School Dist. No. 1 v. Teachers' Retirement Fund , 163 Or. 103 ( 1939 )

I concur in the conclusion reached by Mr. Justice BEAN, but do not believe that the issue before us is affected by the public policy of this state. The issue is settled, I think, by the provisions of the statute (§§ 35-2701 to 35-2710, Oregon Code 1930) which we are considering. That statute, after providing that retirement fund associations may be created, provides that they "shall have full power and authority to receive, collect, invest, loan and disburse funds in accordance with the plan so adopted." But, there is nothing before us which indicates that the waivers exacted by the school board are any part of the plan which has been adopted. To the contrary, § 35-2706 plainly says that after a retirement fund association has been incorporated "all teachers accepting employment in said district," with the exception of a few with whom we are not now concerned, automatically become members of the association and become "subject to the provisions and requirements contained in said plan of the association * * *." Next, the section just cited provides that all of the teachers aforesaid shall be "entitled to the benefits thereof"; that is, to the benefits of membership in the association. Thus, payments must be made to all teachers employed by the district except to the few aforementioned who are not concerned with this proceeding. The act certainly mentions no formula or test whereby some teachers are to be picked out for membership in the association and others are to be rejected, although permitted to become teachers. Membership in the association is not voluntary — it is compulsory. If a teacher can be disqualified by reason of ill health, even though the legislature by the passage of this act made her a member of the association, then conceivably the school board, or the officials of the association, can prescribe other disqualifying tests. Thereby, they could repeal parts of the act.

We have been cited to no law which grants to the school board power to discriminate among the teachers, rendering some eligible for membership in the association and others not. To the contrary, the statute expressly renders all of them, whether their health be good or bad, members of the association by saying that "all teachers accepting employment in said district" shall be members of the association and shall be entitled to receive the beneficial payments. A board has the power to select teachers, but, having made the selection, the statute makes the teacher a member of the association whether the teacher desires membership or not. The teacher becomes a member, not through choice but through the operation of the statute. Membership is not a matter of volition — it is the result of legislation.

A retirement fund association is created, so § 35-2702 says, under the provisions of our law which authorize the formation of religious, charitable and educational corporations. That law and the act before us measure the power which the association possesses. The exercise of a power which the corporation does not possess is an ultra vires act. Therefore, to exclude from membership a teacher employed by the district, and to refuse to remit to her or him the beneficial payments, although the act defining the course to be pursued by the association recognizes such teacher as a member of it and as entitled to receive the benefits, is an ultra vires act. It is our duty to say so.

It is true, as the plaintiff argues, that retirement fund associations may be created or not as the teachers to be affected choose. The act is permissive — not mandatory. But, when an association is formed, it is bound by the terms of the act — as much so as is a community bound by a local option law after having voted to exclude liquor.

I concur in Mr. Justice BEAN'S opinion and in his reasoning, so far as his views and those expressed above do not conflict. The public policy of the state, in my opinion, does not affect the issue.

I realize that the Portland School Board in taking its course was prompted by good faith, and hence my use of the word "discrimination" was intended only for legal, and not for critical purposes.

BELT, J., concurs.