                               No. 85-340
               IN THE SUPREME COURT OF THE STATE OF MONTANA
                                   1986




CLARE J. JENSEN,
                Plaintiff and Appellant,


STATE OF MONTANA, DEPARTMENT OF
LABOR & INDUSTRY, JOB SERVICE
DIVISION, and DAVID HUNTER,
                Defendants and Respondents.




APPEAL FROM:    District Court of the Eighth Judicial District,
                In and for the County of Cascade,
                The Honorable Joel G. Roth, Judge presiding.

COUNSEL OF RECORD:

         For Appellant:
                Marra, Wenz, Johnson   &   Hopkins; Neal G. Jensen,
                Great Falls, Montana

         For Respondent:
                R. Scott Currey, Dept. of Labor     &   Industry, Helena,
                Montana




                                   Submitted on Briefs: Jan. 16, 1986
                                     Decided: April 17, 1986


Filed:    APR 17 1986




                                   Clerk
Mr. Justice John C. Harrison delivered the Opinion of the
Court.


        Clare Jensen    appeals from an order of the Cascade
County District Court which dismissed Count I1 of his amended
petition for veterans preference in the termination of his
job.    We affirm the order of the District Court.
        The facts of this case are basically undisputed by the
parties.      Appellant Clare Jensen ("Jensen") was hired by the
Employment Security Division, the predecessor of the Job
Service Division of the Department of Labor and Industry, in
1961.       When initially hired by the Department, Jensen, a
veteran, claimed and received a n employment preference.
                               .                               In
March 1982, Jensen applied for the position of Employment
Manager I11 in the Great Falls Job Service Office.        On or
about June 16, 1982, Jensen was informed by the Department
that he was not chosen for the Great Falls manager position.
On   June    30,   1982, Jensen was   terminated pursuant to   a
department-wide reduction in force.
        On July 5, 1983, Jensen filed an Amended Petition to
Enforce Employment Preference in the District Court, Eighth
Judicial District, in and for the County of Cascade.        His
amended petition contained three counts.        Count I alleged
that Jensen was not hired by the respondents, (hereinafter
"Department"), as the manager of the Great Falls Job Service
Office in violation of his veterans preference.        Count I1
alleged that he was terminated pursuant to a reduction in
force by the Department in violation of his veterans prefer-
ence, and Count I11 alleged that the 1982 interview process
utilized by the Department in filling the manager's position
violated a rule of the now defunct Montana Merit System
Council.
      In July 1983, in response to Jensen's amended petition,
the Department filed a Consolidated Motion that in part asked
the District Court to dismiss Jensen's amended petition.     In
August 1983, the parties filed with the District Court a
stipulated set of facts and an agreement that the court would
hear only Jensen's Count I.      Paragraph 5 of the Stipulation
dealt with    the remaining two counts of Jen.senrs amended
petition.    It read:
            Petitioner's Counts Two and Three shall
            be reserved and that all claims and
            defenses arising from Counts Two and
            Three are reserved as to all interested
            parties.    Any statutes of limitation
            pertinent to Counts Two and Three are
            tolled   pending    the resolution   of
            petitioner's Count One.
      On September 19, 1983, the District Court issued an
order ruling on Jensen's Count I.          The court found that
Jensen had been denied his veterans preference.    In addition,
the District Court ordered the Department to appoint Jensen
to the manager's job and to provide him with backpay.
                            .                               The
Department appealed this order.      In Jensen v. State of Mon-
tana, et al.     (Mont. 1984), 689 P.2d 1231, 41 St.Rep. 1971,
this Court affirmed in part and vacated in part the District
Court's order.    Th.is Court concluded:
            For the foregoing reasons, we vacate that
            part of the judgment that addresses
            Jensen's remedy and remand to the Dis-
            trict Court with directions to order the
            Department of Labor and Industry to
            reopen the manager position to the origi-
            nal applicants, grant Jensen and the
            other preferred applicants their prefer-
            ence, and otherwise fill the vacancy in
            accordance with Crahtree.
Jensen. 689 P.2d at 1235.
      The Department subsequently did reopen the manager's
position in question, reinterviewed the preferred applicants,
including Jensen, and filled the position with a preferred
applicant, not Jensen.
     While the Department's appeal involving Count I was
pending before this Court, however, the Montana legislature
met in special session in December 1983 and enacted a new
Veterans' and Handicapped Persons' Employment Preference Act
which became effective December 20,           1983.        This new act
retroactively repealed the old Veterans Preference Act under
which Jensen had filed his amended petition.               In doing so,
the legislature decreed that claims under the old act were
barred if they were not reduced to judgment on the effective
date of the new act.      Only cl.aims that had been reduced to
judgment before December 20, 1383, were enforceable, and no
claims under the old act could be made under the new act.
      In February      1985, the Department        filed an Amended
Motion to Dismiss asking the District Court to dismiss the
remaining Counts I1 and I11 of Jensen's amended petition.
With regard to Count TI, the subject of this appeal, the
Department   argued    that   Section    14   of   the     new   Veterans
Preference Act    (which is now known as            the     "retroactive
repealer") had   the    effect   of barring        Count    I1   and   its
allegation that Jensen was wrongfully terminated by the Great
Falls Employment office because the person who was retained
in his position was not a veteran.            The Department argued
that since Jensen's claim in Count I1 was not reduced to
final judgment before the effective date of the new act
(December 20, 1983), his preference claim was barred.
      In March 1985, Jensen filed a Motion of Partial Summary
Judgment as to his Count 111.           In June 1985, the District
Court granted the Department's motion to dismiss Counts I1
and    I11 of Jensen's amended petition and denied Jensen's
Motion for Partial Summary Judgment.             Jensen then commenced
this appeal in which he only appeals that portion of the
District Court's order dismissing Count I1 of his amended
petition.
        Jensen presents the following issue for review by this
Court :
        Whether Jensen's claim of veterans preference under

Count 11, which was expressly reserved by the Stipulation of
the parties, survived the Montana legislature's "retroactive
repealer."
        Jensen's Count I1 is brought pursuant to S$ 10-2-201
through 10-2-206, MCA (repealed 1983) .               In Crabtree v. Mon-
tana State Library          (M0n.t. 1983), 665 P.2d         231, 40 St.Rep.
963, issued approximately one month before Jensen filed his
amended petition, this Court held that                 $    10-2-201 through
5 10-2-206 granted qualified veterans and handicapped civil-

ians      an    "absolute     preference"      over    non-veterans       and
non-handicapped applicants in public employment.                    Sections
1.0-2-201 through 10-2-206, referred to here as the old Veter-
ans Preference Act, were           repealed by        the    legislature in
special session in December 1983 as part of its adoption of
the    new      "Montana    Veterans'    and     Handicapped        Persons'
Employment       Preference    Act,"    S 39-30-101,         et   seq.   MCA.
Section 14 of the act reads:
               Section 14. Repealer. Sections 10-2-201
               through 10-2-206, MCA, are repealed.
               This repeal applies retroactively to bar
               any claim of violation or application of
               10-2-201 through 10-2-206 that has not
               been reduced to judgment, whether or not
               the judgment is final, on the effective
               date of this act [December 20, 19831.
               Claims und.er 10-2-201 through 10-2-206
         that have been reduced to judgment,
         whether or not the judgment is final, on
         the effective date of this act, are
         enforceable. No claim for a violation of
         10-2-201 through 10-2-206 may be made
         under section 8 of this act [39-30-206
         and 39-30-2071.
     As the Department points out, the validity of Section
14 was affirmed by this Court in Conboy v. State of Montana
(Mont. 1985), 693 P.2d   547, 42 St.Rep.   120.   Jensen now
argues that Count 11, although not yet reduced to judgment,
is not barred by Section 14 due to a Stipulation (quoted
above) between the parties herein "reserving" his claim.
Jensenls argument can be summarized by the following excerpts
from his brief:
          The issue in this appeal can be stated
          simply:   Can the government, obliged as
          though a private person to observe the
          terms of its contracts, totally repudiate
          by a legislative act its earlier express
          a.greement to reserve an individual s
          claims. That is, can the government
          forbid one to pursue a claim which it had
          earlier    affirmatively    promised   an
          ind-ividual he could preserve?


          Simply stated, the Department is now
          seeking to backtrack on its earlier
          Stipulation, for the sole purpose of
          trapping Jensen who relied in good faith
          on such written agreement when he did not
          bring Count Two on for a hearing and
          reduce it to judgment while awaiting the
          Department's appeal of Count One.      By
          abiding by his agreement to wait for
          Count One to be resolved, Jensen should
          not now be penalized.   Judicial economy
          was achieved by pursuing Count One to a
          conclusion.


          For his patience and consideration  ...
          Jensen should not be thrown out of Court.
          Instead, the Department should be com-
          pelled to abide by the Stipulation, and
          its express agreement to reserve Jensenls
          Count Two preference claim pending the
          resolution of Count One, even though a
                special    session    of    the             blontana
                Legislature has intervened.
         Jensen's argument in this case, although intriguing and
persuasively written, is flawed and cannot stand. This Court
may sympathize with Jensen's position, but we cannot ignore
the realities of the current law in this state.
         Both parties seem to agree that paragraph 5 of the
Stipulation was entered into voluntarily for the purpose of
simplifying litigation.             The intent seems to be clear:                  to
get Count I, apparently viewed by the parties as the key
issue, before the District Court as quickly as possible.
         We agree with Jensen that the Stipula.tion should be
viewed as a contract or agreement that is to be interpreted
pursuant        to   contract     principles.        See:      Olson   v.        Idaho
Department of Water Resources (Idaho 1983), 666 P.2d 188, and
Thayer v. Federal Life Insurance Company                    s is. 1935), 258
N.W.     849.        Jensen seems to argue that this Stipulation
creates     an       obligation    on   behalf      of   the    Department         to
"reserve"        Jensen's    claim      for   an    indefinite     period         and
regardless        of   the   action     of    the   legislature.            As    the
Department points out, however, this argument fails to take
into     consideration the          gratuitous      character     of    Jensen's
und.erlying veterans preference claim.
         In Conboy this Court held, in discussing the character
of the veterans preference created by the old preference law,
that :
                We hold that the veterans ' preference
                rights granted under the repealed portion
                of the Veterans Preference Act are not
                rights earned through years of service to
                the state, but are a gratuity given to
                citizens of Montana by the State to show
                its appreciation for service in the Armed
                Forces.   They do not amount to rights
                vested in the veterans.
           We further point out that in repealing
           the   old   veterans1 preference     law,
           § 10-2-201  through 10-2-206, MCA, the
           legislature was not faced with any statu-
           tory or constitutional limitations on its
           rights of repeal. There is no provision
           in that Act or in the Montana Constitu-
           tion limiting the leqislaturels right to
           repeal the preference..   ..  We conclude
           that the legislature properly could
           repeal the veterans1 preference by a
           majority vote at any time and that veter-
           ans acting under the old law are deemed
           to have acted in contemplation of that
           power of repeal on the part of the
           legislature.
Conboy, 693 P.2d at 552.
        This position adopted in Conboy was recently reaffirmed
by this Court in Femling v. Montana State University (Mont.
1986), 713 P.2d    996, 43 St.Rep.   235, and ~ i c kv. Montana
Department of Highways (Mont. 1985), 711 P.2d 795, 42 St.Rep.
1926.    In Fleming, this Court stated:
            "A citizen can have no vested right in a
            general law which can preclude its
            amendment or repeal, and there is no
            implied promise on. the part of the state
            to   protect    its    citizens   against
            incidental injury occasioned by changes
            in the law." Stanford v. Coram (1903),
            28 Mont. 288, 293, 72 P. 655, 656. As
            we noted in Conboy v. State (Mont.
            1985), 693 P.2d 547, 42 St.Rep. 120, a
            veteran   acting   under   the   absolute
            veterans1 preference statute did so in
            contemplation of the legislature's power
            of repeal. Statutes may be replaced at
            any time, and a person acting under a
            statute is "deemed to have acted in
            contemplation of this power of repeal."
            Section 1-2-110, MCA.


            In Conboy, we stated that the preference
            statute was a gratuity given to veterans
            by the State.   It did not amount to a
            right vested in the veterans.    Conboy,
            693 P.2d at 552.     We reaffirmed this
            conclusion in Nick v. Montana Dept. of
            Hwys. (Mont. 1985), 711 P.2d 795, 42
            St.Rep. 1926.
Fleming, 713 P.2d at 998.
      When viewed in light of Conboy, Femling and Nick, the
Department correctly argues the Stipulation must be viewed as
an agreement to reserve a claim based on a gratuity that the
legislature was empowered to repeal at any time.             Jensen and
other veterans are deemed to have "acted in contemplation" of
this power to repeal.        In other words, Jensen entered the
Stipulation. with knowledge of the legislature's power to
repeal the old Veterans Preference Law at any time.
      Jensen's     strong reliance on Perry v. United States
(1935), 294 U.S. 330, 55 S.Ct. 432, 79 L.Ed. 912, indicates
that he is confusing the gratuitous nature of his claim with
the binding contractual nature of the Stipulation.              As the
Department points out, a close reading of Perry shows that
the situation in that case is easily distinguishable from the
present    case.     In Perry, the Court was asked to decide
whether a joint resolution passed by Congress allowing the
United States government to pay off government bonds with
currency    rather   than   gold,   as   called   for   in    the   bond
obligation itself, was proper.      The Court found that Congress
could not change its contractual obligation by legislation
once that obligation had been incurred.           The implication is
that the bond holder's right to be paid in gold had vested
and once vested could not be tampered with by Congress.
     Jensen relies on this case to argue that the Montana
legislature's passage of Section 14 illegally repudiates the
Stipulation or "contract" he had with the Department reserv-
ing his Count I1 claim.       Jensen sums up his argument under
this issue by stating:
             [I] Perry the point is inescapable: -
                n                                a
             qovernment cannot repudiate - -
                                           its own
             contracts.
             A government, such as the State of
             Montana in this case, must be held to
             the terms of its contracts.      If its
             agent stipulates to reserve the claims
             of an individual under an existing
             legislative act, that Stipulation cannot
             be repudiated and annulled simply on the
             pretext of the subsequent "fluctuating
             policy" of the Legislature.


              Just as the bond before the Court in
              Perry was "an obligation of the United
              States," so too is the Stipulation
              executed by counsel for the Department
              an obligation of the State of Montana.
         The Department correctly points out, however, that in
Perrv the obligation at issue was a bond obligation creating
vested    rights   in   the    bond    holder.       The government was
attempting to modify          these vested       rights by    giving bond
holders less than they had bargained for.              In this case, the
obligation that Jensen relies on is a Stipulation reserving
the enforcement of a claim.           It does not create a claim as in
Perry.       The   Stipulation reserves          a   claim   that   can   be
eliminated at any time by legislative action.                The fact that
the claim was reserved does not change the character of the
claim--it can still be eliminated by the legislature at any
time.
        We agree with the Department that Jensen. is attempting
to make a gratuity into a vested right.              His argument implies
that the preference creates an obligation, rather than a
gratuity, however this is not the current law in light of
Femling, Nick and Conboy, supra.          The Stipula.tion,therefore,
reserved only what existed at the time it was entered into (a
gratuity).     It cannot now be used to give Jensen more than he
originally had.
     The District Court's order dismissing Jensen's Count
I1 is affirmed.




We concur:




Justices
Mr.   J u s t i c e John C .         Sheehy, d i s s e n t i n g :



        Justice          sometimes t a k e s         strange          forms.        This case        is

illustrative.

        When J e n s e n f i r s t b r o u g h t h i s c a s e h e r e , J e n s e n v .       State

( 1 9 8 4 ) , 689 P.2d            1231, 4 1 St.Rep.            1971, t h i s Court h e l d t h a t

t h e a b s o l u t e p r e f e r e n c e accorcled v e t e r a n s under t h e V e t e r a n s

and      Handicapped                Civilian        Employment           Preference          Act     (5
10-2-201,          et        seq.    PCA)     was     applicable,            and     therefore      we
remanded          the    case        so    that     the     manager          position       could    be

reopened          and    a        decision     made       in    the      accordance         with    the

preference.              I n t h a t c a s e b o t h J u s t i c e H a r r i s o n and myself

d i s s e n t e d , s a y i n g t h a t s i n c e J e n s e n had b o r n e t h e h e a t o f t h e

battle       to    secure           the    result        that     recognized         the    veterans

p r e f e r e n c e law, h e should b e t h e r e c i p i e n t o f t h a t b e n e f i t .

        In    a    later           case    involving Charles                 F.    Femling     (Mont.

19861, 713 P.2d 9 9 6 , 43 St.Rep.                        235, t h i s C o u r t h e l d t h a t t h e

legislature              could        retroactively              withdraw           all     veterans

p r e f e r e n c e r i g h t s w i t h o u t v i o l a t i n g t h e due p r o c e s s c l a u s e o f

the     state       or        federal       constitution.                I   dissented        in    the

Femling c a s e on t h e ground t h a t Femling had a p p l i e d f o r s t a t e

employment          at        a     time    when     he     had      a   statutory          right    to

preference,             he    had     claimed       the      preference,           his     right    had

v e s t e d and s o he was e n t i t l e d t o t h e job.

        Now, J e n s e n i s back a g a i n .               What happened t o him b e f o r e

t h e Department was what we p r e d i c t e d , t h a t t h e Department o f

Labor and I n d u s t r y would n e v e r g r a n t him t h e job t o which h e

had    proven       his           right,    but     in    retaliation             for beating the

Department i n c o u r t ,             t h e appointment would go t o some o t h e r

veteran.           The m a j o r i t y       opinion         now     condones        this    result.
       J   dissent from the majority opinion here on the grounds
 that Jensen was entitled to the job from the heginning, was
 entitled. to the job by reason of his being successful. in the
 first Jensen case, and that his right had become vested, as I
 argued in Femling, from the time that he demanded the benefit
 of the preference law in his application for appointment.
       In an era when this country seems to be undergoing a
 binge of patriotism with country-rock singers blazing out
 their love for the flag, and our armed forces confronting
 every two-bit nation in the world, the attitude of this State
 through its legislature and courts towards the men and women
 who actually gave something of themselves to protect the
country is a contradiction.      Rudyard Kipling must have been
 looking down the long years to this State when he wrote of
 the   difference    in   treatment   accorded   Tommy     Atkins   in
 peace-time and in war-time:
         Then its Tommy this an' Tommy that and "Tommy,
       'OW'S your soul?''
         But its "Thin red line of 'eroes" when the drums
       begin to roll.
         The drums begin to roll my boys, the drums begin
       to roll.
         Oh it's "Thin red line of 'eroes" when the drums
       begin to roll.
         We aren't no thin red. 'eroes nor we aren't no
       blackguards too,
         But single men in barricks most remarkable like
       you.
         An' if sometimes our conduck isn't all your fancy
       paints
         Why, single men in barricks don't grow into
       plaster saints.
         While its Tommy this and Tommy that an' "Tommy
       fall be'ind",
         But it's "Please t-o walk in front, sir" when



                                       -
       there's trouble in the wind.
         There's trouble in the wind, my boys, there's
       trouble in the wind.
         Oh it's "Please to walk in front, sir", when
       there's trouble in the wind.
                                                   R  .-
                                                 Justice
  Mr. Justice Frank B. Morrison j o i g in the dissent of Mr.
  Justice John C. Sheehy.
