Opinion
Page __
__ Cal.2d __ 255 P.2d 409 TREU v. KIRKWOOD, State Controller et al. Sac. 6282. Supreme Court of California April 3, 1953Rehearing Granted May 1, 1953.
Prior opinion 240 P.2d 32.
Edmund G. Brown, Atty. Gen., Wilmer W. Morse and Marcus Vanderlaan, Deputies Atty. Gen., for appellants.
James H. Phillips, Sacramento, for respondent.
[255 P.2d 410] EDMONDS, Justice.
From 1947 to 1949, Florenz Treu was a non-civil service employee in the office of the lieutenant governor. By writ of mandate, the state controller and the treasurer have been ordered to approve and pay her claim 'for overtime worked * * * for which petitioner was not compensated and was not given compensating time off'. The appeal is from this judgment.
In her petition for a writ of mandate, Miss Treu alleged that, prior to the time the work was performed, the lieutenant governor had established normal office hours and promised her compensating time off for work beyond those hours. All overtime work was authorized by the lieutenant governor, she said, and she did not receive time off or any other compensation for such work, nor was any offered to or refused by her. According to the petitioner, a payroll claim for the cash equivalent of the accumulated overtime hours at the time of her separation was filed by the lieutenant governor and approved for payment by the State Personnel Board, but the controller refused to issue a warrant.
By their answer, the controller and treasurer denied that any amount was due for overtime. They alleged that Miss Treu was exempt from, and never held a position in, the state civil service. Her salary, they said, was fixed by the lieutenant governor with the approval of the department of finance at a monthly rate which was paid in full and no salary or compensation on any other basis or in any form other than cash was authorized by the department.
There is no dispute as to the facts. Miss Treu was appointed secretary to the lieutenant governor on March 1, 1947, in which capacity she served for one year. She then became executive secretary. Her employment was terminated by resignation on August 1, 1949. In both positions she was exempt from civil service. During her employment, her salary, fixed on a monthly basis with the approval of the department of finance, progressively increased from $275 to $436 per month.
When Miss Treu commenced her work for the lieutenant governor, he fixed office hours from 9:00 a. m. to 5:30 p. m. on week days and from 9:00 a. m. to noon on Saturdays. At the beginnnig of her employment, he told her, she testified, 'that there was a terrific amount of work in the office and he knew I was going to work a lot of overtime, and that I was going to be paid for the overtime that I worked'. She was informed 'that she would be paid for the overtime as it would be impossible for her to take any time off because of the increased amount of work.'
Thereafter, the lieutenant governor wrote to the department of finance requesting a salary increase for his staff upon the basis that two employees 'have taken over and are doing work that a staff of three people performed previous to my administration. Because of their willingness to assume this additional responsibility, I feel they should be compensated accordingly'. He suggested that the appropriation for his office was sufficient to increase their salaries and stated: 'I do not intend to further add to my staff as long as Mr. Mydland and Miss Treu continue doing the work that has required three people'. In response to this request, the director of finance approved a salary increase for Miss Treu. All of her salary was paid in full.
The department of finance at no time fixed or approved salary or compensation for Miss Treu on other than a monthly basis, or in amounts different than her agreed monthly salary, nor did it approve compensation in any form other than cash or fix normal working hours for her. An official record was maintained in the lieutenant governor's office showing hours which she worked in addition to normal office hours. All such work was authorized by the lieutenant governor, and she was at no time granted compensating time off for these hours.
Upon her separation from service, a claim for payment for overtime was approved by the State Personnel Board. While the claim was pending in the controller's office, a letter from the attorney general was forwarded to the controller by the director of finance. The attorney general's letter set forth seven facts upon [255 P.2d 411] which it said the validity of the claim would depend. Among these were that the lieutenant governor had established normal hours of work for Miss Treu and that he promised her compensating time off for extra hours worked. The covering letter from the director of finance stated that: 'The seven items * * * already have been substantiated, and there is available in our files the required letters and affidavits making the required substantiation.' Thereafter, the claim was rejected by the controller and this proceeding was commenced.
Upon this evidence, the trial court found the allegations of the petition to be true. Judgment was entered directing that a peremptory writ of mandate issue commanding the respondents to approve and pay her claim. The appeal is from that judgment.
In support of their appeal, the respondents contend that the finding that Miss Treu was promised compensating time off for overtime work is not supported by the evidence. In addition, they say, the judgment may not be sustained upon the theory of a contract to pay cash compensation for overtime work because no such contract was approved by the department of finance as required by statute. They argue that, in the absence of either a valid contract or a statutory provision, Miss Treu's monthly services during each month, regardless of services during each month, regardless of the number of hours worked. Other objections made by the respondents are that the trial court failed to find upon certain material issues and that other findings are not supported by the evidence. This court is requested to make findings of fact to conform to the proof. A final contention is that, even if Miss Treu is entitled to a cash payment for overtime work, it should be computed upon the basis of her salary at the time the work was performed, rather than her salary at the time of separation.
Miss Treu relies upon Howard v. Lampton, 87 Cal.App.2d 449, 197 P.2d 69, and Clark v. State Personnel Board, 56 Cal.App.2d 499, 133 P.2d 11, holding that a state employee is entitled, in the absence of statute, to payment upon separation from service for properly authorized overtime work. She also contends that a promise of compensating time off is not a prerequisite to payment for overtime. Even if it is, she says, the promise by the lieutenant governor to pay her for overtime work may be construed as a promise to give her compensating time off. In addition, she disputes each of the other contentions of the respondents.
In Martin v. Henderson (Redwine v. Henderson), Cal.Sup., 255 P.2d 416, the Howard and Clark decisions were disapproved insofar as they determine that a state employee, in the absence of specific statutory authority, is entitled to payment for accrued overtime upon separation from service. Therefore, the question here is whether there was contractual or statutory authority for payment to Miss Treu for overtime services.
The petition specifically alleges a promise by the lieutenant governor to give Miss Treu 'compensating time off for overtime hours worked in addition to her normal hours of work'. The court found that the promise was made. However, the proof, in the form of a letter from the lieutenant governor to the department of finance and Miss Treu's own testimony, shows conclusively that she was not promised time off. She was told that 'it would be impossible for her to take any time off because of the increased amount of work'. The promise made to her was 'that she would be paid for the overtime'.
The respondents contend that this amounted to a failure of proof within the meaning of section 471 of the Code of Civil Procedure, rather than a mere variance. They rely upon Gillin v. Hopkins, 28 Cal.App. 579, 580-582, 153 P. 724, which held that evidence of a contract to accept payment in stock constituted failure of proof of a cause of action upon an agreement to pay a designated sum of money. The situation is analogous to that here. Obviously, a promise to grant compensating time off is far different from a promise to pay cash for overtime work. However, '(n)o variance between the allegation in a [255 P.2d 412] pleading and the proof is to be deemed material, unless it has actually misled the adverse party to his prejudice in maintaining his action or defense upon the merits'. Code Civ.Proc. s 469.
(1) 'The code also provides that the court must, in every stage of an action (and that means on appeal, as well as in the trial of the cause), disregard any error, improper ruling, or drfect in the pleadings or proceedings, which, in the opinion of the court, does not affect the substantial rights of the parties. It must appear from the record that the error, improper ruling or defect was prejudicial and caused substantial injury before the judgment rendered may be reversed or be held to be affected by it; and it must further appear that a different result would have been probable if such error, ruling, or defect had not occurred or existed. Code Civ.Proc. s 475. Not only do these code sections require this court, under such circumstance, to determine from an examination of the entire record, whether or not there has been a miscarriage of justice before reversing a judgment, but the state Constitution is equally mandatory and imperative. Const. s 4 1/2 of art. 6. It therefore indubitably follows that it is not every variance that will necessitate the overthrow of a judgment.' Murnane v. Le Mesnager, 207 Cal. 485, 495, 279 P. 800, 804.
(2)(3) It is obvious from a review of the record in this case that the respondents were not misled to their prejudice. They anticipated proof of a contract for payment for overtime work and introduced evidence to show that no such contract had been approved. In addition, the pleading adequately apprised the respondents of the claim which they would be called upon to meet. It alleged that 'at the time of said separation from said State employment petitioner herein had accumulated and was entitled to be paid in cash by the State of California for overtime worked while an employee of the said Lieutenant Governor in the total sum of $3,076.53'. Construed liberally, as must be done, Code Civ.Proc. s 452, the petition demanded payment for overtime work for which compensation in some form had been promised. Under the circumstances, it cannot be said that the variance is so material as to require a reversal of the judgment. Hayes v. Richfield Oil Corp., 38 Cal.2d 375, 382, 240 P.2d 580.
Although there is no evidence to support the finding that Miss Treu was promised compensating time off for overtime work, the evidence would be sufficient to support a finding that she was promised compensation in cash for work beyond normal office hours. However, the respondents argue that the judgment cannot be sustained upon this theory because no such contract was approved by the department of finance as required by statute.
Miss Treu was appointed under the authority of section 12101 of the Government Code which provides: 'The Lieutenant Governor may appoint and, subject to the approval of the Director of Finance, fix the salaries of one secretary and such clerical assistants as the Lieutenant Governor deems necessary for his office.' It is not disputed that the only salary basis fixed by the lieutenant governor for Miss Treu which was approved by the director of finance was one for monthly compensation without mention of additional payment for overtime. She concedes that the department never approved payment of compensation for overtime, but argues that no such approval was required.
However, Miss Treu's position is directly contrary to the express provisions of section 18004 of the Government Code. At the time she commenced her employment, that section read: 'Uness the Legislature specifically provides that approval of the Department of Finance is not required, whenever any state agency * * * fix the salary or compensation of an employee * * * which salary is payable in whole or in part out of state funds, the salary is subject to the approval of the Department of Finance before it becomes effective and payable.' The office of lieutenant governor is included within the term 'State agency'. Govt.Code s 11000.
The words 'salary' and 'compensation' are, in general usage, interchangeable and are synonymous in most definitions. 'Compensation' is '(t)he remuneration or wages [255 P.2d 413] given to an employee or, especially, to an officer. Salary, pay, or emolument.' Black's Law Dictionary, 4th ed., p. 354. Likewise, 'salary is defined as 'a stated compensation, amounting to so much by the year, month, or other fixed period, to be paid to public officers and persons in some private employments, for the performance of official duties or the rendering of services of a particular kind'. Black's Law Dictionary, 4th ed., p. 1503. 'While the term 'salary' in its original and strict sense signifies a fixed compensation, it is frequently used in our constitution and laws as the equivalent of 'compensation. " Martin v. Santa Barbara, 105 Cal. 208, 212, 38 P. 687, 689.
(4)(5)(6) Reading section 18004 with reference to related statutory provisions, it becomes obvious that the words 'salary' and 'compensation' are there used as being synonymous. Section 13070 of the Government Code provides that the department of finance 'has general powers of supervision over all matters concerning the financial and business policies of the State'. The purpose of the latter section 'is to conserve the financial interests of the state, to prevent improvidence, and to control the expenditure of state money by any of the several departments of the state. Ireland v. Riley, 11 Cal.App.2d 70, 72, 52 P.2d 1021.' State of California v. Brotherhood of R. R. Trainmen, 37 Cal.2d 412, 422, 232 P.2d 857, 863. Therefore, a contract fixing matters relating to pay and working conditions which has not been approved by the department in accordance with section 18004 is invalid. State of California v. Brotherhood of R. R. Trainmen, supra.
Any doubt concerning the necessity for approval by the department of contracts for 'compensation' and 'salary' is dispelled by reference to section 13370 of the Government Code which, at the time Miss Treu was hired, provided: 'All contracts entered into by any state agency for * * * services * * * are of no effect unless and until approved by the Department of Finance.' Under this section, the contract to pay Miss Treu for her services beyond normal working hours, regardless of whether payment be considered 'compensation' or 'salary', or both, was invalid for lack of approval by the department.
Although Miss Treu pleaded and tried her case entirely upon a theory of contract, she now contends that no promise of time off was necessary to entitle her to recover. She concedes that section 18005 of the Government Code, authorizing payment upon separation for accumulated overtime, was inapplicable to employees exempt from civil service during the period in question. However, she refers to Government Code sections 18023 and 18024 and Rule 133 of the Personnel Board which provide for the adoption of rules governing hours of work and the granting of time off in lieu of cash compensation for overtime. But she does not claim nor does the record indicate, that she was within those statutory or regulatory provisions or that any statute entitled her to payment for overtime. Instead, she argues that no statutory authority is essential to permit her recovery. This point has been decided adversely to her position in Martin v. Henderson, supra.
(7) In the absence of either a valid contract or statute, there is no basis for a recovery by Miss Treu. Her monthly salary was payment in full for all of her services, without regard to the number of hours which she worked. Martin v. Henderson, supra; Jarvis v. Henderson, Cal.Supp., 255 P.2d 426; Robinson v. Dunn, 77 Cal. 473, 19 P. 878.
(8) This determination makes it unnecessary to consider the other questions raised by the parties. The request by the respondents for this court to make additional findings of fact is not appropriate under the circumstances. Normally, the appellate court will exercise its power to make findings, Code Civ.Proc. s 956a, only for the purpose of affirming the judgment and should not do so when the judgment must be reversed. Tupman v. Haberkern, 208 Cal. 256, 266, 269-270, 280 P. 970.
The judgment is reversed.
GIBSON, C. J., and SHENK, TRAYNOR and SPENCE, JJ., concur.
[255 P.2d 414] CARTER, Justice (dissenting).
I dissent.
In this case Florenz Treu was a non-civil service employee in the office of the Lieutenant Governor. The Lieutenant Governor had established regular working hours for the employees in his office. Miss Treu's position was that of secretary to the Lieutenant Governor and she served for a year. At the time she was employed by the Lieutenant Governor, he told her there was a 'terrific' amount of work in the office and she would have to work overtime for which she would be paid. She worked overtime and a record thereof was kept. She was never given time off in lieu of the overtime or paid therefor. Not only did the Lieutenant Governor agree to pay for the overtime worked but upon her separation from service she filed a claim therefor with the state personnel board which was approved. Moreover, high state officials were in accord. The attorney general advised that if the facts were as heretofore outlined, she was entitled to payment and the Department of Finance found that all of such facts were substantiated.
With all those circumstances the application of the doctrine of estoppel is completely compelling. See discussion and authorites in dissent in Martin v. Henderson (Redwine v. Henderson) supra. In face of these circumstances the majority holds that Miss Treu cannot recover because the Department of Finance never approved payment for overtime. It is clear that estoppel would obviate the requirement for such approval.
In addition there is statutory authority for payment of the overtime, contrary to the majority opinion, as pointed out in my dissent in Martin v. Henderson (Redwine v. Henderson) supra.
In addition to estoppel, a factor eliminating the necessity of the approval of the employee's claim by the Department of Finance, there are factors which negate the lack of approval as a defense. The Department of Finance gave tacit approval to the claim. After it was approved by the personnel board, it was sent to the controller, and while pending there, the Department of Finance wrote to the controller asking him to withhold approval until the claim could be audited. The department later wrote the controller and stated that all the facts needed to substantiate the claim as outlined in a letter from the attorney general had been substantiated and whether the claim should be paid was up to him (the controller). The thought was never suggested that the claim was defective for lack of approval by the department, and its conduct clearly evinced at least an implied approval. The department, in effect, said it approved the claim, that is, on the issue as to whether it was fair and just but passed the question as to whether there was statutory authority for it to the controller. Moreover, this conduct further fortifies the existence of an estoppel against the state.
It should be noted that the Lieutenant Governor is authorized by statute to fix the salary of members of his staff. Gov.Code, s 12101. The provision requiring the approval of the Department of Finance cannot embrace more than the rate of pay the amount thereof. Certainly, under its right to withhold approval, the department could not properly say we will not approve any compensation which exceeds $1 per month. Where the power to fix compensation of an officer is conferred upon a board or officer, the latter may not provide that there shall be no compensation or the office could be destroyed by fixing the amount at so low a figure that no one will discharge the duties. De Merritt v. Weldon, 154 Cal. 545, 98 P. 537, 671. Thus the approval of the department goes only to the rate or amount of compensation and it must approve a reasonable rate or amount. It does not appear that the rate or amount of compensation fixed for the overtime was unreasonable. On the contrary, the showing is otherwise because the rate for overtime was the same as the rate for regular time. Thus when the department approved the rate of pay for regular time it also approved the rate for overtime or at least there is no basis for complaint because it could not have approved less than a reasonable amount. It is not to be supposed that the staff of every officer in the state, where the officer is empowered to fix their compensation, is subject [255 P.2d 415] to the arbitrary whim or caprice of the department that it may destroy the functioning of all such officers by arbitrarily or capriciously withholding its approval of their staff's compensation. I cannot believe the Legislature had any such intent when it required approval by the department.
Finally I believe the District Court of Appeal, Third District, adequately answered this proposition in quoting from the memorandum opinion of the trial court: "Respondent further argues that even though petitioner was promised that she would be paid for the overtime; that, (A) She was paid by a salary increase of $50.00 a month, and (B) that if there was anything further than the increase in salary expected, there was no approval of the Department of Finance, and accordingly, this being additional 'compensation', would be ineffective without such approval.
"Section 18,004 of the Government Code provides in part: 'Unless the Legislature specifically provides that approval of the Department of Finance is not required whenever any state agency or court fixes the salary or compemsation of an employee or officer, which salary is payable in whole or in part out of state funds, the salary is subject to the approval of the Department of Finance before it becomes effective and payable.'
"It will be noted that respondent includes a lump sum compensation in lieu of compensating time off in this requirement. It is true that the statute states 'salary or compensation' but later each one of the clauses refers only to the word 'salary'. This court does not feel that that statute is subject to the broad interpretation which respondent puts upon it. We are of the opinion that the words 'salary or compensation' are used as interchangeable terms, but that a lump sum to be paid in lieu of compensating time off is not such 'compensation' as is meant there. It is admitted that in the ordinary case where an employee is promised compensating time off for overtime and fails to receive the full amount of this, that a lump sum payment may be given upon separation from the service without regard to any action by the Department of Finance. Section 12,101 of the Government Code refers specifically to the fixing of the salaries of one secretary and such clerical assistance as the Lieutenant Governor deems necessary by the appointing power with the Director of Finance. This Court feels that there was no evidence in the case that the question of overtime was in any way a factor in granting the pay raise to petitioner in this matter. * * *" Treu v. Kuchel, Cal.App., 240 P.2d 32, 35.
The judgment should be affirmed.
SCHAUER, Justice (dissenting) to opinion by EDMONDS, Justice.
I would affirm the judgment of the trial court.
No case is likely to come before us in which the presumptions favoring an affirmance of the judgment will be stronger. Upon what is inherently a claim for labor the trial court has heard the evidence and has made findings of fact and entered its judgment in favor of the claimant. No suggestion of fraud is made. Admittedly the services were rendered. The controlling question is a cold technical one as to the construction of statutes governing the right of the state to pay for services it has requested and received. In my view the findings of fact are supported by the evidence and the material conclusions of law, as drawn by the trial court, are tenable.
Although the relationship between public employes and the state employer is basically one of law rather than of contract this does not preclude either party from incurring obligations which within the law are regarded as contractual. Rights once established are regarded as vested and will be enforced by judicial process. Good faith and fair dealing by the state will not only be presumed but will be enforced. Thus, in England v. City of Long Beach (1945), 27 Cal.2d 343, 348, 163 P.2d 865, this court in requiring the payment of a pension despite the failure of a municipality to have adopted measures to provide funds for such payment, said: 'We must, of course, reject any theory that the provisions of the charter were designed to create an appearance of granting pensions while at the same time withholding the benefits by providing inadequate funds * * *.
[255 P.2d 416] The injustice that would prevail if the provisions relating to the fund were construed to be a limitation on the obligation to pay pensions is apparent. The existence of a pension plan is, of course, a strong factor inducing persons to enter into or remain in a particular employment. Moreover, the employee involved here was required to contribute a portion of his salary to the pension fund * * *. It obviously would be unjust to make the payment of pensions dependent upon the solvency of a particular fund, thereby depriving employees of the benefits of the system, unless we were compelled to do so by a clear, positive command in the charter.'
How much more forcefully it may be observed here that we should reject any theory that the provisions of applicable law and regulations were designed to create an appearance of expressly authorizing the fixing of a definite number of hours for a regular working day and likewise, either expressly or impliedly, authorizing the promise of payment for overtime services expressly requested and dutifully rendered, while at the same time withholding the compensation by failing to allow either compensating time off or cash payment. Surely, the expectation of receiving pay, as promised, is 'a strong factor in inducing persons to enter into or remain in a particular employment,' and, after the employe has contributed the requested services, we must not deny compensation unless we are 'compelled to do so by a clear, positive command.' The appellant has failed to point out any such 'clear, positive command.'
That no such 'clear, positive command' exists is emphasized by the fact that the majority here in reversing the judgment find it necessary to disapprove Clark v. State Personnel Board (1943), 56 Cal.App.2d 499, 133 P.2d 11, and Howard v. Lampton (1948), 87 Cal.App.2d 449, 197 P.2d 69. Clark v. State Personnel Board was the law of this state during all of the time that Miss Treu served it and Howard v. Lampton, following the Clark case, and construing the decision of this court in Pohle v. Christian (1942), 21 Cal.2d 83, 130 P.2d 417, was the law of this state at the time of her separation from the state service. This court, with two justices dissenting (and I was one of them), denied a hearing in the Howard case. Regardless of whether we should now approve or disapprove the holdings in the Clark and Howard cases I think that we should not disapprove them and in the same opinion hold, in effect, that our newly announced view of the law is compelled by 'clear, positive command,' a command so clear and positive that we must now enforce such new view retroactively upon Miss Treu and thereby deprive her of compensation for the services which she rendered in all good faith in presumptive reliance upon the old view.
For adequate treatment of points not here discussed in detail reference is made to the opinion prepared for the District Court of Appeal by Justice Schottky, reported in Treu v. Kuchel, 240 P.2d 32.
Upon the record here I think that the judgment should be affirmed.