Freyermuth v. State ex rel. Pinter

• Decision Date: 29 June 1939
• Docket Number: 27176.
• Parties: FREYERMUTH et al. v. STATE ex rel PINTER et al.
• Court: Indiana Supreme Court

21 N.E.2d 707

215 Ind. 693

FREYERMUTH et al. v. STATE ex rel PINTER et al.

No. 27176.

Supreme Court of Indiana

June 29, 1939

Appeal from Superior Court, St. Joseph County; J Fred Bingham, judge.

George Sands, of South Bend, for appellants.

Hammerschmidt & Johnson, of South Bend, for appellees.

FANSLER Chief Justice.

The appellees brought this action against the appellants to procure a mandate for the payment of certain sums claimed to be due the appellees as part of their pension as retired policemen of the City of South Bend. There was a judgment for the appellees after a demurrer was sustained to an affirmative answer by the appellants and their refusal to plead further. Error is assigned upon the ruling on the demurrer.

The appellee are all retired members of the South Bend city police force. The answer alleges that the Board of Trustees of the South Bend Police Pension Fund had regularly awarded pensions to each of them in the sum of $102 per month, which amount was regularly paid until the 6th day of April, 1933. The appellees had been retired from active service by reason of continuous service for a period of twenty-five years or more. In April, 1933, there were thirty-nine persons entitled to receive pensions for that month, and the board of trustees did not have available in the pension fund sufficient cash to pay all of the pensions in full by reason of the fact that more than $20,000 of its funds were on deposit in a closed bank, and more than $100,000 invested in Barrett Law Improvement Bonds and other municipal bonds for which there was no market at par and for which the market was very much depressed, so that a sale thereof for the purpose of procuring cash would involve a large sacrifice of principal. In view of this situation, the board invited the appellees to a conference, which they attended and at which the facts concerning the condition of the fund were placed before them. It was represented to appellees that they had an interest in the conservation of the fund, and that a sale of securities in order to realize cash would result in great damage to them and to the fund. The board proposed that it would either sell bonds to raise money to pay appellees' pensions in full or that it would deliver to the appellees bonds at par in payment of their pensions, or if they did not wish to agree to these alternatives, it would reduce their pensions. The appellees did not wish to accept bonds and did not wish to have them sold at a sacrifice to the injury of the fund, and proposed, as recited in appellants' answer, 'that in order to avoid a sale of said bonds, they would accept a reduction in their pension from One Hundred Two ($102.00) Dollars per month to the sum of Ninety-one and 80-100 ($91.80) Dollars per month for a period until such time as in the judgment of said Board said decrease could be restored * * *.' The Board accepted this proposal. Accordingly, the appellees were paid the reduced compensation from the 6th day of April, 1933, to the 15th day of June, 1937, at which time the board resumed payments in the full amount the financial situation of the fund at that time warranting the...