Court Opinion

ID: 6747911
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:01:23.979216+00
Date Added: 2024-06-11T16:02:09.306266
License: Public Domain

*214OPINION
By LIEGHLEY, PJ.
My conclusion reached after a full examination of the record, briefs and authorities cited and read is:
“Decree for defendants for the reason that the obligations assumed by the purchase contract justified the Council in authorizing the payment by ordinance of said sum to partially meet and be within the rate of pay fixed by the arbitrators as a potential contractual liability and as the justifiable payment of a valid moral claim.”
In the first place, it should be noted and emphasized that there is no tax money involved in this lawsuit. It concerns the assets and earnings of the railway company. It concerns monies apart from those levied and collected as taxes upon the property and holdings of Cleveland residents. It is distinctly a separate bookkeeping account of the city. The statutes enacted and designed as safeguards over the expenditure of strictly tax money are not necessarily applied or strictly designed to be applied to these funds when contracts are involved.
Whether or not the award of the arbitrators of an increase of pay of twelve and one-half cents an hour is reasonable and justified by 'the' evidence presented to them, was not presented nor mentioned to us. It would not have been pertinent to any issue in this case. '
On March 1, 1942, there was a contract existing and in full force between the Labor Union and the Railway Company by the terms of which, in the event of a dispute over rate of pay, the issue should be submitted to arbitration, the mechanics for which are set up in the contract. Such dispute then existed and arbitrators were promptly and duly appointed.
On April 28, 1942, the City of Cleveland elected to purchase the Railway Company under and through a contract of purchase and by its terms agreed to assume all contractual obligations of the Railway Company. One of these contractual obligations was the existing contract between the Labor Union and the Pailway Company.
At that time a Board of Arbitrators were supposedly functioning under and by authority of the contract between the union and the railway company, and as of March 1, 1942, the members thereof were not in the employ of the Union or the Railway Company, nor of the City of Cleveland. They were merely appointed as provided *215by the contract. They derived their authority from the provisions of the contract and the terms of the contract defined their duty and the limits of their duties were prescribed. Their chief and outstanding obligation in this instance was to hear and consider the evidence adduced and award a reasonable and fair rate of compensation to street car and bus employees for the period from March 1, 1942 to March 1, 1943.
The arbitrators made an award of 12 %c per hour for the period from March 1, to April 28, on May 22nd. Upon what theory or upon what authority? It was said that the officers of the City insisted upon such limitation of the award. In the face of the contract between the Union and the Railway Company, and the assumption thereof by the City, by what authority? The contract provided for no such'award. It can be justified only by claiming that the larger includes the smaller, a formula not resorted to in such matters.
It would seem that either this award has the legal effect of fixing the rate of pay for one year or it is a nullity. The arbitrators were not authorized or commissioned to make an award for two months. It should be deemed to fix the rate for one year or it determines nothing legally.
If the rate of pay fixed by the arbitrators for March and April was fair and reasonable compensation, it is safe to say that the same, or an approximate rate is fair and reasonable for three months thereafter and would have been so declared to be by the arbitrators but for the interference of certain officers of the City at the time and for which the City would be obligated by the assumptions in its purchase contract. If the rate had been determined and award made prior to April 28th as it might very well have been, then such rate would have been read into and become a part of the contract assumed to March 1, 1943.
When a municipaltiy in the exercise of its proprietary functions goes into business by way of engaging in the operation of a public utility and acquires same by a purchase contract, it should be held to the performance of its terms by every moral and equitable rule and by the same rules as control a private corporation under similar circumstances. When the terms of such contract are complied with and performed, a strictly municipal outlook may be justified and necessary for the public interest when the welfare of the general public will be best served thereby.
Whether there exists an enforceable contractual obligation on the City by reason of all the facts and circumstances affecting this situation, has not been decided. This issue was not presented or submitted to us for decision. However, so much may be said in favor of it, that when coupled with the public needs and indispensable requirements of the time, the payment of the money involved by the City in the manner proposed and at the instance of the City as a valid moral claim has ample legal support and justification to the end that there be no potential interruption or reduction of the *216transportation facilities of the City in these times of urgency and stress.
Decree for defendants O. S. J.
MORGAN, J., SKEEL, J., concur in the judgment, for reasons hereinafter stated.