Board of Educ. of Louisville v. City of Louisville

• Decision Date: 16 December 1941
• Citation: 157 S.W.2d 337,288 Ky. 656
• Parties: BOARD OF EDUCATION OF LOUISVILLE v. CITY OF LOUISVILLE et al.
• Court: Kentucky Court of Appeals

157 S.W.2d 337

288 Ky. 656

BOARD OF EDUCATION OF LOUISVILLE v. CITY OF LOUISVILLE et al.

Court of Appeals of Kentucky

December 16, 1941

Appeal from Circuit Court, Jefferson County; Gilbert Burnett, Judge.

Action by the Board of Education of Louisville, Ky. against the City of Louisville and others to have the court declare the duties of defendants respecting retirement payments to teachers on the retirement roll of the local system when it was discontinued by being merged into the state system, and to command defendants, by injunction, to levy necessary additional taxes to pay retirement benefits to teachers on retirement roll of the local system when it was discontinued. From an adverse judgment, the plaintiff appeals.

Affirmed in part, and in part reversed, with directions.

William T. Baskett, of Louisville, for appellant.

Lawrence S. Poston, of Louisville, for appellees.

STANLEY Commissioner.

The case involves the validity of that part of Section 49 of the Teachers' Retirement Act of 1938, Acts of 1938, 1st Ex Sess., Chapter 1; now Section 4506b-1 et seq., Statutes Supplement 1939, which makes provision for the continuance of payments to teachers on the retirement roll of a local system at the time it is discontinued by being merged into the state system. The circuit court held so much of it as mandatorily requires the levy of a special tax for that purpose to be unconstitutional because not embraced in the title of the act. The judgment is before us for review. A declaration of rights of the parties in respect of paying the annuities out of general funds of the district will also be made.

Section 27 of the Act, Section 4506b-26, Statutes, excludes from its benefits teachers of a local district in which a retirement or annuity system is maintained under other laws, but provides that upon a majority vote of the teachers participating and the approval of the Board of Education all active members of a local organization may become members of the state system and the local plan shall be discontinued. Section 49 of the Act, § 4506b-49, Statutes, more particularly prescribes the procedure to be observed for the merger, and states the rights of "present teachers" as defined in the act. When the merger shall have been accomplished and the local system discontinued, "the payment of all benefits to members on the retired roll at the time of discontinuance shall become the obligation of the school district in which the local system was operated prior to its discontinuance." It is further provided that the funds of the local organization shall be evaluated and the present value of its liabilities on account of the annuitants on the roll shall be computed. Then "the amount of refundable deposits due each member in accordance with the laws and regulations of the local retirement system" shall be ascertained and the board of education shall pay the sums to the members--apparently to other than those on the retirement roll.

We come now to the portion of the section involved in the case. It is as follows: "If the remaining sum is less than the present value of liabilities on account of annuitants on the rolls of the local system at the time the local system is discontinued, the local board of education or the taxing authority which levies school taxes for the local board of education upon recommendation of said board of education shall annually levy a tax rate sufficient to discharge in full the obligation to annuitants, provided that in cities of the first class such levy shall not exceed (1) one cent on each $100.00 of assessed value of property made by such taxing authority. The levy of such tax shall be mandatory."

Other portions of this lengthy section do not appear to be material to the decision as to its validity under Section 51 of the Constitution.

The local retirement system in Louisville was merged into the new state system and the local organization discontinued in accordance with the act before it became operative on July 1 1940. The funds of the local organization have been valued at $131,836.85 and the aggregate of "refundable deposits due each member" is $126,036.85. This is 50% of their contributions. So there is left available only $5,800 for the production of income with which to pay the retired teachers. At the time of the merger there were on the pension roll eighty-five former teachers ranging in age from forty-three to ninety-one years. The amount required to pay them in the fiscal year ending August 31, 1941, is $16,676.

Complying with the terms of Section 49 of the State Teachers' Retirement Act, the Board of Education of Louisville, by proper procedure, requested the Board of Aldermen, which is the authority that levies the school tax (Section 4399-40, Statutes), to levy a special tax sufficient to yield the sum necessary to meet the obligation to the retired teachers, not exceeding 1 cent on the $100 of assessed value of property. The Board of Aldermen refused to make the levy. Thereupon the Board of Education instituted this action against the city and the members of the Board of Aldermen seeking to have the court declare the duties of the defendants and to command them, by injunction, to levy the necessary additional tax. As we have stated, the circuit court sustained the defense that the portion of the State Teachers' Retirement Act sought to be enforced is unconstitutional under Section 51 of the Constitution, which requires that the subject of a legislative act shall be expressed in the title.

It has been the consistent interpretation of this section of the Constitution that if the title of an act is general, then any provision in the body having a natural connection with the subject expressed in the title and not foreign to it satisfies the requirement of the Constitution. But if the title is specific as to the provisions of the act and is such as leads to a reasonable supposition that its object is to restrict the scope of the act within the limits specified, then any provision outside of those specifications must be eliminated as unconstitutional. Wiemer v. Commissioner's Sinking Fund, 124 Ky. 377, 99 S.W. 242; Ingram's Adm'r v. Advance Motor Co., 283 Ky. 87, 140 S.W.2d 840. These early and late cases will serve to show the scope and continuity of the interpretation. Particular application will be found in them and many intermediate opinions.

The title to the act under consideration is as follows: "An Act providing a Teachers Retirement System for the State of Kentucky; providing for retirement allowances for teachers of State supported Colleges, Public Schools, (including all elementary and secondary schools of the state); providing for disability benefits for disabled teachers of such schools; providing that the funds for the payment of retirement annuities to teachers and for disability benefits shall be raised by contributions from the teachers and by contributions from the State of Kentucky from its general funds; providing for the repeal of Section 4506a-1 through and including Section 4506a-15; and providing for the administration and management of the retirement system and all funds created for its maintenance and support, by a Board of Trustees to be selected under the supervision of the Superintendent of Public Instruction, by a vote of the members of the system. This Act shall be known as the Porter-Rayburn Act."

Nowhere in this title can be found any reference to the provision which requires a local board of education, or "the taxing authority which levies school taxes" upon its recommendation, to levy an extra tax to pay the pensions of superannuated teachers who are not eligible to become members of the state system. On the contrary, the terms of the title negative such an idea. The fourth clause of the title specifies "that the funds for the payment of retirement annuities to teachers and for disability benefits shall be raised by contributions from the teachers and by contributions from the State of Kentucky from its general funds." Sometimes it is difficult to draw the line between what is within and what is without a specification in the title. Where there is reasonable doubt, in recognition of its duty to sustain the validity of a legislative act, the court always resolves the doubt in favor of its constitutionality. But there is no doubt in this case. We have a number of analogous cases.

In South v. Fish, 181 Ky. 349, 205 S.W. 329, the title indicated only that the act related to the codification of existing statutes on the subject of public health in certain specified particulars; but the act itself established a new board of health. That part was declared unconstitutional. And in District Board of Tuberculosis Sanitorium Trustees v Bradley, Mayor, 188 Ky. 426, 222 S.W. 518, we held a provision in the same act requiring a local tax levy for the benefit of a sanitarium invalid because not covered by the title. In Booth v. City of Owensboro, 275 Ky. 491, 122 S.W.2d 118, the title indicated only that an existing statute empowering cities of the third class to establish and operate electric plants was extended to embrace other cities, but the body of the act amended the statute so as to restrict the acquisition of such plants by a city of the third class and others as well by requiring a submission of the proposition to a vote of the people. That was clearly unconstitutional. There are many other decisions of like effect. But little precedent is needed here. The title indicates that all funds for pensions and benefits are to be raised by contributions of the teachers and the State of Kentucky. Reading the act one is surprised to find a provision in it mandatorily requiring a local taxing authority to make a special levy for that purpose. Moreover, the title...