Case Name: City of Wellston v. Morgan
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1898-11-01
Citations: 59 Ohio St. 147
Docket Number: 
Parties: City of Wellston v. Morgan.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 59
Pages: 147–162

Head Matter:
City of Wellston v. Morgan.
Contract for lighting city — Statute granting municipality power to contract for ten years — Invalidity of ordinance authorizing contract for ninety-nine years — Action by assignee of electric light company against city — Nature of action — Pleadings.
1. Where a statute gives power to a municipal corporation to contract for the lighting of its streets and other public grounds for a period not exceeding ten years, the conclusive implication is that such corporation is forbidden to contract for a longer period. And where such corporation undertakes, by the passage of an ordinance, to contract with an electric light company for an exclusive privilege to such company for the use of its streets, and stipulating for the lighting of the street, et cetera, for ninety-nine years, at a given price per month, such ordinance is ultra vires and void, and the contractual stipulations contained therein are equally void, and neither party can enforce them.
2. M., the assignee of an electric light company, brought action in the court of common pleas against the City of W., claiming that the company had furnished electric light to the City under a valid subsisting contract, which had not been paid for, and that the City had violated its contract and refused to perform it, and was threatening to prevent plaintiff from performing on his part in the future, by destroying the poles, et cetera, of plaintiff rightfully in the streets of the city, and praying an injunction, and that an account be taken of the amount due for light furnished, and that the City be required to pay for such lighting, and to recover damages for the violation of the contract. A general demurrer to the petition was sustained by the court of common pleas and, judgment being rendered against plaintiff, he perfected an appeal to the circuit court.
3. In due time the defendant moved to dismiss the appeal for want of jurisdiction, which was overruled and exceptions taken. An answer was then filed. This pleading disclosed, what had not appeared in the petition, that the only semblance of a contract between the City and the electric light company was in the form of an ordinance passed by the council, which undertook to grant to the company the exclusive use of the streets for the erection of its poles, et cetera, for the period of ninety-nine years, and to bind the City to purchase light of the company during that time at a stated sum per month. These allegations were not controverted. As to other matters involved, issues were made up and a trial had. The court thereupon found the ordinance illegal, null and void, and found against the plaintiff in all respects, except as to light furnished, and as to that claim, found that the plaintiff ought to recover for light furnished what it was reasonably worth, viz : the sum of $3,600, and proceeded to render judgment in favor of plaintiff for that sum, interest and costs, and as to the equitable relief prayed for, dismissed the petition. The defendant moved for a new trial on the ground that the finding and judgment were contrary to law, which, being overruled, exception was duly taken.
Held: a. That the case of the plaintiff, when fully disclosed in the circuit court, embraced a cause of action legal in its nature, and a simulated cause of action equitable in its nature, not arising from the same transaction, nor transactions connected with the same subject of action.
b. Of the latter the circuit court acquired jurisdiction by appeal. But as to the legal action it had not jurisdiction to adjudicate it, and upon discovery of the facts, a dismissal of plaintiff’s entire petition was the proper judgment to render.
c. The City having, in proper time, moved to dismiss the appeal on the ground of want of jurisdiction in the circuit court, and having at the first opportunity, pleaded the real facts and brought to the attention of the court the illegal character of the ordinance, and having also moved for a new trial upon a f like ground, and preserved proper exceptions, is not estopped to make the question of such want of jurisdiction in this court.
(Decided November 1, 1898 )
Error to the Circuit Court of Jackson county.
The defendant in error, Morgan, commenced an action -against the plaintiff in error, the City of Wells ton, a municipal corporation, in' the court of common pleas of Jackson county, alleging in his petition, in substance, that about the year 1888 the municipality, through its council, duly and legally entered into a contract with the Consolidated Wells-ton Coal & Iron Company, a corporation, providing for the lighting by electricity of its streets, alleys and public places therein, and by ordinance granted to the company and to its assigns certain rights and franchises in the use of its streets and alleys for the erection and building therein of necessary buildings, poles, wires, et cetera, to carry out the terms of the contract of lighting’, and further provided for the rights of the company and its assigns in the operation of the plant for lighting, fixing the price, time and manner of payment. Pursuant to the contract and ordinance, the company, at great expense and outlay of money and labor, erected its plant within the city limits, all in conformity to the contract and ordinance, and to the acceptance of the City, until about February 7, 1889, in accordance with the terms of the contract. On that day the City, without any fault on the part of the company, or the owners of the plant, refused to further pay, and still refuses, although the contract is in full force and effect; notwithstanding which the company continued to operate the plant and light the streets, et cetera, according to the terms of the contract and ordinance for more than two years after the refusal, and until the City became indebted to the company therefor in the sum of $4,800, which it still owes and refuses to pay. The company continued ready to perform, but did not light after that date because of the refusal of the City to pay.
The petition further alleged the assignment by the company and transfer of its said plant and all appurtenances, including all rights, privileges and franchises, and the said claim of $4,800 to the plaintiff, Morgan, who, since that date, at great expense, has kept up the plant and has been ready and willing and offered to carry out the terms of the contract, but the City has wholly refused to permit the plant to be operated, and refused to carry out its stipulations under the contract and ordinance, which have continued and still are in full force and effect. Said plant, et cetera, is adapted only for the lighting of said streets, public places as well as the buildings in said city, and does not interefere in the use of said streets, alleys and public places for other matters, and the plant could not be removed and would be of no value for any other purpose or place.
The City, regardless of plaintiff’s rights, and unlawfully, and without a hearing, and without 'consent of the plaintiff, without condemning or making compensation to plaintiff, and by force, is threatening to and is about to tear down and remove said machinery, poles, wires and lamps, and will, if not restrained, cut down and remove the same to the irreparable damage and injury of the plaintiff, against which he could have no adequate remedy at law.
The prayer was for a temporary restraining order; also that an account may be taken between the Citjr and plaintiff, the owner of the plant, that the City maybe required to carry out the terms of the contract, said injunction be made perpetual, and the plaintiff recover such damages as may be justly due for the violation of the terms of the agreement, and the City’s refusal to perform on its part, and for other and further relief in law and equity as he may be entitled to. A temporary restraining order was allowed upon the filing of the petition.
To this petition a general demurrer was filed by the City, which upon hearing, was sustained, and the plaintiff failing to plead further, judgment was rendered for defendant, that it go hence without day and recover costs. Notice of appeal to the , circuit court was entered and in due time bond given and the appeal perfected.
In the circuit court a motion was interposed by the defendant to dismiss the appeal because: 1. It appears by the petition that the case is in law and not in equity. 2. Because there was no final order or decree made by the common pleas from which an appeal can be legally taken. 3. Because the judgment rendered is a money judgment, and not a decree in equity. ■
Upon hearing, this motion was overruled to which the City duly entered its exception. A general demurrer to the petition was then interposed which was overruled and exception taken. Thereupon an answer was filed by the City, alleging, in substance, as a first defense, that the so-called ordinance undertook to give to the company exclusive permission and authority within the limits of the municipality to erect, lay, operate and maintain on the public streets, alleys, et cetera, its poles, wires, et cetera, and other electrical apparatus, for the period of ninety-nine years. It provided also that the company should receive §200 a month, and for each lamp over twenty, eight dollars per lamp. It further provided that the company may at any time after three months’ notice to the council abandon all rights and privileges granted to the company by the ordinance, and that when the company signified its assent in writing, filed with the clerk, the same should become operative. The ordinance was the only authority, contract or agreement that the municipality had with the company, and the only semblance of contract that the company had when it erected its said plant. The ordinance is unconstitutional and illegal because the council had no power to pass the same; because it is contrary to law, is in restraint of trade and against public policy, and because it is an attempt to dispose of public money without such money being in or due the treasury or any tax levied therefor at the time said company entered upon what it claimed to be part performance on its part of the stipulations of the pretended contract.
The company was not formed for the purpose of furnishing light, nor could it under any implication possess the power of entering into any such contract, the same not being- authorized by the certificate of its organization or by the laws of the state. So there was and is no mutuality of obligation between the municipality and the company, nor between the plaintiff and the defendant, and on the seventh day of February, 1889, the council duly notified the company that said council had stopped the payment of said $200 per month, as it then did, and as it was legally bound to do, and from said date no further payments were made on said alleged contract.
For a second defense the City denied the indebtedness claimed, and put in issue generally the averments of the petition not covered by the allegations of the first defense.
For a third defense the answer took issue with allegations of the petition bearing upon plaintiff’s claim for equitable relief, and tending- to justify the City’s action with respect to its order for the removal of the poles, eb cetera, from the streets. A copy of the ordinance was attached to the answer and made a part of it. A reply was filed to the third defense which took issue upon all the allegations of new matter therein.
At the May term, 1896. of the circuit court, the cause was heard upon the petition, the answer and reply, and the evidence. The court, on request, stated its conclusions of fact and law separately. Among other facts found by the court was the passage of the ordinance of the character as stated in the answer; that the poles for lights were placed and located by direction of the City; that in erecting the plant and lighting the City the company acted under the ordinance and in good faith and in the belief that the same was legal and binding. That the company commenced to light and continued from about the first of May, 1888, for over two j^ears and the City paid the bills which were rendered until Felruarv 7, 1889, subject to certain deductions agreed upon. On the date named the City refused to further pay because of ■ certain other promises made by the company with other parties. The company and its assigns continued to run and operate the plant for twenty-four months after February, 1889, with the knowledge of the council, and without objection other than as shown by a written notice of February 7th, to the effect that the council had ordered the payment of $200 per month to be stopped until certain agreements and contracts were complied with by the company. About February 1, 1891, the City notified the company to take down its poles and wires from the streets, and remove the plant, or that it would be done by thé direction of the council and at the expense of the owners. The City did not pay any portion of the amount provided by the ordinance to be paid monthly for the twenty-four months from and after' the first of February, 1889. The court found that the lighting during the twenty-four months was subject to a deduction of $50 a month because the plant was not in repair and the light furnished not as good as the ordinance required, but that it was worth $150 a month. The court further found that Morgan was the owner and assignee of the rights of the company, and of the claim against the City, and entitled to' recover any amount that might be due thereon.
' As conclusion of law the court found: 1. The ordinance to be illegal, null and void, and the plaintiff not entitled to the equitable relief thereunder as prayed for. 2. The City to be liable for lights furnished after the seventh of February, 1889, and the plaintiff entitled to recover from the defendant the value of said lighting, being $150 a month for twenty-four months, amounting- to $3,600:
To all of which findings of fact, and to the second conclusion of law, the defendant excepted. Judg-ment was thereupon rendered for plaintiff for the amount found, with interest and costs, and as to the equitable relief prayed for the petition was ordered dismissed. A motion for a new trial was filed by defendant and overruled; exception duly taken, and this proceeding is to reverse the judgment of the circuit court on the ground, among others, that the court erred in overruling the motion to dismiss the appeal; that it erred in overruling-the demurrer to the petition; that it erred in its second conclusion of law; erred in overruling the motion for a new trial; and erred in rendering judgment against the City and in favor of Morgan.
James M. Tripp, for plaintiff in error.
J. W. Bannon and J. M. Me Qillivray, for defendant in error.

Opinion:
Spear, C. J.
Our inquiry naturallybegins with the petition. It was the judgment of the common pleas that it did not state facts sufficient to entitle the plaintiff to any relief, and hence the sustaining of the demurrer followed, and a judgment for the defendant. The record does not disclose the ground of the ruling. The circuit court took the opposite view, and overruled the demurrer, holding . that sufficient facts were stated to entitle the plaintiff to some relief. We are of opinion that in this the circuit court was right, and that had the allegations of the petition been sustained by proof, and no countervailing facts presented by the defendant, the plaintiff would have been entitled to judgment. But the case finally made was one essentially different from that set out in the petition. The plaintiff's theory was that he could stand on the ordinance as a valid contract (there being no other express contract), and hence was entitled to relief, legal, upon showing that he had performed the contract on his part, and thus earned the stated compensation for lighting, and equitable, upon showing that the City was violating its contract, and undertaking to make it impossible for the plaintiff to perform in the future on his part, and unlawfuby attempting to destroy his property; and further, that the former ground was an incident to the latter, and not an independent ground of action. His theory, although consistent with the allegations of his petition, was shown to be wrong upon a disclosure of the facts, because of the invalidity of the ordinance, the council being without power to contract, either for an exclusive privilege to the company for the use of its streets, or for a stipulation to purchase light at an agreed price for ninety-nine years, as the circuit court properly held. And clearly the City could not have been held to the performance of the stipulations of the ordinance, and had the right to cease operating under it, and this without reference to the motive which" induced its action; and on notice of such intention to the company it could not longer claim to act under it, and could not maintain its poles, etc., in the streets after reasonable notice to remove them. Indeed it was bound to know, and in law did know, that the ordinance was ultra vires and invalid. But the council had power, under section 2491-1, Revised Statutes (Bates), to contract in a legal way for the lighting of its streets and other public grounds, for a term not exceeding- ten years, and upon its being shown by the company that it had furnished light to the City, which it had accepted and enjoyed, a right to recover, as upon a quantum meruit, would arise in favor of the plaintiff.
The action of the City in permitting the company to place its poles, etc., in the streets, and in directing the location thereof, gave to the company the position of a licensee as to occupancy of the streets, which would forbid a ruthless or unreasonable destruction of its poles by the City. Its rights would not be based upon contract, however, but would result from the conduct of the City in giving consent and direction. Whether the judgment of the circuit court is or not erroneous in this respect we need not inquire, inasmuch as no complaint is here made of the judgment in that respect.
It is sugg-ested, however, that the ordinance was not absolutely void, but may be treated as good for the term of ten years, since the subject-matter is not ultra vires, and inasmuch as ninety-nine years is greater than ten years and must include it; and hence the contract in that way may be supported. This implies that the purpose of the law is only to prevent the enforcement of contracts made in violation of its terms, and not to prevent the mak ing of such contracts. Now, the language of the statute is that the municipalities referred to shall have power to contract for light for any ttrm not exceeding ten years. This implies, with as much force as if it had been expressly stated, that the municipality shall not have power to contract for any term longer than ten years, and the natural inference is, we think, that the purpose is to inhibit such contracts entirely, for the only certain way of insuring their non-enforcement is to prevent their attempted execution. This may not be effectually accomplished unless they are held to be void. And this is in accord with the general rule which is well expressed by Professor Freeman, in his note to Robinson v. Mayor, 34 Am. Dec., 625: "As it" (the municipal corporation) "is permitted to exercise the powers which its charter authorizes, so it is prohibited from exercising those which are not authorized. Any act or attempted exercise of power which transcends the limits expressed or necessarily inferred from the language of the instrument by which its ¡lowers are conferred, is beyond the authority of a municipal corporation, and is therefore, null and void." Attention is also called to the language of Follett, J., in Cincinnati Gas Light & Coke Co. v. Avondale, 43 Ohio St., at pages 267 and 268.
But another objection seems equally fatal to the proposition. We are dealing with the subject of contract. It implies parties and a meeting of the minds. The paper presented undertakes to stipulate for the furnishing of light and an agreed price therefor, for a period of ninety-nine years. The proposition is that we now treat it as a contract for ten years; that is, that the court shall make a new contract for the parties for ten years, and then en force it. How can we say that the company would have incurred the great expense and outlay of money find labor, which the petition declares was incurred, for the period of ten years only? And if the court were of opinion that probably the company would have been willing to so contract, where is there any authority in the court to now alter the terms that they did agree upon and then enforce them, as changed? We are of opinion that neither in law nor reason, is there any ground for such a proposition.
Another theory of the plaintiff we think equally mistaken. Reference is had to the claim that the legal relief asked was incidental to the claim for equitable relief. At first blush it might seem that this proposition is tenable, but it will not, we think, bear examination. If the alleged contract (ordinance) had been a valid one, so that the rights of plaintiff could be founded on it, then it might possibly be said that in an action to enforce it the rig'ht to maintain the poles, et cetera, in the streets, and the right to continue to operate the plant and furnish to the City light at the price named in the contract, and for injunction to prevent the City from interfering with these rights by forcibly destroying the poles, et cetera, was the major ground of action, and that the claim for .pay for light already furnished was but an incident to it. But the moment it is ascertained that the averments of the petition alleging a contract are wholly false, and that there never was a contract, then it becomes apparent that the real g'round of action is totally distinct from the pretended one, and that the maintaining of one would not, in the slightest degree, aid the support of the other, and the defeat of one not in any manner tend to the defeat of the other. Had there been, in fact, a contract between the parties, and the plaintiff had simply failed to sustain by his proof the alleged attempted breach by the City, and the threatened destruction of his property, there might, perhaps, have been some warrant for claiming that an accounting to ascertain the amount due under the contract was an incident to the other claim. But the claimed equitable case having no basis whatever, being in fact a myth, resting only on unsubstantial averments of the petition, a claim for money could not be an incident to it.' Substance cannot in any sense become an incident to mere shadow. In other words, the petition, when the real situation was disclosed, contained, as already suggested, a ground of action cognizable at law, being upon a quantum meruit for light furnished. It also contained in form, but in. form only, a cause of an equitable nature. True, the two were conglomerated in one statement. But that affects only the form; it does not reach to the substance.
This initial error on the part of the plaintiff led him to a mistaken course as to the future. Failing in the common pleas, he appealed to the circuit court, thus attempting to carry the whole case up. As to the attempted cause of action relating to the injunction, being tested by the allegations of the petition, it was appealable, and hence the appeal as to that was effective. Therefore the overruling of the motion to dismiss the appeal by the circuit court, at that stage of the inquiry, was not erroneous. But, the action to recover pay for light already furnished, being an action to recover money only, and of right triable by jury, and not an incident to the equitable cause, neither arising from the same transaction nor transactions connected with the same subject of action, was not, standing- by itself, appealable, and the circuit court could not, under our statutes, rightfully take jurisdiction of it. Hut beyond this, if the money claim could, in any view, be treated as an incident to the other, it would necessarily depend for its support upon the other, and perforce must share its fate; and when that was dismissed, as without foundation, the claim for an accounting- should have been dismissed with it. That is, there cannot be an accounting- under a contract which does not exist.
But it is contended that the question of the jurisdiction of the circuit court cannot be raised in this court because the case was tried below as though that court has jurisdiction; that it was practically so conceded in argument and hence the conduct of the City amounts to an acquiescence, and the case of Kershaw v. Snowden, 36 Ohio St., 181, is cited in support of the contention. In that case an administrator was sued for money alleged to have been placed in the hands of his intestate upon the express trust to be repaid to the plaintiff on the death of the intestate, but retained by her as, trustee of the express trust, viz: to retain the same in trust until her death, and then to execute the trust by the return of the sum, and the petition prayed that the administrator be ordered, adjudged ahd decreed, to pay plaintiff out of the estate the amount he is equitably entitled to. A demurrer to the petition was overruled, and then an answer filed traversing the facts alleged, and setting up the six years' limitation. On trial in the common pleas the court found for the plaintiff and rendered judgment. Both parties gave notice of appeal. Plaintiff perfected his appeal by giving bond; the administrator was not required to give bond. In the district court a larger sum was recovered. A motion for new trial was made on the ground that the finding was not supported by the evidence. A bill of exceptions was taken containing all the evidence. The errors assigned in this court by the administrator were that the petition does not show a cause of action,. and that the evidence does not support the finding, the latter being the principal ground. The court found the judgment excessive and reduced it, and rendered judgment for the proper amount. The court also found that the case was one of a legal, and not an equitable, nature, but, inasmuch as the case was tried on its merits in the district court without objection, this court did not feel called upon sua sponte, to consider the question of error in entertaining the appeal. That point does not appear to have been presented by the plaintiff in error, but seems to have been first noticed by the court here, and the statement of it made as an explanation of the court's ruling in affirming the judgment notwithstanding the nature of the action.
Clearly this holding does not cover the case at bar. In this case the defendant interposed a motion to dismiss the appeal at the threshhold on the ground that the case is a.t law and not in equity, and excepted to the order overruling it. True upon the face of the record as it then stood, the motion was properly overruled. But it was probably the best the defendant could do to express its objection to the effort to try the case over again in the circuit court. At least it showed that the City did not intend to give away its rights; and had the petition contained a true and full statement of the exact case as it existed, and of the ground on which the plaintiff -must finally rest his claims, the motion to dismiss would have properly raised the real question of jurisdiction, and, in such condition of the record, would have been well taken. The answer followed setting up the invalidity of the ordinance. The City also excepted to the second conclusion of law. It then moved for a new trial because the judgment was contrary to law, and error is urged here because the circuit court erred in the particulars named and because of error in rendering judgment for the plaintiff. Just what argument was made to the court we cannot know, as of course the record does not disclose that. But, inasmuch as the answer pleaded that the ordinance was invalid, which the court found, and that, therefore, there was no contract, it may he inferred that the point was made by counsel in argument also, and its legal effect pointed out. However, this matter of argument is not of much consequence. Suffice it to say that we cannot find from this record that the City's action was such as to estop it from now questioning the jurisdiction of the circuit court. We think that court was without jurisdiction and that its judgment should be reversed and judgement entered for plaintiff in error.
Reversed.