Elyria Gas & Water Co. v. City of Elyria

7 Ohio Cir. Dec. 528

• Court: Lorain Circuit Court
• Decided: May 7, 1897
• Status: Published

Opinion

Hale, J.

The case of the Elyria Gas and Water Company v. The City of Elyria comes into this court by appeal, and has been submitted upon an agreed statement of facts. The ease has been prepared with more than usual care by the attorneys upon both sides.

The city had, prior to the commencement of this action, taken certain preliminary steps towards the erection of waterworks to supply the city and its inhabitants with water, and was proceeding in the execution of the plan proposed when this action was commenced.

The plaintiff is a corporation, having its principal place of business in this city, and therefore a resident of the city and a taxpayer. It requested the corporation counsel or solicitor of the city to bring an action to enjoin the city from proceeding further with that enterprise, on the ground that to do so was an abuse of corporate power; that the city was proceeding illegally in the execution of that enterprise.z

It is objected, first, that the ease made does not fall within the statute authorizing a taxpayer, on the refusal of the solicitor to bring the action. It is somewhat doubtful whether this action is properly maintainable by this plaintiff.

Generally, if the action is to enforce the private rights of the corporation bringing the action, it could not be maintained.

It is only to enforce a public right that this action can be sustained.

There are certain allegations in the petition and certain facts that transpired on the hearing that certainly could not but raise a query in the minds of the court whether in fact the real object of the action was not to enforce some private rights of the plaintiff.

It will be conceded that by the statute of the state ample authority is given to the city council or to a municipality to construct and maintain waterworks for the purpose of supplying a city and its inhabitants with water. I suppose it will be further conceded that, except for the limitation contained in the statute, that power conferred upon the municipality is ample to enable it to construct waterworks without a vote of the electors of the corporation if there is money in the treasury subject to an appropriation for that purpose.

But it might defeat an enterprise of this kind to delay the commencement of the work until the money needed could be raised by taxation. That is, to get the money into the treasury by taxation before going forward with the construction would necessitate a delay that would be entirely unreasonable.

The limitation to which I refer is contained in section 2702 Revised Statutes.

And this provides that no contract, agreement or other obligation involving the expenditure of money shall be entered into, nor shall any ordinance, resolution or order for the appropriation or expenditure of money be passed by the council or by any board or officer of a municipal corporation, unless the auditor of the corporation, and, if there is not an auditor, the clerk thereof shall first certify that the money required for the contract agreement or other obligation, or to pay the appropriation or expenditure is in the treasury to the credit of the fund from which it is to be drawn, and not appropriated for any other purpose, which certificate shall be filed and immediately recorded. It will be seen that the corporation could not go forward with this work until the money was in the treasury to pay the contracts that must be made to carry out the enterprise.

To enable the city to go forward with the work the legislature has conferred upon the municipality, with certain restrictions, the power to issue and sell bonds and put the money into the treasury.

The mode to be pursued in the issuing and selling of these bonds ia quite clearly defined by statute. Section 2835 Revised Statutes provides, in substance, that the trustees of any township or hamlet or the council of any municipal corporation may issue and sell their bonds' in amount and denominations such as they may deem necessary for the special purpose in view, whenever it is desired by the voters of such township or municipal corporation to make any of the following improvements or to provide for any of the following purposes, and among those enumerated, for erecting or purchasing waterworks and supplying water to the township or corporation and the inhabitants thereof.

Section 2837 then provides for the steps to be taken in providing for the issue of bonds. Before any bonds are issued or tax levied, as provided in the next two preceding sections, the question of issuing the bonds shall be submitted to the voters of the township or municipal corporation at a general or special election. And whenever the trustees of any township or hamlet or the council of any municipal corporation shall by resolution declare it necessary to issue and sell the bonds of such township, hamlet or municipal corporation, as the case may be, for any or either of the purposes mentioned in section 2835 Revised Statutes, in any amount specified in sueh resolution, and shall, by such resolution fix a date upon which the question of issuing and selling such bonds shall be submitted to the electors of such township, hamlet or municipality, and shall cause a copy of such resolution to be certified to the deputy state supervisor of the county in which sueh township, hamlet or municipal corporation is situated, or board of election in such cities as have sueh boards (and), such deputy state supervisor, or board of election shall, within ten days thereafter, proceed to prepare the ballots. The details of submitting that question to the electors are provided for.

On the 6th day of March, 1896, the council of the city of Elyria passed, or attempted to pass this resolution: “A resolution declaring it necessary to issue bonds for the erection and purchase of waterworks for the supplying of water to the inhabitants of the city of Elyria. Be it resolved by the council of the city of Elyria, Ohio, that it is necessary to issue and sell bonds of the said city in a siim not to exceed $250,000 for the purpose of the purchase and erection of waterworks for the supplying of water to the inhabitants of the city of Elyria, Ohio. And that the question of issuing and selling the bonds of said city, what amount, etc., thereby be submitted to the electors of said city at a general election to be held in said city on the sixth day of April, 1896, and that the mayor be directed to give notice of the holding of sueh election in the manner provided by law.

“The clerk is hereby authorized to transmit a certified copy of this resolution to the board of deputy state supervisors of elections of Lorain county. ’ ’

At the time that resolution was passed the council was composed of eight members; there was one vacancy. At this meeting there was an attendance of six members, one of the seven being absent. Of those present four voted in favor of its adoption and two against it, and the resolution was declared adopted.

It is objected, that the resolution is of a permanent and general nature; that it should have been read before its final adoption at three separate meetings of the council, and, because it was not so read, is entirely void, and being necessary to validate this proceeding that the whole must fall.

By section 1694, Revised Statutes, it is provided: “By-laws, resolutions and ordinances of a general and permanent nature shall bo fully and distinctly read on three ■ different days, unless three-fourths of the members elected dispense with the rule.” There has been some changes in that section of the statute. As originally passed, it read as quoted above. On the 28th day of February, 1890 (87 O. L., 36), it was amended to read “By-laws, resolutions and ordinances of a general or permanent nature, including those for the issue of bonds, shall be fully and distinctly read on three different days, unless three-fourths of the members elected dispense with the rule.”

On the 31st day of March, 1893, evidently overlooking the fact that this section had been amended in 1890, the legislature of the state again amended the original section practically as if it had not been amended in 1890, so that it now stands as first read.

The objects of this resolution in these proceedings in general terms may be said to be two.

First — To declare the necessity of providing means to carry out the proposed improvement by the issue and sale of .bonds. So far it is declaratory only of an existing need.

Second — The object is to provide for the necessary steps to be taken in the submission of the subject to a vote of the electors of the municipality.

The resolution does not, in terms, provide for the issue of bonds, but declares the necessity for such an issue. And when authorized and sanctioned by the electors, the council may then, by proper legislation, provide for the issue and sale of the bonds.

It is apparent that the council, in its discretion, after the vote is taken, may discontinue the enterprise or go forward with it.

It would be entirely competent, if deemed wise, for the legislature of the state to authorize directly the city council to issue and.sell bonds to meet the costs of improvements of the nature of this improvement, but it has seen fit to limit the power of the municipality by requiring the proposed issuing of bonds to be sanctioned by the vote of the people to whom it must be submitted.

We are dealing then, as all concede, -with a preliminary resolution, declaratory of the necessity of the improvement, and providing a mode of submitting to the people the question or proposition.

The ease of Upington v. Oviatt, 24 O. S., 232, is relied on as an authority sustaining the proposition that this is not a resolution of a general or permanent nature, requiring the formality for its passage claimed by the plaintiff. That case related to a street improvement, and it was held that a resolution, declaring the necessity of such improvement, was not a resolution of a permanent nature.

In the case of Campbell v. Cincinnati, 49 O. S., 463, the court had under consideration the passage of an ordinance relating to the condemnation of private property to public use, and not a preliminary resolution. In that ease the supreme court held that the ordinance was of a general and permanent nature.

It is said by counsel for plaintiff that no distinction can be drawn beween the rule applicable to ordinances and to resolutions. That is undoubtedly true if the object to be attained can be attained either by ordinance or resolution, and if the ordinance required the formality for its adoption then the resolution would.

But a preliminary resolution declaring the necessity of the condemnation of land or property for the use of the public, may not stand upon the same ground as an ordinance condemning private property for public use.

One may be permanent and the other not, depending upon the object and the place it fills in the proceedings to be taken.

In view of the fact that this resolution is such as I have indicated, we are of the opinion that it is not a resolution requiring the formality for its adoption claimed by the plaintiff and that in the manner in which it was adopted renders the resolution a legal enactment.

I want to say that this question is perhaps not entirely free from difficulty, but we feel reasonably satisfied with the conclusion reached.

It is objected that the amount of the bonds "to be issued is not fixed by the resolution; that the language is “Not to exceed $250,000.” It is said that this is too indefinite; that the exact amount should be stated, mid to provide for the issue of bonds not to exceed $250,000 gives no authority to issue any bonds. There is very little authority upon this particular point. It is claimed that the case reported in 27 Pa. St., 389, is in point. In substance that case was founded upon the statute of the state of Pennsylvania authorizing municipalities to subscribe for the stock of a railroad, and the limitation in the statute was that that subscription should be made only by the grand jury which passed upon the subject, recommending the subscription and fixing the exact amount of the subscription. The grand jury, considering the subject, authorized and recommended the commissioners to subscribe for the stock of the company to an amount not exceeding $150,000. Inasmuch as the commissioners had no authority to fix any amount, and inasmuch as the grand jury was the only power that had that authority and had not done it, the supreme court held the proceedings to be invalid.

But we do not think that case is in point. In this case the council had charge of that enterprise, not as in the case in Pennsylvania.

There is a case decided by the circuit court of Hamilton county, which I refer to upon another branch of the case very soon.

A municipal corporation of Butler county, having waterworks within the corporation, determined that they would enlarge, the plant, and connect with it an electric plant. A preliminary resolution was passed, declaring the necessity of enlarging the waterworks and building an electric plant, and authorizing the issue of bonds not to exceed $15,000. These proceedings were sustained, no objection, however was taken that the resolution was indefinite as to the-amount, and the ease is not for that reason of much weight. Still a transaction of this kind was sanctioned by this court.

We think that the objection that the resolution and the proceedings did not definitely state the amount, is not well taken; that it does not invalidate the proceedings.

It further claimed that the resolution states a double purpose for which the bonds were to be issued.

First — And the language of the resolution is “For the erection and purchase of waterworks.”

This presents a question of considerable difficulty, fairly debatable question.

In the case of Hensly v. Hamilton, 3 C. C. 210, that court had before it the question of construction or purchasing gas wells in the municipal corporation. The language of the resolution was “issuing bonds for the purpose of purchasing or constructing gas wells.” The circuit court of that circuit, the first circuit, held that that resolution was invalid and the proceedings founded upon it were illegal and void, for the reason that the resolution contained a double purpose.

In the case of Ryan et al. v. Orbinson et al., 7 C. C., 30, that same .court had before it the case to which I have referred, where there were proceedings, to enlarge the waterworks it had, and, in connection, therewith, construct an electric light plant.

In the resolution submitted, providing for a submission to the vote of the people the object specified, was for the construction of or to increase the capacity of the waterworks and to construct in connection therewith an electric light plant.

That court, in considering the question, say there is not express provision in the statute, and we see no implication therein that the council may not unite in the proposed improvement two or more things so authorized by law if they are so intimately connected as in fact to form but one improvement, as the evidence shows it to be in the case under consideration.

It may be, although it is not stated in the opinion, that, the change made in the statute has affected this question.

But here we have a city proposing to supply the city and the inhabitants with water, having a plant already in existence.

The form of the resolution was “To purchase and construct,”’ evidently contemplating that the existing plant, if purchased, was insufficient. The one enterprise of supplying the city with water was contemplated, and we are not, after as careful consideration as we can give this subject, prepared to hold that these proceedings were illegal for this reason.

- I do not stop to refer to, or comment upon many cases that have been cited outside of the state; I have not time to do it.

It is said that there is a variance between the reading of the resolution, the proclamation issued by the mayors submitting the proposition to the people and the ordinance passed after the vote of the people, providing for the issue of these bonds.

The resolution I have already stated was for the erection and purchase; the proclamation designated the purpose for which the bonds were to be issued, “For the erection of waterworks.” The ordinance, “For the erection or construction of waterworks. ” I do not think these two words add anything. ■

The difference in the reading of the resolution, proclamation and ordinance that we have stated does not, in our judgment, invalidate the proceedings.

But it seems to us it would be applying a very technical rule to this transaction to so hold.

Another objection is taken, and that is that a part of this work is to be done outside of the city limits. Certainly we think this not well taken. Some discretion must be left in all this transaction to the city council. That is where the law has put it; there is where it must be left.

It is said further, ti» manner of the selling of the bonds is not m accordance with the statute; that we think also is not well taken.

E. Q. Johnson and W. H. Wells, Attorneys for Plaintiff. TP. W. Boynton and Lee Stroup, Attorneys for Defendant.

We have nothing to do with the policy of this enterprise. That is lodged in other hands.

The decree will be for the defendant, dismissing the plaintiff’s petition.