author: Williams, C. J.:

text:
    City of Cincinnati v. Connor.

      Sewer assessments — Limitations as to amount — Construction of ■special provisions — Sections 8871, and 8884, Rev. Stat. — Constitutional law.

    1. Where, in a code or system of laws relating to a particular subject, a general policy is plainly declared, special provisions should, when possible, be given a construction which will bring them in harmony with that policy.
    2. In municipal corporations to which section 2211, of the Revised Statutes is applicable, assessments for the construction of sewers are subject to the limitation on the amount of the assessment prescribed by that section, as well as to the limitation imposed by section 2384, of the Revised Statutes.
    3. The former section is not in conflict with section 26, of article 2, of the constitution of this state.
    (Decided June 23, 1896.)
    Error to the Circuit Court of Hamilton county.
    The case is sufficiently stated in the opinion.

      Frederick W. Utrtensteim, Corporation Counsel, W. H. Whittaker, and Jones <& Janies, for plaintiff in error.
    The question presented is: Does the limitation of twenty-five per cent, of the value apply to sewer assesments?
    Our contention is that it does not, for the following reasons: First — Revised Statutes, section 2271, does not apply to sewer assessments.

      (a) Where two sections of the Revised Statutes apply to the same, subject matter, one or both should be so limited as to give force and effect to both.

      (b) Where one section of the Revised Statutes provides a limitation on assessments for improvements of all kinds, and another section a limitation on assessments for improvements by sewering, both sections cannot apply, and the former will be limited to all kinds of improvements, except those by sewering.

      ip) The general language of section 2271 of the Revised Statutes does not furnish the limitation upon sewer assessments, the same being specially provided for in section 2384.
    The subject-matter of sections 2271 on the one hand, and 2384 on the other, are limitations on assessments ; the former by its terms includes allkinds of improvements, and the latter, improvements by sewering. Both cannot apply, and the general provisions covering all subjects must be limited so as not to cover a subject specifically provided for. This rule has been frequently applied by this court in, among other cases, Kemper v. Campbell, 44 Ohio St. 210 (1886), and Seymour v. R. R. Co., 44 Ohio St., 12 (1886).
    By the same reasoning section 2271 should be limited to all kinds of improvements and assessments therefor, except sewerage, in order to give full force and effect to both sections 2271 and 2384. The case of Elevator Co. v. Van Anken, 9 Col., 204; S. C. 11 Pac. Rep., 80 and Black Interpretation Laws 166 are to the same effect.
    Second — Revised Statues section 2271, is unconstitutional and void.

      (cl) ' Statutes levying special assessments upon owners of private property for improvements are of a general nature and must have a uniform operation throughout the state and must give each and every citizen the equal protection and benefit of the law.

      (Ó) Statutes which impose upon citizens owning property in one part of the state, an assessment of a percentage upon the value of the property as assessed «upon the tax duplicate and upon citizens owning property in another part of the state, an assessment of a percentage upon the value as determined after the improvement is made, is a law of a general nature, has not a uniform operation throughout the state, denies to the citizens the equal benefit and protection of the law, and is, therefore, unconstitutional, null, and void.
    (/) Revised Statutes of Ohio, sections 2270, 2271 and 2272, are laws of a general nature, have not each of them a uniform operation throughout the state, deny to some citizens the equal benefit and protection of the law, and are, therefore, unconstitutional, null, and void.
    But the proposition here advanced is that the general assembly has no power to pass a law which takes from a citizen owning property in one part of the state twenty-five per cent, of its tax value' at the time a resolution to. improve is adopted, and a citizen owning property in another part of the state twenty-five per cent, of its value after the improvement is made. Such a law is of a general nature, does not have a uniform operation throughout the state, and does not give all citizens equal protection and benefit of the law. Costello v. Wyoming, 49 Ohio St., 202, at page 208. The limitations of section 2, article 1, of the constitution of Ohio (1851), that “all political power is inherent in the people. Government is instituted for their equal protection and benefit;” and of section 26, article 2, that “All laws of a general nature shall have a uniform operation throughout the state,” are mandatory, and a statute in contravention thereof is unconstitutional, null, and void. City of Cincinnati v. Caroline Steinkamp, 54 Ohio St., 284; State v. Bargus, 53 Ohio St., 94; State v.

      Howard Ferris, 53 Ohio St., 314; Hocking Valley Coal Co. v. Rosser, 53 Ohio St., 12; Ex parte Falk, 42 Ohio St., 638.
    The application of the same principles renders sections 2270 and 2271 equally unconstitutional. Their subject is a legislative limitation upon assessments for improvements.
    The power to tax rights, privileges and franchises comes from the general grant of legislative power (State v. Ferris, supra) just as the power to assess (Reeves, v. Treasurer of Wood Co., 8 Ohio St., 333; Session v. Crunkilton, 20 Ohio St., 349), and as the exercise of the power to tax rights, privileges and franchises is limited by section 2 article 1, and section 26, article 2, .so should the exercise of the power to assess,- for the same reasons. The language used by Judge Burket, as to the inheritance tax, applies equally to Revised Statutes, sections 2270 and 2271.

      Marsh & Ritche, for defendant in error.
    The point we' desire to impress upon the court is' that the judgment of the circuit court was right as far as it went; it enjoined seventy-five per cent, of the assessment, but that said judgment is erroneous to the extent that it permitted in the face of the conclusive facts as shown by the record ■as to value, any assessment to stand against the property. In other words, not only should the seventy-five per cent, have been enjoined, but the remaining twenty-five per cent, also, for the reason that it is necessarily, in view of the evidence, pro ■ tanto confiscation, our contention being in effect that if it conclusively appears that no money value has been added to an individual’s property by reason of a public improvement, there is no ground or authority lor assessing any amount upon said property to pay for said improvements, for to the extent that an assessment is made under such a state of facts it is, clearly a case of an appropriation of private property for public use without compensation.
    In Chamberlain v. The City of Cleveland, et al., 34 Ohio St., 551, the principle we are here contending for is clearly and emphatically announced.
    We take it that what is meant by benefits is benefits measured by a money value which is added to the property, and cannot mean any other kind of benefits, for it is value that is being taken. Wewell v. The City of Cincinnati, 45 Ohio St., 407.
    This is not a case where the court can apply presumption of added value equal to twenty-five cents per front foot, for the undisputed testimony, which must, we contend, overcome any presumption, shows that no benefit or added value resulted to her property by reason of the improvement.
   Williams, C. J.:

The plaintiff in error caused a sewer to be constructed along one of its streets, and levied an assessment for the cost thereof on certain lots of the defendant in error, abutting on the street. The assessment was made by the front foot, and at the rate of two dollars per foot. The entire value of the lots after the sewer was • completed, as found by the circuit court, did not exceed one-half of the amount of the assessment so levied. The lots are vacant, lying on a hill side that slopes to the street at an angle of forty-five degrees, and in regard to the possibility of any practical benefit resulting to them from the sewer, as a means of drainage, or otherwise, there was conflict in the evidence.

By the judgment below, the reversal of which is here sought, the assessment was enjoined to the extent that it was in excess of twenty-five per cent, of the value of the lots after the improvement was made, and the case presents the question whether an assessment for the construction of a sewer is subject to the limitation prescribed by section 2271,of the Revised Statues,which is, that: “In cities of the first grade of the first class, and in corporations in counties containing a city of the first grade of the first class, the tax or assessment especially levied or assessed upon any lot or land for any improvement shall not, except as provided in section 2272, exceeded twenty-five per cent, ■of the value of such lot or land after the improvement is made, and the costs exceeding that per cent, shall be paid by the corporation out of its general revenue.” The only improvements excepted from the operation of the above provision, by section 2272, are the improvements of streets made on the petition of three-fourths of the owners of property abutting thereon.

The whole subject matter of a ssessments for public improvements by municipal corporations,including sewers, is provided for in chapter 4,of division 7, of the Revised Statutes. The subject is there arranged under sub-divisions, the first of which under the head of “assessments in general” contains many general provisions applicable, and intended to apply to all assessments made under it and the following sub-divisions, of the chapter, including sewers. Section 2271, is found in this first sub-division, and its language above quoted is clear and explicit, and in plain terms denies to the municipal corporation the power to make any valid assessment in excess of the per cent, named, on any lot or land, for any improvement not made on the requisite petition according to the succeeding section; and the limitation it imposes, it is conceded must control assessments made for the construction of sewers, unless they are taken out of its operation by some other statutory provision. That result, it is claimed is accomplished by sections 2380, and 2384, found in the sub-division relating to sewers; the former of which provides, that the assessment for a main sewer “shall not exceed the sum that would; in the opinion of the council, be required to construct an ordinary street sewer, or,drain, of sufficient capacity to drain or sewer the abutting lots or lands,” and no lots or lands “shall be assessed that do not need local drainage, or which are then provided therewith;” while section 2384, contains the provision that: “In no case shall the assessment exceed the sum of two dollars per front foot on the property assessed. ”'

The proposition advanced by counsel for the plaintiff in error, as stated in the brief, is that: “where two sections of the Revised Statutes apply to the same subject matter, one or both should be so limited as to give force and effect to both;” from which it is argued that the effect of the special restriction on assessments for sewers prescribed by section 2384, is to exclude the application of section 2271, to them, for the reason that both cannot have application. The propositon may be accepted as sound, without admitting the consequences supposed to flow from it. We recognize it to be a well settled rule of statutory interpretation that: “Where a general intention is expressed, and also a particular intention which is incompatible with the general one, the particular intention shall be considered an exception to the general one;” and hence “if there are two acts, or two provisions in the same act, of which one is special and particular, and clearly includes the matter in controversy, whilst the other is general, and would, if standing alone, include it also; and if, reading the general provision side by side with the particular one, the inclusion of that matter in the former would produce a conflict between it and the special provision, it must be taken that the latter was designed as an exception to the general provision.” Endlieh on Inter. Stat., section 216; Sedwick on Stat. and Const. Law,'section 652. Maxwell on Inter, of Stat. p. 202, Second Ed. It is an equally well established rule, that the provisions of a statute are to be construed in connection with all laws in pari materia, and especially with reference to the system of legislation of which they form a part, and so that all the provisions may, if possible, have operation according to their plain import. It is to be presumed that a code of statutes relating to one subject, was governed by one spirit and policy, and intended to be consistent and harmonious, in its several parts. And where,in a code or system of laws relating to a particular subject, a general policy is plainly declared, special provisions should, when possible, be given a construction which will bring them in harmony with that policy. And it is only when, after applying' these rules in the endeavor to harmonize the general and particular provisions of a statute, the repugnancy of the latter to the former is clearly manifest, that the intention of the legislature as declared in the general language of the statute is superseded. Reading* sections 2271 and 2384, side by side, we find no incompatibility or inconsistency in their provisions, nor any difficulty in the application of both to assessments made for the construction of sewers. Taken together, and giving effect to both when applied to sewer assessments, they constitute a plain legislative declaration that such assessments shall in no case exceed twenty-five per cent, of the value of the property on which they are laid, nor amount to more than two dollars per foot front of the property; and any assessment in excess of either shall be invalid. The limitation imposed by the latter section is in addition to that prescribed by the former one. It seldom occurs that the real benefits derived by abutting property from any local improvement amounts to twenty-five per cent, of its value; it is often much below that amount; and the benefits of the improvement are largely shared and enjoyed by the general public, without bearing’ any of the burden. The local benefits which the abutting property is supposed to receive from the improvement are often uncertain, sometimes wholly illusive, while the burden is both certain and substantial, which, however onerous, must be borne by the owner and his property.- The general policy of the statute with respect to all assessments, it is obvious from section 2271 is, that not more than one-fourth of the owner’s estate shall be taken for any single improvement; and having declared that general policy, it is not to be presumed there was an intention to change or abandon it in the subsequent provision of section 2384. If such change had been intended, it could, and doubtless would have been expressed in clear and unambiguous terms; and not being so expressed, proper interpretation requires, as we have seen, that the general policy shall be allowed to control. And there is no good reason why it should not. Nor, does any appear why the owner should be compelled to contribute his whole estate for the benefit of the public in the construction of a public sewer, when not more than one-fourth of it can be exacted for any other municipal improvement. When the whole estate is taken, wherein consists his special benefits, or any benefits differing from those enjoyed by the general public? Obviously there can be none, And if the owners’ entire property were allowed to be taken to pay for any public improvement, we should have in a new form, a repetition of the abuses under the old constitution, of making compensation for property taken for a public use with specious benefits supposed to be derived by the owner from the contemplated public use. At all events, it is the declared .policy of our legislation that an owner who contributes one-quarter of his estate in abutting lots for the construction of a municipal improvement whose benefits are shared in some degree, at least,. by the public, as well as by himself, bears his full proportion of the public burden in that respect. Ordinarily an assesment for a sewer at the rate of two dollars per front foot will fall much below that proportion, but any assessment to be valid must be within that limit.

Another principle applicable here, leads to the same conclusion. The rule generaly prevails that, independent of any legislative requirement on the subject, statutes imposing taxes and public burdens of that nature are to be strictly construed ; and where there is ambiguity which raises a doubtastothelegislativeintent, that doubt must be resolved in favor of the subject or citizen on whom the burden is sought to be imposed. We have an express statutory requirement that proceedings with respect to assessments of all kinds shall be strictly construed in favor of the owner of the property assessed, as to the limitations on the amount of the assessment. Revised Statutes, section 2327.

The further claim is made by the plaintiff in error, that section 2271, is unconstitutional; being, it is said, a law of a general, nature not having uniform operation throughout the state, and therefore in contravention of section 26, article 2, of the constitution. That the power to construct sewers and levy assessments for their cost may be appropriately conferred on municipal corporations is not questioned ; and legislation applicable to classes of such corporations as they are designated in the statute under consideration, has been uniformly sustained by the decisions of this court, and so often, that we deem it unnecessary to enter upon the discussion of the question here. There is nothing in any recent decision of the court which is in conflict with former adjudications on this- question»

Judgment affirmed.


source: Caselaw Access Project

author: Williams, C. J.

license: Public Domain

text:
    City of Cincinnati v. Dexter et al.

      Obligation of contract — Sale of railroad — Act of May 4, 1869, does not exclude alienation, of property — Validity of act of March IS, 1887, authorizing sale of property — Conditions of sale — Constitutional law.

    1. The act of May 4, 1869 ( 66 Ohio Laws, 80), under which the line of railroad known as the “Cincinnati Southern Railway’ ’ was constructed, does not require that the road be kept under lease perpetually by the board of trustees provided for by the act, nor exclude the power of alienation of the property by the proper municipal authorities, in aecoralance with appropriate legislation.
    2. The act of March 12, 1887 (84 Ohio Laws, 82), which authorizes the sale of railways constructed under the act above mentioned, is not in conflict with section 6, of article 8, of the constitution of this state, nor will a bona fide sale, made under its provisions, constitute a loan of municipal credit to the purchaser, or to any corporation that may obtain control of the road, though in making the sale, the parties contemplate that the road will pass into the hands of a corporation, and a per centum of the future gross earnings of the road is to be paid- as a part of its purchase price.
    3. Payment of the purchase-money in cash is not essential to a valid sale under the statue; the sale is authorized to be made upon terms of payment satisfactory to the designated municipal board.
    4. While the states of Kentucky, and Tennessee, each granted the privilege of constructing the railway within their respective territorial limits, and also certain franchises necessary to the operation and maintenance of the road, which add materially to its value, neither state acquired any property interest in the railway, nor is the consent of either necessary to its sale.
    5. It is not a ground of injunction in favor of the debtor, that the act or proceeding sought to be restrained will impair the obligation of his contract; as the creditor is the only party who can be injuriously affected, the remedy belongs to him.
    (Decided June 23, 1896.)
    Error to the Circuit Court of Hamilton county.
    The action below was brought by the corporation counsel of the city of Cincinnati, in its name, against Julius Dexter and others constituting the board of trustees of the sinking fund of that city, to restrain the taking of steps toward a proposed sale of The Cincinnati Southern Railway. The prospective purchasers are also parties defendant.
    It appears from the petition, that the line of railroad known as “theCincinnati Southern Railway,” extending from a point in the city of Cincinnati; through the states of Kentucky and Tennessee, to the city of Chattanooga in the latter state, was constructed by the city of Cincinnati, under the act of the legislature, of May 4, 1869, (66 O. L. 80). Under power conferred by that act on a board of trustees authorized to construct the road, ten millions of dollars were borrowed, and the bonds of the city therefor issued, which are secured by a mortgage on the line of railway and its net income, and by a pledge of the faith of the city to levy taxes sufficient with the net income, to pay the interest, and provide a fund for the payment of the principal at its maturity. The act authorized' the trustees to lease portions of the road, as the same should he constructed, and on its completion to lease the .whole of it on such terms and conditions as should be prescribed by the city counsel. Under subsequent legislation additional bonds were issued by the trustees, until the total amount exceeded eighteen millions of dollars; and for the security of these additional bonds the statute declares a mortgage shall exist without conveyance, of the same purport as that given to secure the first issue of bonds.
    Statutes were adopted by the legislatures of Kentucky, and Tennessee, which gave authority to appropriate property, and construct and operate the road in those states, respectively, and do all acts necessary thereto. These statutes also declare that a mortgage shall exist, without conveyance, upon the line of railway and its net income, as a security for the bonds issued by the trustees.
    By an act of the legislature of this state, passed February 24, 1876, (73 O. L. 13), authority was conferred on the board of trustees, under certain restrictions, to lease the whole line of the railway upon its completion; and, in 1881, it was leased, having then been completed, to the Cincinnati, New Orleans & Pacific Railway company, which is now operating the same. The lease is for a term of twenty-five years, expiring in 1906. The first issue of bonds matures in 1902, and, while the petition does not distinctly disclose when the later issues mature, it may be inferred that their time of maturity is the same as that of the first issue. It also appears that some donations were made to the road.
    On the 12th day of March, 1887, the general assembly of this state, passed the following statute (84 O. L. 82), supplementary to the above mentioned act Of May 4, 1869.
    “Section 1. Be it enacted by the General Assembly of the State of Ohio. That whenever a line of railway has been completed and leased under the act to which this is supplementary, and under the acts amendatory of and supplementary to such act, and the city council of the city owning said line of railway shall, by a resolution, passed by a majority of the members elected to each board thereof, declare it to be to the interests of said city that said line of railway shall be sold, it shall be the duty of the trustees of the sinking fund of said city to negotiate for a sale; and whenever said trustees of the sinking fund shall receive in writing from a responsible party, an offer to buy said line of railway at a price and upon terms of payment satisfactory to said trustees of the sinking fund, the written offer to buy shall be published twice a week for three consecutive weeks in not less than four newspapers, printed, published and of general circulation in such city, if there be so many, but not more than two of said newspapers shall be printed in the same language or be of the same politics; and in addition thereto such further publication and advertisement may be made as said trustees of the sinking fund may deem proper.
    “Section 2. Immediately upon making the first insertion of such advertisement as above required, said trustees of the sinking fund shall give notice in writing to the mayor of the city owning said line of railway; and the mayor of said city, within ten days after the receipt of such notice, is hereby authorized and required to issue his proclamation, which shall' state the price and terms of payment 'of the proposed sale, and shall declare to the qualified electors of said city the time of holding an election, which shall be within twenty days from the date of such proclamation, at which election the question of making such sale shall be submitted to a vote of the qualified electors of said city; said vote shall be taken at the usual place of holding elections in each ward of said city, and the ballots cast at said election shall have printed or written thereon the words ‘Por the sale of the railroad — Yes,’ or ‘Por the sale of the railroad— No;’ and such sale shall not be binding or take effect unless the majority of all the ballots cast at said election shall have written or printed thereon the words ‘For the sale of the railroad — Yes.’ The returns .of said election shall he made to the city clerk of said city, who shall canvass the same and report the vote to the common council, and if a- majority of the electors voting at such election shall have voted in favor of the making of the said sale at the price and upon the terms of payment proposed, the said trustees of the sinking fund are authorized to consummate such sale at the price and upon the terms of payment contained in such offer, and also to arrange and fix all the other terms and conditions of said sale, and formally and finally to agree upon the same and to execute a contract therefor. The mayor of said city and the president of the board of trustees of said line of railway shall, on behalf of said city, execute and deliver all deeds and other instruments in writing necessary or proper fully to carry out said sale; and the comptroller of said city shall sign his name and affix the seal of said’ city, and the secretary of the board of trustees of said line of railway shall sign his name and affix the seal of said board of trustees to all deeds and writing in attestation thereof; provided, that only one election shall be held under the provisions of this act. If at any such election the proposed sale, as submitted, receives a majority of the votes cast, then the sale shall be carried into effect as above provided.
    “Section 3. To enable said trustees of the sinking fund to arrange the terms of the payment of the purchase money, and to enable them to carry out any such sale, they hereby are authorized to issue the registered and coupon consolidated sinking fund bonds of said city in such sums and denominations as they may find expedient or necessary in retiring and refunding the outstanding bonds of said city which, are issued for the construction and completion of said line of railway, and for that purpose the said trustees of the sinking fund are authorized and empowered to execute,.sell or exchange said bonds in such manner and form as said trustees may determine.
    “Section 4. That section 2729c of the Revised Statutes of Ohio, as passed January 29, 1885 (2 Ohio L.), be and the same is hereby repealed.” “Section 5. This act shall take effect and be in force from and.after its passage.
    The petition then alleges that:
    “In pursuance of this act, the board of legislation of the City of Cincinnati, by a majority of the members elected to said board, did .on the 10th day of March, A. D. 1896, pass a resolution declaring it to be to the interest of said city that said line of railway, known as the “Cincinnati Southern Railway,” and extending from Cincinnati to Chattanooga,'be sold, which said resolution was concurred in by the board of administration of said city on the 13th day of April, 1896, and was approved by the mayor of said city on the 15th day of April, 1896, and is still in full force and effect. After the passage and approval of said resolution, the trustees of the sinking fund of said city did receive in writing an offer from the defendants, A. B.. Andrews and Henry A. Taylor, to buy said line of railway which said offer is as follows, viz:
    ‘To the trustees of the sinking fund of the city of Cincinnati:
    We, the undersigned, offer to buy the line of railway, of the Cincinnati Southern Railway, subject to the rights of the present lessees therein, at the price and upon the terms of payment following, to-wit:
    1. To pay in gold coin $19,000,000 on the first of October, 1996, with interest thereon, in gold coin, from October 1, 1896, at the rate of four per cent, per annum, payable semi-annually; such payment to be secured to the satisfaction of your Board by a first mortgage lien upon the said line of railway and upon the equipment of the Cincinnati, New Orleans and Texas Pacific Railway Company ; the mortgage to provide that the principal shall become due and payable in cash at any time the interest shall remain unpaid for 90 days.
    2. To pay in cash $1,440,000, in quarter yearly installments of $60,000 each, begining October 1, 1896.
    3. To pay in cash a sum equal to ten per cent, of the annual gross earnings of said line of railway in excess of $4,500,000 from and after October 1,1902.
    4. To pay the rental falling due after October 1, 1902, upon the following leaseholds, amounting to $5,808 per annum; from Sarah B. McLean to the city of Cincinnati, recorded in Lease Book 62, page 21, and from Francis T. White’s assignors to the city of Cincinnati, recorded in Lease Book 62, page 16, of the records of Hamilton county.
    We agree also:
    5. That general offices of said lire of railway shall be maintained in the city of Cincinnati.
    6. To indemnify and hold the city of Cincinnati harmless against all claims of the Cincinnati, New Orleans and Texas Pacific Railway Company for damages on account of alleged breach of any of the conditions or convenants of the present lease of the city to that company.
    7. In each and every year for eight years after the delivery of the deed hereunder to expend not less than $250,000 in betterments, including bridge renewals, upon said line of railway to be covered by said mortgage.
    '8. To secure the payment.of said $1,440,000 and the said expenditure of $250,000 per annum for eight years for betterments by the deposit of $2,000,000 in bonds satisfactory to your Board, which bonds shall be returned to us in proportion to payments as made from time to time.
    The deed shall be delivered on October 1, 1896, and the sale, whenever consummated, shall date as of that day; the rents to be payable to the city up to that day under the present lease.
    This offer is made by us individually, but with the intention of transferring • our interests to a corporation to be organized under the laws of one or more of the states of Ohio,. Kentucky and Tennessee, for the purpose of operating said line of railway, and. when such corporation shall have been organized to your satisfaction it is our intention to transfer to it all our rights under this offer, or its acceptance, whereupon our individual rights, interests and liabilities under this offer and its acceptance, and the contracts in pursuance thereof, shall vest in and rest upon the said corporation alone.
    Cincinnati, June 13, 1896.
    A. B. Andrews. Henry A. Taylor,

      This plaintiff says that said board of trustees of the sinking fund resolved that said offer was from responsible parties, and at a price and upon terms of payment satisfactory to said trustees, and ordered the clerk of said board to publish said offer in the newspapers of said city as provided by law, and they propose immediately upon making the first insertion of such advertisement to give notice in writing to the mayor of the city, and to take all the other steps contemplated by said act for the purpose of consummating a sale of said railway under said offer. Plaintiff says that all the bonds issued by the trustees, aggregating about $18,610,000, are still outstanding and unpaid, and that the first issue thereof, amounting to $10,000,000, is still a valid and subsisting lien upon said line of railway and jts net income, and for that reason said act of March 12, 1887, under which said trustees are proceeding is illegal and void, and in contravention of the constitution, and especially of section 28, article 2, thereof, and that said railway cannot be sold, if at all, until said bonds are paid, or until the consent of said bondholders has been obtained to said sale; and such consent has not as yet been obtained. Plaintiff says that there is no power conferred to sell said line of railway, because said act of March 12, 1887, is null and void. Plaintiff says that said line of railway can not be sold because the consent to such sale has not been obtained from the States of Kentucky and Tennessee, under the statutes herein referred to of said states. Plaintiff says that if said act of March 12, 1887, is valid, and if said line of railway can be sold,then said offer by said A. B. Andrews and said Henry A». Taylor is not in accord with the terms of said law, because it does not provide for a purchase price to be paid all in cash. Plaintiff says that said offer is invalid because it provides that the City of Cincinnati shall receive ten per cent, of the annual gross earnings of said line of railway in excess of $4,500,000 from and after October 1, 1902, which is in contravention of section 6, article 8, of the constitution. Plaintiff says that the trustees of the sinking fund, unless restrained by this court, will advertise said offer, which would be a misapplication of the funds of the corporation and an abuse of its corporate powers.
    Wherefore plaintiff prays that said trustees of the sinking fund may be restrained from advertising said offer, and for all other and further relief to which he may be entitled. ”
    A general demurrer to the petition was sustained, and the petition dismissed, by the court of common pleas. That judgment was affirmed by the circuit court.

      Frederick Nertenstein, Corporation Counsel, for plaintiff in error.
    The first act that was passed by the general assembly of Ohio providing for the construction of this railway was sustained by the supreme court of Ohio. Walker v. Cincinnati, 21 Ohio State, 14.
    When the city of Cincinnati proceeded to construct this road it was acting in its private capacity, having received a charter from the legislature to build a railroad in a certain manner. Bailey v. Mayor of New York, 3 Hill, 531.
    If the legislature granted a charter, then it was a contract; and if so, then any subsequent legislation impairing the obligations and rights growing out of such contract is invalid.

      “No state shall * * * pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts. ” * * * Constitution U. S., Art. I, section 10.
    “The general assembly shall have no power to pass retroactive laws, or laws impairing the obligations of contracts.” Constitution of Ohio, Art. II, section 28.
    The leading case upon this question is that of The Trustees of Dartmouth College v. Woodward, 4 Wheaton, 518; Trustees Bishop's Fund v. Rider, 13 Conn., 87.
    A reservation by the legislature to change, alter, repeal, or amend does not imply the power to alter or change the vested rights acquired by the corporation under the charter and add new parties without the consent of the corporators. Charters are contracts; Sage v. Dillard, 15 B. Mon., 340; Seibert v. Lewis, 122 U. S., 284; Green v. Biddle, 8 Wheaton, 84.
    It cannot be successfully claimed that the city of Cincinnati, under our present constitution, can build a railroad to sell, lending her credit to some corporation (Article 8, section 6). If the city cannot build a road to sell, then has she a right to sell the road after it is once constructed? What cannot be done directly, cannot be done indirectly. 23 Ohio St., 76.
    This road was built under the legislation of three states, Ohio, Kentucky, and Tennessee. It can only be dealt with in accordance with the terms of the laws of those three states. The original Ohio Law provided for a lease, and for a lease only. Oregonian Railway Case 130 U. S., 1; Thomas Railroad Case, 101 U. S., 71.

      A sale means that the purchase money shall all be paid in cash. Under the offer of the bidders the city does not receive one cent of cash. The bidders obligate themselves to pay nineteen millions of dollars in one hundred years, and interest at the rate of four per cent, from the date of the issue of the bonds, and two hundred and forty thousand dollars per annum, up to October 1st, 1902, in all, one million four hundred and forty thousand dollars ($1,440,000).
    The bid contemplates that the city should receive in perpetuity a sum equal to ten per cent, of the annual gross earnings of said line of railway in excess of four million five hundred thousand dollars from and after October 1, 1902. This provision of the bid is looked upon as a very valuable one, which may at some future date yield the city a large revenue. It has been said that for that reason the city is extending its aid in support of this railroad, and for that reason is in direct conflict with article eight, section six, of the constitution. Pennsylvania Cental R. R. Co. v. The City of Philadelphia 47, Pa. St., 189; State of Iowa v. County of Wapello, 13th Ia., 388; Smith v. Henry County, 15th Ia., 385; Ten Eyck v. Mayor, 15th Ia., 486; City of St. Louis v. Allen, 13th Mo., 415; Meyers v. County of Jackson, 14th Ia., 47.

      E. W. Kittridge, J. B. Foraker and Laiorence Maxwell, Jr., for defendants in error.
    The petition assails the statute upon the ground that it is in contravention of article 2, section 28, forbidding laws impairing the obligation of contracts, and of article 8, section 6, preventing any city from becoming a stockholder m any corporation, and from raising money for, or lending its credit to, or in aid of, any corporation.
    The latter is the section that was involved in the original case concerning the Cincinnati Southern Railway of Walker v. City of Cincinnati, 21 O. St., 14. The validity of the original act authorizing the constuction of this road, by the board of trustees, as a mere agency of the city of Cincinnati, which was the sole beneficiary of the trust, and became the sole owner of .the railroad' after it was constructed, is conclusively settled by that decision.
    The only question, therefore, that now arises, is whether the road, having been constructed, and operated, for many years under a lease which the legislature authorized by the act of March 18, 1881 (78 O. L., 58; Revised Statutes, S. & B. section 83367), the legislature is competent to authorize, and the city, as the owner, is competent to effect a sale of it.
    It is unquestionably true that the legislature cannot authorize a municipality to build a railroad merely as a speculation for the purpose of sale. Neither could the municipality be authorized to erect any public building, or water-works, or gas works, for the purpose of sale, and as a speculation. But this road, or other public works of the character mentioned, having been authorized and constructed for the ulterior public purpose which they are intended to subserve, can there be any doubt that the legislature may authorize the sale of such properties, upon such terms and conditions as that, while they continue to subserve these public ends, they shall become the property of private individuals or corporations?

      But it is said that the act of Ohio, of April 18, 1873 (70 O. L, 139), and the laws of Kentucky and Tennessee mentioned in the petition, created a statutory mortgage, without any conveyance, upon the railway and the “net income thereof” to secure the bonds, and that the city is therefore obliged to continue to operate the road until the bonds are paid, in order that the lien of bondholders upon “the net income thereof” may not be impaired. But this is the ordinary provision of railroad mortgages, which, in the event of default, secures to the bondholders the right, through the appointment of a receiver or other judicial proceedings, to have the income of the road, pending sale, as well as the corpus, after sale, applied to their debt. It does not prevent the mortgagor from selling the property, which will pass to the purchaser, subject to the same lien upon “the income thereof” as when it was in the possession of the mortgagor. In other words, it does not involve or imply a covenant on the part of the mortgagor to operate the road personally or through a lessee so as to produce an income. And in no event has the mortgagee a right to interfere with the"income or operation (except in the case of waste) until there is a default in the payment of principal or interest. Jones on Mortgages, section 670.
    The plaintiff’s first objection is that the offer is not for cash. But the statute expressly authorizes a sale “at a price and upon terms of payment satisfactory to said trustees.” Both -the price and terms of payment of the proposed sale” must be advertised by the mayor in his proclamation for the popular election, and the sale is to be consummated only “if a majority of the electors voting at such election shall have voted in favor of the making of the sale at the price and upon the terms of payment proposed.”
    Nor will the reservation of such further contingent payment convert the conveyance into a lease as distinguished from a sale; because the title is to be conveyed absolutely and in fee simple, without any reversion remaining in the city, which is the essential and distinguishing feature of a lease.
    It is well settled that such a condition may be lawfully annexed to a conveyance in fee. Van Rensselaer v. Ball, 19 N. Y., 100; Van Rensselaer v. Hays, 19 N. Y., 68.
    Next it is said that the city cannot sell the road without the consent of the states of Kentucky and Tennessee.
    It is true that those states have passed the acts set out in the petition, under which .the trustees, as trustees and agents of the city, have acquired the property of the road in those states. But the court will look in vain for any provision in those acts restricting the power of disposition of the city of Cincinnati, as the owner of the road, which it had or might acquire under the legislation of this state. It may or may not be that the purchasers of the property will need to seek further legislation in those states to facilitate their enjoyment of the title that they acquire from the city. But surely nothing is to be found that precludes the city from selling, or the other defendants from buying, the title of the city; and it is no concern of the plaintiff that the purchasers may not, for instance, ac- * quire by this transaction the right to exercise its power of eminent domain in the state of Kentucky.
   Williams, C. J.

One ’ contention of the plaintiff in error is, that the municipal authorities of the city of Cincinnati, the owner of the line of railway in question, cannot constitutionally be invested with the power to make a sale of the road, and the act of March 12, 1887, purporting to confer that power is, therefore, without validity; being, it is claimed, in conflict with section 6, of article 8, of the constitution of this state, which prohibits municipal corporations from raising money for, or loaning their credit to, or in aid of joint stock companies, corporations or associations, or becoming stockholders therein. In support of. this contention, the case of Taylor v. Commissioners, 23 Ohio St., 22, is relied on, where, in holding the act there under review, which was similar in some respects to the statute under which the road in question was constructed, tobe in contravention of the constitutional inhibition mentioned, stress is placed upon a provision that roads constructed under that act might be leased or sold before or after the completion of the whole, or any part thereof. That provision, it was there held, in connection with the general scheme of the act, gave the public authorities opportunity to accomplish by indirection, what the constitution was designed to prohibit; that it was within the purview of the act that roads or parts of roads built under it should, and would pass into the hands and control 'of railroad corporations, as their construction proceeded, and when completed become absorbed in the line or system of railroad operated by such corporation ; so that, the statute not only afforded opportunity for the public .authorities to raise money for, and loan their credit to, and in aid of the corporation, but that was the practical effect of the statute when put into operation. In distinguishing that act'from the one under which the railway here involved was built, the court, speaking of the latter, said : “The proprietary interest in the road when completed, is as fully in the municipality as that of any other of its public works. It is the road owned by the municipality that is authorized to be leased. The public use for which the road was built is to be preserved, and the power of leasing the right .to use and operate it is designed only as a mode of making such use available to the public. ”

The railway in question here, was built and acquired by the city of Cincinnati after the act of May 4, 1869, had been held valid, in the case of Walker v. Cincinnati, 21 Ohio St., 14. The constitutionally of the act is there placed upon the ground that the construction of an improvement of that kind, to be owned exclusively by the municipality, does not involve an alliance of public and private capital or credit, nor constitute a loan of municipal credit to, or raising money for, Or in aid of other parties, incorporated, or unincorporated, and, therefore, it is as competent, by legislation to authorize municipal corporations to construct improvements of that nature, and provide means therefor by taxation, when deemed essential to the public interests, as to authorize them to acquire and hold property for other needed public uses, and make other municipal improvements. True, the act only makes provision for leasing roads constructed under, its sanction, and does not, in terms authorize their sale; it may not have been deemed advisable at the time of its enactment to confer such authority. But, we think, it does not follow that the power to make a sale of the road must be denied for all time, though exigencies should arise which would seem to require the sale, or render it desirable and advantageous to the owner. A sale made in good faith and for a fair value, under such circumstances, cannot properly be characterized as a loan of the credit of the municipality, directly or indirectly to, or in aid of the purchaser. The power of dispositionis generally an inseparable incident of ownership ; and the ownership of this property by the city of Cincinnati is not different from that of other property belonging to it for other public uses, nor is its sale, by the duly constituted municipal authorities, when authorized by appropriate legislation, within the constitutional inhibition referred to, nor any of which we are aware,

It is further claimed, in this connection, that the contemplated sale, if consummated, will have the effect of making the city of Cincinnati interested as a stockholder in the company that shall obtain control of the road, or, constitute a loan of its credit to that company. This claim is based upon the third paragraph of the proposition of purchase, which stipulates that the purchasers, in addition to the other consideration named, will ‘ ‘pay in cash a sum equal to ten per cent, of the annual gross earnings of said line of railway in excess of $4,500,000 from and after October 1, 1902.” But it is obvious the stipulation cannot have the effect claimed for it, nor any other effect than to create an obligation to pay in the future, upon the happening of the specified contingency, an additional sum as part of the purchase price of the road.

Another contention of the plaintiff in error is, that the proposed sale will impair the obligation of its contract with the bondholders, and cannot be made without their consent, which has not been obtained. It is undoubtedly true that the law, under which the bonds were issued, entered into and became part of the contract with the holders, and any change in the law which affects their rights cannot be operative as against them without their consent. The precise claim here made is, that the statute under which the road was built and the bonds were issued, contemplates that the road shall always remain the property of the city, and under the control of the trustees, to be kept under lease by them, so as !to provide a net income which can be used in payment of the interest on the bonds, and assist in creating a fund for the payment of the principal; and, as the trustees provided for by the statute are trustees of the bondholders, as well as for the city, it is the right of the former to insist that the trust shall be controlled and executed by the agencies, and in the manner so contemplated.

The ownership of the road by the city, resulted from its construction by the city with its own means; and, as before observed, that ownership is not different from that of other property, the complete title to which is vested in the city, for public purposes. We find no requirement in the statute providing for the construction of the railway, that its proprietorship shall continue perpetually in the city, or that excludes its power to alien the same, when, and as may be provided by legislation thereafter enacted. Provision is made for leasing the road, but not requiring that it shall always be kept under lease; that might be impossible. That provision is evidently designed for the benefit of the municipality, as a source of income, and to enable it to relieve the tax payers to that extent by using the income in the construction of the road, and payment of indebtedness created therefor. The failure to lease the road, or derive a net income therefrom, does not relieve the city of its obligation, to any extent, to the bondholders ; nor, is it apparent how their security can be impaired on that account. The obligation is met, and is to be met by taxation, except in so far as any net income may be used in reduction of the amount required to be so raised; and as any net income must necessarily pass through the proper official agencies of the city, before reaching the bondholders, as must also the amounts raised by taxation, and the city is ultimately liable in the latter mode for the payment of the whole bonded indebtedness, principal and interest, the income, as a matter of security, rises no higher than the corporate liability of the city, since its application to that indebtedness can be enforced only by the enforcement of the corporate obligation to apply it; and complete payment can as well be made or enforced through the process of taxation alone.

Besides, by the proposition of purchase which the parties are desirous of completing, the offer is to buy the line of railway subject to the present lease which does not expire until after the maturity of the bonds; so that, the holders will have the benefit of whatever security or advantage there may be in keeping the road under lease, until the payment of the entire indebtedness, or default giving rise to the right of foreclosure. They will, therefore, be in no worse position if the sale be made, than they now are.

Again, the bondholders are not here interposing any objection to the-sale, nor complaining that it will result in any impairment of their contracts. It is unusual for a debtor to object to an act or proceeding on the ground that it will impair his obligation. It is not clear, to say the least, how he can sustain, or reasonably apprehend such irreparable injury as will warrant the interference of a court of equity in his behalf, by injunction. As the creditor is the only party who can be injuriously affected, the remedy belongs to him.

It is further contended that the proposed sale cannot be legally effected without the consent of the states of Kentucky, and Tennessee. The petition does not allege that .either of those states has any property interest in the line of railway, or any part of it, or in any of the appurtenances, or the income. The ownership of the entire property, it is conceded, is in the city of Cincinnati. Those states, throug’h their legislatures, have granted to the owner certain privileges and franchises which were necessary to the construction of the road, within their respective territorial limits, and are also necessary to its operation and maintenance. These franchises add materially to the value of the property. But our attention has been called to no legislation of either of those states which places any restriction upon the owner’s right of sale or disposition of the property, or which renders the consent of either necessary to its 'sale. If the purchaser is willing to assume the risks that may arise, if any shall, with respect to the continuance of the franchises granted by the legislatures of the states referred to, the city of Cincinnati can have no interest in their continued existence, provided the payment of the purchase price is well secured, for it can suffer no injury from that source. The offer shows this difficulty has received the attention of the proposed purchasers, and that the situation in that respect is fully appreciated by them.

In regard to any danger arising from that source to the security of the bondholders, it has already been observed they are making no objection here to the consummation of the sale; and inquiry into their rights will be in time when an objection comes from them.

Finally, it is claimed that the only sale of the railway which the act of March 12, 1887, authorizes, is a sale for cash. The authority conferred by the statute is to make the sale upon such terms of payment as shall be satisfactory to the sinking fund trustees, and ratified at the election held under the act. The act nowhere, in terms, requires the purchase price to be paid in cash. But, it is said, a sale imports a disposition of property for cash; and the payment of the price in cash is, .therefore, necessary to a valid sale under the statute. The payment, or agreement to pay the purchase price of property in money, is essential to a sale of it, as .distinguished from an exchange or bartér; but sales may be made on credit wholly, or partially, as well as for cash; and the statute under consideration excludes the idea that payment in cash is essential to a sale under its provisions, by authorizing the sale to be made upon terms of payment.

Whether the offer of purchase which the sinking fund trustees have declared satisfactory to them, is an advantageous one to the- city, or not, or whether it will be judicious to make any sale of the railway property, are questions with which the court is not concerned; their decision belongs, under the statute, to the proper official body of the city, and to its inhabitants who shall be called upon to express themselves at the election for which the statute makes provision. We see no valid legal objection to the steps thus far taken toward the accomplishment of the sale it is proposed to make, nor any to the statute under which they have been taken.

Judgment affirmed.


author: By the Court.'

text:
    The State of Ohio v. Dreher.

      Pure food laws — Sale of chicory as coffee, an offense.

    To offer for sale, as an article of food, liquid chicory and coffee as “liquid coffee” is an offense punishable by the pure food laws of the state.
    (Decided June 23, 1896.)
    On exceptions of the Prosecuting Attorney to the rulings .of the court of common pleas of Cuyahoga county.
    L. Dreher was arrested, convicted and fined before a justice of the peace on an affidavit substantially as follows: That on November 25, 1895, he did, at the county of Cuyahoga, in the city of Cleveland, “unlawfully offer and expose for sale a certain compound and mixture, then and there labeled, exposed and offered for sale as and for liquid coffee, as and for an article of human food, to be used with, as and for food, and to be consumed as human food, which said mixture and compound, offered and exposed for sale as and for liquid coffee, as and for an article of human food, and to be consumed as human food, was composed of coffee, chicory, sugar and water; and which said package containing said mixture did not have . thereon a label with the name and per cent, of each ingredient therein contained, and that the same was not injurious to health.”
    A motion was made to quash the affidavit on the ground, that it charged no offense against the laws of the state, which was overruled and exceptions taken. On error to the common pleas the conviction was reversed and the defendant discharged.
    The prosecuting attorney excepted to the ruling and took a bill of exceptions, and the case is now here on his exceptions to the ruling of the common pleas.

      Olar-he and Thompson, for plaintiff in error.

      ■J. A. Osborne, for defendant in error.
   By the Court.'

We think the court erred in reversing the conviction. Under the 4th clause of section 3, of the act to provide against the adulteration of foods and drugs, as amended April 22, 1890 (87 Laws, 248), it is provided that an article shall be deemed to be adulterated, “If it is an imitation of, or is sold under the name of another article.” The affidavit in this case in substance charged that the defendant offered hnd exposed for sale as an article of food, liquid coffee and chicory as and for liquid coffee. This is an offense under the statute, whether the compound be deleterious or not. It is a fraud on the purchaser, and one of the purposes of the statute was to protect him against such frauds.

Exceptions sustained.


author: By The Court.

text:
    Hayes & Sons v. The City of Cleveland.

      Grade of Cleveland.

    The city of Cleveland is a city of the second grade, first class.
    (Decided June 23, 1896.)
    Error to the Circuit Court of Cuyahoga county.
    On an agreed case filed in the court of common pleas of Cuyahoga county, in which W. J. Hayes & Sons were plaintiffs and the city of Cleveland was defendant, the court rendered judgment in favor of the defendant. On error the judgment was affirmed by the circuit court; and this proceeding is prosecuted to reverse the judgment of both courts.
    The agreed case is as follows:
    “Now come the said W. J. Hayes & Sons and The City of Cleveland, and respectfully represent to the court that there is a controversy between them, arising out of, and depending upon, the facts hereinafter stated; and they hereby present and submit to the court their said controversy, to be by the court determined; upon the facts following, to-wit:
    “The said W. J. Hayes-& Sons is a partnership, formed for the purpose of carrying on business in Ohio, and is so carrying on business in the firm name of W. J. Hays & Sons, which name it has assumed, and by which it is known, in the conduct of said business.
    “The said The City of Cleveland is a municipal corporation within said county of Cuyahoga, state of Ohio.

      “On or about the 14th day of March, 1891, the acting superintendant of the census transmitted from the census office in the department of the Interior of the United States, at Washington, to the secretary of state of the state of Ohio, at Columbus, certain statements showing the population of the state of Ohio, by minor civil divisions as officially determined by the count of the returns made under the eleventh census; which statements were duly received by said secretary of state, and the same were reliable sources of information, and the said eleventh census was the federal census of 1890, taken under an act of congress, approved March 1, 1889. Thereupon the said secretary of state prepared from said statements a report or abstract of said census, and said report or abstract was, on or about the first day of April, 1891, printed and publised with, and as a supplement to, the annual report of the said secretary of state for the fiscal year ending November 15, 1890.
    “According to said report or abstract, the said census, which was the then next preceding federal census, the said city of Cleveland had, on the first day of June, 1890, more than two hundred thousand inhabitants, to-wit, two hundred and sixty-one thousand three hundred and fifty-three inhabitants.
    “Thereafter, the said secretary of state prepared, pursuant to the authority of law, another report or abstract of said census, and transmitted the same on or about November 17, 1891, to the governor of Ohio, with, and as a part of, said secretary of state’s annual report for the fiscal year ending November 15, 1891; and on or about the first day of December, 1891, the said secretary of state submitted to the general assembly of the state of Ohio, his said annual report for the said fiscal year, ending November 15, 1891, including said official report and abstract, and the same was received by said general assembly at its next sessions thereafter, being the regular session, begun and held in the city of Columbus, January 4, 1892. Said official report and abstract last above mentioned contained a statement of the population of each and all the municipal corporations in the state of Ohio, as shown and determined by said census of 1890, which was the then next preceding federal census; and according to said report or abstract, and according to said census as shown therein, said city of Cleveland had, on the 1st day of.June, 1890, more than two hundred thousand inhabitants, to-wit: two hundred and sixty-one thousand three hundred and fifty-three inhabitants.
    “On the 13th day of April, 1891, the governor of Ohio, the auditor of state of Ohio, and the secretary of state-of Ohio, at the time of ascertaining the ratio of representation as required by the eleventh section of the eleventh article of the constitution of Ohio, did ascertain what cities of the second grade of the first class were entitled to be advanced to cities of the first grade of the first class, and then did determine that the said city of Cleveland was entitled to be advanced to a city of the said first grade of the first class; that the original of said report was filed in the office of the secretary of state and a copy thereof was, on that day, certified to the general assembly of the state of Ohio, then in session; and in said report appeared the following, to-wit:

      ‘Cities first class, second grade, entitled to be advanced cities of the first class, first grade Cleveland. ’
    “On the 14th day of April, 1891, the secretary of state caused said report to be published in the Ohio State Journal, a newspaper published at Columbus, Ohio, and. of general circulation in said city and throughout said state, and in the Cleveland Plain Dealar and Cleveland Leader, both newspapers published in said city of Cleveland, Ohio, and of general circulation in said city of Cleveland and throughout said state. On the 15th day of April, 1891, the said secretary of state certified to the general assembly of Ohio, then in sessionj an abstract-of the population of the different municipal corporations of Ohio, in which the said city of Cleveland appears as a city of the second grade, first class, having a population of two hundred and sixty-one thousand three hundred and fifty three, by the census of 1890, which was then the next preceding federal census, and as having a population of one hundred and sixty thousand one hundred and forty-six, by the federal census of 1880, which was the federal census next prior to that of 1890.
    “On the 15th day of February, 1892, the city council of said city of Cleveland duly adopted a resolution which is in the words and figures following, to-wit:
    “Resolved by the council of the city of Cleveland, that in pursuance of the provisions of section 1549 of the Revised Statutes of the state of Ohio, it is hereby deemed to be expedient that the city of Cleveland should pass from the second grade of the first class, to which it now belongs, to the first grade of the first class, under the operations of the Revised Statutes; and it is hereby declared and determined that the said city shall remain a city of the second grade of the first class.’
    “Prior to the said federal census of 1890, the said city of Cleveland was a city of the first class, second grade, and at no time since the federal census of 1880 has there been in Ohio any other city of the first class, second grade, nor has there, since that census, been any other city in Ohio entitled, by reason of its population according to the federal census of 1880 or 1090, to become a city of the first, class second grade.
    “At no time has any action, other than the adoption of the resolution aforesaid, relating to the grade of said city, or a change of its grade, had or been taken, by the said city, or by the council, or any other officer or officers thereof, or by the voters thereof.
    “Prior to the 9th day of May, 1896, the said city of Cleveland duly advertised for bids for the purchase of bonds of the said city of the par value of $153,000: and on said 9th day of May, 1896, the bid of said W. J. Hayes & Sons, in the sum of $158,265, was by the said city accepted, and the said bonds sold to them.
    “The said city duly tendered the said bonds to the said purchasers, but they refused and still refuse, to accept the said bonds and refused, and still refuse, to pay the said purchase price, or any part thereof.
    “The said W. J. Hayes & Sons deposited with their said bid, as required by the city, a certified check for $7,650.00, payable to the treasurer of said city, as a pledge for their faithful performanee of their said contract of purchase, which check the city still holds.
    “The said bonds are sewer district bonds, issued and sold to provide money to pay a part of the cost of constructing certain specified sewers within certain specified sewer districts in said city and they were issued under authority of section, thirty-six (36) of an act of the general assembly of the state of Ohio, passed April 16, 1883, entitled ‘An act to provide for the construction and repair of sewers in cities of the second grade of the first class.’ (See 80 Ohio Laws, 143.)
    “The said bonds are in due and legal form, and all the proceedings and acts requisite for the validity of said bonds have been duly and legally had and done; and all the facts requisite for such validity exist; and said bonds are the valid and legal obligations of said city, if the said city is of the first class, second grade, unless they are rendered invalid by reason of the invalidity of the said statute under authority of which they were issued.’
    “The said W. J. Hayes & Sons claim that the said city is not of the first class, second grade, and that the said statute under which the ’said bonds were issued is unconstitutional and void, and that the said bonds are, for these reasons, invalid; and the said city claims that it is of the first class, second grade, and that the said statute is constitutional, and that the said bonds are valid. This contention is .submitted to the court, and if, upon consideration, the court shall find right thereof to be with the said W. J. Hayes &Sons,they should be discharged from any liability to the city in the premises, and the said check should be ordered to be returned to them; but if the court should find the right of such contention to be with the city, there should be judgment herein in favor of the city and against the said W. J. Hayes & Sons, for the sum of one hundred and fifty-eight thousand two hundred and sixty-five dollars, and it should be ordered that upon payment thereof, the said bonds be delivered to them, and the said check be returned to them. ‘
    “W.. J. Hayes & Son, by Harry E. Hayes.
    “The City op Cleveland, by Miner G. Norton, Corporation Counsel. ”

      Frederick A. Henry and Koine, Carr, Tolies & Goff, for plaintiffs in error.

      Minor G. Norton and Phillips, Ford <& Groiol, for defendant in error.
   By The Court.

The power of the legislature to classify municipal corporations and legislate for the classes so made, has been sustained by a long line of decisions in this conrt, and has recently been reaffirmed in State ex rel., v. Baker et al., Ante 1.

On the question whether Cleveland is a city of the second grade, first class, we are of the opinion from the agreed case, that it is such city. Under a proviso contained in section 1549, Revisd Statutes, the advancement of a city from the second grade to the first grade of its class, by increase of population, could be prevented by the action of its city council declaring- it inexpedient to do so. This was done on February 15, 1892. The claim that this should have been done on or before July 1, 1891, is not tenable. The “official report” referred to' in section 1547, Revised Statutes, on which the population of a city is to be ascertained for the purpose of determining the class and grade to which it belongs, is not the report of the superintendent of the census, but the report of an officer of the state, designated by law to make the report. This officer is the secretary of state, and the report is that which he is required by section 1617, Revised Statutes, to make of the name “of each municipal corporation, its grade and class, and its population as ascertained by the preceding federal census.” This report is required by the following section to be transmitted to the general assembly at its next session thereafter. The section does not fix the time when the report is to be transmitted. This is ascertained by section 62 Revised Statutes, and must be on or before November 20th of each year, the time fixed for the making of all reports by state officers. The report was transmitted November 17, 1891, as required by this section, and then became the official report, of which municipal corporations must take notice, and, before the first of the following July, take steps to prevent advancement if by their population, thus shown, they would then advance, and they deem it inexpedient to do so. Hence, the action taken by the council was in' due time, and the city remained and is a city of the second grade, first class; and the act of April 16, 1883 (80 Ohio Laws, 143), authorizing the construction and repair of sewers in cities of the second grade of the first class, applies to the city of Cleveland, and the bonds issued by it in pursuance of this statute, are valid bonds.

The following eases: No. 5040, William G. Dietz v. The City of Cleveland et al., No. 5041, William G. Dietz v. The City of Cleveland, et al., No. 5042, William G. Dietz v. The City of Cleveland et al., No. 5043, William G. Dietz v. The City of Cleveland et al., No. 5044, William G. Dietz v. The City of Cleveland et al., are here on error to the circuit court of Cuyahoga county, and were argued and submitted with the case of Hayes ds Sons v. Cleveland. Each presents substantially the same questions as are presented in that case, and each is for like reasons, Affirmed.


author: Minshall, J.

text:
    Young et al. v. Stone et al.

      Fee of counsel — In partition proceedings — Allowance by court — Sec' tion 5778, Rev. Stat. — Attorney waives right under statute when he makes agreement with parties as to compensation.

    1. Under section 5778, Revised Statutes, authorizing the court jo. partition proceedings to allow a reasonable fee to plaintiffs counsel, to be taxed as costs in the case, the power conferred is limited to such services as are rendered for the common benefit of all the parties; for services rendered in litigation between parties to the suit, no allowance can be made by the court under this section.
    2. Where an attorney makes an agreement with the plaintiff in partition proceedings, whereby he is to receive a certain compensation for his services in the matter, he necessarily waives any right he might otherwise have had to be awarded compensation by the court under the statute; in such case the ■ contract fixes his rights and the measure of the relief to which he may be entitled.
    (Decided October 20, 1896.)
    Error to the Circuit Court of Cuyahoga county.
    The object of this proceeding is to obtain the reversal of an order and judgment of the circuit court in a partition proceeding, making an allowance of $2,500 to L. A. Russell for services as an attorney under section 5778, Revised Statutes.
    Silas M. Stone, his brother Francis W. Stone, and their sister, the said Cornelia T. Young, as representatives of the brother of the whole blood of Silas S. Stone, deceased, brought an action in the court of common pleas of Cuyahoga county in partition, claiming to be the owners of one-half of . a large amount of land, described in the petition, formerly owned by Silas S. Stone. The brothers . and sisters of Margaretta Stone were made defendants, and were conceded to own one-half of the land sought to be divided. The half-brother and sisters of Silas S. Stone were on their motion made parties defendant and claimed to be owners of the property, as tenants in common, with the plaintiffs. This claim was decided against them in 50 Ohio St., 495, and by that decision Silas M. Stone, Francis W. Stone and Cornelia T. Young were each ascertained to be the owner of an undivided one-sixth of the property. On the case being remanded to the circuit court, partition was made in accordance with the decision of this court; that is, one-sixth was divided to Silas M., one-sixth to Francis W. and one-sixth to Mrs. Young, her husband William S. Young and George L. Carlisle, to whom she had in the meantime conveyed an interest in. her one-sixth. The other half was aparted to the brothers and sisters of Margaretta Stone. L. A. Russell was the attorney originally and throughout of Silas M. Stone and Mr. Miller, of the city of New York, was the attorney of Francis W. Stone. Mr. George L. Car-lisle, of New York, a plaintiff in error, was the original attorney of Mrs. Young. Carlisle had a contract with her for his services, which is as follows :
    ‘‘This witnesseth that: .Cornelia T. Young has retained and employed and does hereby retain and employ, George L. Carlisle, of No. 2 Wall street, New York City, to be her attorney and to represent her in all matters relating in any way to the estates of Silas S. Stone and of his wife Margaretta Stone, both deceased, or the settlement of either of them and of any and whatever claim or other interest she now has or hereafter may have against her brother Francis W. Stone, arising from or by reason of any writing which she may have given to him. and relating in any way to either or both of said estates.
    “The said Carlisle accepts said employment upon the terms hereafter set forth, and agrees to. attend to the interest of said Young in said matters to the best of his ability.
    ‘ ‘In consideration of the foregoing, and of one dollar, each to the other in hand paid, receipt whereof is acknowledged,- it is mutually promised, understood and agreed that the said Carlisle for his services hereunder shall be entitled to and shall receive an amount equal to one-fourth (i) of all and whatever shall be recovered by or paid to said Young directly or indirectly on account of any of said claims or interests, in lieu of any other fee therefor.
    “And it is further understood that all necessary incidental expenses for the prosecution of said claims or interests shall be borne and paid by said Young. But it is asserted by said Carlisle, that, in his opinion, the amount thereof will not reach five hundred dollars ($500.00).
    “It is also understood and agreed that the said claims and interest shall not be settled or compromised without the consent of both parties hereto, and that this agreement, as a whole, binds said parties, their heirs, representatives and assigns.” (Signed by the parties.)

      Carlisle then employed Mr. L. A. Russell as local attorney by an agreement in writing, which is as follows:
    “Whereas, George L. Carlisle is the attorney at law and in fact of Cornelia T.-Young in all matters relating to her interests in the estate of Silas S. Stone and Margaretta Stone, both deceased;
    “And whereas, it may become necessary or proper for him, in the discharge of his duties aforesaid, to have the assistance of an Ohio lawyer.
    “Now, therefore, this shows:
    “That L. A. Russell, of Cleveland, Ohio, has been and is hereby retained and employed by George L. Carlisle, of New York City, to appear for Cornelia T. Young in any partition or other suit or proceeding which may be commenced or taken with respect to the settlement of her interest in the estates of Silas S. Stone and Margaretta Stone, both deceased, either or .both; and to do and perform all things necessary for the speedy and complete settlement of said interest.
    “Said Russell accepts said employment and it is mutually agreed as follows:
    “1st. Said Carlisle shall be consulted as the principal or employing attorney herein in any such suit or proceeding hereunder (and as often as may be priorthereto)whichsaidRussell shall commence or take, and (as near as may be), all1 papers necessary and of importance for the prosecution of said interest shall be first submitted to said Carlisle; and all 'payments on account or otherwise of said interest, shall be made to said Carlisle as the attorney for said Young.
    “2d. The compensation which said Russell may charge for such service shall in no event be more than he will charge and receive from either Silas S. Stone or his brother, Prank I. Stone, for like services, nor more than seven and one-half (7i) per cent, of the net amount of whatever recovery in cash shall be made through his efforts for said Cornelia T. Young during the continuance here-, of ; except that if a, suit in equity (other than in partition), or in law, for ejectment, shall be brought in the name of said Cornelia T. Young hereunder against the personal representatives, heirs or next of kin of said Margaretta Stone or Silas S. Stone, deceased, or any other person or persons to recover any moneys or other property now in the possession of said personal representatives, heirs, next of kin, or any other person, under a claim of title thereto or interest therein, but in which said Young is entitled to share, or if, such suit be brought against said Young then and in any such event, said Russell will charge and shall 'be entitled to receive for such services no more than ten (10) per cent, of the net final recovery therein to said Cornelia-T. Young.
    “It is also understood and agreed that in event that any real or other property belonging to said estates or either of them, be, in the settlement of the same, recovered by said Russell for said Cornelia T. Young during the continuance hereof, and which shall be set apart and accepted by said Young, either in common with her said brothers or either of them, or in severalty, that said Russell, for the purpose of computing and collecting his compensation hereunder, shall be entitled to substitute the value of said Young’s interest in such lands at the time as so much cash; and if dispute shall arise as to the value thereof, the same shall be finally determined by arbitration in the usual way.
    £ ‘In witness whereof, we have hereunto set our hands and seals this 12th day of February, 1892.
    . “Signed, sealed and delivered in the presence of James L. Barger.
    George L. Carlisle,
    L. A. Russell. ”
    At the conclusion of the services, Mr. Russell claimed of Mr. Carlisle upward of $20,000 for services he had rendered under the contract; and in the motion made by Silas Stone for the confirmation of the report of the commissioners, he: “Moved that the court fix and allow to said L. A. Russell of the plaintiff’s attorneys, as his counsel fee against Cornelia T. Young, William S. Young and George L. Carlisle, as the owners in common of one-sixth of said estate, and fix the same as a lien upon said one-sixth set off in severalty to them by the partition herein, the sum of $15,455.70 being’ as and for 7£ per cent, upon the value of their one-sixth of the said estate as found by the said commissioners in partition, being $206,076— said sum being the amount of said counsel fee as fixed by contract for said services in said cause between said parties and the said L. A. Russell, and that the court order that unless the said sum of $15,455.70 be paid by said parties to said Russell by a date to be fixed upon by said court, that said one-sixth of the said estate so set off to said parties in partition, or so much thereof as may be necessary to be sold as upon execution at law in order to pay the said' counsel fee so allowed.”

      Alter hearing the evidence the court found the facts and rendered judgment thereon as follows:
    “The court finds that under the provisions of the statutes of Ohio, the court has jurisdiction and authority to make an allowance to counsel for services rendered ‘for the common benefit of all the parties’ to be taxed in the costs of the case; that a reasonable fee for the services rendered by the several counsel in and about the said partition cause in effecting and securing the partition of lands and tenements actually aparted and set off in severalty to the said owners were of the value of $15,000 — one-sixth of which should be paid by Cornelia T. Young, William Shipman Young and George L. Carlisle to L. A. Russell, for the services of the said Russell rendered in said cause, for said three parties last named, in securing the partition of the lands actually aparted and set off to them.
    “The court also finds that the services for which the said Russell is allowed $2,500 were embraced within the terms of the written contract signed by said L. A. Russell and said George L. Carlisle, and the court in making this allowance, save to said Russell all his rights under his said contract except so far as the amount allowed him herein shall .be taken as payment in part for a portion of the services he was to render under his said contract.
    “It is therefore ordered, adjudged and decreed that said sum of $2,500 so allowed to said Russell as attorney fees, be taxed in the costs of said cause against the said George L. Carlisle and Cornelia T. Young and William Shipman Young, and that unless, etc., * * * execution issue therefor.”

      To this order and judgment the plaintiff in error excepted and now ask to have it reversed, and the motion on which it was made, overruled.

      Boynton & Horr, for plaintiffs in error.

      L. A. Bussell, for defendants in error.
   Minshall, J.

The professional services for which an allowance was made by the circuit court to Mr. L. A. Russell, as an attorney in the case, were rendered under a written agreement by which he was employed by George L. Carlisle, the attorney at law, and in fact of Mrs. Young. The agreement, as will appear from an examination of it, was between himself and Mr. Carlisle — the latter having an agreement in writing between himself and Mrs. Young, by which he was, for his services, to receive a definite part, one-fourth, of the property recovered, for “representing her in all. matters relating in any way to the estate of Silas S. Stone and of his wife, Margaretta Stone, both deceased.” The entire services rendered by Mr. Russell under his employment by Car-lisle, aside from the partition of the estate, by proceedings for that purpose, were rendered in litigation between the children of a deceased and only brother of the whole blood of Silas S. Stone, deceased, and the brothers and sisters and representatives of those deceased, of his half-blood. Mrs. Young and her two brothers, Silas M. Stone, and Francis W. Stone, were the children of the deceased brother of the whole blood. Those of the half-blood claimed the right under the statute of descent and distribution to share equally with those of the whole blood. It was a controversy of much importance to these children: For if the claim of the half-bloods prevailed, the interest of each in the estate would be reduced from one-sixth to a much smaller aliquot part. But it concerned no one in the partition proceedings except the parties to it. It was finally determined by this court, in favor of the children of the deceased brother of the whole blood of Silas S. Stone. Stone v. Doster, 50 Ohio St., 495.

Two questions are presented by the record, either of which is decisive of the case. (1), Whether, regard being- had to the character of the services, the court had power under section 5778, Revised Statutes, to make an allowance of any sum to the attorney for services in the litigation between the representatives of the whole blood and those of the half-blood, of Silas S. Stone, deceased; or (2), if so, had it power to make any allowance, when it appeared that the attorney and his clients had an express written agreement as to what his compensation should be for all services bo be rendered in the matter.

(1) The statute under which the allowance was made reads as follows:

‘ ‘The court having regard to the interest of the parties and the benefit each may derive from a partition, and according to equity, shall tax the costs and expenses which accrue in the action including reasonable counsel fees which shall be paid to plaintiff’s counsel unless the court award some part thereof to other counsel for services in the case for the common benefit of all parties ; and execution may issue therefor as in other cases.” Section 5778, Revised Statutes.

Now it is evident, we think, from the language of this section in connection with its history, that the services of “the plaintiff’s counsel” in partition proceedings for which, the court may make an allowance and cause the same to be taxed along with “the costs and expenses which may accrue in the action,’’are such services as are rendered “for the common benefit of all parties” in the case. The statute as first enacted, 29 Laws. 254, section 16, simply included the costs and expenses- that may accrue in the action. These of course could not be otherwise than for the common benefit. It-was afterward, in 1880, so amended, as to include “a reasonable counsel fee” to be paid the plaintiff’s counsel, “unless the court award some part thereof to other counsel for services in the case for the common benefit- of all the parties.” The latter clause, “for the common benefit of all the parties,” is a controlling one in the construction of the statute. Services for which an allowance may be made to other counsel and taxed as part of the costs, are required to be of like character with the costs, expenses and the counsel fee authorized to be taxed in favor of the plaintiff’s counsel in the case. So that no counsel fee, whether to the plaintiff’s counsel or otherwise, can be allowed by the court and taxed as costs in the case, under this section, unless the services were rendered for the common benefit of all the parties. The services rendered are to be such as may be taxed as costs and expenses and apportioned to the parties .according to their respective interests. The allowance made in this case, and taxed to the one-sixth interest owned by Mrs. Young, her husband and •Carlisle, was not for such services. They in no way benefited or affected the next of kin of Mar■garetta Stone, deceased.

But it is claimed that the language, “The court having regard to the interest-of the parties and the benefit each may derive from a partition, and according to equity,” conferred power on the court to make the allowance it did, and to charge it upon the interest of Mrs. Young, her husband and Mr. Carlisle, in the property as partitioned, as the equitable contribution they should make to the services rendered by Mr. Russell in defeating the claim made by the half-bloods. The statute does not warrant this construction. Without doubt the court may determine the proportion of the costs, expenses and counsel fees of the character above stated, that should be taxed to each party, regard being had to the interest of each in the subject of partition; but the costs, expenses and counsel fees so apportioned, must have been made for the common benefit of all the parties to the action, and must not include compensation for services rendered by counsel in litigation between some of the parties to the suit, and others who are adversaries in interest. Compensation for such services is a matter of agreement between the counsel and his clients, express or implied; and the court, in such ease, has no more power to fix the compensation the plaintiff should pay his counsel, than it has in an ordinary civil action. Such has been the construction placed by the courts of other states on their own statutes similar to ours; and also conforms to the rule observed in equity. In Grubb’s Appeal, 82 Pa. St., 1, it was held that it was “ indispensable aid only that was contemplated —such usual and accustomed services as the exigencies of such case should render necessary. The compensation of ■ counsel for services in the trial of contested cases was not the end in view.” In Fidelity Insurance Co’s. Appeal, 108 Pa. St., 342, it was held that: “The fees should be graduated according to the circumstances of each case, the nature and extent of the services necessarily rendered for the common benefit of all the parties in the case. It (the compensation) does not include the expenses of adversary proceedings resulting from a defense to the demand for partition, or from any other cause. ” See also the following cases: Kilgour v. Crawford, 51 Ill., 249; Stempel v. Thomas, 89 Ill., 147; Building Association v. Savings Bank, 142 Pa. St., 121; Coles v. Coles, 13 N. J. Eq., 365.

2. As to the second question: It appeared from the motion of the counsel as well as from the evidence, that he had a written agreement with Mr. Carlisle, whereby he was to be compensated for all services rendered in the matter. Carlisle was the attorney in fact of Mrs. Young; and he was to perform all the services in and about the matter for a fourth interest in the property claimed by Mrs. Young. By the agreement between Car-lisle and Russell, the rights of the latter to compensation for services rendered in his employment, must be measured and determined. He cannot have the right given him by statute for a reasonable compensation, and also, a right to compensation secured by contract for the same services. By the contract he waived his right under the statute, and must rely on it for such compensation as he is entitled to, be it much or little. This is in analogy to the principle that where there is an express contract none can be implied. To insist on compensation under the statute, would be to repudiate the contract, which he certainly cannot do. It is entirely competent to parties to make such a contract, as it contravenes no principle of public policy. The statute is designed for eases in which there has been no contract. The fact that his rights under the contract were greater than they would be under the statute, and that the court did not assume to measure his rights under the contract, but, simply made an allowance under the statute, and directed it to be used as a credit on any sum that might be due him under the contract, is of.no consequence. The contract precluded the court from taking any action in the matter. It, in a summary way, had no right to assume that anything would be due the attorney under the contract. The services may not have been fully performed according to con-, tract; or may have been in part, or fully, paid. In fact, it was admitted that some $4,500 had been paid on it. Under such circumstances the court should have overruled the motion of the counsel for compensation under the statute. Where there .is a contract and the client refuses to pay what is due under it, the remedy of the attorney is in an ordinary suit upon the contract for damages, in which suit, on any issue of fact, either party is entitled to a jury.

For these reasons the order of the circuit court making an allowance to Mr. Russell for services, rendered in the proceeding is reversed, and his motion for such allowance is overruled.

Reversed.

Burket and Spear, JJ., dissent from the second proposition of the syllabus.