State ex rel. Breshears v. Missouri State Emp. Retirement System, 49505

• Decision Date: 11 December 1962
• Docket Number: No. 49505,49505
• Citation: 362 S.W.2d 571
• Parties: STATE of Missouri at the Relation of J. C. BRESHEARS et al., Relators, v. MISSOURI STATE EMPLOYEES' RETIREMENT SYSTEM, Respondent.
• Court: Missouri Supreme Court

Page 571

362 S.W.2d 571

STATE of Missouri at the Relation of J. C. BRESHEARS et al., Relators, v. MISSOURI STATE EMPLOYEES' RETIREMENT SYSTEM, Respondent.

No. 49505.

Supreme Court of Missouri, En Banc.

Dec. 11, 1962.

Morris E. Osburn, Robert L. Hawkins, Jr., Graham & Hawkins, Jefferson City, for relators.

Thomas F. Eagleton, Atty. Gen., George W. Draper, II, Asst. Atty. Gen., Jefferson City, for respondent.

EAGER, Judge.

This is a proceeding in mandamus, in which we granted an alternative writ. Relators moved for judgment on the pleadings, and from the petition and return the following facts appear: that Relators represent a class of approximately 1,850 former state employees who were eligible to become and did become members of the Missouri State Employees' Retirement System (Secs. 104.310-104.600, RSMo 1959, V.A.M.S., ¹ being Laws 1957, p. 706 et seq.) established in 1957; that they all retired prior to October 13, 1961, without electing to receive accumulated contributions in a lump sum as permitted under Sec. 104.380(3), but did accept the annuity provisions of the Act; that each of them has since been paid upon the annuity formula provided by Sec. 104.390, namely, a sum computed at five-sixths of one percent of the member's average compensation multiplied by the number of years of his creditable service; that from the effective date of the Act in 1957 payroll deductions of 4% were regularly made from the Relators up to the times of their respective retirements; that the legislature in 1961, and effective October 13, 1961, amended Sec. 104.390 of the said Act, so as to read, in part: 'The normal annuity of a member shall equal one per cent of the average compensation of the member multiplied by the number of years of creditable service of such member, * * * provided, however, that the annuity of any member shall never exceed two-thirds of the compensation being paid to members of the general assembly.' So far as this case is concerned, the only change was to increase the five-sixths of one percent to one percent, as used in the basic calculation. The contribution required of active members was not thereby increased, and, of course, Relators have not made contributions since retirement. Relators have requested payment of annuities on the increased basis effective October 13, 1961, but this has been refused, largely by reason of an Attorney General's opinion that an increased payment to them would be unlawful. The reasons will be developed in our subsequent discussion. It has been alleged and admitted that the existing funds were adequate to make such payments, but the Respondent (to whom we shall sometimes refer as the 'Board') further asserts that such payments 'might result in depletion of the fund to such an extent that it would be required to increase the amount of contribution' by present, active employees. As stated, their contributions are now at the rate of four percent, but the percentage is not limited by the Act, as is the State's.

The issue has been thus stated rather simply. Its resolution is not so simple. Relators assert here, in substance: that the legislature clearly intended to include the annuities of retired members in providing for the increase; that the enactment, as thus construed, violates no constitutional provisions; that the relationship between the State and its employees, including Relators, constitutes a contract founded upon the offer by the State and its acceptance by all participating employees, and, in effect, that the contract was amended for the benefit of all employees with no further consideration required; also, that the funds, having reached the Board, have ceased to be 'public money.' The Board insists: that mandamus is not the proper remedy; that the amendment operates only prospectively and should not be construed to be applicable to any persons who had retired prior to its effective date; that, if construed as applicable to them, it would be violative of Sec. 39(3), Art. 3 of the Mo. Constitution; and finally, that so construed, the amendment would be violative of the constitutional provisions requiring due process and prohibiting the impairment of contracts, in so far as it affects those members who had not retired prior to October 13, 1961, and have contributed to the fund; particularly noting Sec. 104.540 of the Act.

At this point we quote, for convenience, the applicable portions of Sec. 39(3), Art. 3 of the Constitution and the section of the Retirement Act last referred to: 'Section 39. The general assembly shall not have power: * * * (3) To grant or to authorize any county or municipal authority to grant any extra compensation, fee or allowance to a public officer, agent, servant or contractor after service has been rendered or a contract has been entered into and performed in whole or in part; * * *' Section 104.540, supra, is as follows: '1. All payroll deductions and deferred compensation provided for under sections 104.310 to 104.550 are hereby made obligations of the state of Missouri. No alteration, amendment, or repeal of sections 104.310 to 104.550 shall affect the then existing rights of members and beneficiaries, but shall be effective only as to rights which would otherwise accrue hereunder as a result of services rendered by an employee after such alteration, amendment, or repeal.'

Mandamus is a discretionary remedy. Ordinarily, where we have issued the alternative writ, we follow through to a final decision. State ex rel. Phillip v. Public School Retirement System of City of St. Louis, Banc, 364 Mo. 395, 262 S.W.2d 569, 574. The action has frequently been entertained in matters involving extraordinary emergencies or of considerable public importance, and of more than local concern. The Phillip case, just cited, is an appropriate example, with a somewhat similar factual background. In cases of such a character this court has ruled in mandamus the constitutionality of statutes. State ex rel. School District No. 24 of St. Louis County v. Neaf, Banc, 344 Mo. 905, 130 S.W.2d 509. Respondent Board objects that the active members are not parties. Respondent has been constituted a body corporate by Sec. 104.320, and in its presentation here it is adequately and properly representing those members. We proceed on the merits, keeping in mind that Relators must always show a clear and unequivocal right to relief in mandamus.

It is true that a statute will not generally be given a retrospective application unless such an intent is 'manifest upon the face of the statute.' Atchison v. Retirement Bd. of Police Retirement System of Kansas City, Mo., 343 S.W.2d 25; also, that statutes should be given their plain and rational meaning. State ex rel. Wright v. Carter, Banc. Mo., 319 S.W.2d 596. We have no particular difficulty in arriving at the meaning and intent of this statute. In 1957 the legislature said that '[t]he normal annuity of a member shall equal five-sixths of one per cent of the average compensation * * *.' In the same enactment (Sec. 104.310) it defined a 'member' as '* * * a member of the Missouri state employees' retirement system, without regard to whether or not he has been retired.' In 1961 the legislature provided (effective as of October 13, 1961), that 'The normal annuity of a member shall equal one per cent of the average compensation * * *' (Italics ours.) It did not change the definition of a member as it then existed. The only reasonable construction is that the legislature intended that all future annuity payments, both to members retired before October 13, 1961, and thereafter, should be computed on the new basis. We cannot rule otherwise without discarding the statutory definition of a 'member.' Thus construed, the Act is prospective to the extent that it contemplates increased payments only for the future, to all members. It is retroactive in the sense that the future increases are made applicable to members already retired, but this is really accomplished not by our construction but by the legislature's own definition. We thus construe the amendment as applicable to Relators, by its terms.

We shall not attempt to distinguish all the various cases cited. In Atchison v. Retirement Bd., supra, it was held that a new legislative act prescribing a new formula for the computation of police pensions did not apply to members theretofore retired and already receiving pensions under the prior act. The new Act (1957) provided that those in service on June 15, 1946, or entering it after that date 'may retire' after twenty-five years of service (and 'shall retire' after thirty years) and that they 'shall receive' certain designated compensation upon a new and different basis. The Act was held to look only 'to the future' as to eligibility, retirements, and compensation, from its very wording; and thus, that it could not apply to those who had retired and were receiving pensions prior to its effective date. There was not present in that case any such controlling legislative definition as we have, extending the meaning of the term 'members'; also, in our case the only applicable reference to the future concerns payments, not retirement or eligibility. The Atchison case was properly decided, but on its facts is not applicable here. Cases from other states holding that particular amendments to retirement plans should be construed prospectively, follow recognized rules of construction but are based upon materially different statutes and facts. Miner v. Stafford, 326 Ill. 204, 157 N.E. 164; Schwarzkopf v. State House Comm., 123 N.J.L. 78, 8 A.2d 103; Jensen v. Pritchard, 120 Ind.App. 439, 90 N.E.2d 518, 91 N.E.2d 846. Other cases involving statutory constructions by which increases in benefits were held to be applicable to persons already retired, and certainly under no more compelling terms than are present in our Act, are: McCord v. Iowa Employment Security Comm., 244 Iowa 97, 56 N.W.2d 5; People ex rel. Albright v. Bd. of...