Opinion
No. 37172.
December 12, 1949.
1. Statutes — local and private — constitution.
A local and private statute, authorizing the water and light commission of a named municipality to establish a pension and disability and annuity system for its employees, is not violative of (a) Sec. 87 Const. 1890 which prohibits special or local enactments for the benefit of individuals or corporations, nor of (b) Sec. 88 Const. 1890 which requires that general laws shall be enacted by which cities and towns may be chartered and their charters amended.
2. Municipalities — pension system — statutes — constitution.
An injunction will not be issued against the setting up by a municipal commission of a pension and disability and annuity system for its employees upon the complaint that the benefits contemplated by the local act authorizing it provided for "extra compensation" in defiance of Sec. 96 Const. 1890, when no system of any kind has yet been set up.
3. Municipalities — pension and disability plan — tax funds, when not diverted.
When the sources of the funds for the operation by a municipality of a pension or retirement system for the employees of its light and water works is prescribed by the legislative act authorizing it, and these are (1) proceeds of the assessments on the wages and salaries of the employees; (2) from the interest on any permanent fund created by gift bequest, appropriations, assessment or otherwise, and (3) from money derived from the operation of the municipal facility in which the employees are employed, there is involved thereby no diversion or application of tax funds.
Headnotes as approved by Alexander, J.
APPEAL from the chancery court of Leflore County; R.E. JACKSON, Chancellor.
Hardy Lott, for appellant.
House Bill 27 definitely contravenes that provision of Section 87 of the Constitution which prohibits the Legislature from suspending the operation of any general law for the benefit of any individual.
The general law in question is Chapter 283 of the Mississippi Laws of 1940 which applies to all municipal water and electric light commissions in the State of Mississippi. Section 2 of that act sets forth the power and duties of the water and electric light commissioners. These powers and duties are specified at great length, even including the purchasing of liability insurance, but it does not confer upon them the power to establish a retirement and disability fund. Section 5 of that act is mandatory in that it provides the manner in which all revenues derived from the operation of said plants shall be disposed of, and it distinctly does not provide that any such revenues may be placed in any retirement or disability fund.
The intent and purpose of House Bill 27 is to except the defendant water and light commission from the provisions of this general law. House Bill 27 clearly and specifically suspends the operation of this general law in favor of the employees of the defendant commission in that it authorizes revenues from the Greenwood Plant to be used for their benefit, although such use is prohibited by the above quoted general law.
In Yazoo and Mississippi Valley Railroad Company v. Southern Railway Company, 83 Miss. 746, 36 So. 74, this court held in no uncertain terms that the operation of a general law could not be suspended by the Legislature for the benefit of any individual or private corporation; that this provision of the Constitution was mandatory and that Section 89 of the Constitution has no application to that part of Section 87 prohibiting the suspension of the general law.
House Bill 27 also contravenes Section 88 of the Constitution of Mississippi, which section reads as follows: "The legislature shall pass general laws, under which local and private interests shall be provided for and protected, and under which cities and towns may be chartered and their charters amended, and under which corporations may be created, organized, and their acts of incorporation altered; and all such laws shall be subject to repeal or amendment."
In Monette, et al. v. State, 91 Miss. 662, 44 So. 989, this court held that Section 88 of the Constitution is mandatory. The facts in that case were that by a general law, Section 3039 Code 1892, the Legislature had provided a way in which municipalities might amend their charters. Subsequently, the Legislature adopted a special act, Chapter 134 of the Laws of 1900, amending the charter of the City of Meridian by creating and providing for a police commissioner for said city and prescribing the duties of the same. Pursuant to this special act, Meridian created a police commission by ordinance and under the provisions of that ordinance the appellants were appointed policemen. This was a quo warranto proceeding brought to oust the appellants who were exercising the functions of policemen of the city under appointment made by the police commission under the authority of the ordinance last mentioned. From a judgment of ouster an appeal was taken and the case was affirmed by this court.
The act of the Legislature complained of in this case is a special act which purports to confer upon the city of Greenwood an additional right that other cities and the water and light commissioners thereof do not possess. To that extent it is an amendment of the charter of the City of Greenwood and as it is not passed by general law it violates Section 88 of the Constitution. In City of Pascagoula v. Krebs, 151 Miss. 676, 118 So. 286, the court held that a special act of the Legislature defining the boundaries of one city was void under Section 88 of the Constitution.
House Bill 27 clearly violates Section 96 of the Constitution of Mississippi, which section reads as follows: "The legislature shall never grant extra compensation, fee, or allowance, to any public officer, agent, servant, or contractor, after service rendered or contract made, nor authorize payment, or part payment, of any claim under any contract not authorized by law; but appropriations may be made for expenditures in repelling invasion, preventing or suppressing insurrections."
In its prohibition, Section 96 of the Constitution uses the term "legislature", but this court has held that this section of the Constitution not only prohibits the legislature from granting extra compensation, etc., but also prohibits such act being performed by any subordinate state agency created or controlled by the State. What the legislature cannot do directly it cannot do indirectly by delegating the power so to do to a subordinate agency.
In Clark v. Miller, 142 Miss. 123, 105 So. 502, the Yazoo Miss. Delta Levee Board, which was created under act of the legislature, made a contract with a contractor for the construction of a levee, and later changed the contract and paid the contractor increased compensation. The state tax collectors brought suit against the contractor to recover the extra compensation paid. The contractor claimed that the Levee Board had a right to do this under a statute which gave the Levee Board full power and authority to contract with any person for the construction, maintenance or repair of the whole or any part of its line of levees, etc. The court held that despite the broad language of this statute, the statute must be restricted so as not to authorize the board to grant extra compensation to any public contractor after the contract is made.
It is self-evident that the employees of the Water and Light Commission are in the service of a municipality engaged in rendering service to the public and are, therefore, either public officers, agents or servants. It is also self-evident that granting to these employees the right to draw money on retiring and on becoming disabled without requiring any extra service of them is granting to them extra compensation and an extra allowance.
As this is clearly and expressly forbidden by Section 96 of the Constitution, it follows that the acts of the Legislature and the defendant commissioners are void.
A.H. Bell, for appellees.
House Bill No. 27, Extraordinary Session of the Mississippi Legislature for 1947 does not violate Section 87 of the Constitution of 1890.
We believe that it will suffice to cite Feemster v. City of Tupelo, 121 Miss. 733, 83 So. 804, as the authority for answering the appellant's contention that Section 87 is violated by House Bill No. 27.
In a more recent case decided September 26, 1949, styled City of Greenwood v. Ward Telfair and Sam Wright, No. 37173 (not yet officially reported), this same section 87 was interposed to invalidate a special act of the Legislature and the court in that case held that "Section 87 of the constitution has no application to municipal corporations, but applies only to individuals and private corporations."
The appellant contends that Section 87 was violated (A) because it is a special act for the benefit of individuals, and (B) because it suspends a general law for the benefit of individuals or private corporations.
Both of these provisions of Section 87 were carefully considered in the Feemster case and in the City of Greenwood case cited above. The local or private act, House Bill No. 27, was not enacted for the benefit of individuals but was passed to serve a beneficent and useful governmental function and to stimulate and reward faithful services on behalf of the public.
This court has held that enactments of the legislature creating pensions and disability funds for policemen and firemen were not unconstitutional on the ground that it granted private benefits or was one solely for the benefit of the individual and not the public. See Mayor and Aldermen of the City of Vicksburg v. Crichlow, 196 Miss. 259, 16 So.2d 749. In that case, this court adopted what was referred to as "the overwhelming weight of authority" and upheld the act creating pensions and disability relief as a benevolent expression of the legislative power.
It is next contended that House Bill No. 27 contravenes Section 88 of the Constitution of 1890.
We may answer this contention of the appellant by again referring to Feemster v. Tupelo, supra. This very section of the Constitution of 1890 was interposed to invalidate a special act of the legislature, which permitted the City of Tupelo to issue bonds for the purposes not designated by general law. The court in that case held that the word "corporation" as used in Sections 80, 87, and 88 in Article 4 of the Constitution referred to private corporations as described in Article 7 of the Constitution of 1890.
In the Feemster case, the opinions states as follows: "Yazoo City v. Lightcap, 82 Miss. 148, 33 So. 949, it was held by the court speaking through Judge Whitfield that Section 88 of the Constitution did not require that each municipality have the same powers. That case involved an amendment to a special charter, which was held to be authorized, though the Code Chapter did not confer similar powers on other municipalities. Likewise, the case of Sick v. City of Bay St. Louis, 113 Miss. 175, 74 So. 272; both of the cities involved in these cases being cities under special charter, and not under the municipal chapter of the Code."
From the holding of our court, it appears that the case Monette, et al. v. State, 91 Miss. 662, 44 So. 989, does not apply because it involved local and private act amending the special charter of the City of Meridian. The argument set forth by the appellant in his brief based on the Meridian case above is met by a reference to the Yazoo City v. Lightcap case and the Feemster v. Tupelo case above cited.
Appellant asserts that House Bill No. 27 is contrary to Section 96 of the Constitution of 1890.
The case of Clark v. Miller, 142 Miss. 123, 105 So. 502, is cited as authority to sustain the appellant's contention. In our humble judgment, that case has no bearing whatever on the proposition here involved. There was an attempt by the Yazoo Mississippi Delta Levee Board to pay a larger sum to contractors for doing certain work than was originally contracted for. We heartily agree with the principle announced in that case. The appellant cites no case that holds a statute creating pensions and disability allowances to public employees is the same as the contract described in the Clark v. Miller case. On the contrary the courts have almost uniformly held that pensions and disability grants are not increases in salary after service rendered nor do they amount to an allowance in payment of a claim or contract not authorized by law.
We again refer to the Vicksburg v. Crichlow case, supra. In the opinion in that case, these very words are used: "Such pension is not 'extra compensation'". Likewise we quote from a most highly respected authority, McQuillin, on Municipal Corporations, revised ed., Volume 2, Section 529, pages 273 and 274. "Pensions are not regarded in the nature of increased compensation to public servants, nor do they involve 'a gift' of the city's money, as prohibited by the Constitution. Pensions may be provided for by statutory enactments of the legislature, or the legislature may vest in the municipality authority to provide for and arrange the payment of pensions." See also Volume 6, Section 2582 of the same authority.
This is a taxpayer's suit for injunction against the commissioners of the municipal Water and Electric Light Commission of the City of Greenwood, acting under appointment under authority of Code 1942, Sections 3524-3531. The prayer of the bill is for injunction against putting into effect the disability and pension system for its employees as authorized by House Bill 27 of the Extraordinary Session of 1947. The provisions of this act will be set out in the margin by the reporter, The attack is upon its constitutionality, sections 87, 88, and 96 of the Constitution of 1890 being brought into view.
"Section 1. Be it enacted by the Legislature of the State of Mississippi:
"That the water and light commission of the city of Greenwood is authorized to establish a pension, disability, and annuity retirement system for the employees of the electric light system and water works, operated by the municipality.
"Section 2. The fund for such pension, disability, and annuity retirement system shall be created from any or all of the following sources:
"(a) From the proceeds of the assessment on the wages and salaries of the employees of any such electric light, water works, or gas public utility systems eligible to receive the benefits thereof.
"(b) From the interest on any permanent fund which may be created by gift, bequest, appropriations, assessment, or otherwise any such permanent fund may be invested in the same securities as other public funds of a municipality are permitted to be invested.
"(c) From monies derived from the operation of such electric light and water works available and appropriated therefor by the governing authority of the municipal public utility systems. Such monies so expended shall constitute an operating expense of such utility.
"Section 3. The water and light commission of the said city of Greenwood may formulate and establish such pension, disability, and annuity retirement system, and may make and establish such rules and regulations for the operation thereof as may be deemed necessary or appropriate, including the right to define how employees shall become eligible, what length of service must be necessary before retirement, and what assessment shall be made against the wage or salary of such employee.
"Section 4. The water and light commission of the city of Greenwood shall have the right and power to contract with any legal reserve insurance company authorized to conduct its business in the state of Mississippi, for the payment by such insurance company authorized to conduct its business in the state of Mississippi, for the payment by such insurance company of the pensions, disabilities, and annuities provided in any such pension, disability, and annuity retirement system as may pay the premiums accruing under such contract out of the funds provided for in section 2 hereof.
"Section 5. That this act take effect and be in force from and after its passage.
"Approved March 15, 1947."
(Hn 1a) Section 87 is as follows: "No special or local law shall be enacted for the benefit of individuals or corporations, in cases which are or can be provided for by general law, or where the relief sought can be given by any court of this state; nor shall the operation of any general law be suspended by the legislature for the benefit of any individual or private corporation or association, and in all cases where a general law can be made applicable, and would be advantageous, no special law shall be enacted." This section applies only to private corporations. Feemster v. City of Tupelo, 121 Miss. 733, 83 So. 804; City of Greenwood v. Telfair, Miss., 42 So.2d 120, not yet reported in State reports. The municipality is for all purposes the defendant here.
(Hn 1b) Section 88 is to the following effect: "The legislature shall pass general laws, under which local and private interests shall be provided for and protected, and under which cities and towns may be chartered and their charters amended, and under which corporations may be created, organized, and their acts of incorporation altered; and all such laws shall be subject to repeal or amendment." The City of Greenwood operates under a commission form of government, pursuant to the Code chapter. As to whether Section 88 was violated by a local law which amended such City's "Charter", was presented to us in the Feemster case and this Court approved a special act authorizing the Town of Tupelo to issue bonds for a purpose not accorded to other similar municipalities. It was held that Section 88 was not thereby violated. Support was found in Yazoo City v. Lightcap, 82 Miss. 148, 33 So. 949, and Sick v. City of Bay St. Louis, 113 Miss. 175, 74 So. 272. That the two cases involved cities operating under special charter is a distinction without controlling difference.
(Hn 2) In Mayor and Aldermen of City of Vicksburg v. Crichlow, 196 Miss. 259, 16 So.2d 749, we held that retirement benefits provided for under the Firemen's and Policemen's Pension Act, Laws 1940, Chapter 287, were not "extra compensation" in defiance of Constitution 1890, Section 96. The record before us does not reveal the conditions applicable to the "system" to be established by appellees. The injunction prayed for here seeks to forbid the setting up of any system.
(Hn 3) It is in point to notice the source of the funds by which the system will be made operable. These are indicated in the quoted Act, none of which involves a diversion or application of tax funds.
We do not find that the burden of showing unconstitutionality has been met nor that it was outside the competence of the Legislature to authorize the appellants to establish a proper system applicable to the employees of the Electric Light Water Works of the City of Greenwood.
Affirmed.