Court Opinion

ID: 4136764
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:17:17.214562+00
Date Added: 2024-06-11T14:35:12.000898
License: Public Domain

Honorable F. T. Graham        Opinion No. W-215.
Criminal District Attorney
Cameron County                Re:   Legality of payment of
Brownsville, Texas                  pension, vacation end
                                    welfare benefits by navi-
                                    gation district to trust
                                    fund for benefit of em-
Dear Mr. Graham;                    plogees.

          In your letter of July 18, 1957, you request an
opinion of this office aoncerning the legality of the payment
by the Port Isabel-Ban Benito Navlgation District of certain
moneys from time to time to a trust fund for the benefit of
certain employees of the District. The problem is whether
the payment contravenes the constitutional provision contained
in Sections 4, 51, 52, and 53 of Article III of the Constitu-
tion of Texas against gifts, grants, and gratuities.
          From your letter it appears that these employees are
engaged in the loading and unloading of cargo to and from
ships using the Navigation District's ship channel and other
facilities. These benefits consist of pension, vacation and
welfare funds and are part of the overall compensation paid
to these employees,
           Although not paid to these employees Immediately
and directly, they are paid to a trust fund for their ultimate
use and benefit. In our opinion these payments are not a
gratuity because the employee does not get them unless he
works D and ha gets them only in the proportion to the number
of hours which he works.
          Friedman V- American Surety Co. of New York, 151
S.W.2d 570, 578 (Sup.Ct. 194J.)was a suit challenging the con-
stitutionality of the Texas Unemployment Compensation Act
(Art, 5121b, V.C.S.). The Supreme Court said:
          "It is true that the employers alone directly
     create the unemployment fund, but it is created
     for the benefit of their employeea. Therefore, the
     right of such employees to enjoy or participate in
     the fund in times of unemployment should be re-
     garded as a part of their compensation or wages.
                                                         _         -
                                                             --.       _

Honorable F. T. Graham, page 2   (WW-21.5)

     All employees who labor or perform services for
     employers who are covered by this Act labor or
     serve in part for the right to enjoy the bene-
     fits of this unemployment fund. So regarded,
     the fund and the benefits to be derived there-
     from by unemployed employees cannot be regarded
     as a gratuity within the meaning of Section 51
     of Article III of our State Constitution. To
     the contrary, those who come under its provi-
     sions have labored or served for such privilege.
     Byrd vO City of Dallas, 118 Tex. 28, 6 S.W.2d
738.
          "In the case just cited this Court had be-
     fore it a statute which authorized a certain
     class of cities to create a pension or aid fund
     for certain of their officers and employees.
     The fund was created in part by payments made
     into the same by the officers and employees to
     be benefited and in part by the City out of its
     own revenues. The plan authorized by the stat-
     ute contemplated that the officers and employees
     of the City designated should receive their sal-
     aries in the usual way, and, in addition thereto,
     should be entitled to participate in the pension
     fund above described. Itwasheld that the stat-
     ute did not create or attempt to create a gratu-
     ity; but that the right to participate in the
     pension fund was a part of the compensation paid
     for the services rendered. We think the same
     principle applies here. The right of an em-
     ployee covered by this Act to participate in the
     fund created thereby is a part of the compensa-
     tion earned while he is employed.n
          The Friedman case, sunra, involved an unemployment
fund, The BJ& case, m,       involved a pension or aid fund.
In our opinion the payments involved in these asses are so
similar to the payment of pension, vacation and welfare bene-
fits under the arrangements outlined In your letter as to
render these cases fully decisive of your question. There-
fore, we~hold that the payment of such funds is not a gratu-
ity.
     -      .
_ .--

         Honorable F. T. Graham, Page 3 (WW-215)

                                    SUMMARY

                     Funds paid by a Navigation District to
                     a pension, vacation and welfare trust
                     fund for the benefit of employees as a
                     part of the compensation paid such em-
                     ployees is not a grant, gratuity or
                     donation of public funds within the
                     meaning of Sections 44, 51, 52 or 53
                     of Article III or Section 3 of Article
                     XI of the Constitution of Texas.

                                       Very truly yours,
                                       WILL WILSON
                                       Attorney General of Texas

         RRR:wb                               Assistant
         APPROVED:
         OPINION COMMITTEE
         H. Grady Chandler, Chairman
         W. V. Geppert
         B. H. Timmins, Jr.
         Wallace Finfrock

         REVIEWED FOR THE ATTORNEY GENERAL
         BY: Geo. P. Blackburn