On appeal from the Superior Court, Appellate Division, whose opinion is reported at N.J. Super. (1976).
For reversal -- Chief Justice Hughes and Justices Mountain, Sullivan, Pashman, Clifford, Schreiber and Handler. For affirmance -- None. The opinion of the Court was delivered by Hughes, C.J.
[77 NJ Page 540] This case involves the application of a statute so pivotal to the controversy we consider on this appeal, that we quote its relevant substance at once. N.J.S.A. 40A:9-172 provides as follows:
Whenever any municipal officer or employee shall be * * * dismissed from his office, employment or position and such * * * dismissal shall be judicially determined to be illegal, said officer or employee shall be entitled to recover his salary from the date of such * * * dismissal * * *.
The plaintiff-respondent (the employee) was the duly appointed Tax Assessor of the Township of North Bergen (the municipality), having been appointed to a term which would have ended on June 30, 1972. His status was accurately described in his brief as follows:
The Tax Assessor is a municipal employee and so far as Civil Service status is concerned, he is in the unclassified service. He does not enjoy so-called "tenure of office" protection, but merely a right, at most, to claim the office and the emoluments thereof for the unexpired portion of the term.
On July 18, 1969, the municipality dismissed him from his position for specified cause, the nature of which is not relevant here. He brought an action to challenge that dismissal and in due course, on August 9, 1972, it was determined by a trial court to have been illegal, a decision later tested and upheld on appeal. He then resorted to the above statute to claim an award of his back salary. Since his term had expired before his judicial vindication, reinstatement to his position is not here involved.
The municipality resisted his claim and this litigation ensued. At trial the municipality advanced a single issue, namely that the statutory right to back salary declared in the above statute is subject to mitigation by earnings which the employee enjoyed in other employment activities during the period of his dismissal, that is to say until the natural ending of his term of office. These earnings were quite substantial though their precise extent was in dispute. They were contended by the employee to have been $38,748.22 and by the municipality, $57,419.82. The trial judge did not make factual findings of the exact amount of earnings. However (and most astutely), because he foresaw at least the possibility
of change in existing judicial application of the statute, the judge held a plenary hearing "to spread on the record the facts relating to mitigation in the event the Supreme Court is requested by appropriate appeal to reconsider its holding in McGrath [ McGrath v. Jersey City, 38 N.J. 31 (1962), infra ]."
In this posture the trial judge, reluctantly (because he did not believe such result to be right and just) and only in deference to the principle of stare decisis, and its relevance in the context of existing New Jersey decisions applying the statute, entered judgment for the employee for some $44,000, the full and undiminished amount of the public salary which he would have enjoyed but for his dismissal.
The majority in the Appellate Division, affirming, shared the trial judge's discontent with the result invoked by application of the rule of stare decisis, and said:
A change in the law must come either from the Supreme Court or the Legislature.
The dissenting member, Judge Allcorn, believed that the statute, if applied as hitherto in New Jersey law, would amount to a municipal gift and be violative of the Constitution,*fn1 and therefore that the statute should not be so interpreted. He would have interpreted and applied the statute to embrace the common law mitigation rule, to save the statute's constitutionality. He recognized the obligation of a court to "strain" to uphold a legislative act, as did Justice (then Judge) Pashman in New Jersey Sports & Exposition Auth. v. McCrane, 119 N.J. Super. 457, 476 (Law Div. 1971), aff'd 61 N.J. 1, appeal dismissed 409 U.S. 943, 93 S. Ct.
270, 34 L. Ed. 2d 215 (1972), upon the thesis that "[t]he duty of the court is to strain if necessary to save the act [rather than] to nullify it." This upon the general and salutary principle of respect to the Legislature, expressed so long ago by Chief Justice John Marshall, sitting at circuit in Ex parte Randolph, 20 F. Cas. 242. 254 (C.C.D. Va. 1833) (No. 11,558). There he stated:
No questions can be brought before a judicial tribunal of greater delicacy than those which involve the constitutionality of a legislative act. If they become indispensably necessary to the case, the court must meet and decide them; but if the case may be determined on other points, a just respect for the legislature requires, that the obligation of its laws should not be unnecessarily and wantonly assailed.
The municipality's appeal comes to this Court as of right. R. 2:2-1(a)(2).
We therefore confront several fundamental questions involving (1) the stability of the law as supported by the rule of stare decisis, and the implications and propriety of withholding application of that principle in the case before us; (2) the nature and history of the statute itself, as accommodating, vel non, its interpretation from the standpoint of legislative intent; (3) whether such interpretation under the circumstances would trench upon the province of the Legislature, and (4) depending upon the answers to these questions, whether judicial action to consider the common law rule of mitigation of loss of earnings to be implicit in the statute is here warranted. Consideration of these problems, we think, should begin with the history, nature and purpose of the statute as previously dealt with in New Jersey cases.
THE STATUTE AS HERETOFORE APPLIED
The present law in New Jersey dealing with the above statute is generally reflected in three leading cases, McGrath
In Ratajczak the court dealt with a predecessor of the above statute of similar language, and held that the Legislature thereby intended "to change the rule of the common law * * * to confer on an excluded officer or employe adjudged to have been so excluded illegally, the right to his salary, whether he worked for it or not, whether he earned money outside or not, and whether the work he would have done if not so excluded, was or was not done by some de facto substitute." 118 N.J.L. at 312 (emphasis added). The contingency underlined was not in the case factually and therefore the decision, as extended to it, must be regarded as dictum. Nevertheless, although conceded to be such, it was the underpinning of the first case directly confronting the issue, D'Elia v. Jersey City, supra. There the court held that the purpose of the statute was "to eliminate from the law the harsh common-law rule that the right of a public officer to receive or recover wages is dependent entirely upon the performance of service," 57 N.J. Super. at 468, and that the corrective statutory rule to recover the salary of his office or employment for the period covered by the illegal dismissal was unconditional in nature and not subject to mitigation by other earnings ad interim. Id. at 468-70. The court thought such right to be conferred by the statute in "words of such clarity that they can have but one meaning," and that in such case "[a]ttributing to them a meaning other than that which is so plainly expressed would be a gross invasion of the legislative prerogative in this area of the social sphere." Id. at 470. The holdings in Morrissey, supra, and McGrath, supra, followed this concept.
In DeMarco v. Board of Chosen Freeholders, 21 N.J. 136 (1956), the "harsh common law rule" referred to was traced by Justice Jacobs, who identified decisions then spanning almost a century, stating "principles which have become firmly imbedded in the common law of our State," (21 N.J. at 140) clearly equating the right to recover salary to a claim for compensation growing " out of the rendition of the services." 21 N.J. at 141 (quoting from Hoboken v. Gear, 27 N.J.L. 265, 279 (Sup. Ct. 1859) (emphasis in original)). Such was the rule in New Jersey despite the majority view at common law that a public officer who was illegally prevented from performing the duties of his office could recover his salary without mitigation, whereas a public employee's recovery in the same situation would be subject to the doctrine of mitigation by any outside earnings. The rationale for this distinction between officers and employees was the view that an officer's right to compensation does not arise out of a contract but ex lege and therefore belongs to the officer as incident to the office. And that he is therefore entitled to that compensation regardless of any other income he earned while deprived of the public office. 4 McQuillin, Municipal Corporations, § 12.186 at 54-56 (rev. 3d ed. 1968); Annotation, "Earnings or opportunity of earning from other sources as reducing claim of public officer or employee wrongfully excluded from his office or position," 150 A.L.R. 100, 102-03 (1944); 63 Am. Jur. 2d, Public Officers and Employees §§ 401-02 at 874-75 (1972).
The clear rejection of this view under New Jersey common law was based upon the distaste of our courts for the notion accepted in many other states that there was a right to salary which was incident to the public office and which "belonged" to that public officer. But the "harsh common law rule" in New Jersey, precluding any recovery of salary except that earned by rendition of service, on the part of public officers, was not held applicable to actions by other public employees who were not public "officers." Ross v. Board of Chosen Freeholders, 90 N.J.L. 522 (E. & A. 1917). Rather, such
"employees" could recover back salary when wrongfully discharged or suspended, but the recovery was subject to the general common law doctrine of mitigation. Miele v. McGuire, 31 N.J. 339, 348-52 (1960); Miller v. Board of Chosen Freeholders, 10 N.J. 398, 407-09 (1952).
"Mitigation of damages" is defined as "[a] reduction of the amount of damages * * * [based on] facts which show that the plaintiff's conceded cause of action does not entitle him to so large an amount as the showing on his side would otherwise justify * * *." Black's Law Dictionary 1153 (rev. 4th ed. 1968). Thus, in the context of "making whole" an injured party, a purely compensatory concept as distinguished from punitive damages, certain acts or failures to act of that party are taken into account in computing the amount of his recovery. By way of example, this Court has recently held that, in the interests of fairness and equity, a landlord seeking to recover rents due from a defaulting tenant has a duty to mitigate his damages by seeking another tenant. Sommer v. Kridel, 74 N.J. 446, 456-57 (1977). It is this same concept of compensating or making whole the wrongfully ousted employee that underpinned the common law mitigation rule affecting his right to recover. To that extent the statute as hitherto construed involves dual compensation, which as pointed out in D'Elia, supra, has not gone unnoticed by our courts. In Bianchi v. City of Newark, 53 N.J. Super. 66, 72 (App. Div. 1958) the court, in speaking of this statute, observed:
It may well be that a dismissed employee had been gainfully employed during the period of his separation from municipal service, in which case his recovery of back salary would be nothing less than a windfall. Another possibility is that the municipality may have replaced him, paid the substitute, and then found itself faced with the necessity of making a second payment when visited with a judgment for back salary.
In his dissent below, Judge Allcorn attributed a significance beyond the concept of "windfall." He perceived ...