefrom in the manner provided by law, ‘ ‘ or resignation from membership in said fund. ’ ’ Resignation is provided for more explicitly in what immediately follows in this section, which says “ Subject to the provisions of section four hundred sixty-nine, any member may resign from membership in said fund at his election. Such resignation shall be in writing, signed, acknowledged and filed with the board. Thereupon all deductions from his compensation theretofore paid into said pension fund shall be returned to him without interest and his right and the right of any dependent to benefits from said fund shall terminate.”
In other words, even if petitioner did, along with other members of the fund, pay a substantial sum in comparison to that contributed by the city, no unconstitutionality would appear to be involved in changing the provisions of the pension requirements prior to July 1,1940, provided that a means was supplied, as it has been, to refund to the member that which he had himself paid in. It bears analogy to the difference with which we are familiar in the State Retirement System, between the annuity and the pension which together go to make up the customary retirement allowance. There would be no unconstitutionality prior to July 1, 1940, in changing the pension rights, provided that the member were permitted to withdraw what he had paid in. That having been done in 1940 under section 462 of
It is recommended that the order appealed from should be affirmed.
Lewis, Ch. J., Conway, Desmond, Dye, Fuld and Froessel,, JJ., concur.
Order affirmed.