Bonner v. District Court , 122 Mont. 464 ( 1949 )

I agree with many of the elementary principles of law announced in the majority opinion but deny that they furnish any assistance in determining the question before us. I do not take issue with what is said in the majority opinion regarding the learning and achievements of Governor Ayers and Governor Bonner. I merely assert that the question before us is not in any manner affected by the experience, qualifications or ability of either. The so-called Hitler Bill (Ch. 5, Laws of 1937) referred to in the majority opinion has nothing to do with the issue before us. It is limited to the appointment and removal of assistants, deputies, agents, attorneys, administrators, engineers, experts, clerks, accountants, stenographers and executive attaches. It has nothing to do with either the appointment or removal of public officers.

The single question presented by this proceeding is whether Barclay Craighead or Carroll Stewart is the chairman of the unemployment Compensation Commission. Craighead was appointed by Governor Roy E. Ayers in 1937 and has acted in that capacity ever since.

On March 31, 1949, Governor John W. Bonner, assuming that Craighead held at the will of the governor, appointed Stewart to the position effective April 1, 1949.

Chapter 137, Laws of Montana 1937, established the unemployment compensation commission. The legislature provided that the commission should cooperate with federal officials and agencies in carrying out the national employment system and expressly accepted the provisions of the Act of Congress and promised to observe and comply with the requirements thereof. Sec. 12(a).

In fact, Chapter 137 did not become effective unless approved by the federal social security board. Sec. 23. The Act of Congress provided in substance that federal funds would not be forthcoming to any states unless the state law for administration included provisions for the establishment and maintenance of personnel standards on a merit basis. Title 42 U.S.C.A., sec. 503. Acting pursuant to the requirements of the federal government the legislature by Chapter 137 provided for the creation of a commission and that it "shall consist of three members who shall be appointed by the governor on a non-partisan merit basis." Two members were to serve on a per diem basis and serve for six year terms. The third member was designated as chairman of the commission and the "executive director." As above noted all were to be appointed on a non-partisan merit basis.

The phrase "non-partisan merit basis" has acquired a distinct and well known meaning. Once an appointment is made under it, removal can be accomplished only for cause and not upon personal considerations. Taylor v. McSwain, 54 Ariz. 295,95 P.2d 415; In Donaldson v. Sisk, 57 Ariz. 318, 113 P.2d 860, 865, where the director of the unemployment compensation commission was involved, the Supreme Court of Arizona, quoting with approval from the case of Welch v. State Board of Social Security and Welfare, 53 Ariz. 167, 87 P.2d 109, said: "No employee could be appointed who did not comply with the regulations for competitive examinations set up by the board, and we think it was equally intended that no one should be removed except in pursuance of a fair and impartial system of separation from service. Such a system, in our opinion, must necessarily include (a) specific reasons for removal, and (b) a reasonable hearing before some designated and proper authority as to whether the party whose removal was sought fell within the reasons for removal set forth in the regulations established by the board."

After this decision contempt proceedings were instituted for not complying with the court's mandate. Those proceedings resulted in the decision reported in 57 Ariz. 483,114 P.2d 907, which the majority opinion states "sheds light upon the rules and principles of law here applicable."

After the decision in 113 P.2d 860, was rendered, and in March, 1941, the legislature passed an Act changing the system in Arizona and it was because of this later Act that caused the defendants to refuse to comply with the order in113 P.2d 860. The court in 114 P.2d 907, 909, said: "The merit system established under the Act of 1936 [in effect when the decision was rendered in 113 P.2d 860] is of no force and effect under the Act of 1941 except in so far as it may be adopted and approved by the Employment Security Commission provided by the later Act."

We have no later Act than Chapter 137 and it expressly provides that the commissioners shall be appointed on a non-partisan merit basis. The case of Donaldson v. Sisk, 57 Ariz. 483,114 P.2d 907, has not changed the rule announced in 113

487 P.2d 860, where the merit system is provided for by statute.

The Arizona Supreme Court also pointed out that the federal officials notified the state officials that further federal aid in the administration of the law would be withheld if the state officials insisted upon enforcing the 1941 law which did away with the merit system.

Our legislature in order to insure that at least some of the Montana taxpayers' money should not be transported to the Potomac and points eastward on a one-way ticket readily agreed to the merit system in the selection of personnel.

The Supreme Court of Oklahoma in speaking of the merit system in Burge v. Oklahoma Employment Security Commission, 200 Okla. Supp. 429, 195 P.2d 285, 289, had this to say: "We think the purpose and effect of the merit system is to take from the appointing power the right of arbitrary removal."

As said in King v. Cole, Ohio App., 62 N.E.2d 650, 652, "The entire purpose of the Civil Service Law is to create a merit system for the determination of the fitness and efficiency of those within the classified service and to prevent discharge therefrom without just grounds."

In Turrill v. Erskine, 134 Conn. 16, 54 A.2d 494, 496, the court said: "The state, in adopting the merit system law, in effect voluntarily established conditions governing, among other things, the suspension or discharge of its employees, with the purpose of protecting them against unjustified suspension or dismissal. * * * The merit system statute in effect writes into the contract of each employee the conditions which it embodies."

Other cases assuming that under the merit system there can be no removal at the mere will of the appointing power are: Ahlgren v. Cromwell, 179 Md. 243, 17 A.2d 134; State ex rel. Levy v. Pallotti, 133 Conn. 334, 51 A.2d 136; Gipner v. State Civil Service Commission of California, 13 Cal. App. 2d 100, 56 P.2d 535; Stephenson v. Unemployment Reserves Commission of California, 34 Cal. App. 2d 19, 92 P.2d 931; State ex rel. Neffner v. Hummel, 142 Ohio St. 324, 51 N.E.2d 900. The case of State ex rel. Hathaway v. Williams, 149 Fla. 48, 5 So. 2d 269, 271, involved facts very similar to those here. It involved the director of the Florida State Employment Service. His appointment was authorized by section 11 of the Florida Act, Laws 1937, c. 18402, F.S.A. sec. 443.11, to be made by the Governor. That section also specifically provided that he "shall hold office at the will of the Governor." After referring to section 12, subdivision D of the Florida Act, Laws 1937, c. 18402, F.S.A. sec. 443.12, which is identical with parts of subdivision (d) of section 11 of our Act, the court pointed out: "The record discloses that prior to December, 1938, there had been friction between the Florida Industrial Commission and the United States Employment Service with reference to the administration of the unemployment compensation laws. The differences were reconciled and it was agreed that on acceptance of the Wagner-Peyser Act, a Director of the Florida State Employment Service would be appointed under the merit system pursuant to Section 12, subd. D, as quoted."

The court then noted that sections 11 and 12, subd. D were in apparent conflict but concluded that removal at the will of the Governor was permissible only during the probationary period of six months and that thereafter the tenure was permanent and the incumbent then subject to removal only for cause. The court said: "If the Florida State Employment Service unconnected with the Wagner-Peyser Act [29 U.S.C.A., sec. 49 et seq.], was all that was involved, the question would be simple and might be answered by holding that the appointment and tenure were subject to the will of the Governor. But we are confronted instead with a pact on the part of the Federal Government under the Wagner-Peyser Act and the State Government under the Florida Unemployment Compensation Law. * * * Both sovereignties are committed to the merit system as a means of naming personnel to the Workmen's Compensation Division other than the exceptions enumerated.

"We have heretofore pointed out the circumstances under which the United States Employment Service exacted and the Florida Industrial Commission agreed that the Director of the Florida State Employment Service would be appointed under the merit system. The governor at that time was party to this agreement, had knowledge of the provisions of Sections Eleven and Twelve as here quoted but acted pursuant to the latter and named petitioner because he secured the highest mark in the examinations held under the merit system. When this was done and petitioner completed his probationary period as provided under the merit system, we think his tenure became permanent, subject to removal for cause."

Under the foregoing authorities persons appointed on a non-partisan merit basis may not be discharged except for cause. The legislature made it plain that it understood what was meant by the merit system and accordingly undertook to prescribe the causes which would be ground for removal. It provided in paragraph (a) of section 10 that: "The governor may at any time, after notice and hearing, remove any commissioner for inefficiency, neglect of duty, malfeasance, misfeasance, or nonfeasance in office."

It cannot be said that this provision for removal for cause applies only to the two commissioners appointed for fixed terms. It says the governor may remove any commissioner for the stated causes.

Where removal is for cause there must be notice and hearing. State ex rel. Nagle v. Sullivan, 98 Mont. 425, 426,40 P.2d 995, 99 A.L.R. 321; State ex rel. Holt v. District Court,103 Mont. 438, 63 P.2d 1026; State ex rel. Ryan v. Norby,118 Mont. 283, 165 P.2d 302.

Section 422, R.C.M. 1935, which provides that, "Every office of which the duration is not fixed by law is held at the pleasure of the appointing power," can have no application to one appointed under the merit system. Under such an appointment there is written into the contract of employment the condition that the employment is to continue until removal is made for cause or until the employee voluntarily chooses to give up the employment. An appointment under the merit system is not one without a fixed term. The purpose of the merit system was to give permanency to the tenure.

One who is appointed to hold office during good behavior or until removed for cause such as under the merit system holds for a definite and fixed number of years, People ex rel. Akin v. Loeffler, 175 Ill. 585, 51 N.E. 785; Roth v. State ex rel. Kurtz,158 Ind. 242, 63 N.E. 460; Board of Street Com'rs v. Williams,96 Md. 232, 53 A. 923, and hence section 422 can have no application to such a situation and the conclusion cannot be drawn that he can be removed at the pleasure of the appointing power.

The merit system places appointees in much the same situation as federal judges. So long as the position is retained the incumbent holds until removed for cause. It establishes a tenure for those appointed under the system. That is the reason why Congress insisted upon the merit system being used in selecting the personnel.

The definition of "merit system" adopted by the majority opinion leaves no basis for holding that any of the employees of the unemployment compensation commission have any tenure or security in their respective positions. I think they have a permanent tenure status by reason of the fact that they are appointed under the merit system. The law requires the commissioners to be appointed under that system and if it gives a permanent tenure to employees it must also do so as to the commissioners, excepting of course the two who are appointed for fixed terms of six years.

Nor is it of any importance that the rules governing the merit system purport to exempt the executive officer of the state agency from the effect of those rules. The rules cannot supplant the Act of the legislature which specifically states that the commissioners shall be appointed on a non-partisan merit basis. Those rules are for the guidance of the agencies making appointments of employees and by their very terms are not made to fit appointments made by the governor. As to appointments made by the governor on a merit basis he can adopt such reasonable method as he sees fit in determining the fitness of applicants. Once he makes an appointment, removal can be accomplished only for cause.

The presumption is that Governor Ayers, when he appointed Mr. Craighead, did his official duty (Subd. 15, sec. 10606), and that the law was obeyed (Subd. 33 id.), and that he satisfied himself of the qualifications of Mr. Craighead, and the same presumptions attach to the action of Governor Bonner in the recent appointment of Mr. Smith as one of the per diem members of the commission.

I think the Hon. George W. Padbury, Jr., was right in holding that Mr. Craighead is the incumbent of the position of chairman of the unemployment compensation commission until and unless removed for cause.