Opinion
No. 25627
Decided December 19, 1935.
Municipal corporations — Pension a gratuity, not vested or contractual right — Pension awards may be increased or reduced, when.
1. A pension granted by public authorities is a gratuitous rather than a vested or contractual right.
2. An existing board of trustees of a pension fund has discretionary power to modify pension awards theretofore made by it or by predecessor boards, by increasing or reducing the amount thereof, provided the same is done reasonably and not arbitrarily.
ERROR to the Court of Appeals of Summit county.
This is an action in mandamus originally instituted in the Court of Appeals of Summit county by defendant in error, a retired fireman, against the Board of Trustees of the Firemen's Pension Fund of the city of Akron to enforce payment of the pension awarded to him upon his retirement.
For convenience, we shall hereinafter refer to defendant in error as the "relator" and to the Board of Trustees of the Firemen's Pension Fund of the city of Akron as the "board."
The following are the facts pertinent to the issues involved:
On April 1, 1930, after forty-three years of service in the fire department of Akron, the relator was retired on a pension which was fixed by the then board at $170.06 per month, that being the amount to which he was entitled under the rules and regulations then in effect and governing such fund. At that time the board consisted of five firemen and the Director of Public Safety. On April 3, 1929, Section 4600, General Code, was amended, effective July 11, 1929, and provided for a new board consisting of two firemen, two councilmen and two citizens. A new board was not elected in Akron until long after the amended law went into effect, and no meeting was held by the new board following its election until April 16, 1930. The order fixing relator's pension was therefore fixed by the hold-over members of the old board, and the relator was paid $170.06 monthly until May 1, 1934. Shortly prior to such date, the current board adopted new rules and regulations which raised some pensions and reduced others. The effect of the new rules and regulations was to reduce the pension of relator to $125 per month. He thereupon filed suit in mandamus in the Court of Appeals asking for an order to compel the board to pay him the pension granted to him by the old board, namely, $170.06 per month. The writ was allowed in the Court of Appeals as prayed for, and the board now prosecutes error to this court to reverse the judgment of the Court of Appeals.
Mr. Charles C. Benner and Mr. Jerome Taylor, for plaintiffs in error.
Mr. Ralph L. Kryder and Mr. Paul E. Werner, Jr., for defendant in error.
The sole question presented for our determination is whether the board has the power to reduce or increase pensions of those already receiving them.
The Court of Appeals of Summit county denied the existence of such right and cited in support of its position Holmes et al., Trustees, v. State, ex rel. Delaney, 93 Ohio St. 480, 113 N.E. 1070; State, ex rel. Dieckroegger, v. Connors, 122 Ohio St. 359, at page 366, 171 N.E. 586; and State, ex rel. Eden, v. Kundts et al., Trustees, 127 Ohio St. 276, 188 N.E. 9. However, we do not deem the above cases authority for the determination of the issue here raised. We are here concerned with the right of the board to increase or decrease pensions of those already receiving them, which question was neither raised, discussed, nor determined in the cases above mentioned. As counsel for the board point out, the case of Holmes et at., Trustees, v. State, ex rel. Delaney, supra, concerned itself with the question of the right to revoke and suspend entirely the pension paid to a retired policeman, and this court held that the board had no such authority in view of the rules and regulations then existing. No rules were then in effect giving the board the right to thus suspend the pension and the act was consequently unauthorized. In the instant case, the board of trustees did act pursuant to existing rules and regulations governing the question of increasing or reducing the amounts of pensions.
In the case of State, ex rel. Dieckroegger, v. Connors, supra, the rules of the board entitled the retiring police officer to a pension and the board acted contrary to and in violation of its own rules in denying him a pension. In the instant case, the board acted in conformity with its rules and regulations.
The case of State, ex rel. Eden, v. Kundts, supra, announces the doctrine that "The right of a retired or dismissed police officer to a pension * * * is governed entirely by the rules adopted and in force at the date of his retirement or dismissal." However, in that case, the bone of contention was the right of a retiring or dismissed police officer to a pension, which right is not questioned in this case. We are here concerned merely with the right of the board to change the amount of pensions previously allowed.
In determining that question we must first decide whether the right to pension is a vested right.
A pension is generally defined as a gratuity, at all times subject to the will of the donor. It is a creature of law rather than of contract, and the pensioner has no vested right in the continuance of a gratuitous allowance.
"The unquestioned rule is that a pension granted by the public authorities is not a contractual obligation but a gratuitous allowance, in the continuance of which the pensioner has no vested right; and that a pension is accordingly terminable at the will of the grantor, either in whole or in part." 21 Ruling Case Law, 242. See also Walton, Admr., v. Cotton, 60 U.S. (19 How.), 355, 15 L. Ed., 658; United States v. Teller, 107 U.S. 64, 2 S.Ct., 39, 27 L.Ed., 352; Pennie v. Reis, 132 U.S. 464, 10 S.Ct., 149, 33 L.Ed., 426; Frisbie v. United States, 157 U.S. 160, 15 S.Ct., 586, 39 L.Ed., 657; Gibbs v. Minneapolis Fire Dept. Relief Assn., 125 Minn. 174, 145 N.W. 1075, Ann. Cas., 1915C, 749, and note.
"Pensions * * * are gratuities. They involve no agreement of parties; and the grant of them creates no vested right." Lynch v. United States (1934), 292 U.S. 571, 54 S.Ct., 840, 78 L.Ed., 1434. To the same effect, Gibbs v. Minneapolis Fire Dept. Relief Assn., supra.
And this is so even where a pensioner has made compulsory contributions to the fund.
"In some instances pension funds are maintained in part by compulsory contributions of the beneficiaries thereof. This is generally true where the beneficiaries are policemen or firemen; and in such a case the statute creating the fund ordinarily authorizes the proper official to retain weekly or monthly a certain per cent of the prospective pensioner's pay. By the great weight of authority the fact that a pensioner has made such compulsory contribution does not give him a vested right in the pension." 21 Ruling Case Law, 243. See also Pennie v. Reis, supra.
The right to pension not being vested, the board has a right at any time, in its discretion, to modify or alter pension awards by increasing or decreasing them, so long as it acts reasonably and not in an arbitrary fashion. This right the board may exercise pursuant to and under its own rules and regulations then prevailing, and, in the absence of abuse, mandamus will not issue to control its discretion.
The board has not acted illegally in effecting a reduction of relator's pension. We find no abuse of discretion.
Judgment reversed.
WEYGANDT, C.J., STEPHENSON, WILLIAMS, JONES, MATTHIAS and ZIMMERMAN, JJ., concur.