Leonard v. City of Seattle

503 P.2d 741, 81 Wash. 2d 479, 1972 Wash. LEXIS 752

• Court: Washington Supreme Court
• Decided: November 15, 1972
• Docket: 42199
• Status: Published

Opinions

Hale, J.

Defendant is a retired Seattle police officer who challenges the loss of his pension, canceled because of his felony conviction. He joined the Seattle Police Department December 15, 1941, and, except for military service, served for 25 years until his retirement on March 1, 1967. During his tenure as a police officer, he made mandatory contributions to the retirement system totaling $4,820.25; he retired at a monthly pension of $493.50.

Following plaintiff’s conviction in federal court January 8, 1971—some 4 years after his retirement—of violating Int. Rev. Code of 1954, § 5861 (Supp. 1972), the felony of unlawful possession of an unregistered machine gun, the trustees of the police pension fund applied RCW 41.20.110, and discontinued payment of his pension on or about April 7, 1971. From a declaratory decree ordering reinstatement of the plaintiff’s pension and reimbursement of all unpaid back payments with interest at 8 percent, the city appeals.

The first question is whether the appeal should be dismissed for lack of jurisdiction in the trial court because the Attorney General had not been served with the summons and complaint pursuant to RCW 7.24.110, which reads:

When declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceeding. In any proceeding which involves the validity of a municipal ordinance or franchise, such municipality shall be made a party, and shall be entitled to be heard, and if the statute, ordinance or franchise is alleged to be unconstitutional, the attorney general shall also be served with a copy of the proceeding and be entitled to be heard.

Plaintiff brought this suit under the declaratory judgment provision of RCW 7.24, asking that the pension forfeiture provision, RCW 41.20.110, be declared unconstitutional. He did not serve the summons and complaint upon the Attorney General of the state, nor did the defendant city demand that such service be made. The city did not call the trial court’s attention to the lack of such service, nor move against the suit in any way in the trial court for the want of such service. The record is totally silent as to the subject of service upon the Attorney General; and the trial court determined the cause solely upon the issues. The issue of service of the summons and complaint upon the Attorney General was raised for the first time in the hearing of this appeal when the defendant city moved to dismiss the case or for a remand.

Although in a general sense it is correct to say that the provisions of the statute, RCW 7.24.110, are jurisdictional and mandatory, Parr v. Seattle, 197 Wash. 53, 84 P.2d 375 (1938), we are not confronted here with a situation in which on the face of the pleadings the court is without jurisdiction over either the parties or subject matter. All that the statute says with respect to service is that “the Attorney General shall also be served with a copy of the proceedings and be entitled to be heard.” The so-called lack of jurisdiction claimed because of failure to perform what in this case would amount to no more than a formal act, is the omission of an act which if performed would here have no substantive effect upon the decision. It is a failure to take a procedural step, but not a failure of such vital nature that it cannot be waived by the Attorney General.

The statutory provision that the Attorney General be served before proceeding with the trial did not impose upon the court a duty to examine sua sponte all jurisdictional aspects before entertaining the suit. That the statute requiring service can be waived by the Attorney General so as to continue the court’s jurisdiction is clearly implicit in our comment on the subject that “lack of jurisdiction to enter the declaratory judgment does not, however, affect the validity of the portion dismissing the complaint.” See Roehl v. PUD 1, 43 Wn.2d 214, 245, 261 P.2d 92 (1953) ; Manlove v. Johnson, 198 Wash. 280, 88 P.2d 397 (1939).

Here, the Attorney General actually, in open court, waived the requirement of service. When the appeal was called for hearing before this court, the Attorney General, through his duly qualified and acting assistant, Mr. Keith Dysart, stated categorically that the Attorney General’s office would not stand upon the statute, did not wish the cause to be remanded to the trial court for service of the summons and complaint upon the Attorney General and that he was satisfied that the statute in controversy had received and would receive a vigorous support by the defendant city’s corporation counsel.

Following are some of the statements made by Mr. Dysart to this court 'and counsel when the appeal was called for oral argument. After observing that the Attorney General’s office is served in declaratory relief actions in excess of 250 cases a year, Mr. Dysart said:

We appear only in those actions where we think there is an overriding state interest and where we believe that the statute is not going to receive an adequate and vigorous constitutional defense, something that is certainly not the case where the corporation counsel and Mr. Lane are involved.

He added that if plaintiff had to start the action over again, the appeal would come back to the court next year; and said, too, that the Attorney General’s office had been advised by plaintiff’s counsel and knew of the pendency of this action and went on to say:

We are here before you to tell you that if we had been served, we simply would have entered a notice of appearance and in effect tendered the defense to the corporation counsel’s office, because we have respect for their ability to defend ordinances and statutes on constitutional grounds . . .

Then, after stating that the Attorney General’s office sometimes finds out about actions of this sort in a rather informal way and advises counsel that they would like to be served, and referring to the instant case, Mr. Dysart said:

But as to this particular case we join in Mr. Lane’s [Assistant Corporation Counsel] position, the position that we would have advocated . . .We believe that the argument was adequately presented in his briefs and oral argument . . . This is the kind of situation where we don’t think the priorities warrant our attention. He’s there to defend the statute. We hate to have the case sent down and start all over again simply to tender the defense to Mr. Lane to bring it right back up to you again . . .

Our decisions on the subject of jurisdiction, that is, the power of a court to hear and decide a controversy, have never gone so far as to hold in a case of this kind, where all of the real parties in interest are before the court, that the superior court, at the outset, was without jurisdiction.

The record discloses this to be a suit for a declaratory judgment, and for affirmative relief brought by a proper party against a proper party defendant in a court having jurisdiction over both parties and subject matter, and constitutionally empowered to enter a determinative judgment and decree in the premises. All that is lacking for fulfilling jurisdiction is proof that notice of the pendency of the action had been given to the state Attorney General—a notice which that officer acknowledged in open court had been given him before argument of the appeal. This acknowledgment coupled as it was with a categorical declaration that had a summons and complaint been timely served, the action of the Attorney General in the case would not have differed from the position taken by that officer in open court, constituted, we think, an appearance. Statements made in the course of an appearance by the Attorney General that he believed the position taken by defendant city had been and would be vigorously supported at trial, and on appeal and that had the Attorney General received a summons and complaint he would have tendered the defense of the statute back to the defendant city. These declarations coupled with the statements that the Attorney General would not and did not intend to litigate the issue further, constitute in our opinion a formal waiver; of all objection to the jurisdiction and an affirmance by the Attorney General of the court’s jurisdiction insofar as it would have been affected by the service of a summons and complaint.

On the next issue, the trial court held unconstitutional, as amounting to a forfeiture of estate for conviction of a crime, RCW 41.20.110 which provides for cessation of pension rights upon conviction of a felony. The crime of which plaintiff was convicted was punishable by imprisonment for not more than 10 years and a fine of not to exceed $10,000 (Int. Rev. Code of 1954, § 5871 (Supp. 1972)), and thus, as noted, amounted to a federal felony defined as any crime punishable by death or imprisonment for a term exceeding 1 year. 18U.S.C. § 1 (1969).

Plaintiff’s retirement pension was discontinued under the terms of RCW 41.20.110, which provides:

Whenever any person who shall have received any benefit from said fund shall be convicted of any felony, or shall become an habitual drunkard, or shall fail to report himself for examination for duty as required herein, unless excused by the board, or shall disobey the requirements of said board then such board shall order and direct that such pension or allowance that may have been granted to such person shall immediately cease, and such person shall receive no further pension or allowance or benefit under this chapter, but in lieu thereof the said pension or allowance or benefit may, at the discretion of the board, be paid to those immediately dependent upon him, or to his legally appointed guardian.

In holding the above provision unconstitutional as applied to plaintiff’s circumstances, the court gave full effect to Const, art. 1, § 15, which states:

No conviction shall work corruption of blood, nor forfeiture of estate.

Cf. U.S. Const. art. 3, § 3, clause 2:

The congress shall have power to declare the punishment of treason, but no attainder of treason shall work corruption of blood, or forfeiture except during the life of the person attainted.

Both parties rely considerably on their contrasting views of the rationale of Bakenhus v. Seattle, 48 Wn.2d 695, 296 P.2d 536 (1956), probably our leading statement on the basic legal nature of public pensions. The city cites Bakenhus as declaring that the right to a pension, although vesting upon retirement is wholly contractual in nature, including all applicable statutes as component parts of the contract, and that plaintiff thus contracted that if convicted of a felony his pension should be discontinued. Accordingly, argues the city, the estate is no greater than the contractual rights which created it, and plaintiff’s pension vested conditionally only, to be canceled upon occurrence of the very condition upon which he had agreed it should be discontinued. It is thus argued that the duty of the city to discontinue the pension is an integral part of contract, and plaintiff’s felony conviction placed a contractual as well as a statutory obligation on the pension board to stop the pension payments. Accordingly, contends the city, even though the pensioner’s rights to his pension commence to vest as he performs his work and contributes into the pension fund, these rights, accruing and vesting as they do from day to day and year to year until finally ripening to a right to payment at the time of retirement, constitute but a limited estate, delimited by contractual rights according to the terms of a contract set forth by statute, charter and ordinance during the years of employment.

We accept the city’s contention to the extent that the retirement pension is contractual in nature; but that does not mean that once vested the right to the pension does not constitute a part of the recipient’s estate. That the retirement pension arises out of a contract of employment does not deprive it of the characteristics of property, but rather imparts to it that very characteristic by removing it from the status of a gratuity, mere expectancy, or simply a promise enforceable ultimately by no more than a judgment for damages.

As this court said in Bakenhus, at page 698:

In this state, a pension granted to a public employee is not a gratuity but is deferred compensation for services rendered. The contractual nature of the obligation to pay a pension when the employee has fulfilled all of the prescribed conditions was recognized in Luellen v. Aberdeen, 20 Wn. (2d) 594, 148 P. (2d) 849 (1944) . . .

Bakenhus thus held that, although the rights to a retirement pension were contractual in nature and supported by consideration in the form of work performed and contributions made by an employee in the public service, they accrued and vested from day to day and year to year to ripen finally with the fulfillment of the conditions of the contract. The employee ultimately acquires a vested right to the present payment of the pension, which right imposes upon the state or its subordinate agencies a corresponding duty to create and maintain the fund to pay the pension according to the terms of the contract. Even before ripening finally, and during the years of its accrual, it was more than an expectancy and more than an enforceable promise or a contract; it gave him steadily accruing rights in and to the pension fund itself. As fully ripened, plaintiff’s pension constituted property—the present right to payment of his deferred compensation. When his rights to the pension fully vested, he acquired enforceable rights to funds under the control of the trustees according to his contract, and these rights thus finally vested constituted property not to be divested or defeated by means or for other reasons or on different grounds than those upon which any other kind of property could be alienated or defeated.

The general rules delineating the nature of public pensions are seen in a series of cases passing directly upon the subject. In Bakenhus v. Seattle, supra, it was established that a pension provided by law for public employees and officers to which contributions have been made or for which services have been performed by the employee or officer is not a gratuity but is deferred compensation for services rendered and contributions made. As the employee or officer contributes into the fund and performs services, his rights to a pension vest, and he cannot be deprived of such vested rights by intervening legislation which inequitably operates to the detriment of such accrued rights. Eisenbacher v. Tacoma, 53 Wn.2d 280, 333 P.2d 642 (1958). Stated another way, a public employee or officer who performs services and contributes to a public pension plan or system contracts in accordance with the legislation in effect governing the plan or system, and the public cannot constitutionally modify the plan or system to the detriment of the employee if such modifications are inequitable. Letterman v. Tacoma, 53 Wn.2d 294, 333 P.2d 650 (1958).

Because the rights to a public pension accrue with the performance of the public work or service, they are to be determined as of the latest enactments applicable to the recipient in effect prior to actual retirement. This, of course, is not to hold that in periods of extreme economic emergency the state may not make equitable and temporary alterations in the pension in order to insure its continuance and the survival of the pension system, but that problem is not now before us. The issue here does not arise from a general change in pension benefits made necessary by a deep and general economic crisis threatening the survival of the whole pension system, but rather from a statute which provides for a total defeat of one man’s pension occurring long after it had finally vested. Dailey v. Seattle, 54 Wn.2d 733, 344 P.2d 718 (1959).

Pension rights, because of their nature as deferred compensation, vest under then applicable legislation upon the commencement of employment or service and continue to vest with each day of employment or service. Bowen v. Statewide City Employees Retirement Sys., 72 Wn.2d , 433 P.2d 150 (1967); Tembruell v. Seattle, 64 Wn.2d 503, 392 P.2d 453 (1964); DeRevere v. DeRevere, 5 Wn. App. 741, 491 P.2d 249 (1971). Vesting as they do from day to day and year to year, they constitute property and as property amount to an estate. Plaintiff’s property in the pension, therefore, seems to us to be much like his property interests in paid-up insurance, his bank accounts, his home and furniture, and his automobile. In short, his pension rights are an integral part of his estate.

The city relies, too, on the basic principle that a criminal acquires no property rights in the fruits of his crime, and would extend this principle to the plaintiff’s situation because, it is said, he agreed he would surrenderi his pension if he were convicted of a felony. One cannot deprive the true owner of his property through criminal acts; we adhere to the idea that one who murders his spouse to inherit from her acquires nothing thereby. In re Estate of Tyler, 140 Wash. 679, 250 P. 456 (1926). It follows, therefore, as a general rule in such cases that, since no property is lawfully acquired by the crime, there is nothing to be forfeited on conviction for it. See also In re Estate of Helwinkel, 199 Cal. App. 2d 283, 18 Cal. Rptr. 473 (1962), holding that a woman convicted of murdering her husband could not compel a family allowance from his estate. This court follows the overwhelming weight of authority in this country that a slayer cannot inherit from his victim, or otherwise benefit from the victim’s death through insurance, joint tenancy, or other interests in the victim’s property.

But these principles are inapplicable to the case before us. The property in issue, i.e., the vested right to a pension, was not the fruit of crime nor acquired in the pursuance of criminal activity as a policeman. Instead, the felony conviction occurred some 4 years after retirement; the criminal act of which plaintiff had been convicted contributed in no way to the enlargement or aggrandizement of his pension, nor was it proved to have been done in the course of his duty as a Seattle police officer during his 25 years of active duty. The crime had no connection with a police officer’s performance of his duties, nor his contribution into the pension fund either in money or services during his active tenure as a police officer.

Raising one other point, the city refers to RCW 41.20.100 which requires that all retired police officers shall report to the chief of police where so retired on the first Mondays of April, July, October and January of each year, and be available for emergency assignment as police officers to serve without compensation. Since a felony conviction presumably would bar a retired officer from such service, and render him legally incapable of performing that part of his contract, he has, it is urged, breached that part of the contract, and loses his pension because of such willful breach. This particular issue, we think, is not before us. The extent to which a retired policeman must remain available for emergency police duty and the measure of damages for a breach of such duty will have to await a decision when such a case arises.

Finally, we should not overlook the rationale of Tembruell v. Seattle, supra. There a police officer whose pension was discontinued for felony conviction had received a deferred sentence, and the case turned on the question of whether he had been convicted. Because the information was subsequently dismissed, the finding of guilty, we held, did not under the pension laws amount to a conviction; but in reaching that decision and as a part, we think, of the rationale of that case, this court touched upon the very point in issue now:

Thus the statute (RCW 41.20.110) providing for discontinuance of the pension when the recipient has been convicted of any felony must be considered in connection with the rule that the right to the pension is a vested right in the nature of a property; and interpreted so as to avoid working a forfeiture of estate for conviction of a crime.

Tembruell v. Seattle, 64 Wn.2d 503, 506, 392 P.2d 453 (1964).

We must, therefore, conclude that plaintiff’s rights to a pension vested completely on his retirement; that, although these rights had developed in a continuing process of vesting through a continuing contract of employment in the public service and were contractual in nature, they completely vested upon his retirement; that, having fully vested upon retirement, they constituted valuable property of his estate; and that to take this property away from him as a consequence of his conviction of a felony after fully vesting would unconstitutionally work a forfeiture of estate prohibited by Const, art. 1, § 15, for conviction of a crime. To the extent, therefore, that RCW 41.20.110 purports to deprive a retired police officer of his pension for conviction of a felony occurring after his retirement, it is unconstitutional and without effect.

Affirmed.

Hamilton, C.J., Finley, Rosellini, and Hunter, JJ., concur.