Source: http://supreme.nolo.com/us/302/74/case.html
Timestamp: 2019-04-21 06:10:11+00:00

Document:
1. An Act merely fixing the terms or the tenures of public employees is presumptively not intended to create a vested right in the incumbent, but merely to declare a policy to be pursued until the legislature shall ordain otherwise. P. 302 U. S. 78.
2. He who asserts the creation of a contract with the State in such a case has the burden of overcoming the presumption. P. 302 U. S. 79.
3. While this Court, in applying the contract clause of the Constitution, is required to reach an independent judgment as to the existence and nature of the alleged contract, great weight is given to the views of the highest court of the State. P. 302 U. S. 79.
4. Decision of Supreme Court of Illinois construing "An Act to provide for compulsory and voluntary retirement of teachers, . . . and the payment of retirement annuities," in pari materia with earlier laws and decisions, as not intending to create contracts or vested rights held a reasonable construction to be accepted by this Court when questioned under the contract clause of the Constitution. P. 302 U. S. 79.
5. Interchangeability of the terms "pensions," "benefits," and "annuities," in Acts of Illinois dealing with retirement of teachers. P. 302 U. S. 81.
364 Ill. 547, 5 N.E.2d 84, affirmed.
impair the contract rights of school teachers in respect of retirement privileges and pay.
Since 1895, the state has had legislation creating a teachers' pension and retirement fund, originally the fruit of teachers' contributions and gifts or legacies but later augmented by allotments from interest received and from taxes. With this fund and the benefit payments thereunder we are not concerned.
"Each person so retired from active service who served in the public schools of such city for twenty or more years prior to such retirement shall be paid the sum of fifteen hundred dollars ($1,500.00) annually and for life from the date of such retirement from the money derived from the general tax levy for educational purposes."
There were two provisos, the one requiring that the annuitant should be subject to call by the superintendent of schools for consultation and advisory service and the other declaring that the annuity granted by the act was not to be in lieu of, but in addition to, the retirement allowance payable under existing legislation.
In 1927, a third section was added [Footnote 5] permitting teachers who had served for 25 years or more, and were 65 years of age or over, who had not reached the age of compulsory retirement, to be retired upon request, and to be paid from $1,000 to $1,500 per annum depending upon age at retirement.
The appellants fall into three classes: those who were compulsorily retired under the Miller Law, those who voluntarily retired under the law as amended, and those eligible for voluntary retirement who had signified their election to retire prior to July, 1935.
July 12, 1935, a further amendment of the Miller Law was adopted [Footnote 6] requiring the board presently to retire teachers then in service who were 65 years of age or over, and in the future to retire teachers as they attained that age. Each person so retired was to be paid $500 annually for life from the date of retirement. The provisions that such teachers should hold themselves available for advisory service and consultation and that the annuity payments should be in addition to those made to retired teachers pursuant to other legislation were retained. Section 3 of the Miller Law, permitting voluntary retirement between the ages of 65 and 70, was repealed. As construed by the state Supreme Court, the new law reduced to $500 the annuities of teachers theretofore retired, or eligible for retirement under the Miller Law, as well as those to be retired subsequent to its enactment.
Board of Education filed an answer in which it denied the existence of a contract and asserted that the payments to be made to appellants were pensions, subject to revocation or alteration at the will of the Legislature. The appellee city of Chicago filed a motion to dismiss for want of equity. After a hearing at which testimony was taken on behalf of the appellants, the trial court dismissed the bill.
The parties agree that a state may enter into contracts with citizens, the obligation of which the Legislature cannot impair by subsequent enactment. They agree that legislation which merely declares a state policy and directs a subordinate body to carry it into effect is subject to revision or repeal in the discretion of the Legislature. The point of controversy is as to the category into which the Miller Law falls.
service . . . all teachers [of a given age]."
The court further held that the Legislature presumably had the doctrine of these cases in mind when it adopted the act now under review, and that the appellants should have known that no distinction was intended between the rights conferred on them and those adjudicated under like laws with respect to other retired civil servants. We cannot say that this was error.
"We are unable to see the distinction. The plan of payment is the same, the purposes are evidently the same, and the use of the term 'annuity' instead of 'pension' -- which is but an annuity -- does not seem to us to result in the distinction for which counsel for appellants contend."
The act embraces teachers, principals, district superintendents, and assistant superintendents, and retired members of those classes are among the appellants. For the sake of brevity, all will be denominated teachers.
Act of June 12, 1909, § 133, Laws of 1909, p. 380.
Act of April 20, 1917, §§ 138 and 161, Laws of 1917, pp. 730, 731; Smith-Hurd Ill.Stats. c. 122, §§ 161.
Cahill's Ill.Rev.Stats.1927, c. 122, par. 269.
Act of June 24, 1927, Laws of 1927, p. 792, Cahill's Ill.Rev.Stats.1927, c. 122, par. 269(3).
Act of July 12, 1935, Laws of 1935, p. 1378, Smith-Hurd Ill.Stats.1935, c. 122, §§ 614a-614c.
364 Ill. 547, 5 N.E.(2d) 84.
Hall v. Wisconsin, 103 U. S. 5.
New Jersey v. Wilson, 7 Cranch 164; New Jersey v. Yard, 95 U. S. 104.
Butler v. Pennsylvania, 10 How. 402; United States v. Fisher, 109 U. S. 143; Fisk v. Jefferson Police Jury, 116 U. S. 131, 116 U. S. 133; Mississippi ex rel. Robertson v. Miller, 276 U. S. 174, 276 U. S. 178.
Crenshaw v. United States, 134 U. S. 99; Phelps v. Board of Education, 300 U. S. 319.
Rector of Christ Church v. County of Philadelphia, 24 How. 300, 65 U. S. 302; Tucker v. Ferguson, 22 Wall. 527, 89 U. S. 575; New Jersey v. Yard, supra; Newton v. Commissioners, 100 U. S. 548, 100 U. S. 561; Wisconsin & Michigan Ry. Co. v. Powers, 191 U. S. 379, 191 U. S. 387.
Pennie v. Reis, 132 U. S. 464; Lynch v. United States, 292 U. S. 571, 292 U. S. 577, and cases cited.
Larson v. South Dakota, 278 U. S. 429, 278 U. S. 433; Phelps v. Board of Education, supra, and cases cited.
Eddy v. Morgan, 216 Ill. 437, 449, 75 N.E. 174; Pecoy v. Chicago, 265 Ill. 78-80, 106 N.E. 435; Beutel v. Foreman, 288 Ill. 106, 123 N.E. 270. The same principles have been consistently announced since 1926. People ex rel. v. Retirement Board, 326 Ill. 579, 158 N.E. 220; People ex rel. v. Hanson, 330 Ill. 79, 161 N.E. 145; McCann v. Retirement Board, 331 Ill.193, 162 N.E. 859. Appellants urge that the authority of the foregoing cases has been shaken by Porter v. Loehr, 332 Ill. 353, 163 N.E. 689, and DeWolf v. Bowley, 355 Ill. 530, 189 N.E. 893, but these cases did not deal with the question presented in the instant case, and what was said with respect to the nature of pensions was in connection with provisions of the State Constitution.
In acts creating funds through enforced contributions of state and municipal employees, or out of taxes, or both, the titles and the substantive provisions for benefits to retired employees disclose the use of the terms "pensions" and "annuities" interchangeably to describe the payments to be made from the fund. Act of May 24, 1877, Laws, p. 62; Act of May 10, 1879, Laws, p. 72; Act of May 12, 1905, Laws, p. 309; Act of May 24, 1907, Laws, p. 529; Act of June 14, 1909, Laws, p. 133; Act of June 27, 1913, Laws, p. 598; Act of June 29, 1915, Laws, p. 465; Act of May 27, 1915, Laws, p. 649; Act of June 14, 1917, Laws, p. 748; Act of July 11, 1919, Laws, p. 700; Act of July 11, 1919, Laws, p. 743; Act of June 29, 1921, Laws, p. 203.

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