Court Opinion

ID: 3428143
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:56:54.373851+00
Date Added: 2024-06-11T12:43:30.525498
License: Public Domain

ON PETITION FOR REHEARING.
On petition for rehearing, appellant earnestly contends that the decision of this case gives *Page 353 
a retroactive effect to a statute, and permits the 8, 9.  impairment of the obligation of a binding contract. The original opinion was intended to be understood as expressing the view that no contractual right to be continued as a teacher from year to year is involved. The teachers' contracts are made for one year, and the terms may be changed annually. The Tenure Statute, in effect, grants a privilege to the teacher who has served five years, and signed a new additional contract to continue as a teacher, under certain conditions, by limiting the power of the local school officers to employ any one in the place of a tenure teacher. The teacher had no contractual right to continue in employment. The statute merely deprived the local school officers of power to employ any other teacher in place of the tenure teacher, and required that the tenure teacher be reemployed unless there was a necessary reduction in the number of teachers. Schools are under the control of the Legislature, and local government units act only as legislative agencies in the operation of the schools. The statutes, the Constitution, and the law, must be deemed to be a part of every teacher's contract. If appellant's contention could be sustained, it would mean that the statute, as it existed at the time a teacher acquired tenure status, could not be changed, even in respect to the grounds of cancellation or removal.
As pointed out in the original opinion, the Legislature, in enacting school laws, exercises one of the functions of sovereignty. The right to control public policy, in respect 3.  to the management and operation of schools, cannot be contracted away by one Legislature so as to fix a permanent public policy, unchangeable by succeeding Legislatures.
But, if the relationship were considered as controlled by the rules of private contract, the provision for reemployment *Page 354 
from year to year is not enforceable for want of 5, 10,  mutuality. The teacher may terminate the tenure at any 11.     time, except during the school year and for thirty days previous to its beginning, by giving five days' notice. This provision clearly indicates that the statute was not intended to bind the state or the teacher to a permanent relationship; that it was intended only as a limitation upon the discretion of local school officers. Davis v. Davis, DirectorGeneral of Railroads (1926), 197 Ind. 386, 151 N.E. 134;Kostanzer et al. v. State ex rel. Ramsey (1933), 205 Ind. 536, 548, 549, 187 N.E. 337, 342.
The latter case was an action by a teacher to mandate the school board to continue her as a teacher in the schools under the Tenure Statute. It is said in the opinion: "The tenure act permits a teacher to cancel his contract at any time after the close of a school term up to thirty days prior to the beginning of the next school term, provided five days' notice is given, and appellant contends that there was no contract between appellee and appellants for the reason `that a contract which does not bind both parties binds neither of them.' This proposition is undoubtedly supported by the law of contracts. But there is nothing in the law of contracts to prevent one party to a contract granting to the other the privilege of rescission or cancellation on terms not reserved to the former party. The local school corporations are agents of the state in the administration of the public schools and the General Assembly has the power to prescribe the terms of the contract to be executed by these agents." The controlling principle is that local school corporations, being agents of the state, must follow the statute and continue tenure teachers in employment so long as the statute is unrepealed. It is of no consequence whether the tenure rights are based upon a contractual obligation or upon a mere *Page 355 
privilege granted by the state revocable at will. The ministerial agents must obey the statutory mandate in either event. But now the statute has been repealed. The Legislature is no longer exercising discretion in the matter of reemployment. That discretion is again lodged in the local officers. It is now contended, not that ministerial officers must follow the dictates of the Legislature, but that the Legislature itself is bound by contract to continue teachers' tenures; that the tenure arises out of a contract which created a vested right and not out of a mere privilege or by grace. No question of the state being bound by contract creating a vested right was presented in the Kostanzer case. Teachers have no contractual right to a license, but, when they have complied with the statutory requirements, ministerial officers may be mandated to grant the license. The statement that "there is nothing in the law of contracts to prevent one party to a contract granting to the other the privilege of rescission or cancellation on terms not reserved to the former party," is correct as an abstract proposition of law, but it is not without limitation. In contracts for personal services, the provision granting a privilege to the employee to cancel or rescind at will must be supported by some consideration independent of the reciprocal agreements to render service and to be paid for services rendered. It is said in Williston on Contracts, § 104, p. 351, that: "The promise of either party may be optional, if the exercise of the option not to employ or to serve involves a detriment to the promisor, or benefit to the promisee." See McMullan v. Dickinson Co. (1896), 63 Minn. 405, 65 N.W. 661. Where an employer, as part of the agreement in settlement of a claim for damages arising out of negligence, agrees to give the employee permanent employment, and the employee is left free to cancel and leave the employment, the contract is not *Page 356 
bad for want of mutuality for the reason that the settlement is payment in advance for the privilege of discontinuing the employment at will. Other similar considerations might be suggested, but it is well settled that, where the term of service is left to the discretion of one party, it is a contract at the will of either and may be terminated by either. It has been said that where the terms of a contract of employment give a privilege to one party to terminate the contract, the law will extend the privilege to the other. Pennsylvania Co. v. Dolan (1892),6 Ind. App. 109, 32 N.E. 802; Cox v. Baltimore  O.S.R. Co.
(1913), 180 Ind. 495, 103 N.E. 337.
It is contended that the opinion gives the repealing statute retroactive effect, but it does not. All annual teaching commitments continue, and the repeal acts only 12.  prospectively by striking down for the future those limitations which the statute placed upon the discretion of local school authorities with respect to reemployment of teachers for successive years.
Since the original opinion was filed, the Supreme Court of the United States has sustained the Court of Errors and Appeals of the State of New Jersey in appeals from two cases involving a situation comparable in all substantial respects with the case at bar. Phelps v. Board of Education of Town of West New York etal.; Askam et al. v. Board of Education of Town of West NewYork et al. (1937), 300 U.S. 319, 57 S. Ct. 483.
Petition for rehearing denied.