Summary
holding that State could be estopped because it was engaging in a proprietary function
Summary of this case from Nordonia Landscape Supplies, LLC v. City of AkronOpinion
No. 22875
Decided June 15, 1932.
Constitutional law — Taxation and assessment of school lands — State, acting in proprietary capacity, estopped to claim statutes unconstitutional — Section 16 school land rentals liable for drainage assessments, when — Section 5380, General Code, constitutional.
1. The State of Ohio, by participating in a proceeding through one of its departments acting within the scope of its departmental powers concerning lands toward which the State is exercising a proprietary function, is estopped to claim that the law under which the proceeding was brought is unconstitutional or violative of a compact between the United States and the State of Ohio.
2. The rentals of land in Section 16 are liable for and should be applied to the payment of assessments for drainage purposes, when the proceedings to assess are brought under and by virtue of Section 5330 of the General Code of Ohio.
3. Section 5330 of the General Code of Ohio is not unconstitutional and is not violative of the compact between the United States and the State of Ohio, whereby Section 16 in Marion Township, Hardin County, Ohio, was granted by the United States to the State of Ohio in trust for the use of the schools of Ohio.
IN MANDAMUS.
This is an action in mandamus brought by the State of Ohio, on the relation of The Upper Scioto Drainage Conservancy District, against Joseph T. Tracy, Auditor of the State of Ohio, and is before the court on the demurrer of defendant to relator's petition and the amendment thereto.
Relator by way of petition states that it is a body corporate, duly organized under the laws of Ohio, with its office and principal place of business in the city of Kenton, Hardin county, Ohio; that defendant is the duly elected, qualified and acting auditor of the state of Ohio, and by virtue of his office is the state supervisor of school lands and charged with the performance of certain duties in connection therewith; that relator has carried out the object and purpose of its creation by establishing a drainage and conservancy district within the county of Hardin, state of Ohio, has provided for an improvement therein, and has constructed such improvement through its regularly constituted board of directors; that the appraisal of benefits to the lands in the district was determined, approved and confirmed; that contracts were let and the improvement constructed; that bonds issued for the amount thereof were sold and delivered to the purchasers and became and are obligations of the district and liens upon the lands thereof; duly certified upon the duplicate of the district, including the known lands contained in section 16 of Marion township, Hardin county, Ohio; and that the appraised benefits to said lands resulting from the improvement included in section 16 of Marion township were in the amount of $24,495, and the assessments duly made and certified against said lands for such improvement between August 30, 1921, and September 4, 1930, are as follows:
1921 Certified August 30, 1921,............. $1,87 1.68 1922 Certified October 2, 1922,............. 860.97 1923 Certified September 1, 1923,............. 1,849.58 1924 Certified September 1, 1924,............. 1,859.87 1925 Certified July 3, 1925,............. 2,108.73 1926 Certified August 21, 1926,............. 2,121.89 1927 Certified September 3, 1927,............. 1,887.07 1928 Certified September 9, 1928, ........... 1,878.84 1929 Certified September 7, 1929, ........... 1,872.18 1930 Certified September 4, 1930, ........... 1,863.38
Relator further states that these sums are wholly unpaid and constitute liens upon the lands of said section 16, and no proceedings to reverse, vacate or modify these assessments or any part thereof have been brought or prosecuted by any one; that each and all said assessments are now delinquent and bear a penalty of two per cent. a month from the date of certification, and in addition thereto will be increased in an unknown amount for expense incident to their collection; that it was and is the duty of defendant, as state supervisor of such lands, whenever it appears that the net annual income accruing from such lands will be insufficient to pay the assessments as the same become payable, to issue and sell notes for the sum so required, payable in such number of years as will be required for the net rents to meet the sum of the assessments, and bearing interest at not more than five per cent. per annum, as defendant shall determine, and thereupon the notes and interest shall be a lien upon the rents or earnings or the proceeds of sale of lands so assessed, and the sum of such notes shall be paid out of such rents or earnings or proceeds of such sale by defendant acting as state supervisor of school lands; that the amount standing to the credit of said lands as annual rents or earnings is insufficient to pay the sum of such assessments as the same have become payable; that the balance of said amount as of March 3$ 1931, applicable to such purpose, is $633.50; that demand has been made upon defendant to issue and sell the notes as provided by law for the sum so required, to wit, $22,527.69, with interest and penalty, to be applied upon the whole sum of such assessment; that the lands herein described as contained in section 16, township 4, range 9 East, of Marion township, Hardin county, Ohio, and duly assessed for said improvement, are held by the state of Ohio in trust for free education, and are held under lease for term of years not renewable forever, and are subject to such special assessments benefiting such lands, and the same should be paid out of the annual rentals accruing to said trust; that defendant as auditor of state and as supervisor of school lands has failed and refused to observe and comply with the provisions of law relative to the payment of the assessments so made upon the aforesaid real estate, without lawful reason, his sole and only asserted reason being that the provisions of the General Code of Ohio as contained in Section 5330, et seq., are each and all unconstitutional and confer no authority on him to do and perform the several acts therein required to be done and performed by him as auditor and supervisor.
Relator further says it is without adequate remedy at law, and prays that a writ of mandamus issue commanding said defendant to issue and sell notes for the sum of $22,527.69, and in addition thereto prays for the amount of interest and penalties thereon, payable to the relator in such number of years as will be required for the net rents to meet the whole sum of such assessments, bearing interest at not more than five per cent. per annum, as he, the said defendant, may determine, and to do and perform each and all the acts in the premises required by Section 5330 et seq., of the General Code of Ohio.
By way of amendment relator alleges the establishment of itself as a drainage and conservancy district under the laws of Ohio, and says that defendant had due notice thereof by reason of a certain action in the court of common pleas of Hardin county, Ohio, numbered 14598 on the docket of that court, and during the pendency of these proceedings defendant maintained in said district a special agent in charge of the lands in said section 16, who represented him in all matters pertaining to and connected with said improvement; that during the pendency of these proceedings such agent recommended to defendant by letter that the original plan of the proposed improvement should be modified and changed so as to properly drain the lands in said section 16; that upon the recommendation of his agent defendant filed in said proceeding an application for instructions, and the matter was submitted to the court on the official plan and the evidence, and the court ordered and decreed a modification of the original plan so as to accommodate the lands in said section 16, and defendant waived all errors and took no exceptions to such order and decree and paid for such particular improvement, which is merely a part of the general improvement, from the annual rents or earnings accruing from the lands in said section 16; and that bonds have been issued and sold for the improvement and said bonds will be defaulted unless relator is granted the relief as prayed for in his petition.
Defendant demurs to plaintiff's petition, for the reason that it does not state facts sufficient to constitute a cause of action against defendant, or to show grounds for the relief sought by plaintiff in said petition, and for the reason that the provisions of Section 5330, General Code, relied upon by plaintiff in said petition, are unconstitutional and void and are contrary to the compact between the United States of America and the state of Ohio, whereby the state of Ohio acquired the property described in plaintiff's petition in trust for the benefit of the common schools in this state, for the benefit of which the proceeds from the lease of said lands are required to be devoted.
Mr. J. Ray Stillings and Mr. Smith W. Bennett, for relator.
Mr. Gilbert Bettman, attorney general, Mr. L.F. Laylin and Mr. William J. Ford, for defendant.
The petition and amendment do state facts sufficient to constitute a cause of action against the defendant, and show ample grounds for the relief sought under the statutory provisions as they exist. The main question here is whether or not these statutes are unconstitutional; or, if constitutional, whether they are violative of the compact between the United States and the state of Ohio whereby the lands contained in section 16 were obtained, if such question is raised by the demurrer.
Relator pleads that defendant as auditor of state and as state supervisor of school and ministerial lands participated in the proceedings under which this general improvement was made, waived all errors and took no exceptions to the proceedings and order of the court, and thereby foreclosed the state to either attack the constitutionality of the statutes under which the proceedings were had or to plead a violation of the compact between the state of Ohio and the federal government; and this contention is not without merit. The state can no more "eat its pie and have it" than can the ordinary corporation or individual.
For the purposes of the demurrer it is admitted that the auditor of state, as supervisor of school and ministerial lands, participated in the proceedings whereby this improvement was established. Whether the proceeding in which the auditor of state in his capacity as supervisor of school and ministerial lands participated was an independent proceeding, and the proceedings he now seeks to question are subsequent proceedings, is a question of fact and would to a great extent be determinative of the question whether or not the auditor of state, as supervisor of school and ministerial lands, is estopped to raise the question of the unconstitutionality of the statute, or that such statute violates the compact between the state of Ohio and the United States. This question could be raised by answer.
By the process of proffer and acceptance, section 16, here in question, was vested in the Legislature in trust for the use of schools. Was the acceptance of this trust by the state an exercise of a governmental or a proprietary function? The question in this case arises under a grant of lands. Most certainly this is not a governmental function. Were it a governmental function, we would be obliged to hold that there could be no estoppel; but it is proprietary, and the proceeding was participated in by a state department acting within the scope of its departmental powers, under existing laws, and in our opinion that department is estopped to question the validity of such laws. Chicago N.W. Ry. Co. v. Dey, (C. C.), 35 F., 866, 1 L.R.A., 744; State, ex rel. Clemmer Johnson Co., v. Turner, Atty. Genl., 93 Ohio St. 379, 113 N.E. 327.
As the estoppel is pleaded, it would necessitate our overruling the demurrer, and the same is overruled.
In the assessment of these lands in section 16, the state through one of its agencies was exercising its police power. Defendant insists that the state never had and has not now any right to exercise its police power, so far as these lands in section 16 are concerned; that, by the acceptance of these lands in trust, it bargained away its police power.
With this contention we cannot agree. If it were sought to sell these lands to pay these assessments, then the question would be academic; but plaintiff only asks that the rentals of the lands be applied toward the payment of the assessments.
There is no claim that the assessments are arbitrary, excessive, or that the lands are not being benefited; hence we have the right to assume that the lands are receiving the full benefit of the assessment. That being so, the value of these lands is being enhanced to the extent of the assessments, and, as a finality, nothing is being taken as a matter of fact.
In so holding we are not flying in the face of the case of Bentley v. Barton, 41 Ohio St. 410.
This money paid for the drainage of section 16 is as much for the benefit of the schools as if it were used in the purchase of fencing for the lands in question, or for schoolhouse equipment. It was certainly not contemplated by the United States or the state of Ohio that section 16 should stand in the way of sanitation, safety or good husbandry.
It has been held by this court that in Ohio school lands generally may be lawfully assessed for local improvements. Jackson, Treas., v. Board of Education of Cedarville Twp. Rural School Dist., 115 Ohio St. 368, 154 N.E. 247.
Of course section 16 is in a class by itself. There are a multitude of cases on both sides of the question raised herein. We prefer to follow the decisions that are keeping step in the march of civilization, and we hold that Section 5330, General Code, is not unconstitutional and is not violative of the compact between the United States and the state of Ohio.
The demurrer to the petition, as amended, is overruled, and leave is granted to respondent to answer.
Demurrer overruled.
MARSHALL, C.J., MATTHIAS, DAY, ALLEN and KINKADE, JJ., concur.
JONES, J., concurs in propositions 2 and 3 of the syllabus and in the judgment.