text:
    The Acklin Stamping Co. v. Kutz, by etc.

      Workmen’s compensation — Minor not employe, when — Section 1465-61, General Code — Illegal employment — Civil liability of employer — Common-law defenses — Section 1465-76, General Code — Fraud or misrepresentation by minor — Section 6245-2, General Code — ■Fañhire to safeguard machinery.

    1. The Workmen’s Compensation Act was enacted for the purpose of providing a state insurance fund for the benefit of injured and dependents of killed employes and requiring contribution thereto by employers. If the relation of employer and employe does not exist the provisions of the act have no application.
    2. A minor who is employed in violation of a statute enacted for the protection of children is not an employe within the meaning of that term as used in that act and as defined in Section 14 (Section 1465-61, General Code).
    3. In an action by such a minor for damages on account of personal injuries claimed to have arisen from the failure of the employer to comply with a lawful requirement for the protection of the lives and safety of employes, the provisions of Section 29 of that act (Section 1465-76, General Code) do not apply.

      4. In such an action the provisions of Section 6245-2, General Code, apply, and the defense of contributory negligence is not available to the employer unless he show by a preponderance of the evidence that there was fraud or misrepresentation on the part of the minor employe as to his age.
    (No. 15630
    —Decided April 2, 1918.)
    Error to the Court of Appeals of Lucas county.
    Defendant in error, as a minor fifteen years of age, brought an action by Louis Kutz, his father and next friend, in the common pleas court of Lucas county, to recover damages on account of personal injuries sustained by him while in the employ of The Acklin Stamping Company.
    It appears from the amended petition that the defendant in the common pleas court, The Acklin Stamping Company, owned and operated a factory and workshop in the city of Toledo and employed more than five workmen, operators and employes in and about said business; that on June 28, 1916, and for about thirty days prior thereto, Walter Kutz, the plaintiff, was employed as an assistant to a stamper, between the hours of 5:45 o’clock in the evening and 5:15 o’clock in the morning; that on the night of June 28, 1916, plaintiff was ordered by the foreman of the defendant to take small pieces of iron or steel, called and known as yoke-ends, from barrels and place them on a board set at an incline immediately adjacent to one of defendant’s stamping machines, in such manner and in such numbers that the yoke-ends would at all times be convenient, and at the command of the operator of the stamping machine.

      It was alleged, in substance, that on June 28, 1916, defendant had erected and maintained in its factory a steel fan about four and. one-half feet in diameter, and had connected the same with machinery which caused it to operate and be operated by revolving rapidly at great speed, and that defendant had carelessly and negligently caused and permitted said fan to revolve at said high rate of speed at said time and place without the protection of any guard of any kind, and had thereby carelessly and negligently failed to comply with the lawful requirements for the protection of the lives and safety of employes as set forth in Section 1027, General Code of Ohio.
    The defendant was charged also with negligence on account of its failure to comply with the lawful requirements for the protection of the lives and safety of employes as set forth in Sections 15 and 16 of an act creating an industrial commission of Ohio, 103 Ohio Laws, page 95.
    It was further alleged that about nine o’clock in the evening of June 28, 1916, while in the performance of his duty under said employment and under the direction of his foreman, plaintiff went to some barrels standing in said factory near said revolving fan to get some of said yoke-ends for said stamping machine, and while so engaged, and without any fault on his part, his right hand was drawn into said revolving fan and was by said fan so broken and torn and crushed and mutilated that it was necessary in order to save his life to amputate his hand at the wrist, and it was so am-

      putated. There was a prayer for judgment in the sum of $40,000.
    The answer contained four defenses. In its first defense defendant admitted that it was a corporation owning and operating a factory in the city .of Toledo, that it regularly employed more than five workmen, and that plaintiff, Walter Kutz, received some injury during the evening of June 28, 1916, which necessitated the amputation of his right hand. Each and every other allegation in the amended petition was denied.
    In the second defense it was alleged that defendant had elected to operate and on June 28, 1916, was operating under the Workmen’s Compensation Law of the state, that it had paid the required premium into the state insurance fund in pursuance of said law, and that if plaintiff had been injured in its factory on or about June 28, 1916, said injury was in no way the result of its wilful act nor did it result from the failure of defendant to comply with any lawful requirement for the protection of the lives and safety of its employes.
    In its third defense defendant alleged that plaintiff was employed by it on or about May 15, 1916; that from said date until June 28, 1916, his duty was to lay out work and act as helper; that prior to the time plaintiff was so employed he represented to defendant that he was more than sixteen years of age and that defendant in employing him relied on his representations that he was more than sixteen years of age and that at no time did it have any knowledge that he was under sixteen years of age. It was further alleged in the third defense that defendant on June 28, 1916, about six o’clock p. m., installed in its factory in an opening in the wall thereof, and about five feet from the floor, a metal fan about three or four feet in diameter; that after said fan had been so installed defendant caused it to revolve for the purpose of testing and adjusting it, and that while said fan was revolving and was being so tested and adjusted defendant warned and ordered its employes and said plaintiff in particular to keep away from said fan; that within three or four hours after said fan had been installed, and while it was revolving and being tested and adjusted, plaintiff left his work and commenced to experiment and play with the fan and throw articles into said fan while it was revolving, with the result that his right hand was caught in some way unknown to defendant by the fan and injured; that plaintiff, Walter Kutz, had no business or duty about or near said fan and that his duties did not require or make it necessary that he go near it, but on the contrary plaintiff in going near and about said fan disobeyed the warning and instructions given to him; and that there was no negligence or want of care on the part of the defendant which contributed to or caused said injury to plaintiff in any way whatsoever.
    In its fourth, defense defendant averred that if it was in any way negligent, which it specifically denied, the negligence of plaintiff in going near and about and experimenting and playing with said fan while it was revolving and while it was being tested and adjusted, and after having been warned and ordered to keep away from it, directly contributed to the accident and was the proximate cause thereof.
    In his reply plaintiff denied each and every allegation contained in the answer which was not affirmatively stated as a fact in his amended petition.
    The case was tried to a jury and resulted in a verdict for the defendant. A number of interrogatories were submitted to the jury, which, with the answers thereto, are as follows:
    “1. Did the plaintiff, during the evening before he was hurt, know the fan was running? Answer. Yes.

      “2. Should the plaintiff, in the exercise of ordinary care úpon his part, have known that the fan was revolving before and while he stood within a short distance of it? Answer. Yes.
    “3. During the evening before he was hurt, was the plaintiff ordered away from the fan by his foreman? Answer. Yes.

      “4. Did the plaintiff go into the vicinity of the fan to look for yoke ends in pursuance of any instructions from anyone in authority over him? Answer. No.
    “5. Was the plaintiff’s hat lifted from his head by the air suction of the fan when his head was at a distance of at least three feet from the fan? Answer. No.

      “6. Was the plaintiff’s hand drawn into the fan by the air current created by the fan from a distance of at least three feet? Answer. No.

      “7. Did the plaintiff just shortly before he was hurt go into the immediate vicinity of the fan for his own entertainment or amusement? Answer. Yes.”
    A .motion for a new trial was overruled and judgment was rendered on the verdict in favor of the defendant. Defendant in error here prosecuted error to the court of appeals and the judgment of the common pleas court was reversed and the cause remanded to that court for a new trial. On application of plaintiff in error the court of appeals was directed to certify its record to this court.

      Messrs. Marshall & Fraser and Mr. John E. Parsons, Jr., for plaintiff in error.

      Mr. S. S. Burtsfield, for defendant in error.
   Newman, J.

The Acklin Stamping Company had in service five or more workmen or operatives regularly in the same business and had paid into the state insurance fund the premiums provided for in the Workmen’s Compensation Act. Plaintiff in his amended petition charged that the injury on account of which he claimed damages had arisen from the failure of The Acklin Stamping Company to guard the revolving fan, which he claimed was required by the provisions of Section 1027, General Code.

The court of common pleas treated the case as one where the employe in the exercise of his option had seen fit not to claim compensation under the Workmen’s Compensation Act, but had instituted a proceeding in the courts for his damage on account of the injury alleged to have arisen from the failure of the employer to comply with a lawful requirement for the protection of the lives and safety of employes. In such a case the employer would, under the provisions of Section 29 of the act (Section 1465-76, General Code), be entitled to plead the defense of contributory negligence. It is there provided that in all actions authorized by the section “the defendant shall be entitled to plead the defense of contributory negligence and the defense of the fellow-servant rule.” But was the court of common pleas correct in assuming that the case was controlled by the provisions of the Workmen’s Compensation Act?

This act was enacted for the purpose of providing a state insurance fund for the benefit of injured and the dependents of killed employes and requiring contribution thereto by employers. If the relation of employer and employe does not exist its provisions have no application. It becomes necessary, therefore, to determine who is an employe within the meaning of that term as used in the Workmen’s Compensation Act. - The term is defined by Section 14 of the act (Section 1465-61, General Code). It includes minors “who are legally permitted to work for hire under the laws of the state.” We think that it was intended by this clause to exclude from the operation of the provisions of the act minors whose employment is illegal. We cannot subscribe to the view that it was intended to mean minors who may be legally employed to work under the laws of the state at some occupation, at some time and under certain circumstances, regardless of whether the minor was eligible for employment in the work or occupation in which he was engaged at the time of his injury. The test is, Was the employment of the minor in the given case illegal ? If there has been on the part of the employer a violation of the statutes of this state enacted for the protection of children, the employer cannot avail himself of the provisions of the Workmen’s Compensation Act.

It was alleged in the amended petition that Walter Kutz, the plaintiff, a minor under sixteen years of age, had been employed to work between the hours of 5.45 in the evening and 5.15 in the morning as an assistant to a stamper.

Section 12996, General Code, provides, among other things, that no boy under the age of sixteen shall be employed to work in, about or in connection with any establishment or occupation named in Section 12993, General Code, before the hour of seven o’clock in the morning or after the hour of six o’clock in the- evening. Among the establishments named in Section 12993 are a mill, factory and workshop. Section 13001, General Code, prohibits the employment of a child under the age of sixteen years to assist in operating a stamping machine used in sheet metal and tinware manufacturing.

There was evidence offered tending to prove the allegations as to the time at which plaintiff was required to work and the capacity in which he was employed. At the conclusion of the testimony of plaintiff, a motion was made by counsel for the defendant to withdraw from the jury the evidence with respect to the age of plaintiff, the time he was employed in the factory, the evidence with respect to the hours he worked, and that with respect to his having been a helper on the press. At the close of all the evidence in the case the court sustained this motion, and the. jury was instructed to disregard such evidence. We think this evidence was competent and should have been allowed to go to the jury. If plaintiff had been employed to work in or about or in connection with the factory before the hour of seven o’clock in the morning and after the hour of six o’clock in the evening, or had been employed to assist in operating a stamping machine used in sheet metal and tinware manufacturing — and these were questions of fact for determination by the jury — then the employment was illegal, and plaintiff would not be an employe within the meaning of that term as used in the Workmen’s Compensation Act. Its provisions would have no application and the case would be one as though the act had not been enacted.

In the amended petition defendant is charged with failure to comply with the provisions of Section 1027, General Code. If the revolving fan in question was machinery which came under the provisions of that section, and there was a failure on the part of the employer to guard it, such failure was negligence per se (Variety Iron & Steel Works Co. v. Poak, 89 Ohio St., 297); and it was held in Schell v. DuBois, Admr., 94 Ohio St., 93, that if such negligence was the direct and proximate cause of the injury, not directly contributed to by the injured party, the defendant is liable. There Would then arise in the case at bar the question whether or not the defense of contributory negligence was available to the defendant. Section 6245-2, General Code, is as follows: “That in all such actions [for damages for personal injuries] where a minor employee has been employed or retained in employment contrary to any statute or law of the state or United States, such employee shall not be deemed or held to have been guilty of contributor}'- negligence, nor to have assumed any of the risks of such employment; but the employer may show by way of defense any fraud or misrepresentation made by such employee.”

As we have said, it was for the jury to determine whether or not Walter Kutz, the minor, had been employed to work in or about or in connection with the factory before the hour of seven o’clock in the morning and after the hour of six o’clock in the evening, or had been employed to assist in operating the stamping machine used in sheet metal and tinware manufacturing. If he had been, the employment was illegal, and, under the provisions of Section 6245-2, supra, a minor employe could not be deemed or held to have been guilty of contributory negligence; but the employer might show by way of defense any fraud or misrepresentation by such employe. The defendant in its answer alleged that plaintiff represented that he was more than sixteen years of age and that in employing him it relied upon this representation, and that at no time did it have knowledge that he was under sixteen years of age. The burden of proving these allegations was upon the employer. If the jury found from a preponderance of the evidence that there was fraud or misrepresentation on the part of the employe as to his age, the defense of contributory negligence would then be available.

It is said by counsel for plaintiff in error that the record indicates that the action was not only instituted on the theory that the Workmen’s Compensation Act applied, but that throughout the trial both plaintiff and defendant consistently clung to that theory. It is to be noted, however, that counsel for plaintiff requested the court to charge before argument, in substance, that plaintiff had been employed contrary to law and in violation of Section 12996, General Code, supra, and that under the provisions of Section 6245-2, supra, he could not be deemed or held to have been guilty of contributory negligence, nor to have assumed any of the risks of such employment, which the trial court refused to charge.

We think the court of common pleas erred in assuming that the case was One coming within the provisions of the Workmen’s Compensation Act, and that it erred in sustaining the motion of the defendant to have withdrawn from the jury the evidence with respect to the age, the time of employment, and the character of the work. The court of appeals was correct in reversing the judgment of the common pleas court and remanding the cause for a new trial.

Judgment affirmed.

Nichols, C. J., Wanamaker, Jones, Matthias, Johnson and Donahue, JJ., concur.


source: Caselaw Access Project

author: By the Court.

license: Public Domain

text:
    Phillips Sheet & Tin Plate Co. v. Griffith, Admx.

      Mobs — Judgment against county — Action against corporation not barred, when — Armed guards kill mother.

    (No. 15516
    Decided April 2, 1918.)
    Error to the Court of Appeals of Jefferson county.
    Edith M. Griffith, as administratrix of the estate of George A. Griffith, deceased, brought an action in the court of common pleas of Jefferson county against the Phillips Sheet & Tin Plate Company, alleging that during a strike at the defendant company’s tin mill in the city of Steubenville a riot occurred on the streets of that city, and in that riot her intestate, George A. Griffith, was shot and killed by an employe of the defendant company; that the death of said George A. Griffith was caused by the wrongful act of the defendant company in arming their employes with guns, the firing of which caused the death of said Griffith.
    The Phillips Sheet & Tin Plate Company answered, and by way of second defense pleaded that the plaintiff prior to the bringing of this suit had maintained an action against Jefferson county, Ohio, under provisions of Section 62?8 et seq., General Code, to recover damages for the death of her intestate from injuries received from lynching by the mob in said riot, and in that case had recovered a judgment which was afterwards satisfied by the county.

      Plaintiff demurred to this second defense, which demurrer the court of common pleas overruled. Plaintiff not desiring to plead further, judgment was entered upon the ruling on said demurrer, and error was thereupon prosecuted to the court of appeals. The court of appeals, on consideration of the error complained of, sustained the demurrer to said second defense, therebjr overruling and reversing the judgment of the court of common pleas.
    Error is now prosecuted to this court to determine the question, and the sole question, as to whether or not that defense is a valid bar to the action against the Phillips Sheet & Tin Plate Company.

      Mr. J. C. Bigger, for plaintiff in error.

      Mr. W. R. Alban, for defendant in error.
   By the Court.

It is conceded that under the common law the plaintiff had a cause of action against the defendant company for any wrongful act by its servants, agents, or employes, causing the death of her intestate, George A. Griffith.

Did Section 6278 et seq., General Code, in any wise affect that common-law right or remedy? These sections were passed in 1898 obedient to a popular demand that some further remedy be provided by law for persons sustaining injury or death by the violence of mob law. Clearly these were remedial statutes, and as such should be liberally construed in favor of those who were given the remedy.

The question here is, Did plaintiffs election to sue Jefferson county under this statute cause her to lose her common-law rights to sue The Phillips Company? Is her election of one remedy the rejection of all other remedies?

The question naturally presents itself, Is it so written in the statute? If the plaintiff is entitled to a liberal construction of the statute in her favor, she is also entitled to have the statute applied as it is written. There is nothing written in this statute, nor any section thereof, in any wise affecting any other civil remedy at common law, or otherwise, and the only way that such common-law remedy could be denied would be by writing such denial into the statute. The legislature did not do it. This court has neither power nor right to do it.

It is a fundamental rule that when a new remedy for a violation of any right is provided it is cumulative, unless there be express denial, or denial by necessary implication, of the exercise of any other right or remedy.

Moreover this statute is of a penal or nature. It is really a punishment inflicted upon the county for the injury or death inflicted upon one who was entitled to the protection of the law in that county.

The issues in a case under the statute are few and simple and wholly different from what they are in the case under the common law. In the case against The Phillips Company the issue was wrongful assault by the company, its officers, agents, or employes, the same kind of issue you would have in any prosecution for criminal assault in which the action is one for damages only. The legislature, however, realizing that in case's of mobs the defendants are generally unknown, or irresponsible financially, proceeded to afford to the wronged parties some remedy in addition to the rights and remedies that then existed at common law.

It is elementary in joint liability, either under contract or in tort, that where there is a full satisfaction by one joint obligor, the same works a release as to all other obligors.

Now in this case suppose The Phillips Company were sued jointly with Jefferson county, clearly such petition would be demurrable. While each is liable, each is liable on an entirely different state of facts, in different causes of action; and hence the satisfaction of either’s liability is not a bar to the liability of the other.

Judgment affirmed.

Wanamaker, Newman, Matthias and Johnson, JJ., concur.


text:
    Graham v. The State of Ohio.

      Criminal law — Homicide — Charge to jury — Self-defense—Duty to retreat — Aiding and abetting — Misconduct of counsel.

    (No. 15670
    —Decided April 2, 1918.)

    Error to the Court of Appeals of Seneca county.

      Mr. Frank T. Dore and Mr. Ralph Sugrue, for plaintiff in error.

      Mr. Joseph McGhee, attorney general; Mr. Russell M. Knepper; Mr. John C. Royer and Mr. Calvin D. Spitler, prosecuting attorney, for defendant in error.
   By the Court.

The plaintiff in error, Frank P. Graham, was indicted and tried for murder in the second degree and found guilty of manslaughter.- Briefly stated the facts attending the alleged homicide are as follows: Graham and other guards had been employed by a manufacturing company for the protection of their plant and premises. While thus engaged a crowd composed of boys and men gathered in the vicinity of the plant, and according to the evidence produced by the defense marched about its environs in a threatening attitude. The evidence is very conflicting as to the circumstances attending the killing. The evidence of the state tended to prove the assault was unprovoked, while that of the defense purported to show that the alleged mob was making a criminal assault upon the gúards and on the premises of the company when the decedent, Albert Latona, Jr., was killed. The state’s case was predicated upon the fact that Latona was killed by a weapon discharged by Graham himself, or by one of the other guards whom Graham was then aiding and abetting in a criminal act; and, furthermore, that a conspiracy to make an unlawful criminal assault existed between Graham and his associates.

The errors mainly relied upon in this court are that the court erred in its instructions upon the trial, and that the state’s counsel was guilty of misconduct..

In the course of its general charge, the court, after stating to the jury that if they found that the defendant and his associates were employed in guarding the buildings and property of the company and that the crowd of men and boys was making the attack upon them with deadly weapons, instructed the jury that the defendant had a right to defend himself from such attacks and to employ sufficient force to repel them. And, immediately following, the court used this language: “If you find by a preponderance of the evidence that the defendant in the careful and proper use of his faculties, believed in good faith that he was in imminent danger of death or great bodily harm, and that his only means of escape consisted in taking the life of his assailants, and that, under the circumstances he had reasonable grounds for such belief, then you would be warranted in finding that the killing was justifiable on the grounds of self-defense although in fact the defendant may have been mistaken as to the existence or imminence of danger.”

This charge is now assailed upon the claim that under the circumstances detailed the court has in effect charged that it was the duty of the defendant to retreat. In the main it embodied the substance of the law declared in Marts v. State, 26 Ohio St., 162. It is to be regretted that the court did not elucidate this portion of the charge by the statement that the means. of escape referred to related to the escape from the impending danger, as clearly evidenced in the syllabus of the cited case. However, we do not think the charge as given is so prejudicial as to require a reversal, especially in view of the latter portion of the charge quoted, and in the absence of a request by the defendant to make such charge more specific. Under the facts detailed, if the defendant did not provoke the assault, but while in the lawful pursuit of his business was suddenly and violently assaulted with a deadly weapon and placed in danger of loss of life or great bodily harm, under the current of modern authority he was not required to retreat. Ruling Case Law, 826; Erwin v. State, 29 Ohio St., 186; Beard v. United States, 158 U. S., 550; State v. Gardner, 2 L. R. A., N. S., 60; Eversole v. Commonwealth, 95 Ky., 623, and Hammond v. People, 199 Ill., 173.

The claim is further made that the court erred in charging the jury that the defendant might be convicted if they found that a criminal assault was made by the defendant on “some person whom the defendant was then and there aiding, abetting and assisting.”

This charge is said to be misleading because of undisputed evidence that Graham was assisting his associate guards in a lawful enterprise, and that from the language employed the jury might infer that his aiding, abetting and assisting therein would make him criminally liable. The language of the court was unfortunate in that it did not state that the aiding, abetting and assisting related to the criminal act. However, in view of other portions of the general charge, especially the state’s request Number 5, we do not think the jury could have been misled; for the reason that therein it is clear that the assisting, aiding and abetting related only to the criminal act, and not to the lawful purpose of assisting his associates in guarding the plant.

The court charged the eighth proposition of the syllabus of the case of Goins v. State, 46 Ohio St., 458, detailing under what circumstances a defendant could be found guilty if he did some overt act producing the homicide. In the case at bar the evidence adduced by the state tended to prove that the defendant and one or more of the guards were at the time acting in concert in driving back the alleged mob. If this evidence were true, the jury might have found, under the facts detailed, that an overt act was committed by the defendant'in actively aiding his associate or associates there present in making a criminal assault which resulted in the death of Latona. The legal principle involved in the charge is correct, and the only question that arises upon the record is whether such charge should have been given in view of the testimony disclosed. While the testimony relating to the overt act on the part of Graham is not very strong, we are unable to say in this case that the charge was prejudicial.

In its general charge to the jury the .court gave the defendant the benefit of the law relating to self-defense. It is now claimed that in this the court erred for the reason that the defendant denied the act of firing the shot that killed Latona. It is therefore claimed that the injection of the question of self-defense impliedly admitted that the defendant may have fired the shot that killed the decedent, and was therefore prejudicial error. While it is true the defendant denied the killing, several of the state’s witnesses gave testimony lending to show that he fired the shots that killed the decedent. It also appears, both from the cross-examination of the state’s witnesses and from the defendant’s witnesses, that whatever was done by Graham and his associates on that occasion was done in the lawful defense of their persons. Under that phase of the case, it became the duty of the court to charge the right of self-defense. When the defendant entered his plea of not guilty, he could avail himself of all the defenses which the evidence disclosed. It would be perfectly proper for him to say (a) I did not fire the shot; (b) Whatever I did, I did in my own self-defense. The mere fact that defendant does not admit the killing does not preclude him from this right. Indeed, the defendant may not take the stand at all or offer any evidence in defense. The evidence of self-

defense may come wholly from the state; but whether the evidence comes from the defense, or from the state supporting his lawful right of self-defense, it is the duy of the court to charge that feature of the law. The rule is stated as follows in 13 Ruling Case Law, page 813: “If the defendant denies the killing and there is no evidence adduced by either party which tends to show that the killing might have been in self-defense, although other evidence shows quite conclusively that the defendant committed the crime, it is not the duty of the court to instruct as to self-defense; but if the evidence tends to raise the issue of self-defense although the defendant denies the killing, it seems that an instruction based on the theory of self-defense is proper and should be given.” That the ihstruction relating to self-defense was properly given is supported by the overwhelming weight of authority. State v. Jackett, 81 Kans., 168; Frazier v. Commonwealth, 114 S. W. Rep., 268, and State v. Sloan, 149 Ia., 469.

Misconduct of counsel for the state on the trial is also urged as reversible error. The record discloses that these remarks were exceedingly censurable, and of such character that their effect could hardly be avoided by any exception, that might have been taken at the time. But the bill of exceptions does not disclose that the misconduct was excepted to on the trial, but was brought into the case only by affidavit attached to the motion for a new trial. This affidavit was made a part -of the bill of exceptions. The procedure took the same character as in the case of State v. Young, 77 Ohio St., 529, which holds that erroneous misconduct of this character cannot be made available by affidavit in support of a motion for a new trial.

Judgment affirmed.

Newman, Jones, Matthias and Johnson, JJ., concur.

Wanamaker, J., concurs in the judgment.


author: Don-ahue, J. Wanamaker, J.,

text:
    The State, ex rel. Doerfler, Pros. Atty., v. Otis et al. The City of Cleveland, by etc., v. Neal, Director of Finance, et al.

      Municipal corporations' — Home rule — Cleveland charter — Powers granted — Rapid transit commission — Validity of ordinance.

    1. Under the provisions of Sections 1 and 2 of the charter of the city of Cleveland, authority is reserved to that city to exercise any power now or that may hereafter be conferred upon the municipalities of this state by the laws of Ohio.
    2. Initiated ordinance No. 45222 of the city of Cleveland, Ohio, entitled: “An ordinance to provide for the appointment of a Rapid Transit Commission,” is not in conflict with the provisions of its charter, but is a valid and subsisting ordinance under and by the terms of which the mayor is lawfully empowered to appoint a Board of Rapid Transit Commissioners for that city.
    (Nos. 15853 and 15854
    Decided April 2, 1918.)
    In Quo Warranto.

      Error to the Court of Appeals of Cuyahoga county.
    Under the authority conferred by Section 7, Article XVIII of the Constitution of Ohio, as amended September 3, 1912, the city of Cleveland, on the first day of July, 1913, adopted a charter for the government of that city. Under the provisions of this charter, an ordinance was duly initiated by petition, which ordinance was rejected by the city council on the fourth day of September, 1917.
    It was then submitted to a vote of the electors of the city of Cleveland, at the general election held November 6, 1917, and received a majority of the votes of the electors voting on the question of its adoption. This initiated ordinance is as follows:
    "Ordinance No. 45222.
    "Section 1: It is hereby declared to be essential to the interests of the City of Cleveland that a. Rapid Transit Commission, with the powers and duties prescribed in Sections 4000-16 to 4000-28 of the General Code of Ohio, and to be known as the Board of Rapid Transit Commissioners of Cleveland, be appointed by the mayor.
    “Section 2: Be it further ordained that this ordinance shall take effect and be in force at the earliest period allowed by law.”
    In compliance with the provisions of this • ordinance, the mayor of the city of Cleveland appointed the defendants, Clarence J. Neal, Charles A. Otis, M. A. Bradley, Fielder Sanders, and Charles E. Adams, as members of The Board of Rapid Transit Commissioners of the City of Cleveland, Ohio.
    Each of the above cases involves the question of the constitutionality of Sections 4000-16 to 4000-28, inclusive, General Code (106 O. L., 286), the validity of the initiated ordinance No. 45222, and the authority of the mayor of the city of Cleveland to appoint the members of The Board of Rapid Transit Commissioners under the terms and provisions of that ordinance. These cases were heard and submitted together.
    In Cause No. 15853, State, ex rel. Doerfler, Pros. Atty., v. Otis et al., a petition in quo warranto was filed in this court, averring that the appointment of the defendants as members of The Board of Rapid Transit Commissioners of the City of Cleveland is wholly illegal and void, and that the defendants are holding and exercising this office without warrant or authority of law, and praying that they may be ousted therefrom.
    In the second case, No. 15854, an action was brought on behalf of the city of Cleveland by W. S. FitzGerald, as director of law of that city, in the common pleas court of Cuyahoga county, Ohio, asking that an injunction issue restraining the defendants, The Board of Rapid Transit Commissioners of the City of Cleveland, from incurring any indebtedness on behalf of that city, and praying that Clarence J. Neal, as director of finance, be restrained from approving or paying any obligations incurred by that board.

      To this petition of plaintiff, the defendants filed a general demurrer, which demurrer was sustained by the common pleas court, and the plaintiff not desiring to plead further the petition was dismissed and judgment for costs entered against the plaintiff.
    This judgment was affirmed by the court of appeals.

      Mr. Samuel Doerfler, prosecuting attorney, and Mr. Frederick W. Green, for relator.

      Mr. W. S. FitzGerald, director of law, and Mr. John D. Marshall, for plaintiff in error.

      Mr. Walter D. Meals and Mr. Pierre D. White, for defendants in error.
   Don-ahue, J.

Since the commencement of these actions, Sections 4000-16 to 4000-28, inclusive, General Code (106 O. L., 286), have been held constitutional by this court, in the case of State, ex rel. Campbell, Pros. Atty., v. Cincinnati Street Ry. Co. et al., 97 Ohio St., 283, decided March 5, 1918. Further discussion of this question is therefore unnecessary.

It is contended, however, that the initiated ordinance providing for the appointment of a Rapid Transit Commission, with the powers and duties prescribed in Sections 4000-16 to 4000-28, inclusive, General Code, is void, for the reason that these sections are in conflict with the charter of the city of Cleveland.

It is pernaps true that the charter of the city of Cleveland might have been written so as to deprive that city of the right to exercise statutory powers that may be exercised by other cities having a different charter or no charter at all. Certainly, however, this charter has not been so written.

Section 1, among other powers enumerated, expressly reserves to the city of Cleveland “all powers that now are, or hereafter may be granted to municipalities by the constitution or laws of Ohio.” Section 2 is equally explicit in declaring that “The enumeration of particular powers by this charter shall not be held or deemed to be exclusive.” Every provision found in any subsequent section of this charter must be read in connection with, and, if possible, construed in harmony with, these provisions found in Sections 1 and 2. In other words, these declarations at the very threshold of the charter provisions clearly indicate that it was not the intention of the people of the city of Cleveland when they adopted this charter to deprive that city of any power conferred upon municipalities by the statutes of this state, -or that might under the constitution and laws of the state of Ohio have been written into the charter itself.

Where, by the express terms and provisions of a written charter, a municipality reserves to itself the right to exercise a power conferred by statute, which statute provides specific and exclusive methods of procedure for the exercise of such power, it follows that the electors of the municipality voting for such charter must necessarily have understood and intended that the municipality should exercise such power in accordance with the terms and conditions of the statute conferring the same; otherwise such reservation in the charter of the right to exercise powers conferred upon municipalities by the laws of this state would be a vain and useless thing.

If it were conceded, however, that the provision in this charter, reserving to the city of Cleveland, in addition to the powers expressly enumerated therein, all powers now or hereafter granted to municipalities by the laws of Ohio, did not include as incident thereto the right to exercise these powers in the manner and method provided by the statute conferring the same, nevertheless it is further provided in Section 1 of the charter that such powers “shall be exercised and enforced in the manner prescribed by this charter, or when not prescribed herein, in such manner as shall be provided by ordinance or resolution of the council.”

The initiated ordinance provides not only that the city of Cleveland shall avail itself of the powers conferred by these statutes, but further provides how_these powers shall be exercised.

Some objection is made to this ordinance upon the ground that it does not recite in detail the method of exercising this power, as fully as it is written into the statute itself. It is true that the constitution of this state provides that the general assembly shall not amend or revive a law unless the new act contains the entire act revived or the section or sections amended. If it were conceded that this constitutional provision applies to city .ordinances, there is no attempt here to revive or amend any other ordinance.

On the contrary, the purpose of this ordinance is to authorize the city of Cleveland to avail itself of the authority conferred by these statutes upon the municipalities of this state, and, whether necessary or not, it does further provide that that power shall be exercised in accordance with the provisions of the statutes granting this power, which is the only manner in which it can be exercised in order that the city may have the full benefit of the power conferred thereby.

So far as the city of Cleveland, or any other city of the state, is concerned, this statute is fixed, definite and certain, and it would be idle for a city seeking to avail itself of the power therein granted to rewrite into an ordinance the specific terms of the statute itself. This ordinance, therefore, does provide according to express terms of the charter the manner of exercising this power. .

It is insisted, however, that Section 77 of this charter includes within its terms the construction of a rapid transit system, and confers upon the City Plan Commission full authority to construct, control, and operate the same, and that, in harmony with the provisions of this section of the charter, ordinance No. 32476 was passed by council on the 11th day of May, .1914, which ordinance provides for a City Plan Commission of seven members, to be appointed by the mayor, and further provides the manner in which this commission shall exercise its power and control over the matters and things mentioned in Section, 77 of the charter.

Even if Section 77 of the charter specifically provided for the construction of a rapid transit system, it must nevertheless be read and construed in connection with Section 1, reserving to the city all powers granted by the laws of Ohio, and Section 2, which provides that the charter enumeration of powers shall not be exclusive; so that in such event either the charter or statutory method would be open to the city.

It is by no means clear, however, that Section 77 of the charter contemplates the construction of a rapid transit system. It provides that “There shall be a city plan commission to be appointed by the mayor with power to control, in the manner provided by ordinance, the design and location of works of art which are, or may become, the property of the city; the plan, design and location of public buildings, harbors, bridges, viaducts, street fixtures and other structures and appurtenances; the removal, relocation and alteration of any such works belonging to the city; the location, extension and platting of streets, parks and other public places, and of new areas; and the preparation of plans for the future physical development and improvement of the city.”

It is unnecessary to consider the ordinance passed under authority of this section, for it must be confined to the things enumerated in the charter itself. If such ordinance were in conflict in any particular with the initiated ordinance; the initiated ordinance, having been passed later, would repeal by implication all the provisions of the earlier ordinance in direct conflict therewith. Therefore, the charter is all that is necessary to consider in determining whether it, in terms, precludes the city from availing itself of the power and benefits conferred by Sections 4000-16 to 4000-28, inclusive, General Code.

It is true that aside from the provisions of the charter, the city of Cleveland has authority to construct a rapid transit system under the provisions of Section 4, Article XVIII of the Constitution of Ohio, as amended September 3, 1912. No statute can deprive it of that power, but it is by no means clear that such power could be exercised under the provisions of Section 77 of the charter.

The clear intent and purpose of this charter is to provide a general plan for the government of the city of Cleveland. The construction of a rapid transit system is not an everyday affair. It is not within the usual and ordinary routine of municipal government. A matter of this importance, involving the expenditure of millions of dollars, would necessarily demand the entire time and attention of every member of the commission having it in charge. Such added duties and burdens would undoubtedly embarrass, hinder, and delay a commission appointed as a permanent institution of government and charged with the administration of the usual and ordinary governmental functions. It is hardly within the range of probabilities that it was the intent and purpose of the people of Cleveland, when they adopted this charter, to overburden a permanent governmental commission with such unusual and extraordinary duties. To so hold would be a strained construction of this section that would deny to the city of Cleveland the right to exercise the powers conferred by these statutes upon the municipalities of the state. Such construction would be wholly in disregard of and in conflict with the provisions of Sections 1 and 2 of the charter.

The prophetic wisdom of these provisions of the charter clearly appears by the conceded facts in this case.

• The act of May 17, 1915 (106 O. L., 286), now Sections 4000-16 to 4000-28, inclusive, General Code, confers upon the municipalities of the state not only the authority to construct a rapid transit system, but also authority to levy a tax to pay the interest upon bonds issued for such purpose and to provide a sinking fund for their redemption at maturity, in excess of the limitations provided by law for maximum taxing rates on property in municipal corporations, except the combined maximum rate fixed in Section 5649-5b, General Code, and one-half mill in addition thereto.

It was admitted by counsel in open court in the argument of this case that if the city of Cleveland were proceeding to construct a rapid transit system under the provisions of its charter, it,could not, under the limitations imposed by law, levy a tax sufficient for such purpose. It must also be admitted, that the city cannot, by amendment to its charter, exempt such levy of taxes from the limitations imposed by statute; for it is expressly provided in Section 13, Article XVIII of the Constitution, as amended September 3, 1912, that “Laws may be passed to limit the power of municipalities to levy taxes and incur debts for local purposes.”

It follows, therefore, that, if the city of Cleveland cannot avail itself of the powers conferred by law upon the municipalities of the state to levy a tax for this purpose in excess of the maximum tax rates that may be levied in any taxing district, it is powerless to meet the urgent and imperative need of its people, regardless of the fact that a large majority of the electors of that city have emphasized by their vote in favor of the adoption of this ordinance the public demand for rapid transit facilities, and regardless of the further fact that all other cities of the state that have no charter, or that have not in their charter deprived themselves of this privilege, may exercise this power.

This contention overlooks the fact that the amendment to the Constitution of Ohio conferring upon cities and villages authority to exercise all powers of local self-government was not intended to abridge, but rather to enlarge the powers of municipalities.

It is clear, however, that the exercise of this power to levy an additional tax can in no wise conflict with the provision of the charter that cannot and does not purport to confer any such power. On the contrary, if the provision in the first section of this charter, that the city shall have and exercise in addition to the powers enumerated therein “all powers that now are, or hereafter may be granted to municipalities by the constitution or laws of Ohio,” means anything at all, it certainly means that the city of Cleveland can exercise this power conferred by law upon municipalities, to levy a tax for this purpose in excess of the maximum rate fixed by other statutes. To do this, it must follow the terms of the statute. It cannot have the benefits without accepting the burdens and conditions imposed.

The people of Cleveland, who adopted this charter for the government of their city, have, by the adoption of this ordinance, interpreted its terms. While an interpretation clearly at variance with its express provisions could not be permitted, yet the interpretation of a written instrument by those responsible for the existence of that instrument, and who undoubtedly are best informed as to the intent-and purpose thereof, is entitled to some consideration and respect, for if the intent, purpose and understanding of the electors of a municipality that have adopted a city charter are. to be wholly disregarded by the courts a city might be entirely deprived of its constitutional right to home rule. It is true, however, that where the language of a charter is plain, clear, and unambiguous, it must be given its usual and ordinary meaning, and if such construction is not in accord with the intent and purpose of the electors the remedy is by amendment of the charter.

A majority of this court are of the opinion, however, that the provisions of this charter fairly and fully state the purpose and intent of the charter commission and the people of the city of Cleveland; that the electors of that city fairly interpreted its

terms when they adopted this ordinance; and that there is nothing in this charter that deprives or was intended to deprive the city of Cleveland of the right to exercise any power conferred by statute upon the municipalities of this state, or that compels the city of Cleveland to drop out of the march of progress and give place to lesser municipalities that under favor of this statute may levy a tax necessary to meet the needs of increasing population.

For these reasons, in case No. 15853 the writ is refused and petition dismissed, and the judgment of the court of appeals in Case No. 15854 is affirmed.

Writ refused.

Judgment affirmed.

Nichols, C. J., Newman, Jones, Matthias and Johnson, JJ., concur.

Wanamaker, J.,

dissenting.

Cleveland’s municipal constitution, or city charter, went into effect January 1, 1914. The general assembly passed the statute known as the “Bauer Law” in 1915.

Question: Does the Bauer law apply to the municipal government of Cleveland, notwithstanding the city’s charter? This is the vital issue in this case.

The majority opinion admits that the charter of the city of Cleveland is supreme in municipal affairs, and that the city of Cleveland had, prior to the statute, the right to construct a rapid transit system under the home-rule amendment. That part of the opinion reads:

“It is true that aside from the provisions of the charter, the city of Cleveland has authority to construct a rapid transit system under the provisions of Section 4, Article XVIII of the Constitution of Ohio, as amended September 3, 1912. No statute can deprive it of that power * * *.”

The majority opinion further admits that the city in the exercise of its municipal home-rule power could have so written its charter as to make the Bauer law void, or at least inoperative, in the city of Cleveland, as appears from the following language in the majority opinion:

“It is perhaps true that the charter of the city of Cleveland might have been so written as to deprive the city of the right to exercise statutory powers that may be exercised by other cities having a different charter or no charter at all.”

Let us now examine these admissions from the majority opinion and draw such legal and logical conclusions as are warranted.

The admission that the charter could have been so written must be based upon the fact that the “Home Rule” grant of power, directly and expressly given to the city, was clear and complete within the circle comprehended by the phrase, “all powers of local self-government.”

After making these admissions, which after all are only self-evident truths, apparent from the language of the constitution, the majority opinion proceeds to hold that the Bauer law is not only not in conflict with the city charter, but that it is clearly authorized and provided for by Sections 1 and 2 of the city charter of Cleveland; that said Section 1 of the charter provided for adoption in advance of its passage of just such a statute as the Bauer law. The whole of the majority opinion is anchored solely on this proposition.

This simplifies and shortens the question and its answer.

Let us now critically examine Section 1. The first reference in the majority opinion is as follows:

“Section 1, among other powers enumerated, expressly reserves to the city of Cleveland ‘all powers that now are, or hereafter may be granted to municipalities by the constitution or laws of Ohio.5 ”

Simplified to meet this case it reads, “all powers hereafter granted to municipalities by laws of Ohio, that is, statutes.” And of course it is claimed that the Bauer law is such a statute.

In every city and village there are exercised three classes of governmental power:

1. Municipal.

2. State.

3. National.

The third class, national power, is not here involved. That leaves for our consideration class 1 and class 2.

Now the people through the “Municipal Home Rule” amendment expressly delegated all municipal powers, that is, “all powers of local self-government,” to municipalities. - They did not say “some power,” or “part power,” but “all power.”

When the constitution expressly conferred this power (municipal power) upon the municipality, it necessarily implied a deprivation upon the part of the general assembly of the right to confer any such power; for, the people having once conferred it through the constitution, how could it be claimed that they delegated to the legislature the right to further confer this municipal power, which they themselves had theretofore directly conferred upon the municipality?

The bottom of the “Municipal Home Rule” amendment was to emancipate, to free, the cities and villages of Ohio from interference, exploitation and ripper legislation by the general assembly of Ohio, and to leave the matter of the government of the cities to the people of the cities.

It must follow, therefore, that the Bauer law did not grant any municipal power to the city of Cleveland. The constitution of Ohio had already done that, and, so far as the Bauer law attempted, so to do, it is void and inoperative on the city of Cleveland.

If it be true that all political power is inherent in the people, and that the people through a constitutional provision have conferred upon municipalities the powers of local self-government, then by the same truism they forbid any other branch of the government from conferring, adding to or subtracting from such grant of power. But if it be felt in some quarters that judicial decision is needed to support this axiomatic doctrine, it will be found in an opinion of this court in The Cincinnati Poly clinic v. Batch, 92 Ohio St., 415, the first two paragraphs of the syllabus of which read as follows:

“1. Section 6, Article IV of the Constitution of Ohio as amended September 3, 1912, confers jurisdiction upon the courts of appeals to review, affirm, modify or reverse the judgments of the court of common pleas, superior courts, and other courts of record within the district. The general assembly has no power to enlarge or limit the jurisdiction conferred by the constitution of the state, but may provide by law for the method of exercising that jurisdiction.

“2. Section 26 of the act of April 17, 1913 (103 O. L., 279), as amended February 6, 1914 (104 O. L., 187), in so far as it purports to limit the appellate jurisdiction of the court of appeals to review, affirm, modify or reverse the judgment of the courts of common pleas within its district, is unconstitutional and void.”

Donahue, J., in the opinion, says at page 417:

“This amended section of the constitution of the state does not authorize the legislature to grant any jurisdiction, original or appellate, to the courts of appeals, but on the contrary specifically confers on these courts appellate jurisdiction,” etc.

Those concurring in that opinion were Judges Johnson, Wanamaker, Newman, Jones and Matthias. Nichols, Chief Justice, dissented.

In Wagner v. Armstrong, 93 Ohio St., 443, the same principle arose.

Paragraph 1 of the syllabus reads:

“Section 12224, General Code, purporting to vest the courts of appeals with jurisdiction in the trial of cases on appeal, is unconstitutional and void. The jurisdiction of the courts of appeals in the trial of cases on appeal is expressly limited by the constitution to chancery cases, and this jurisdiction cannot be enlarged by the general assembly.”

Nichols, C. J., at page 446 of the opinion, says:

“Here is a plain attempt to enlarge the jurisdiction on appeal of the courts of appeals. This is a power that the general assembly does not possess. It was decided by this court in The Cincinnati Polyclinic v. Balch, 92 Ohio St., 415, that the jurisdiction of the courts of appeals was unalterably fixed by Section 6, Article IV of the new Constitution, and the legislature consequently could neither enlarge nor diminish it.”

All the judges of this court concurred in the paragraph of the syllabus above quoted, and in the judgment.

Now, what is the logic of these two cases? Merely this, that where the constitution has expressly spoken upon any given matter, such as conferring a power of a jurisdiction upon a court, or any other branch of the government, that the legislature may in no wise interfere with it. The grant of power was direct from the people to the court, and hence there was nothing for the legislature to confer upon the court as to such power or such jurisdiction.

In the case at bar the people directly granted all powers of local self-government to cities, so that as to such powers the legislature has nothing whatsoever to do. It may neither enlarge nor limit them, for the grant is directly from the. people of the state to the people of the city.

The only other power that the general assembly might grant to the city of Cleveland would be state power, and that is evidently what the people of Cleveland had in mind when they adopted Section 1 of the charter; new or “additional power,” not power they already had.

Now, what state power does the Bauer law grant to municipalities ?

The majority opinion reads:

“The act of May 17, 1915 (108 O. L., 286), now ' Sections 4000-16 to 4000-28, inclusive, General Code, confers upon the municipalities of the state not only the authority to construct a rapid transit system, but also authority to levy a tax to pay the interest upon bonds issued for such purpose and to provide a sinking fund for their redemption at maturity, in excess of the limitations provided by law for maximum taxing rates on property in municipal corporations, except the combined maximum rates on property fixed in Section 5649-5&, General Code, and one-half mill in addition thereto.

“It was admitted by counsel in open court in the argument of this case that if the city of Cleveland were proceeding to construct a rapid transit system under the provisions of its charter, it could not, under the limitations imposed by law, levy a tax sufficient for such purpose. It must also be admitted, that the city cannot, by amendment to its charter, exempt such levy of taxes from the limitations imposed by statute; for it is expressly provided in Section 13, Article XVIII of the Constitution, as amended September 3, 1912, that ‘Laws may be passed to limit the power of municipalities to levy taxes and incur debts for local purposes.’ ”

Here we have a matter in which the state legislature has a right to grant state powers. The constitution expressly authorizes the legislature “to limit the power of municipalities to levy taxes and incur debts for local purposes,” and to the extent in which it raises the limit or enlarges the amount of the levy the general assembly is exercising a state power, a state legislative power directly and expressly granted to it in Section 13 of the “Home Rule Amendment.”

This is the only new or “additional power” granted to a municipality by the Bauer law.

If the contention of the majority opinion is right, that this was a grant to the municipality, then this part of the law may stand; because here is a statute, comprehended in the family of statutes named in Section 1, wherein some new or “additional power” is granted to the city of Cleveland, which it did not theretofore have.

The general assembly evidently anticipated that parts of the Bauer law might be unconstitutional. Accordingly it wrote into the Bauer act, Section 13:

“Should any section or provision of this act be decided by the courts to be invalid, the same shall not affect the validity of the act as a whole or any part thereof, other than the part so decided to be invalid,” etc.

Now, we have seen that all alleged grants of municipal power were invalid; first, because the city of Cleveland already had them under the constitution and its charter; second, because, by necessary implication, the general assembly therefore could not grant them, the constitution having disposed of that matter. The only other class of powers referred to in the Bauer law is the tax-limit power, which is a state power, and which the legislature could grant by raising the tax limit, which it did in this case.

Therefore, so far as the Bauer act deals with municipal powers, which it does in the main, it is void and inoperative upon the city of Cleveland; so far as it grants a state power to the city of Cleveland, if Section 13 is of any avail, it is a valid law, and that power to-day rests in the city of Cleveland to be exercised in any manner that it may see fit, pursuant to its charter.

Section 2, Article XVIII of the Constitution of 1912, contains the following language:

“And additional laws may also be passed for the government of municipalities adopting the same; but no such additional law sháll become operative in any municipality until it shall have been submitted to the electors thereof, and affirmed by a majority of those voting thereon, under regulations to be established by law.”

Counsel for the rapid transit commission urge with much vigor the application of this part of Section 2 as authorizing the Bauer law for the city of Cleveland.

The argument is made with much ability, or at least plausibility, that the necessary steps were taken in substance to make such law operative in the city of Cleveland, by virtue of the initiated ordinance, which it is urged was adopted by a majority vote of the people of Cleveland.

At first blush I am frank to admit I was disposed to give this matter very serious consideration, not being inclined to give undue weight to mere technical departures, and permitting them to be cured by the action of the voters on the ordinance. But upon further consideration, and looking at the case from another angle, the fallacy of this contention becomes very apparent.

Suppose, for “instance, the council had passed the ordinance, the mayor had thereupon made his appointment, and the commission had proceeded with its duties under the Bauer act, and at that stage of'the case an injunction was sought by some taxpayer, claiming that the Bauer act was not a valid operating law in the city of Cleveland, would it then have been urged that the Bauer law was such an “additional law?”

The only reason why the referendum was had was because the council refused to pass the initial ordinance, not the ordinance for the adoption of the law, but an ordinance provided within the law itself, the passage of which of course must have recognized the law as operative.

The majority opinion absolutely ignores this contention of thé rapid transit commission and does not even discuss it.

But waiving for a moment the irregular form in which the referendum was had, such referendum by the people is still limited by the test as to whether or nor such law is in conflict not only with the state constitution but with the municipal constitution. Otherwise of what avail is any constitution ?

A favorable referendum had upon a law passed by the general assembly of Ohio does not give that law any higher rank than any other statute, and if the legislature of Ohio refuses to pass an act, and an initiated petition calls for a referendum thereon, which the people of Ohio later approve by such referendum, then such referendum law approved over the heads of the state legislature is still subject to all constitutional tests, because in Section 1, Article II, under the heading “Legislative,” the constitution itself reserves those tests and limitations in this language:

“The limitations expressed in the constitution, on the power of the general assembly to enact laws, shall be deemed limitations on the power of the people to enact laws.”

If this means anything, it means that a law, even approved by a referendum of the people, must conform to the constitutional test. If it be a state law, it must conform to the state constitution. If it be a municipal law, it must conform to the municipal constitution.

If this be not true, of what avail is any legislative constitution? If people may adopt a constitution to-day and enact a law to-morrow in plain conflict therewith, what becomes of your constitution ?

The fundamental theory of all constitutions, municipal, state, federal, is to give stability to law and order, to limit the powers therein delegated to the terms of the grant, and to. likewise limit- the officers who exercise the power.

If the constitution, municipal, state, federal, prevents necessary legislative relief, let it be first amended, and then proceed with your relief.

So that, after all, the fact that there was a referendum upon the ordinance does not exempt the ordinance from the constitutional test, state or municipal.

Coming now to the provisions of the municipal constitution, these must remain fixed as they are in the charter, controlling and supreme as they are, until they are regularly amended as provided in the charter.

The director of law must remain the director of law, must not have his power as the legal supervisor of the city taken from him and conferred upon somebody else whom the rapid transit commission may appoint. Why? Because it is so ordered in the city charter.

The director of public service must continue to manage and supervise all public improvements, works, undertakings of the city, and be given charge of the construction, improvement, repair and maintenance of streets, public highways, sewers, drains, parks, boulevards, and the like, as provided in the charter. Why? Because it is so written in the charter.

The same is true of the board of control, board of public utilities, director of finance, city plan commission, civil service commission, and the like.

After all, in its strict sense, this law is not a grant of any power to the city, but rather to the rapid transit commission.

By what right may the state legislature create a municipal office? If the selection or designation of the officers of a municipality is not purely a matter of municipal concern, is not a matter embraced within the “Home Rule” power, I would like to know what is.

If the powers they shall exercise in conducting the municipal government under a charter are not a municipal matter, and exclusively a municipal matter, I would like to know what is.

Let us apply one more test. Suppose there had been no Bauer law, but the city council, pursuant to its legislative power, as defined by the city charter under the constitution, had enacted an ordinance embracing all the terms and provisions of the Bauer law, save and except the raising of the tax limit, would any one contend that it could thus defy the city charter as to the jurisdiction and powers of the various officers, boards, departments and commissions therein named?

If the city council may not disrupt and disorganize the charter, the constitution of the city, how can it be contended in common sense that the state legislature may do so in a municipal matter? And surely the constitution itself treats this public utility as a municipal matter.

If the “Home Rule Amendment” and the city charters adopted pursuant thereto are to be more than mere ornamental scraps of paper, it is important that legislative interference with municipal affairs in Ohio shall come to an end.

We have the following objections to the Bauer law:

1. The attempt by the state legislature to create a municipal officer or municipal board, which is a purely municipal matter.

2. Conferring or delegating municipal powers to such municipal officer or municipal board, which is likewise purely a municipal matter.

3. In such delegation depriving officers already vested with those powers under the city constitution, the charter.

4. Numerous other provisions prescribing how the power shall be exercised, in clear conflict with the provisions of the organic law of the city, the charter.

But not merely these. Back of all these objections is an inherent defect in the qualification of the rapid transit commission, composed of five members.

The Bauer act in Section 1 provides that “they shall be electors of the county within which such city is located, and a majority of such commissioners shall be electors of such municipal corporation.”

This is certainly “Home Rule” with a vengeance. Suppose now that the mayor, exercising his privilege, appoints three electors from the city, two electors from outside of the city. The two members outside of the city would frequently exercise the balance of power, and you would have the city’s policies determined by those who were not electors of the city. The absence of one or more of the city members of the commission would give the country members equal or majority control of the board; that is, in this most important matter to the people of Cleveland their municipal affairs would be managed and controlled by those who were not electors of the city.

This is a new edition of the doctrine of “Home Rule,” with which the voters of the city cannot be said to be familiar.

It looks very much as if some jobs were to be created for someone’s benefit, rather than for the welfare of the city under the exercise of the powers of “Home Rule.”

With the Bauer law raising the tax limit the «city of Cleveland can proceed agreeable to its own charter, without any reference to the Bauer act, pass the necessary legislation, and provide forthwith for the construction of its rapid transit system, without aid or interference of the municipal powers defined and distributed by the Bauer act, all under the “Home Rule” amendment to the Ohio constitution and the “Home Rule” charter of the city, all the while safeguarding the sacred right of all just powers of government derived from “the consent of the governed.”

I have discussed this matter at some length because I see in this case another invasion of the junker variety that is wholly inconsistent with the democracy for the cities of Ohio, as it was planned and provided through the “Home Rule” amendment in 1912.


author: Johnson, J.

text:
    The Lima Telephone & Telegraph Co. v. The Public Utilities Commission of Ohio et al.

      Public utilities commission — Valuation of utilities — For fixing or reviewing rates — Section 499 et seq., General Code — Method of determining rate — Section 614-23, General Code. — Reasonableness and lawfulness of orders.

    1. The making of rates to be paid to a public utility is a legislative
    function to be exercised by the legislature or subordinate body to which the power has been delegated; and where the steps prescribed by the legislature have been followed an order of such body will not be reversed by this court unless it appears from the record of the proceedings that it is unreasonable or unlawful.
    2. Section 499-8 et seq., General Code, prescribe the steps to be
    taken by the public utilities commission in the valuation of the property of a public utility for the purpose of determining the justice of rates or fixing the same.
    3. By the provisions of Section 614-23, General Code, the public
    utilities commission in fixing reasonable rates to be charged by a public utility, is required to have due regard to the value of all the property of the utility used or useful for the convenience of the public, excluding therefrom the value of any franchise or right to own, operate or enjoy the same in excess of the amount actually paid to any political subdivision of the state or county as the consideration of such franchise or right; and exclusive of any value added thereto by reason of monopoly or merger, and to the necessity of making reservation out of the income for surplus, depreciation and contingencies, and of all such other matters as may be proper, according to the facts in each case.
    4. The order of the public utilities commission fixing the valuation
    of the property of the company and the rates that it may charge for service, under the facts and circumstances of this case, is not unlawful or unreasonable.
    (No. 15617
    Decided April 30, 1918.)
    Error to the Public Utilities Commission.

      The city pf Lima and some citizens began a proceeding before the Public Utilities Commission against The Lima Telephone & Telegraph Company, in which they challenged the rates, charges and classifications of the company for its service to the public in a schedule filed with the commission to be effective March 1, 1915. Pursuant to a general order of the commission the company filed with it lists and inventories of all kinds and classes of its property, and fixed values upon each kind and class owned, operated or leased by it. An inventory was also made by the engineers of the commission, which on November 17, 1915, fixed a tentative value as of January 1, 1915, at $696,-921.82. The company filed a protest against the tentative value so fixed, numerous hearings were had, and a large amount of evidence submitted, on consideration of which the commission made some changes in the values assigned to different classes.
    After the conclusion of the rehearings granted by the commission, it made its final order on March 9, 1917, in which it stated the rates and charges which it found to be just and reasonable. It also ordered “that, instead and in lieu of the valuation found and determined by the commission on the twenty-first day of July, 1916, the following be the valuation, as of August 31, 1916, of the several kinds and classes of property of The Lima Telephone & Telegraph Company, used and useful for the service and convenience of the public in the furnishing of telephone service, and of the property of said company, as a whole, to-wit:

      Reproduction Deprecia- Present Value. tion. Value.
    “Final valuation as of January 1, 1915.... $845,404 86 $144,686 58 $700,718 30
    “Net value, not used and useful property..... 109,876 18 53,254.43 56,621 75
    “Property used and useful ................ $735,528 68 $91,432 13 $644,096 55
    “Additions and betterments, January 1, 1915, to August 31, 1916 ............... $27,351 40 .......... $27,351 40
    “Overhead values of such additions and betterments ........ 5,775 00 .......... 5,775 00
    “Total property value, used and useful for the service and convenience of the public ............. $768,655 00 $91,432 13 $677,222 95”
    The company thereupon filed its application for a rehearing, alleging that the order made was unreasonable and unlawful for the following reasons: “1. Because under the previous orders of the commission herein, the valuation was required to be made and determined as of January 1, 1915, and not as of August 31, 1916, and because the unit costs and values fixed by both the state and the telephone company experts was as of January 1, 1915, and because an entirely different value would and should attach to the property of the telephone company if made as of August 31, 1916, than as evidenced by the order of the commission and as disclosed by the evidence submitted therein.

      “2. Because the reproduction value of the said telephone property on January 1, 1915, as found by the commission, was $845,404.86, and the value of said property on August 31, 1916, as shown by the evidence, was not less than $972,214.00 and the value of betterments added to said property, and not included in said last named amount, between January 1, 1915, and August 31, 1916, as shown by the finding of the commission, was $32,126.40, a total value as of said date of $1,004,340.40. •
    “3. Because the value of the property as a whole was not found and determined separate and apart from the value of the physical property, when under' the evidence, such value should have been found and decided to have been, on January 1, 1915, not less than the sum of $950,000.00.

      “4. Because there should not have been deducted from the value of said property, in the finding and order entered March 9, 1917, the item 'net value not used and useful property’ found by the commission to have been of the reproduction value of $109,876.18, and of the present value of $56,-621.75, as such property resulted from the purchase of the exchange system of the Central Union Telephone Company in Lima and Allen county, Ohio, and which purchase was made at the actual value of the property purchased from the said company, viz., the sum of $205,000.00, and for which securities of the Lima Telephone & Telegraph Company were issued and sold at par by authority and under order of this commission.
    "5. Because the valuation of the property as a basis for determining rates, should have been found by the commission by taking into consideration the reasonable value of the entire plant required, used and useful, to produce and supply the service and not the depreciated value of the physical property. Such reasonable value should have been determined by considering the various elements thereof, among others, the physical value, the value of the property as a whole and as a going concern, its market value in view of its situation, future possibilities, its cost and the cost of the component parts, its outstanding capital and its capital account per station, and also in comparison with such cost per station of other companies, and such other factors as the evidence disclosed, and such rates should not be based upon the depreciation value of the property.
    “6. Because the valuation upon which depreciation should be based is the replacement value of the property of said company and not the depreciated Value thereof, as shown by the evidence herein.

      “7. Because that part of the finding and order entered herein on March 9, 1917, which provides ‘that in so far as the rates of said defendant for said classes of service exceed and have since the first day of March, 1915, exceeded the said rates so found by the Commission to be just and reasonable, the same are excessive, unreasonable and in violation of law/ is retroactive and unreasonable and not supported or justified by the evidence and should be stricken from said order.
    “8. Because the present value of the property originally found by the Commission, as of January 1, 1915, to be $700,718.30, should have been as of said first day of January, 1915, $770,640.06 and

      that the present value of said property as of August 31, 1916, under the evidence should have been not less than $805,826.04, and together with the additions in the way of permanent betterments to said property added after January 1, 1915, amounting to $32,126.40.

      “9. Because of other errors apparent on the face of the record used as a basis for determining the questions before the Commission.”
    This application was overruled and this proceeding in error is brought to reverse the order of the commission.

      Messrs. Cable & Cable and Messrs. Wheeler & Bentley, for plaintiff in error.

      Mr. Joseph McGhee, attorney general; Mr. C. A. Radcliffe; Mr. Walter S. Jackson; Mr. John W. Robey and Mr. Melvin C. Light, for defendant in error.

      Mr. S. H. Tolies, amicus curiae

   Johnson, J.

The real purpose of the complaint before the commission was to fix a schedule of rates to be charged by the company, and the values complained of were fixed solely for this purpose. The filing and overruling of the application for a rehearing before the commission is a necessary prerequisite to the maintenance of this proceeding in error, and by the provisions of Section 543, General Code, the company may not rely on any ground not set out in such application. The grounds are set out in the foregoing statement, and it will be observed that the questions they make result from the valuation of the property of the company by the commission.

It is contended that the order of the commission is not sustained by the evidence and is contrary to law. In the various hearings, the results of extensive investigations by experts both of the company and of the commission were produced; the inventory filed by the company was examined by the expert of the commission, and the result of his ex-ámination was given in his testimony.

Prior to the commencement of the proceeding the plaintiff in error had been merged with The Central Union Telephone Company by the consent of the commission, and in this proceeding the engineers of the commission made a careful study of the property contained in the merged plant to estimate and determine the used and useful .property, and these results were submitted to the engineer of the company.

The record discloses that in the making of the valuation a great amount of work was done in the field, as well as in the office; and at the hearings, which covered a considerable period of time, a vast amount of testimony was introduced. In its finding the various elements of value were fully and carefully considered by the commission — buildings, overhead distributing system, underground distributing system, underground cable equipment, paving, central office equipment, overheads, and the contentions of the parties with reference to the going-concern value and with reference to the many elements that contribute to the making up of the value of property concerned in these several heads.

It is earnestly insisted by the plaintiff in error that the commission really adopted the views and accepted the results arrived at by its engineers, and that it ignored and disregarded the testimony of the experts produced by the company.' Plaintiff in error insists that thereby the commission arrived at a result which fixed the value of the property below its real value.

Section 499-8, General Code, provides that the commission, for the purpose of ascertaining the reasonableness and justice of rates and charges for the service rendered by public utilities or railroads of this state, or for any other purpose authorized by law may investigate and ascertain the value of the property of any public utility or railroad in this state, used and useful for the service and convenience of the public.

Section 499-9, General Code, provides that “Such investigations and report shall show separately the property used and useful to such utility * * *

which said inventories and reports shall be filed in the office of the commission for the information of the governor and the general assembly.” Paragraph E of this section directs: “Depreciation, if any, from the new reproductive cost as of a date certain, for existing mechanical deterioration, for age, for obsolescence, for lack of utility or for any other cause, the percentage and amount of each class of depreciation, if any, to be specifically set forth in detail.” ' Paragraph F provides: “The net value as of a date certain, of all physical property other than land owned by such utility or railroad, to be derived by deducting the sum of the amounts of depreciation from the sum of the new reproductive costs.”

The reports, inventories, schedules, and the testimony of experts and other witnesses upon which the commission relied, as well as the detailed finding of the commission, disclose that these requirements of the statute were followed.

In truth, it may be said that the record discloses that the differences between the parties relate to questions of fact. It is apparent that the commission in the weighing of the testimony before it, and in the determination of the value, proceeded upon the lines, plans and principles laid down in the statute which defines its duties and by which it was created, although the company insists that the value fixed by the commission must have been arrived at in disregard of the rules of law which should govern in the ascertainment of values in such a case, and in disregard of the evidence offered by it.

It is well settled that this court will not substitute . its judgment for that of an administrative body as to matters within its province. Before the court will interfere with an order of the Public Utilities Commission it must appear from a consideration of the record that the action was unlawful or unreasonable. Hocking Valley Ry. Co. v. Public Utilities Commission, 92 Ohio St., 362.

We have carefully examined the extensive briefs filed by different counsel, which have been of great assistance, not only in the consideration of the questions suggested, but by the references made to the voluminous record in the case, and we are not able to say that the order of the commission is unlawful or unreasonable.

The value of the property as shown by the books of the company was $1,012,227.10, and there is a depreciation charged on the books of $113,056.69, leaving $899,170.41 as the book value.

The commission found the present value, as shown in the table given in the statement printed above, to be $677,222.95, which is $221,947.46 less than the book value claimed by the company.

The commission’s table shows a depreciation item of $144,686.58, which is $31,629.89 more than the same item as claimed by the company. This item was fixed upon by the commission upon the testimony as to the actual condition of the property at the time from observation. This is the method prescribed by the statute, Section 499-8 et seq., General Code.

A depreciation account carried on the books of a utility pursuant to a plan laid down in advance, and in obedience to our statute, while a wise and proper procedure in order to provide a fund for replacements, may or may not show the actual depreciation which • the property has undergone. Actual depreciation is not uniform; it varies in different years with the vicissitudes of actual experience. What it has been at a particular time can only be determined by actual observation and study at that time. The commission was justified in giving effect to the testimony of the witnesses touching this subject.

The item of not used and useful property was determined' from the testimony to be $109,876.18. This was deducted from the reproduction value, in obedience to the requirements of the statutes, Section 499-8 et seq., General Code. The effect of this statutory provision is to prevent the inclusion in total valuations of public utility companies of property not being used or useful for the public service.

Its evident purpose is to safeguard the public from being compelled to pay a return for long periods of time on the value of property which is not used or useful for the service.

No injustice is done a company in such a case. It still has and controls the unused property. It may dispose of it, if it desires, and if the time comes when it is useful and used the company will be entitled to compensation for the use on a just and fair basis.

In addition to the two items above named the commission refused to include about $12,800 of the item designated “working capital,” $22,000 designated “bond discount,” and about $46,000 which the general manager of the company testified he would add to the appraisement value fixed in the original appraisement, on account of elements not included by the engineer, as a going-concern value. The commission refused to allow this for reasons set out in its finding, and points out that one of the reasons advanced in its support, that of the company being free from competition by reason of monopoly or merger, is expressly excluded from consideration by Section 614-23, General Code.

The aggregate of the items named above approximates the difference in totals between the contestants in this proceeding.

The Public Utilities Commission is an administrative governmental agency, with regulatory powers. Aside from its necessary police power to require safe and efficient service its important function is to act as an arbitrator in the ascertaining and fixing of fair compensation to be paid to the utility without injustice to it or to the consumer.

The condition which gave rise to the study and discussion of" the general subject resulted from the fact that as substantially a monopoly privilege is granted to the utility company, competition being practically removed, the law of supply and demand cannot operate in fixing rates and charges.

Therefore, the government acting for the public, which granted the monopoly, must itself prescribe a method for arriving at a just compensation. While preventing the use of the essential advantages of the monopoly unfairly against consumers, it is equally important that justice be done the utility company, and that sufficient compensation be provided, and its continuance assured, to induce the investment of the capital necessary to the furnishing of the service.

When private property is devoted to the public use, its owner so devotes it bound with notice that it will be subject to public regulation both as to its use and as to the compensation to be paid for it. Munn v. Illinois, 94 U. S., 113.

As already shown the statutes of Ohio, Section 499-8 et seq., General Code, expressly lay down the method for ascertaining the value which shall be used as a basis in such a case as we have here.

Section 499-9, paragraph F, reads: “The net value as of a date certain, of all physical property other than land owned by such utility or railroad, to be derived by deducting the sum of the amounts of depreciation from the sum of the new reproductive costs.”

The Ohio statutes are in harmony with the general view that is entertained as to what is just.

In City of Knoxville v. Knoxville Water Co,, 212 U. S., 1, it is said, at page 9: “This valuation was determined by the master by ascertaining what it would cost, at the date of the ordinance, to reproduce the existing plant as a new plant. The cost of reproduction is one way of ascertaining the present value of a plant like that of a water company, but that test would lead to obviously incorrect results, if the cost of reproduction is not diminished by the depreciation which has come from age and use.” The court also says at page 10: “In the view we take of the case it is not necessary that we should undertake the difficult task of determining exactly how much the master’s valuation of the tangible property ought to have been diminished by the depreciation which that property had undergone. It ■is enough to say that there should have been a considerable diminution, sufficient at least to raise the net income found by the court above 6 per cent upon the whole valuation thus diminished.”

In the examination of this and similar cases we have been impressed that there is much confusion of terminology in the discussion of the subject. There has been no general agreement as to the word value and what are proper elements in the valuation of properties such as are involved here.

It seems to be clear that the term may be used in several different senses. As said by Whitten in his work on “Valuation of Public Service Corporations,” page 799: “The term value may signify: (1) inherent utility, or.value in use: (2) cost of production, or normal value; (3) purchasing power, or exchange value.” And at page 804 the author quotes from an opinion of the New York Public Service Commission as follows: “In such

a case the earning power of the plant is uncertain until the decision as to the rate is made, because that is the very thing the controversy is about. It follows that in a rate case the earning power cannot be considered in determining what is the value of the property for the reason that such value depends upon the earning power and the earning power depends again upon the rate, and the rate depends upon the decision which may be made in the case.”

There is a similar confusion in connection with the estimation of the good-will value in rate cases. It may be said that the good-will value of any business enterprise is the value that results from the probability that old customers will continue to trade with the established concern. It is well understood that in the valuation of a business in a negotiation for its sale or exchange, or other purpose, such valuation is entirely incomplete without a proper, estimate of the worth of the good-will of the business, which was possibly the result of long effort and large expense. It is equally apparent that where the concern to be valued is a public utility, which has practically a monopoly, the public, that is the customers, have no choice. They are compelled to deal with the concern whether they wish to or not.

The concern may or may not have the good-will of the public with whom it deals, but this plays a very small part in the earning power of a company which is in the possession of a practical monopoly of the business. Therefore, in such a case the element of good-will value is not a thing to be estimated as part of the capitalization upon which the public must pay a fixed charge. On the other hand, the value that results from the fact that the concern is in active operation, that the physical property, the buildings, the equipment and plant and capital are all active, and together make a going concern, is a thing that must be taken into consideration.

As was said in City of Omaha v. Omaha Water Co., 218 U. S., 180, 202: “The value in equity and j'ustice must include whatever is contributed by the fact of the connection of the items making a complete and operating plant. The difference between a dead plant and a live one is a real value, and is independent of any franchise to go on, or any mere good-will as between such a plant and its customers. That kind of good-will, as suggested in Willcox v. Consolidated Gas Co., 212 U. S. 19, is of little or no commercial value when the business is, as here, a natural monopoly, with which the customer must deal, whether he will or no.”

The justice of these principles is recognized and carried into the provisions of the General Code, to which we have referred, touching the subject.

As pointed out, Section 499-9, General Code, provides for the making of. the inventory by the commission in the manner stated. Paragraphs E and F are hereinbefore quoted, and paragraph G provides: “If there shall be any additional value given to the value of the property of a public utility or railroad due to the possession of a franchise to perform a public service, or for good-will or for financing, such additional value shall be separately and specifically set forth, together with the basis for the computation or estimate of such additional value.” All of the elements in the different paragraphs of said Section 499-9 are required to be included in the making up of the value as a whole of the utility. But by the provisions of Section 614-23, General Code, the public utilities commission in fixing reasonable rates to be charged by a public utility is required to have due regard to the value of all the property of the utility actually used and useful for the convenience of the public, excluding therefrom the value of any franchise or right to own, operate or enjoy the same in excess of the amount actually paid to any political 'subdivision of the. state or county, as the consideration of such franchise or right, and exclusive of any value added thereto by reason of a monopoly or merger, and to the necessity of making reservation out of the income for surplus, depreciation and contingencies, and of all such other matters as may be proper according to the facts in each case.

It is apparent that the commission in this case had no other purpose than to arrive at the reasonable and just valuation of the property used or useful to furnish the service, and no reason is pointed out why an expert selected by it should be, or was, otherwise than wholly disinterested, or that he should or did have any desire to put other than the proper value on the property.

We think it clear that the attitude of the commission was fair, and this court would not be justified in entering into a nice differentiation of details.

It is of course true that if the initial duty had been ours we might have arrived at a different result as to depreciation, or might have included in the estimate this or that item that was not allowed by the commission. It had the testimony and the assistance of the engineers and experts appointed by itself, and also those employed by the company, and as above indicated we find nothing in the case that would warrant us in holding that its finding was unreasonable or unlawful.

Order affirmed.

Nichols, C. J., Newman, Jones, Matthias and Donahue, JJ., concur.

Wanamaker, J., concurs in the judgment but not in the syllabus.