Eichelberger v. City of Berkeley

This is an appeal from a judgment for defendant, city of Berkeley, in consolidated actions by plaintiffs to recover amounts allegedly accrued as payments due from pensions, and in some cases, death benefits, alleged to be payable by defendant, and for declaratory relief.

Plaintiffs Eichelberger and Wescott, here appealing, retired and became entitled to pensions after long service as firemen employed by defendant. Their retirement commenced on July 1, 1938, and February 25, 1939, respectively. Plaintiff Elsie Haggerty, also appealing, is entitled to a pension as widow of George Haggerty who died on August 18, 1938, in the line

It is settled that where the pension statute states, as does the one here, that the pension shall be a percentage of the average salary attached to the rank held by the employee before retirement, it is construed as providing for a fluctuating pension which increases or decreases as the salaries paid to active employees increase or decrease. (Terry v. City of Berkeley, supra, 41 Cal.2d 698 ; Casserly v. City of Oakland, 6 Cal.2d 64 [ 56 P.2d 237 ]; English v. City of Long Beach, 126 Cal.App.2d 414 [ 272 P.2d 875 ]; Aitken v. Roche, 48 Cal.App. 753 [ 192 P. 464 ]; Klench v. Board of Pension Fund Comrs., 79 Cal.App. 171 [ 249 P. 46 ]; Rumetsch v. Davie, 47 Cal.App. 512 [ 190 P. 1075 ].)

Contrary to plaintiffs’ contention the foregoing rule of construction of the above mentioned language does not create such an inconsistency with section 24 of the 1938 ordinance, supra, that it must have the effect of overriding that section. The whole ordinance must be read to properly construe it. Thus, while the language mentioned, standing alone, is susceptible of, and will be given the construction stated in the Terry case, section 24 specifically covers the situation, and it expressly provides that pensions shall not fluctuate up or down in accordance with pay fluctuations of active firemen. It is clear, therefore, that for the period from the date of retirement in the case of plaintiffs Eichelberger and Wescott and the date of death in the case of Haggerty to the effective date of the 1939 amendment of the ordinance, said plaintiffs were not entitled to any increase in their pensions by reason of any pay increase for active firemen. This brings us, then, to the effect of the 1939 amendment and any pay increases after its effective date on the amount of pension to which plaintiffs are entitled. The 1939 amendment removed the language in section 24 which prevented the application of the rule announced in the Terry ease, and hence under it, pensions do increase as the pay of active firemen is increased. Moreover, the clear implication of the 1939 amendment is that the rule in the Terry ease shall prevail because it says, as the 1938 ordinance did, that a decrease in the pay of active firemen shall not reduce the pension. The inference is that an increase

At the time of the 1939 amendment of section 24 of Ordinance Number 2188-N.S., section 7 was also amended to restate the law as it formerly existed insofar as it is here pertinent, that any member of the fire department at the effective date of the ordinance or thereafter shall receive a pension which, on reaching various ages, shall be a percentage of “the average salary attached to the rank or ranks held during the three years immediately preceding the date of retirement”; the same is true of the death benefit provisions (§§11 and 13). The 1939 amendment to section 24 restated it as it previously existed with the deletion of the words above mentioned and provided that the pensions “granted” under the ordinance shall not be decreased, which carries the implication that they will be increased in accordance with the fluctuation in pay of active firemen. The foregoing clearly indicates that the ordinance was intended to apply to existing pensioners especially when we bear in mind the rule that pension laws must be liberally construed to achieve their beneficent purposes (Terry v. City of Berkeley, supra, 41 Cal.2d 698 ). In this connection it has been said: “Another consideration in the matter of providing pensions for retired civil officers, and not the least in importance, is to pay such retirement compensation as will provide for the retired officer or employee means of proper subsistence. An increase in the cost of living always justly calls for an increase in the compensation of those who labor to earn a livelihood, and this proposition obviously applies as well to those who labor for the public as those engaged in private employment, and, of course, equally so to those who, for reasons prescribed by law, have been retired from a public service to which they devoted many years of faithful adherence. We may add the observation that members of police and fire departments of a city are required as such to perform public duties always beset by imminent perils to their lives and limbs—indeed, more than any other officers or employees engaged in the civil department of the public service. It is, therefore, not at all strange but gratifying to find that the government, as in the present instance, so far as police officers are concerned, has been just enough to make such provision for the compensation of such officers or employees as affords not only a fair reward to them while they are actively per

“In our case the refunds provided by section 104(2) are in nowise limited to those deducted pursuant to the provisions of any particular section but ‘of all such sums as have been deducted’ from the firemen’s pay and contributed to the fund. Thus there is no apparent intention of the Legislature to limit the refunds to sums deducted at any particular time. In determining whether section 104(2) is to apply only to moneys deducted after its enactment date, the rule set forth in Cordell v. City of Los Angeles, 67 Cal.App.2d 257 , 266 [ 154 P.2d 31 ], must be borne in mind: ‘Neither can we be unmindful of the rule so firmly established in this state that pension legislation must be liberally construed and applied to the end that the beneficent results of such legislation may be achieved. Pension provisions in our law are founded upon sound public policy and with the objects of protecting, in a proper case, the pensioner and his dependents against economic insecurity. In order to confer the benefits intended, such legislation should be applied fairly and broadly. ’ ” In Busch v. Turner, 26 Cal.2d 817 [ 161 P.2d 456 , 171 A.L.R. 1063 ], the Legislature in 1943 amended the statute fixing the salary of the district attorney stating that the district attorney should receive a salary of $2,400; it had formerly been $1,800. The court said: ‘ ‘ The 1943 legislation was sufficiently broad in its terms to include incumbents, ’ ’ that is, persons holding the office when the amendment was made, and further, “A statute purporting, in general terms, to increase salaries would ordinarily be construed to include incumbents. ...” In harmony with that line of reasoning it has been held that an amendment to a pension law which increases the amount of the pensions applies to those already retired. (Board of Trustees of Policemen’s Pension Fund v. Schupp, 223 Ky. 269 [ 3 S.W.2d 606 ] ; People v. Board of Trustees of Firemen’s Pension Fund, 103 Colo. 1 [ 82 P.2d 765 ]; McNichols v. Walton, 120 Colo. 269 [ 208 P.2d 1156 ]; see Ridgley v. Board of Trustees, 371 Ill. 409 [ 21 N.E.2d 286 ]; Raines v. Board of Trustees, 365 Ill. 610

The foregoing interpretation is further indicated by the circumstance that to apply the 1939 amendment to plaintiffs from its effective date, is in a sense not a retroactive application inasmuch as pension payments are a continuing obligation and the ordinance is being applied only to the pensions thereafter payable. This is nevertheless true whether we say the pension right is vested when the employee enters the employment or a pension system is established after he enters the employment, or is vested when the employee retires. It could hardly be doubted that the 1939 amendment applies to firemen then in the city service. No less does it apply to an employee because he has retired. Hence Aetna Cas. & Surety Co. v. Industrial Acc. Com., 30 Cal.2d 388 [ 182 P.2d 159 ], is readily distinguishable because there the employer’s liability was fixed by a prior injury which was not merely an antecedent fact. Here the retirement is only an antecedent fact because the pension obligation is a continuing one and has force from the time the employment begins (see Allen v. City of Long Beach, 45 Cal.2d 128 [ 287 P.2d 765 ]), and the retirement does not change the employees’ rights insofar as the instant case is concerned. In Gregory v. State, 32 Cal.2d 700 [ 197 P.2d 728 , 4 A.L.R.2d 924 ], we held that an amendment to a statute authorizing interest on taxes paid under protest to the state was applicable to a recovery of taxes after the effective date of the amendment even though the recovery of interest was not allowed when the taxes were paid, and distinguished the Aetna case on the ground that the amendment operated on future events. (See also Record v. Indemnity Ins. Co., 103 Cal.App.2d 434 [ 229 P.2d 851 ].)

The cases relied upon by defendant such as O’Dea v. Cook, 176 Cal. 659 [ 169 P. 366 ], Jordan v. Retirement Board, 35 Cal.App.2d 653 [ 96 P.2d 973 ], Chaney v. Los Angeles County etc. Retirement Board, 59 Cal.App.2d 413 [ 138 P.2d 735 ], Holmberg v. City of Oakland, 55 Cal.App. 270 [ 203 P. 167 ], and Brophy v. Employees Retirement System, 71 Cal.App.2d 455 [ 162 P.2d 939 ], are distinguishable. In the O’Dea case the question was whether an amendment fixing a time limit of death within one year after injury would cut off the widow of an employee previously injured, who later died, and the court felt not “compelled” to give a retroactive effect to the amendment. As was pointed out in Kern v. City of Long

The judgment is reversed and the trial court is directed to enter judgment in accordance with the views herein expressed.

Gibson, C. J., Shenk, J., Traynor, J., Schauer, J., Spence, J., and McComb, J., concurred.