Swank v. Village of Shiloh

• Decision Date: 12 June 1957
• Docket Number: No. 35034,35034
• Citation: 143 N.E.2d 586,166 Ohio St. 415,2 O.O.2d 401
• Parties: , 2 O.O.2d 401 SWANK, Appellant, v. VILLAGE OF SHILOH et al., Appellees.
• Court: Ohio Supreme Court

Page 415

166 Ohio St. 415

143 N.E.2d 586, 2 O.O.2d 401

SWANK, Appellant, v. VILLAGE OF SHILOH et al., Appellees.

No. 35034.

Supreme Court of Ohio.

June 12, 1957.

Syllabus by the Court

1. The power to acquire, construct, own or lease and to operate a utility, the product of which is to be supplied to a municipality or its inhabitants, is derived from Section 4, Article XVIII of the Constitution, and the General Assembly is without authority to impose restrictions or limitations upon that power. (Village of Euclid v. Camp Wise Ass'n, 102 Ohio St. 207, 131 N.E. 349, and Board of Education of City School Dist. of Columbus v. City of Columbus, 118 Ohio St. 295, 160 N.E. 902, approved and followed.)

2. The provisions of Sections 735.29 and 743.05, Revised Code, do not prevent a village from furnishing electricity for the village water department or for public street lighting, and, provided the rates charged to other consumers of such electricity are reasonable in amount such consumers can not successfully complain that the electricity is furnished free for such purposes.

This is an action by plaintiff, a taxpayer of defendant village, in his own behalf and in behalf of all other users of electricity in said village, to enjoin the defendant village and its Board of Trustees of Public Affairs from furnishing free electricity to the village water department and for street lights of the village and to require an accounting of moneys allegedly expended from the light fund for the purpose of purchasing street lights and furnishing free electricity for those street lights and for the water department. The village through its board of public affairs buys electricity from the Ohio Power Company and distributes the same to all users in the village.

The Court of Common Pleas of Richland County sustained defendants' demurrer to the petition and, plaintiff electing not to plead further, dismissed the petition.

The judgment was affirmed by the Court of Appeals.

The cause is before this court as an appeal of right and upon the allowance of the plaintiff's motion to certify the record.

J. L. Mason, Ashland, for appellant.

Henkel, Ross, Sauter & Lett, Mansfield, for appellees.

BELL, Judge.

The Court of Appeals in affirming the sustaining of the demurrer relied principally upon City of Niles v. Union Ice Corp., 133 Ohio St. 169, 12 N.E.2d 483, 484, the second paragraph of the syllabus of which reads as follows:

'A patron, purchasing electric energy from a municipally owned electric light and power plant or system, occupies, with respect to the purchase price paid, the same position as if the purchase were made from a private corporation engaged in the same business. The patron loses all interest in and control over the purchase price after it is paid, and it becomes the exclusive property of the municipality, with the right to use, transfer or divert it to any uses and purposes authorized by law.'

And it would appear that the Niles case has foreclosed that question so far as cities are concerned. However, the statute (Section 735.29, Revised Code), relied upon by plaintiff herein as limiting the powers of defendants, specifically applies only to villages. If, therefore, the action of the defendants herein is to be approved, it must be on some basis other than the Niles case.

Section 735.29, Revised Code, provides, in part, that the Board of Trustees of Public Affairs of a village 'shall have the same powers and perform the same duties as are provided in * * * 743.05 * * * of the Revised Code, and all powers and duties relating to waterworks * * * shall extend to and include electric light * * * plants.'

Section 743.05, Revised Code, provides, in substance, that revenue derived from the operation of a waterworks by a municipal corporation may be used for waterworks purposes only.

Plaintiff contends that since the powers and duties of defendants in regard to electric light plants, as provided in Section 735.29, are the same as those provided by Section 743.05 for the operation of waterworks, the defendant village is limited in the use of electric light funds to electric light plant purposes.

It has been established by a line of cases beginning with City of Cincinnati v. Roettinger, 105 Ohio St. 145 137 N.E. 6, that the application of funds created by water rentals to the payment of general municipal obligations or any purpose other than constructing, maintaining and operating facilities for the supply of water results in levying a tax only on water users to meet the expenses of government, in violation of the express terms of Section 3959, General Code (now Section 743.05, Revised Code). See Hartwig Realty Co. v. City of Cleveland, 128 Ohio St. 583, 192 N.E. 880; City of Lakewood v. Rees, 132 Ohio St. 399, 8 N.E.2d 250; Himebaugh v. City of Canton, 145 Ohio St. 237, 61 N.E.2d 483.

All those cases turned on the proposition that the use of water funds for general municipal purposes is an unwarranted exercise of taxing power. And it can not now be questioned that the authority granted to municipalities to exercise powers of local self-government does not operate to remove from the Legislature its power to place limitations on taxation.

We concede that the rationale of those cases would be applicable to prevent the village from using the light fund to pay salaries for policemen, to retire bonds on a new fire truck or to pave streets, or to make up any other deficiency in funds for...