State ex rel. Atty. Gen. v. City of Toledo

• Decision Date: 24 February 1891
• Parties: STATE ex rel. ATTORNEY GENERAL v. CITY OF TOLEDO.
• Court: Ohio Supreme Court

26 N.E. 1061

48 Ohio St. 112

STATE ex rel. ATTORNEY GENERAL v. CITY OF TOLEDO.

Supreme Court of Ohio.

February 24, 1891

Quo Warranto .

On the 22d day of January, 1889, the general assembly passed an act which reads as follows: ‘ An act to authorize cities of the third grade of the first class to borrow money and issue bonds therefor for the purpose of procuring territory and right of way, sinking wells for natural gas, purchasing wells and natural gas works, purchasing and laying pipes, and supplying such cities with natural gas for public and private use and consumption. Section 1. Be it enacted by the general assembly of the state of Ohio, that any city of the third grade of the first class in the state of Ohio shall be and is hereby authorized to issue its bonds for an amount not exceeding seven hundred and fifty thousand dollars, for the purpose of procuring territory, right of way, sinking wells for natural gas, purchasing wells and natural gas works purchasing and laying pipes, with all necessary fixtures attachments, machinery, and for constructing the necessary buildings to supply such city and the citizens thereof with natural gas for public and private use and consumption. Sec 2. Before such bonds, or any of them, shall be issued by any such city, the question of issuing the same shall be submitted to a vote of the qualified electors of such city at any general or municipal election to be held therein; and at such election separate ballots shall be provided and used by the voters upon the said question. The tickets voted shall have written or printed thereon the words: ‘ Authority to issue natural gas bonds. Yes; ’ or ‘ Authority to issue natural gas bonds. No.’ If the proposition to issue bonds be approved by sixty per cent. of those voting upon the proposition, such city shall have authority to issue such bonds for the purposes named, as provided in this act. Sec. 3. The mayor of any such city, before the next general or municipal election after the passage of this act, shall cause public notice of the submission of said question to be published in all the newspapers published and of general circulation therein, for at least ten days prior to such election. And said election shall be held, proclamation thereof and returns thereof made, in all respects, not otherwise herein provided, as municipal elections are now required by law to be held and returned in such cities. Sec. 4. Said bonds, when so authorized, shall be issued according to the provisions of an ordinance to be by the common council passed for that purpose, in denominations not less than five hundred dollars and not more than one thousand dollars, payable at such times, not less than ten years and not exceeding thirty years from the date of the issue thereof, with interest not to exceed four and one-half per cent. per annum, payable semi-annually, principal and interest payable at such place as may be by said ordinance provided for; and such bonds shall have attached thereto coupons representing the interest to accrue thereon. Said bonds shall in all cases express upon their face the purposes for which and the act under which issued, and shall be signed by the mayor and countersigned and registered by the clerk of such municipality, with the seal thereof impressed thereon, and shall be sold according to law, and for no less than their face value. Sec. 5. No more of said bonds in any case shall be issued or sold than is necessary for and required by actual and necessary cost and expense of procuring the necessary grounds, sinking such number of wells as may be required for the purposes named, the purchase of wells and natural gas works, purchasing and laying of pipes, and the right of way therefor, and such other necessary attachments, fixtures, machinery, and structures as may be requisite to carry into effect the provisions of this act; and such bonds shall be sold from time to time as the works progress, and in such amounts as shall be required for the proper progress and final completion of such work. All proceeds and moneys arising from such bonds shall be used exclusively for and applied to the payment of the work, labor, material, and other expenses necessary for the supply of gas for the purposes aforesaid. But not more than seventy-five thousand dollars of said bonds shall be issued or sold for the purpose of paying the cost and expense of procuring the necessary gas territory, and sinking and purchasing such number of wells as may be required for the purposes named: provided, that the common council of any such city may, by ordinance, authorize the trustees of gas-works to increase said cost and expense to a total amount not in excess of one hundred and fifty thousand dollars, and may authorize the further issue and sale of said bonds for such purpose to the extent of an additional seventy-five thousand dollars. Sec. 6. All moneys collected or received by the trustees of gas-works of such cities, respectively, from the consumers of such gas, after paying the necessary running expenses thereof, shall be applied to the payment of such bonds and interest. And the council of such municipality is hereby authorized to levy a tax annually, not exceeding one and one-half mills on the dollar valuation, on the taxable property within any city affected by this act, in addition to the tax now by law authorized to be levied therein, in such amount as will each year be sufficient with the net income of such gas-works, to pay the principal and interest then falling due upon such bonds, and provide a sinking fund for the gradual redemption of such bonds. Sec. 7. All moneys so applicable to the payment of such bonds which shall come into the hands of the trustees of gas-works before such bonds or any of them become due shall be used to purchase such bonds, or invested under the order of the sinking fund trustees of such city; and the bonds so purchased or the evidences of the investments so made shall be delivered by said gas-works trustees, as soon as the transaction is completed, to the sinking fund trustees of such city, who shall place the same to the credit of said bonded debt, and use the same as required for the extinguishment of the debt created under this act, and for no other purpose. Sec. 8. If any election hereinbefore provided for shall appear by the returns thereof to be in favor of the issue of such bonds, the mayor of such city shall certify such fact, under the seal of such city, to the governor of the state of Ohio, who thereupon shall appoint for such city a board of trustees, composed of five citizens of said city, no more than three of whom shall belong to one political party, one of whom shall be appointed for one, one for two, one for three, one for four, and one for five, years; and the board so appointed shall have charge of the purchase, construction, and management of the gas-works provided for by this act for such city, and shall hold their offices until their successors are elected and qualified. Any vacancy occurring in such board prior to the next general or municipal election shall be filled by appointment by the mayor of such city, subject to approval by the common council thereof. Sec. 9. This act shall take effect and be in force from and after its passage. Passed January 22, 1889.'

Upon the passage of the foregoing act, the city of Toledo, in pursuance of the authority given by said act, by its mayor duly caused to be submitted to a vote of the qualified electors of said city at the first municipal election held therein after the 22d day of January, 1889, to-wit, the municipal election held upon the 1st day of April, 1889, the question of issuing bonds in the sum of $750,000, for the purpose of procuring territory, right of way, sinking wells for natural gas, purchasing wells and natural gas works purchasing and laying pipes, with all necessary fixtures, attachments, and machinery, and for constructing the necessary buildings to supply such city and the citizens thereof with natural gas for public and private use and consumption. At said election over 60 per cent. of those voting voted in favor of said proposition, and thereupon the city, by its common council, duly authorized the issue of $750,000 of natural gas bonds; and of the total issue bonds in the sum of $292,500 were sold at par and accrued interest, in the manner prescribed by law. The proceeds of the bonds so sold were applied to the purchase of gas lands, the sinking and purchasing of wells, the purchasing and laying of pipes, fixtures, attachments, machinery, and buildings necessary to transport the quantities of natural gas obtained in said wells, and to supply the same to said city and its inhabitants; and with the proceeds of the bonds so sold a natural gas pipe-line was substantially completed one-half the distance from the gas-fields to the city of Toledo. Prior to the passage of the act of January 22, 1889, to-wit, on September 6, 1886, the common council of the city of Toledo passed an ordinance for the purpose of granting to the Northwestern Ohio Natural Gas Company the right and privilege of laying, maintaining, and operating gas-pipes in the city of Toledo for heating and power purposes. That ordinance provides as follows: ‘ An ordinance granting to the Northwestern Ohio Natural Gas Company the right and privilege to lay, maintain, and operate gas-pipes in the city of Toledo for heating and power purposes, and repealing an ordinance entitled ‘ An ordinance granting to the citizens' Natural Gas Company the right and privilege to maintain and operate gaspipes in the city of Toledo for heating and power purposes.’ Section 1. Be it ordained by the common council of the city of Toledo, that, subject to the terms, conditions, and provisions of this ordinance,...