Court Opinion

ID: 9636387
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:26:33.143794+00
Date Added: 2024-06-11T18:09:44.931230
License: Public Domain

*469WALLER, Circuit Judge,
(dissenting).
I think that this case should be considered in the light of DeWitt v. Richmond County, 192 Ga. 770, 16 S.E.2d 579, decided long after the case of Trotzier v. McElroy, 182 Ga. 719, 186 S.E. 817, which is cited in the majority opinion. In the DeWitt case, supra, [192 Ga. 770, 16 S.E.2d 582] the Supreme Court oí Georgia said: “A vital question and one that largely determines the constitutional assaults upon this act is whether the fund created by the three per cent, salary deduction is a gratuity or adjusted compensation for services rendered. The words ‘pension’ and ‘compensation’ are not synonymous. The former is ordinarily a gratuity or bounty from the government in recognition of but not in payment for past services. Dickey v. Jackson, 181 Iowa 1155, 165 N.W. 387. Tn Retirement Board of Allegheny County v. McGovern, 316 Pa. 161, 174 A. 400, 404, the court had for consideration a case similar in many respects to the case now before this court, and drew a distinction between a pension and retirement pay, in the following language: ‘A pension is a bounty or a gratuity given for services that were rendered in the past. This act provides for retirement pay. Retirement pay is defined as “adjusted compensation” presently earned, which, with contributions from employees, is payable in the future. The compensation is earned in the present, payable in the future to an employee, provided he possesses the qualifications required by the act, and complies with the terms, conditions, and regulations imposed on the receipt of retirement pay. Until an employee has earned his retirement pay, or until the time arrives when he may retire, his retirement pay is but an inchoate right.’ ” (Emphasis added.)
The statute of Georgia being construed in the DeWitt case, supra, provided that the retirement fund should be made up wholly from three per cent that was to be deducted from the salary of each employee. There was no contribution by the County. The Court held that the payments out of this fund were not pensions but retirement pay or compensation for services, rendered saying: “Thus it is clear that under the terms of the act the only funds that can be used for meeting the payments therein are those derived from the deduction by the county of three per cent, of the county employees’ salaries. It is not provided that an amount of county funds equalling three per cent, of the employees’ salaries shall be deposited in this fund, but, on the contrary, it is expressly provided that this three per cent, must be a portion of the actual salaries of the employees. * * * This act simply directs the county commissioners to pay immediately to the employee 97 cents in cash, and to defer payment of the remaining three cents in the dollar of such employee’s compensation to a future time and condition. The contract of employment is subject to the terms of this law. The three per cent, deducted is by the terms of the law applied to the satisfaction of the county’s obligation for such services. * * * In Trotzier v. McElroy, 182 Ga. 719, 186 S.E. 817, the pensioner’s right to receive $100 per month under the terms of the statute had accrued, and he was actually receiving this amount when the act was amended reducing his pension to $75 per month, and this court held, that, the contingency provided for in the statute having occurred before the change in the statute by-amendment, the right of the pensioner was a vested right and the amendment changing that right was unconstitutional and void; but the ruling was expressly restricted to holding only that the right of the pensioner was vested because of the happening of the contingency. It is our opinion therefore that the fund created by the three per cent, deduction of salaries is an expense of the county for services of employees, and that its use in the manner provided by the act is adjusted compensation and is not a gi-atuity.”
It, therefore, appears that if in that case the payments had been made out of a fund furnished by the county, it would have been a gratuity, but since the payments were to •be made out of deductions from the earned salary of employees, they were not gratuities but deferred or adjusted compensation. There seems to be no difference in the holdings of the Georgia Court from the almost universal rule that a pension paid out of public funds is a gratuity.
Beyond doubt such part of the funds that went into the retirement fund as were with*470held from Mr. Varnedoe’s regular salary was compensation to him for services rendered — deferred compensation [DeWitt v. Richmond County, supra] — but it was compensation to him and not to the taxpayer. The payments were taken from his salary, not hers. If there was any income tax due on that part of his salary, it was due from him, not her. The City is not now paying to her his salary, but they are paying to her that which in part it gave to him and that which in part he bought and paid for. Assuredly it is not now paying to her a salary for any personal services which she has performed.
Thus if the payments had been made to him, they would have come from two sources — one a gratuity from the City, the other from deductions from his own salary — earned by him and paid in his lifetime for his benefit — even if not to him directly — in the acquisition of annuitous arrangement for his and her security in their sunset hours.
At the time the law was passed the taxpayer’s husband had already been working as a fireman for more than the 25 years necessary in order to enable a fireman to retire. He continued to work a good many years after that. He had the option to have retired, but failed to do so in order that he might save up the payments and let them accrue for the benefit of his wife. The payments which she now receives are merely that which he accumulated and acquired and had a right to draw down in his life time.
The widow has, assuredly, rendered no service as a fireman to the City of Atlanta for which she is being compensated. She is receiving that which was a gratuity from the City to her husband and which became vested in him, and which, because of his election not to retire and take it, was transmitted to her upon his death. It was also a gratuity from him to her. It had belonged to him as any other property right.
If the taxpayer’s husband had died on the 12th day of August, 1924, or the day before the Pension Act became effective, neither he nor his widow would have received any pension, notwithstanding the fact that he had then served 34 years. If any fireman should now serve for 24 years, neither he nor his widow would be entitled to the pension. If the payments are only compensation for services, would it be said that there was to be no such compensation for services rendered for 24 years, 11 months,.and 29 days, but upon serving one day more there would be such compensation ? Or would it be said that this so-called pensionary compensation was for the 365th day of the 25th year? If the pension were wholly compensation for personal services, would not the fireman who worked 24 years be entitled to a pro rata payment of this compensation for those 24 years of service prior to reaching the age of retirement? This seems to demonstrate that so much of the payments as are contributed by the City was a gratuity to the husband, awarded in recognition of the fact that after long years of service a fireman becomes too old to climb ladders and hop fire trucks with safety and agility, and that he should not be further subjected to the dangers of fire fighting.
The Legislature of Georgia evidently desired that those old firemen should be replaced by the younger and more efficient, with compensation for the young and with security for the old.
I think that the judgment of the Court below should be reversed.