Cincinnati Street Railroad v. Smith

Gilmore, J. The suit was commenced in the court below by the city solicitor, in the name of certain tax-payers of the corporation, and the first question raised by the demui’rer to the petition is: Had the plaintiffs legal capacity to sue? The suit was brought under section 159 of the municipal code, which reads as follows: “He (the city solicitor) shall apply to a court of competent jurisdiction for an order of injunction to restrain the misapplication of the funds of the corporation, or the abuse of its corporate powers, or the execution or performance of any contract made in behalf of the corporation in contravention of the laws or ordinances governing the same, or which was procured by fraud or corruption.”. Section 160, as amended April 18, 1870, is also necessary to the decision of this question. It reads as follows: In ease the solicitor shall fail, upon the request of any — 303 — of the tax-payers thereof, to make the application provided for in the preceding section, it shall be lawful for such taxpayer to institute a suit in his own name, on behalf of the corporation; provided that no such suit or proceeding shall ibe entertained by any court until such request shall have first been made in writing.” Taking these two sections together, it is manifest* that the principal object the legislature had in view was to provide convenient remedies for the protection of the taxpayers against the violations .of the provisions of section 159 by the corporation. > The sections do not provide remedies that were previously unknown. Courts of equity had long taken juris•diction and granted injunctions in snch cases when prop■erly presented by interested individuals, whose rights were put in jeopardy by the illegal or unauthorized acts, or -threatened acts, of municipal corporations. The sections were therefore simply intended to regulate the practice in such cases to this extent, that applications for injunctions 'in such cases should he made by the city solicitor, and should not- be made without his knowledge. The form of .action is not prescribed, but an adversary proceeding is •.evidently contemplated, and the latter clause of section 605 of the code of civil procedure makes the provisions of that -code applicable to such cases. Section 25 requires the action to be brought in the name of the real parties in interest, and section 37 provides that when the question is one ■ of a common or general interest of many persons, one or more may sue or defend for the benefit of all. The action was therefore well'brought, under the code, in'the name of some of the real pax-ties in intex-est, who ■ sued for the benefit of all, and it must be sustained unless , section 159 imperatively requires the action to be brought in the name of the city solicitor alorxe. We are all of the • opinion that the law did not require the action to be so brought in the case before us. If the tax-payers were -willing to assume the responsibilities of plaintiffs in the ¿ease, it was proper for the city solicitor to permit them to — 304 — do so, and lie complied with the requirements of the law* in this respect, when he acted as attorney for them in his official capacity. If, under section 160, the tax-payer could make the application in his own name without the consent of the city solicitor, it would be a strange construction of these sections to say that he could not maintain the action-in his own name under section 159 with the consent and assistance of the city solicitor. The latter clause of section 160 is merely a limitation upon the right of the tax-payer to sue in his own name without first requesting the city solicitor to act in Kis official capacity as his attorney in the-proposed action. The demurrer in this respect was properly overruled. 2. The second ground of demurrer is, that the petition-does not state facts sufficient to constitute a cause of action. The action was brought to enjoin (1) an abuse of corporate powers by the city, and (2) the execution or performance of a contract about to be made in behalf of the corporation in contravention of the laws or ordinances governing the same, it not being claimed that the facts-stated in the petition show that there is to be any misapplication of corporate funds. Following the order in which objections are made in argument by counsel for plaintiffs in error, the first stated is in effect this: That section 159 does not refer to or include-contracts in general, but is confined to contracts made in behalf of the city, in contravention of the laws and ordinances governing the same, and that a contract formed by the-acceptance of a grant made by the city of an easement in its public streets, is not a contract made in behalf of the city. This objection is made upon the assumption that the city has no property right in the public streets. And it is contended, that such property being in the public, the grant is a contract made in behalf of the public, in the making of which the city does not act in its own behalf as a corporation, but as the agent of the public, in the exercise of — 305 — a.governing power of the state, delegated to it in the particular instance to be executed in the mode authorized. The correctness of this assumption may be determined by the provisions of the statutes on the subject. Section 6 of the act to “ provide for the recording of town plats,” (S. & C. 1483) among other things provides. “ that all proprietors of lots or grounds in any city or town corporate in this state, who have subdivided or laid out, or who shall hereafter subdivide or lay out the same in lots for sale, shall cause true and accurate maps or plats thereof' to be recorded in the office of the recorder of the county .which maps or plats so to be recorded, shall set forth and describe with certainty all grounds laid out or granted for streets, alleys, ways, commons, or other public uses ; . . . and such map or plat so recorned, shall be deemed a sufficient conveyance to vest the fee of the parcels of land therein set forth and described or intended for streets, alleys, ways, commons, or other public uses, in such city,, or town corporate, to be held in the corporate name thereof,, in trust to, and for the uses or purposes so set forth and expressed or intended.” This vests the fee of the streets in the corporation, subject to the right of the state to direct, the mode of administering the trust. So far as the state-has assumed to do this it is binding on the corporation. The 439th section of the municipal code provides: “ The council shall have the care, supervision and control of all public highways, bridges, streets, avenues, alleys, sidewalks, and public grounds within the corporation, and shall cause-the same to be kept open and in repair, and free from nuisance.” This is substantially a re-enactment of the provisions of former laws. It seems to us that the provisions of these sections negative the claim that the proposed contract between the city and the defendant street railroad companies, when the-easement granted in the streets is accepted by them, will not constitute a contract made in behalf of the city. The city holds the fee of the streets in trust for the uses306 intended, and the care, supervision and control of them is expressly imposed upon the council. The 411th section of the municipal code confers upon council the power to make the grant in question in the following language: “ The council, on the written application of any corporation, individual or individuals, desiring to construct any street railroad in any city or incorporated village, before the work of constructing such road be commenced, shall, by ordinance, grant permission therefor, and prescribe the terms and conditions upon, and the manner in which such road shall be constructed and operated, and the streets and avenues which shall be used therefor.” These sections taken together show that the state, in its sovereign character, has reserved no property interest in the streets in question. The revenues and profits that are to accrue from the use of the streets in the mode contemplated will be the private property of the city, in which the state has no interest whatever. Under the plain provisions of the sections quoted, authorities need not be cited to show that the proposed contract, if consummated, would be one made in behalf of the cor poration. 3. It is next contended that the averments of the petition do not show that the ordinance in question, and the proposed action of the city and the street railroads named under it will constitute an “ abuse of its corporate powers ” by the city, or that it is a contract in contravention of the laws governing it. Without stopping to examine the language of the petition, we are content with saying that its averments are sufficient iu both respects to maintain the action if it is found that the ordinance, which is made part of it, contains provisions that contravene the laws governing the city; in which event, the court was authorized to enjoin the operation of the ordinance, and also to enjoin the .acceptance of the grant or the performance of the contract resulting therefrom; notwithstanding it might not have — 307 — been authorized to have interfered to prevent the passage of the-ordinance. The effect of the acceptance of the terms of the ordinance by the then existing street railroad companies, is provided by section 13 of the ordinance, as follows: “ That upon any such railroad company,” i. e., any company having a railroad in operation, “ filing with the city clerk their written acceptance of the terms of this ordinance, it shall thereupon be operative and binding as a contract between the city of Cincinnati and the company so accepting the .game.” It is suggested by counsel for plaintiffs in error that this ¿does not require an acceptance of the “ ordinance” generally, but of its “terms,” meaning those which, when accepted, would become the stipulations of a contract. "We find that the ordinance contains many provisions that might be made the stipulations of a contract, in connection with many others that could not be made such; and these are so intermingled throughout the ordinance, without any -attempt to distinguish the one from the other by any .system, that it would be very difficult to separate or define them. In the view that we take of the case, it is unnecessary to attempt to separate or classify the provisions of the ordinance in these respects. It may be said, however, that there is no valuable right granted or conferred by the ordinance, which, when accepted by the existing companies, would not be claimed, and perhaps held to be within the terms of the contract; and there is no power reserved to the council to modify or change any of the contract stipulations embraced in the ordinance. If any of the terms of the ordinance, which, when accepted, would become the stipulations of a contract, are in contravention of the laws governing the corporation, the performance of the contract, as to such stipulations, will be enjoined; and if such unauthorized stipulations are so connected with authorized provisions that their separation is impracticable, then the whole ordinance will be declared invalid. The same result will follow if the subject-matter — 308 — of the unauthorized stipulations is of such character thatr. the court can not say that the council would have passed the ordinance without such provisions being contained in it.. The'last clause of section 9 provides, “that not more-than one line of street railroad shall be granted upon the-same street without the consent of the existing company.” This clause is contained in a proviso to the section ; but by its terms it would apply to companies existing at the time-of its acceptance as well as to those created after the passage of the ordinance. This clause is clearly illegal, as it-gives to private persons exclusive privileges in the use of the streets. The State v. The Cin. Gas Co., 18 Ohio St. 292. Again, the same section provides that “ The city auditor' shall, when instructed by the city council, advertise for ten days in the official papers of the city, stating the route or-routes which have been designated by the council for street' railroads, and ask for sealed proposals, under this ordinance,., to construct the same, and the corporation or company of individuals that will bid for the lowest price of commutation-tickets., in packages, shall be considered the successful bidder.” This provision is in contravention of law, in two respects. See. 412 of the municipal code requires the notice provided for to be three weeks, instead of ten days, and also requires such grants to be let to the one that “ will agree to carry passengers . . . at the lowest rate of fare.” These illegal provisions are of great importance in the general scheme for the regulation of street railroads sought to be introduced by the ordinance, and contract that was to-result from its acceptance. The use of the streets, and the-rates of fare, are matters of primary importance to street railroad companies. The means and the end are involved in them. Other terms of the ordinance which would become-parts of the contract, on acceptance, must, in a greater or less degree, depend upon or relate to these illegal provisions.. The illegal and legal provisions of the ordinance being thus connected, we do not feel called upon to attempt their separation. If the illegal provisions were matters merely — 309 — incidental to the purposes of the ordinance they might be -stricken out without impairing its effect, but the illegal ■matters referred to above are not of this character. It can not be said that, in the absence of the illegal provisions, the •council would have passed the ordinance. On account of these illegal provisions, the demurrer to the petition was properly sustained, and the judgment and order of the •court below must be sustained. There are several other provisions of the ordinance that rare very objectionable, on the ground that they would tend to create a monopoly in the existing companies, but the decision is placed upon the other ground. Motion overruled.-