Case ID: ohio-st_24/html/0536-01.html
Source: Caselaw Access Project
Author: {"author": "White, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The State, ex rel. B. B. Frost et al. v. James J. Faran et al.
    The commission constituted under the act of April 17,1874 (71 Ohio L. 80), to ascertain "the present floating debt” of the city for which it acts, and to negotiate bonds to raise a fund for its payment, can not include as part of such debt sums which become due for work done or materials furnished after the date of the act, although the contract therefor existed prior to that date.
    Mandamus.
    The relators, B. B. Frost, Henry Stearns, and others, partners as Frost, Stearns & Co., ask for a peremptory writ of mandamus against the defendants, James J". Faran, Alphonso Taft, and Robert Moore, commissioners under the act of April 16,1874, to ascertain the present floating ■debt of the city of Cincinnati, and to perform the other duties required of them by said act.
    The object sought by the writ is to require the defendants to receive and consider the claim of the relators against the city of Cincinnati, and if found correct and valid, to allow it as a portion of the present floating debt of the city, under the provisions of said act.
    The relators represent, that on the 3d day of September, 1872, they entered into a contract with the city of Cincinnati to grade McLean avenue in said city, from Hopkins street to Liberty street, and entered upon the prosecution of the work under said contract, and have been and now ■are diligently prosecuting the same under the directions •of the officers of said city; that there will be due them, upon the completion of the work under said contract, the sum of forty-one thousand two hundred and seventy-five ■dollars, twelve thousand seven hundred dollars of the said sum beiDg already due for work done since the 16th of April, 1874, for which no provision is made by assessment, but the same is wholly payable out of the general fund of •said city..
    That the relators appeared before the defendants, when in session as a board of commissioners, and duly presented their claim for such amount, evidenced by proper certificates and vouchers, and desired the said board to receive and consider the same in ascertaining the present floating ■debt of said city, and to allow and provide for the whole or such part thereof as they found just. But the board refused to receive or consider said accounts, and claim that they have no power or authority to consider the same under said act; but, on the contrary, ordered the following entry to be made on their minutes:
    “It appearing to the board that the city of Cincinnati did, on September 3, 1872, enter into a contract with Erost, Stearns & Co., to grade McLean avenue, from Hopkins street to Liberty street, and that Erost, Stearns & Co. duly •entered upon the performance of said work; that prior to April 16, 1874, the said contractors had done work under said contract, according to the certificates of the city engineer, and ordered to be paid by the board of city improvements, to the amount of one hundred and seven thousand nine hundred and fifty dollars, a claim for which has been presented to this board and found correct and provided for as a part of the floating debt of the city of Cincinnati, under the act of April 16,1874, ‘to authorize the issuing of bonds and to regulate the making of contracts in certain cities.’ And it further appearing to the board that the claims already presented and allowed as part of the floating debt of Cincinnati under said act, amount to six hundred and sixty thousand dollars:
    
      “ And the said Frost, Stearns & Co. appearing now before this board and presenting a further claim under said contract, with estimates and vouchers for the further sum of forty-one thousand two hundred and seventy-five dollars, which will be required to complete said McLean avenue contract, twelve thousand seven hundred dollars of which appears to be now ’ due, for work done thereon since the 16th day of April, 1874, and demanding that we proceed to ascertain the amount of said claim, and by whom bona fide held, and to whom payable, as a portion of the debt to be provided for under said act:
    “This board, without prejudice to the validity of said claim, or the completeness of the vouchers by which it is suppoited, refuses to consider the same, or to exercise any jurisdiction in relation thereto, for the reason that the work for which payment is claimed was performed subsequent to April 16,1874, and therefore is not within the provisions of said act.
    “And it appearing to the board that there are similar claims on behalf of other parties, the whole amounting to-the sum of three hundred and ten thousand dollars :
    “ It is ordered that this entry be spread at large upon the minutes of the board, as evidence of their action in the premises, and their reasons therefor.”
    The relators also represent that, by reason of said refusal, they will be prevented from obtaining payment of their said debt out of the proceeds of the said bonds, although the said commissioners have not yet reached the limit fixed by law for the issuing of said bonds ; .and that the treasury of the city of Cincinnati is now, and long will be, entirely unable to pay for said work out of the funds provided by taxation, and at the same time carry on the essential branches of the city government, as the amount to become due this summer, under this and similar contracts, will exceed $310,000, which is within a few thousand dollars of the entire June levy for the general fund of said city.
    The defendants, by their answer, do not controvert the facts above stated, but submit tbe case to the court for such order in the premises as may be adjudged proper.
    J. jBryant Walker, attorney for relators :
    The question raised in this case is whether, under the| act of April 16, 1874 (71 Ohio L. 80), entitled “an act toj authorize the issuing of bonds and making of contracts in certain cities,” the commissioners appointed under that act should provide bonds to pay for work done subsequently to April 16, 1874, under valid contracts previously made by the city of Cincinnati. It is, therefore, simply a question of the construction of that act.
    Eor the rules applicable to the construction of the statute, see Heydon's case, 3 Rep. 7 b; Wilber v. Payne, 1 Ohio, 256; Burgett v. Burgett, 1 Ohio, 480.
    In applying the rulé, as stated in the cases cited, to the case under consideration, we are to consider, first, the law as it existed before, and the mischief for which it did not provide. The law, as it stood, contained no restrictions upon the power of the city of Cincinnati to make contracts. Such restriction had been embodied in a previous general law, passed April 30,1862 (S. & S. 777), but this was repealed in 1869 (66 Ohio L. 58). The legislature then trusted to the good sense of the city council not to run the city in debt, which the limits of taxation would not enable them to pay.
    But in the ease of Cincinnati, at least, this trust was misplaced. And, owing to the laws then governing, the city council of Cincinnati had been able to plunge that city deep into debt, which they had no means of meeting.
    The remedy which the legislature devised was twofold: To relieve the present embarrassment, and prevent the recurrence of such a state of things in tbe future. This act. proposes to do both. It provides for the issue of bonds by the corporation, and then proceeds to lay down the most stringent limitation yet devised on the power of the city tO' contract in the future.
    Now, it would have been simply impracticable to impose the limitation of the statute without giving relief. The two things go hand in hand in the act: Cancellation of past liability; restriction of power in the future.
   White, J.

The defendants are the commissioners appointed under the act of April 16,1874, entitled “ an act tc .authorize the issuing of bonds, and to regulate the making •of contracts in certain cities.” 71 Ohio L. 80.

The first section of the act authorizes the issuing of the •bonds of the city in sums of one thousand dollars each, to an amount not exceeding one million of dollars, payable at the pleasure of the city after thirty years from the date thereof. The section also provides that the bonds shall be used only for the purpose of paying off “ the present floating debt of the city,” as directed in the act.

The second section provides for the appointment of the -commissioners, and prescribes their duties. The section declares that they shall constitute a commission, under the .authority of the act, “ to ascertain the present floating debt of said city, and by whom bona fide held, and to whom payable, to an amount not exceeding one million of dollars, and when ascertained, the amount of bonds hereby authorized necessary to discharge and pay the same shall be executed, in manner and form as aforesaid, and delivered to said commission, to be disposed of as aforesaid, and to place the proceeds thereof in the city treasury of 'said city, to be applied by the said treasurer to pay the said floating •debt.”

The third section consists of limitations upon the power of making ordinary expenditures unless there is money in the •treasury set apart to meet them; and of provisions declaring acts in violation of such limitations void, and imposing penalties upon parties guilty of such violation.

The whole act is contained in the three sections, except that the fourth section prescribes the time the act is to take effect.

The only question submitted for our consideration, is, whether sums which become due under contracts existing at the date of the act, for work done or materials furnished after that date, constitute part of “the present floating-debt of the city.”

We agree with the counsel of the relator, that in determining this question we are not confined to what may be-the abstract meaning of the terms used. The sense may be restrained or enlarged so as to embrace such claims, if necessary to effect the true intent of the act.

The terms “floating debt” were doubtless used to distinguish the indebtedness to be provided for, from the bonded debt of the city, which is in its nature fixed and,, for the time it has to run, permanent. But it does not follow that it was intended by the act that the funds raised by the issuing of the bonds, should be applied in payment of all sums which might in the future become due under existing obligations, without regard to whether the liability of the city for the payment was fixed, or was contingent upon the performance of future service. The enlarging of the meaning of the terms “ present floating debt,” so as to-include sums to become due for services to be rendered in the future under existing obligations, would make the fund applicable to the payment of official salaries to become due-persons in office, and for the payment of which the city is-bound to provide.

The general policy of legislation in regard to municipal corporations, seems to be to require expenditures for the ordinary purposes of the corporation to be provided for from the current yearly revenue. 66 Ohio L, 260, sec. 656. And in respect to work done or materials furnished, after-the passage of the'act in question, we think it was the intention of the legislature that this policy should still be-adhered to without regard to the time of the making of the contract.

That it was not intended by the act to raise a fund which would be sufficient to discharge all the liabilities of the city except the bonded debt, is apparent from the limitation, imposed as to the amount of bonds to be issued.

The defendants, in our opinion, correctly interpreted their •duty in rejecting the claim of the relators and those of a like nature. A peremptory writ will therefore be refused.

Hay, C. J., McIlvaine and Rex, JJ., concurring. "Welch, J., not sitting.