State ex rel. Singer v. Boos

• Decision Date: 28 October 1969
• Docket Number: No. 124,124
• Citation: 171 N.W.2d 307,44 Wis.2d 374
• Parties: STATE ex rel. Walter SINGER, Sr., Respondent, v. Robert E. BOOS et al., constituting the Annuity & Pension Board of the Employes' Retirement System of the County of Milwaukee, Appellants.
• Court: Wisconsin Supreme Court

Page 307

171 N.W.2d 307

44 Wis.2d 374

STATE ex rel. Walter SINGER, Sr., Respondent, v. Robert E. BOOS et al., constituting the Annuity & Pension Board of the Employes' Retirement System of the County of Milwaukee, Appellants.

No. 124.

Supreme Court of Wisconsin.

Oct. 28, 1969.

This is an appeal from an order overruling appellants' motion to quash the alternative writ of mandamus.

Appellants constitute the governing body of the Annuity & Pension Board of the Employes' Retirement System of the County of Milwaukee. Respondent is a beneficiary under that program who presently receives a retirement allowance. The retirement system for county employees in counties having a population of five hundred thousand or more was established by ch. 201 of the Laws of 1937. Under the plan, the employee contributes a certain rate of his earnings into the annuity fund and the county matches the employee's contribution into a pension fund. When the employee retires he receives a retirement allowance, composed of both an annuity and a pension.

In 1957, the Wisconsin legislature took advantage of the opportunity to integrate the county employee retirement system with the federal social security law. This was accomplished by the enactment of ch. 658 of the Laws of 1957, which allowed each person who was an employee at that time an option to be covered by the social security law as well as the county retirement system. Respondent, as well as many others, elected to take advantage of the dual coverage. In order to receive the full advantage from the dual coverage it was necessary for Milwaukee county to make payments to cover prior periods of time. The county was allowed to recoup these payments from each individual, according to a statutory formula, which effectively reduced each electing person's retirement allowance (called the Social Security Offset).

By ch. 405 of the Laws of 1965, the Milwaukee county board of supervisors was given so-called 'home rule' power over the future course of the retirement system for Milwaukee county. Pursuant to this power, the county board enacted section 201.24(11.3) (11.3) of the General Ordinances of Milwaukee County.

'11.3 Benefits to Previously Retired Members: Effective on December 24, 1967, retirement allowances payable to or on behalf of beneficiaries who retired prior to such date shall be payable without the reductions under subsections 201.05(1)(g), (2)(ba) 4, (2)(d) 4 and (3)(c), of the General Ordinances of Milwaukee County.'

The effect of this section is to remove the above described retirement allowance deduction for employees who had retired between January 1, 1958 and January 1, 1967. The money necessary to cover this reduction will henceforth be appropriated from the county general fund. Because of doubt as to the validity of this removal of the deduction, the appellant Board refused to certify the increase in the retirement allowance of the respondent and others in a similar position to the county treasurer for payment. Upon the respondent's petition, an alternative writ of mandamus was issued ordering the appellant to show cause why the appellants should not certify the increase in respondent's retirement allowance to the county treasurer. Appellants moved to quash the alternative writ, and the trial court denied the motion to quash and ordered that a judgment for the issuance of a peremptory writ of mandamus be entered unless the appellants served a notice of appeal within thirty days of the date of the order. This appeal is from the denial of the motion to quash the alternative writ of mandamus.

Robert P. Russell, Corporation Counsel, John R. Devitt, Asst. Corp. Counsel, Milwaukee, for appellants.

Quarles, Herriott, Clemons, Teschner & Noelke, Milwaukee, Laurence C. Hammond, Jr., W. Stuart Parsons, Milwaukee, of counsel, Stanley A. Jewasinski, Wauwatosa, of counsel, for respondent.

CONNOR T. HANSEN, Justice.

The respondent contends that the appellants lack standing on constitutional grounds to raise the issues presented in this case.

The respondent petitioner, a retired Milwaukee county employee, has brought this action against the Annuity & Pension Board on his own behalf and in behalf of other members of the group of retired employees who are similarly situated. The petitioner seeks the additional benefits for himself and others in the group as provided by sec. 201.24(11.3) of the General Ordinances of Milwaukee.

'The general rule has been that a municipality or state agency cannot question the constitutionality of a statute * * *. The general rule is subject to two exceptions: (1) If it is the agency's official duty to do so, or the agency will be personally affected if it fails to do so and the statute is held invalid, and (2) if the issue is of 'great public concern. " State ex rel. City of Law Crosse v. Rothwell (1964), 25 Wis.2d 228, 233, 130 N.W.2d 806, 808, 131 N.W.2d 699. ¹

The rule is nominally limited to cases in which a state agency or unit of government is challenging a state enactment. However, it is equally applicable when a county agency is challenging the constitutional validity of a county ordinance when responding to an action commenced against it by an individual seeking to enforce his alleged rights under the ordinance.

In State ex rel. Sullivan v. Boos (1964), 23 Wis.2d 98, 126 N.W.2d 579, this court held that the duties of the county auditor fit within the first exception to the rule above stated, that it is part of his official duty to so challenge, and that he had such standing. We are of the opinion that in this proceeding the Annuity & Pension Board has standing to raise these issues if it can be determined that one of the two exceptions do, in fact, exist.

Also, this court has held that the two exceptions to the rule apply only in cases where a private litigant is involved. ² Such is the case now under consideration.

As we view this case, the fundamental question to be resolved is whether public funds are being diverted for a private purpose. This is a question of great public concern and interest.

'When we apply the test of great public concern to the two issues of unconstitutionality raised by the department in the instant case we find one falls within such category and one does not. The issue of whether public funds are being diverted to a private purpose clearly is a matter of great public interest. * * *' Fulton Foundation v. Department of Taxation (1961), 13 Wis.2d 1, 13, 108 N.W.2d 312, 318, 109 N.W.2d 285.

In addition, the issues raised by appellants will probably not be raised by an individual taxpayer, since the expense and trouble would be too great. In this connection, this court has held:

'We also recognized that there is a further exception where the question raised is of great public concern, particularly where the circumstances are such that there is little likelihood that a taxpayer or other person whose interests are affected would take the steps required to get a determination of the question.' State ex rel. Sullivan v. Boos, supra, 23 Wis.2d 101, 126 N.W.2d 581.

Therefore, we determine that the appellants have standing to raise the issues presented in this case.

CONSTITUTIONAL ISSUES.

The appellants argue that various state and federal constitutional prohibitions bar the increase of a pension for someone who is already retired.

Two constitutional arguments are presented by this statement: (1) That the ordinance violates art. IV, sec. 26 of the Wisconsin Constitution, ³ and (2) that the ordinance authorizes the expenditure of public funds for a private purpose.

Art. IV, sec. 26.

This court has repeatedly held that the constitutional prohibition in art. IV, sec. 26, applies only to public officers who are paid out of the state general fund. ⁴ In the instant case, the increased pensions will be paid entirely out of county funds and thus the mandate of art. IV, sec. 26, is inapplicable.

Public Purpose.

Although there is no specific constitutional clause so stating, the rule is firmly established that there can be no expenditure of public funds for a private purpose.

'* * * The rule in Wisconsin is, of course, an exacting one, and this court has sharply limited the spending of public funds and has insisted that the levy of taxes and the expenditure of a government's money be for public purposes only.' City of West Allis v. Milwaukee County (1968), 39 Wis.2d 356, 376, 159 N.W.2d 36, 46.

The scope of review to determine whether or not a public purpose does exist in a particular case is described as follows:

'In State ex rel. Thomson v. Giessel, (265 Wis. 207, 60 N.W.2d 763) supra, 265 Wis. page 215, 60 N.W.2d page 767, we quoted with approval the rule appearing in 81 C.J.S. States, § 133, p. 1149:

"* * * a public purpose, is a question for the legislature to decide, with respect to which it is vested with a large discretion, which cannot be controlled by the courts unless its action is clearly evasive. * * * Where a doubt exists whether the purpose of an appropriation is public or private, it will be resolved in favor of the validity of the appropriation. * * *." West Allis v. Milwaukee County, supra, 376, 159 N.W.2d 46.

Thus, if this court can determine that there is any publaic purpose which serves as a basis for the instant expenditure, the test is satisfied. Stating it conversely, before the expenditure is to be declared invalid, it must be clear that there is no possible public purpose to serve as the foundation for the expenditure.

Both the appellants and the respondent agree that a moral obligation of a governing body is a sufficient public purpose for the expenditure of funds. They differ as to whether the facts in this case give rise to a moral obligation on the part of the county. The appellants strongly rely on the case of State ex rel. Smith v. Annuity & Pension Board (1942), 241 Wis. 625, 6 N.W.2d 676, to establish that an increase in pensions of retired employees does not constitute...