author: Bradbury, C .J.

text:
    Hubbard, as Treasurer v. Brush.

      Taxation of personal property — Foreign corporation doing business in this state — Property situated and taxed in Ohio — Stock shares exempt from taxation — Deduction of debts from credits — Sections 2746, 2744 and 2730, Revised Statutes.

    1. Where all the business of a foreign corporation is transacted in this state, and all of its property situated and taxed here, shares of its capital stock held in this state are exempt from taxation by force of section 2746, Revised Statutes.
    2. dioses in action, whether book accounts, promissory notes, or the like, of foreign corporations that are kept in this state and arise out of the corporate business transacted here, are subject to taxation under the provisions of section 2744, Revised Statutes.
    8. Such corporation, in listing for taxation its “credits” liable to taxation in this state, may, under the provisions of section 2730, Revised Statutes, deduct from its claims and demands that arise out of the business it transacts in this state, such of its bona fide debts as arise from the same source.
    (Decided November 28, 1899.)

      Error to the Circuit Court of Cuyahoga county.
    The defendant in error brought this action in the court of common pleas of Cuyahoga county to restrain the collection of taxes assessed against him in that county on certain shares of stock owned by him in The Sandusky Portland Cement Company, a West Virginia corporation. The defendant in error prevailed in the court of common pleas, and on appeal by the plaintiff in error to the circuit court he again had judgment enjoining the collection of the taxes in dispute. Whereupon the plaintiff in error brought the cause to this court for review. The facts will be stated in the opinion.

      P. H. Kaiser, for plaintiff in error.
    First, The facts as found by the circuit court do not show that all the capital stock of said company is taxed in Ohio in the name of the company, but do show the contrary.
    Second, Said section 2746 applies only to domestic corporations, and has no reference whatever to foreign corporations. Worthington v. Sebastian, Treasurer, 25 Ohio St., 1; The Railroad Co. v. Pennsylvania, 15 Wall (U. S.), 300; The Railroad Co. v. Jackson, 7 Id., 265; Thomas v. Mason County Court, 4 Bush (Ky.), 135; McKean v. Northampton Co., 49 Penn St., 519; Great Barrington v. Berkshire, 16 Pick., 572; Bradley v. Bauder, 36 Ohio St., 28; Grant v. Jones, 39 Ohio St., 506; Brown v. Noble, 42 Ohio St., 405; Myers v. Seaberger, 45 Ohio St., 232; Sommers v. Boyd, Treas., 48 Ohio St., 648; Rutland v. Hotchkiss, 42 Conn., 426, 100 (U. S.) 491; 1st Beach on Private Corporations, Sec. 289 on page 481; Bank of Augusta v. Earle, 13 Pet., 519; Rece v. N. N. & M.

      M. V. Co., 82 West Va., 164; B. & O. R. R. Co. v. Cary, 28 Ohio St., 208.
    Substantially the same holdings are made in Western Union Telegraph Co. v. Mayer, Treasurer, etc., 28 Ohio St., 521; Bridge Company v. Mayer, 31 Ohio St., 317; Cooley on Taxation (2nd Edition), page 21.
    The foregoing considerations and authorities warrant the following conclusions as applied to the present case:
    First • — • That the Sandusky Portland Cement Company had its residence in the state of West Virginia on the day preceding the second Monday in April, 1895, being the day for listing personal property in that year.
    Second — That on that day the legal situs of the $8,136.53 of accounts receivable, then owned by said company, was in the state of West Virginia, and not in Ohio.
    Third — That, therefore, said accounts receivable were not taxable in Erie county, Ohio, or in any other place in Ohio.
    Fourth — That such being the case, it is not true that all the capital stock of said company was taxed in Ohio in the name of such company; and the facts, therefore, do not bring the case within the terms of Section 2746 of the Revised Statutes of Ohio.
    Section 2746 applies only to stock in domestic corporations and has no application whatever to stock in foreign corporations.
    The scope and reach of this legislation has been under consideration by the Supreme Court of Ohio in two cases. Bradley et al. v. Bauder, Auditor, 36 O. S., 28.

      Again the legislation of Ohio upon the subject of the exemption of shares of stock in corporations whose capital stock was taxed in the name of the company, came under the consideration of the Supreme Court in the case of Lee, Treasurer v. Sturges, 46 Ohio St., 153.

      Williamson, Cushing & Clarke, for defendant in error.
    The main question for decision is, therefore, what does Rev. Stat., Sec. 2746 mean by saying, “No person shall be required to list for taxation any share or shares of the capital stock of any company, the capital stock of which is taxed in the name of such company?” When is the capital stock (i. e., the property representing the capital stock) “taxed in the name of a company” in Ohio? Brush claims it is so “taxed” when the company pays taxes on it; in other words, that the test of exemption is location of property. The treasurer claims it is to be taken as “taxed” only when the company has been incorporated in Ohio, no matter where the property is, or is taxed; in other words, that the test of exemption is place of incorporation.
    Brush’s claim is in accordance with the language of the statute; the treasurer absolutely ignores the language of the statute.
    The construction of this provision has already been before the supreme court of the United States once, and before this court three times. Sturges v. Carter, 114 U. S., 511; Jones v. Davis, 35 Ohio St., 476; Bradley v. Bauder, 36 Ohio St., 28; Lee v. Sturges and Ins. Co. v. Ratterman, 46 Ohio St., 153.
    It is plain that the legislature was recognizing the inequity and oppressiveness of a certain form of what is popularly called" “double taxation,” and, with intent to avoid it, enacted this exempting clause.
    And we submit that, both by the spirit and by the strict letter of section 2746, the shares of this Cement Company’s stock were exempted from taxation.
    To make Section 2746 fit the treasurer’s construction, it is necessary to eliminate entirely the phrase, “the capital stock of which is taxed in the name of said company,” and to substitute the pharse “the charter of which was obtained solely from Ohio,” or some equivalent expression referring only to place of incorporation and omitting all reference to taxation.
    Counsel for the treasurer also refers to the majority opinion in Lee v. Sturges as laying down the rule that the legislature is presumed not to intend exemptions from taxation. It is true that such presumption is there said to exist; but this court, both before and since the decision of Lee v. Sturges, has announced the conflicting, or rather the controlling rule, that the legislature is presumed not to intend to impose what is popularly called double taxation. Bank v. McGregor, 6 Ohio St., 50; Fraser v. Seiborn, 16 Ohio St., 623; Payne v. Watterson, 37 Ohio St., 124; Tennessee v. Whitler, 117 U. S., 137; McNeal v. Hagerty, 51 Ohio St., 267.
    To tax, as property, the shares of a corporation which, though chartered elsewhere, has all its property in Ohio, and pays taxes on it all in Ohio, while exempting from tax the shares of Ohio corporations on the groud that the corporate property is taxed in Ohio, would, we submit violate Section 2, Article 12, of the Ohio Constitution, which requires the property must be taxed by a uniform rule, and also Section 2 of Article 1, which provides that “gov-eminent is instituted for their” (the people’s) “equal protection and benefit.”
    The unifromity required in taxing property must be uniformity with regard to the property, not with regard to some immaterial incident. It would not be uniformity to tax the property of all tall men by one rule and of all short men by another. Field v. Commissioners, 36 Ohio St., 476; State v. Ferris, 53 Ohio St., 314.
    And, as Sec. 2746 must, if possible, construed so as to conform to the Constitution, and not violate it, our opponents’ construction of it is inadmissible.
    These constitutional questions are not touched on in the opinion in Lee v. Sturges.

    If we are right in our claim that Ohio does not tax shares of stock in a foreign corporation having' all its property in Ohio, and being taxed on all of it in Ohio, then we submit that the Cement Company’s ownership of $8,000.00 worth of business accounts receivable did not render its shares of stock taxable. And this for several reasons:
    1. Even if the taxable situs of these accounts were not in Ohio, the law does not concern itself “de minimis.” The circuit court found that the company’s tangible property in Ohio constituted the bulk of its property. If location of property in Ohio is the test of exemption, nobody would claim that the shares of a rich Ohio company would be deprived of exemption just because it had a horse and wagon, or some trifling or unsubstantial part of its property, over the line in Indiana, so as to make it not taxable in Ohio. The presence of substantially all the property in Ohio would sufficiently comply with the statute.
    2. As these accounts receivable are less in amount than the company’s debts, the company would not have to pay any taxes on them in Ohio, even if they were situated in Ohio. The company pays already just as much taxes as though it had been organized in Ohio.
    3. ' Besides, as they are less than the debts, .they represent borrowed money rather than the “capital stock” of the company; and this court has several times said that it is the payment of taxes on the property which represents the subscribed capital (viz., personal property: such real estate as is necessary to the daily operations: moneys: and “credits,” or excess of claims over debts), that entitles the shares to exemption. Jones v. Davis, 35 Ohio St., 476; Lee v. Sturges, 46 Ohio St., 160.
    4. And finally, Ohio has the power, and by statute exercises the power, of taxing the accounts receivable of foreign corporations, so far as those accounts receivable grow out of business conducted in Ohio from Ohio headquarters, just as it taxes the áecounts receivable of Ohio corporations. Rev. Stat, Sec. 2744 requires (with immaterial exceptions) every corporation, “whether incorporated by any laAV of this state or not,” to list for taxation “all the personal property, which shall be held to include all such real estate as is necessary to the daily operations of the company, moneys and credits, of such company or corporation, within the state.”
    Under Sec. 2776, when any railroad company has part of its road in this state and part thereof in any other state or states, the proper board shall take the value of its entire property, moneys, and credits, and divide it in the proportion the length of road in this state bears to the whole length of the road, and determine the principal sum for the value of such road in this state accordingly.

      The practical effect of the Nichols law, sustained in State v. Jones, 51 Ohio St., 492, and in Adams Express Co v. Ohio, 166 U. S., 185, is to tax foreign express, telegraph and telephone companies doing part of their business in Ohio, on a proportionate part of their intangible property, such as franchises, goodwill, contracts and credits, all of which contribute to the value of the shares of stock, taken as a guide in fixing the valuation of the property of the companies for taxation in Ohio.

      People ex rel. Yellow Pine Co. v. Barker, 23 N. Y. App., Div. 524 (affirmed in 155 N. Y., 665, without report on the prevailing opinion below) sustained the right of the state of New York to tax a New Jersey corporation which did business, and had property in vested in its business, in New York, on “credits and bills receivable, due the corporation for merchandise sold by it in the course of the transaction of its business in the state of New York.”
    These decisions make it clear that the accounts receivable of the Cement Company, growing out of business which it conducts solely in Ohio, and payable to it at its principal office, which is in Ohio, do have in Ohio a situs for taxation, although the company’s charter is a West Virginia charter.
   Bradbury, C .J.

The defendant in error, a resident of Cleveland, in the county of Cuyahoga, owned preferred shares of stock in The Sandusky Portland Cement Company, of the par value of $10,-000, which in 1895, he declined to list for taxation on the ground that the corporation, though created under the laws of West Virginia, had its principal office, place of business and property in Ohio, and that it listed and paid taxes in this state on all its property; which action of the corporation, by virtue of Section 2746, Revised Statutes, he claimed exempted the shares of its capital stock from taxation. The board of equalization of the city of Cleveland, however, denied his claim, and valuing his stock at $6,000, added that sum to the amount of his taxable property, and taxes thereon were charged against him on the books of the auditor of Cuyahoga county. This action was brought to restrain the collection of the taxes assessed against him by reason of the addition thus made to his taxable property. In his petition he alleged as the grounds on which the collection of the taxes in controversy should be restrained, that the corporation, as above stated, had listed and paid taxes in this state on all of its property. Issue was taken on this averment of his petition. After a trial in the court of common pleas the cause was appealed to the circuit court, there tried on its merits and the facts found and separately stated by the court as follows:

’’The Sandusky Portland Cement Company is, and at all times herein referred to has been, a corporation organized under the laws of the state of West Virginia, having its principal office and principal .place of doing business in Erie county, Ohio. * * * and engaged solely in the business of extracting from its lands in said Erie county, the materials for Portland cement, and manufacturing such cement from such materials upon said lands in said county and there selling the same. Its property upon the day preceding the second Monday in April, 1895, consisted of its real estate and plant thereon, in said county, cement on hand in said county] said land, plant and cement constituting the bulk of its property), cash to the amount of $41.19 in its possession in said county, $44.50 on deposit in a bank in said county, and accounts receivable amounting to $8,136.53. It owed on said day legal bona fide debts in the form of bills and accounts payable amounting to $16,630.82.* * * All the personal property field by it witfiin tfie year preceding tfie first day of April, 1895, to be used in manufacturing, or partially or wholly manufactured, was so field by it in said Erie county. All of its said property, except said accounts receivable, was listed for taxation in tfie name of said company, and taxed in tfie name of said company, in 1895, in said county. Tfie company fiad no office and did no business in West Virginia, during tfie times referred to.”

Tfie defendant in error relies upon tfie provision of Section 2746, R. S., wfiicfi reads as follows: “Section 2746. Personal property of every description, moneys, credits, investments in bonds, stocks, joint stock companies, or otherwise, shall be listed in tfie name of tfie person who was tfie owner thereof on tfie day preceding tfie second Monday of April of each year; but no person shall be required to list for taxation any share or shares of tfie capital stock of any company tfie capital stock of wfiicfi is taxed in tfie name of such company.”

This exemption of shares of tfie corporate stock from taxation, by tfie terms of tfie foregoing section, is made to rest on tfie circumstance that tfie “capital stock” of tfie company “is taxed in tfie name of tfie company.” The phrase “capital stock,” witfiin tfie meaning of that term, as employed in that section, should be field to embrace tfie entire corporate property. If any part of tfie corporate property is not taxed witfiin this state, tfie owners of shares of its stock who are residents of this state are not exempt by virtue of tfie provisions of that section from, listing those shares for taxation in this state and paying taxes thereon, the exemption applying only in cases where the “capital stock,” i. e., all the corporate property, has been taxed Within this state. Lee v. Sturges; Insurance Co. v. Ratterman, 46 Ohio St., 153; Sturges v. Carter, 114 U. S., 511.

Although the language of that section in terms exempts corporate shares from taxation only where the capital stock is taxed in the name of the company, yet if all of it was by law taxable, but by the neglect of assessing or corporate officers was not taxed, there would, nevertheless, be strong ground to hold that the shares would be exempt from taxation in the hands of its unoffending owners, and the public remitted for relief against the corporation under the laws that provide for correcting false returns. This question, however, is neither directly involved in the case now before us nor discussed by counsel, the defendant in error not planting his claim to relief on such omission, but contends that as matter of fact all the corporate property was taxed in this state. The finding of fact places this contention beyond all controversy, unless the choses in action of the corporation, which were found to aggregate $8,000, should have been listed for taxation in this state, notwithstanding the corporate liabilities were still greater. The decision of the case depends upon this question.

The finding of the circuit court, in as far as it rejects on this question, shows that the corporation whose stock defendant in error held, was a foreign corporation, but that all of its property was situated within this state and its business wholly conducted herein. Whatever situs, in fact, its choses in action possessed, was also herein, for it appears that it maintained no office and did no business whatever in West Virginia, the state by which it was created, but that its office was in this state where its property was situated and its • business transacted.- And whether these choses in action consisted of promissory notes, book accounts or other evidence of indebtedness, they must be presumed to have been kept in its office in this state. However, notwithstanding all this, doubtless the legal situs of this intangible property for most purposes, was that of the residence of the corporation, which, in law, is within the state by whose authority it was created. Bank of Augusta v. Earle, 13 Pet., 519; B. & O. R. R. Co. v. Cary, 28 Ohio St., 208; Bridge Co. v. Mayer, 31 Ohio St., 317; 25 Am. and Eng. Ency. of Law (1st Ed.), 146.

Does that situs for all purposes adhere to the corporate residence, or may choses in action, having the relation, connection and situation in which these were found, be held to possess such a situs in this state as will clothe the state with jurisdiction over them for taxation? The state attempts by section 2744, Revised Statutes, to assert and exercise such power or jurisdiction. The section, so far as it relates to this subject, reads as follows: Section 2744. “The president, secretary * * * of every joint stock company, for whatever purpose they may have been created, whether incorporated by any law of this state or not, shall list for taxation * * * all the'personal property, which shall be held to include * * * credits of such company or corporation within the state.”

We perceive no reason for denying to the state the power asserted by this section. If men choose to resort to another state or country for authority to organize a corporation for the purpose of engaging in business in this state, or if that was not their original purpose, choose afterwards to plant themselves herein, and in either case transact the corporate business and hold the corporate property wholly within our borders, and enjoy the protection of our laws, it is only just and reasonable that its property should be subject to taxation herein as fully as if its organization had been effected under our own laws, and the right of taxation should not be defeated nor limited upon the ground that for some other purpose the situs of a part of its property should be regarded as being in the state or country where the corporation was organized.

Where foreign corporations voluntarily bring their property and business into this' state to avail themselves of advantages found here which they believe will enhance the probabilities that the business they intend to pursue will be profitable, they should not be heard to complain of laws which tax them as domestic corporations are taxed by the state. We hold, therefore, that the provisions of Section 2744, which make it the duty of foreign corporations to list for taxation in this state, their choses in action where they are held within this state and grow out of the business they conduct herein, is a valid exercise of the taxing powers vested in the state. This holding finds support in many adjudications, among which may be cited The People ex rel. v. The Village of Ogdensburgh, 48 N. Y., 390; Redmond v. Commissioner, 87 N. Car., 122; State ex rel, Taylor, Adm’r., v. St. Louis County Court, 47 Mo., 594. The state thus having jurisdiction to tax; among other classes of property owned by foreign corporations, its choses'in action found here which grow out of the business it transacts in this state, it becomes necessary to consider how they should be or are taxed by our laws. They fall within that class of property which our tax laws call “credits,” a definition of which is found in Section 2730, Revised Statutes, in so far as material to the present inquiry in these words: “The term ‘credits’ shall be held to mean the excess of the sum of legal claims and demands * * * over and above, the sum of legal Iona fide debts owing by such person.” This definition of “credits” applies equally to all persons and corporations, foreign or domestic. So that where a duty is enjoined upon either to list for taxation its “credits,” the term “credit” implies the balance remaining after all dona fide debts are deducted from its legal claims and demands. In this case the finding of the court showing that the corporate claims and demands aggregated $8,000, and its legal liabilities $16,000, therefore within this statutory definition it had no credits to list for taxation. The finding of facts showing further that the corporation had listed all of its other property in this state, it follows that it paid taxes on all its property and its shares of stock were not taxable. This conclusion, however, depends upon the meaning of the term “credits.” It is a constitutional term and found in Section 2 of Article 13 of the Constitution of 1851, where it is declared that “Laws shall be passed taxing by uniform rule all moneys, “credits” * * * etc. The framers of the Constitution did not define the word “credits,” which it thus employs to denote a specific subject of taxation. Prom the nature of its objects, and the brevity required of these fundamental instruments they can not deal in definitions, but can lay down only general rules, and employ general terms, leaving questions of construction to the appropriate departments of the government. This court in the year 1853, Bank v. Hines, 3 Ohio St., 1, in construing this section of the Constitution, held that a statute which allowed debts to be deducted from moneys and credits was repugnant to that section of the Constitution and, therefore, void. Ranney, J., in this regard, dissented from so much of the opinion and judgment as denied the right to deduct liabilities from claims and demands. Three years later, in Latimer et al. v. Morgan, Auditor, 6 Ohio St., 279, this ruling was adhered to by the court. Nevertheless, in 1856, the general assembly by statute defined the term “credit” and declared it to mean “the excess of the sum of all legal claims and demands * * * over and above the sum of the legal Iona fide debts owing by such person.” And ever since, a period of more than forty years, that legislative definition has been acquiesced in and Bank v. Hines, in as far as it denied the right to deduct liabilities from claims and demands, has been ignored. What this term “credits” means is directly involved in this action; for if that term, as it is found in the Constitution, is equivalent to the “claims and demands” so as to require every claim or demand, or in othe” words every chose in action, to be specifically listed for taxation in like manner as specific items of tangible property are listed, the general assembly has no power to assign to such term, or declare it to possess, any other meaning. This want of power in that body rests upon the established principle that the interpretation or construction which is to be placed on the language of the Constitution, at least where private, pecuniary rights are involved, belong not to the legislative, but to the judicial department of the state. Governor v. Porter, 5 Humph., 165; Westinghausen v. The People, 44 Mich., 265; Nougues v. Douglass, 7 California, 65; People v. Lynch, 100 Ill., 495; Powell v. The State, 17 Tex. App., 345.

Nevertheless, the legislative declaration under consideration, followed as it has been for so many years as well by those who gather, as by those who pay taxes, should be accorded great weight in determining this right of deduction. The People v. Andrew Lynch, 100 Ill., 495.

The word “credits” in the connection in which it is used in the Constitution is not made at all clear by a resort to the lexicographers. It is apparent, however, that if the framers of the Constitution had intended to specifically tax book accounts, promissory notes and the like, it would have only required the addition of a few words, not at all incompatible with the brevity required in such instruments, to manifest that intention. The ease with which it could have been done gives to the omission a signification entitled to some consideration. The administration of the laws governing taxation has developed the difficulties, if not the impracticability, of permitting the subtraction of debts and liabilities of the owner of real estate and tangible personal property from its value for taxation. Though even here there are those who contend that the deduction should be made.

The difficulties however attending a deduction of liabilities from claims and demands have not proved formidable since the practice was authorized by the legislature, and the practice itself has received general approbation. For these considerations, not to specify others, we are of opinion that the legislative declaration is in accord with the Constitution and, therefore, hold that the corporation involved in this controversy rightfully, in listing its property for taxation, deducted its liabilities from its claims and demands.

Judgment affirmed.


source: Caselaw Access Project

author: By the Court:

license: Public Domain

text:
    C., C., C. & St. L. Ry. Co. v. Wells.

      Fare for passengers on railroads — Fare charged may be multiple of five, when — How computed.

    1. A railroad company operating a railroad in whole or in part in this state, may charge as fare that multiple of five which is nearest to the product produced by multiplying the rate of three cents per mile by the distance, whether such multiple is above or below such product.
    2. If such product should be equi-distant from the multiple below and the one above, the railroad company may charge as fare either multiple.
    (Decided November 28, 1899.)
    Error to the Circuit Court of Seneca county.
    The defendant in error, Winfield S. Wells, filed his petition against the Cleveland, Cincinnati, Chicago & St. Louis Railway Company, to recover penalties for charging a greater rate of fare than is allowed by statute. The petition contains five separate causes of action, and the whole amount of penalties sued for is $750, being the sum of $150 for each cause of action. The first cause of action is as follows:
    Plaintiff says that defendant is a corporation duly organized under the laws of the State of Ohio, and that it is operating a line of railway in and through the State of Ohio.
    For first cause of action against' the defendant, plaintiff says:
    That on the 15th day of June, 1897, plaintiff, in the due course of his business, purchased a ticket of the agent of the said railway company at the defendant’s railway station at Tiffin, Seneca county, Ohio, which entitled plaintiff to ride on defendant’s train running between its station at Tiffin, Ohio, and its station at the village of Carey, Wyandot county, Ohio; that thereupon plaintiff became a passenger and rode upon defendant’s train between the said stations of Tiffin and Carey. That the agent of said railway company, for said ticket, charged, demanded and received of said plaintiff, the sum and price of fifty cents for plaintiff’s fare between said stations.
    Plaintiff alleges that the distance between the stations of Tiffin and Carey as aforesaid is fifteen and 60-100 miles, by actual measurement, and that, the amount so charged and received by defendant was more than defendant was entitled by law to charge for riding on said railway said distance of fifteen and 60-100 miles; whereby an action has accrued to the plaintiff for the same and he is entitled to have and receive from defendant by reason of the premises, the sum of one hundred and fifty dollars.
    The other four causes of action are in substance and form the same as the first. To this petition the railway company demurred, for the reason that said petition does not contain facts sufficient to constitute a cause of action against it.
    The court of common pleas sustained the demurrer, and the plaintiff below not desiring to amend, his petition was dismissed and judgment rendered in favor of the railway company, to all of which the plaintiff excepted.
    The circuit court upon petition in error reversed the judgment of the common pleas, and overruled the demurrer. Thereupon the railway company filed its petition in error in this court, seeking to reverse the judgment of the circuit court, and asking an affirmance of the common pleas.

      McCauley & Weller, for plaintiff in error.

      Willis Bacon, for defendant in error.
   By the Court:

The action was brought under Sections 3374 and '3376 of the Revised Statutes. Section 3374 is as follows: “A company operating a railroad, in whole or in part, in this state, may demand and receive for the transportation of passengers on its road not exceeding three cents per mile, for a distance of more than eight miles; but the fare shall always be made that multiple of five nearest reached by multiplying the rate by the distance.” Section 3376 provides that for a violation of Section 3374, the railway company shall pay to the party aggrieved for every such overcharge a sum equal to double the amount of the overcharge, but in no .case less than $150.00.

These sections of the statute are highly penal, and should be strictly construed; and in case of doubt, should be so construed as to avoid the penalty; but if the intention of the general assembly is clear, then effect should be given to that intention, even though penalties may thereby be exacted.

The controversy arises over that part of the statute which provides that “the fare shall always be made that multiple of five nearest reached by multiplying the rate by the distance.”

The statute was passed to avoid the trouble of making change in pennies, and was regarded as a favor to the railroad companies. It was assumed that the losses and and gains would be substantially equal, and therefore there would be no loss either to the railroad companies or the public, while both would be greatly eonvenienced by making change in multiples of five.

To allow thé railroad companies to always charge as fare that multiple of five next above the product of the rate by the distance, would inure to their benefit and to the detriment of the public, while the object of the statute was to benefit neither, but convenience both.

It is urged by counsel for plaintiff in error, that the words “nearest reached,” mean a point approached but not yet reached, and that therefore the fare to be charged is that multiple of five first above the product of the rate by the distance and not below it, because the one beloAV has been reached and passed.

We are clearly of opinion that this was not the intention of the general assembly. The statute is not one of linear measure. It does not imply that by measurement a point is reached and passed, and another point approached and not reached. The true construction is that the rate is multiplied by the distance and the product thus obtained constitutes the point in numbers from which to reckon, and from this point the nearest multiple of five, whether above or below, is reached and made the fare to be charged. If this point should be equally distant from the multiple of five next below and the one next above, the railroad company may charge either fare without incurring any liability under the statute, because under a strict construction it could not be said in such cases that the statute had been violated.

Judgment affirmed.


text:
    Lotze et al. v. City of Cincinnati.

      Change of grade of street — Not appropriation of easement, when — Owner of property not entitled to compensation, when — How damages to abutting property may be estimated.

    1. A change in the grade of a street, which leaves the buildings erected on an abutting lot with reference to a previously established grade as convenient of access and use as before the change, and does not otherwise diminish the market value of the property, is not an appropriation of the easement, or of any property right of the owner of the lot, which entitles him to compensation in consequence of the change of grade.
    2. The owner is not entitled to recover, as damages, the cost of making alterations in the buildings, unless such alterations have been rendered necessary by the change of grade in order to make the premises as convenient of access and use as they were before.
    3. In estimating the damage to abutting property by a change of grade of a street, it is proper to take into account the incidental local benefits thereby accruing to the property, such as improved light and ventilation afforded the buildings, and increased facilities for carrying on the business for which the buildings are used.
    (Decided November 28, 1899.)
    Error to tbe Superior Court of Cincinnati.
    Action for damages to abutting property by change in the grade of a street. Judgment for defendant affirmed.
    The plaintiffs in error erected a building, which they used for manufacturing purposes, on a lot of theirs, abutting on Lodge street in the city of Cincinnati, with reference to the then-established grade of the street. Afterwards, by authority of the city, other abutting owners lowered the grade of the street two feet, and, without expense to the plaintiff in error, improved it with an asphalt pavement. The plaintiffs in error brought the action below, against the city, to recover damages done to their property, as they claimed, by the change of grade. The jnry returned a verdict for the defendant, on which judgment was rendered, and that judgment was affirmed in general term. Plaintiffs bring the case on error, to this court.

      Drausin Wulsin and C. M. Lotze, for plaintiffs in error.

      Ellis G. Kinkead and George H. Kattenhorn, corporation counsel, for defendant in error.
   By the Court:

One complaint of the plaintiffs in error is, that their easement in the street, appurtenant to their lot, was appropriated by the change of grade, and they should have been awarded compensation for it without deduction for any benefits resulting from the improvement. And it is another complaint of theirs, that they were denied damages for what it would cost to lower the floors of their buildings to correspond with the new grade.

While an owner undoubtedly has an easement in a public street on which his property abuts, as an appurtenance thereto, it does not entitle him to a perpetual continuation of the street at any particular grade, but his right is subject to such changes of grade,- from time to time, as the public convenience and welfare may require. Nor, does it necessarily follow that such change appropriates the easement, or invades any property right, of the abutting owner. If the change renders his buildings less covenient of access and use than they were before, there may be an appropriation pro tanto of his property right in the easement, for which he should receive compensation; or, if the change so interferes with the ingress and egress to and from his buildings as to render it necessary to incur expense m making alterations in his buildings in order to make the premises as convenient of access as they formerly were, or thejr are otherwise depreciated in value, he is entitled to such damages as will cover his actual loss. But there may be changes of grade which leave the abutting property more convenient of access than before, or equally so, without any necessity for expenditure to adapt the property to the new grade, or any depreciation in its market value; and when that is the case, there is obviously no appropriation which entitles the owner to compensation, nor-injury for "which damages should be awarded. This was - the claim of the city on the trial of the action below, and it gave evidence tending to show that the convenient use of the plaintiff’s property for all the purposes to which it was adapted, was in no way affected by the change made in the grade of the street on which it abutted; that no change had been made in the plaintiff’s building, or expense in that behalf incurred, and none was necessary to adapt the property to the new grade; and, that the market value of the property was not diminished. The plaintiffs contested this claim of the city, and introduced evidence to controvert that given by the city; and the charge of the court, though open to criticism in some of its parts, on the whole, submitted the real matter of controversy to the jury, who found generally for the defendant. So that, since an inquiry into the weight of the evidence is not required, there appears to be no ground, on this branch of the case, for the reversal of the judgment

The plaintiffs in error complain of the admission of evidence offered by the city to show that their property would receive special benefits from the change made in the grade of the street, in the way of improved light and ventilation afforded the basement of the building, and increased facilities for loading and unloading vehicles from, and into, the building; and also of the charge of the court permitting the jury to take such benefits into account in determining the damage to the property. These benefits, if they existed, were peculiar to the particular property, and were so incidental to, and connected with, the condition resulting to the property from the change of grade, that they necessarily entered into an inquiry and estimate of the actual damage which the property thereby sustained. If the easement was not impaired, there was no such appropriation of the plaintiff’s propt erty as entitled them to compensation without deduction for benefits; and in estimating the incidental damage to the buildings, it was proper to taken into consideration any local benefits accruing solely and directly to the property, as distinguished from general benefits resulting from the improvement made by the change of grade. In no other way could the actual damage be ascertained.

Some other questions have been argued, which it is not deemed necessary to notice. Assuming that the evidence was sufficient to support the verdict, there is no substantial error in the record requiring the reversal of the judgment. >

Judgment affirmed.


text:
    Fry v. Smith.

      Homestead exemption — Judgment creditor’s lien does not preclude debtor’s allowance in lieu of homestead — From accounts receivable, etc.

    A judgment creditor, by a suit in equity to subject the proceeds of his debtor’s bills and accounts receivable and the appointment of a receiver for the purpose of collecting them, does not acquire such lien as will preclude an allowance out of such proceeds to the debtor in lieu of a homestead, the debtor being the head of a family from the commencement of the proceeding, and not the owner of a homestead at the time of the distribution of such proceeds.
    (Decided November 28, 1899.)
    Error to tlie Circuit Court of Tuscarawas county.
    Fry filed his petition to subject the proceeds of sundry bills and accounts receivable of Smith to the satisfaction of a judgment which he had recovered against him. A receiver was appointed to collect the proceeds who made collections thereof, and Smith, as the head of a family, demanded an allowance out of the proceeds of five hundred dollars in lieu of a homestead. The only question for determination here is. whether the circuit court erred in sustaining his demand upon the following facts which it found:
    “This day this cause came on to be heard by the court upon the pleadings and an agreed statement of the facts. And the court having been requested by plaintiff and defendant, T. J. Evans, with a view of excepting thereto, to state its conclusions of fact and law separately, does find and state the facts herein as follows:
    First. That Robert Smith and Clara Smith are husband and wife living together, and are now and for many years last past have been residents of the state o.f Ohio.

      Second. That at the time of the commencement of this action, the said Robert Smith owned a homestead, in which he lived, on which there were mortgage liens, signed by both him, the said Robert Smith, and his wife. That afterward the said homestead was sold in a foreclosure proceeding against him and his wife, and that the proceeds did not pay all the liens against it, that precluded the allowance of a homestead. That said homestead was sold before said Robert Smith made and filed herein his demand for the allowance of the sum of §500 herein in lieu of a homestead.
    Third. That no homestead or an allowance in lieu of a homestead were ever set off to the said Robert Smith or his wife, in any proceeding.
    Fourth. That at the time the said Robert Smith filed his application and demand for an allowance of §500 in lieu of a homestead herein, he was not, and has not since been, and is not now the owner of any homestead, nor is his wife.
    Fifth. That the funds in the hands of the receiver in this cause, out of which. §500 is claimed in lieu of a homestead, are the proceeds of collections made upon certain book accounts of the said' Robert Smith, which collections were all made and in the hands of the receiver, when the answer of said Robert Smith was filed in this case, and that said Robert Smith never made any selection of, or claim or demand for, said funds or accounts previous to the filing of said answer in this cause.
    Sixth. That the said Robert Smith remained the owner and occupier of a homestead until after the said book accounts were collected and all in hands of said receiver, and that he remained the owner and occupier of said homestead up and until within a few days prior to the time of the filing of his answer herein.
    Seventh. The receiver herein had filed no report and no order of distribution had been made by the court previous to the filing of the answer of said Robert Smith herein. And upon the foregoing state of facts the court, finds as a matter of law that the said Robert Smith is entitled to demand and receive out of the funds in the hands of the receiver in lieu of a homestead, the sum of $500, or so much thereof as shall remain in his hands after payment of costs and expenses. And it is therefore ordered, adjudged and decreed by the court that the said receiver, out of the money in his hands, pay first the costs of this suit, and that he next pay to the said Robert Smith the sum of $500 in lieu of a homestead as above found, or so much thereof as there are funds in his hands to apply thereon.

      Helea & Greene and G. W. Reed, for plaintiff in error.

      W. B. Stevens and P. S. Olmstead, for defendant in error.
   By the Court:

The judgment of the circuit court is in accordance with the settled interpretation of the statute in question. Niehaus v. Faul, 43 Ohio St., 63; 54 Ohio St., 664, affirming Carter et al. v. Ross, 8 C. C. Rep., 139, upon grounds stated in the opinion of the circuit court.

The right of the debtor to the exemption is as strong when his property is being sold and its proceeds distributed under the forms of equity as when that result is being reached by legal process. Comer et al. v. Dodson et al., 22 Ohio St., 615.

Judgment affirmed.


author: Shatjgk, J.

text:
    McLaughlin et al. v. The Wheeling and Lake Erie Railway Company.

      Petition in error to reverse Circuit Court — Judgment of Circuit Court regarded as involving weight of evidence, when — Conclusiveness of the record — Court practice.

    1. When a petition in error is filed in this Court for the reversal of a judgment of the Circuit Court, and it appears from the accompanying record that the Circuit Court reversed the judgment of the Court of Common Pleas for error in overruling a motion for a new trial, the judgment of the Circuit Court will be regarded as involving the weight of the evidence, if that is one of the grounds stated in the motion for a new trial, even though more particular grounds of reversal may be stated in the entry of the judgment of the Circuit Court.
    2. In such case the record of the Circuit Court must be taken as conclusive upon the subject of the grounds of reversal.
    (Decided November 28, 1899.)
    Error to the Circuit Court of Huron county.
    On motion to affirm the judgment of the circuit court.
    Plaintiff's brought a civil action in the court of common pleas against defendant, and upon issues of fact joined the cause was tried to a jury. In the progress of the trial numerous exceptions were taken by the company to the rulings of the court as to the competency of evidence, to the refusal of the court to give to the jury the instructions which it requested, and to portions of the charge given. After a verdict for the plaintiffs the company moved for a new trial upon numerous grounds, including the following:
    Fourth: — That the court erred in not charging the jury as requested by said defendant, to which refusal to so charge the said defendant then and there excepted;

      Fifth: — That the court erred in its charge to the jury in each and every the particulars and parts thereof, to which the said, defendant then and there excepted;
    Sixth: — That the amount of damages awarded said plaintiffs is excessive and appears to have been given under the influence of passion and prejudice;
    Seventh: — That the verdict is not sustained by sufficient evidence;
    Eighth: — -That the verdict is against and contrary to the weight of the evidence;
    Ninth: — That the verdict is contrary to law;
    Tenth: — That said verdict should have been in favor of said defendant and against said plaintiffs;
    Eleventh: — For errors of law occurring at the trial and then there duly excepted to by said defendant;
    The motion was overruled and a judgment was entered upon the verdict, to which the company excepted. The company thereupon filed its petition in error in the circuit court, alleging error in all of the matters alleged in the motion for a new trial. Upon the hearing the circuit court reversed the judgment of the court of common pleas for the following reasons, as appears from its journal entry:
    “The court find that there is error apparent upon the record in the proceedings of said court, to the prejudice of the plaintiff in error, in this, to-wit: that the said court of common pleas refused to the plaintiff here a new trial on its motion therefor.
    “Said court also finds that said court of common pleas also erred in admitting testimony that was objected to by the plaintiff in error, tending to show the depreciation of the value of the defendant in error’s property.

      “The court also finds that the court of common pleas erred in its charge to the jury, and in its refusal to charge the jury as requested by the plaintiff in error, and especially in refusing to give requests numbers 1-4-6 and 7.”
    Plaintiffs having filed a petition in error here for the reversal of the judgment of the circuit court, the company moves for the affirmance of that judgment for the reason that one ground of reversal by the circuit court is that the judgment of the common pleas court was not sustained by the evidence.

      Andrews Brothers; G. T. Stewart and A. E. Rowley, for plaintiffs in error.

      Swayne, Hayes & Tyler, and Jesse and Willis Vickery, for defendant in error.
   Shatjgk, J.

The motion is made under favor of the following rule of this court: “In all cases in which the judgment of the circuit court reversing the judgment of the court of common pleas, is wholly or partly on the ground that such judgment is not sustained by sufficient evidence, and a petition in error is filed in this court upon the record of the circuit court, a motion to affirm such judgment forthwith will be entertained.” The rule regards the provisions of Section 6709 of the Revised Statutes that “in every case where a judgment or order is reversed and remanded for a new trial or hearing, the circuit court shall in its mandate to the court below state the error or errors found in the record upon which the judgment is founded;” and the provision of section 6710 of the Revised Statutes that “the supreme court shall not in any cause or proceeding, except when its jurisdiction is original, be required to determine as to the weight of the evidence.”

It is conceived that, notwithstanding the provision last quoted, cases may arise involving public considerations of so grave a character that it would be the duty of this court to consider and determine as to the weight of the evidence. Because the jurisdiction referred to remains in this court, motions to dismiss petitions in error for the reason that the judgments of reversal rendered by the circuit courts were wholly or partly upon the ground that the judgments of the common pleas court were contrary to the weight of the evidence, have been uniformly overruled. The rule under consideration was framed to meet this condition and to prevent the unnecessary accumulation here of cases in which the judgments of the circuit court must be affirmed because supported by a consideration which this court will not review, it being understood that upon a motion to affirm it will be determined whether this court should consider the weight of the evidence. The record before us presents no reason why that subject should be considered here. The rule assumes that the circuit court will in all cases perform the duty defined in section 6709 by passing upon all errors assigned and stating the grounds’"of its judgment reversing that of the court of common pleas. No dire consequences are to be apprehended from this rule. The assumption which it makes is justified not only by the terms of the statute but by our knowledge of the practice in the circuit court. If it be true that the weight of the evidence was not' a ground of reversal in this case, it was only necessary that in the preparation of the judgment entry counsel should have used apt language to exclude that consideration from the grounds of reversal, or, if necessary, apply to the circuit court for a more definite statement of such ground. Reference to its opinion cannot be made to correct a supposed inadvertence in the entry of its judgment.

The difficulty encountered by the plaintiffs is not met by the suggestion of a diminution of the record. The entire record is here. The claim of counsel is, that from the record that appears to have been adjudged by the circuit court which was not in fact adjudged. Upon a question of that character the record, even if inadvertently made, must be accepted as conclusive.

Motion to affirm sustained.


author: Spear, J.

text:
    Hull v. Burson, et al.

      Surety on bond — For plaintiff before Justice of Peace — Liable for costs in Justice's court — Not affected by action of common pleas in case of appeal, when — Section 6701 Rev. Stat.

    A surety in an undertaking for costs given by a plaintiff in an action before a justice of the peace by force of section 6701, Revised Statutes, is liable, in case final judgment is rendered against suck plaintiff for costs, for tke costs made before tke justice, and suck liability is not affected by tke fact tkat tke judgment is recovered in tke court of common pleas to wkick tke action kas been appealed. But suck surety is not liable for costs accruing in tke court of common pleas.
    (Decided December 19, 1899.)
    Error to the Circuit Court of Morrow county.
    The action below was upon an undertaking for costs commenced in the court of common pleas by Calvin Hull against Burr Burson and John W. Edwards, upon an agreed case and submission, under favor of Section 5207, Revised Statutes. The essential facts thus submitted are as follows:

      The defendant in error, Burson, commenced an action against plaintiff in error, Hull, before a justice of the peace of Congress township, Morrow7 county. Bur-son was a non-resident of that township, but a resident of the coifnty. Being required before trial to give an undertaking for costs, he did so with Edwards, defendant in error, as surety, the condition of the undertaking being: “Now7 w7e, the said Burr Bur-son and John W. Edwards (his surety), hereby undertake and promise the said Calvin Hull to pay all costs that may accrue in the said action.” On trial Burson obtained judgment. Hull appealed. In the common pleas Hull obtained judgment against Bur-son for costs. The wdiole amount of costs claimed against Burson was $182.64, of which $135.54 accrued in the common pleas, and $47.10 before the justice. Burson is insolvent. A large number of persons, as witnesses, officers, etc., are interested in the costs. Judgment was demanded for the w7hole amount with interest.
    The common pleas found that Edwards w7as not liable for any of the costs and awarded judgment in his favor against Hull for costs, which judgment was affirmed by the circuit court. Hull brings error.

      L. K. Powell, for plaintiff in error.

      Jabez Dickey, for defendant in error.
   Spear, J.

The question argued is, is the surety in the undertaking, w7here the plaintiff fails, liable for costs in the common pleas? The record itself presents, also, a question as to his liability for costs made before the justice.

The proposition on which the contention of counsel for plaintiff in error rests is that a judgment w7hich may be the termination of an action is a final judgment, ending the controversy. Hence, w7here it is provided, as in Section 6701, Eevised Statutes, that, “when a person, intending to bring an action before a justice of the peace, is a non-resident of the township in which he intends to commence such action, the justice may, previous to his issuing process, or at any time before trial, require such person to give security for the costs of suit, which may be done by depositing a sum of money deemed by the justice to be sufficient to discharge the costs that may accrue in the action, or by giving an undertaking with surety approved by the justice, payable to the adverse party, for the payment of all costs that may accrue in the action,” the “costs which may accrue in the action” includes all of the costs which accrue from the commencement of the suit until its final determination, even though it be appealed and finally tried in a court higher than that of the justice of the peace, where it was commenced.

Undoubtedly the term “judgment,” which is the final determination of the rights of the parties in action, implies a final judgment, and all of the costs of the action could not be ascertained until final judgment had been rendered, and if the section quoted is to be taken alone as expressive of the legislative will, then there is much force in the contention of plaintiff in error. But, it does not follow, necessarily, that the will and meaning of the laAV-making body is to be gathered from one section alone. On the contrary, we look to kindred sections upon the general subject, and expect to find the purpose expressed by a comparison of all of them.

Now, the subject matter in question is the securing by the plaintiff of the costs accruing in the court of common pleas. Eecurring to the section dealing with the securing of costs in that court, 5340, we find it provided that the plaintiff, if a non-resident of the county, must furnish security for costs. As to a plaintiff, resident of the county, no such requirement is made. This applies as well to actions which may be appealed into that court as to those which are originally commenced there, and it is common practice for that court, in appeal cases as well as others, to require the plaintiff, if a non-resident of the county, to furnish security for costs. Turning again to Section 6701, we find that the requirement as to giving security for costs applies to every party plaintiff who is a non-resident of the township where the action is brought, irrespective of the fact of residence within the county. The construction contended for by plaintiff in error, therefore, would bring this result: A plaintiff resident of the county may bring his action in the court of common pleas without furnishing security for costs in that court, but he cannot prosecute an action before a magistrate in a township in the same county, but other than the township of his residence, without giving an undertaking whereby the surety is made liable for costs not only before the justice but in the common pleas as well, should it happen that the cause is appealed to that court. To put a plain instance: If the claim be $100, the plaintiff, a resident of the county, may bring his action in the court of common pleas without giving such security, although the defendant may live in a township other than the township of the plaintiff’s residence, whereas, if the claim of the same party against the same defendant is $99 he must give security which will be liable for costs in the common pleas, should the case be appealed, as well as in the court below. No reason for such distinction seems apparent.

Again, the liability expressed in Section 5310 is “the costs which may be adjudged against the plaintiff in the court in which the action is brought, or in any other court to which it may be carried,” while in Section 6701 there is an absence of this provision, and it is but natural to assume that if the same extent of liability had been intended to be imposed on the surety in actions before a justice of the peace, such intention would have been expressed.

To the foregoing may be added another consideration, having some, though less, weight. When the defeated party before the justice of the peace desires to appeal he is required, by Section 6584, to enter into an undertaking to the adverse party with surety conditioned to prosecute the appeal to effect and without unnecessary delay, and that if judgment be adjudged against him on appeal he will satisfy the same with costs. In a case where the non-resident plaintiff appeals there would, if the proposition of plaintiff in error is correct, be two independent bonds securing the costs of the defendant, a result which it would seem improbable could have been intended by the lawmakers.

Our conclusion is that, while the question is not wholly free from doubt, yet the more reasonable construction of Section 6701 is that the term “action,” as there used, is confined to the action before the justice of the peace.

This construction seems to have been placed upon the statute by Judge Swan in his Treatise, page 28, and is believed to be the construction accepted by the bench and bar generally throughout the state.

But for the costs made before the justice in the original action the surety in the undertaking is liable, provided the defendant recovers judgment for costs against the plaintiff and the same cannot be made from such plaintiff himself, and this liability is not affected by the fact that such judgment for costs is rendered in the court of common pleas on appeal rather than in the justice’s court. It appearing in the present case by the agreed submission that such judgment for costs in favor of the defendant in the original action, and against the plaintiff, was rendered on the final trial and that the plaintiff is insolvent, the surety is liable for the costs made before the justice of the peace, and the finding and judgment releasing hjm from all liability by the courts below is to that extent erroneous.

The judgment of the common pleas respecting the costs before the justice, and that of the circuit court affirming it, will be reversed, and judgment for costs before the justice entered here.

Reversed.


author: Burket, J.

text:
    Comstock et al. v. The Incorporated Village of Nelsonville, et al.

      Restrictions as to contracts, appropriations and expenditures — ■ By municipalities — Burns law — Section 2yo2 Revised Statutes.

    1. Unless a valid exception is made by some provision of statute, section 2702, Revised Statutes, is applicable to so much of the cost and expense of a street improvement as is to be paid by the municipality out of funds arising from a levy on the general tax list.
    2. Said section is not applicable to so much of the cost and expense of a street improvement as is to be paid by an assessment on the ' property bounding and abutting on such improvement or adjacent thereto.
    3. Whether the certificate required by said section 2702 has been filed and recorded or not, must be ascertained by each contractor for himself at his peril. In the absence of such certificate, when required, no liability arises against the municipality, even though the contractor has fully performed his contract.
    (Decided December 19, 1899.)

      Error to the Circuit Court of Athens County.
    A petition in proper form, and signed by more than two-thirds of the owners by the front foot of the property abutting on Chestnut street in the incorporated village of Nelsonville, between the east side of Fourth street and the west side of Grosvenor street, was presented to the council of the village praying for the improvement of that part of the street by grading, draining, constructing a curb on each side of the roadway, and paving the roadway with brick or block, with the necessary foundations and gutters, and asking that the cost and expense of the brick or block and curbing be levied and assessed upon the bounding and abutting property, and that all other expense of the improvement be paid by the village.
    The council, by a vote of two-thirds of its members, passed a resolution in proper form on the 7th day of June, 1898, in which it resolved that the council deemed it necessary to improve said part of Chestnut street by excavating, grading, preparing foundations, constructing a curb on each side, and paving with brick or block in accordance with plans, profiles and specifications on file in the office of the village clerk; and that the cost and expense of the brick or block and of the curbing be assessed by the front foot upon the lots and lands bounding and abutting upon the improvement, and that all other costs and expenses of the improvement be levied on the general tax list of the village, and that bonds be issued in anticipation of the collection of the assessments.
    On July 13, 1898, the council passed an ordinance in which it ordained that the improvement of said part of Chestnut street be proceeded with in accordance with the above resolution, and that the cost and expense of the improvement, less the labor and less such further portion as the said council might levy on the general tax list, be assessed by the foot front upon the lots and lands bounding and abutting upon said improvement.
    The council published notice for bids and awarded the contract for making said improvement to John F. Welch and Abner Juniper, who proceeded with the improvement under their contract.
    After the contractors had partly completed the improvement, the plaintiffs in error, tax-payers in said village, commenced an action against the village, its mayor, clerk and councilmen, and against said contractors, setting out in their petition the foregoing facts, and in addition thereto averring that said village had no solicitor, and then continued in their amended petition as follows:
    “Said village has not appropriated or otherwise acquired any lots or lands for the purpose of laying off, opening, extending, straightening or widening said part of said Chestnut street, and said village is not possessed of any property which it desires to improve by the improvement of said part of said street.
    At the time of the passage of the resolution by the council, to-wit: On June 7,1898, there was not in the treasury of said village and never has been, money to pay for said improvement of said street or any part thereof. And the clerk of said village never at any time certified to said council that the money or any part thereof, required to pay for said improvement of said street, was in the treasury to the credit of the fund from which it is to be drawn and not appropriated for any other purpose.
    The said mayor and clerk have signed on behalf of said corporation negotiable notes and certificates of indebtedness and the same have been delivered in payment of a large proportion of the costs and expenses of said improvement, and said council intends to issue bonds of said village in payment of said costs and expenses or a large portion thereof.
    And said council has not made any assessment of any kind upon the lots and lands abutting and abounding on said part of said street, and has made no assessment of any kind or character whatever to pay the costs and expenses of said street.
    No levy of any kind has been made on the general tax list for the proportionate share contemplated by said resolution to be paid by said village.
    The said council on the first day of November, 1898, directed the clerk of said village to draw an order on the general street fund of said village for the payment of the costs of the improvement of said part of said Chestnut street, and the said clerk has drawn said order, and there has been paid out of said general street fund over one thousand dollars, and the said council will, if not enjoined by this court, expend all the money in said general street fund for said improvement.
    Said council will, if not enjoined by this court, take from said general street fund whatever money is collected there hereafter by taxation and appropriate and use the same for the payment of the costs and expenses of said Chestnut street improvement. The money in said general street fund was not collected by taxation for the purpose of improving said part of said Chestnut street, and was not collected or appropriated for the improvement of any street in said village under the street assessment laws of Ohio.
    Said council will, if not enjoined by this court, make a levy and place an assesment upon the general tax list of said village, to pay a great part of the costs and expenses of said Chestnut street improvement.
    The defendants are misapplying the funds of said corporation and if not restrained by this court, will abuse the corporate powers of said corporation as above set forth.
    Wherefore plaintiffs pray that they may have a temporary restrainig order, and upon the final hearing of this cause, a perpetual injunction, enjoining said council, said mayor and said clerk, and said village of Nelsonville, Ohio.
    First. From levying and assessing upon the real and personal property of said village of Nelsonville, Ohio, returned on the grand levy, an assessment and levy for the payment of the costs and expenses of said Chestnut street improvement or any part thereof.
    Second. From paying the negotiable bonds, notes and certificates of indebtedness of said village of Nelsonville, Ohio, heretofore issued to pay the costs and expenses of said Chestnut street improvement.
    Third. From drawing orders upon and taking out of the general street fund of said village of Nelson-ville, Ohio, money with which to pay the costs and expenses of said Chestnut street improvement or any part thereof. And for all other relief to which they may be entitled.”
    ' To this amended petition the defendants filed the following demurrer:
    “Now come the defendants and severally and jointly demur to the amended petition of the plaintiffs for the reasons:
    First. That there is a defect of parties defendant;
    Second. That several causes of action are improperly joined.
    Third. That the petition of the plaintiffs does not state facts sufficient to constitute a cause of action.”

      The court of common pleas overruled this demurrer, and the defendants below not desiring to plead further, judgment was rendered against them; to all of which they duly excepted. No ruling was made as to the right of the council to make an assessment upon, the abutting property to pay the cost and expense of the improvement, and that question is not here.
    Upon petition in error the circuit court held that the common pleas erred in overruling the third paragraph of the demurrer to the amended petition, and upon that ground alone reversed the judgment, and remanded the cause to the court of common pleas for further proceedings according to law; to all of which exceptions were taken.
    Thereupon the plaintiffs below filed their petition in error in this court, seeking to reverse the judgment of the circuit court, and asking that the judgment of the court of common pleas be affirmed.

      Lewis & Sayre, for plaintiffs in error.

      Grosvenor, Jones & Worstell, for defendants in error.
   Burket, J.

The judgment of the circuit court is, that the amended petition does not state facts sufficient to constitute a cause of action, and that there is no other error in the record. We think that the circuit court was right in finding no other error in the record, and will therefore consider only the question as to whether the petition states facts sufficient to constitute a cause of action.

If Section 2702, Revised Statutes, known as the Burns law, is applicable to the case, the petition states a good cause of action, and the other questions, so ably argued by counsel, become of little importance.

The proceedings of the council show that the costs and expenses of the brick or block and curbing were to be assessed upon the bounding and abutting property by the foot front, and all the other costs and expenses of the improvement were to be levied upon the generar tax list of the village. The “other costs and expenses” included all except the cost of brick, block and curb; and the materials and labor included in these other costs and expenses formed a part of the contract for the whole improvement awarded to said John F. Welch and Abner Juniper; and by that contract the village agred to pay them a certain sum of money for the whole improvement, including these other costs and expenses. This agreement to pay the contractors for all of the improvement not included in the brick, block and curb, out of a levy on the general tax list of the village, involved an expenditure of money which could only be raised by such a levy, and the same was therefore included in those agreements which are prohibited by said Section 2702.

The section is general in its terms, but the object of the general assembly evidently was to compel municipalities to have the money in the treasury before appropriating or spending it. This can only apply to money raised, or to be raised, by a levy on the general tax list of the municipality. If the money is to be provided, in the first instance, by taxation, it must be collected and in the treasury before it can be appropriated or expended either by ordinance, resolution, order, contract, agreement or other obligation. If bonds are issued and sold, and the money provided in that manner, the bonds to be paid by a levy on the general tax list, money arising from the sale of such bonds must be in the treasury before it can be expended, the same as if it had been raised by taxation in the first instance.

In all such cases said Section 2702 is applicable, unless there is an exception by some other provision of the statute; and when that section is applicable to any particular case, no liability can arise as against the municipality, unless the certificate required by the section shall be first filed and recorded; and whether the same has been so filed and recorded must be ascertained by all contractors for themselves at their peril. Lancaster v. Miller, 58 Ohio St., 558; McCloud and Geigle v. Columbus, 54 Ohio St., 439; Buchanan Bridge Co. v. Campbell et al., 60 Ohio St., 406. A municipality is not estopped from availing itself of the provisions of this section to defeat a claim brought against it, when the section has been violated, even though the contractor has performed his work. In such cases the contract as well as what is done thereunder, is void as against the municipality.

In cases of street improvements the course of procedure is usually about as follows: A resolution is passed by the council to the effect that it deems it necessary that a certain named street should be improved in a certain manner, the cost and expense to be assessed' in whole or in part upon the property bounding and abutting thereon, or adjacent thereto. After notice and other proceedings, an ordinance is passed to the effect that the improvement be made as provided in the resolution, plans, specifications, etc. The improvement is then advertised, bids received, and a contract made for the completion of the improvement. This bid, and the contract made thereunder, for the first time enables the council to ascertain the cost and expense of the improvement. With the cost and expense thus fixed, the council at the proper time makes an assessment of the amount to be paid by the property holders upon their property, and pays the balance out of money in the treasury raised by taxation, or by sale of its bonds, the bonds to be paid by a levy on the general tax list. Some of the property owners pay their whole assessment at once, and that money is paid over to the contractor. Others fail to pay, and for the amounts of their assessments with the interst thereon, the municipality issues and sells its bonds and pays the money to the contractor, and pays the bonds out of the assessments when collected.

In such a transaction the only money which the municipality pays out of its treasury of money raised by levy on the general tax list, is so much of the cost and expense of the improvement as is not assessed against the property holders, and as to that part said Section 2702 is applicable, and must be complied with in order to make the municpality liable for such part of the cost and expense.

As to the part of the cost and expense to be assessed against the bounding, abutting or adjacent property, said section does not apply, and in the nature of the case cannot apply, because it is impossible for the council to ascertain the amount of money required, until after it knows who has paid and who has failed to pay his assessment, and by that time a large part, if not all, of the cost and expense will have been incurred.

It does not apply for the further reason, that by necessary implication said section has reference to money of the municipality, that is, money raised, or ultimately to be raised, by a levy on the general tax list, and does not cover or refer to money of individuals, that is, money to be raised by an assessment upon the property along tbfe improvement. The municipality is limited and restrained by this section, as to the expenditure of its own money, but not as to the money of others. As to such assessments, it is competent for the contractor to agree to take the assessments in payment for his labor and materials, and collect the same as provided by law; and if he does so, the money never goes into the treasury, and no certificate can be filed as to the same.

It is therefore clear, that as to the expenditure of money to be raised by such assessments, Section 2702 is not applicable;

This holding protects the treasury and the general taxpayer, and at the same time enables needed local improvements to be made without detriment to the municipality, and is in accordance with the intention of the general assembly in passing the Burns law.

The case of Cincinnati v. Holmes, 56 Ohio St., 104, known as the Avondale case, is in line with this holding. It was not held in that case as argued by counsel for the defendant in error, that the Burns law does not apply to any part of the cost' and expense of street improvements; but the holding was that the special acts under which the improvements were made in that case, and which had been previously held constitutional by this court, were to be read as an exception to the Burns law, and that for that reason alone the statute did not apply in that case. The Burns laAV being one of a general nature it is doubtful whether exceptions of a local nature can be constitutionally made thereto.

Judgment of the circuit court reversed and that of common pleas affirmed.