Case ID: ohio-st_59/html/0486-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Thompson et al. v. Nemeyer, Mayor, et al.
    
      Power of city or village to sell tts gas plant — Section 1692-84 Revised Statutes — Municipal corporation law.
    
    Under section 1692 subdivision 34, Revised Statutes, a city or village has power to sell its gas plant.
    (Decided January 24, 1899.)
    Error to the Circuit Court of Hancock county.
    In the year 1886 the city of Findlay, by proper action of its council, determined to establish and erect a natural gas plant for the purpose of supplying the city and the citizens thereof with natural gas for public and private use and consumption, and such a gas .plant was properly established and a board of gas trustees appointed and afterward elected as authorized by law; and wells for natural gas were drilled, pipes laid and natural gas furnished an'd supplied to the city for public lighting and to the citizens for public and private use and consumption. . And this gas plant was continued and operated with considerable profit at times until the latter part of the year 1898, when the city council, with the approval of the board of improvements and board of gas trustees, entered into a contract to sell the gas plant together with a franchise to use the streets, alleys and public grounds of the city by the purchaser, for the purpose of continuing and carrying on the business of supplying natural gas to the city and its citizens, the same as had been previously done by the city itself. Thereupon A. W. Thompson and Thomas Kelly, citizens and tax-payers requested the city solicitor to apply to the proper court for an injunction to restrain the city from so selling and disposing of its gas plant. The city solicitor refused to commence such action, and thereupon Mr. Thompson and Mr. Kelly, on behalf of the city of Findlay, commenced this action against the mayor and the city council, naming them individually, to restrain the execution of said contract. The defendants demurred to the petition and the court of common pleas sustained the demurrer and dismissed the petition. The cause was appealed to the circuit court, and that court also sustained the demurrer and dismissed the petition. Thereupon a petition in error was filed in this court seeking to reverse the judgments of the courts below.
    
      George II. Phelps, for plaintiffs in error.
    The statute (Sec. 1777-8) is remedial; for the benefit and protection of the city and her citizens, against excesses by and on the part of her various municipal agencies; and the prompt application for the injunctive remedy is to be commended rather than discouraged. Gas Co. v. Elyria, 57 Ohio St., 383; 29 Ohio St., 291; 26 Ohio St., 625; Lutman v. Railroad, 56 Ohio St., 433.
    Both the city, herself, and all her agencies, are alike subject to the settled rule respecting all power derived from legislative enactment. They possess such power, and such only as is expressly conferred, and such as is incidental or implied, as being necessary to carry into effect those powers which are expressly granted ; and doubtful, claims to power are resolved against them. Ravenna v. Railroad, 45 Ohio St., 121; Markley v. Mineral City, 58 Ohio St., 439; City of Wellston v. Morgan, ante 147.
    
      The general powers of cities and villages in Ohio, including that to take, hold and dispose of property, for the use of the city, is conferred by the Revised' Statutes, section 1692,' in its various subdivisions.
    Subdivision 34 of that section, is that relating to the power of the city generally to take, hold, sell, lease and dispose of property, for the use of the corporation. Revised Statutes, sections 2673, 2675, 2487 and 2489.
    Thus far we have no municipal power, and no municipal agency in respect to the subject of the present controversy.
    In this legislation the city was given a new corporate power and capacity; and, at the same time, there was. created for her a special agency, not to sell and dispose of her corporate enterprise, but to erect, maintain and operate the same for her benefit, and the benefit of her citizens at large.
    It is only for the muoicipal corporate use that the city herself can buy or hold property of any description.
    That the legislature has not conferred upon cities the right and power to erect or purchase gas works property, to be sold at a profit when so erected, it ought to be sufficient for all purposes and for all' time, that the constitution of our state expressly denies to the legislature any such power. Constitution, article 8, section 6; Adams v. Nemeyer, 54 Ohio St., 614.
    This court, in several recent and well considered cases, has held that the use of gas property by our municipal corporations, under existing legislation, is a distinctly and exclusively public use. State ex rel. v. Toledo, 48 Ohio St., 112; Toledo v. Hosler, Treas., 54 Ohio St., 418.
    
      It is elementary in municipal law that this class of municipal property, held for the public use of its citizens, cannot be sold except by authority of the legislature. New Orleans v. Morris, 105 U. S., 600; Merriweather v. Garret, 102 U. S., 473; Rochester v. Rush, 80 N. Y., 302; Dillon on Municipal Corporations, Third Edition, section 650 and note; Taylor v. Commissioners, 23 Ohio St., 78; 39 Lawyer’s Reports, Annotated, 841; Huron Waterworks Co. v. The City of Huron, S. D., Vol. 30, L. R. A.
    
      Marion G. Foster, city solicitor, and Ross c& Kinder, for defendants in error:
    We claim that the authority to acquire and dispose of the property in question in this case is specifically granted by sections 1552, 1692-34, 2673, 2675 Bates’ Revised Statutes of Ohio, and further that if the authority to dispose of were not so granted, the authority to acquire by implication, gives authority to dispose of the same. Reynolds v. Com. of Stark County, 5 Ohio, 204; Gall v. Cincinnati, 18 Ohio St., 563; Cincinnati v. Cameron, 33 Ohio St., 336.
    Municipal corporations proper, as ordinarily constituted, are possessed of a double character— the one public, and the other private.
    If granted for public purposes exclusively, they belong to the corporate body in its public, political or municipal character.
    But if the grant was for purposes of private advantage or emoluments, though the public may derive a common benefit therefrom, the corporation, quo ad hoc, is to be regarded as a private company.
    
      It stands on the same footing as would any individual or body of persons upon whom like special franchises had been conferred. 4 Waite, Action and Defenses, 596; 31 Penn. St., 175; 1 Dillon on Mun. Corp., 107.
    Section 2486 provides “that the council of any city or village shall have power, whenever it may be deemed expedient and for the public good, to erect gas works at the expense of the corporation, or to purchase any gas plant already erected therein.” Bailey v. Philadelphia, 39 L. R. A.; 184 Pa. St., 594.
    It has been held by this court that the city council, in cities of the second class having no board of improvements, have power to sell and convey real estate of the city, without'any recommendation of the board. Newton v. Com. Mahoning County, 26 Ohio St., 618.
   By the Court.

By the 34th subdivision of section 1692, cities and villages are granted the power “to acquire by purchase or otherwise and hold real estate, or any interest therein, and other property for the use of the corporation, and to sell or lease the same.” The city having acquired the property known as the gas plant and held the same for over twelve years, for some reason satisfactory to the officers of the city, concluded to sell and dispose of the same for a price agreed upon between the contracting parties. This was not in the nature of a speculation, but was disposing of property which the city did not desire to longer hold or use, and the statute just quoted clearly gives the city the power to make such sale whenever in the judgment of the officers of the city it becomes for the best interests of such city. The petition does not claim that there was any fraud or improper motive in the proceedings to sell the gas plant, but everything was in good faith, and in the judgment of the officers of the city, for the best interests of the municipality. It is therefore clear that the city has the right and power to make such sale, and that' the judgments of the courts below in sustaining the demurrer and dismissing the petition were right.

Judgment affirmed.