City of Dallas v. Trammell

• Decision Date: 11 February 1937
• Docket Number: No. 7163.,7163.
• Citation: 101 S.W.2d 1009
• Parties: CITY OF DALLAS et al. v. TRAMMELL.
• Court: Texas Supreme Court

Page 1009

101 S.W.2d 1009

CITY OF DALLAS et al. v. TRAMMELL.

No. 7163.

Supreme Court of Texas.

February 11, 1937.

Rehearing Denied March 17, 1937.

Error to Court of Civil Appeals of Fifth Supreme Judicial District.

Suit by C. W. Trammell against the City of Dallas and others. Judgment for plaintiff was affirmed by the Court of Civil Appeals [96 S.W.(2d) 110], and defendants bring error.

Judgments of Court of Civil Appeals and of trial court reversed, and judgment rendered for defendants.

H. P. Kucera, City Atty., and A. J. Thuss and J. Manuel Hoppenstein, Asst. City Attys., all of Dallas, for plaintiff in error City of Dallas.

J. L. McNees and W. C. Graves, both of Dallas, for intervener-plaintiffs in error.

J. C. Muse, Jr., and E. Crippen, both of Dallas, for defendant in error.

GERMAN, Commissioner.

In this case the one dominant question is the constitutionality of what is known as H.B. 122, enacted by the 44th Legislature, 1st Called Sess., c. 387, of the State of Texas, being article 6243a of Vernon's Annotated Texas Civil Statutes, in so far as it attempts to reduce the amount payable to defendant in error, C. W. Trammell, as a monthly pension. Defendant in error, on September 18, 1935, retired from the police department of the City of Dallas after twenty years of continuous service. Prior to 1933, the City of Dallas adopted provisions for the creation of the Firemen, Policemen, and Fire Alarm Operators' Pension Fund, as provided by articles 6229 to 6243 of the Revised Statutes of 1925 and preceding acts. This fund was created by deducting from the wages of each fireman, policeman, and fire alarm operator accepting the benefits of same 1 per cent. of the agreed compensation, by donation of rewards, and by appropriations by the city of designated percentages from the general revenues of the city. The provisions of the statutes of 1925 were amended in 1933 (Acts 1933, 1st Called Sess., c. 4), and section 7 of that amendment was as follows:

"Retirement pensions. — Whenever any member of said departments who shall have contributed a portion of his salary, as provided herein, shall have served twenty (20) years or more in either of said departments, he may be entitled to be retired from said service upon application, and shall, if the board approves, be entitled to be paid from such funds a monthly pension of one-half of the salary received by him at the time of his retirement."

This provision was in effect at the time defendant in error retired from the police service, and was applicable to him, and upon his retirement he was allowed a pension in the sum of $183.33 per month. He was paid on this basis up to the time H.B. 122 became effective on October 11, 1935. That act amended section 7 of the act of 1933, and the section with reference to amounts payable as pensions is as follows:

"Retirement pension: Whenever any member of said departments shall have contributed a portion of his salary, as provided herein, shall have served twenty (20) years or more in either of said departments and has made application to said Board he may be entitled to a Certificate of Retirement. The issuance of which Certificate shall be mandatory upon the Board, and when the said member reaches the age of fifty (50) years he may, upon approval of the Board after making application, be retired. No member shall ever receive any award from this Fund in a Retirement nature until he has at least served twenty (20) years in either of the departments. A member retiring under the provisions of this Act shall receive one-half of the salary received by him at the time of his retirement; provided, however, that in no instance shall the monthly pension allowance awarded him be in excess of one-half of the base pay of a private per month, plus one-half of the service money granted to the member under any provision of any City Charter, which pension allowance shall be computed on the basis of the current pay roll. This pension allowance, set out above based on the current pay roll, shall be granted to the man going on the Pension Fund as well as the man already on the pension. Any member reaching the age of sixty-five (65) years and having served twenty (20) years in either of the Departments, and who has not then retired from such Department, shall be summoned before the Board for the purpose of determining whether or not he should be retired under the provisions of this Act." Vernon's Ann.Civ.St. art. 6243a, § 7.

After the effective date of this act, the board of trustees of the pension fund reduced the amount to be paid retired employees from the pension fund, including defendant in error. The result of the application of this new act to defendant in error was to reduce his monthly pension payment from $183.33 to $72.36. It appears undisputed that the pension fund of the City of Dallas had been from September 1, 1933, to October 11, 1935, inadequate to pay in full the monthly pensions due and payable to those on the pension roll. From September 1, 1933, to October 11, 1935, the effective date of the new law, payments to pensioners had been prorated, and such prorations continued until approximately April 1, 1936. It also appears that under the new law, at its effective date, 74 pensioners on the rolls received benefits over the amounts paid under the old law, and 60 pensioners, including defendant in error, received less than under the old law.

This suit, which was instituted by defendant in error, Trammell, against the City of Dallas and those in charge of the pension fund, had for its purpose the reinstatement of defendant in error to his status under the law of 1933, applicable at the time of his retirement, and the obtaining of a decree entitling him to payment of $183.33 per month, instead of the amount tendered to him by the board of trustees under the act of 1935. The gist of his contention is that, having accepted the benefits of the pension laws applicable at the time he entered the service with the City of Dallas, and having complied with the terms of said laws, and having retired on September 18, 1935, after complying with all of the conditions applicable to him, and having been granted a pension in the sum of $183.33 per month under the applicable provisions of the law at the date of the retirement, he acquired a vested right in the pension fund to the amount of $183.33 per month, as a part of his agreed compensation, and that he cannot be constitutionally deprived of any part of said sum of $183.33 per month; that consequently all subsequent legislation, such as the act of 1935, in so far as it may deprive him of the full amount of the monthly compensation payable to him from the pension fund, is in violation of his constitutional rights. He was awarded the relief prayed for in the district court, and the judgment of the district court was affirmed by the Court of Civil Appeals. 96 S.W.(2d) 110. The result of the decision by the Court of Civil Appeals was to hold the act of 1935, known as H.B. 122, in so far as it diminished the amount payable to defendant in error monthly as a pension, unconstitutional and void.

The constitutionality of the law providing for the creation of the Firemen, Policemen and Fire Alarm Operators' Pension Fund for the City of Dallas was upheld in the case of Byrd v. City of Dallas, 118 Tex. 28, 6 S.W.(2d) 738, 740, and both sides of this controversy rely upon that case. In our opinion, the language of that case which is applicable here is the following: "There is no reason why a city may not engage its servants and employees upon any terms of payment acceptable to both parties. The plan authorized by the statute contemplates in legal effect that as compensation the officers and employees named shall receive the salaries agreed upon to be paid periodically and shall be entitled to participate in the fund provided for pensions according to the statutory plan. The law pertaining to such employment is necessarily a part of the contract of employment and is read into the contract as fully as though it had been actually incorporated therein. Trinity, etc., Co. v. Lion, etc., Co. (Tex.Com.App.) 229 S.W. 483; United States Fidelity, etc., Co. v. Henderson County (Tex.Com.App.) 276 S. W. 203; [Id. (Tex.Com.App.) 276 S.W.] 1119. When an officer or employee coming within the statute is employed and evidences his assent to the pension scheme, he thereupon has a binding contract with his employer for the stipulated salary and likewise to be `entitled to participate' in the fund upon the terms prescribed. The right to participate in such fund is therefore not a gratuity or donation in any sense. It is as much a part of the agreed compensation as is the monthly stipend." (Italics ours.)

This language is plain and unambiguous. It is distinctly stated that an employee, occupying a situation such as is occupied by defendant in error, acquires by virtue of his contract with the city, and as an essential part thereof, "the right to participate in" the pension fund. No one can question this, and for the purpose of this decision it may be conceded that this right to participate in the pension fund, so long as there is such a fund, is one which cannot be destroyed. This, however, is not the real question for decision. As we view the matter, the true question involved is this: Does the employee, after retirement, have a vested right to participate in the pension fund to the extent of the full amount of the monthly installments granted to him at retirement; that is, does he have a vested right in future installments which cannot be affected by subsequent legislation tending to diminish the amount of such installments? Putting the matter in somewhat different language, we may properly inquire if the right which the employee has to participate in the pension fund, acquired by virtue of his contract, imposes upon the city and the Legislature of the state (the source of the city's power and authority in a...