Opinion
No. 24055
Decided December 27, 1933.
Roads and streets — Change of grade — Interurban railway to pay cost — Section 6956, General Code — County commissioners may provide for installment payments and issue anticipatory bonds — Commissioners may contract to lower tracks and assess cost — Public credit not loaned by county incurring such expense, when — Section 6, Article VIII, Constitution.
1. Whenever a road or street is improved, where an interurban railway lies within the improved portion of the roadway, under Section 6956, General Code, the cost of a change of grade shall be paid by such interurban railway company, and the commissioners of the county in which such improvement is situated may provide for the payment of such amount in installments under the statute, and may issue bonds in anticipation of the collection of such installments.
2. Where an interurban railway fails or refuses to lower its tracks to conform to a change of grade in the improvement of a road or street under Section 6956, General Code, the commissioners of the county in which such improvement is situated may contract for the lowering of such tracks and assess the cost thereof under the statute against such interurban railway company.
3. The incurring of expense by the county for the lowering of such tracks does not constitute a loaning of credit in violation of Section 6 of Article VIII of the Constitution of Ohio.
ERROR to the Court of Appeals of Hamilton county.
In this case the plaintiff in error filed an injunction suit against the treasurer of Hamilton county, to enjoin the collection of an assessment levied by the commissioners of Hamilton county as a charge against the plaintiff in error to pay for the cost which Hamilton county had incurred in lowering the tracks of the plaintiff in error to conform to a grade established by the county commissioners for the improvement of Springfield pike, a county road through the village of Wyoming. The village consented to the improvement, and the plans and specifications therefor. A temporary injunction was obtained, enjoining the collection of the cost of lowering the tracks. The defendant in error filed an answer, setting up certain defenses, none of which is of moment here except a portion of the fourth defense of the second amended answer, which reads as follows:
"Appellant says that at the time the legislation hereinbefore recited was adopted for the improvement it was essential that the grade of said tracks be lowered, which necessitated the tearing up of the rails, ties and other adjuncts of said track and the excavating and filling of the place to which, under the plans the track had to be removed; and their relaying and reconstruction upon said proposed place in Springfield pike. The appellee company represented to the board of county commissioners and the council of the village of Wyoming that it was unable to finance said work and reconstruction and it falsely represented that said work and reconstruction would confer no benefit upon it, but, nevertheless, on the thirtieth day of December, 1918, suggested that the board of county commissioners contract not only for the entire paving, but also for the work necessary for the appellee to do in connection with the relaying of its tracks (including the grading and work above mentioned); and suggesting that half of the cost of the excavating, concreting and paving together with the cost necessary to relay its tracks, be assessed against the appellee over a ten year period, as was frequently done by other municipalities for work of that nature. Subsequently, pursuant to said suggestion, the legislation hereinbefore referred to was passed and the appellee knew that the board of county commissioners were expending the amount of money hereinafter set forth as the cost of lowering appellee's tracks with all of the work necessary in that connection, and that appellee was duly notified and knew that said cost was to be certified and charged against it and took no steps to prevent the expenditure of said money. The appellant actively co-operated in said work in that it installed cross-overs for the continuation of the operation of its street railway system wherever and whenever necessary to consummate said work.
"The appellant says that in doing the grading it was necessary to handle 10,543 yards of earth at a cost of one dollar per yard; the cost of laying the track for labor alone was $24,679.20; that the cost of relaying under-drainage for said track, after the manner it had been drained before, was $3,658.75; and the cost of the track inlets necessary for said draining was $480.00. All of said charges were reasonable and the result of legal competitive bidding."
The second amended answer prayed for the dismissal of the petition and for a personal judgment against the Ohio Traction Company in the sum of $108,000. A demurrer was filed to the second amended answer.
The case was heard on appeal in the Court of Appeals of Hamilton county, which court struck from the fourth defense of the second amended answer and eliminated therefrom "all allegations with reference to the cost of furnishing new rails and ties and foundation for tracks." The court then found the demurrer of the appellee to be not well taken, and overruled the same. A reply was then filed.
After hearing upon the pleadings and the evidence, the court entered the following decree:
"Summary decree permanently enjoining treasurer of Hamilton county from the collection of assessment in excess of $70,563.93 and ordering the costs apportioned equally against the plaintiff and defendant.
"This cause having been submitted on appeal upon the pleadings and the evidence, the court finds: In the year 1919 the sum of $108,000.00 was assessed against the plaintiff by reason of the issuance of bonds in that amount issued and awarded by the board of county commissioners of the county of Hamilton, Ohio, in anticipation of such assessment, and to defray the costs of lowering the tracks belonging to the plaintiff in a certain roadway designated Inter-County Highway No. 43, and known as the Carthage-Hamilton pike, within the limits of the village of Wyoming, Ohio, and for the purpose of causing the grade of such tracks to conform to the grade of such highway, as provided by said board of county commissioners for such highway as then proposed to be improved; and that such high-way was so improved and such tracks were lowered and such grade of said tracks was so caused to conform to the grade of such improved highways; and that such assessment was ordered alternately to be paid in twenty semi-annual installments, beginning in January, 1920; that such assessment was certified to the auditor of Hamilton county, Ohio, and by him placed upon the special duplicate, to be collected as other taxes.
"The court further finds that the cost of changing the tracks to conform to the grade established by the board of county commissioners in said highway and the cost of paving the same between the rails and for eighteen inches outside thereof are proper items of assessment, and that the cost included in such assessment of furnishing new rails and ties was an improper and unlawful assessment against the plaintiff, and that the payment of the cost of same by the board of county commissioners of said Hamilton county, Ohio, constituted a lending of credit of such county for private purposes.
"The court further finds that the cost of excavating which can be lawfully charged to and assessed against plaintiff, is $10,543.00; that the cost of laying the tracks, which can be lawfully charged to and assessed against plaintiff is $15,054.15; and that the cost of concrete foundations for such tracks, which can be lawfully charged to and assessed against plaintiff, is $44,966.74, a total lawful charge and assessment of $70,563.93.
"And the court further finds all of said assessments of $108,000.00 in excess of $70,563.93 is unlawful and should be enjoined.
"It is, therefore, so ordered and decreed that all of such assessment in excess of $70,563.93 be permanently enjoined, and the defendant treasurer of Hamilton county, Ohio, be and he is permanently enjoined from the collection of said excess."
Further facts are stated in the opinion.
Mr. Joseph Wilby, Messrs. Taft, Stettinius Hollister and Mr. Charles P. Taft, 2d, for plaintiff in error.
Mr. Louis J. Schneider, prosecuting attorney, and Mr. Walter M. Locke, for defendant in error.
The charge against the Ohio Traction Company was assessed by the county commissioners of Hamilton county under the authority of the latter part of Section 6956, General Code, which reads as follows:
"Whenever a road or street is improved where a street or interurban or other railroad or railway lies within the improved portion of the roadway, such railroad or railway grade shall in all respects be changed to meet the approval of the county surveyor unless otherwise provided for in the grant or franchise, by virtue of which such railway operates on or occupies such highway, and costs of such change of grade be paid by such company under the law or by the terms of its franchise or grant, shall be a lien upon the property of such company and the proper authorities may provide for the payment of the amount chargeable against said company under the law or by the terms of its franchise or grant, in installments as in the case of other property owners, and such installments shall bear interest as in other cases, and the board of county commissioners or other authorities may issue bonds in anticipation of the collection of said installments."
The record shows that the commissioners proceeded under this statute, and not under the statutes with reference to assessment for benefits. The grade of Inter-County Highway No. 43, known as the Carthage-Hamilton pike, lying within the limits of the village of Wyoming, was lowered, and the tracks of the interurban railway lying within such improved portion of the roadway were lowered in order to conform to the change of grade. Although repeatedly notified to do so, the Ohio Traction Company failed to proceed with this lowering of the tracks, and the county commissioners themselves took bids, let a separate contract for the lowering and reconstruction of the tracks, and assessed the cost thereof against the Ohio Valley Traction Company, to be paid in ten annual installments, and issued bonds in anticipation of such assessment.
The record shows, in the statement of George M. Lemmel, deputy county surveyor, which was admitted without objection, that the following was the cost of the work:
"The contract awarded June 3, 1919, by the county of Hamilton to Joseph A. Byrnes comprehended the laying of a double street railroad track from the south line of Wyoming for a distance of 7,250 feet north. The items included and the amount actually paid for each are:
Grading ...................................... $10,543.00 Track laying ................................. 32,552.50 Joints ....................................... 1,452.00 Extra rails .................................. 752.50 Under-drainage ............................... 3,680.75 Concrete ..................................... 44,966.74 Track inlets as per plan ..................... 480.00 ------------- Total ............................... $94,405.49"
The Court of Appeals retained the items for grading, for concrete foundations, and part of the cost of track laying. Lemmel found that the total cost of labor for track laying was $15,054.19. The Court of Appeals deducted from the item of track laying $17,498.31 for new ties, new braces, new rails, spikes, shim plates, fish plates, bolts, and cross-overs, and rendered judgment assessing the cost of excavation, labor on the laying of track, and the cost of the new concrete foundation, to the amount of $70,563.93. The court held that the supplying of new material to the Ohio Traction Company was illegal because it constituted a loaning of credit in violation of Section 6 of Article VIII of the Constitution of Ohio, which provides:
"No laws shall be passed authorizing any county, city, town or township, by vote of its citizens, or otherwise, to become a stockholder in any joint stock company, corporation, or association whatever; or to raise money for, or to loan its credit to, or in aid of, any such company, corporation, or association."
The constitutionality of Section 6956, General Code, is not attacked. If that statute were not constitutional, a traction company or railroad which refused to comply with the order as to lowering the tracks might completely block a road improvement and leave the county powerless.
We have here not an assessment for benefits, but an assessment for the cost of the change of grade, and this for a change of grade upon a public right of way. The case is strongly differentiated from the case of City of Cincinnati v. Harth, 101 Ohio St. 344, 128 N.E. 263, 13 A. L. R., 308, because in that case the voluntary furnishing of new construction by the city was enjoined. The Harth case involved a totally different statute, namely, Sections 3812-2 and 3812-3, General Code (108 Ohio Laws, 215). In the instant case the county proceeded under Section 6956, General Code, after having been compelled to incur expense in order that it might proceed with its public improvement. It is admitted that the county commissioners notified the company to lower its tracks, and that it failed to do so. The county now is endeavoring to recover the expense incurred in the improvement of a public highway from the private corporation which was under an obligation to relay the tracks. It is not claimed that any statutory provision was violated in the various proceedings. The Court of Appeals heard the evidence and eliminated from the claim of the county the cost of furnishing all materials and labor which became the property of the railroad as such, and charged the company only with the cost of lowering the tracks to conform to the grade of the public highway. We see no error in the judgment, and it is hereby affirmed.
Judgment affirmed.
WEYGANDT, C.J., STEPHENSON, JONES, MATTHIAS, BEVIS and ZIMMERMAN, JJ., concur.