Lehman v. City of Toledo

This action is in this court on appeal from a judgment of the Court of Common Pleas dismissing the petition of Earl O. Lehman, the plaintiff. The plaintiff, who brings the action as a taxpayer, seeks to enjoin the payment of 10 per cent. of the wages or salaries withheld from employees in accordance with an ordinance and an agreement thereafter executed and acquiesced in by the employees of the city. On April 17, 1933, the council of the city of Toledo passed the following ordinance:

"Section 1: That all of the officers and employes of the City of Toledo, except those working three days or less per week, and exclusive of the elective officers be, and are hereby required to donate to the General Fund of the City Treasury, for the period commencing April 1st, 1933, and ending December 31st, 1933, ten (10%) per cent of their compensation for such period, with the understanding that if sufficient revenue is received later on, the compensation shall be restored to regular basis.

"Section 2. That the elective officers of the City of Toledo be, and are hereby requested to make donations to the General Fund of the City Treasury ten (10%) per cent of their compensation for the period above mentioned.

"Section 3. That the heads of the various offices and departments of the City of Toledo be, and are hereby directed to secure agreements from their employes to the effect that they will comply herewith and the Commissioner of Accounts is hereby authorized to make deductions in accordance with provisions of this ordinance.

"Section 4. That the donations above mentioned shall be made during the period from April 1st to December 31st, 1933, in eighteen installments."

Pursuant to the direction contained in Section 3 of the ordinance, the "heads of the various offices and departments" of the city secured agreements from the officers and employees of the city in form as follows:

"Donation Agreement. "In accordance with the provisions of Ordinance 9604, I, the undersigned employe of the City of Toledo, for a valuable consideration, do hereby donate to the City of Toledo, for payment into the General Fund, 10% of my compensation for services rendered during the period from April 1, 1933, to December 31, 1933, or until such time as the provisions of Ordinance 9604 shall be rescinded by the Council of the City of Toledo in case this should occur prior to December 31, 1933, and I hereby authorize the Commissioner of Accounts to deduct said 10% from each check issued to me for compensation for services rendered during such period."

Conformably to the foregoing quoted ordinance and "Donation Agreement," the deductions were made semi-monthly to and including the first half of December, 1933. For the months of April, May and June, employees and officers of the city were paid in cash, but because of the financial condition of the city were not thereafter so paid, and on September 25 an ordinance was passed by the city council authorizing the director of finance to issue certificates of indebtedness, "For the purpose of evidencing that the particular employe in whose favor the certificate is drawn has a valid and legal claim against the City of Toledo for salary due in the amount and for the period indicated on the face of the certificate, and shall be acceptable for any and all bills due the City of Toledo except taxes."

This ordinance also provides:

"In no case shall issuance of certificates of indebtedness be considered as discharging the city's liabilities to its employes for salaries due as evidenced by such certificates."

Pursuant to this authorization, certificates of indebtedness, commonly referred to as "scrip," were issued in form as follows:

"Non-interest bearing "Monthly payroll for No. MC 39803 ____________________ ____________ period ending date issued "City of Toledo, "Certificate of Indebtedness. "This certifies that _________________, $_______ has salary due from the City of Toledo for the period ending as above indicated in the amount of $__________

"Negotiable by endorsement only."

The certificates of indebtedness so issued were given to and accepted by the city employees. All of the amounts paid, after the passage of the ordinance of April 17, and the execution by the employees of the "Donation Agreement," whether paid in cash or evidenced by "scrip," represented only 90 per cent. of the amount of their wages or salaries. The "scrip" so issued and accepted for the period from July 1 to August 15 was subsequently redeemed by the city, but that covering the period from August 16 to November 30, inclusive, has not been so redeemed. For the December 1 to December 15 period, the employees were paid in "Marshall Scrip," so-called.

They were paid in full for the amounts due them from December 15 to the end of the year, the city council having passed an ordinance on December 11 purporting to repeal the ordinance of April 17 and to restore to all officers and employees of the city the theretofore deducted 10 per cent. of their wages and salaries. Sections 2 and 3 of this ordinance are as follows:

"Section 2. That any and all agreements executed by such officers or employes under the provisions of Section 2 of said ordinance 9604 be, and the same are hereby, declared to be null and void and of no effect.

"Section 3. That the claims of any and all officers and employes of the City of Toledo to the extent of the 10% reduction in salaries required of them under the provisions of ordinance 9604 be and the same are hereby allowed, * * *."

The evidence discloses that the budget covering the estimated cost of operating the various departments of the city for the year 1933 was based upon a prospective refund to the General Fund by the employees of the city of 10 per cent. of their salaries, and shows also that the finances of the city, because of non-payment of taxes and assessments, plus unusual and exceptional expenditures, were in a precarious and uncertain condition, which at the time of the trial of this action had not improved, but, on the contrary, had become increasingly worse.

It is admitted that the ordinance of April 17th could constitute no more than a request that the employees forego payment of 10 per cent. of their salaries for the reasons and purposes therein stated, and the employees, we think it fair to say, knew that the effect of the ordinance necessarily was so limited, and if they did not actually so understand, the law itself declares it to be so. In the absence of fraud or deceit, one may not avoid the legal consequences of his acts by asserting that he did not know that he would become bound thereby. It is a matter of common knowledge that other political subdivisions of the state, as well as of the city, have requested a deduction by employees of a percentage of their salaries, and that the employees thus affected have acceded to the request, and having done so, they are not now in position to claim the amount so donated. The city, by its ordinance, could not require the donation to it by employees of any part of their wages or salaries, but when all of them severally agree to a uniform deduction, and, thereafter, without protest, receive and accept their respective salaries on the basis of their agreement, as evidenced by cash and redeemed scrip to August 16th, and by negotiable certificates of indebtedness from that date to December 16th, they can not now in law complain of that which each must be held to have voluntarily done. In any event, the controversy before us is between a taxpayer and the city, and not between the employees and the city; and surely the city is not in a position to claim that the employees shall be paid more than they have agreed to receive, and which, by their conduct, they have all consented to and acquiesced in. And, although it is contended "that two thousand or more present and former city employees are the real parties in interest", it may also be suggested that the plaintiff in error represents the taxpayers of the city, many of whom by reason of present conditions are unable to meet their obligations and are at least in no better, if as good, position financially as the employees.

It is contended that because the acting finance director refused to pay the salaries of any of the employees unless all of them signed the donation agreement, the signing thereof by the employees was involuntary, and also that there was no consideration therefor. Sufficient it is to say that none of the employees could have been compelled to sign such an agreement, and that the city could not have compelled the signing thereof as a prerequisite to the payment of their salaries. Each signed the agreement with full knowledge of the facts and of the financial condition of the city, and that in determining its budget for the year the city was relying thereon, and that the then mayor of the city had suggested and advocated the plan adopted.

The court appreciates the hardships which the present situation imposes more or less upon everybody, not only upon public officers and employees, but upon many others perhaps less fortunate. Like the rain that falls upon the just as well as the unjust, the law does not change to satisfy individual desires, but aims to provide a rule that shall operate uniformly and consistently upon all alike.

This court therefore finds on the issues joined in favor of the plaintiff, and a decree may be entered accordingly.

Decree for plaintiff.

RICHARDS and WILLIAMS, JJ., concur.