Case Name: Kerr v. City of Bellefontaine et al.
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1899-01-17
Citations: 59 Ohio St. 446
Docket Number: 
Parties: Kerr v. City of Bellefontaine et al.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 59
Pages: 446–464

Head Matter:
Kerr v. City of Bellefontaine et al.
Purchase or erection of gas works by municipal corporations— Powers and duties of trustees of gas works — Provisions of sections 2486 and 2489 Revised Statutes — Trustees cannot charge municipality with general liability — Claim upon funds accrued from operation of such works — Allegations of petition — Pleadings — Municipal law.
1. An averment in a petition that an account for articles sold, which are the subject of the action, was presented to the defendants and by them admitted to be correct, should on motion be stricken from the petition in obedience to the rule that evidence should not be pleaded.
2. The provisions of sections 2486 et seq. Revised Statutes, relating to the erection or purchase and management of gas works by municipalities, do not vest in the trustees of such works authority to charge the municipality with a general liability on account of machinery or appliances purchased by them for such works.
3. By the provisions of section 2489 Revised Statutes, money derived from the operation of such works under the management of trustees constitutes a distinct fund which they have authority to control independently of the council.
4. A petition alleging a sale and delivery by plaintiff to such trustees of machinery and appliances for the use of such works and the non-payment of the purchase price therefor, though not alleging facts sufficient to entitle him to recover a judgment at law against the municipality, does allege a cause of action for the equitable appropriation of so much of the funds which have accrued or may accrue from the operation of the works as may be necessary to satisfy his just demand.
(Decided January 17, 1899.)
Error to the Circuit Court of Logan county.
The plaintiffs action' in the common pleas court was against the city of Bellefontaine and the trustees of its gas works. His petition is as follows: .
1. On and for more than ten years next prior to the twelfth day of June, 1892, the defendant, the village of Bellefontaine, which since the commencement of this suit has been advanced to the grade of a city and is now the city of Bellefontaine, was, and it still is the owner of gas works, erected by said, the village of Bellefontaine, under the provisions of section number 2486 of the Revised Statutes of Ohio, which gas works have, during all said time and down to the present date, been managed, conducted and controlled by a board of trustees as provided in sections numbers 2487, 2488 and 2489 of the Revised Statutes of Ohio, and at the date of the commencement of this suit, Sidney Nichols, Joseph P. Hunter, George W. Bartholomew, William Lane and John Gauss were the duly elected and qualified and acting trustees of said gas works.
2. On or about the---day of June, 1892, the said gas trustees of Bellefontaine, for the defendant, the village of Bellefontaine, purchased from one Joseph Askins,' who then delivered the same, certain purifying boxes for use in the gas works of Bellefontaine, which were of the value of $1,040.00, one-half of which value and price, to-wit: $520.00 and one-half of the freight charge thereon, to-wit: $7.80, to-wit: a total sum of $527.80, the said defendant, the village of Bellefontaine, by its said gas trustees, then and there agreed to pay to said Askins.
3L On or about the second day of June, 1892, the said defendant, the village of Bellefontaine, through, its said gas trustees, by contract in writing, purchased from said Joseph Askins, one condenser, valve, 10-inch pipe and connections, which the said Askins then delivered, and, at the request of said gas trustees, put in place in the gas works of said village, for which the said defendant, the village of Bellefontaine, by and through its said trustees of gas works, then and there agreed to pay said Askins the sum of $1,507.00.
4. On said second day of June, 1892, the defendant, the village of Bellefontaine, through and by its agents, the said trustees of gas works, purchased from said Joseph Askins, and employed him to place in position in said gas works of Bellefontaine, the following goods and material, which, with the skill and labor of placing the same in position were of the following values, to-wit: .
4 10-ineh valves at $35.00 each.............................$140.00
3 10-inch tees at $16.80............................................. 50.40
6 10-inch ells at $10.00................................................ 60.00
15 10-inch sci'ew flanges at $2.72......................... 40.80
204 f bolts at .05 each.................................................. 10.20
18 10-inch threads at $1.50........................................ 27.00
[Erroneously carried into account hereinafter mentioned as..................................................... 37.00]
6 10-inch cuts at $1.25............................................... 7.50
The said Joseph Askins then and there delivered all said goods and material and placed the same, and the said defendant, the village of Bellefontaine by its said trustees of gas works then and there agreed to pay him. said sum of $345.90, the aggregate thereof for the same.
5. On or about the second day of June, 1892, the said defendant, the village of Bellefontaine, by its said trustees of gas works, employed the said Joseph Askins to, and he then and there did fur nish, and set, and adjust a new meter, which wad of the value of $25.00 which the said defendant, the village of Bellefontaine, by its said trustees of gas works, then and there promised and agreed to pay to said Askins.
6. On or about the second day of June, 1892, the said defendant, the village of Bellefontaine, by its said trustees of gas works, employed the said Joseph Askins, to furnish the means and materials including a 10-inch outlet, and to furnish the skill and labor, in connecting, the governor with the mains of said gas works, all of which the said Askins then and there did, and the same was of the value of $50.00 and the said defendant, the village of Bellefontaine, by its said trustees of gas works, then and there agreed to pay the same to said Askins.
7. On the fifth day of July, 1892, the defendant, the village of Bellefontaine, b3r its said trustees of gas works, purchased from said Joseph Askins, who then delivered to said defendant, the village of Bellefontaine, for use in said gas works, the following materials which were of the values following, to-wit:
21 5-12 ft. 10-inch pipe at $4.75, less 65 per cent, $35.61, and 64 1-3 ft. 10-inch pipe at $4.75, less 65 per cent, $106.96.
And the said defendant, the village of Bellefontaine, by its said trustees of gas works, then and there promised and agreed to pay said sums for the same to the said Askins.
8. On or about the twent3'--third-day of August, 1892, said J oseph Askins rendered an account to said defendant, the village of Bellefontaine, by delivering the same to said trustees of the gas works, of all of the foregoing- items of materials and labor, •which were then and there computed to amount to $2,598.27, but by correction of the extending thereof is in fact $2,588.27. Copy of said account is hereto attached marked “Exhibit A.”
9. On the twenty-third day of August, 1892, the said account, above mentioned, copy of which is hereto attached marked “Exhibit A,” was duly rendered to the defendant, the village of Bellefontaine, and to said trustees of gas works, and the same was then and there settled and agreed to and the same then and there became an account stated between said Joseph Askins and the said defendant, the village of Bellefontaine, now said city of Bellefontaine, and it was then and there settled, agreed and determined that the surd of $2,598.27 was then due to said Askins from the defendant, the village of Bellefontaine, and the same then and there and thereby became an account stated.
10. Plaintiff as a further cause of action says that about the first of November, 1892, by contract in writing, the defendant, the village of .Bellefontaine, through its said trustees of gas works, employed the said Joseph Askins to furnish for and place in said gas works of Bellefontaine, one gas generator for the sum and price of $500.00 which was then and there done and performed by said Joseph Askins.
11. Plaintiff says that all said materials, skill and labor, were so furnished and performed by said Joseph Askins, to and for said defendant, the village of Bellefontaine, under contract with said trustees of gas works, for the use and maintenance of said gas works, and the same have all been had and used by said defendant, the village of Bellefontaine, ever since said dates, respectively, and no part of said aggregate sum of $3,088.27 has ever been paid except as hereinafter stated.
13. Before the commencement of this suit, to-wit: On the fifth day of August, 1893, said Joseph Askins, for value received sold, and assigned to plaintiff, in writing, all his said claims hereinabove set out against the defendant, the village of Bellefontaine, now said city of Bellefontaine, and the same is now the property of said plaintiff, except that the same was assigned subject to the payment by plaintiff out of the same
To The Buchanan Bridge Company of...............$60.00
To George W. Emerson of............................................. 20.00
To Howenstine & Huston of....................................100.00
And such other and further sum to Howenstine & Huston as would be their reasonable charges and fees for collecting said claim.
14. Upon said indebtedness, the said defendant, the village of Bellefontaine, paid to said Joseph Askins upon the items for purifying boxes set out in the second paragraph of this pleading, the sum of...................................................................................................$450.00
And further paid upon said whole claim
July 1, 1892 [or July 5]...................:...........................$200.00
July 22, [or July 5]............................................................. 500.00
July 22, 1892............................'.......................................... 24.75
Aug. 26, 1892, to Buchanan Bridge Co........... 25.00
Oct. 26, 1892, to Haekenger on order.............. 4.00
Oct. 26, 1892, to Ear hart on order.................... 6.00
Dec. 1, 1892, to Buchanan Bridge Co................ 35.00
May 8, 1894, to B. M. Allen....................................... 100.00
June 5, 1894, to Hamilton............................................ 86.93
Total...........................................................................$1,431.68
Said items of $25 and $35 paid to the Buchanan Bridge Co., aggregating $60.00, constitute 'the amount of $60.00 reserved m said assignment, for the benefit of said The Buchanan Bridge Co.
The gross amount of said claim of plaintiff against the defendant, the village of Bellefontaine, now the city of Bellefontaine, is $3,088.27 upon which has been paid said aggregate sum of $1,431.68 and no other or further payment has been made thereon, and there is due and remaining unpaid to this plaintiff, which he claims from the defendant, the village of Bellefontaine, now the city of Bellefontaine, the sum of sixteen hundred and fifty-six and 59-100 [$1,656.59] dollars, which plaintiff claims with interest on $1,156.59 thereof, from August 23, 1892, and on $500.00 thereof, from November 1, 1892, and for the same he asks judgment against said defendant, the village of Bellefontaine, now said city of Bellefontaine.
A motion by the city to strike from the petition the averment numbered nine was sustained. Thereafter a general demurrer was interposed by the city and sustained by the court and the petition was dismissed. To the rulings on the motion and the demurrer plaintiff excepted. The circuit court affirmed the judgment of the court of common pleas. The reversal of both judgments is sought here for alleged errors in sustaining the motion and the demurrer.
How.enstine, Huston & Miller, for plaintiff in error.
The question is, “Had the gas trustees of the c.ty power to make contracts for the repair and improvement of said gas works, and to bind the city to the performance thereof?” It follows that if the gas trustees had such power or authority, they had power to state an account or an amount to be paid.
Section 6, article 13, of the Constitution of Ohio, of 1851, authorizes the general assembly to provide for the organization of cities and incorporated villages by general laws.
Section 1 of the Schedule provides that all the laws then in force not inconsistent with the new Constitution shall remain in force until amended or repealed.
Section 1538 of the Revised Statutes, provides that existing municipal corporations, and those hereafter created, shall be governed by the provisions of Title XII of the Revised Statutes.
Section 1678 of the Revised Statutes provides that the council shall have the management and control of the finances and property of the corporation, except as may be otherwise provided. A similar provision in section 1693 restricts the power to contract to the city council. • “But this section shall not be construed to * * * impair the power to contract whenever elsewhere given in this title, namely, Title XII.
Section 2486 provides that such gas works shall be placed under the control of a board called trustees of gas works, who shall manage the gas works and supply the corporation and citizens thereof with gas.
This power to construct, manage, conduct and control the gas works, to purchase material, employ laborers andhnanufacture and sell gas, and by implication the duty enjoined upon, and the duty assumed by the trustees, to furnish gas to the citizens who desire it, carries with it the power to make any modifications, changes, or repairs deemed necessary by the trustees of gas works. See section 2489.
Corporations can be bound, without note or deed, by implication from corporate acts. Like natural persons, they may ratify any act which they can perform, and contract by parol as well as under seal. Bank of Columbia v. Paterson, 7 Cranch, 299; School District v. Wood, 13 Mass., 199; Town of Athens v. Thomas, 82 Ill., 259; Paret v. City of Bayonne, 39 N. J. L., 559; Moss v. Averell, 10 N. Y., 454; Blunt v. Walker, 11 Wis., 334.
A corporation has the power to make any such contracts as further the purpose of incorporation if the same is not prohibited by its charter or some statute binding upon it. In general, an express authority to make a given kind of contract is not indispensable to the exercise thereof, provided they are not foreign to the corporate purposes. Booth v. Robinson, 55 Md., 419; Wayland University v. Bowman, 56 Wis., 657; C & M. R. R. Co. v. Himrod Furnace Co., 37 Ohio St., 321; Detroit v. Mutual Gas Co., 43 Mich., 594.
Therefore, the contracts alleged in the third amended petition are and must be covered by the powers granted in section 2489.
Clarke v. Columbus, 23 Bulletin, 289, holds that section 2702, known as the Burn’s Law, does not apply to a contract for lighting the city.
Section 1693, as it now stands, was enacted on February 27, 1880, and section 2489 is subsequent to and inconsistent with said 1693, and if for no other reason 2489 must be read as an exception to 1693. Cincinnati v. Holmes, 56 Ohio St., 104.
If 2702 applies at all, it must apply in its entirety.
Then no purchase, though the most trivial, can be made by said trustees without first procuring a certificate from the city clerk. And the city clerk, elected by tbe council, can use his own pleasure about issuing said certificate.
Such a construction would cause more evil than it could remedy, and would not be in harmony with the general rules for interpretation of statutes. Bishop’s Written Laws, section 92, 1 Ohio, 480; Wright, 233.
7. Municipal Powers are statutory, and classed as follows:
[a.] Powers granted in express words by charter or general statute under which it is incorporated.
[b.] Powers necessarily, or fairly implied in, or incident to the powers thus expressly granted.
[e.] Powers essential to declared purposes of the corporation, not simply convenient, but indispensable. Dillon, 4 ed., section 89; 15 Am. & Eng. Enc. of Law, 1041.
Under above subdivisions [b] and [c] we claim again that the gas trustees have the power to hire labor and pay the necessary running- expenses of the plant; and, further, that they have the power to make needed improvements and repairs without said certificate being filed, and an enabling ordinance passed, since this would be but exercising an incidental or indispensable power to the powers granted to the gas trustees in section 2489, and, moreover, section 2702 was never intended to apply to the running expenses of a gas plant, nor does it. Lima Gas Co. v. Lima, 4 C. C., 22; 2 Circ. Dec., 396; Cincinnati v. Cameron, 33 Ohio St., 336; Le Grand v. M. M. Ass’n, 80 N. Y., 638.
A corporation may ratify unauthorized acts of its agents, and this may be inferred from acquiescence merely. Hoyt v. Thompson, 19 N. Y., 207; Pixley v. Western Pacific R. R., 33 Cal., 191; I Dil lon, section 463; Supervisors v. Schenck, 5 Wall., 782.
When an indebtedness for such improvements and repairs is incurred, the gas trustees, as agents of the city having incurred said indebtedness, the city is estopped from alleging a mere irregularity to avoid the contract. Moore v. Moore, 73 N. Y., 238; Moran v. Commissioners, 2 Black, 722; Turner v. Curzer, 70 Iowa, 204; Bissell v. City of Jeffersonville, 24 How., 287; Knox County v. Aspinwall, 21 How., 539.
A municipal corporation is estopped the same as an individual. County of Randolph v. Post, 93 U. S., 502; Searcy v. Yarnell, 47 Ark., 269; Am. Dig. ’90, p. 2656; I Dillon, sections 459, 460; II Kent Commentaries, 291.
Money paid for corporate property where no title passed can be recovered. Then, why cannot property obtained by a city under a void contract be recovered, on a quantum meruit? II Dillon, section 936-938; Dill v. Wanham, 48 Mass., 438; Nelson v. Mayor, 63 N. Y., 535.
Where a city causes work to be more expensive by slight changes in work or materials, it is liable for such extra compensation. Cincinnati v. Cameron, 33 Ohio St., 336; Messenger v. Buffalo, 21 N. Y., 196; Fleming v. Suspension Bridge, 92 N. Y., 368; Nat. Tube Works v. Chamberlain [Dak.], 37 N. W., 761; [Am. Dig. ’88, p. 937, section 106]; Maguire v. Rapid City [Dak.], 43 N. W., 706; [Am. Dig. ’89, p. 2645, section 189]; Merrill R. R. & Light Co. v. Merrill, 80 Wis., 358.
No corporation can have the benefits of a contract and repudiate its obligations accruing thereunder. State v. VanHorn, 7 Ohio St., 327; Goshen Township v. Shoemaker, 12 Ohio St., 624; Shoemaker v. Goshen Township, 14 Ohio St., 569; State v. Mitchell, 31 Ohio St., 592.
It seems to be the well-established rule that where a contract has been executed and fully performed on the part either of the corporation or of the other contracting party neither will be heard to object that the contract and such performance were not within the legitimate powers of the corporations. Bank v. Chillicothe, 7 Ohio, 412; Hays v. Galion Gas & Light Co., 29 Ohio St., 330; Larwell v. Hanover Savings Fund Society, 40 Ohio St., 274; Whitney Arms Co. v. Barlow, 63 N. Y., 62; Atlantic State Bank v. Savery, 82 N. Y., 307; Gold Mining Co. v. Nat. Bank, 96 U. S., 640; II Kent Comm., 291; Argenti v. San Francisco, 16 Cal., 255; Mahre v. Chicago, 38 Ill., 266; Dillon on Municipal Corporations, sections 384 and 750; Messenger v. Buffalo, 21 N. Y., 196.
When the contract has been executed and all its • stipulations fully performed, the corporation having received the benefit, then it is bound to render an equivalent therefore. Pixley v. R. R., 33 Cal., 183; Fister v. Trustees, 15 Barb., 323; San Francisco Gas Co. v. San Francisco, 9 Cal., 453.
To all laws there is a spirit as well as a letter, and their construction must stand with reason and right. What is intended to work justice and prevent fraud must not be made the means to work injustice and nourish fraud. Cincinnati v. Cameron, 33 Ohio St., 364; Matthews v. Caldwell, II Disney, 279; United States v. Kirby et al., 7 Wall., 482.
The principle that a corporation is under an obligation to give value received for accepted benefits has been held to apply to counties in Ohio, and the same principle of liability will apply to municipal corporations. Wilder v. Comm'rs, 41 Ohio St., 601; Comm’rs v. R. R. Co., 37 Ohio St., 205; Cook Co. v. Hannes, 108 Ill., 151; Harrison Co. Comm’rs v. Bryne, 67 Ind., 21; S. & C., 250, 53 O. L., 155; Revised Statutes, section 878.
West <& West and William W. Biddle, for defendants in error.
It will not be seriously contended that under sections 2486 and 2487 it was intended to vest in any board or authority, other than the council, the power to erect or purchase gas works, or to build them, according to plans or specifications, other than as prescribed by the council. The council alone is authorized to erect or purchase, and when so done, it may appoint a provisional board of trustees, to execute its will, under its directions, until their successors shall be chosen by popular election. In either of these sections is a power, independent of the council, either given or intended to be' given, to said provisional board, to erect, purchase or manage the works. This will become more apparent when we reach Revised Statutes 2489.
Revised Statutes 2488, merely provides for and prescribed the manner of electing a regular board of trustees to succeed those provisionally appointed. Considered alone, section 2484 might seem to vest in the gas board independent power to erect or purchase gas works or grounds therefor, and do many other things. But statutes in pari materia must be read and construed together. Reading and construing this section in connection with Revised Statutes 2486 and 2487, holding the board of trustees to have such independent power, is in conflict with and repugnant to the provisions of said two sections, and the absolute powers vested in the council. It would recognize in the board and in the council each a separate and independent power to do the same thing, which the legislature did not intend. One must be subordinated to the power and control of the other, else we shall have two independent municipal authorities clothed with power to erect separate and distinct gas works, or an unlimited number of gas works for that matter, in the same village. This cannot have been intended, and the repugnancy must be reconciled which can only be done by subordinating the gas board.
Plaintiff assumes that the board of gas trustees is the agent for the municipality, within the scope of its powers, as fully as is the council, and might bind its principal, within its powers, absolutely. In support of this, he cites Cincinnati v. Cameron, 33 Ohio St., 336, which arose in 1866, prior to the enactment of Revised Statutes 2702 some ten years. To the extent that it furnishes any analogy to the present contention, it sustains the position of the defendant in error.
The principle recognized in the case controls here, and does not exclude the gas board from the restrictive operation of 2702.
• Plaintiff pleads ratification, and cites sundry authorities to sustain him, which arose out of the dealings of private or trading corporations, except one or two, and the actors in which were not restrained by prohibitory statute or anything other than the doctrine of ultyra vires. We cite I Dillon on Corp., 457.
The municipal code is the chartered authority of municipal corporations in Ohio, and every provision thereof must be observed by its officers and boards, to bind the corporation. 2 Beach on Con tracts, section 1453; Miller v. Ammon, 145 U. S., 421.
The rule is that a contract made void by positive statute cannot be validated by ratification, and the consideration thereof cannot be made a ground of recovery on any plea whatever. Revised Statutes, 1693, 2702, in express and positive terms, declare that all contracts entered into by the council or any board or officer of a municipal corporation, contrary to or in violation of these sections, or either of them, shall be absolutely void, as against the municipality.
Plaintiff further claims, that the gas trustees, having incurred the indebtedness for certain improvements the village is estopped fi'om alleging a mere irregularity to avoid it. To this, sundry authorities are cited, none, so far as we can discover, under statutes like Revised Statutes, 1693 and 2702. It is not the village, but these statutes, which avoid the contract in controversy, and the village cannot validate or vitalize them against their denunciation. If the doctrine of estoppel can override such statutes, it is in vain that municipalities endeavor to restrain the excesses of their officers and agents. Those dealing with the corporation have no cause of complaint. They are bound to know the requirements of public statutes, and to inquire whether the municipal officers, with whom they deal, have complied therewith and by such compliance are authorized to contract.

Opinion:
Shauck, J.
The provisions of the code afford no reason for the numbering of the several averments of the petition which relate to the same cause of action. Whether there are different causes of action which should have been separately stated and numbered we need not consider, no motion to require it having been made. The common pleas court did not err in sustaining the motion to strike from the petition the averment numbered nine. The admission of the defendants that the account presented to them of the articles sold and delivered was correct did not foreclose inquiry as to its correctness. The remaining averments of the petition fully tender the issues upon which the plaintiff's right to recover for the several items of his claim would be determined. The admission alleged was, at most, but part of the evidence by which the plaintiff would maintain the issues on his part, and the averment is within the rule that evidence should not be pleaded.
The demurrer calls in question the authority of the trustees of the gas works to make valid contracts for machinery, apppliances and supplies deemed necessary to the operation of the works. Their authority, as well as that of the municipal council over the subject matter, is found in Chapter 3, Division 8 and Title XII of the Revised Statutes. Section 2486 provides that the council of any city or village shall have power to erect gas works, or to purchase such works already erected. Section 2487 provides that when such works have been purchased, erected or authorized the city council "shall create and appoint a board of trustees which shall construct said works according to plans and specifications to be furnished by the council and shall manage such works when they shall have been constructed or purchased."
Section 2489, which defines the powers and duties of the trustees with more particularity, provides that "the board may construct gas works, extend gas pipes, manufacture and sell gas and coke, collect gas bills and other moneys, due for gas, coke or other material sold by it ; and to carry into effect the provisions of this section said trustees may also purchase material, employ laborers, appoint officers, purchase or lease the necessary real estate and erect buildings thereon and all money collected for gas works purposes shall be deposited weekly, by the collectors thereof, with .the treasurer of the corporation ; and all money so deposited shall be kept as a separate and distinct fund, subject to the ordey of the board; and all moneys levied or assessed by the corporation for the purpose of paying for public lighting shall be by the council paid and turned over to such trustees and be by them disbursed the sanie as if it had been received from private individuals ."
These sections are found in the same chapter of the Revised Statutes and they relate to the saíne subject matter. They should be construed together so that, if it is possible, apparently repugnant provisions may be brought into harmony. Reading the sections with that object in view it appears to be quite clear that the authority to contract which was conferred upon the trustees by section 2489 is not in conflict with, but in subordination to, the authority for that purpose which section 2486 confers upon the council. The trustees are not vested with authoritv to levy taxes or assessments upon the property of the citizens of the municipality, nor to accomplish that purpose indirectly by the creation of general obligations against it. Their authority to erect works is limited to cases where it may be accomplished by the use of funds raised by the council and authorized to be devoted to that purpose as con templated by section 2487, or. those funds which are realized from the operation of gas works under section 2489. This limitation upon the authority of the trustees is clearly indicated by the provision that "the council shall have power whenever it may be deemed expedient and for the public good, to erect gas works at the expense of the corporation, " etc.
But while the trustees are denied the power to erect the gas works "at the expense of the corporation," the terms of section 2489 vest them with the absolute control of the moneys arising from the operation of the works without any revisory authority in the council. It is for this purpose that moneys so arising are required to be kept as a distinct fund. There is no limitation or restriction to the provision that said fund "shall be subject to the control of the board," nor is there any other provision of the statute inconsistent with the general terms in which the control of the fund so arising from the operation of the gas works is vested in the trustees. It follows that while the trustees are without authority to enter into a contract effectual to create a general liability of the municipality, they have power to contract with ref" erence to that particular fund for the purchase of such machinery, material and supplies as may be necessary to the operation of the works.
Nor are the trustees in the exercise of this authority restricted by the provisions of section 2702 of the Revised Statutes that "No contract, agreement or other obligation, involving the expenditure of money shall be entered into, nor shall any ordinance, resolution or order for the appropriation or expenditure of money be passed by the city council or by any board or officer of a municipal corporation, unless the auditor of the corporation, and if there is no auditor, the clerk thereof, shall first certify that the money required for the contract, agreement or other obligation, or to pay the appropriation or expenditure, is in the treasury to the credit of the fund from which it is to be drawn, and not appropriated for any other purpose Not only was this requirement of the statute designed to place a restriction upon the increase of municipal indebtedness but its terms are inapplicable to a contract of this character. The requirement is that the certificate must show that the money required for the contract is in the treasury to the credit of the fund and not appropriated for any other purpose. The fund from which the plaintiff is entitled to satisfaction of his demand is not raised by taxation. It is derived from the operation of the gas works and made subject to the order of the board whose authority is so limited that they can make valid contracts only for appliances and supplies for the gas works to which the fund is devoted. The fund can be appropriated to no other purpose, and the trustees can contract for no other purpose.
It follows that although the petition does not allege facts which show the general legal liability of the city, it does state a cause of action in equity for the appropriation of so much of the fund which has accrued, or may accrue, from the operation of the gas works as may be necessary to satisfy the plaintiff's demand.
Judgment of the common pleas and circuit courts reversed.