Hyperlawhypertext legal databasebeta Ayman v. Teachers' Retirement Board 9 N.Y.2d 119

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Ayman v. Teachers' Retirement Board

9 N.Y.2d 119 Court N.Y. Decision date 1961-01-19 English

Delivered by Froessel, J.

Contents

Majority

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In the Matter of David Ayman et al., Individually and in Behalf of All Others Similarly Situated, Respondents, v. Teachers’ Retirement Board of the City of New York, Appellant. In the Matter of Ellis Johnson et al., on Behalf of Themselves and All Others Similarly Situated, Respondents, v. New York City Teachers’ Retirement Board, Appellant.
Argued November 29, 1960;
decided January 19, 1961.
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Charles H. Tenney, Corporation Counsel (Pauline K. Berger and Leo A. Larkin of counsel), for appellant in both proceedings.
I. The 1934 and 1943 revisions of mortality tables in their application to then existing members retiring in the future are valid under the New York City Teachers’ Retirement Statute and the New York Constitution (art. V, § 7). (Matter of Carroll v. Grumet, 281 App. Div. 35 , 305 N. Y. 692 ; Cashman v. Teachers’ Retirement Bd., 193 Misc. 57 , 275 App. Div. 908 , 301 N. Y. 501 ; Hoar v. City of Yonkers, 295 N. Y. 274 ; Employers’ Liab. Assur. Corp. v. Hayes Constr. Co., 243 N. Y. 261 ; Employers Liab. Assur. Co. v. Success Uncle Sam Cone Co., 124 Misc. 614 ; Matter of Smith, 279 N. Y. 479 ; Matter of Otis v. Board of Higher Educ. of City of N. Y., 199 Misc. 157 , 277 App. Div. 1035 , 302 N. Y. 740 ; Matter of Hammond v. Joseph, 271 App. Div. 677 , 297 N. Y. 574 ; Martorano v. Capital Finance Corp., 289 N. Y. 21 .) II. The Constitution (art. V, § 7) did not change the terms of the retirement statute or repeal the statutory reservation to the Retirement Board of the right to revise annuity benefit mortality tables as to existing members not yet retired, and did not grant to members of the system any right at the time of
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retirement to mortality tables, other than the last revised tables in use at such time. (Roddy v. Valentine, 268 N. Y. 228 ; Matter of Montesani v. Levitt, 9 A D 2d 51 ; Matter of Dalton v. City of Yonkers, 262 App. Div. 321 , 287 N. Y. 592 ; Rosen v. New York City Teachers’ Retirement Bd., 282 App. Div. 216 , 306 N. Y. 625 ; Matter of Carroll v. Grumet, 281 App. Div. 35 , 305 N. Y. 692 ; Hoar v. City of Yonkers, 295 N. Y. 274 ; Gorman v. City of New York, 280 App. Div. 39 , 304 N. Y. 865 , 345 U. S. 962 ; Matter of Chiurazzo v. Valentine, 181 Misc. 830 ; Matter of Wolf v. Valentine, 178 Misc. 308 ; Dunn v. City of New York, 7 N Y 2d 232 .) III. The Constitution (art. V, § 7) did not convert “ variable ” factors of the benefit formula into “ fixed ” factors. (Hoar v. City of Yonkers, 295 N. Y. 274 ; Gorman v. City of New York, 280 App. Div. 39 , 304 N. Y. 865 , 345 U. S. 962 .) IV. The Constitution (art. V, § 7) protected the benefit formula “ stated ” in the statute from diminution by the legislative body but did not prevent the Retirement Board from carrying out its obligation under the existing statute. (Cashman v. Teachers’ Retirement Bd., 193 Misc. 57 , 275 App. Div. 908 , 301 N. Y. 501 ; Birnbaum v. New York State Teachers Retirement System, 5 N Y 2d 1 ; Matter of Day v. Mruk, 307 N. Y. 349 ; Davison v. Parke, Austin & Lipscomb, 285 N. Y. 500 ; McNulty v. W. & J. Sloane, 184 Misc. 835 .) V. The Constitution (art. V, § 7) did not invalidate the 1934 resolution. (Matter of Day v. Mruk, 307 N. Y. 349 .) VI. The Birnbaum decision ( 5 N Y 2d 1 ) is inapplicable to the present case. (Wood v. Brady, 150 U. S. 18 ; Matter of Smathers, 309 N. Y. 487 ; Crane v. Bennett, 177 N. Y. 106 ; Colonial City Traction Co. v. Kingston City R. R. Co., 154 N. Y. 493 .) VII. The principle established by the Birnbaum decision should be re-examined and overruled. (Sears, Roebuck & Co. v. 9 Ave.-31 St. Corp., 274 N. Y. 388 ; Matter of Cameron v. Ellis Constr. Co., 252 N. Y. 394 ; Woods v. Lancet, 303 N. Y. 349 ; Klein v. Maravelas, 219 N. Y. 383 ; Thomson v. Board of Educ., 201 N. Y. 457 ; People ex rel. Schau v. McWilliams, 185 N. Y. 92 ; Rumsey v. New York & N. E. R. R. Co., 133 N. Y. 79 ; Dunn v. City of New York, 7 N Y 2d 232 .) VIII. Petitioners are estopped by their conduct and barred by laches from asserting the alleged invalidity of the 1934 and 1943 revisions of mortality tables. (Matter of Curtin v. Dorman, 293 N. Y. 505 ; Harman v. Board of Educ. of City of N. Y., 300
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N. Y. 21 ; Matter of Amsterdam City Hosp. v. Hoffman, 278 App. Div. 292 ; Matter of Villovic v. Valentine, 250 App. Div. 701 , 274 N. Y. 548 ; People ex rel. Steinson v. Board of Educ., 158 N. Y. 125 ; Matter of Williams v. Pyrke, 233 App. Div. 345 ; Matter of Hartmann v. Tremaine, 250 App. Div. 188 ; Matter of Piani v. Davidson, 240 App. Div. 383 ; People ex rel. Millard v. Chapin, 104 N. Y. 96 .)
Benjamin M. Zelman for respondents in the first above-entitled proceeding.
I. The pertinent sections of the Administrative Code relating to the Teachers Retirement System preclude the board from computing annuities based on less favorable mortality tables adopted after teachers enter the system. Such tables may only be applied to persons who enter the system thereafter. II. The constitutional amendment prohibits the reduction of a teacher’s annuity through the adoption of a less favorable mortality table. (Roddy v. Valentine, 268 N. Y. 228 ; Matter of Day v. Mruk, 307 N. Y. 349 ; Employers’ Liab. Assur. Corp. v. Hayes Constr. Co., 243 N. Y. 261 ; Employers Liab. Assur. Co. v. Success Uncle Sam Cone Co., 124 Misc. 614 .) III. The court should adhere to the principle established in the Birnbaum case ( 5 N Y 2d 1 .) (Matter of Montesani v. Levitt, 9 A D 2d 51 ; Dunn v. City of New York, 7 N Y 2d 232 .) IV. The defenses are insufficient in law. (Zuckerbrod v. Board of Higher Educ. of City of N. Y., 276 App. Div. 752 , 300 N. Y. 765 ; Matter of Benvenga v. La Guardia, 268 App. Div. 566 , 294 N. Y. 830 ; Matter of Cash v. Bates, 301 N. Y. 258 ; Matter of Powers v. La Guardia, 292 N. Y. 695 ; Wakefield v. Board of Educ. of City of N. Y., 274 App. Div. 884 , 299 N. Y. 664 ; Harman v. Board of Educ. of City of N. Y., 275 App. Div. 694 , 300 N. Y. 21 ; Nelson v. Board of Higher Educ. of City of N. Y., 263 App. Div. 144 , 288 N. Y. 649 .)
Benjamin Masen and Jules Kolodny for respondents in the second above-entitled proceeding.
I. The Birnbaum decision ( 5 N Y 2d 1 ) is applicable to this proceeding in all respects. (Railroad Companies v. Schutte, 103 U. S. 118 ; Matter of Fay (Dewey), 291 N. Y. 198 ; Smith v. Rentz, 131 N. Y. 169 ; O’Brien v. Union Cent. Life Ins. Co., 207 N. Y. 180 ; Dunn v. City of New York, 7 A D 2d 711 , 7 N Y 2d 232 .) II. Petitioners are barred neither by estoppel, nor waiver, nor laches. (Quayle v. City of
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New York, 278 N. Y. 19 ; Clark v. State of New York, 142 N. Y. 101 ; Matter of Furgueson v. La Guardia, 257 App. Div. 1048 , 281 N. Y. 678 ; Cox v. Stokes, 156 N. Y. 491 ; Wilson v. Phelps, 165 Misc. 455 ; Jenkins v. Hammerschlag, 38 App. Div. 209 ; Bank of New York v. New Jersey Tit. Guar. & Trust Co., 256 App. Div. 609 ; Dulberg v. Equitable Life Assur. Soc., 277 N. Y. 17 ; Matter of Ramsay v. Lantry, 123 App. Div. 71 .)
Louis J. Lefkowits, Attorney-General (Paxton Blair and Milton Kaplan of counsel), amicus curiae.
I. The decision in Birnbaum v. New York State Teachers Retirement System ( 5 NY 2d 1 ) fully supports the order appealed from. (Taylor v. United States Cas. Co., 269 N. Y. 360 ; Prescott v. Buffalo Fire Appliance Corp., 237 App. Div. 198 , 262 N. Y. 475 ; Matter of Day v. Mruk, 307 N. Y. 349 ; People ex rel. Joyce v. Brundage, 78 N. Y. 403 ; Dodge v. Board of Educ., 302 U. S. 74 ; Indiana ex rel. Anderson v. Brand, 303 U. S. 95 ; Roddy v. Valentine, 268 N. Y. 228 .) II. The Retirement Board’s use of revised mortality tables after July 1, 1940 in computing the annuities of existing members is an impairment of their benefits in contravention of section 7 of article V.
Victor Levine for New York City Teachers’ Retirement Board, amicus curiae.
I. The retirement statute should be construed to call for the computation of an annuity by the mortality table in effect when a teacher entered the service. (Matter of Ryan, 291 N. Y. 376 ; Matter of Lewisohn, 294 N. Y. 596 ; Matter of Broderick v. City of New York, 295 N. Y. 363 .) II. The Constitution prohibits diminution of an annuity by either the Legislature or by any official action. (Trenton v. New Jersey, 262 U. S. 182 ; City of Utica v. County of Oneida, 187 Misc. 960 .) III. The teachers are neither barred by laches nor are they estopped from attacking the propriety by applying revised mortality tables to them.

These are two appeals by the New York City Teachers’ Retirement Board, taken on constitutional grounds, from orders of the Appellate Division, First Department, which unanimously affirmed without opinion orders of Special Term, Supreme Court, New York County, in article 78 proceedings. Petitioners are members of the Teachers Retirement System which is administered by appellant board. They challenge the

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legality of the board’s method of calculating the annuity portion of the retirement allowance to which they and others similarly situated are or will be entitled. The case of Birnbaum v. New York State Teachers Retirement System ( 5 N Y 2d 1 ) is controlling here.

We are in agreement with so much of the holding below as provides that the board may not calculate the retirement annuities due petitioners on the basis of the tables in effect at the time of their retirement. We are not in agreement, however, with so much of the orders appealed from as directs that the board calculate the retirement annuities to which petitioners are, or will be, entitled on the basis of the mortality tables in use at the time they entered the service. Special Term, apparently based on some language in our decision in Birnbaum v. New York State Teachers Retirement System {supra), held— beyond petitioners’ prayer for relief—that the tables in use when petitioners entered the service must be employed.

Changes in mortality tables, subsequent to the time when the Birnbaum petitioners joined the system, but before July 1,1940, were not brought to the attention of this court in that case. Our decision, therefore, did not consider the question of whether, in the event the mortality tables were revised between the date a member entered service and July 1, 1940, the constitutional amendment should be given retroactive effect, and thus nullify as to such a member the changes which had been made. This question must now be considered, since each of the present petitioners commenced service prior to 1931, and the mortality tables were thereafter revised both before and after the effective date of the amendment—once in 1934 and again in 1943.

In Matter of Day v. Mruk ( 307 N. Y. 349 , 354) we noted that, while section 7 of article V was added to the Constitution in 1938, it was specifically provided that it was not to become effective until July 1, 1940. This postponement of 1% years was (307 N. Y., at p. 354) “ presumably to enable the State and its civil divisions to review their pension systems and to adjust, amend, modify or supplement the provisions of existing systems in the light of the fact that after such effective date such systems were no longer gratuitous, but by virtue of the new amendment became contracts and the members of pension systems thereby acquired vested interests which could not' thereafter be

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diminished or impaired. Excerpts from the proceedings of the Convention appear to bear out this conclusion.” This view of the situation was quoted with approval in the Birnbaum decision ( 5 NY 2d 1 , 12, supra). If the amendment was intended to have retroactive effect, there would have been no need for the postponement of its effective date (see Matter of Kaufman, 158 Misc. 102 , 106). Any changes made during that time could not have affected the rights of existing members, as their rights under such a construction would have been fixed on the day they entered the service.

As was noted in Birnbaum v. New York State Teachers Retirement System ( 5 N Y 2d 1 , 8-9, supra), and Matter of Day v. Mruk ( 307 N. Y. 349 , 354, supra), prior to the effective date of the constitutional amendment members of pension and retirement systems had no vested interest therein until the right to retirement matured. The leading case (Roddy v. Valentine, 268 N. Y. 228 , 231) indicated that, whatever the legal nature of the member’s interest was prior to his retirement, “ there seems to be no doubt that it is subject to change or even to revocation at the will of the Legislature ’ ’. It was this conclusion which the amendment was designed to overcome (Birnbaum v. New York State Teachers Retirement System, 5 N Y 2d 1 , 8, supra). Therefore, since a member’s rights could be changed prior to the effective date of the amendment, and a period of time was expressly provided during which any further changes might be made, it seems clear that the amendment was intended to have only prospective, and not retroactive, effect. This view is in accord with the general rule of construction that statutes as well as constitutional provisions are to be construed as prospective only, unless a clear expression of intent to the contrary is found (Matter of Container Co. [Corsi], 298 N. Y. 277 , 279; Garzo v. Maid of Mist Steamboat Co., 303 N. Y. 516 , 522; People v. Fancher, 50 N. Y. 288 , 291). We have examined the other arguments advanced by appellants, many of which were presented in the Birnbaum case (supra), but do not find that they have any merit.

Accordingly, the orders appealed from must be modified so as to provide for the recalculation of petitioners’ retirement annuities on the basis of the actuarial values including tables of mortality in effect immediately prior to July 1,1940, with inter

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est from the date of retirement, and, as so modified, affirmed, without costs.

Chief Judge Desmond and Judges Dye, Fuld, Van Voorhis, Burke and Foster concur.

In each case: Ordered accordingly.

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