Campbell v. Judges' Retirement Board

Souris, J.

(dissenting). I dissent. While I agree with Mr. Justice Dethmers that the Michigan judges’ retirement plan is voluntary, in the sense that it is based upon a contractual undertaking by the State and the member judge, I do not agree with his construction of that contractual relationship; nor do I agree that this is a proper case for the exercise by this Court of its jurisdiction in mandamus.

I.

All 13 of the plaintiff judges¹ joined the Michigan judges’ retirement system voluntarily upon its creation in 1951. Each executed with the retirement board the agreement of membership in the system' required by section 11 of the judges’ retirement act.² One such agreement is set forth in the margin.³ . At the time each of the plaintiffs entered into his agreement with the retirement board, section 14 of the aet provided that, upon qualification therefor, such member judge would receive a retirement annuity of $4,500.

Upon Judge Miller’s retirement in 1953, the defendant board commenced paying him a $4,500 annuity. In 1956, however, before any of the other plaintiffs had retired, section 14 of the judges’ retirement act was amended by PA 1956, No 224 (CLS 1956, § 38.814 [Stat Ann 1959 Cum Supp § 27.125 (14)]), to provide annuities in an amount equal to one-half the annual salary paid by the State to circuit judges, then $12,500, and this amendment was made applicable, by express legislative language, to those members of the system, like Judge Miller, who already had retired. Thereafter, the defendant board increased Judge Miller’s annuity from $4,500 to $6,250 and, upon the subsequent retirement of each of the other plaintiffs, from the end of 1956 to 1960, commenced to pay each of them $6,250 annuities.

After each of the plaintiffs had retired, the legislature again amended section 14, by PA 1961, No 169 (CLS 1961, § 38.814 [Stat Ann 1962 Rev § 27.125 (14)]), to provide that retirement annuities be in the amount of one-half the salary paid by the State to the member judge at the time of his retirement. Since the State portion of the salary paid to each of the plaintiffs except Judge Miller at the time each retired was $12,500 annually,⁴ the defendant board did not change the annuities paid those plaintiffs, nor did it reduce Judge Miller’s annuity to an amount equal to one-half the annual State salary, $9,000, paid him at the time of his retirement.⁵

Two years later, by CL 1948, § 600.555, as amended by PA 1963, No 172 (Stat Ann 1965 Cum Supp § 27A.555), the legislature increased the annual salary paid by the State to circuit judges from $12,-500 to $15,000. Shortly before the September 6,1963 effective date of Act No 172, plaintiffs made demand upon the defendant board to increase their pensions from $6,250 to $7,500 as of the effective date of Act No 172 on the theory that, as to all plaintiffs except Judge Miller, their pension rights vested as of the time of retirement, at which time section 14 of the act, as amended by PA 1956, No 224, provided annuities equal to one-half the annual salary paid by the State to circuit judges, and as to Judge Miller, it was plaintiffs’ argument that the 1956 amendment was expressly made applicable to those members of the judges’ retirement system who previously had retired and that it should therefore continue to be applicable to Judge Miller notwithstanding its subsequent amendment by PA 1961, No 169. Upon advice of the attorney general, the judges’ retirement board, by motion adopted at a board meeting held in September of 1964, rejected the plaintiffs’ demand.

•Within a few weeks after the defendant board’s rejection of their demand, plaintiffs instituted this original proceeding by complaint for issuance of our writ of mandamus to compel the defendant board to increase their pensions in accordance with their demand. The writ of mandamus against the judges’ retirement board which they seek from this Court has been superseded by the writ of superintending control. See GrCB 1963, 711.3.

The issue as it has been joined in this proceeding presents no factual dispute, but only questions of law. In its essential nature, the plaintiffs’ complaint seeks to review the decision of the defendant judges’ retirement board very much in the manner judicial and quasi-judicial decisions of inferior tribunals historically have been reviewed in this State for errors of law by writ of certiorari. Because I do not believe plaintiffs are entitled to’ issuance of our writ of superintending control in the nature of mandamus, for reasons which I shall set forth later in this opinion, but because of tbe importance of prompt and final determination of the issues these retired judges seek to have resolved for themselves and for their surviving kin, I would consider their complaint and our subsequently issued order to show cause based thereon as a granted petition for review in the nature of certiorari of the defendant board’s action taken in September of 1964.

It would be most unfortunate, in my judgment, were this Court today to proceed to judgment herein as in mandamus, our recent divisions considered in that other recent and memorable mandamus case, Superx Drugs Corporation v. State Board of Pharmacy (1963), 372 Mich 22, and, on rehearing (1965), 375 Mich 314. As I read Mr. Justice O’Hara’s com trolling opinion on rehearing, five of my Brothers on this Court reaffirmed our policy that the writ of mandamus shall not issue if there be another adequate remedy available to the party seeking the writ. See, also, GCR 1963, 711.2. Justice .O’Hara expressed that policy of this Court, with specific respect to the availability of relief in the nature of mandamus, this way in his opinion just one year ago on the rehearing in Superx (p 320):

“The policy of this Court is to adhere in all but extremely rare instances to the method of review of the decisions of administrative agencies which is provided by specific statutes and covered generally by the administrative procedure act.”

That other remedies were and are available to the plaintiffs hardly can be questioned. Indeed, plaintiffs did not even pursue the administrative remedy of a hearing before the board, which remedy was available to them in accordance with the rules of procedure adopted by the board (see 1962 AACS, §§ R 38.801-R 38.808) and which administrative remedy otherwise is authorized by section 4 of the State’s administrative procedure act (CLS 1961, § 24.104 [Stat Ann 1961 Rev § 3.560 (21.4)]). Neither did the plaintiffs seek judicial review of the board’s action by petition in the circuit court as authorized also by the administrative procedure act (CLS 1961, § 24.108 [Stat Ann 1961 Rev § 3.560 (21.8)]).

The fact that other adequate remedies may be available to plaintiffs does not, however, preclude our discretionary consideration of this cause as on petition for writ of certiorari to review only questions of law. This I believe we should proceed to do in view of the importance to plaintiffs and, as well, to other members of the judges’ retirement system, of prompt and final decision on the legal issues raised in this proceeding.

II.

It should be noted that our decision in this case does not involve consideration of the effect of article 9, § 24⁶ of the Constitution of 1963. The rights sought to be enforced in this proceeding arose prior to the January 1,1964, effective date of the Constitution of 1963.

At the threshold of the substantive issues of law involved herein is the disagreement between the parties concerning the nature of the relationship between them. While plaintiffs assert that that relationship was a contractual one and that their contractual rights thereunder cannot be impaired by statutory changes made subsequent to their retirement without violation of article 1, § 10 of the United States Constitution,⁷ and article 2, § 9 of onr Constitution of 1908,⁸ defendant argues, relying upon Brown v. City of Highland Park (1948), 320 Mich 108; Thiesen v. Dearborn City Council (1948), 320 Mich 446; and Wyrzykowski v. Budds (1949), 324 Mich 731, that a retirement plan established by a public authority, at least before the effective date of article 9, § 24 of our Constitution of 1963, created no contractual rights and obligations whatever and that, consequently, the State was entitled to amend the judges’ retirement act at will.

We need not pause long over Brown, Thiesen, and Wyrzykowski, each of which concerned compulsory retirement systems established by municipalities for the benefit of city employees. The judges’ retirement system, on the other hand, is entirely voluntary in the sense that eligible judges have a choice between electing to become members of the system, and thereby obligating themselves to make voluntary contributions thereto of a portion of their salaries, or electing not to participate in the pension plan. The act itself, in section 11 thereof, provides for the execution of a written form of agreement of membership between an eligible judge electing to become a member of the system and the judges’ retirement board. See footnote 3, supra. Other provisions of the act make it clear that a contractual relationship is authorized to be created between the member judges and the board and, consequently, our holdings in Brown, Thiesen, and Wyrzykowski, supra, are not applicable to this case of Campbell. See Bardens v. Board of Trustees of Judges Retirement System of Illinois (1961), 22 Ill 2d 56 (174 NE2d 168).

What we have here, instead, is a contract between each of the plaintiffs and the defendant board, the terms of which must be determined by reference to the judges’ retirement act as it read at the time each became a member of the system. Section 11 of the act expressly provides that “by agreeing to become a member of the retirement system,-a judge voluntarily agrees to be bound by and consents to all provisions of this act”. Nowhere in the act did the legislature reserve to the State the power to amend the act in such fashion that such amendments would become binding upon those judges who theretofore had executed agreements of membership in the system. Nonetheless, the retirement board caused to be inserted in the agreement of membership executed by all of the plaintiffs the following paragraph :

“The undersigned further agrees that should any future change be made in said judges’ retirement act, the undersigned shall be deemed to have consented thereto, and to be bound thereby, unless the undersigned, within 30 days from the effective date of. said change or amendment, files written notice with the retirement board of his objections thereto.”

- Without considering the authority of the board to enter into a contract with such a provision, the plaintiffs argue that the quoted language permits a member judge to terminate'his membership in the retirement system and to recover his accumulated contributions by giving the 30-day written notice specified in the contract provision. I do not agree. First', even if we were to assume the board’s authority to make such an agreement, the quoted contractual provisión does not authorize termination of membership and recovery of contributions, nor does the act, except in the circumstances specified in sections 16 and 19 thereof, neither section being applicable herein; it purports only to authorize one of the contracting parties to give notice of his objections to a statutory change of the terms of his contract. At best, the quoted contractual provision, if it had been authorized by statute, properly could be interpreted only to mean that if a statutory amendment be made in the judges’ retirement act, the amendment would be binding upon the member judge unless, within 30 days from the amendment’s effective date, the judge filed with the retirement board written objections thereto, in which event that judge’s contractual rights and obligations would be determined by the act prior to its amendment. Thus, conceivably, there could be a substantial number of different retirement contracts between the board and judges who were members of the system, each tailored to the needs of the individual member judge as the judge himself determined those needs to be as the act might be amended from time to time.

But the second reason I disagree with the plaintiffs’ contention is that the quoted contractual provision is not authorized by the act from which must come all authority possessed by the retirement board to bind the State contractually. Absent any provision in the act itself authorizing the board to enter into a contract which would permit a member judge to pick and choose between subsequent statutory amendments, as I read the contractual provision, or to terminate membership in the system and withdraw his accumulated contributions therefrom if dissatisfied with subsequent statutory changes, as plaintiffs read the contractual provision, the contractual provision is a nullity whatever its intended meaning might have been.

As I read the act, a judge who becomes a member of the judges’ retirement system enters into a contract with the retirement board the terms of which are determinable by reference to the provisions of the judges’ retirement act as then in effect. Absent statutory authority so to do, the retirement board cannot agree with judges who become members of the system that the terms of their contracts may be changed from time to time by subsequent statutory amendments of the judges’ retirement act, nor can the legislature directly change the terms of their contracts by amending the statute without violating the contract clauses of our Federal and State Constitutions.

This does not mean, however, that the legislature cannot, by amendment of the judges’ retirement act, unilaterally and gratuitously grant to those judges already retired under the act retirement benefits not included in their contract with the board. This the legislature expressly did in PA 1956, No .224, the amendment which tied pension benefits to the State salary payable to judges in active service, by including in the amendment the following language:

“The retirement annuity herein required to be paid shall also be paid to those members already on retirement in a sum equal to that which they would receive if they retired after the effective date of this amendatory act.”

By such language the legislature, as an act of grace, extended the additional benefit provided by the amendment to those judges already in retirement, like Judge Miller, one of the plaintiffs. The amendment also was applicable, again as a matter of legislative grace, to those members of the retirement system, like the other plaintiffs, who subsequently retired but whose retirement contracts were executed before the 1956 amendment and, thus, did not include its provisions as a term of their contracts with defendant board. This benefit which the legislature granted to plaintiffs notwithstanding the board’s lesser contractual obligation to them, it could, and by PA 1961, No 169, it did, unilaterally rescind as to plaintiffs and judges who subsequently became members of the retirement system.

Thus as to plaintiffs herein, I would conclude that their contractual rights and obligations must be determined on the basis of the judges’ retirement act as it read when each of the plaintiffs became a member of the retirement system. The fact the defendant board paid to each plaintiff, during his retirement between 1956 and 1961, an annuity determined as required by PA 1956, No 224, established no contractual right in plaintiffs to a continuation thereof after legislative rescission of Act No 224 by PA 1961, No 169.

I would not assess costs, a question of statutory construction affecting a public interest being involved.

1 Although Judge Souter is named among the 13 plaintiffs in the original complaint, he died prior to its filing (Appendix A to plaintiffs’ brief).

2 PA 1951, No 198. See, currently, CLS 1961, § 38.801 et seq., as amended (Stat Ann 1962 Rev and Stat Ann 1965 Cum Supp § 27.125[1] et seq ).

3 “State of Michigan

Judges’ Retirement System

“Agreement to beeomc member of Michigan judges’ retirement system under BA 1951 No 198.

“In consideration of the provisions of PA 1951, No 198, and the payment of a retirement annuity of not less than $4,500 or its actuarial equivalent as provided for in said Aet No 198, the undersigned hereby agrees to become a member of the judges’ retirement system under said aet, and to be bound by all the terms thereof, and to comply with all the provisions thereof, whether specifically enumerated herein or not.

“The undersigned further expressly agrees that should he be adjudicated mentally incompetent that any guardian who may be duly appointed under any regular judicial proceedings shall have the power and authority for the purposes of the judges’ retirement aet to complete and execute any retirement application or any other forms required to effect the retirement of the undersigned as such member; in accordance with the provisions of said aet, and said guardian is hereby authorized to execute said application for me.

“The undersigned further agrees that should any future change be made in said judges’ retirement aet, the undersigned shall be'deemed to have consented thereto, and to be bound thereby, unless the undersigned, within 30 days from the effective date of said change or amendment, files written notice with the retirement board of his objections thereto.

“In witness whereof, I have signed this agreement in duplicate this 4th day of January, A. D. 1952. ’ '

“Signed: Howard L. Campbell

;Judicial Office: Circuit Judge,

28th .Circuit

“Witness:

Walter H. Edwards,

Clerk.

■ “It is hereby certified that by action of the retirement board for the judges’ retirement system, duly recorded at a meeting - of said board held at the eity of Lansing on the 11th day of January, A. D. 1952, the above judicial officer (fill in name and official title and court) Howard L. Campbell, circuit judge, 28th judicial circuit has: been determined and declared to be a member of the Michigan judges’ retirement system under PA 1951, No 198, and as sueh. member is entitled to the benefits thereunder upon compliance with' all the requirements and provisions contained in said aet, and the agreements expressly entered into by him by becoming a member.::

“Dated this lltli day of January, A. D. 1952.

“Judges’ Retirement Board By Donald ’O’Hara ’ '

• Executive Secretary”. ?

4 PA 1954, No 155 (CLS 1956, § 602.58 [Stat Ann 1959 Cum Supp § 27.195]).

5 PA 1949, No 103 (CLS 1952, §,§Q2.58 [Stat Ann 1949 Cum Supp § 27,195]).

6 “See. 24. Tie 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.

“Financial benefits arising on account of service rendered in each fiscal year shall be funded during that year and such funding shall not be used for financing unfunded accrued liabilities,”

7 “No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.”

8 “No bill of attainder," ex post facto law or law impairing the obligation of contracts shall be passed.” See currently. applicable Const 1963, art 1, § 10.