Genkinger v. City of New Castle
| Citation | 84 A.2d 303,368 Pa. 547 |
| Parties | GENKINGER v. CITY OF NEW CASTLE et al. |
| Decision Date | 15 November 1951 |
| Court | United States State Supreme Court of Pennsylvania |
Jacob F. Genkinger brought a taxpayer's bill against the City of New Castle and the Officers' and Employees' Retirement Board to declare null and void an ordinance setting up a pension or retirement system for officers and employees of the city and to enjoin payments thereunder by the city to the Retirement Board. Edith M. Cleaveland, and others, intervened as defendants. The Court of Common Pleas of Lawrence County at No. 6 March Term, 1950, Equity, W Walter Braham, President, entered judgment declaring the ordinance void and defendants and intervenors appealed. The Supreme Court, No. 130, March Term, 1951, Bell, J., held that the ordinance went far beyond anything authorized by and in some respects conflicted with legislative enabling act, was fundamentally contrary to public policy, to purpose of retirement or pension system, and important pension provisions directly benefited four of the five councilmen in a manner and degree unauthorized by Legislative Enabling Act and to that extent was void, and that valid provisions were not separable from invalid provisions.
Decree affirmed.
Ralph A. Cooper, Alvah M. Shumaker, New Castle, for appellants.
Robert White, City Solicitor, Robert E. Jamison, Asst. City Solicitor, New Castle, for City of New Castle.
Sherman K. Levine, John S. Powers, New Castle, for appellee.
Before DREW, C. J., and STERN, STEARNE, JONES, BELL, LADNER and CHIDSEY, JJ.
Plaintiff brought a taxpayer's bill to declare null and void an ordinance of the City of New Castle, enacted December 1, 1947, setting up a pension or retirement system for officers and employees of the City, and praying for an injunction to prevent payments thereunder by the City to the Officers' and Employees' Retirement Board.
Municipalities are not sovereigns; they have no original or fundamental power of legislation; they have the right and power to enact only those ordinances which are authorized by an act of the Legislature: Kline v. City of Harrisburg, 362 Pa. 438, 68 A.2d 182; Murray v. Philadelphia, 364 Pa. 157, 71 A.2d 280.
Moreover, an ordinance must be in conformity with the provisions of the enabling statutes; if it conflicts therewith it is void: Bussone v. Blatchford, 164 Pa.Super. 545, 67 A.2d 587; Grisbord v. Philadelphia, 148 Pa.Super. 91, 24 A.2d 646; Kline v. City of Harrisburg, 362 Pa. 438, 68 A.2d 182, supra; 1 Dillon on Municipal Corporations, 5th Ed., 449.
The Legislature of Pennsylvania by Act of May 23, 1945, P.L. 903, 53 P.S. § § 12198-4371 to 12198-4384, authorized Cities of the Third Class to establish a retirement system for officers and employees and prescribed certain conditions or limitations. The Act expressly permitted such a city to include in a pension ordinance persons who were officers or employees of the city at the time of the enabling ordinance and those who were thereafter elected.
The third-class city of New Castle had a Council of five members composed of the Mayor and four elected officials. The Ordinance of December 1, 1947 covered all the Councilmen and if valid would permit 4 of the 5 to retire on a pension at the end of their respective terms, which was 1948 for one councilman and 1952 for three councilmen. Their ages varied from 55 to 72. Two of them had served the City of New Castle for 8 years; one for 15 years; and one for 19 years . The heart of the Ordinance was contained in Section 7 and Section 14. A, B and C of Section 7 dealt with officers or employees who had attained or shall attain the age of 60 years after having served 20 years . These are in conformity with Section 4(a) of the Act and appear to be valid. D, E and F of Section 7, as well as other parts of the Ordinance, appear to be invalid and therefore require further discussion.
(1) The Act Section 4(b), provided that where an officer or employee is involuntarily retired after serving between 12 and 20 years, he shall be entitled to such proportion of full compensation as the period of his service bears to 20 years; and where an officer or employee's tenure of office is involuntarily terminated after 20 years' service, he shall be entitled to full compensation for the remainder of his life.
The Ordinance, Section 7D, authorized an employee to involuntarily retire after 12 years of service. The Ordinance, Section 7E, applied only to elected officials and provided that anyone who had served 12 years or more and voluntarily quits or otherwise retires, is entitled to a pension based upon the years served divided by 20. Section 4(b) of the Act has been declared void and it follows that Sections 7D and 7E of the Ordinance, which are based thereon, are likewise null and void: Altieri v. Allentown Retirement Board, 368 Pa. 176, 81 A.2d 884.
(2) Section 4(b) of the Act further provided that if an officer or employee is permanently disabled before attaining the age of 55 years and has served the City 15 years he would be entitled to receive full compensation. Section 7F of the Ordinance, which was obviously passed for the benefit of one councilman, provided that if an employee is permanently disabled after 1 year's service he should receive a pension.
(3) Section 10 of the Ordinance provides that ‘ anyone working for an agency of the City financed in whole or in part by funds not of the City, can join the retirement system and such agency shall pay such money as the Board shall require’ . The Act of the Legislature nowhere authorizes such a municipal provision.
(4) The Act is silent as to amendment or repeal. Section 14 of the Ordinance provides that if the Ordinance is amended at any time without the consent of more than 50% of the contributors to or beneficiaries of the fund, the fund shall be liquidated upon a petition to the Board signed by a majority of contributors and beneficiaries. This deprives future Councils of the right of amendment without the consent of a majority of the contributors, even where a contributor's rights have not matured; and it is certainly contrary to public policy . But Section 14 of the Ordinance goes even further and provides that if the Ordinance is repealed at any time, the fund shall be liquidated and distributed among beneficiaries and contributors in proportion to their contribution, thus requiring public or tax money which has been paid into the fund to be forthwith distributed to the contributors or beneficiaries. There is no provision in the Act authorizing this shackling or impairment of the right of future Councils to amend or repeal the Ordinance.
It is a well and wisely established principle of public policy in Pennsylvania that a public official may not use his official power to further his own interests. This principle originated in the common law and has become embodied in the Constitution of Pennsylvania[1] and has been declared to be the policy of this State in many Acts of Assembly: Reckner v. German Township School District, 341 Pa. 375, 19 A.2d 402, 133 A.L.R. 1254; Commonwealth v. Raudenbush, 249 Pa. 86, 94 A. 555; Com. ex rel. McCreary v. Major, 343 Pa. 355, 22 A.2d 686; 62 C.J.S., Municipal Corporations, § 402, p. 761; 43 Am.Jur. § 266, p. 81; Third Class City Code of June 23, 1931, P.L. 932, Art. X, § 1009, 53 P.S. 12198-1009. The reasons for this must be obvious-a man cannot serve two masters at the same time, and the public interest must not be jeopardized by the acts of a public official who has a direct pecuniary or personal or private interest which is or may be in conflict with the public interest.
With respect to the specific issues in this case, the authorities have held that a councilman is disqualified from voting in any matter or proceedings where he has a direct personal or pecuniary interest, and the prohibition is so strictly enforced that if a measure is passed by the vote of one or more persons who have a direct private interest therein, no matter how beneficial the ordinance may be, it is void Reckner v. German Township School District, 341 Pa. 375, 19 A.2d 402,supra; Commonwealth v. Raudenbush, 249 Pa. 86, 94 A. 555,supra; Third Class City Code May 23, 1945, § 1009, supra. There is no doubt that, as stated by President Judge Braham in his able OPINION below, each of the four Councilmen had a direct pecuniary interest in certain important pension provisions of the Ordinance. However, because of necessity, the Legislature in this...
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