[Cite as Union Stock Yards Co. v. Hillsboro, 191 Ohio App.3d 564, 2010-Ohio-5975.]

IN THE COURT OF APPEALS OF OHIO 

FOURTH APPELLATE DISTRICT 

HIGHLAND COUNTY 

UNION STOCK YARDS : 

COMPANY, : 

 : 

 Appellee, : Case No. 09CA17 

 : 

 v. : Released: December 2, 2010

 : 

CITY OF HILLSBORO, : DECISION AND JUDGMENT 

 : ENTRY

Appellant. : 

_____________________________________________________________ 

APPEARANCES: 

Thomas M. Tepe, for appellee. 

Kathryn Hapner, for appellant. 

_____________________________________________________________ 

Per Curiam. 

{¶ 1} Appellant, the city of Hillsboro, appeals the trial court’s 

judgment entered in favor of appellee, the Union Stock Yards Company. 

The trial court determined that a binding contract existed under which 

appellant agreed to purchase property from appellee for the price of 

$325,000. The court awarded appellee $140,000 in damages. Appellant 

argues that the trial court should have entered summary judgment in its 

favor. Appellant raises several subarguments in support of its assertion, but 

appellant’s essential argument is that no valid contract exists between the 
Highland App. No. 09CA17 2

parties. We agree. The undisputed evidence shows that as a matter of law, 

no valid contract existed. Accordingly, we sustain appellant’s first 

assignment of error and reverse the trial court’s judgment. The remaining 

assignments of error are moot and we need not address them. 

I 

FACTS 

{¶ 2} In the fall of 2007, the Hillsboro city council passed a 

resolution that authorized the mayor to enter into an agreement to purchase 

appellee’s real estate for a price not to exceed $325,000. The resolution 

stated: “The Mayor is hereby authorized and directed to enter into a 

purchase agreement for the real property located in the City of Hillsboro * * 

* from the Union Stockyards [sic, Stock Yards] Company for the purchase 

price not to exceed $325,000, upon the following conditions: (1) the 

purchase must be completed before the end of 2007 calendar year; (2) 

property must pass an environmental study and (3) if a new survey is 

required, the Seller will pay for the cost of the survey.” Although an 

agreement was prepared and appellee signed it, the mayor never executed an 

agreement to purchase the real estate. 

{¶ 3} On February 7, 2008, appellee filed a complaint against 

appellant for breach of contract. Appellant subsequently filed a motion for 
Highland App. No. 09CA17 3

judgment on the pleadings and later filed a summary-judgment motion. 

Appellant asserted that no contract existed because it did not execute the 

agreement and thus the purported contract does not comply with the statute 

of frauds. Appellant further argued that the contract is invalid for failing to 

comply with certain statutory provisions governing municipal contracts. 

Appellant also contended that even if the city council’s resolution could be 

construed as a contract, the contract contained three conditions, at least one 

of which remained unfulfilled. Appellant additionally argued that any 

promissory-estoppel or equitable-estoppel claim must fail because these 

doctrines are inapplicable against a political subdivision when the political 

subdivision is engaged in a governmental function. 

{¶ 4} The trial court overruled both of appellant’s motions. At the 

trial, council member Charles Walker testified that he believed that the city 

had agreed to purchase the property but for whatever reason, the mayor 

decided in December that he wanted an appraisal. The mayor testified that 

the appraisal was conducted after the city council passed the resolution and 

that the property appraised at $185,000. 

{¶ 5} On June 19, 2009, the trial court entered judgment in appellee’s 

favor. The court determined that the parties reached an oral agreement and 

that the resolution constituted “a sufficient writing signed by the city to be 
Highland App. No. 09CA17 4

charged to remove this contract from the [statute of frauds].” The court 

awarded appellee $140,000 in damages. 

II 

ASSIGNMENTS OF ERROR 

{¶ 6} Appellant timely appealed and raises the following assignments 

of error: 

First Assignment of Error: 

The trial [court] erred in overruling appellant’s motion 

for summary judgment. 

Second Assignment of Error: 

The trial court erred in its determination that a valid real 

estate purchase contract existed between appellant and appellee 

even though appellant, the purchaser, did not execute said 

contract. 

Third Assignment of Error: 

The court erred in determining that plaintiff was ready, 

willing and able to close the transaction and that therefore, 

specific performance was appropriate. 

Fourth Assignment of Error: 

The decision of the court is against the manifest weight 

of the evidence in that requirements of Title 7 of the Ohio 

Revised Code which lists various formalities that are 

prerequisites in order to bind a municipal corporation to a 

contract were not met. 

III 
Highland App. No. 09CA17 5

ANALYSIS 

{¶ 7} In its first assignment of error, appellant argues that the trial 

court erred by denying its summary-judgment motion. The crux of this 

assignment of error is that a valid contract does not exist. 

{¶ 8} When reviewing a trial court’s decision regarding a motion for 

summary judgment, appellate courts must conduct a de novo review. Doe v. 

Shaffer (2000), 90 Ohio St.3d 388, 390, 738 N.E.2d 1243; Grafton v. Ohio 

Edison Co. (1996), 77 Ohio St.3d 102, 105, 671 N.E.2d 241. In such a 

review, an appellate court reviews the trial court’s decision independently 

and without deference to the trial court’s determination. See, e.g., Brown v. 

Scioto Bd. of Commrs. (1993), 87 Ohio App.3d 704, 711, 622 N.E.2d 1153. 

{¶ 9} A trial court may grant a motion for summary judgment only 

when (1) the moving party demonstrates there is no genuine issue of 

material fact, (2) reasonable minds can come to only one conclusion, after 

the evidence is construed most strongly in the nonmoving party’s favor, and 

that conclusion is adverse to the opposing party, and (3) the moving party is 

entitled to judgment as a matter of law. Civ.R. 56; see also Bostic v. Connor 

(1988), 37 Ohio St.3d 144, 146, 524 N.E.2d 881; Harless v. Willis Day 

Warehousing Co. (1978), 54 Ohio St.2d 64, 66, 375 N.E.2d 46. 
Highland App. No. 09CA17 6

{¶ 10} The existence of a contract is a question of law. Telxon Corp. 

v. Smart Media of Delaware, Inc., Summit App. Nos. 22098 and 22099, 

2005-Ohio-4931, at ¶ 40; see also Hocking Valley Community Hosp. v. 

Community Health Plan of Ohio, Hocking App. No. 02CA28, 2003-Ohio4243, at ¶ 11. “[T]o declare the existence of a contract, both parties to the 

contract must consent to its terms; there must be a meeting of the minds of 

both parties; and the contract must be definite and certain.” (Citations 

omitted.) Episcopal Retirement Homes, Inc. v. Ohio Dept. of Indus. 

Relations (1991), 61 Ohio St.3d 366, 369, 575 N.E.2d 134. A contract does 

not exist unless the parties have a meeting of the minds as to the essential 

terms of the contract. Id.; see also Kostelnik v. Helper, 96 Ohio St.3d 1, 

2002-Ohio-2985, 770 N.E.2d 58, at ¶ 16. 

{¶ 11} In a case bearing facts similar to those in the case at bar, the 

Supreme Court of Ohio considered whether a city manager possessed 

authority to bind the city to a long-term lease. See Shampton v. Springboro, 

98 Ohio St.3d 457, 2003-Ohio-1913, 786 N.E.2d 883. In Shampton, the 

plaintiff asserted that he and the city had entered into a long-term lease and 

that the city breached the agreement. The plaintiff also asserted a 

promissory-estoppel claim. On appeal to the Supreme Court of Ohio, the 

court determined that the city never entered into a long-term lease with the 
Highland App. No. 09CA17 7

plaintiff. The court first looked to the city charter, which gave the city 

manager the power to enter into contracts but only if the city council 

authorized the city manager to bind the city or otherwise ratified the 

contract. The court then examined the plain meaning of the city council’s 

resolution, which stated: “The City Manager is hereby authorized to enter 

into a temporary lease agreement.” Id. at ¶ 30. The court determined that 

the city council delegated the authority to bind the city to the temporary 

lease arrangement to the mayor. The court then determined that although the 

city manager entered into a temporary lease arrangement with the plaintiff, 

the city manager never executed a long-term lease with the plaintiff. The 

court thus rejected the plaintiff’s breach of contract claim. 

{¶ 12} The court also rejected the plaintiff’s promissory estoppel 

claim. The court explained: 

To be successful on a claim of promissory estoppel, 

“[t]he party claiming the estoppel must have relied on conduct 

of an adversary in such a manner as to change his position for 

the worse and that reliance must have been reasonable in that 

the party claiming estoppel did not know and could not have 

known that its adversary's conduct was misleading.” Ohio State 

Bd. of Pharmacy v. Frantz (1990), 51 Ohio St.3d 143, 145, 555 

N.E.2d 630, citing Heckler v. Community Health Serv. (1984), 

467 U.S. 51, 59, 104 S.Ct. 2218, 81 L.Ed.2d 42. Persons 

seeking to enter into a contractual relationship with a 

governmental entity are on constructive notice of the statutory 

limitations on the power of the entity’s agent to contract. 

Bohach v. Advery, Mahoning App. No. 00-CA-265, 2002-Ohio3202, 2002 WL 1396744. Since state and local laws are readily 
Highland App. No. 09CA17 8

available for public review, it is a simple matter for a party to 

educate itself as to the procedural formalities with which 

government officials must comply before they may bind a 

governmental entity to a contract. Here, as noted previously, 

the charter and Resolution No. R-95-32 clearly did not grant 

Doczy the authority to enter into a long-term lease. As a result, 

even if Doczy did make any promises regarding the long-term 

lease, appellees could not have reasonably relied upon them. 

Liability does not attach to the city based on appellees’ 

mistaken interpretation of the resolution. Thus, appellees’ 

claim of promissory estoppel is without merit. 

Our decision in this case is consistent with long-held 

principles of this court. “ ‘An occasional hardship may accrue 

to one who negligently fails to ascertain the authority vested in 

public agencies with whom he deals. In such instances, the loss 

should be ascribed to its true cause, the want of vigilance on the 

part of the sufferer, and statutes designed to protect the public 

should not be annulled for his benefit.’ ” Lathrop Co. v. Toledo

(1966), 5 Ohio St.2d 165, 173, 34 O.O.2d 278, 214 N.E.2d 408, 

quoting McCloud & Geigle v. Columbus (1896), 54 Ohio St. 

439, 452-453, 44 N.E. 95. Accord Lancaster v. Miller (1898), 

58 Ohio St. 558, 51 N.E. 52. Protection of the public’s 

resources in this context sometimes comes with a cost to 

misinformed parties. 

Id. at ¶ 34-35. 

{¶ 13} Similarly, in the case at bar, a plain reading of the city council’s 

resolution reveals not that the city council entered into a contract with 

appellee but that the city council authorized and delegated the authority to 

enter into the contract to the mayor. Because the mayor never entered into a 

contract with appellee, there is no valid contract upon which appellee can 

base its breach of contract claim. 
Highland App. No. 09CA17 9

{¶ 14} Moreover, even if one could construe the council’s resolution 

as a contract, the contract did not define the purchase price, but apparently 

left it open to further negotiation. There is no evidence that the city council 

consented, by its resolution, to purchase the property for $325,000. Instead, 

the evidence shows that the council’s resolution authorizes the purchase as 

long as the price does not exceed $325,000. No evidence exists that the 

mayor, the person to whom council gave the authority to contract, ever 

agreed to purchase the property for any price, let alone $325,000. Because 

there was no meeting of the minds regarding the purchase price, no valid 

contract exists. 

{¶ 15} Additionally, just like the plaintiff in Shampton, appellee does 

not have a valid promissory-estoppel claim against appellant. Even if 

certain council members made promises to appellee regarding the purchase 

of its property, appellee could not have justifiably relied on those promises 

when the council resolution plainly gave the authority to contract to the 

mayor, not to the council or to any individual council member. Liability 

cannot attach simply because appellee mistakenly interpreted the resolution 

as a contract to purchase the property. Furthermore, the mayor’s decision 

not to enter into the contract resulted from his consideration of the city’s 

financial resources, which is a valid consideration under Shampton. 
Highland App. No. 09CA17 10

{¶ 16} We further find the instant case similar to the facts presented in 

Asbury v. Hugh L. Bates Lodge No. 686 (1939), 62 Ohio App. 430, 24 

N.E.2d 638. In Asbury, lodge members adopted a resolution to purchase real 

estate. The resolution recited that the “master and wardens be given power 

to purchase the property.” The court held that the resolution was not an 

acceptance of the offer to sell so as to create a binding contract. The court 

explained: 

[A] resolution to accept is not an acceptance * * *. It is 

not a memorandum of a promise, or acceptance of an offer, 

made to the lodge. It is evidence that the members of the lodge, 

or some of them, had agreed among themselves that the lodge 

would accept—not that it did accept. It was not itself a 

purchase. The members were not dealing with the offerors in 

passing this resolution. They were acting inter sese, and 

conferring authority upon their officers. It was an authorization 

to the master and wardens to act for the lodge in its dealings 

with the offerors. * * * 

 The fact that the offerors as members of the lodge were 

present and participated in the deliberations and actions, and, 

therefore, knew that the lodge, or certain members had 

concluded to accept, does not change the essential character of 

what was done. 

 Mere statements of intention, promissory expressions, or 

statements made to third persons are not sufficient, in 

themselves, to create contractual obligations. Such expressions, 

even though promissory in form, must be construed in the light 

of the surrounding circumstances, and as a normally constituted 

person would understand them. 

(Citations omitted.) Id. at 433-434. 
Highland App. No. 09CA17 11

{¶ 17} A similar rationale applies in the case at bar. The city council, 

similar to the lodge members, passed a resolution authorizing the mayor to 

act for the city in its dealings with appellee. The council’s resolution did not 

constitute an acceptance of appellee’s offer to sell. The resolution 

contemplated that the mayor would take further action to complete the 

contract formation. The resolution authorized the mayor to purchase the 

property for a price not to exceed $325,000. The mayor did not accept 

appellee’s offer to sell for $325,000. Instead, he requested and obtained an 

appraisal of the property, after which, the mayor declined to execute a 

contract with appellee. 

{¶ 18} In addition to basic contract formation requirements, a 

municipality may enter into a contract only as provided by statute. See Pugh 

v. Ned Peppers, Montgomery App. No. 22939, 2010-Ohio-1917, at ¶ 47. 

This principle is outlined in Buchanan Bridge Co. v. Campbell (1899), 60 

Ohio St. 406, 54 N.E. 372: 

Whatever the rule may be elsewhere, in this state the 

public policy, as indicated by our constitution, statutes and 

decided cases, is that, to bind the state, a county, or city for 

supplies of any kind, the purchase must be substantially in 

conformity to the statute on that subject, and that contracts 

made in violation or disregard of such statutes are void, not 

merely voidable, and that courts will not lend their aid to 

enforce such a contract, directly or indirectly, but will leave the 

parties where they have placed themselves. If the contract is 

executory, no action can be maintained to enforce it; and, if 
Highland App. No. 09CA17 12

executed on one side, no recovery can be had against the party 

on the other side. 

Id. at 419-420. Thus, a city “cannot be bound by a contract that is not 

properly endorsed or ‘formally ratified through proper channels.’” Pugh at ¶ 

48, citing Wellston v. Morgan (1901), 65 Ohio St. 219, paragraph three of 

the syllabus. An individual or entity entering into a contract with a 

municipality bears the burden of “ ‘ascertain[ing] whether the contract 

complies with the Constitution, statutes, charters, and ordinances so far as 

they are applicable. If he does not, he performs at his peril.’ ” Shampton, 98 

Ohio St.3d 457, 2003-Ohio-1913, 786 N.E.2d 883, at ¶ 28, quoting Lathrop 

Co. v. Toledo (1966), 5 Ohio St.2d 165, 173, 214 N.E.2d 408. 

{¶ 19} For example, in Enviro-Flow Cos. Ltd. v. Chauncey, Athens 

App. No. 07CA5, 2008-Ohio-698, we held that a village contract was null 

and void because of noncompliance with R.C. 731.141. In Enviro-Flow, the 

mayor signed a contract with Enviro-Flow for certain sewer repairs. After 

Enviro-Flow incurred more expenses than approved in the bid that the mayor 

signed, Enviro-Flow filed an action for breach of contract and unjust 

enrichment. The village of Chauncey filed a summary-judgment motion, in 

which it argued (1) that the contract was null and void due to noncompliance 

with R.C. 731.141 and (2) that Enviro-Flow could not maintain an unjustenrichment claim against it. The trial court agreed with the village (1) that 
Highland App. No. 09CA17 13

the contract was null and void under R.C. 731.141, which requires a contract 

to be signed by the village administrator and the village clerk and (2) that 

Enviro-Flow could not assert an unjust-enrichment claim against it, a 

political subdivision. On appeal, we affirmed the trial court’s judgment. We 

stated: 

R.C. 731.141 requires both the Village Administrator and 

the Village Clerk to sign the contract. In addition, the contract 

does not appear to conform to R.C. 705.11 (Village Solicitor is 

required to approve the contract as to form.). “ [‘]We think 

there is no hardship in requiring [contractors], and all other 

parties who undertake to deal with a municipal body in respect 

of public improvements, to investigate the subject, and 

ascertain at their peril whether the preliminary steps leading up 

to contract, and prescribed by statute, have been taken.[’] ” * * 

* Lathrop Co. v. City of Toledo (1966), 5 Ohio St.2d 165, 173[, 

214 N.E.2d 408, quoting McCloud & Geigle v. Columbus

(1896), 54 Ohio St. 439, 452, 44 N.E. 95]. 

Id. at ¶ 15. We further determined that Enviro-Flow could not maintain an 

unjust-enrichment action against the village. We noted that the unjustenrichment claim “sound[ed] in promissory estoppel” and that this doctrine 

does not apply “ ‘against a political subdivision when the political 

subdivision is engaged in a governmental function.’ ” Id. at ¶ 16, quoting 

Hortman v. Miamisburg, 110 Ohio St.3d 194, 2006-Ohio-4251, 852 N.E.2d 

716, syllabus. 

{¶ 20} Other than the applicable statute, we find Enviro-Flow

indistinguishable from the case at bar. In both cases, the contract fails to 
Highland App. No. 09CA17 14

comply with the statute specifying the requirements for a municipal contract. 

R.C. 705.11, which is similar to the statute we considered in Enviro-Flow, 

states that “[n]o contract with the municipal corporation shall take effect 

until the approval of the village solicitor or city director of law is indorsed 

thereon.” Here, there is absolutely no dispute that the director of law failed 

to indorse his approval on the alleged contract. Therefore, in accordance 

with our Enviro-Flow decision, we agree with appellee that the alleged 

contract is null and void due to noncompliance with proper statutory 

procedures, i.e., R.C. 705.11. See Wright v. Dayton, 158 Ohio App.3d 152, 

159-160, 2004-Ohio-3770, 814 N.E.2d 514 (stating that a party does not 

have a valid breach-of-contract claim against a municipality unless the 

contract was properly executed in accordance with statutory procedures). 

{¶ 21} Furthermore, we observe that R.C. 731.05 governs the powers 

of a city council and states: “All contracts requiring the authority of the 

legislative authority for their execution shall be entered into and conducted 

to performance by the board or officers having charge of the matters to 

which they relate. After the authority to make such contracts has been given 

and the necessary appropriation made, the legislative authority shall take no 

further action thereon.” This statute apparently does not give the city 

council the authority to execute a contract. Rather, that duty belongs to the 
Highland App. No. 09CA17 15

mayor. See Coyne v. Salvatore, Cuyahoga App. Nos. 79507, 79509, and 

79510, 2002-Ohio-5819, at ¶ 80 (stating that the power to execute contracts 

belongs to the mayor and thus holding by implication that the power to 

execute contracts does not belong to the city council). Consequently, we 

agree with appellant that the trial court erroneously denied its summaryjudgment motion. 

{¶ 22} Moreover, appellee’s estoppel claim must fail because appellee 

cannot prove that it justifiably relied on the city council’s resolution when 

that resolution constituted only an authorization for the mayor to enter into a 

contract.1

 See Shampton, 98 Ohio St.3d 457, 2003-Ohio-1913, 786 N.E.2d 

883. Furthermore, had appellee investigated whether proper statutory 

procedures had been followed, appellee would have discovered that the 

resolution could not constitute the contract, but rather that R.C. 705.11 

required the law director to indorse the contract. 

{¶ 23} Accordingly, because the undisputed evidence shows that the 

mayor did not enter into a contract with appellee, no valid contract exists. 

Additionally, any alleged contract is null and void due to noncompliance 

 

1

 We observe that the Supreme Court of Ohio held in Hortman, 110 Ohio St.3d 194, 2006-Ohio-4251, 852 

N.E.2d 716, that “[t]he doctrines of equitable estoppel and promissory estoppels are inapplicable against a 

political subdivision when the political subdivision is engaged in a governmental function.” Id. at syllabus. 

However, in the case at bar, we find it questionable whether appellant’s conduct in negotiating the purchase 

of real estate for the construction of a fire station constituted a governmental function. Our review of the 

relevant statutory authority, R.C. 2744.01(C), and the applicable case law does not definitively clarify 

whether the negotiation of a real-estate contract for the construction of a fire station constitutes a 

governmental or proprietary function. Thus, we choose to decide this issue on grounds other than those set 

forth in Hortman. Moreover, the Supreme Court of Ohio has not overruled Shampton.
Highland App. No. 09CA17 16

with statutory procedures. Thus, the trial court erroneously denied 

appellant’s summary-judgment motion. Consequently, we sustain 

appellant’s first assignment of error and reverse the trial court’s judgment. 

The remaining assignments of error are moot, and we need not address them. 

See App.R. 12(A)(1)(c). 

Judgment reversed. 

 MCFARLAND, P.J., and HARSHA, J., concur. 

 KLINE, J., concurs separately. 

__________________ 

KLINE,Judge, concurring. 

{¶ 24} I concur in judgment and opinion with one exception. That is, I 

believe that purchasing real estate for the construction of a fire station is a 

governmental function. Under R.C. 2744.01(C)(2)(a), “[a] ‘governmental 

function’ includes * * * [t]he provision or nonprovision of police, fire, 

emergency medical, ambulance, and rescue services or protection.” 

(Emphasis added.) And in my view, the disputed transaction falls under the 

city of Hillsboro’s provision or nonprovision of fire services. Therefore, I 

would apply the syllabus in Hortman to Union Stock Yards’ estoppel claim.