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decided: April 5, 1982.


Appeal from the Order of the Court of Common Pleas of the Fifty-Ninth Judicial District in case of In the Matter of the Salaries of County Officers, No. 78-1321, Elk County Branch, and No. 45 November Term, 1978, Cameron County Branch.


Robert S. Adams, Sutter, Sutter & Adams, for appellant.

Gordon J. Daghir, for appellee, County of Elk.

President Judge Crumlish and Judges Mencer, Rogers, Blatt and Williams, Jr. Opinion by President Judge Crumlish, Jr. Judge Williams, Jr., dissents. Judges Palladino did not participate in the decision in this case.

Author: Crumlish

[ 66 Pa. Commw. Page 2]

Although our holding today on this appeal is of enormous consequence to county officials across the Commonwealth, the issue is deceptively simple: whether elected county officials, who had received compensation increases under a state statute which was subsequently declared by our Supreme Court to be constitutionally inapplicable, are required now to reimburse the county for such unauthorized receipts.

[ 66 Pa. Commw. Page 3]

The Act of October 7, 1976, P.L. 1101, 16 P.S. § 11011-1*fn1 (hereinafter "Act 223") establishes compensation increases for certain county officials; Section 2 of Act 223 provides that it "shall take effect immediately and shall be applicable to each officer when permitted by the Constitution of the Commonwealth Page 3} of Pennsylvania." (Emphasis added.) Since the Supreme Court decision in Bakes v. Snyder, 486 Pa. 80, 403 A.2d 1307 (1979), John Kestler, Elk County Treasurer, has refused to sign any pay vouchers for the affected officials at either the Act 223 rates or the former pay rates. The common pleas court*fn2 held that the county officials need not return pay increases previously received, but must be paid at the rate established prior to Act 223.

On December 19, 1978, the common pleas court, in Oblackovich v. McCormick,*fn3 held that Act 223 permitted payment of increased salaries to elected officers holding office on the date that the Act took effect. Six months later, our Supreme Court in Bakes v. Snyder, held that Art. III, § 27 of the Pennsylvania Constitution*fn4 prohibits public officials elected as of Act 223's effective date from receiving increased salaries. The Counties then asked for a judicial determination of whether or not these officials so affected must refund the increases. The court held that the increased compensation received prior to Bakes need not be refunded. Kestler appeals. We reverse in part and remand.

Elk and Cameron Counties, appellees, contend first that, since the Treasurer neither presented testimony nor argument at the hearing,*fn5 he is precluded from presenting the issue to us. We disagree for two reasons.

[ 66 Pa. Commw. Page 4]

First, the court below specifically ordered that "the affected public officials . . . need not return to [the] counties all pay increases made . . . under Act 223*fn6 To us, there can be no doubt that this question has been addressed below.*fn7 Secondly, assuming it had not been raised below, the exception to the general rule of law that an issue not previously raised may not be considered by appellate court is where public policy is concerned. See Muse-Art Corp. v. Philadelphia, 373 Pa. 329, 333, 95 A.2d 542, 543 (1953). The appropriation or misappropriation of public funds is obviously a public policy matter.

We have, without doubt, been instructed that public officials, albeit in good faith, having received salary increases as provided in Act 223 during their tenures, must now refund this additional compensation. In Bakes, the Supreme Court held that our Constitution restrains the General Assembly from increasing an elected official's salary during his tenure. Since the Legislature has expressly admonished that Act 223 applies only "when permitted by the Constitution of the Commonwealth of Pennsylvania" and, since Article III, § 27 of our Constitution clearly prohibits

[ 66 Pa. Commw. Page 5]

    salary increases during a public official's tenure, the additional compensation under Act 223 constituted an overpayment.

Our Supreme Court, addressing a similar issue in Loushay Appeal,*fn8 370 Pa. 453, 459, 88 A.2d 793, 795-96 (1952), held that payment of public funds by public officials as compensation under an authorizing statute which is subsequently declared to be unconstitutional or inapplicable may be recovered by the county. In Cotlar v. Warminster Township, 8 Pa. Commonwealth Ct. 163, 302 A.2d 859 (1973), we held that reimbursement of unauthorized disbursements to township supervisors is required, even though the supervisors acted in good faith and were bolstered by a township solicitor's opinion that the payments were legally permissible.

There is no inherent right in the county officials to keep the additional compensation, since they are entitled only to the salary expressly authorized by statute. See County of Allegheny v. Grier, 179 Pa. 639, 36 A. 53 (1897). That public officials received illegal payments in good faith and without fraudulent intent does not relieve them of surcharge liability.

We reject appellees' claim that the common pleas court decision, Oblackovich v. McCormick, constitutes

[ 66 Pa. Commw. Page 6]

    the "law of the case".*fn9 This doctrine is triggered only when an appellate court has decided the issue, see Delaware River Port Authority v. Public Utility Commission, 408 Pa. 169, 174, 182 A.2d 682, 684 (1962), hence, it has no application here.

Reversed in part and remanded.*fn10


The Fifty-ninth Judicial District Common Pleas Court order, dated October 29, 1979, is reversed as to

[ 66 Pa. Commw. Page 7]

    its direction that affected public officials of Cameron and Elk Counties need not return pay increases made under the Act of October 7, 1976, P.L. 1101, 16 P.S. § 1101-1 (Act 223). We affirm, however, the direction that these same county officials must be paid at the rate established prior to Act 223. We remand for proceedings not inconsistent with this opinion.

Judge Williams, Jr., dissents.

Judge Palladino did not participate in the decision in this case.


Reversed in part and affirmed in part. Case remanded.

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