Gall v. City of Wheeling
| Decision Date | 15 June 1937 |
| Docket Number | C. C. 577. |
| Parties | GALL v. CITY OF WHEELING et al. |
| Court | West Virginia Supreme Court |
Submitted April 20, 1937.
Syllabus by the Court.
Pension funds for the benefit of the members of the fire and police departments of a municipal corporation, created from tax levies, and assessments deducted from the monthly pay of said members, under the provisions of Code 1931, 8-6-14, and subsequent amendments thereto, are public funds of the municipal corporation. Such municipal corporation is authorized to make a deposit or deposits of such funds and secure a pledge of securities from the depository to secure the same.
Certified from Circuit Court, Ohio County.
Suit by O. H. Gall, receiver, against the City of Wheeling, wherein the Board of Trustees of the Policemen's Pension or Relief Fund of the City of Wheeling and another intervened wherein defendant filed a cross-bill, and wherein the circuit court on its own motion certified its ruling overruling demurrers to the answer and cross-bill of defendant and the petitions of interveners.
Ruling affirmed.
Carl B Galbraith, of Wheeling, for plaintiff.
Jay T McCamic, Russell B. Goodwin, Benj. L. Rosenbloom, Carl O Schmidt, and Frank A. O'Brien, all of Wheeling, for defendants.
This is the suit in equity of O. H. Gall (successor to C. E. Lawhead), receiver of State Bank & Trust Company a corporation, against the City of Wheeling, a municipal corporation, defendant, and the Board of Trustees of the Policemen's Pension or Relief Fund of the City of Wheeling and the Board of Trustees of the Firemen's Pension or Relief Fund of the City of Wheeling, intervening defendants. The demurrers to the answer and cross- bill of the City of Wheeling and the petitions of the intervenors were overruled. The circuit court, on its own motion, certified its ruling on said demurrers.
The purpose of this suit, as indicated in the bill of complaint, is to require the City of Wheeling to account to the receiver of said State Bank & Trust Company, which closed its doors on January 27, 1933, for certain stocks and bonds of the value of about $120,000, theretofore hypothecated by the bank in accordance with a contract, as provided by statute, to secure the deposits of the City of Wheeling. The bill of complaint alleges that on January 27, 1933, at the time of its closing said State Bank & Trust Company had three accounts, to wit, one in the name of "City of Wheeling, W. D. Robertson, Treasurer," in the amount of $729.29; a second account in the name of "Regular Account, City of Wheeling, W. D. Robertson, Treasurer," in the amount of $2,677.29; and the third a certificate of deposit issued to "W. D. Robertson, Treasurer of the City of Wheeling," in the amount of $9,665.92, all of which deposits aggregated $13,072.50. The bill of complaint then sets forth in detail the shares of stock and bonds and the par value thereof so hypothecated by said bank with said city. The prayer is that the City of Wheeling be required (1) to account for the stocks and bonds not sold by it; and (2) to make payment to the plaintiff of the proceeds of stocks and bonds sold over and above $13,072.50, the alleged amount of the city's deposits at the time the bank was closed by the State Banking Commissioner.
In its answer and cross-bill, the defendant city alleges, among other things, that the three accounts of the city set forth in the bill of complaint amount to $13,081.90, and in addition thereto, its treasurer, on January 27, 1933, had also on deposit in said bank two other accounts, bringing the total amount to $110,492.47, namely, one for $62,087.74, in the name of "City of Wheeling, Policemen's Pension or Relief Fund, W. D. Robertson, Treasurer," and, the other in the amount of $35,322.82, in the name of "City of Wheeling, Firemen's Pension or Relief Fund, W. D. Robertson, Treasurer."
Said answer and cross-bill and the intervening petitions aver, in effect, that some years prior to 1916, the council of the City of Wheeling had adopted two ordinances, each similar in character, one to provide for a policemen's pension or relief fund and for the levy of taxes to sustain such fund, and the creation of a board of trustees for its administration, and the other, in a similar way, to provide for a firemen's pension or relief fund; that said ordinances were amended and re-enacted on July 23, 1916; that each of said ordinances provides for the creation of a board of trustees which shall be a corporation, and which, by its corporate name, is authorized to sue and be sued, plead and be impleaded, contract or be contracted with, take and hold real estate and personal estate of its funds, and may have and use a common seal; that said boards of trustees shall consist of the chief executive official of the City of Wheeling and four members of the police or fire departments, as the case may be; that the council of the City of Wheeling shall levy annually, in the manner provided for other municipal levies, a tax of 1 cent on each $100 of all real and personal property as listed for taxation in the City of Wheeling for said policemen's pension or relief fund, and a like levy for said firemen's pension or relief fund; that no tax of less than 1 per cent. shall be so levied unless fixed and admitted by said boards of trustees and certified to said council; that there shall be deducted from the monthly pay of each member of the police and fire departments of said city a monthly sum which sum shall become a regular part of said pension funds; that the treasurer of the City of Wheeling shall be the custodian of the funds and shall deposit and pay out of the same in accordance with any proper orders, which treasurer shall be liable for said fund on his official bond; that payments of pension money shall be made to each member of the police and fire departments who has become disabled or who, after continuous service during a certain number of years, may come and upon his application be retired from all service.
The answer and cross-bill and intervening petitions further aver that the ordinances were adopted in accordance with the provisions of the laws of the state of West Virginia; that levies were laid regularly and turned over to the treasurer of the city; that the members of the police and fire departments contributed monthly to the proper fund, the monthly contributions being, by the City of Wheeling, deducted from the monthly pay of each member, and likewise turned over to said treasurer; that the city council had, on July 24, 1917, enacted an ordinance providing for the deposit of public moneys in a bank, or banks, furnishing security and offering the highest rate of interest; that on July 18, 1927, after said city advertised for bids as provided by law, for the deposit of its public moneys, bids of several banking institutions in said city were submitted to the city council; that said State Bank & Trust Company submitted the highest bid, which was accepted by council; that thereupon the council directed that the public moneys of the city be deposited in said bank in accordance with its bid; that on February 14, 1928, the city treasurer made four separate deposits, two of which were the pension funds aforesaid, totaling $79,083.11; that at the time of making said deposits the bank delivered to the city a surety bond in the amount of $100,000 to protect said deposits; that, as the deposits increased, and particularly when the total thereof reached a point where they exceeded the sum of $100,000, the bank in addition to said bond, deposited with the city, for protection and safety of said funds, collateral in the nature of stocks and bonds; that in 1932, the surety bond, which had been renewed from year to year, was not renewed and in lieu thereof the bank pledged assets which were represented to be worth something more than the entire amount of the deposits.
Said answer and cross-bill and intervening petitions further aver that after the bank closed and prior to the appointment of a receiver, a representative of the State Banking Commissioner advised the mayor-manager and the city treasurer that said Banking Commissioner had consented to the sale of about $66,500 worth of securities theretofore pledged; that $36,500 worth thereof were sold and the remainder, to wit, $30,000 of the state of West Virginia State Road Bonds, were taken over by the city and the two boards of trustees, at the prevailing market price, and carried thereafter as an investment; and that the accounts in the bank and in the hands of the receiver were and are public moneys.
On demurrers, the pleadings of the defendant and intervenors are challenged on two general grounds, namely: (1) That the funds created under the ordinances for the maintenance of the firemen's and policemen's pension funds are not public funds, in that a portion of the same was raised through assessments against the individual fireman's or policeman's salary; and (2) that, in any event, such funds cannot be considered municipal funds, in that...
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