Elyria Gas & Water Co. v. City of Elyria

• Citation: 49 N.E. 335,57 Ohio St. 374
• Court: United States State Supreme Court of Ohio
• Decision Date: 26 January 1898
• Parties: ELYRIA GAS & WATER CO. v. CITY OF ELYRIA.

49 N.E. 335

57 Ohio St. 374

ELYRIA GAS & WATER CO. v. CITY OF ELYRIA.

Supreme Court of Ohio.

January 26, 1898

Error to circuit court, Lorain county.

The Elyria Gas & Water Company, the plaintiff in error, a corporation, and resident taxpayer of the city of Elyria brought suit against the city and its mayor and clerk to enjoin the issue and sale of bonds of the city for the purpose of raising a fund with which to build waterworks. The plaintiff, before commencing the suit, requested the city solicitor to bring an action for the same purpose, which he refused to do; and the action below was brought by the plaintiff in behalf of the city. The injunction is sought on the grounds that the proceedings of the council are illegal in the several particulars set out in the petition, and are therefore insufficient to warrant the issue and sale of the city's bonds. After trial in the common pleas, the cause was appealed to the circuit court, where a finding of the facts was made, and judgment rendered for the defendants. That judgment, it is contended here, is not supported by the facts found. These will be noticed in the consideration of the questions raised. Plaintiff brings error. Reversed and rendered.

Syllabus by the Court

1. The proceedings of the council of a municipal corporation must in order to be valid, be within the powers conferred on it and in substantial conformity with the statutes regulating them.

2. The proper adoption, by the council, of the resolution declaring it to be necessary to issue and sell the bonds of the corporation for a specified purpose authorized by section 2835 of the Revised Statutes, and providing therein for the submission of the question of their issue to the electors at an election to be held for that purpose, is essential to the validity of all subsequent proceedings, and without which there can be no lawful issue or sale of the bonds.

3. Such a resolution is of a general and permanent nature, within the meaning of section 1694 of the Revised Statutes, and must before it can be legally adopted by the council, be read on three different days, or the rule requiring such reading be dispensed with by three-fourths of the members elected to the council.

4. The purchase of waterworks, and the erection of new ones, are distinct measures, requiring different proceedings; and a resolution of council which combines both as one, and provides for the ubmission, in that form, of the question of the issue and sale of the bonds of the municipality for both purposes combined, is unauthorized, and ineffectual for either purpose; nor can it be made effectual for either, by the elimination of the other in the proceedings subsequent to the resolution. It is the policy of the statute that each measure for which it is proposed to issue and sell the bonds of the corporation shall stand on its own merits, unaided by combination with others, and that it be voted upon as an independent measure, by the council and electors, uninfluenced by such combination.

5. Section 2837a of the Revised Statutes requires that bonds issued in pursuance of the preceding sections shall be sold, ‘in not more than four different series, at not more than four different times, as the money may be needed’ (Laws 1894, p. 340), for the contemplated use. The power of determining when, and in what series and amounts, the bonds shall be so sold, belongs to the council, and cannot be delegated to the mayor or other person. An ordinance which purports to give the mayor authority to sell the bonds, ‘either all at once, or from time to time, in such amounts as he may deem necessary,’ is in conflict with the statute, and void.

6. Where the proceedings of a municipal corporation are unauthorized and void, either for want of power or its unlawful exercise, and are designed to raise a fund by the sale of its bonds or by taxation to be applied to the object contemplated by the proceedings, a suit to enjoin them may be brought by a taxpayer, under sections 1777 and 1778 of the Revised Statutes, without waiting until the fund is raised ready for expenditure. The abuse of corporate powers, within the purview of section 1777, includes the unlawful exercise of powers possessed by the corporation, as well as the assumption of power not conferred.

W. H. Wells and E. G. Johnson, for plaintiff in error.

Lee Stroup and Boynton & Horr, for defendants in error.

WILLIAMS, J.

Proceedings of a municipal council, to be valid, must be within the powers conferred on that body, and in substantial conformity with the provisions of the statutes regulating them. The objections made to the proceedings here involved are (1) that the resolution declaring the necessity for the issue and sale of the bonds, and directing the submission of the question of their issue and sale to the electors of the city, was not on three different days before its adoption, nor was the rule requiring such reading dispensed with; (2) that the resolution fails to conform to the statute, in that it embraces both the purchase and erection of waterworks, and the proceedings subsequent to the resolution are not in accordance with its declared purpose; and (3) the ordinance providing for the sale of the bonds attempts to delegate to the mayor the discretionary power to make the sales at such times, and in such amounts, as he may deem necessary.

1. By section 2835 of the Revised Statutes authority is given to the council of any municipal corporation to issue and sell its bonds in such amount as it may deem necessary for the purpose of erecting or purchasing waterworks, and supplying water to the corporation and its inhabitants, when it is desired by the voters of the corporation to make such improvement. It is provided by section 2837 that, before any bonds can be issued or tax levied for such purpose, the question of issuing the bonds shall be submitted to the voters of the corporation at a general or special election and whenever the council of any municipal corporation shall, by resolution, declare it necessary to issue and sell the bonds of such corporation for any or either of the purposes mentioned in section 2835, in any amount specified in such resolution, and shall by such resolution fix the date upon which the question of issuing and selling such bonds shall be submitted to the electors of such municipality, and shall cause a copy of such resolution to be certified to the deputy state supervisors of the county in which the municipal corporation is situated, the deputy state supervisors shall, within 10 days thereafter, proceed to prepare the ballots, and make all other necessary arrangements for the submission of such question to the electors of the municipal corporation at the time fixed in the resolution. The section further provides that 15 days' notice shall be given of the election, stating the amount of bonds to be issued, the purpose for which they are to be issued, and the time and place of holding the election; and that the ballots of those voting for the bonds shall have written thereon the words ...