Opinion
No. 25109
Decided February 20, 1935.
Public bonds — Resolution of municipal council relates to only one purpose, when — Section 2293-20, General Code — Acquiring or constructing waterworks.
A resolution passed by the council of a municipality, which provides for calling an election on the issuance of bonds, "for the purpose of acquiring or constructing waterworks," relates to one purpose only, as defined in Section 2293-20, General Code, and is a valid exercise of legislative power. ( Elyria Gas Water Co. v. City of Elyria, 57 Ohio St. 374, distinguished.)
IN MANDAMUS.
This action is brought originally in this court by the State of Ohio, ex rel. the Village of Upper Sandusky, a municipal corporation, against James R. Snyder, as Clerk of the Village of Upper Sandusky, defendant. The petition prays for a writ of mandamus to compel the defendant as village clerk to sign an anticipatory note in the sum of $125,000, as provided by ordinance of the council of such village, to offer such note to the Board of Sinking Fund Trustees, and if necessary to proceed to sell such note as provided in the legislation passed by the council.
It appears from the petition that the village of Upper Sandusky on September 5, 1933, adopted a resolution calling an election upon the question whether or not the municipality should issue bonds in the sum of $165,000 for the "purpose of acquiring or constructing waterworks", under the provisions of Article XVIII, Section 4, of the Constitution of Ohio, and in pursuance of authority granted by Section 2293-2, General Code, and declaring the necessity of the issuing of bonds for such purpose, said proposition to be voted upon at the general election to be held November 7, 1933.
The petition sets out facts showing that all necessary and appropriate legislation was passed by the council of the village preliminary to the submission of the question to the electorate, and in that legislation it was provided: "That for the purpose of acquiring or constructing waterworks as provided by Article XVIII, Section 4, of the Constitution of Ohio, and in pursuance to authority granted by Section 2293-2 of the General Code of Ohio, and the acts amendatory thereof, it is necessary to issue the bonds of said Village in an amount which this council estimates as One Hundred and Sixty-Five Thousand Dollars ($165,000); that it is necessary to levy a tax outside of the one and one-half (1 1/2) per cent limitation imposed by Article XII, Section 2 of the Constitution of Ohio, and in pursuance of authority granted by Section 2293-19 of the General Code of Ohio, and the acts amendatory thereof, to pay the interest on and to retire said bonds; that the question of the issuance of said bonds and the levy of such tax be submitted to the electors of said Village at the next November election; * * *."
The petition alleges that the question was then submitted to the electorate in accordance with the legislation and approved by a vote of 1344 in favor thereof to 358 against. It also appears from the petition that thereafter an ordinance was passed directing the clerk of the village to proceed with the execution and the disposal or sale of an anticipatory note preliminary to the issuance of said bonds in which note the same purpose was expressed, and facts are alleged showing that all necessary and required steps were taken in connection with the issuing of the note. But the clerk refused and still refuses to sign the note and to proceed to dispose of and sell the same for the sole reason that the resolution calling the election relates to more than one purpose.
The defendant has filed a general demurrer to the petition maintaining that the petition does not state sufficient facts to constitute a cause of action.
Mr. F.J. Stalter, village solicitor, Mr. A.K. Hall and Mr. Earl B. Carter, for relator.
Mr. H.L. Mason, for defendant.
The only question raised by the demurrer is whether or not the legislation passed by council calling an election to determine whether bonds should be issued for the purpose of "acquiring or constructing waterworks" voiced a dual purpose. If not, the clerk of the municipality could not legally refuse to sign the anticipatory note, and a peremptory writ of mandamus should issue. We will therefore inquire whether or not the words "acquiring or constructing" express a double purpose.
There are some cases in Ohio relating to the subject of inquiry, but before considering them it will prove somewhat instructive to weigh the authorities in other jurisdictions. According to the great weight of authority, expressions such as the one involved here do not express duality of purpose. City of Albuquerque v. Water Supply Co., 24 N.M. 368, 174 P. 217, 5 A. L. R., 519; C. B. Nash Co. v. City of Council Bluffs, 174 F., 182; People v. Sisson, 98 Ill. 335; Truelsen v. Mayor of Duluth, 61 Minn. 48, 63 N.W. 714; Henderson v. City of Shreveport, 137 La. 667, 69 So. 88, 5 A.L.R., 516; Tulloch v. City of Seattle, 69 Wn. 178, 124 P. 481; Thomas v. City of Grand Junction, 13 Colo. App., 80, 56 P. 665; State, ex rel. City of Columbia, v. Allen, State Aud., 183 Mo., 283, 82 S.W. 103; Everett v. Village of Potsdam, 112 App. Div. 727, 98 N.Y. S., 963; Simpson v. City of Nacogdoches (Tex.Civ.App.), 152 S.W. 858; Beers v. City of Watertown, 43 S.D. 14, 177 N.W. 502.
The reasoning of these cases is in substance that the purpose is the single one of establishing municipal ownership of a public utility, and that the method of acquirement, whether by purchase or construction, relates only to the means; in accordance with this principle one scheme of municipal improvement relating to one kind of utility is considered as involving one subject. Although such expression of purpose leaves to the council of a municipality the choice of acquiring a public utility by purchase or by construction, there is still only one objective. In this way the municipality through its council is given the liberty to purchase an existing waterworks if satisfactory terms are offered, or to construct its own plant if it considers the terms disadvantageous. To afford opportunity to the council to select the preferable of two alternatives is to the interest not only of the municipality, but, in many instances, to an existing private utility as well; the latter may choose to sell at a reduced price rather than to incur the risk of ruinous competition from a publicly owned utility enterprise.
There are a few cases in which the contrary rule is adhered to, and citations sustaining both the majority rule and the minority rule are collected by the compiler in an annotation in 5 A. L. R., 538, 549.
Since in the last analysis we are concerned with the law of Ohio, we turn our inquiry in that direction.
In the case of Elyria Gas Water Co. v. City of Elyria, 57 Ohio St. 374, 49 N.E. 335, decided January 26, 1898, it was held that a resolution declaring the necessity for the issue and sale of the city's bonds "for the purpose of the purchase and erection of water-works" involved a dual purpose and made the resolution fatally defective. At that time the Ohio statute gave the municipality power to issue bonds "for the erection or purchase of water-works." It thus appears that the statute expressed the purpose in the alternative, and the resolution in the conjunctive. This fact has been stated in many of the cases cited as a reason for distinguishing that case. There was then no constitutional provision to confer authority on municipalities to acquire a public utility by purchase, construction or otherwise. An amendment to the Ohio Constitution (Article XVIII, Section 4), adopted September 3, 1912, reads as follows: "Any municipality may acquire, construct, own, lease and operate within or without its corporate limits, any public utility the product or service of which is or is to be supplied to the municipality or its inhabitants, and may contract with others for any such product or service. The acquisition of any such public utility may be by condemnation or otherwise, and a municipality may acquire thereby the use of, or full title to, the property and franchise of any company or person supplying to the municipality or its inhabitants the service or product of any such utility."
This provision made the State Constitution the source of municipal power as to utilities, whereas before its adoption municipal authority was derived from statutory enactments. While this change is of no controlling importance the whole situation has been altered by the passage of The Uniform Bond Act, which became effective August 11, 1927, 112 Ohio Laws, 364. Sections 2293-2 (amended 115 Ohio Laws, 52), 2293-19 (amended 114 Ohio Laws, 843) and 2293-20, General Code, found in said act, invite our attention.
Section 2293-2 gives the taxing authority of any subdivision power to issue bonds for the purpose of "acquiring or constructing, any permanent improvement which such subdivision is authorized to acquire or construct."
Section 2293-19 provides for submitting to the electors of such subdivision the question of the issuance of any bonds which such subdivision has power to issue; for the passage of a resolution declaring the necessity of such bond issue, and for fixing the amount thereof; and, further, for the certification of the "resolution to the county auditor at least sixty days prior to the election at which it is desired to submit such questions."
Section 2293-20 contains the controlling statutory provisions, and so far as pertinent to the instant case it reads as follows: "The resolution provided for in the foregoing section shall relate only to one purpose. 'One purpose' shall be construed to include * * * in any case all expenditures, including the acquisition of a site and purchase of equipment, for any one utility, building or other structure, or group of buildings or structures for the same general purpose, or for one or more roads, highways, bridges and viaducts included in the same resolution."
The language of this section is plain and free from double meaning; it applies to any bond issue of a subdivision, and a municipality is such a subdivision. This section expressly provides that all expenditures for any one utility shall constitute one purpose.
This court is therefore able to distinguish the case of Elyria Gas Water Co. v. City of Elyria, supra, from the instant case on two grounds, a difference in the phraseology of the resolutions and a change in the basic statutory law.
Our conclusion is that the resolution of the council providing for a vote upon the issuance of bonds does not involve a dual proposition, and, therefore, the demurrer to the petition is overruled and a writ of mandamus is allowed.
Writ allowed.
WEYGANDT, C.J., STEPHENSON, JONES, MATTHIAS, DAY and ZIMMERMAN, JJ., concur.