author: CALDWELL, J.

text:
    STREET RAILWAYS.
    [Cuyahoga (8th) Circuit Court,
    June 21, 1902.]
    Caldwell, Hale and Marvin, JJ.

      Wm. M. Raynolds, a Taxpayer, on behalf of Cleveland, v. Cleveland et al.
    1. Power of Municipalities to Authorize Construction and Operation of Street Railways Limited.
    Municipal corporations have no inherent power to regulate and control streets therein, for streets and highways belonging to the state are under its control. Nor has a city power to regulate and control the construction and operation of street railways therein merely upon a grant of power to establish, regulate and control streets given at a time when street railways were not contemplated. Such power is only obtained by statutes expressly conferring tbe power and then only under the limitations and conditions attached thereto.
    2. The Entire Route Advertised Must be Definitely Bid Upon and Let.
    A city, having established by ordinance a certain street railway route as an entirety over certain designated streets under Secs. 2501 and 2502 Rev. Stat., and advertised for bids thereon to construct a street railway route at the lowest rates of fare, has no authority to grant the right to construct a street railway upon a part of such designated route, upon which bids have not been taken separate and apart from the other portions. Nor can such city, after having received bids thereon, without afterwards publishing notice by which others may be permitted to bid, grant a route which includes a street not in the route as established and published.
    8. Provision for Determination • of Difficulties Between Employes and Contractor Invalid.
    A provision, in an ordinance establishing a street railway route under Sec. 2501 Rev. Stat., which determines the method in which differences between any street railway company constructing a road over such route, and the employes thereof, shall be settled, is contrary to the spirit of said section as tending to keep persons from bidding and to increase the rate of fare bid.
    A Proper Parties Under Séc. 1778 Rev. Stat.
    Section 1778 Rev. Stat., providing when a taxpayer may institute suit to enjoin certain corporate acts, does not require that a party bringing such action shall not have a personal motive or be influenced otherwise than for the mere protection of the public.
    Appeal by plaintiff.
    Wilcox, Collister, Hogan & Parmely; Squire, Sanders & Dempsey and W. C. Boyle, for plaintiff.
    Beacom, Baker, Payer, Gage & Carey and Blandin, Rice & Ginn, for defendants.

       For decision of the common pleas, contra, see Raynolds v. Cleveland, 13 Dec. 125.

   CALDWELL, J.

Wm, M. Raynolds, as a taxpayer on behalf of the city of Cleveland, alter making application to the corporation counsel to bring this action, which he refused to do, brings this action on behalf of himself, and says that he is a resident and taxpayer of the said city; that the defendant, the city of Cleveland, is a municipal corporation under the laws of Ohio, and is a city of the second grade, first class; that Tom T. Johnson is the duly qualified and acting mayor of said city; that said Johnson, together with the defendants, Harris R. Cooley, Charles P. Salen, Charles W. Tapp, James P. Madigan, John Dunn, and M. W. Beacotn are the duly and legally constituted board of control of said city; and that The People’s Street Railway Company is a corporation organized and existing under the laws of the state of Ohio. And then he sets up his request served upon the city solicitor to bring this action, and the refusal of the city solicitor to do so and his failure to comply with the request. He states that on January 6, 1902, a certain ordinance, known as ordinance No. 35,897-a, and referred to hereinafter as the “establishing ordinance,’’was passed by the council of the city of Cleveland, to establish street railway routes, to provide for granting of a franchise to construct and operate a street railroad thereon, and specifying the manner whereby such franchise should be granted, to the party offering to charge the lowest rates of fare under competitive bidding therefor, and prescribing the terms and conditions under which said street railroad should be constructed and operated; that said ordinance was approved by the mayor of said city on January 7, 1902, and was thereafter published as required by law, and took effect and became in force on January 18, 1902. And then he sets out the “establishing ordinance” in full, and the caption to the same is:

‘‘An ordinance to establish street railroad routes, to provide for granting a franchise to construct and operate a street railroad thereover and specifying the manner whereby said franchise shall be granted to the party offering to charge the lowest rates of fare, under competitive bidding therefor; and to prescribe the terms and conditidns under which said street railroad shall be constructed and operated.”

Then the ordinance provides to establish seventeen diflereut routes, all within the city of Cleveland.

Section 2 provides for advertising lor three consecutive weeks for sealed proposals, to be received at the office of the board of control, cn the fourth Monday, after this ordinance takes effect, to construct and operate a street railroad oyer the routes as established in Sec. 1 hereof; and each and all bids for such street railroad, franchise so proposed to be granted shall be under and subject to the terms and conditions specified in the following sections of this ordinance.

Section 3 provides for the form and words of the bid, and the form is for the bid on a street railroad on routes as the same are described in Sec. 1 of the ordinance, as well as other matters, and the rates of fare proposed to be charged, and requires that, accompanying the bid, there shall be $50,000 put up in money, to be forfeited, under the conditions ot said ordinance, if the same are not complied with. ,

Section 4 requires that each bid shall be accompanied by $50,000 in United States notes, national bank notes, or gold or silver certificates, to insure the performance of the contract. And the same section provides that the money accompanying the bid declared to be the lowest and accepted by the city shall be retained and become the property of the city as liquidated damages against said lowest bidder, upon the following conditions: “Said money shall be so retained as liquidated damages upon the failure of said lowest bidder, within ten days alter being declared such lowest bidder, to request in writing lrom the council and the board of control of the city oí Cleveland permission to construct and operate a street railroad over the routes defined in this ordinance.” And that, “Said money shall be retained as liquidated damages as aforesaid upon the failure of said lowest bidder, within ten days after the passage and legal publication ot the ordinance granting permission to construct said six miles of double track, to accept in writing the terms and conditions of said grant.” And, “Said¡ money shall be retained as liquidated damages as aforesaid upon the failure of said lowest bidder, within six months after the passage and legal publication oí the ordinance making said first grant as above specified, to have constructed at least six miles of double track of said street railroad. “On completion within the time specified, of said six miles ot double track, said money shall be returned to said lowest bidder.”

Section 5 provides: “The board of control shall report all bids to the council with a recommendation as to which is the lowest bidder, and the moneys of all other bidders shall be returned to their respective owners immediately after such recommendation.”

Section t> provides: “The party whose bid is accepted by the city, within ten days after the date of being declared the lowest bidder, shall request in writing from the council and the board of control of the city of Cleveland permission to construct and operate a street railroad over the routes defined in this ordinance, and within thirty days after being so declared the lowest bidder said party shall apply in writing for a grant to construct at least six miles of double track and shall lurnish the necessary consents of the abutting property owners to so construct said six miles of double track within said thirty days. Said party shall accept in writing the terms and conditions of the Ordinance making said grant, within ten days after the passage an(| legal publication thereol. and the said six miles of double track shall be constructed within six months after the date of the grant thereof. The said lowest bidder shall make application, within six months after the date of said first grant, for permission to construct at least an additional six miles of double track of said street railroad, and shall obtain the necessary consents of the property owners and accept the terms oí the ordinance making said grant the same as specified for said first grant. Said lowest bidder shall continue to make such applications to construct at least six miles of double track, at intervals oí six months, obtain consents and' accept the grants, as above specified, until permission to construct said entire system has been granted. The board of control shall have the power to extend the time for making said applications and obtaining the necessary consent of abutting property owners, and all parts of track shall be constructed, equipped and operated within one year irom the time of the granting of each section, unless prevented by legal proceedings over which said lowest bidder has no control.”

Section 7 grants certain privileges as to property owned by the city-

Section 8 gives the right to the party whose bid is declared to be the lowest, to erect the necessary lines of poles and wires to connect the necessary power-houses with said railroad system, and wherever the said route or routes provide for a private right of way the party so constructing said railroad shall have the right to construct the necessary curve into said private right of way, and to lay said tracks through and across the intervening streets.

Section 9 provides for the kind of power and machinery for moving the cars upon the route.

Section 10 provides: “The rates of fare for which the bidder proposes to carry passengers shall entitle the passenger to one continuous ride in the same general direction and each passenger shall be entitled to one transfer ticket for passage to another line, at all points of intersection with other routes, if such transfer be necessary to enable him to continue to his destination.” And provides further for certain reservations, of the right of the city to regulate transfers to carry out this provision, and also reserves the right to establish transfer points, and require the exchange of free transfers at such points between the lines of the proposed grantee hereof and other street railroad companies.

Section 12 provides: “Whenever the routes are along streets not in ‘free territory,’ so-called, now occupied by other street railroad tracks, said party so constructing said street railroad shall have the right to construct straddle tracks, the same to be removed whenever the joint right of use is established.”

Section 13 provides that, “Whenever any controversy arises between the party operating the railroad under the franchise hereby proposed to be granted and its employes which interferes or threatens to interfere with the operation of the road, each side of the controversy shall appoint two persons as its representatives, whose action shall be final.” And if such board does not agree within three days, then the mayor shall become the fifth member of the board and a majority vote of said board, consisting of five members, shall be final. No motorman or conductor shall work more than ten hours within the limits of fourteen hours in any twenty-lour hours, except in case of emergency causing obstruction of traffic.

Section 14 provides for the expiration of the franchise within twenty ■years from the date of the passage of the ordinance.

Section 15 is: “The city reserves the right to purchase said street railroad, with any additions or extensions, whenever it may have the power so to do, lor such price and upon such terms and conditions as may be agreed upon between it and the owner thereof, or upon their failure to so agree, then for such price and upon such terms as may be fixed by a board of arbitration consisting of three persons, a majority of whom shall decide all questions.”

Section lb establishes certain regulations by which said board of arbitration is to be governed and the manner of choosing the same.

Section 17 provides ior the manner of estimating the value of the property to be taken over to the city.

Section 18 is a reservation of the right on behalf of the city to decline to take the property at the valuation fixed by arbitration, but, in case it does decline, it shall not demand the purchase within a period of two years thereafter; and also provides that, “Whenever, after ten years from the date hereof, the net earnings of said company exceed eight per centum per annum on the actual bona fide value of said road, equipment, extension, etc., irrespective of the capitalization thereof, the owner shall pay one-half of said net earnings in excess ot eight per cent., whether said earnings are applied to interest payments, dividends, surplus, extensions or betterments, into the city treasury. And for the purpose of ascertaining said value the same procedure shall obtain as provided in Sec. 17 hereof for purchase.”

Section 19 reserves to the city the right to grant a way for other roads over the tracks of this company.

Section 22 provides: “No bids will be considered which provide for a higher rate oí fare than three cents. The city reserves the right to reject any or all bids.”

The petition further states that, after the publication of such establishing ordinance, the clerk of the city advertised, according to the provisions ot the ordinance, for sealed proposals to be received at the office of the clerk of the board of control, until twelve o'clock at noon on February 10, 1902, lor the right to construct and operate a street railroad over the routes as numbered and described in the establishing ordinance, that John B. Hoelgen bid at a proper time and place, by a sealed proposal in the form provided for in the above-mentioned establishing ordinance; and that, according to his bid, he agreed to construct and operate a railroad on the routes such as are described in Sec. 1 ot the establishing ordinance, and agreed to conform in every particular to the requirements, conditions, provisions, and stipulations as in said ordinance set forth, and as referred to, implied, or indicated by said ordinance, and the rates of fare therein specified; that he was the only bidder, no other proposal being made,oand that thereafter the board of control recommended to the council of said city that the said John B. Hoefgen was the lowest bidder and that he was found and declared by the council to so be; and that therealter, on February 5, 1902, John B. Hoefgen filed an application to the city council and said board of control ot said city for permission to construct and operate a street railroad over the routes referred to in said establishing ordinance'; and that on March 24, 1902, an ordinance known as No. 36,624, and which I shall hereinafter refer to as the “granting ordinance,” was passed by the council of the city of Cleveland, purporting and attempting, in compliance with the provisions ol the establishing ordinance, the advertising for sealed proposals or proposed bids thereunder, and the bid of the said John B. Hoefgen in response to said advertisement, and the acceptance of said bid, to grant to him, the said John B. Hoefgen, the right to construct and operate a street railroad over the routes in said granting ordinance passed March 24, described; and that said.granting ordinance was, on March 24, 1902, approved by the mayor, and was by the clerk of the city published for the first time in the Cleveland Plain Dealer on March 28, 1902.

It is claimed that the granting ordinance does not conform to the establishing ordinance nor does it conform to the publication made alter the passage of the establishing ordinance, and that there are various other conditions which it is unnecessary to notice at this time.

The petition sets up various respects in which the contract made with J. B. Hoefgen on the part of the city is illegal, and, on account of which illegality, it is asked by rhe plaintifl to have the court enjoin the construction or the carrying out ot said contract. Some of these I will briefly state:

First. That at the time the establishing ordinance was passed and the proposals advertised for, there was no application by Hoefgen lor permission to build a road.

Second. That Hoefgen made no application to construct a road on Champlain street, before the granting ordinance was passed, and no such" application was made by any one, nor was such application published for three weeks.

Third. That there were no proposals, and no bid to construct a railroad over the streets included in the granting ordinance: Superior street from the easterly limits of the city to Rosedale avenue, a distance of about 1,800 feet; Rosedale avenue between Superior street and Wade Park avenue, a distance of about 2,550 feet; Norwood avenue between Wade Park avenue and Bona street, a distance' of about 1,425 feet; Bona street between Norwood avenue and Dana street, a distance of about 375 feet; private right of way between Dana street and Lyon street, and crossing .the last-named two streets, about 375 feet; Fast Stanard street between Lyon street and Wilson avenue, about 750 leet, Marquette street between Wilson avenue and Hamilton street, about 900 ieet; Hamilton street between Marquette street and Kirtland street, about 1,800 leet; Champlain street between Canal street and Ontario street, about 1,800 feet. These are the distances^given in the petition, which are only substantially correct as to some of them, as was shown by the evidence and admitted facts. And it is claimed that as to these parts which are covered by the granting ordinance, there was no proposal and no bidding by Hoefgen.

Fourth. It is claimed that there is a departure in the granting ordinance from the establishing ordinance, as to some 2,025 feet on Rhodes avenue between Denison avenue and Burton street; that this diSerence consists of whether the tracks of the road shall be used, or whether straddle tracks shall be built.

Fifth. That the bid oí Hoefgen was for seventeen routes as required in the establishing ordinance, about seventy miles in length, while the grant is only tor a part of these streets and includes other streets not mentioned in the bid, and the grant is for only about eleven miles.

Sixth. That the establishing ordinance, the advertisement ior proposals, and the bid of Hoefgen were for all these routes of about seventy miles in length in the aggregate, as a single road and extending to all parts of the city for a single fare, whereas the grant was for only a part; and it is claimed that there was no competitive bidding for the route that was granted. It is claimed that the carrying out of the contract should be enjoined because the bidder was required to put up $50,000 as a guarantee to get consents, and because of the terms by which it was to be forfeited.

Seventh. That the« contract was illegal in the provision for the city to purchase the entire road; that the city had no authority, and that this was a provision that would deter bidders, and thwart the purpose oi getting a bid at the lowest fare. It is claimed that the contract is illegal because founded upon compulsory arbitration of disputes with employes, and because of the unreasonable and unwarranted conditions in this feature of the contract, which tended to prevent free, competitive bidding.

Eighth. That there is a variation in said contract, from the establishing ordinance, as to the right to use other tracks instead of establishing straddle tracks.

After the bid of John B. Hoefgen was accepted he made application, as required by the establishing ordinance, to build the road; and thereafter, within the time required by the establishing ordinance, he made application to build some thirteen miles of the road, and for which he presented the required consents, and thereupon, the ordinance was passed granting him the permission to build that road. He has not the consents on any other part of the road contemplated in the establishing ordinance, nor does the later ordinance purport to give him any contract rights to build any portion of the seventy-five miles except the thirteen miles above referred to, which thirteen miles is comprehended within three of the routes described in the establishing ordinance. And complaint is made that this contract awarded him is illegal in the matters above referred to, and especially so as to the matter pertaining to Champlain street. It is admitted in the case, on behalf of defendants, that there was no application and no publication as to Champlain street.

When the parties were about to make the contract, or prior thereto, it was discovered that consents could not be had over Canal street, and hence, no legal contract could be made by the city for the construction of a road over that street, and thereupon, instead of following Canal street from Champlain street to Michigan street and over Michigan street to Seneca street and Seneca street to Champlain street, the route was changed, and the road was continued over Champlain street to Seneca street and did not pass over Canal and Michigan streets; and, especially as to the fact that the building of the road under this grant, for some thirteen miles, was never published separate and apart from other routes, was never applied for separate and apart from other routes, and was never bid upon as a separate route; and the city has let it as a separate and distinct route without bidding, without application and without advertisement, and in this, the spirit, intent and purpose of the law has been so far violated that the carrying out of this contract should be enjoined.

The defendants’ counsel in this case have urged upon the court the great public benefit that this road will be to the public in this city, and of its being a step taken in the direction that will result in good, and that the court should be willing to help to carry out a puprose to benefit the public. While these considerations urged with so much earnestness by counsel, appeal to the court with all the force that they should have in a connection oi this kind, yet we regard it our paramount duty in consideration of this, as we do in all cases, to determine what the rights of the parties are. These rights resting in contract, and this contract as to its legality being measured by the authority of the city to enter into and to make such a contract, the only consideration that is worthy of our attention in this case is, as to whether the city has complied with the laws defining its duties and rights, and, if it has acted lawfully, its action should be approved. If it has acted beyond its power, or in such a manner as to thwart the purpose and intention of the law of the state pertaining to this matter, then the court should be fleet to say so and enjoin such unlawful acts. So that our only purpose, as it is our only duty, in determining this case, is to determine whether the city in making the contract it has made, has proceeded according to law and has carried out the purpose and intent of the law in what it has done.

The streets and highways belong to the state and are under the control of the state, and, in former times, the establishment of a street railroad was usually granted by a special act of the legislature; but the state has seen fit to place the stieets of a city under the control of the city authorities, subject to such regulations and restrictions as the state may see fit to impose. Merely granting to the city power over streets at a time when street railroads were not contemplated, would not necessarily give to the city power to regulate and control the building of street railroads within the streets of the corporation; and, hence, after giving the power to the city to regulate and control and improve and lay out and establish streets, the legislature, after street railroads became in use, saw fit, in Sec. 3487 Rev. Stat., to define wherein the municipal corporations of the state may allow street railroads to be constructed, and conferred upon the city the power, in Sec. 3438 Rev. Stat., to grant authority to construct the same, and has seen fit under Secs. 2501 and 2502 Rev Stat. and other sections in connection therewith, to prescribe terms and conditions upon which the city council can allow sucn roads to be built, and these are limitations upon the power conferred upon the city council by the former sections, and the power being granted under limitations and conditions attached thereto, the power can be exercised only in accordance with the limitations and conditions as found in the statutes. If these have been complied with in the granting of this railroad in the streets, the city has performed its entire duty, and its acts should be approved by the courts; if not complied with, it has tailed to make a legal contract and the carrying out of the same should be enjoined.

Section 2501 Rev. Stat, provides:

“No corporation, individual or individuals shall perform any work in the construction of a street railroad, until application for leave is made to the council in writing, and the council by ordinance shall have granted permission, and prescribed the terms and conditions upon, and the manner in which the road shall be constructed, and operated, and the streets and alleys which shall' be used and occupied *herefor, but the council may renew any such grant at its expiration upon such conditions as may be considered conducive to the public interest. ” c

The purpose of this section is to point out what steps are necessary In establishing a road; and it provides that the first step, before any tning shall be done, is, that there must be made an application to the council in writing, and the second step is, that the council by ordinance shall grant permission, and, in that ordinance, it shall prescribe the terms and conditions upon, and the manner in which, the road shall be constructed and operated and the streets and alleys which' shall be used and occupied therefor.

And we think it is the intention of the statute, that upon leave being applied for, the council must, by ordinance, which is the establishing ordinance, map out the streets and alleys and th'e route that the road is to pursue, and fix in that the terms and conditions and the manner in which the road shall be constructed and operated; and Sec. 2502 Rev. Stat. provides that none ot tlv-se things shall be done; there shall be no ordinance nor resolution to define a street railroad allowed except upon the recommendation of a certain board if the city has that board, and no grant shall be made except to the corporation, individual or individuals that will agree to carry passengers upon such proposed railroads at the lowest rate of fare.

' It seems to us, then, that Sec. 2501 Rev. Stat. definitely fixes what shall be done in or by the establishing ordinance. We do not intend to say that the council cannot act, by way of making an establishing ordinance, unless some one has applied lor leave to build a railroad; but the legislators seem to have taken it for granted that the council would not act unless some one desired to build a road; and Sec. 2502 Rev. Stat. says, that no grant shall be made except to the corporation, individual or individuals that will agree to carry passengers upon such proposed road at the lowest rates ot fare, and shall have previously obtained the written consent of a majority ol the property holders upon such street or parts thereof. v

The establishing' ordinance is a condition precedent, and, that it shall mark out the streets and alleys over which the road shall pass, is imperative, and the publishing thereo! required in the same section is imperative, and all that must be done before any contract can be made, and before any contract can be made there must be some method adopted of ascertaining the lowest bidder. The only practical way to ascertain the lowest bidder is by calling for bids and sealed proposals and determining it in that manner, and the city did not undertake to determine it in any other way, and that, to our minds, is the only practical method and the one contemplated by the statute.

In this case, the contemplation of the establishing ordinance is but one railroad, although some seventeen different routes are prescribed in the ordinance, yet it is everywhere referred to as one road. It was treated by the council in the establishing ordinance as one road; it was published as one road, and the streets and alleys were defined as being o?ie road; it was a unit. There is no suggestion, in the establishing ordinance, ot different roads, but only different routes of one road, and the whole action of the city, up to the time of the granting of the contract, seems to point to but one road, but, after the publication, the city undertakes to change the route of the road and undertakes to dissect this road into parts, and accepts a bid over all these routes as though made on the one that it let.

It is contended on the part of the defendants, that no application is necessary prior to the establishing ordinance; and it is contended that the passage of an establishing ordinance is not necessary and is not required by the statute — that it is a mere voluntary proceeding by the council if done at all and is extra-statutory. We cannot agree with counsel in these views. There is no doubt some uncertainty in the authorities as to the purpose ol the application, and this same purpose seemed to bother the judge in the case of Aydelott v. Cincinnati, 4 Circ. Dec. 486 (11 R. 11); but the courts are quite uniform in holding that an application and publication thereof is jurisdictional to the passage of the finai grant. i

In Aydelott v. Cincinnati, supra, that court held that if an application for the route as finally granted, was not made and published prior to the passage of the final grant, such final grant would be void. This case has a very direct bearing upon the grant on Champlain street between Canal and Ontario streets as made in this case, and it was held in that case that if the streets were changed after the publication, it would be necessary that there should be a new application and a new publication before the making of the final grant, and, if they were not made, the grant would be void.

It seems to be fully within the intent as well as the letter of the statute, that some resolution or some proceeding of the council is necessary bel ore bids are taken, in order to advise bidders as to what they are to bid upon, and especially as to a definite route. There would be no basis on which bids could be oflered unless some route over definite streets and alleys was established and the conditions and rules and regulations governing the construction and operation of the road were definitely known to those who expect to bid.

The defendants rely upon the case of Sandfleet v. Toledo, 8 Circ. Dec. 711 (10 R. 460), as authority that an establishing ordinance or resolution is not necessary. But an examination of that case shows that Sandfleet sued as an abutter, and, suing in that capacity, the only question he could raise was the question as to whether the necessary consents had been obtained or not, and he was not concerned with the sufficiency of the application, and the preliminary steps taken by the company and the city were not pertinent questions so far as his rights were involved in the case, and hence that question was not properly before the court. In that case there had been an application for the railroad, and that had been published; there had been competitive bidding, and the railroad had been constructed except one street where it had been enjoined at the suit of an abutter lor want of necessary consents on that street. Bater, new consents were obtained and a grant made to extend over the street in which the line had not been built lor want of consents. The court seemed to regard the publication of an application for the purpose of soliciting bids, as unnecessary because this was an extension and so regarded by the court, and, for that reason, no application was necessary in the case. The court states that it was not the inauguration of a new enterprise; that the street had been once applied for; that the application had been published, and the successful bidder had been ascertained, and the grant had failed for the want of the necessary consents, and that, as to the public, the railroad over the rest of the route was effective as to it.

We do not see how any question could have been raised in that case that would, in any event, bear upon the case before the court. The plaintiff was such that the only question which he could raise, would be a want of consents, and we think that case falls entirely short of being authority lor the proposition that the city can, after the preliminary steps are all taken and the jurisdictional facts found to exist, grant only one part of the line upon which bids have not been taken separate and a part from the other portions.

The defendants claim that Sandfleet v. Toledo, supra, is authority for their claim, that a street not applied for and not bid upon can be covered by the final grant. In that case Summit street had been advertised, bid upon, and had been granted. Every requirement of the law for the protection of the public rights had been complied with; nothing had been left undone; no member of the public could have made any complaint; and construction was enjoined on that street at the suit of an abutter for want of necessary consents. Afterwards the requisite consents were obtained, and that disposed of the only question that the abutter could make, and the question as to whether, when the consent, failed on Summit street, the balance of the grant was valid or invalids was never before the court. The only question as to the validity in that case that was raised and the only one upon which the court could pass, was as to the validity of the consents and whether the required number had been obtained. There was no occasion for the court to pass upon the validity or invalidity of the balance of the grant; it was not challenged by any one who could have been sustained in court under such a challenge.

In Smith v. Railway Co., 10 Dec. 441 (8 N. P. 1), definite routes had been applied for, and application had been published, and all the necessary jurisdictional steps had been taken to a lawful grant as to all questions in which the public was interested, or which the public could raise. The only question there was raised by an abutting owner, and the only question he could raise or did raise, was as to wherther the required number of feet had been obtained; and, after the consents were obtained on these routes the city made a contract for the balance ot the road as already let.

We do not regard these cases cited as any authority upon the question before this court pertaining to Champlain street. In this case, there had been no application, no publication as to Champlain street, no proposals were called for, none made; and, with respect to thisf street, there had been no bidder whatever, and the difference in the facts are so striking, that the authorities cited fall far short of establishing the proposition.

We are also referred to Buckner v. Hart, 52 Fed. Rep. 835. The plaintiff in that case resided on a street which had not been offered for competitive bidding. He objected to the construction of a railroad on that street, and the court held the grant invalid on-that street because it had never been put up to competition, but the court was not called upon to say, and did not say, whether this Fact rendered the whole ordinance void or not, but did hold the ordinance void on other grounds. The case is authority in the case before the court only so fár as it decides that the railroad could not be constructed on the street on which plaintiff lived because that street had never been put up to competition. And the court further proceeded to hold, that the ordinance was void for other reasons. We cannot discover that the court intimates whether the ordinance would be void for that reason or not.

It is said that the change from Canal and Michigan streets to Champlain street is so slight a change that the court should not enjoin the carrying out of the contract on that ground alone. It is admitted that if the application, the establishing ordinance and the publication are imperative requirements of the statute, then the city has not complied therewith as to Champlain street; and the comparatively small distance is such when taking into consideration the thirteen miles, that the court ought not to overturn the granting ordinance on account of that very issue. As we have said before, this entire system is, in contemplation of the parties, but one contract, but one road, and is not separated until application is made before the passage of the granting ordinance to build the thirteen miles. But this question should not be determined on the ground of the insignificance of the deviation, but upon broader principles. The' object and purpose of all that the city is doing and is required to do by the statute is to get finally the lowest bidder, or the one who will carry for the lowest rate.

It was known at the time that these bids were made, or soon after, if not at that time, that consents could not be had on Canal street, and, for aught this court may know, that fact may have deterred other bidders from putting before the city a bid. If a party knew that he could not get consents to build the road, providing he should be found the lowest bidder, he would not be likely to bid at all; and, if there had been an intimation at the time the bids were received, that the change could be, or would be made, for aught we know, other and lower bids might have been received. And this matter, although claimed to be insignificant, may have been the very thing that kept others from bidding; and only one having bid, can the city change the route without after-wards notifying, or publishing notice, by which others may be permitted to bid after the change is made? We think there is no authority in law for the city doing that, and we cannot, in our judgment, overlook the matter on the ground of its insignificance, for, while it is not extensive as to the length of change when compared with the entire line, yet it is sufficient to entirely thwart the very purpose of the statute, and, that being so, the city would have no right to make the change.

We have already said that Secs. 2501 and 2502 Rev. Stat. are limitations upon the mode and manner in which the city shall control the streets, and, being such, they must be substantially, at least, adhered t'o. The statute clearly contemplates that the city is to act when application is made to it, and, when it does act, the steps it is to take are definitely pointed out — as to publication and defining the route, and letting to the lowest bidder, and requiring consents, before the contract is made.

The object and purpose of the statute in requiring publication is, unquestionably, to advise bidders of the nature and character of the road and its location, and of the requirements of the city as.to its rules and regulations in governing the construction and running of the same. It is haul to conceive of any other method by which the city might ascertaih the lowest bidder and the public be assured that the lowest bidder had been obtained; and the city adopted this method as to the entire routes described in Section 1 of the establishing ordinance. Those steps were all regular and properly taken for the purpose of establishing a street-car line on that entire system. But if it was the purpose of the city to let only a portion of the seventy miles or over, after having proceeded regularly to let the whole, and have no bidding arrangement between the bidder and the city as to the remaining portions, but leave them in that condition that if the line is sought to be established upon them, there is no binding contract on the bidder to build them and no binding obligation on the city to allow the bidder to build them. This arrangement seems to divorce entirely the thirteen miles let from the entire road and make of it a distinct and separate road. No bids were ever offered or received upon this thirteen miles; none were ever called for; there were no advertisements for bids on it; hence, there never was competitive bidding, never a chance offered by the city for competitive bidding on it. For all that appears, this may have been the only desirable route on which any one would bid, were the different routes separated. And to obviate the difficulty in which the facts of the case place the city and Hoefgen, it is necessary for the city to contend that application, advertisement and definite description of route are entirely unnecessary; that the only jurisdictional facts to be ascertained by the city before making the contract is, that it has obtained the lowest bidder and that the grants are obtained. And the argument of the city is, that a start can be made from the point in the proceedings where Hoefgen made application to build the thirteen miles; and, if from that point, the city obtained for that portion the lowest bid, then the contract is a valid one, and the city seems to conclude that it devolves upon the public, as represented by the plaintiff, to show that the lowest rate of fare has not been obtained. This, we think, is illogical and leads to an erroneous conclusion.

The statute points out the method in which the lowest bidder is to be obtained and that method is intended for the protection of the public, and, when the steps contemplated by the statute have been taken, the public is protected, but, if those steps are omitted, the public, in veiw of th« legislation upon this subject, is not protected.

For all that appears in this case, it may be that much better terms could have been had on this thirteen miles of road than upon the entire road as advertised. It may have been there would have been many bidders for a road of that length, that would not bid on a road seventy miles or over in length. Much less capital would be involved, and this, of itself, would increase the number of bidders; and the fact that this thirteen miles was a part of the entire line will not validate the action taken in the contract made by the city, for, as we have said before, the city is under no obligation to let any more of the entire road to Hoefgen) nor is Hoefgen under any legal obligation to build the same.

The thirteen miles has been taken as completely out of the entire line as though it had been separate from the beginning. We are of the opinion that the requirements of the statute were not followed in making the contract in question; and the deviation from the statute is such that the public has a right to require the statute to be followed before a contract shall be left tor building the thirteen miles.

It has been said in argument, as to the variation between the establishing ordinance and the granting ordinance, and as to the conditions as to paying a part of the income from the road into the city treasury, and provisions for arbitration as to differences between the road and its employes, and as to the right ol the city to purchase at a future date should it receive the power to do the same from the legislature, and other provisions of like character are immaterial. It seems to us that some of these provisions of the contract, and some of these variations between the two ordinances, are very material, and such an arrangement does not afford the protection that the public is entitled to have under the statutes. SeveraTof the provisions may be proper in a contract ol this character, but, if, as the city claims, the only object and purpose of taking the various steps in obtaining a contract is to ascertain who is the lowest bidder, if that is the ultimatum, and the steps to arrive at that, are immaterial, then it might, perhaps, be said that the contract is not so hampered by these provisions that they might not be included under the provisions of the statute allowing the city to prescribe the rules and regulations and the methods of running the road, but this, clearly, would not seem to include a right on the part of the city to determine the method in which differences between employer and employe should be settled, nor would it include the right of the city to place in its terms of arbitration upon the right of the city to purchase. These things are not contemplated in the statute, and the tendency of them is to keep persons from bidding, and, if they do bid, to increase the rate of fare, and we believe them to be contrary to the spirit of the law.

As to the variation between the establishing ordinance and the granting ordinance as to the route to be followed — referring now to those instances where there is a difference other than that of Champlain street — the only grounds on which it is sought to justify the .same is that the variation is an immateria,l one, being slight, and the variation being as long as the route first prescribed; and, second, on the grounds that no ordinance defining the route was necessary, that it might have been done by any method and at any time changed before the granting ■ordinance.

The claim as to the variation being a substantial route, as pubished in the establishing ordinance, is perhaps, correct under the evidence in the case; but the claim that a definite route is not necessary is, we think, not well taken. But we do not believe that an ordinance ■should be held invalid, thus changing the route, unless that change would be such in its nature as to make a difference in the bidding, and, we think, under the evidence in this case, the difference in the bidding would have been slight, if any, and on that ground alone, we would not enjoin the carrying out of this contract.

It is contended by the defendants, that the plaintiff has no right to bring this action; that he is not sincere in bringing it for the protection of the public, but that he is bringing it for the protection and benefit of the other street-car lines in the city. The only requirement of the statute is fully complied with. There is no intimation in the statute that the party bringing the action must not have some personal motive and that he may not be influenced by other things than the mere protection of the public; and, in a case tried at Elyria, which went to the Supreme Court and was dealt with there in a manner that the court could not have overlooked this same question, it was ignored by the-Supreme Court, though it was made in the case, and the Supreme Court could not have reached the conclusion it did if this ground is well taken in this case. It was not well taken in that case, and the party aggrieved was the one who brought the action in behalf of the public. We do not think this ground is well taken.

The judgment is, that the restraining order in this case be made ■perpetual.


source: Caselaw Access Project

author: ALBAUGH, J.

license: Public Domain

text:
    JUSTICE OF THE PEACE — ADMINISTRATORS.
    [Coshocton (5th) Circuit Court,
    November Term, 1891.]
    Albaugh, Jenner and Follett, JJ.

       Emma E. Squires v. Joseph Martin, Admr.
    1. Liberal Rules Should Govern in Reviewing Proceedings of Magistrates."
    It is the duty of a reviewing court to adopt liberal rules in reviewing the proceedings of justices of the peace and other inferior tribunals, so far aa respects regularity and form, provided they act within the limits of their jurisdiction.
    2. Sufficient Pleadings in Justice Courts.
    No particular form of bill of particulars or pleading is required before a justice of the peace. It is sufficient if it simply states the nature of the claim in general terms, or substantially states the facts constituting the cause of action; it is not required to state a cause of action before a justice of the peace .with the accuracy of a petition in the court of common pleas. There was no error in the justice overruling the motion of defendant below to dismiss the action, on the grounds that the plaintiff’s bill of particulars did not allege his appointment and capacity as administrator, or that the claim was duly presented to him and rejected, or in overruling the motion for a new trial.
    3. Exceptions Embodying Evidence Before a Justice of the Peace not ReviewablE, When.
    That the finding or verdict is against the weight of the evidence does not' come within Sec. .6565 Rev:Stat., authorizing exceptions in cases before justices of the peace,, which provides, “ In all • cases before a justice of the peace, whether tried by jury or by the justice, either party shall have the right to except to the decisions of the justice upon any matters of law arising in the case,” and the bill of exceptions embodying the evidence cannot be considered by the reviewing court with a view of reversing the judgment.
    (. Sufficient Evidence of Capacity of Administrator.
    In an action against a party as administrator, who is properly summoned as such administrator, and who appears and makes a defense before a justice of the peace, and prosecutes error proceedings in the court of common pleas, and as such administrator answers to the summons of the plaintiff in error in this court, and contests the plaintiff’s claim in all the courts, is sufficient evidence by admission of his capacity as such administrator to sustain a judgment against him as such.
    5. Presumption That Proceedings are Regular.
    Where the transcript on its face shows that the proceedings of the justice of the peace were regular, every presumption will be made in favor of the judgment. It will therefore be presumed that every fact necessary to establish the liability of the defendant was properly proven before the justice and jury.
    6. Objection after Verdict Will not lie to Venue, When.
    Under an agreement of the parties, to avoid a change of venue or place of trial, there can be no objection made alter verdict by either party to the justice making a statement to the jury, as evidence for the plaintiff, such statement having been made by consent of parties.
    Error to the court of common pleas of Coshocton county.

      W. & A. H. Stillwell, for plaintiff in error, cited:
    Swans Treatise (16 ed.) 16, 35 ; Bruder v. Biehl, 1 Circ. Dec. 51 (1 R. 85); Sec. 6565 Rev. Stat.; Reonard v. Cincinnati, 26 Ohio St. 447» second syllabus; Baer v. Otto, 34 Ohio St. 11, second syllabus (opinion 15); Bancroft v. Talbott, 29 Ohio St. 538; and see Barto v. Abbe, 16 Ohio 408, and State v. Wood, 22 Ohio St. 537.
    Himebaugh & Nicholas, for defendant in error.

      This decision was affirmed by the Supreme Court without report, December 4, 1894, Martin v. Squires, 52 Ohio St. 634.

   ALBAUGH, J.

The case of Emma E. Squires, plaintiff in error, against Joseph Martin, administrator of the estate of Martha Simpson, deceased, defendant in error, is an action brought by the plaintiff against the defendant, Joseph Martin, as such administrator, before William Hickson, justice of the peace of Jackson township, Coshocton county, and was tried to a jury, March 26, 1891, resulting in a verdict and judgment for the plaintiff and judgment for costs.

Upon the trial before the justice the defendant, Martin, moved to dismiss the action, “on the ground that the plaintift’s bill of particulars does not set out and allege the appointment of the defendant, and his capacity as administrator of Martha Simpscn, deceased, and does not allege that the claim on which this action is founded, was presented to the defendant as such administrator, and rejected by him.”

The justice overruled this motion, to which Martin by his attorneys excepted, and the plaintiff was permitted to amend her bill of particulars, by stating on the margin (although it is not shown on the docket or the transcript, but it.appears on the original bill), that Martin was the duly appointed, qualified and acting administrator of the estate of Martha Simpson,and that said claim was presented to him as such administrator, by the justice, at the request of the plaintiff, and he was requested to endorse the claim as allowed, or to pay the same, which he refused to do.

It also appears that before the trial, at the time the jury was selected, it was agreed between the parties by their attorneys, to avoid a change of venue and removal of the case belore another justice lor trial, that justice Hickson should state to the jury certain facts as evidence for the plaintiff, which was claimed to be material on the trial. After the verdict was returned for the plaintiff, Martin filed a motion for new trial, which was overruled and exception taken, and a bill of exceptions embodying all the evidence given at the trial.

Martin, as- such administrator, thereafter prosecuted error in the court of common pleas and reversed the judgment of the justice, and the plaintiff in error now brings this proceeding to reverse the judgment of the court of common pleas.

In the court of common pleas, Martin as such administrator alleged that there was error in the record and proceedings of the justice substantially as follows:

1. In overruling his motion to dismiss the action on the ground that the plaintiff’s bill of particulars did not allege his appointment as administrator, and that the claim was duly presented to him as such administrator, and rejected.

2. In overruling the motion to set aside the verdict of the jury, on the groun.d that it was against the weight of the evidence, and that there was no evidence offered to show ■ that defendant below was administrator of the estate of Martha Simpson, deceased.

3. That there was no evidence ottered that plaintiff’s claim was ever presented to defendant as such administrator, for his allowance or rejection, or that the claim had been rejected by him.

4. That the justice erred in his charge to the jury on the trial of said cause; that the special request of plaintiff was misleading, and not supported by any evidence in the case.

5. The facts set forth in the bill of particulars of plaintiff below are not sufficient to maintain said action against plaintiff in error.

6. The justice erred in the admission of the evidence of plaintiff below, to which defendant below objected.

7. The justice erred in excluding evidence offered by defendant below.

Defendant in error, Emma Squires, in the court of common pleas, filed a motion, supported by affidavit, for diminution of the record, suggesting that the transcript and record of the justice were imperfect and incomplete, in this, that they do not show the allowance by said justice of an amendment by plaintiff below to her bill of particulars, made and endorsed on the margin of the original bill of particulars March 25, 1891, at the time of and before commencement of the trial, in the presence of the court and jury, and requested that an order issue to the justice to correct his record and transcript so that they show the facts as to the amendment, which motion the court overruled, to which defendant in error excepted. Afterwards at the April term, to-wit, April 20, 1891, of the court of common pleas, the case was heard on the petition in error, and the following entry made:

“On consideration whereof the court find that there is error in said proceedings and judgment, and said judgment is therefore reversed at the costs of the defendant in error, and it is further ordered that the case be retained in the court of common pleas for trial and judgment as in case of appeal, to which ruling and decision defendant, Emma E. Squires, by her counsel, excepts.”

This proceeding is now brought in this court to reverse the judgment of the court oí common pleas, alleging that the court erred in reversing the judgment of the justice of the peace, and in taxing the costs against her, and in ordering that the case be retained in that court for trial.

It is the duty of a reviewing court to adopt liberal rules in reviewing proceedings before justices of the peace and other inferior tribunals, so far as respects regularity and form, provided they act within the limits of their jurisdiction. No particular form of bill of particulars, or pleading is required before a justice of the peace. It is sufficient if it simply states the nature of the claim in general terms, or substantially states the facts constituting the cause of action; it is not required to state a cause of action with the accuracy of a petition in the court of common pleas. Swan’s Treatise (16 ed.) 16, 35; Bruder v. Biehl, 1 Circ. Dec, 51 (1 R. 85).

There was no error in the justice overruling the motion of defendant below to dismiss the action, on the grounds that the plaintiff's bill of particulars did not allege his appointment as administrator, and that the claim was duly presented to him and rejected, or in overruling his motion tor a new trial.

As to the claim that the verdict was against the weight of the evidence, we hold this does not come within the provisions of the statute authorizing exceptions in cases before justices of the peace. Section 6565 Rev. Stat. provides, “In all cases before a justice oí the peace, whether tried by jury or by the justice, either party shall have the right to except to the decisions of the justice upon any matters arising in the case;” and the bill of exceptions containing the evidence cannot be considered by the reviewing court with a view of reviewing the finding or verdict. The sole object oí the bill of exceptions provided for in this section is for the review of questions oí law.

The Supreme Court have substantially held to this effect in Leonard v. Cincinnati, 26 Ohio St. 447 (second syllabus); also in Baer v. Otto, 34 Ohio St. (second syllabus) 11, opinion 15, and see Bancroft v. Talbot, 29 Ohio St. 538; also Barto v. Abbe, 16 Ohio 408, and State v. Wood, 22 Ohio St. 537. See 90 O. L. 358, 359(1893); Sec. 6565 Rev. Stat., amended.

It is further claimed by the defendant in error, that there is not sufficient evidence to show that he is the administrator of the estate'of Martha Simpson, deceased, and no evidence to support the verdict, and that there was no evidence offered to show that the plaintiff's claim was presented for his allowance or rejection as such administrator. The record shows that the defendant appeared before the justice of the peace and contested the case as administrator; also in the error proceedings in the court of common pleas and again in this court. The appearance of the defendant in error as such administrator in the courts below and in this court, and contesting plaintiff’s claim in all the courts, is evidence by admission sufficient of his capacity as such administrator, and the claim, under such circumstances, that there was no evidence upon the trial that he is ' the administrator, is too technical for consideration, in view of the liberality allowed under the statute in actions before justices of the peace.

The transcript on its face shows that the proceedings of the justice of the peace were regular. Every presumption is therefore in favor of the judgment. It will therefore be presumed that every fact necessary to establish the liability of the defendant was properly proven upon the trial before the justice and the jury. We find in this record evidence sufficient, in our opinion, to support the verdict, that the claim was presented to the defendant as such administrator and its allowance refused. Then again the presenting of the claim to the defendant as administrator and his refusal to allow it as a valid claim, are shown by the testimony of the justice before whom the case was tried, whose testimony was admitted by consent of the parties. There are other assignments of error which we have examined, but which are not of sufficient importance to notice further than to say that we find no error in the proceedings before the justice of the peace.

Upon an examination of the whole record of the justice of the peace and the proceedings in the court of common pleas on error, we are of the opinion that there are no substantial errors disclosed in the proceedings before the justice prejudicial to Martin as administrator, and that the common pleas court erred in reversing the judgment and proceedings of the justice ol the peace, and in taxing the costs against defendant in error, and it is thereupon ordered and adjudged that the judgment of the court ol common pleas be reversed, at the costs of defendant in error, Joseph Martin as administrator, and that of the justice be affirmed and that the case be remanded for further proceedings.


author: SWING, J.

text:
    APPROPRIATION — STREETS—DAMAGES.
    [Hamilton (1st) Circuit Court,
    1900.]
    Smith, Swing and Giffen, JJ.
    Ella R. Tenney et al. v. Cincinnati.
    1. Rule as to Recovery eor Property Taken eor Street.
    Damages for property taken for street purposes should be recovered in condemnation proceedings and be awarded with reference to the establishment of a reasonable grade. Hence, the fact that the court erred in the proceedings to condemn will not allow the circuit court upon error to another action to right a serious wrong to the parties, especially when the grade has been established for more than fifty years and is a reasonable one.
    2. Rule as to Recovery for Widening Street.
    Where property is condemned for the purpose of widening a street having an established grade, the damage awarded should, in the absence of a showing that some other grade is contemplated, cover the injury which would be caused by the improvement of the strip to the grade corresponding to the grade of the street as already established.
    Heard on Error.
    Coppock & Hertenstein, Theodore Horstman, Julius G. Penn and Richard F. Werner, for the property owners.
    Ellis G. Kinkead, H. K. Rogers and Frank H. Kunkel, for city.
   SWING, J.

We are of the opinion that the judgment of the court of common pleas should be affirmed in this case.

The parties should have recovered in the original condemnation proceedings all damages for property taken for street purposes which would be caused by the construction on the property taken of a street to a reasonable grade, in the absence of any declaration by the city as to what the grade should be. And in the present case the property having been condemned for the purpose of widening a street with a well established grade, the damage for the construction of the improvement would, in the absence of a showing to the contrary, be that which would be caused by the construction of a grade corresponding to the grade of the street as established.

In this case the improvement is to be made in accordance with the grade of the street as established for more than fifty years and it is a reasonable grade; and the damage, if any, which results to the property owner should have been recovered in the action to condemn for street purposes. That the court in that action erred in not allowing it does not authorize us in this action to right what is undoubtedly quite a serious wrong to these parties. Error should have been prosecuted in that proceeding and not in this.


text:
    APPEAL — INHERITANCE TAX.
    [Hamilton (1st) Circuit Court,
    1903.]
    Swing, Giffen and Jelke, Jf.

       John E. Humphreys, Executor of Isabella Brown, Deceased, v. State of Ohio.
    1. Notice of Appeal Where State is Party.
    Where the state is a party to a suit, and prosecutes an appeal, notice entered upon the record is a proper notice of appeal.
    2. Collateral Inheritance Tax Act Limits Exemptions to Ohio Institutions. *
    It is the purpose of the collateral inheritance tax act to limit exemptions to purely Ohio institutions; denominational corporations organized for purely charitable purposes under the laws of other states are not a care of the state of Ohio, and bequests to such institutions are not entitled to exemption notwithstanding some portion of such bequests may be used in Ohio.
    Lawrence Maxwell, for plaintiff in error.
    Louis B. Sawyer, for the state.

       Eor preceding decision on this case see Brown, Estate of, 13 Dec. 168, wherein the same facts were in controversy in the common pleas.

   SWING, J.

We think the judgment of the court of common pleas should be affirmed.

The court did not err in refusing to dismiss the appeal from the probate court.

The provision in Sec. 6408 Rev. Stat., which requires a written notice to be given, does not apply to the state of Ohio. We find no provision of the statute which does, in terms, apply to the state taking an appeal, therefore, under Sec. 6411 Rev. Stat., Sec. 5227 Rev. Stat. is the section which governs, and under it a notice entered on the records is a proper notice of appeal.

The bequests are to institutions organized for purely public charities, but in our opinion are not to institutions in the state of Ohio. They are all incorporated under the laws of other states, and while controlled exclusively by the Presbyterian church, which church has a very large membership in the state of Ohio, this is not sufficient to make these institutions Ohio institutions within the meaning of this act. The object of the act, we think, was to limit the exemptions to purely Ohio institutions, and this cannot be claimed of any of these institutions. The state must be presumed to have a care for only its own people and its own institutions. While most of these institutions dispense public charity in Ohio, not all of them do. For instance, the Board of Steed-man’s Missions is a corporation under the laws of Pennsylvania, and its charitable work is among the freedmen of the south, so that the only way that this can be considered an Ohio institution is from the fact that a portion of the Presbyterian church is in Ohio. It seems to us that to hold that this is an institution of Ohio would be beyond the meaning of the statute. As to those other charities which operate in Ohio, as far as these bequests are concerned, it is not required, nor is it contemplated that they shall be used exclusively in Ohio. It is possible that all of the bequests may be expended outside of Ohio. No doubt these instr tutions are in their broadest sense national, although incorporated under the laws of different states, and that the Presbyterians of Ohio furnish a large portion of that organization, but being national is the reason why it is not an Ohio institution within the meaning of the act


author: PER CURIAM.

text:
    BENEFICIARY ORDER — DISTRIBUTION OF FUNDS.
    [Hamilton (1st) Circuit Court,
    1903.]
    Swing, Giffen and Jelke, JJ.
    Grand Grove U. A. O. D. of Ohio v. Peter Mullen et al.
    Mutual Division op Dodge Funds Upon Surrender op Charter Valid, Though Irregular.
    A division of tlie funds of a subordinate lodge, upon the surrender of its charter and records to the grand lodge, made among all the remaining members thereof, will not be disturbed where such division comprehends everybody absolutely or contingently, presently or remotely interested in such funds, and no one having any real or substantial interest in the property, objects to the distribution made. The fact that the constitution provides for the distribution of such funds by the grand lodge as trustee will not defeat the division made, it appearing that a just and equitable result has been irregularly reached.
    Sprigg & Fitzgerald, for plaintiff, cited:
    Grand Lodge K. of P. v. Germania Lodge, 88 Atl. Rep. 341 [56 N. J. Eq. 63]; Howard v. Levering, 4 Circ. Dec. 236 (8 R. 614) ; King v. Bell, 36 Ohio St. 460; Rider v. Fritchey, 49 Ohio St. 285, 291 [30 N. E. Rep. 692; 15 L- R. A. 513]; Toledo v. Schulters, 5 Circ. Dec. 269 (11 R. 528); Newberger v. Finney, 9 Circ. Dec. 720 (17 R. 215; Roberts v. Roberts., 61 Ohio St. 96 [55 N. E. Rep. 411]; Bauer v. Samson Lodge, 13 Am. & Eng. Corp. Cas. 618; Madeira v. Mutual Ben. Society, 16 Fed. Rep. 749; Mitchell v. Insurance Co., 51 Pa. St. 402; Walsh v Insurance Co., 30 Iowa 133, 145 ; Treadway v. Insurance Co., 29 Conn-68 ; Penfield v. Skinner, 11 Vt. 296 ; Karcher v. Supreme Lodge, 137 Mass. 368; Royal Arcanum v. Coverdale, 93 111. App. 373; Hass v. Mutual Relief Assn., 49 Pac. Rep., 1056 [118 Cal. 6]; Lawson v. Howell, 50 Pac. Rep. 763 [118 Cal. 613]; Stark v. Byers, 24 Pa. Co. Ct. Rep. 517 ; Livingston v. Lynch, 4 John Ch. (N. Y.) 573; Hall v. Supreme Lodge, 24 Fed. Rep. 450; Altman v. Berry, 27 N. J. Eq. 331; State Council v. Sharp, 6 Am. & Eng. Corp. Cas. 620; Thomas v. EHmaker, 1 Pars. Sel. Cases (Pa.) 98 ; Duke v. Fuller, 9 N. H. 586 [32 Am. Dec. 392]; Nichols v. Bardwell Lodge, 48 S. W. Rep. 1091 [20 Ky. Law 1236],
    Chris. Von Seggern, for defendant, cited:
    Austin v. Searing, 16 N. Y. 112 [69 Am. Dec. 665]; Wells v. Monihan, 29 N. E. Rep. 232 [129 N. Y. 161] ; Wicks v. Monihan, 29 N. E. Rep. 139 [130 N. Y. 232 ; 14 L- R. A. 243] ; Merrill Lodge v. Ellsworth, 20 Pac. Rep. 379, 400 [78 Cal. 166; 2 L. R. A. 841]; Independent Order of Forresters v. Doeahue, 91 111. App. 585.
   PER CURIAM.

The division of the funds in the treasury of Germania Grove No. 5 U. A. O. D., at the time of the surrender of its charter and records to the grand lodge by the • seventeen remaining members, was in violation of the constitution and by-laws of the subordinate lodge and of the laws of the grand lodge under which the subordinate lodge was organized and maintained. If, therefore, anybody with a real or beneficial interest objected to the arrangement and division, it could be set aside and the recipients of the mone^ compelled to return it.

The laws of the grand lodge and the constitution and by-laws of the subordinate lodge, to all of which a member subscribes, make the contract and establishes the relation between the parties.

It is admitted, however, that the grand lodge has no proprietary interest in the funds of the subordinate lodge, and if Germania Lodge No. 5 had paid the $1,051.92 into the grand lodge, the grand lodge would have been a mere naked trustee of the same, holding the fund for' the uses and purposes of the organization, that is, paying benefits to the members of Germania Lodge No. 5.

This being so, and nobody having a real or beneficial interest in the fund being here and complaining, we do not see why the division made by the seventeen members, being everybody, absolutely or contingently, presently or remotely interested in the fund, should not stand, at least as against the grand lodge, on the principles whereby trusts are determined where all the parties who are or may be interested in the trust property are in existence, and sui juris and consent and agree thereto. Trusts are never maintained for the benefit of the trustee. See Perry Trusts, Sec. 920.

True, it might have been more orderly to have procured this division by the sanction of the grand lodge and through its processes or by decree of a cóurt of equity, but the division being accomplished and no wrong having been done or complained of, a court of law will not disturb or undo it merelj^ because a just and equitable result has been irregularly reached.

Judgment affirmed.


text:
    CONTRACTS — PATENTS.
    [Summit (8th) Circuit Court,
    December, 1902.]
    Caldwell, Hale and Hull, JJ.
    (Judge Hull, of the sixth circuit, sitting in the absence of Judge Marvin.)
    Charles L. Douglass et al. v. J. B. Campbell, Receiver, etc.
    1. Whether a Contract is an Assignment or License of a Patent Depends Upon its Effect, not the Name.
    A contract which grants the exclusive right to manufacture, sell and use a certain patented article is an assignment, although it uses the term^" license ” to describe the right granted.
    2. Rights Under Assignment and License of Patent Distinguished.
    An assignment of a patent right, unlike a mere license to make and sell, passes a property in such patent right to a corporation to whom it is made, which, upon the corporation becoming insolvent, will become part of the property in the hands of the receiver thereof.
    8. Parol Evidence not Admissible to Vary Contract, Express or Implied.
    Parol evidence cannot be introduced to vary the clear and settled legal effect and meaning of a contract, nor can it be introduced to vary whatever the law implies from the contract.
    Heard on Appeal.
    Weed & Miller, for plaintiff
    Allen & Cobbs, for defendants.
   CALDWELL, J.

The plaintiffs in this case, on March 15, 1894, were the owners of a certain patent pertaining to tubular steam boilers, and, on that day, as such owners, they entered into a contract with the J. C. McNeil Company, a corporation under the laws of Ohio, having its place ol business at Akron, Ohio, which contract reads as follows:

"This memorandum of agreement made by and between the several owners in common of letters patent oi the United States, No. 478,690, dated July 12, 1892, issued to Herbert'F. Cook, assignor, for an improvement in steam boilers, namely, C. L. Douglass, C. B. Squire and Mary C. Bingham, owners of one-half oi said interest; Herbert F. Cook, C. N. Schmick, S. E- Welker and J. H. King, who are respective owners of one-eighth interest each under the said patent,.parties of the first pari; and the J. C. McNeil Company, a corporation organized under the laws of the state oi Ohio and having its office and place of business at Akron, in the said state, party of the second part, hereinafter called The McNeil Company, made at Cleveland, Ohio, this fiiteenth day ol March, 1894.
“Witnesseth: that the parties of the first part have licensed and do hereby license and empower the party qf the second part to manufacture, sell and use the steam boiler described in letters patent of the United States, No. 478,690, dated July 12, 1892, and issued to Herbert F. Cook, assignor, and by him assigned to the said several parties of the first part, during the life and continuance of the said letters patent and during the life and continuance of any reissue of said letters patent. This license shall also be construed to cover any and all improvements in the said steam boiler which may be hereafter made and described and patented to the said parties of the first part or any of them, during the life of any patent for said improvements issued by the United States of America, or any reissues thereof for any such improvements, devices or inventions as may be acquired by any of the said parties of the first part. The license hereby granted to the party of the second part by the parties of the first part, is an exclusive license to manufacture, sell and use the said boiler and any and all improvements described in the said letters patent hereinbefore recited, and also any and all improvements therein for which patents may be issued to any one of the said parties, or acquired by them, throughout the United States of America, excepting the states of California, Oregon, and Washington, during the term and period covered by said letters patent Nó. 478,690, or during the life and continuance of any letters patent which may hereafter be secured or owned by the parties of the first part or either of them upon any improvements, devices or inventions to be attached to or make a part of said steam boiler described in said letters patent, No. 478,690.
“2: In consideration of the said foregoing exclusive license granted by the parties of the first part to the party of the second part to manufacture and sell boilers and improvements therein described in letters patent of the United States, No. 478,690, and any reissue thereof or improvements thereon,” the said party of the second part hereby agrees with the parties of the first part to pay to the said parties of the first part the sum of $1.00 per horse-power for every boiler manufactured and sold by said party of the second part under letters patent of the United States, No. 478,690, provided said boiler is of the capacity of one hundred horse-power or more; upon boilers having a capacity of less than one hundred horse-power and equal to or greater than seventy-five horse-power, the royalty thereon shall be seventy-five cents per horse-power; upon all and any boilers manufactured and sold by said party of the second part embodying the said improvements whose capacity is less than seventy-five horse-power, the license fee or royalty to be paid therefor by said second party shall be fifty cents per horse» power.
“It is expressly understood and agreed between the parties hereto that in case the party of the second part should use any devices covered by letters patent of the United States for improvements in the said boiler described in said letters patent, No. 478,690. which may hereafter be secured or owned by said parties oí the first part or any oi them, the party of the second part shall not pay any other royalty than that described in and provided for by the terms of this paragraph.
“8. The party oi the second part agrees with the parties of the first part that it will account and pay over to the parties of the first part, semi-annually, on the first day of October'and the first day of April in each year during the life of letters patent No. 478,690, and so long as the party of the second part manufactures and sells and uses boilers thereunder, for royalty on all boilers manufactured and sold and delivered by the said party of the second part during the six months immediately preceding the first day of September and the first day of March respectively in each year; that is to say, the said party of the second part shall on the first day of April in each year account lor and pay royalties on all boilers which have been manufactured and sold and delivered during the six months preceding the first day ot March of said year and on the first day of October, shall account and pay over to said parties of the first part all royalties due for the six months immediately preceding the first day ot September in said year. Until further notified by any of the several parties in interest, all of the said accounts shall be rendered and payment made to Messrs. Bingham, Douglass & Squire of Cleveland, Ohio.
“4. It is further agreed by and between the said parties hereto that for the purposes of this contract, one horse-power is defined to be ten square feet of heating surface in tubes.
‘ ‘5. The parties of the first part agree to furnish to the party of the second part all drawings, measurements and information necessary to enable it to build a complete boiler under said letters patent, No. 478,690.
“6. The said party of the second part agrees with the said parties of the first part that it will use all reasonable efforts during the continuance ol this contract to promote the sale and use of the improvements covered by the said letters patent; that it will by all reasonable means in its power extend the use and sale of boilers embodying the said improvements throughout all the territory covered by the said contract. The said party of the second part expressly agrees that it will not during the term of said contract, manufacture, sell or use, or promote the manufacture, sale or use of any water-tube boilers other than the one described in the said Cook patent, No. 478,690. For the purpose of this contract, a water-tube boiler is defined to be a steam boiler having tubes filled with water and upon the outside of which the heat impinges.
“ The said second party hereby admits the validity ofi said letters patent in consideration of the granting of the said license; and it is further mutually agreed between the said parties that in the event that the said letters patent, No. 478,(590, dated July 12, 1892, be finally determined to be invalid by the United States courts ol final resort, then and in that case this contract shall be void from the date of such determination. , '
“8. The said second party agrees to keep full and accurate accounts of all sales made by it under this contract, which shall be open at all reasonable times to the examination of said first parties or of their representatives duly authorized by them in writing.
"In witness whereof the parties have hereunto set their hands on the day and year first above written.
¡ “(Signed) Mary C. Bingham,
“C. E. Douglass,
“C. B. Squire,
"H. F. Cook,
“J. H. King,
“C. N. SCHMICK,
"S. E. Welker.
“(Signed) The J. C. McNeil Co.,
“By A. M. Cole, Pres’t.
“J. B. Campbell, Sec’y & Treas.”

Some time thereafter, and after the J. C. McNeil Companj* had been making boilers under this patent, that company went into the hands of a receiver. J. B. Campbell, the defendant in this case, is now the receiver. The boilers then under construction under the order of the court, and, under the same order, proceeded to carry on the business, manufacturing other boilers under the patent, but claims that he did not construct the boilers other than those under way after he became the receiver under the agreement above set forth, but says that he went into court, and, under the order of the court, upon a proper • application, obtained leave to purchase a one-eighth interest of the patent, and, under that purchase, he has been operating since he obtained the one-eighth interest referred to.

This action was brought, asking him to account for all the boilers he has constructed as receiver, and he sets up the defense that he has constructed no boilers under the agreement save the two that he completed after the receiver was appointed. After the case was appealed to this court he obtained leave to amend his pleading and set up certain facts, and, on the facts so set up, asked for a reformation of the above contract.

The contract is termed by the parties a license. In several places where they seek to denominate the character of the contract it is called a license, and, in one place it is called an exclusive license; and the defendant claims that the contract conveyed to the McNeil Company only a license to use the patented improvement. The plaintiffs claim that the contract is more than a license, and that it is a grant and conveys all the monopoly that the plaintiffs had in the patent; and that claim is based upon the language used in the contract — that it conveyed to the J. C- McNeil Company the power to manuiacture, sell and use said steam boiler described in the letters patent; and the contract says that “The license hereby granted to the party ol the second part by the parties of the first part, is an exclusive license to manufacture, sell and use the said boiler and any and all improvements described in the said letters patent. ’ ’

And the question to be determined in the case 3s, whether the contract is a license, or an assignment, or a grant.

Formerly in the patent law, there was a difference between an assignment and a grant, which distinction was determined by the amount of terrritory covered. If the territory covered in the assignment was all the territory covered by the patent, it then amounted to an assignment; if the territory covered was only a part of that conveyed by the assignment, it was known as a grant.

This contract, reserving a part of the United States to the plaintiffs under the former classification formerly in the patent law, would be known as a grant, but this distinction has now been broken down to that extent that all conveyances of patents, whether covering the entire territory covered by the patenr or only a certain portion of the same, is now called an assignment. So that, in the lurther consideration of this case, we will not undertake to keep up any distinction between assignment and grant. An assignment is where the party owning the patent, transfers all his interest and title and right to make, use, and sell, to his assignee. A license is where he transfers simply a use, simply a right to make and use, or use and sell, or make and sell the article made; it conveys no interest in the patent nor in the monoploy, but simply a right to operate under the patent and use the monopoly. Every patent gives to the patentee a right to make, use, and sell the article patented, and, when he disposes of this, he disposes of all that he has, and the one who obtains it from him, has his entire right; while a libensee only operates under the rights of his licensor. So that, if this contract transferred, as it purports to, all the interest that the plaintills had in the patent, then it cannot be a license, but is an assignment. If the contract had omitted calling the interest transferred a license, there would be no room for construction of the same.

It is urged in the case, that, in the petition first filed, the parties themselves treated the contract as nothing more than a license and so denominated it. In determining, then, what was transferred by this contract, we have the language of the contract, which would make it an assignment, and also the language oi the parties calling it a license, and we are called upon to say which it is.

The defendant, in his cross-petition to reform this contract, has offered testimony tending to show that the plaintiffs agreed to prosecute in their own name all suits of infringement of the patent, and has also offered evidence tending to show that the J. C. McNeil Company had no right to allow others to make the boiler containing the patented improvement; and from this testimony, which is contradicted by the plaintiffs, it is insisted that we should reform this contract so that it will appear when reformed, that the plaintiffs were to prosecute all suits for infringement and had reserved to themselves the right to grant to others the privilege of operating under the patent. And it is claimed that if the contract is so reformed by inserting these two elements, then it will appear that the plaintiffs retained to themselves the title to the |íñfení, and having retained the title to the patent, the defendant, The J„ C. McNeil Company, is a licensee under such reformed contract. The evidence is of that character that he would not be warranted, in law. íe reforming the contract as we are asked to do. The evidence must be dear and certaiis before a reformation can be had. It is doubtful in our minds whether the evidence would warrant the court in believing that the agreement as to prosecutions and letting to others a right under the patent was as claimed by the defendant. He takes upon himself the burden of producing sufficient evidence to warrant the court in making Kite reformation. In this, he has not sustained himself.

But it may be claimed that, although we cannot use this testimony So ¡reform the contract, yet it is proper testimony to consider in construing the contract; and, if this testimony is properly in the case for such purpose, then it may be claimed that when the two elements above referred to, are added to the contract, it clearly appears that the contract grants nothing but a license. And it may be considered to be the law that if parties make such a contract and write therein that the grantor is to carry on all suits for infringement and is to grant Other rights to operate under the patent, that he has then not disposed of his entire title, for he cannot ^prosecute unless he is the owner of the title, nor can he grant licenses to others, or rights and privileges to others, under the patent, unless he is the owner; or, if he is a licensee, that his license shall run to him and to his assigns, etc.

The question arises, then, can these two elements be added to the contract by oral testimony ? In determining this, it is necessary to consider what the contract is as it stands. The granting part of the contract is the language used in making an assignment. Instead of the-parties calling it an assignment, they have called it a license; and it has been determined in patent cases under such contracts, that the contract is an assignment and not a license. Moore Mfg. & F. Co. v. Hanger Co., 69 Fed. Rep. 998.

In Waterman v. MacKenzie, 138 U. S. 252, 256 [11 S. Ct. Rep. 334], Mr. Justice Gray says:

“ Whether a transfer of a particular right or interest under a patent is an assignment, or a license does not depend upon the name by which it calls itself, but upon the legal effect of its provisions.”

The contract, then, as it is written, is an assignment. The law implies certain rights to the assignee under such an assignment, and one is that he is the only proper party to prosecute suits for infringement of the patent; and the other is that he has the right to grant to others a privilege to use the patent. The contract then would read, by supplying what is implied, that the defendant, The J. C. McNeil Company, was to prosecute all suits for infringement and that he alone had the right to license others to operate under the patent. If 'this testimony, then, can be used as it is intended in construing the contract, it Is to be used to contradict what Is implied in the contract as it is written. This, we understand, cannot be done.

In Fawkner v. Wall Paper Co., 88 Ia. 169 [55 N. W. Rep. 200; 45 Am. St. Rep. 230], second syllabus, it is said;

“Whatever the law implies from the language used in a written contract is as much a part of the contract as that which is expressed Kherein; and if the contract, found In the light of what the law thus implies, is clear, definite and complete, it cannot be added to, varied or contradicted by extrinsic evidence.”

In Bryan v. Dull, 40 Pac. Rep. 936 [12 Wash. 233; 50 Am. St. Rep. 889], it is said that parol evidence is no more admissible to contradict or vary a contract implied from a written instrument than it is to contradict or vary the express terms of such instrument.

It has been repeatedly held that parol evidence cannot be introduced to varjT the clear and settled legal effect and meaning of a contract, nor can it be introduced to contradict or vary whatever the law implies from the contract.

It is unnecessary to cite further authorities except Harris v. Oil Co., 57 Ohio St. 118, 125 [48 N. E. Rep. 502]. In his opinion, in that case, Burket, C. J., says:

“While the written instrument must be co'nstrued in the light of the surrounding circumstances, no new terms or conditions can be injected into such instrument, and no existing terms or conditions can be taken therefrom by averment in a pleading.”

And quoting from Kellogg v. Larkin, 3 Pinney (Wis.) 123, he says:

“ ‘No averments can give to an agreement character it had not, and no admission can take from it the character it had.’ The effort to bind and change the construction of the written instrument in question, by averments in the pleadings, as to its true construction and' meaning, must therefore fail, and the instrument must be construed, and its legal effect declared from the language used when read in. the light of the surrounding circumstances.”

The evidence introduced cannot be used to reform the contract, nor is it competent to use the same in construing the contract; it is not admissible for such purposes.

The defendant claims that he, as receiver, did not come into the right to have and use the rights of the McNeil Company under the contract unless he adopted the same; and this is grounded upon his claim that the contract is but a license and the license conferred upon the McNeil Company only a privilege, and that that privilege is not transferable neither by law nor by the terms of the contract, and that he cannot be held to account in this case unless he has adopted the same and estopped himself in that way from asserting that he has not or that he could not use this right that was personal to the McNeil Company. But this claim is based upon the ground that the contract creates only a license. Having found the contract to be an assignment, it created in the McNeil Company a property, and, it being a part of the property of the McNeil Company,’ it would, by force of his being made receiver of the propertj’of the McNeil Company, become a part of the property in his hands as such receiver. And it is our holding in this case, that he must account to the plaintiffs as asked in the petition, and, for such accounting, the case is referred to E. A. Hershey as referee to determine the amount due the plaintiffs under the petition in this case; to report his findings of the amount due in detail at the next term of this court, and the case will stand continued for such report.