Court Opinion

ID: 9655851
Source: CourtListenerOpinion
Date Created: 2023-08-23 19:23:51.4759+00
Date Added: 2024-06-11T18:13:22.624510
License: Public Domain

Holbrook, J.
(dissenting). The doctrine of res judicata is too well established to be questioned at this point. On one hand it effectuates the policy of putting an end to litigation — interest republicae ut sit finis litium; and on the other it prevents individuals from being harassed by successive suits —nemo debet bis vexari pro eadem causa. 50 CJS, Judgments § 592. In furtherance of the purposes of the doctrine, two rules have been developed.
“It is a well-settled general rule that where a judgment is asserted as an absolute bar to another action on the same demand or cause of action, it is conclusive not only as to every matter that was offered in the former action to sustain or defeat the demand, but as to every other matter that might have been offered for that purpose. On the other hand, where the subsequent action is on a different demand or cause of action, the judgment operates as an estoppel only as to those matters in issue, or points *623controverted, upon the determination of which the finding or verdict was rendered. In other words, where the second action is upon the same canse of action, the judgment is conclusive upon every matter that might have been litigated in the former action, whether it was in fact litigated or not, while if the second action is upon a different cause of action, the judgment operates as an estoppel only as to the facts or questions actually litigated and determined.” 128 ALR 483.
See, also, United States Fidelity & Guaranty Co. v. McCarthy (CA 8, 1929), 33 F2d 7 (70 ALR 1447), and Creek v. Laski (1929), 248 Mich 425, 431 (65 ALR 1113), where the Michigan Supreme Court said.:
“ ‘the same transaction or state of facts may give rise to distinct or successive causes of action, and a judgment upon one will not bar a suit upon another. Therefore a judgment in a former suit, although between the same parties and relating to the same subject matter, is not a bar to a subsequent action, when the cause of action is not the same.’ ”
Accordingly, the first inquiry must be directed toward the question of whether the Morrison decision adjudicated the same cause of action upon which the present plaintiffs have based their suit. If the cause of action is not the same, then the issues still open for adjudication must be determined. :
“While it is fully established that one who has a claim against another cannot, in the absence of an agreement to the contrary, divide his claim and make it the subject of separate actions * * * ‘a contract may be divisible by its terms so as to give rise to more than one cause of action. Thus, if one contracts to do several things at several times, an action lies upon every default; for, although the agreement is *624entire, the performance is several, and a contract is divisible in its nature.’ * * *
“ ‘The bringing of the suit * * * on the ten installments, then past due, did not estop appellant from instituting- suits on the other installments when due, if not paid, and if appellee was vexed or harassed thereby, it must submit or pay the installments. * * * Appellant had a right of action for each monthly installment, each being distinct and separate from the other, and therefore he was entitled to bring suit on each installment as it became due, if not paid.’ ” 69 ALR 889.
In Morrison, the plaintiffs sought and recovered increased pension benefits under the charter provisions of the defendant city of Dearborn, and the judgment specifically covered the period from October 1,1952, through January 31, 1961. The plaintiffs in the instant case seek to recover increases since the latter date. The annuity payable to retirees is payable in separate installments, and each gives rise to a separate cause of action. The strength of this conclusion is not diluted merely because the quotation above speaks in terms of a contract.
The 1963 Constitution, art 9, § 24, provides that “the accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired thereby.” After the effective date of the 1963 Constitution,1 the obligation of the defendant city with respect to these plaintiffs is contractual. This obligation is severable, i.e., it is performed by making periodic payments, each being separate and distinct from the other, and failure to pay each giving- rise to a *625separate cause of action although they all arise from a single agreement. Thus, after January 1, 1964, failure to pay each annuity payment creates a cause of action the moment it becomes payable, and each cause of action is distinct from the cause adjudicated in Morrison.
Payments prior to January 1,1964, but subsequent to January 31,1961, also give rise to separate causes of action which may be sued upon despite the Morrison judgment. It is true that prior to the effective date of the 1963 Constitution, municipal retirement systems did not have a contractual status. Brown v. City of Highland Park (1948), 320 Mich 108. However, whether a new cause of action will arise does not depend upon there being a contractual obligation. Eather, the feature which gives rise to several distinct causes of action is the severability of the obligation, regardless of whether that obligation is contractual or otherwise. The city, by enacting a retirement system, obligated itself to pay according to the provisions of that system until it was either altered or deleted. Brown, supra, did not decide that municipal employees have no rights at all. It only held that the rights to an annuity upon retirement may be abrogated by the city. Until the system is altered, however, employees may expect to receive their pensions under existing charter provisions and they may resort to the courts for enforcement of their rights. In its brief, the defendant city has quite proudly stated that there has been no change in the charter provisions relating to retirement annuities. That being the case, these plaintiffs are only attempting to enforce existing rights. The rights and obligations are severable and therefore give rise to distinct causes of action. Because the *626cause of action in the instant case is different from that settled in Morrison, only the issues common to both cases are res judicata.
• According to the majority opinion, the matter of longevity pay was in issue in the Morrison case and is therefore foreclosed from further adjudication. Such a conclusion is not consistent with the record. The only support mustered for this statement is the opinion of the trial judge in the instant proceedings and an affidavit of an employee of the defendant city. Such authority is not at all compelling and is wholly irrelevant. The statement by the lower court in the present case that longevity pay was considered in Morrison has no legal effect because the Morrison judgment speaks for itself. An examination of the Morrison Case itself is the only reliable criterion for determining what was or was not in issue. Judge Gillis quite candidly admits that the matter of longevity pay was never mentioned by the court in Morrison. Since the issue was never considered, it is obvious that it was not a part of the case. Moreover, considering the extreme thoroughness of the Morrison decision, the omission cannot be written off as a mere inadvertence. Therefore, because the issue of longevity pay was not an issue in Morrison, that case is not res judicata and these plaintiffs have a right to fully litigate their claims in this regard.
This Court should not lose sight of the fact that longevity pay is a significant factor in determining the pension rights of petitioners.
“The primary purpose of the fluctuating pension plan * * * is to guarantee the pensioner or his widow, a fairly constant standard of living despite the inflationary tendencies of the economy ■ and to maintain equality of position between the retired member and the person currently holding the rank attained by the pensioner before his retirement.” *627Abbott v. City of Los Angeles (1960), 178 Cal App 2d 204, 215, 216, 3 Cal Rptr 127.
Defendant argnes in its brief that the matter of longevity pay has been sufficiently accounted for by including it in the computation of each pensioner’s average final compensation. First, this would-have no effect upon those who retired before the longevity pay plan went into effect; second, to the extent that this inclusion will possibly increase the size of the. denominator of the fraction used to determine the' retirement rates, it is not consistent with the fluctuating benefit provision of the city charter because it will result in a lower retirement ratio than would-otherwise be the case if there were no inclusion. Moreover, the issue is whether appellants’ pensions should be increased in accordance with the aforementioned purpose of the fluctuating benefit provision to reflect increases in longevity payments made' to those currently employed by defendant. Defendant’s argument does not face this issue, and, as noted above, the judgment in Morrison is silent on the point.
Plaintiffs also claim that the defendant is using the wrong formula to determine the amount that each member of plaintiff association should receive as his retirement annuity. Since the formula was a matter in issue 'in Morrison, it cannot now be relitigated. However, the plaintiffs are not thereby foreclosed from adjudicating the issue of whether the formula, as determined by the Morrison decision, has been correctly applied by defendant to payments made since January 31, 1961, and whether the payments made since January 1, 1964, have been consistent with the charter provisions of the city of Dearborn.
In the footnote the computations of the annuity of Arthur B. Theisen are included in this opinion as an illustration of the disputed application of the *628formula.2 According to the formula, set forth in a footnote to the majority opinion, the first step is the ascertainment of the employee’s average final compensation. Both parties agree that as to Mr. Theisen, this figure is $6,082.95, and it includes longevity pay paid to the employee. The second step *629in the formula, set forth on the second line of each computation submitted by the parties, is a determination of the employee’s service retirement annuity. This is the annuity to which the employee is entitled immediately upon his retirement. Once again, both parties agree on the figure, which is $2,859.
The third step involves the disputed fluctuating benefit provision of the city charter. The result of this computation is expressed as a percentage and this figure is applied to all wage increases given to active employees subsequent to the date of retirement. For example, suppose a hypothetical employee named Mr. B retired on January 1, 1958. Assume also that his retirement ratio, the percentage arrived at by computing the third step of the formula, is figured on the date of his retirement as 50%. If active employees are given a $100 raise on January 1, 1959, the retirement ratio of Mr. B will he applied to that wage increase and his pension will he increased by 50% of the amount of the increase given to active employees. Thus, if his pension for 1958 was $3,000, in 1959 he will he entitled to an additional $50, or a total of $3050.
Turning to the case of Arthur Theisen, the plaintiffs submit the following computation of the third step in the formula. The service retirement annuity (step 2) is divided by the average final compensation (step 1), and the result is 47%. In other words, as active police lieutenants receive increases in their wages, Mr. Theisen’s annuity should be increased by 47% of the amount of the increase received by the active police lieutenants.
In the defendant’s computation, however, the service retirement annuity (step 2) is divided by the sum of the maximum class rate as of the date of retirement plus longevity pay as of the date of retirement. *630The retirement ratio is thus reduced to 42.456% and the result is that the retired employee, Arthur Theisen, gets a smaller percentage of the increases given to active police lieutenants. In both plaintiffs’ and defendant’s computation, the dividend is the same figure, i.e., $2,859. In the defendant’s computation, the smaller quotient is achieved by using a larger divisor. Essentially, therefore, the point of contention is whether the service retirement annuity (step 2) should be divided by the average final compensation (step 1) as plaintiffs contend, or by the maximum class rate at the date of retirement plus longevity pay at the date of retirement, as defendant contends.
As to Mr. Theisen, the difference between the two computations of step 3 in the formula are obvious and not insubstantial. If the defendant’s computation is used, his annuity is $3,456.92. According to plaintiffs’ figures, the annuity should be $3,814.05— a difference of $357.13 on an annual basis. In this regard, it is interesting to note line 5 of the defendant’s computation, attached hereto. This is what the defendant says will be the result if plantiffs’ computations are followed. It is erroneous, because an examination of step 3 reveals that the 42.456% figure is arrived at by using the maximum class rate plus longevity as the divisor. Plaintiffs expressly controvert that contention.
Finally, as to the disputed third step in the formula, the maximum class rate should have no application. First, it does not have any relation to what the employee actually earned during his years of service. It is absurd to use a figure unrelated to an employee’s actual earnings to determine the amount of his annuity where the annuity of each retiree is determined by a formula which depends on figures based on the employee’s past earning record. The *631court in Morrison stressed tliat each step in the computation was an individual one for each employee. Second, the term “maximum class rate” is not mentioned in either the opinion or judgment in the Morrison Case. The city has relied on the defense of res judicata. That doctrine, however, works both ways. The defendant should not be allowed to claim that plaintiffs are bound while it continues to use an application of the formula containing figures not authorized by the Morrison judgment. The city has no authority to use maximum class rate in computing benefits. By affirming the decision of the lower court, this Court is permitting the defendant to meddle with the formula as it chooses with no fear of having its actions reviewed by a higher authority.
Moreover, the 1963 Constitution makes the effectiveness of the formula after January 1, 1964, extremely doubtful. Article 9, § 24 of the 1963 Constitution gives municipal pension systems a contractual status, and the rights of employees in the system may not be impaired. Campbell v. Judges’ Retirement Board (1966), 378 Mich 169. The rights of the retired employees of the city of Dearborn are set forth in the Dearborn city charter — these are the rights which may not be impaired. To the extent that the judgment in Morrison varies these rights, it is void after the effective date of the 1963 Constitution. When the rights of individuals are enlarged or changed by fundamental law, prior judicial pronouncements which diminish those rights are of no effect.
The second question raised, i.e., do appellants have the right to see the financial records of defendant city, can be answered in the affirmative. Article 9, § 23 of the 1963 Michigan Constitution provides:
*632“All financial records, accountings, audit reports and other reports of public moneys shall be public records and open to inspection. A statement of all revenues and expenditures of public moneys shall be published and distributed annually, as provided by law.”
If the records pertaining to retirement annuities are reports of public moneys, they are public records and open to inspection. Public moneys are defined as:
“All moneys which shall come into the hands of any officer of any county, or of any township, school district, city or village, or of any other municipal or public corporation within this state, pursuant to any provision of law authorizing such officer to collect or receive the same, shall be denominated public moneys within the meaning of this act.” CL 1948, § 129.11 (Stat Ann 1961 Rev § 3.751).
The Michigan Supreme Court has held that not all funds held by governmental officers are public moneys. The case of Pokorny v. County of Wayne (1948), 322 Mich 10, defines public funds as funds belonging to the State or to any county or political subdivision of the State raised for governmental purposes. Under this definition, are retirement funds public moneys? Authorization for municipal retirement systems is found in CL 1948 and CLS 1961, § 38.551 et seq., as last amended by PA 1963, No 57 (Stat Ann 1958 Rev and 1963 Cum Supp § 5.3375[1] et seq.). Part of the funds for the retirement system come from salary deductions, and part of the funds come from municipal appropriations. CLS 1961, § 38.559 (Stat Ann 1958 Rev § 5.3375[9]). At least part of the funds, then, are raised by defendant city, a governmental unit.
The final question is whether payment of municipal pensions is a governmental purpose. That it *633is, is indicated by the following quotation from 40 Am Jur, Pensions, § 16.
“A judiciously administered pension fund is doubtless a potent agency in securing and retaining the services of the most faithful and efficient class of men connected with those arms of the municipal service in which every property owner and resident of the city is most vitally interested.” Cited with approval in O’Connell v. Dearborn Pension Board (1952), 334 Mich 209, 215. See, also, 3 McQuillin, Municipal Corporations (3d ed), § 12.143.
The case at hand is concerned with pensions for policemen and firemen when they retire. Certainly no other group of public servants is more directly concerned with the safety and well-being of the general public. Their function is governmental, and if the incentive of generous pensions will enable municipalities to attract qualified personnel, payment of such annuities must certainly be a governmental function.
Further support for the right to inspect public records is found in Nowack v. Auditor General (1928), 243 Mich 200 (60 ALR 1351), wherein Mr. justice McDonald at pp 204, 205 stated:
“Undoubtedly, it would be a great surprise to the citizens and taxpayers of Michigan to learn that the law denied them access to their own books for the purpose of seeing how their money was being expended and how their business was being conducted. There is no such law and never was either in this country or in England. Mr. Justice Morse was right in saying:
“ ‘I do not think that any common law ever obtained in this free government that would deny to the people thereof the right of free access to, and public inspection of, public records.’ Burton v. Tuite, 78 Mich 363, 374 (7 LRA 73.) * * * *
*634“ ‘At common law, every person is entitled to the inspection, either personally or by his agent, of public records, including legislative, executive, and judicial records, provided he has an interest therein which is such that would enable him to maintain or defend an action for which the document or record sought can furnish evidence or necessary information.’ 23 ROL p 160.”
It is obvious that the appellants herein have a special interest in the records of the city, pertaining to the funds available and paid for pensions. Under Nowack v. Auditor General, supra, this is sufficient. The record discloses that plaintiffs requested the court to require defendant to furnish the necessary records for inspection. This is contained in paragraphs 4,10,12, and 16 of the complaint. Again, in their motion to set aside the judgment, plaintiffs requested the court to order production of the pertinent records.
In reviewing the record, I fail to find any foundation for the statement by Judge G-illis that plaintiffs failed to raise this issue in the trial court. On the contrary, it was a part of this case from the very first. By summarily dismissing the claims of these plaintiffs this Court is allowing the defendant to place its own interpretation on the provisions of the Morrison judgment with the result that the plaintiffs are foreclosed from in any manner investigating or correcting the operations of their pension system.
I would vote to reverse and remand for further proceedings in accord with this opinion, with costs to appellants.

 January 1, 1964.

 ABTSUM B. THEISEN — POLICE LIEUTENANT
Retired 7-16-57

Defendant’s Computation

1) ADC — $6,082.95 (Includes Longevity) ADC Service OA
2) Dormula — ■ - - - $6,082.95 X 1/50 X 23 yrs 6 mos = $2,859.00 OA ADC
3) RR= -- - ■ $2,859.00 -j- $6,474.00* = 44.161% OB 2859. 2859. 6474. + 260. at 7-16-57 = 6734. = 42.456% (salary) (long.) MCR Longevity TOTAL
4) Present Total Spread - - - $7,828.00 $287.00 $8,115.00 Total Spread (Retirement Ratio)
5) Proposed by Thomson - (claimed by defendant) $8,115.00 X 42.456% = $3,445.30 Paid by City $7,828.00 X 44.161% = $3,456.92 $ 11.62

Plaintiffs’ Computation

1) ADC — $6,082.95 (Ineludes Longevity) ADO Service OA
2) Dormula — ■ - - - $6,082.95 X 1/50 X 23-1/2 yrs = $2,859.00 OA ADC
3) RR = 2,859.00 -H 6,082.95 = 47% MCR Longevity TOTAL
4) Present Total Spread $7,828.00 $287.00 $8,115.00 Total Spread (Retirement Ratio)
5) $8,115.00 X 47% = $3,814.05 KEY ADC — Average Dinal Compensation MCR — Maximum Class Rate RR —Retirement Ratio * Max. for Police Lt. OA —Original Annuity at 7-16-57