Firemen's Relief Ass'n of Washington v. Minehart

• Decision Date: 13 May 1968
• Citation: 430 Pa. 66,241 A.2d 745
• Court: Pennsylvania Supreme Court
• Parties: The FIREMEN'S RELIEF ASSOCIATION OF WASHINGTON, Pennsylvania, v. Thomas Z. MINEHART, Treasurer of the Commonwealth of Pennsylvania, and Grace Sloan, Auditor General of the Commonwealth of Pennsylvania, Appellants.

Page 745

241 A.2d 745

430 Pa. 66

The FIREMEN'S RELIEF ASSOCIATION OF WASHINGTON, Pennsylvania, v. Thomas Z. MINEHART, Treasurer of the Commonwealth of Pennsylvania, and Grace Sloan, Auditor General of the Commonwealth of Pennsylvania, Appellants.

Supreme Court of Pennsylvania.

May 13, 1968.

William C. Sennett, Atty. Gen., Raymond Kleiman, Deputy Atty. Gen., Dept. of Justice, Harrisburg, for appellants.

Henry W. Rhoads, Rhoads, Sinon & Reader, Harrisburg, Frank C. Carroll, Alexander McIlvaine, McIlvaine, & Carroll, Washington, for appellee.

OPINION OF THE COURT

ROBERTS, Justice.

Foreign fire insurance companies in Pennsylvania are assessed a tax of two percent on premiums collected by them in this Commonwealth. Under the Act of June 28, 1895, P.L. 408, § 2, as amended, 72 P.S. § 2262, there must be paid annually to the treasurers of the various municipal subdivisions in Pennsylvania a portion of this tax money corresponding to the amount of foreign fire insurance written in the receiving municipality. This same Act of 1895 further requires the recipient municipality to pay over the amount received to the designated firemen's relief or pension fund which serves the specific area. The City of Washington and the Township of Canton, having designated the Firemen's Relief Association of Washington as the authorized recipient of its share of tax money, have been collecting funds from the state and disbursing them to the Association since 1931.

By letter of January 12, 1965 the Auditor General informed the Association that payments under the Act of 1895 would thereafter be suspended. According to this letter, the Auditor General concluded that certain by-laws of the Association rendered its pension plan invalid for purposes of receiving said funds. ¹ The challenged bylaws provided (1) for pension benefits based solely upon years of service; ² (2) for certain medical benefits for any member of the Association in good standing; ³ and (3) for certain death benefits to the family of a deceased member of the Association. ⁴ In response to this refusal to pay, appellee brought an action in mandamus in the Court of Common Pleas of Dauphin County. That court issued the mandamus, directing that appellee be paid its proper share of the tax monies collected under the Act. From that decision the Auditor General and Treasurer have taken this appeal.

Appellants maintain that the Act of 1895 does not authorize the payment of monies to any pension plan which fails to establish a minimum age for receiving benefits. They further contend that the Legislature did not intend to bestow Commonwealth funds upon any pension association which would use this money to provide medical and/or death benefits for its members. We are unable, however, to find any such limitations in the language of the Act of 1895, and thus agree with the court below that mandamus properly issued.

The Act of 1895 provides, in relevant part, as follows:

'On and after the first day of January, one thousand nine hundred and nineteen, and annually thereafter, There shall be paid by the State Treasurer to the treasurers * * * (of the municipalities of this Commonwealth), the entire net amount received from the two per centum tax paid upon premiums by foreign insurance companies. * * * Each * * * (municipality) receiving any payment from the State Treasurer hereunder, Shall forthwith pay the amount received to the relief fund association of, or the pension fund covering the employes of the fire department * * * (of such municipality).' (Emphasis supplied.)

It is readily apparent that, in the present case, the Auditor General has unilaterally decided that the Only pension funds eligible for money under this statute are those which do not provide medical and death payments and which condition their benefits upon a minimum age. Since the statutory language quoted above fails to so limit the words 'pension fund,' we have, pure and simple, this classic problem of administrative law: To what extent may an administrative body or officer, under the guise of its regulatory power, actually amend a legislative pronouncement? The answer to this question is clear. It Cannot so amend. As this Court said in Commonwealth v. DiMeglio, 385 Pa. 119, 124, 122 A.2d 77, 80, 56 ,A.L.R.2d 1120 (1956): 'The power of an administrative agency to prescribe rules and regulations under a statute is not the power to make law, but only the power to adopt regulations to carry into effect the will of the Legislature as expressed by the statute: (citing cases).' In the present case it nowhere appears that the 'will of the Legislature as expressed by the statute' even remotely condones the arbitrary placing of these conditions upon pension plans, and we must therefore conclude that this administrative officer has stepped squarely upon the toes of our Legislature in direct contravention of established principles of administrative law and in flagrant disregard of Pennsylvania's judicial precedents.

Just recently this Court, in litigation involving the Firemen's Relief Association of Reading, set out the limitations on the Auditor General's power under the Act of 1895. The Auditor General sought to withhold funds from the Firemen's Relief Association of Reading on the ground that this association planned to use part of the money for certain death benefits that would not be available equally to all members of the association. This, said the Auditor General, was not permitted under the Act of 1895. The controversy first reached our Court on the issue of whether mandamus was the proper remedy to compel payment of the funds to Reading. Volunteer Firemen's Relief Association of City of Reading v. Minehart, 415 Pa. 305, 203 A.2d 476 (1964). It was there held that mandamus would lie. The Court read the Act of 1895 as being a non-discretionary directive to the Auditor General that he Shall pay this money to the municipality and that these funds may be used 'by the latter For any lawful purpose.' Id. at 307, 203 A.2d at 478. (Emphasis supplied.) Cf. Firemen's Relief Association v. City of Scranton, 217 Pa. 585, 66 A. 1103 (1907).

Several statements made by the Court in the first Reading opinion shed additional light on the present problem. In deciding that mandamus was a proper remedy the Court noted that 'mandamus will lie to compel action by an official where his refusal to act in the requested way stems from his erroneous interpretation of the law. (Citing case.) The present case falls squarely within these principles.' 415 Pa. at 311, 203 A.2d at 479--480. Finally, the death knell was sounded for the Auditor General's position in that case when we said at page 308, 203 A.2d at 478: "The manner in which the fund was to be set up or administered was left by the legislature to the municipalities.", quoting from Commonwealth v. Souder, 172 Pa.Super. 463, 470, 94 A.2d 136, 139 (1953), aff'd, 376 Pa. 78, 101 A.2d 693 (1954).

The merits of the Reading mandamus were not reached by our Court until three years later, when, in Volunteer Firemen's Relief Association of the City of Reading v. Minehart, 425 Pa. 82, 227 A.2d 632 (1967), the result so clearly foreshadowed by our first Reading case came to actual fruition: the Auditor General was ordered to disburse the money. Facing practically the same problem confronting this Court today, we held in the second Reading case that the Auditor General could not read words into the Act of 1895, and since that act contained no language whatsoever indicating that death benefits had to be made available equally to all members of the firemen's association, the Auitor General was not permitted to withhold any monies on that basis. As we there recited, 'while we concede the authority of the Auditor General to make regulations in connection with his statutorily imposed duties, we believe that in the present case the rules laid down by him have no sound basis in the statute and therefore are not in furtherance of his auditing duties.' Id. at 89, 227 A.2d at 635.

This statement, as well as the decision of which it is a part, controls the controversy now before the Court. We can see no legal distinction between an attempt by the Auditor General to read, for example, a minimum retirement age into the Act of 1895 and his former unsuccessful attempt to read equality of death benefits into it. Neither requirement can find any statutory supprot and both constitute a clear intrusion by an administrative officer into the chambers of the Legislature. ⁵

Appellants rely quite heavily upon a statement contained in Altieri v. Allentown Officers' and Employees' Retirement Board, 368 Pa. 176, 181, 81 A.2d 884, 886 (1951) that a retirement system ought to bear some reasonable relation to the length of the public service of the recipients and also to the age of its beneficiaries. This reference to the age of the beneficiaries was intended to apply and must be limited to retirement systems under the Act or Acts which expressly or impliedly have such a requirement. Moreover, Altieri is not applicable to the present case since it concerned a retirement system established pursuant to the Act of May 23, 1945, P.L. 903, § 1 et seq., 53 P.S. § 39371 et seq. Not only is the Washington Firemen's Relief Association administered completely independently of that act, but that act, as indicated by its very title, 'Optional Retirement System for Officers and Employes' is not even intended to govern all the relief, retirement and pension associations in Pennsylvania's third class cities. ⁶ Of course, we realize that there have been instances in which this Court has upheld the Auditor General when he refused to disburse funds to various pension and relief associations. However, those were cases in which the municipal associations were attempting to use Commonwealth money for purposes directly Contrary to the words of the statute itself. Thus, in Hanover Twp. Police Pension and Benefit Fund...