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Beumler v. Stillman

Supreme Court of Arizona

April 30, 1953

BEUMLER et al.
v.
STILLMAN et al.

[75 Ariz. 351] John M. Williams, of Douglas, for appellants.

Page 726

Anthony T. Deddens, of Phoenix, for appellees.

PHELPS, Justice.

This is an appeal from a judgment of the superior court of Cochise County in a certain proceeding wherein the court declared null and void certain acts of the appellant board.

The facts are that Herman C. Hartman, Henry A. Kelly and John B. Stillman were paid members of the Douglas Fire Department and became eligible for retirement under the provisions of chapter 16, article 19, A.C.A.1939, as amended by chapter 26, Session Laws of 1941 and chapter 44, Session Laws of 1947.

In 1947 the board of trustees of the firemen's relief and pension fund of the city of Douglas created under the provisions of the above act voted unanimously [75 Ariz. 352] to retire Herman C. Hartman and H. A. Kelly, and in 1948 retired John B. Stillman. Under the provisions of the act creating said fund the above-named firemen became entitled to pension benefits equal to one-half of their average wages for the 12 months immediately preceding their retirement. The board of trustees thereupon fixed their pensions in said amounts. Thereafter in April 1949 H. A. Kelly died and at a regular meeting of the board of trustees is accordance with the provisions of said retirement act it unanimously voted a monthly benefit to his widow, Mrs. H. A. Kelly, in the sum of $95.54, the same being equal to two-thirds of the pension theretofore received by H. A. Kelly during his lifetime.

Said beneficiaries continued to receive their pensions in the amounts fixed by the board in accordance with the provisions of the statute until June 1951 when the board in regular meeting assembled, voted to reduce such benefits to 50% of the amount fixed by statute; voted to transfer $1500 of the amount received from the 2% tax on fire insurance premiums in that area to the permanent reserve fund; and to transfer government bonds of the value of $28,000 to said permanent reserve fund. Under the provisions of the law, money derived from fire insurance premiums must be applied to the payment of pensions if required for that purpose. The board at that meeting also authorized the payment of a note and interest in the sum of $456.90 due the bank for money borrowed to refund payroll deductions to a former active paid member of the Douglas fire department who had been separated from the service. The resolution adopted provided that said note should be paid out of the pension fund instead of the permanent reserve fund as required under the law.

Thereafter on July 3, 1951, the said Herman C. Hartman, Mrs. H. A. Kelly and John D. Stillman, appellees herein, petitioned the superior court of Cochise County for a writ of certiorari directed to said board of trustees alleging that such board had exceeded its jurisdiction in all the business matters transacted by it on June 4 as above enumerated and prayed that all records relating thereto be transmitted to the superior court for review.

The writ of certiorari duly issued thereon and return made in accordance with its mandate. After a hearing and an examination of the record certified to it by the board, the court entered its judgment thereon finding, adjudging and decreeing that the board had exceeded its jurisdiction in all the matters above enumerated, and said actions were each and all null and void.

Appellants have presented three assignments of error for our consideration, contending that the court erred in declaring (1) that the transfer of the $1500 from the pension fund to the permanent reserve fund by the board was null and void; (2) that the transfer of the United States government bonds in the sum of $28,000 to the [75 Ariz. 353] permanent reserve fund was null and void; and, (3) that the reduction of pensions to appellees by 50% was null and void.

Counsel have devoted much time and space to a discussion of whether a pension is a mere gratuity and subject to repeal by the legislature at any time without obligation to beneficiaries, contingent or otherwise, or whether it is based upon contract and if so, at what time does the beneficiary acquire a vested right and what is the character of the right vested. Does it vest

Page 727

immediately or at the time of retirement and does the vestiture entitle the beneficiary to payment of the amount fixed for the remainder of his life, or does it only arise when an installment becomes due and limited to such installment?

None of these issues are presented in this case. The sole question here is: Did the board of trustees created under the provisions of chapter 16, article 19, as amended, supra, have authority to do the things above enumerated, on June 4, 1951? The answer to this question must be found in the language of the statute itself.

The board of trustees is a creature of the legislature and has only such powers as have been expressly or by necessary implication delegated to it. Let us examine the statute, therefore, to ascertain what powers it has.

Section 16-1901, A.C.A.1939, creates the board and provides that:

'* * * The board of trustees shall provide for the disbursement of the fund and designate the beneficiaries thereof as in this ...


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