Frankeinstein v. Goodale

164 N.E. 363, 30 Ohio App. 110, 1928 Ohio App. LEXIS 521
CourtOhio Court of Appeals
DecidedMarch 12, 1928
StatusPublished

This text of 164 N.E. 363 (Frankeinstein v. Goodale) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Frankeinstein v. Goodale, 164 N.E. 363, 30 Ohio App. 110, 1928 Ohio App. LEXIS 521 (Ohio Ct. App. 1928).

Opinion

Hamilton, P. J.

This case is here on appeal from a decision of the court of common pleas, refusing an injunction.

The plaintiff below, appellant here, by his action as a taxpayer, sought to enjoin the defendants, as trustees of the Cincinnati Southern Railway, from carrying out, or putting into effect, a proposed extended lease of the Cincinnati Southern Railway to the Cincinnati, New Orleans & Texas Pacific Railway Company.

The plaintiff in his amended petition pleads four causes of action.

*111 The first cause of action sets up facts upon which appellant claims to be entitled to relief by way of injunction, in that the terms of the lease constitute a lending of the city’s credit, contrary to Section 6, Article VIII, of the Constitution of Ohio.

The second cause of action sets up the granting of the right to the city of Cincinnati to build the Southern Railway through the states of Kentucky and Tennessee, and states that the right or charter in the states of Kentucky and Tennessee expires 42 years from January 1, 1928, while the proposed extended lease continues for a period of 99 years from said date, and that the expiration of the right or charter granted by these states is an obstacle to the carrying out of the lease.

The third cause of action sets up the claim that the extended lease would violate the rule of the Public Utilities Commission of Ohio as to the net rental.

The fourth cause of action presents the claim that the extended lease would violate the interstate commerce regulations. It appears that the matter is pending before the Interstate Commerce Commission, in which its approval is requested, and this point will necessarily be determined by the ruling of the Interstate Commerce Commission, in accordance with the Interstate Commerce Act (Title 49, Section 1, et seq., U. S. Code). .

The third cause of action is without merit, and needs no further comment.

The second cause of action with reference to the grant from the states of Kentucky and Tennessee is taken care of by the terms in the extended lease, in that it is provided therein that the extension and *112 modification shall be subject to the renewal of the rights of the trustees of the Cincinnati Southern Railway in the states of Kentucky and Tennessee, in the securing of which extension the lessee agrees to cooperate with the lessors to the fullest extent, and that if such extension is not secured, neither the city of Cincinnati nor the lessee shall have any claim against the other for failure to secure the same, and all payments of rentals, etc., accruing prior to the expiration of the rights in said states, shall remain the property of the city of Cincinnati, and the lessee shall have no right to make any claim to recoup or recover any payments from the city of Cincinnati.

That no consent on the part of the states of Kentucky or Tennessee is required was decided in principle in the case of City of Cincinnati v. Dexter, 55 Ohio St., 93, 44 N. E., 520. Subhead 3 of the opinion in that case, page 113 (44 N. E., 525), is to the effect that these states have no property interest in the Southern Railway property, and their consent is not necessary to a sale of the road. If their consent is not necessary to a sale of the road, much less would their consent be necessary to an extension of the lease. However that may be, plaintiff has abandoned all claims for relief under causes of action 2, 3 and 4, and the sole proposition argued in the brief is the question of the city lending its credit or financial resources for the furtherance of private enterprises.

The claim of the plaintiff is based upon his contention that some $6,900,000 of bonds of the city of Cincinnati, issued for the making of improvements under the original and supplementary leases, cov *113 ered all improvements that the lessee was obliged to make and pay for, and that in equity the outstanding' bonds are the obligation of the lessee, and we gather that he contends that the extension of the lease for 99 years is a continued lending of this credit, and, further, that the provision for the sharing of the net profits, and the language used defining net profits, indicate a further lending of the credit of the city, in violation of the Constitution. The question, it seems to us, was decided in principle in the case of City of Cincinnati v. Taft, 63 Ohio St., 141, 58 N. E., 63, which approved the extension of the maturity of the bonds, originally issued for a period not to exceed 40 years, at a reduced interest charge. The court upheld the extension holding that the case of Walker v. City of Cincinnati, 21 Ohio St., 14, 8 Am. Rep., 24, passing on the validity of the act under which the railroad in question was constructed, was conclusive in support of the judgment of the circuit court, which upheld the extension.

The points made in the brief of plaintiff in error concern only certain terms and obligations in the lease. Whether or not they are wise or unwise is not before the court. When we review the extended litigation and numerous cases concerning the Cincinnati Southern Railway, the acts of the Legislature and the decisions concerning the same, and the decisions construing the acts, it would seem that all the questions sought to be raised have been fully settled by the acts and by judicial decisions.

We have the Act of May 4, 1869 (66 Ohio Laws, 80), authorizing the construction of the Cincinnati Southern Railway and the power to lease the same. We have the case of Walker v. City of Cincinnati, *114 21 Ohio St., 14, 8 Am. Rep., 24, holding the act valid.

In the case of Taylor v. Commissioners of Ross County, 23 Ohio St., 22, the case of Walker v. Cincinnati was distinguished. The court says in the opinion at page 77:

“The proprietary interest in the road [Cincinnati Southern Railway] 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.

In the case of City of Cincinnati v. Dexter, 55 Ohio St., 93, 44 N. E., 520, in passing on an act authorizing the sale of the Cincinnati Southern Railway, it is stated in the syllabus:

“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.

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Bluebook (online)
164 N.E. 363, 30 Ohio App. 110, 1928 Ohio App. LEXIS 521, Counsel Stack Legal Research, https://law.counselstack.com/opinion/frankeinstein-v-goodale-ohioctapp-1928.