Court Opinion

ID: 9726954
Source: CourtListenerOpinion
Date Created: 2023-08-26 13:14:15.390114+00
Date Added: 2024-06-11T18:25:32.198241
License: Public Domain

Currie, J.
(dissenting). This court in State ex rel. Dudgeon v. Levitan (1923), 181 Wis. 326, 193 N. W. 499, held that the provisions of the Teachers’ Retirement Act, which provided for granting past-service credits in computing the pension of a teacher still in service at the time of the enactment of the act, was not a grant of extra compensation for services already rendered by such teacher, contrary to sec. 26, art. IV of the Wisconsin constitution. Twenty-nine years have now elapsed since that decision, during. which period we have not only witnessed a great growth in retirement systems for both public servants and employees in private industry, but we have seen how inflation has intervened *66to render nugatory to a large measure one of the chief objectives of our teachers’ retirement system, viz., that retired teachers who have devoted the best years of their lives to the noble profession of teaching might be enabled to live in self-respect in their old age on their retirement annuities rather than be the objects of public charity.
In my opinion the time has come when this court should take one further forward step in the direction in which the decision in State ex rel. Dudgeon v. Levitan, supra, pointed, and declare that sec. 26, art. IV of the constitution, has no application to pension or annuity benefit pay to retired public servants pursuant to a genuine retirement system embodying an otherwise valid statute or ordinance serving a public purpose.
To hold, as the majority opinion does, that the state is powerless to increase retirement benefits to retired public servants in an attempt to restore the adequacy of such benefits seriously impaired by inflation, is to place all retirement systems for public servants in a strait jacket, thus rendering it impossible that such retirement benefits shall serve the original purpose intended.
The framers of our state constitution never intended sec. 26, art. IV, Const., to apply to retirement benefits paid to retired public servants under a validly enacted retirement system whereby such benefits might be paid over a long period of time, after all service to the state or municipality has ended. The provisions of sec. 26, art. IV, were included in the 1846 constitution (sec. 5, art. VI thereof), which constitution was rejected by the electors on other grounds, and when the 1848 constitutional convention met, the same provisions were inserted in the new 1848 constitution without debate. At the time of the writing of our state constitution, there was no retirement plan in effect for the employees of any state or municipality in the nation. According to an article entitled “Retirement Systems and Morale in Public *67Service” appearing in 113 Annals of the American Academy of Political and Social Science, 338, the first retirement system for public employees in the United States ,of which a record is available is a New York City pension fund for policemen established in 1857. Massachusetts was the pioneer in the establishment of a state-wide system, having enacted its law in 1911, which is the same year in which the first teach--ers’ pension plan was adopted in this state (ch. 323, Laws of 1911). Thus the framers of our constitution could not have had a public retirement system in mind when the provisions of sec. 26, art. IV, were inserted in the constitution.
What evils did the framers seek to prevent by the language employed in sec. 26, art. IV, Const. ?
Following the 1846 state constitutional convention, and while such constitution was before the electors of the state for consideration prior to the date set for the election to ratify or reject the same, the Racine Advocate ran a series of articles explaining the various provisions of the constitution. In article No. 6 of the series, published March 3, 1847 (“The Struggle over Ratification 1846-1847” by M. M. Quaife, at page 480), appeared an exposition of the provisions of the 1846 constitution which is the exact counterpart of sec. 26, art. IV of the 1848 constitution, in which article it was stated:
“We will now point out some of the most important restrictions of the powers of the legislature. By this article it is provided that ‘the legislature shall never grant extra compensation to any public officer, agent, servant, or contractor after the service shall have been rendered or the contract entered into.’ A vast reform as all who understand anything of all the corrupt and corrupting influences and maneuvers of extra allowances will at once comprehend. A vast reform, indeed, full of the deep philosophy of the Lord’s prayer as applicable to legislators in their official as in their personal relations — ‘lead us not into temptation.’ This .one section, full of purifying reform against an abuse which besets *68all legislatures and corrupts so many, is worth all the evils alleged against this constitution. Ponder well upon it; it will brighten to the eyes of every intelligent freeman the longer he reflects upon it.”
A number of constitutions of other states contain provisions very similar in wording to sec. 26, art. IV of the Wisconsin constitution. See “Federal and State Constitutions of the United States” by Frederic Jesup Stimson, p. 208, sec. 214, and footnote 4. In checking the journals and recorded debates of the constitutional conventions of these other states which have adopted like provisions against prohibiting extra compensation after the contract or service’ has been performed, one finds practically no recorded discussions of the reasons underlying the adoption of such provisions. One notable exception is that of the constitutional convention of Utah held in 1895. In the “Official Report of the Proceedings and Debates of the Utah Convention,” pages 890 to 894, the following enlightening debate took place with respect to inserting such a provision in the Utah constitution:
“Mr. Richards. Mr. Chairman, I move that section 4 be added to the legislative article. I desire to say, Mr. Chairman, to the gentlemen of the committee that this section does not in my opinion partake of a partisan character, and perhaps there may be gentlemen enough on this floor, who would be willing to support it. The object of this will be clear to gentlemen who will stop and consider it for a moment. It is to prevent people who are in power in any department of the state occupying public positions from letting contracts, at low figures and then afterwards increasing the amount of compensation in this way: A man who is a favorite with a county court or a city council or with any other public officer, who might have it in his power to let public contracts, might come in and underbid all bona fide bidders for this work and get the contract, with the understanding afterwards that if the work cost him more, he would be reimbursed by the county or by the city as the case might be. This is an evil that has occurred a great many *69times in different places as you are all aware if you have given this matter any consideration, and the object of this is to prevent that sort of thing and to compel bona fide transactions in the letting of public contracts. Also if any unauthorized agreement is made, as for example, to prevent an officer of a city or a county or of the state who has no authority in law from going out and letting contracts to some favorite, when if the contract was let in the regular way the public would have an opportunity to bid — declaring that such contracts would not be valid and could not be enforced. And I say, I do not see, and I do not believe that there is anything in this section of a partisan character. Whether it is such a section as you gentlemen approve of, or not, of course remains to be seen by the vote, but it seemed to the minority of the committee that it would be a proper provision to insert in the constitution. It appears in the constitutions of other states. I think that this particular provision is taken from the constitution of the state of Missouri. . . .
“Mr. Button. I would like to ask a question. Under this clause, last year, when the governor ordered the deputy sheriffs out here when the commonweal army came through, could the sheriff collect pay for those deputies he swore in under this clause?
“Mr. Richards. I think so; I do not think this has any reference to that at all. There was service that he was performing that he would be entitled to pay for; but this is intended to cover a case where a person has undertaken to do a certain thing, either as a public officer, in the performance of his public duty, or as a contractor, under contract; he has undertaken to do a certain thing, and do it for a certain sum. Now, this is intended to prevent the granting of any additional sum afterwards, and the reason for it is just as stated in the illustration I made. If men would always bid honestly they would probably all get a fair compensation for their work.
“Mr. Button. So far as that goes, I think it is right.
“Mr. Richards. Why should not the same thing apply to a public officer ? For example, should the county court or city council appoint a man to perform a certain public duty — that is, the office is created by ordinance or by statute, the duties of the office are defined, the man is elected or appointed to *70that position. He enters upon the duties of the office, he agrees to perform his duties, and after his term has expired or after a certain period has expired and the work has been done, they come in and pay him more than his salary or than was provided by law for him to receive for this service. That is not right, and it is just to prevent those things that this section is proposed.”
From the foregoing quotations from the March 3, 1847, Racine Advocate, and the debates of the Utah convention, it appears that the evil, which the provision of sec. 26, art. IV, Const., was aimed to prevent, was that of a type of corruption which resulted from some favored contractor making a low bid for some public work in connivance with the governing body or legislature of the municipality or state for whom the work was to be undertaken, and then having extra compensation thereafter voted to such contractor. Along the same line it was felt to be morally wrong for a man to accept an elective or appointive political office at a certain fixed salary and then, thereafter, either during the term of office or after the service had been rendered, to have extra salary voted. It was felt that a public officer stood in a parallel position with a public contractor, and having contracted to perform a certain service for a fixed sum, he should be bound by his contract.
In Gubler v. Utah State Teachers’ Retirement Board (1948), 113 Utah, 188, 192 Pac. (2d) 580, the Utah court upheld a prior-service-credit provision of its Teachers’ Retirement Act against a claim that it violated a provision of the Utah constitution similar in wording to sec. 26, art. IV of our constitution. In the concurring opinion by Mr. Justice Wolfe in that case he declared (p. 204) :
“I concur. I might add that I do not think that article VI, section 30 of the constitution of Utah was intended to prevent retirement plans for public officers or employees. While its language is broad, its intent was to prevent the acceptance of a low bid from a favored contractor and a subsequent *71increase of his emoluments by additional later payments. This was one device by which contractor city machines had been built up in eastern cities at the time our constitution was being drafted. As to public officers, agents, and servants, it was to prevent extra pay above that contracted for in the case of the public agent or servant, or above the statutory salary which becomes part of the employment contract upon the election or appointment of the public officer.”
Annuities and pensions paid under a public retirement system are so far removed from the type of compensation which the framers of the constitution had in mind in barring public officers from receiving after their terms of office had expired that the provisions of sec. 26, art. IV of the constitution should not be construed to apply to such benefits or to an increase in the same.
The majority opinion declares there is no distinction between the case where a legislature attempts to vote additional compensation to some public officeholder, such as a governor or judge, after the expiration of his term of office in gratitude for the service rendered, and the present case of increasing the retirement benefits of a teacher after her retirement. A careful analysis of the two cases will disclose that they are poles apart. In the former case, the public officer is similar to the contractor who has agreed to perform a public contract for a definite price, as the officer has agreed that so long as he serves in the current term of such office he is to receive as his remuneration therefor the established salary of such office applicable to such term. Any additional money voted to him after such term is intended to further compensate him for such past services and therefore is directly in conflict with sec. 26, art. IV of the constitution. On the other hand, increasing retirement benefits under a validly established public retirement system to a retired public servant, such as the teachers in this case, is not done for the purpose of granting additional compensation for the past services performed, but to make adequate the retirement *72benefits which were being paid to the retired annuitant at the time he or she ended public employment, and which retirement benefits were to extend throughout the annuitant’s remaining life.
There is one further marked point of distinction between the two cases. In the case of the public officer who finds that he cannot adequately live on the salary of his office due to inflation occurring during his term, or other causes, he has the privilege of resigning and accepting other better paid employment. Not so the retired teacher! Her retirement benefits are intended to provide for her during her declining years, and in'many cases she has no option then available to her to seek other employment because her earning power is already gone as a result of the infirmities of advancing age. Such a teacher may have given forty or fifty years of life to devoted public service, and have been persuaded to stay in the teaching profession under the inducement that her retirement benefits would adequately provide for her old age when she was no longer able to work, only to now find that inflation has in reality cut the true value of such retirement pay in half. The legislature recognized the moral responsibility of the state to remedy the situation and enacted the statute now under consideration, but the majority opinion, oblivious to the fact that the increased retirement benefits so voted were not intended as compensation for past services, but instead were for the purpose of making the teachers’ retirement benefits adequate so that the system would accomplish its original objective of the retirement system, declares the act void.
The objective of our teachers’ retirement system was eloquently stated by Mr. Justice Owen in his opinion in State ex rel. Dudgeon v. Levitan, supra (p. 330) :
“As a phase of that broader social philosophy which has come to demand that an employee who has given the services of a lifetime to an employer be provided for in his old age, *73public thought has crystallized upon the idea that teachers who render society service of the highest order shall not wear themselves out and be summarily dismissed from the service without something in the nature of a provision for the support of themselves and their dependents. It is recognized that this protection should be more definite and dignified than that of common charity. This belief finds expression in so-called teachers’ pension laws providing a fund created by the contributions of the teacher and the state.”
Mr. Justice Owen further flatly stated in his opinion in State ex rel. Dudgeon v. Levitan, supra (p. 343) :
“As we view it, the annuity based on past service is not intended to be, or operate as, compensation for past service. It was rather intended to be, and in fact is, an inducement to the seasoned and experienced teacher to remain in the service and give the public the benefit of his experience.”
The majority opinion in the instant case denies that increasing benefits of teachers already retired can be an effective means to induce other teachers still in service to remain in the teaching profession, and states that the proper way to induce teachers still in service to remain in the profession is to increase their own retirement benefits. Teachers, as well as citizens in all other walks of life, are today keenly aware of the problems imposed by our present inflation. It is difficult to believe that the present statute, if permitted to be carried out, whereby the state recognizes its moral responsibility to protect retired teachers from the adverse effect on their retirement pay caused by inroads of inflation, would not have some beneficial effect to induce teachers to stay in the profession. On the other hand, can it be doubted that the effect of the majority decision in this case will not be to adversely affect teachers remaining in the profession as the result of their realizing that the state is powerless to' do anything to protect their retirement benefits from inflation once their status is changed by their own retirement? In *74any event, it is for the legislature, and not this court, to determine the means to be adopted in so altering the retirement system as to accomplish the objective of inducing teachers to remain in the profession.
In conclusion, to summarize the arguments previously advanced herein, it is my opinion that the act before us does not violate the provisions of sec. 26, art. IV of the constitution because:
(1) The framers of the constitution could never have intended such provision to apply to retirement benefits being paid to a public servant after he retires from public service.
(2) The increasing of retirement benefits to retired teachers was not voted as additional compensation for services already rendered, but to make their retirement pay adequate which had been rendered inadequate by inflation, thus insuring that the original objective of the Teachers’ Retirement Act would be carried out.
(3) Strongest reasons of sound public policy require that sec. 26, art. IV, Const., be construed as having no application to retirement benefits paid to retired public servants pursuant to a genuine retirement system validly enacted for public purposes.
I am authorized to state that Mr. Justice Fairchild joins in this dissent.