Kasch v. Miller
| Decision Date | 07 March 1922 |
| Docket Number | 17062 |
| Citation | 135 N.E. 813,104 Ohio St. 281 |
| Parties | Kasch v. Miller, Superintendent Of Public Works |
| Court | Ohio Supreme Court |
Constitutional law - Superintendent of public works - Conservation of waters and watercourses - Issue and sale of bonds by state -Section 419-1 et seq., General Code (108 O. L., pt. 1, 219) - State debt or obligation, not incurred, when - Section 8, Article VIII, Constitution.
1. The act authorizing the initiation and construction of a proposed improvement under the supervision of the state superintendent of public works, with a view to the conservation of surplus flood and other waters of the state, is valid. Where the entire improvement is to be paid for by the issue and sale of bonds in the name of the state, and the principal and interest are to be paid entirely out of the revenues derived from the improvement or from the sale of the corpus in case of default, a state debt is not thereby incurred within the purview of the state constitution; nor do the bonds so issued become an obligation or pledge the credit of the state under the express provisions of Section 412-2, General Code.
2. Section 412-1 et seq., General Code (105 O. L., pt. 1, 219) authorizing the construction of such improvement and the issue and sale of bonds therefor, under the facts stated, do not violate Section 3, Article VIII, or any other provision of the constitution, prohibiting the incurring of debts or obligations by the state.
Plaintiff in error, Gustave F. Kasch, as a resident, citizen and taxpayer of the state, brought an action in the common pleas court seeking to enjoin the defendant, John I. Miller, superintendent of public works of the state, from proceeding in the acquisition of lands for the construction of public works under authority of a certain act of the Ohio legislature. This injunction was sought for the reason that it was claimed that the act of the general assembly, under which the superintendent was proceeding, was in conflict with the Constitution of Ohio.
The defendant superintendent filed his answer containing two defenses. Since the first defense was substantially a general denial, the case was disposed of in the lower courts upon the sufficiency of the second defense. In his second defense the defendant alleged that he deemed it for the public welfare and best interests of the citizens of the state that the surplus, flood and other waters of a certain part of the watershed of the Tuscarawas river should be conserved impounded and stored, in order to insure and promote the public health, welfare and safety and encourage and promote agriculture and other public purposes; that he proposed preparing plans, specifications and estimates of the cost for the construction of a certain dam or reservoir on said river, and if they were approved by the governor he would, as superintendent of the public works of the state, negotiate for the sale or lease, for much public purpose, of the water and power generated thereby, and would secure contracts for the con- struction at an aggregate not exceeding the estimated cost. He further alleged that "if he is able to sell or lease said water and power and to sell bonds in the amount of the estimated cost of the construction of said dam and to secure contracts for the construction thereof, at a figure not exceeding said estimated cost, he will proceed, unless enjoined by this court, to acquire, either by purchase or appropriation, the land necessary for the construction of said dam, and thereupon to construct the same, pursuant and in conformity with the provisions of said act of April 10, 1919; and in so doing proposes to sell under the provisions of Said act bonds in excess of $750,000."
In both the lower courts, Kasch, present plaintiff in error, filed a general demurrer to the second defense, challenging its sufficiency. In the common pleas court this demurrer was overruled and the petition dismissed. Upon an appeal taken to the court of appeals, that court likewise overruled the demurrer of the plaintiff in error and dismissed his petition. Whereupon error is prosecuted to this court.
Messrs. McGhee & Johnson and Mr. W. J. Laub, for plaintiff in error.
Mr. John G. Price, attorney general; Mr. Wm. J. Meyer; Mr. B. W. Gearheart and Mr. W. E. Young, for defendant in error.
In seeking the injunction the petition stated that while ostensibly the purpose of the construction of the improvement was to encourage and promote commerce, manufacturing and other public purposes, in reality the sole purpose thereof was "to promote the interest of certain private persons and corporations who desire to appropriate the waters in the lakes and streams" to their own private uses. This was denied in the first defense of the answer. Since the plaintiff did not see fit to offer evidence upon this issue, but confined himself to his demurrer challenging the sufficiency of the second defense, we are necessarily confined to the consideration of his general demurrer to that defense.
The act of the general assembly challenged in this case comprises Sections 412-1 to 412-15, inclusive, General Code. This act (108 O. L., pt. 1, 219) was entitled an act to supplement Section 412 of the General Code by adding thereto other sections "relative to preventing destructive floods and conserving and preventing waste of the waters of the streams lakes and public waters of the state of Ohio, and to provide for the sale or lease to the public of such water," etc., and was evidently passed under authority of Section 36, Article II of the Constitution as amended in 1912. The act comprised fifteen subsections of the General Code. Briefly stated, in its general outlines, it authorized the superintendent of public works, subject to the approval of the governor, to acquire property for the construction of reservoirs, dams, etc., for the purposes named in the first section of the act. It empowered the superintendent with authority to prepare and submit to the governor for approval plans, specifications and estimates for construction. Upon approval by the governor the superintendent was required to proceed with the construction of the im- provements, and was authorized to "issue and sell bonds of the state of Ohio, not in excess of the estimated cost of such improvements," which bonds were not to mature later than twenty-five years from the date of the issue. After the sale of the bonds, and payment of the proceeds, the superintendent was empowered to make contracts for construction, which should not exceed the estimated cost of the improvement, together with the cost of the land acquired and damages resulting therefrom. The improvements, including said contracts, were to be paid for out of the proceeds from the sale of the bonds. The superintendent was authorized to sell or lease for a period of twenty-five years the water or power generated thereby, and to impound the funds derived from the sale or rental thereof in the hands of the state treasurer, which funds were expressly pledged for the purposes of maintaining the improvements, and for the payment of interest and principal on the bonds as they might mature. The owners of the bonds were given a lien on such improvements, and on certain default in payments thereon they were authorized to foreclose their liens. The purchaser at foreclosure sale, under the provisions of the act, acquired the interests of the state and bondholders in the improvements for a period of twenty-five years, with the right to conduct water and power during that period over the lands, channels, etc., of the state. During that time the purchaser at foreclosure sale was required to maintain the improvements in a good state of repair, and refrain from interfering in any wise with certain specific rights of navigation, control and maintenance reserved to the state. By his de- murrer, plaintiff in error challenges the constitutionality of the act referred to. It is argued that the act violates Sections 1, 2, 3, 4 and 7, Article VIII, and Sections 6 and 11, Article XII, of the Ohio Constitution. These various sections of the constitution relate to the limitations placed in the constitution in relation to the incurring of bonded and other indebtedness by the state, and to the pledging of its...
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