Tone v. Columbus (39 Ohio St. 281, 1883)

Doyle, J.

In State ex rel. v. Mitchell, 31 Ohio St. 592, it was decided by this court that the act of March 30, 1875, under which the improvement of North High street was made, was in conflict with sec. 1, art. 13, of the constitution, and therefore void.

That was a proceeding, in mandamus, to compel the commissioners of the improvement to make an assessment upon the abutting property for the cost of the improvement, the controversy between the commissioners and the city of Columbus being as to whether the intersecting streets and alleys were to be excluded from or charged with the assessment, in common with the abutting lots. The majority of the commissioners, resisting the claim of the city, presented the question whether the act was constitutional, insisting that if it was not, the court would not compel them to make the assessment upon any of the abutting property.

Having held the act to be unconstitutional, the court was called upon to consider whether its invalidity constituted an answer to the alternative writ, in other words, to the claim of the city., ,

It was held that it did not. The commissioners were selected by a vote of the property owners; they were the active agents in the construction of the improvement and incurring the large outlay for which the city issued its bonds; and they had full knowledge that the only provision made by the act of March 30, 1875, for the payment of such indebtedness, wras by an assessment upon the abutting property. So far as the commissioners were concerned, it is clear, and it was so decided, that they were estopped from raising the question under which they sought to justify their action.

This court, however, in that case extended the application of the doctrine of estoppel to others besides the commissioners, and beyond the finding that the commissioners could not on that ground refuse to make the assessment. It was held to apply to all who had participated in causing the improvement to be made, and to the extent that they were estopped from denying the validity of the assessment made to pay the cost thereof.

It is urged here that the court was not warranted in that case in deciding that any one would be estopped to deny the validity of the assessment, or including within the rule established any class of persons other than the commissioners themselves, and that all that is apparently considered or decided beyond that, found in the opinion of the court, is obiter dictum.

We think otherwise. The act under which the improvement was made provided that the commissioners should be selected from the owners of abutting property; and they were themselves, as such owners, liable for the payment of a part of the cost of the improvement. It also appeared in the case, that a petition was presented to the city council, by owners of abutting- property, asking for the privileges of the act in question, and that owners of abutting property had also voted for and elected such commissioners. ^

The court was called upon to say more than that the mere form of making an assessment should be gone through with, i. avail. When it is a question of the right of a stockholder to restrain the corporate body within its express or incidental powers, the stockholder may in many cases be denied, on the ground of his express assent or his intelligent, though tacit, consent to the corporate action. . . A corporation may do acts which affect the public to its harm, in as much as they are fer se illegal, or are mahom prohibitum. Then no assent can validate them. It ipay do acts not thus illegal, though there is a want of power to do them, which affect only the interests of the stockholders. They may be made good by the assent of the stockholders, so that strangers dealing in good faith with the corporation will be protected in a reliance upon those acts.” 22 N. Y. 269; 2 L. R. (Exch.) 390; 63 N. Y. 63; L. R. (7 Com. Pl) 43; Law R. (3 H. of L.) 249. . . .

“ And where third parties have dealt with the company relying in good faith upon corporate authority to do an act there is not needed that- there be an express assent thereto on the part of the stockholders to work an equitable estoppel. Their conduct may have been such, though negative in character, as to be taken for an acquiescence in the act; and when harm would come to such third parties if the act were held invalid, the stockholders are estopped from questioning it. We suppose acquiescence, or tacit assent, to mean the neglect to promptly and actively condemn the unauthorized act, and to seek judicial redress, after the knowledge of the committal of it, whereby innocent parties have been led to put themselves in a position from which they cannot be taken without loss. It is the doctrine of equitable estoppel which applies to members of associated or corporate bodies as well as to persons acting in a natural capacity.”

We presume the estoppel in such case would apply as well to third persons dealing with the corporation and receiving the benefit of the ultra vires act or contract as to the members of the corporation, and would arise from the same facts.

It may be suggested here that while there was a want of power to order this improvement under the act in question, and perhaps a total want of power to issue the bonds, there was ample power vested in the corporation to make the improvement, and assess the cost of it, under valid existing law; and whatever may be said about the rights of the holders of the bonds thus issued without authority, it does not necessarily follow that the question between the city and the property-holders or the contractors doing the work is the same. Hitchcock v. City of Galveston, supra.

Y. Several of the plaintiffs allege that they were married women, owning in their own right and as their separate property, the lots or lands abutting upon the street upon which the assessment is charged. The improvement in question, being for the benefit of such separate property and relating thereto, and the benefits accruing therefrom attaching to such separate property, the-rules heretofore announced apply to them, as fully as if they were femmes sole. As such owners they were vested with the full right to petition, to vote, and to act precisely as any other owner, and whatever would operate as an estoppel were they sole, will with respect to such separate property have the same effect. notwithstanding their coverture.

YI. "What effect the signing of a remonstrance against *the passage of the ordinance, and presenting it to the city council, as in Carter’s case, will have, will depend largely upon the subsequent conduct of the signers. While they are in the attitude of remonstrants, it certainly cannot be maintained that they are silently acquiescing.

The demurrers must be overruled; and those cases that were appealed from the common pleas, will be remanded to the district court, and those in which petitions in error were filed in the district court, will be remanded to the court o£ common pleas, for such further proceedings as are authorized by law.

Judgment accordingly.

Okey, J.

I concur in the judgments rendered in these cases, and generally in the views expressed by the majority as to the questions directly presented by the record; but I do not concur in the view that, in a case like this, there may be an estoppel by silence. That question is not presented now, but it may become important in’the further hearing of the causes, 'and hence it has been deemed proper to consider it. In my opinion, where a municipal corporation grades and paves, in an ordinary manner, one of the public streets to which it has a title in fee, and seeks to charge, under an unconstitutional law, the expense on the owners of lots abutting on the street, such owners who have never encouraged the corporation, its officers and agents, by act or word, in making such improvement, will not be estopped to en join an assessment for such improvement, under Rev. Stats. §§ 5848, 5851, although they have been materially benefited by the improvement, and knew, while the improvement was in progress, that two-thirds of such owners had not, as required by the act, petitioned for the improvement, and that the officers and agents intended to assess such owners for the same. To estop them they must in some other way than by mere silence and inaction, have encouraged such officers and agents to make the improvement. State v. Railway Co., 74 Mo. 163; State v. Railway Co., 31 Ark. 701; Matter of Van Buren, 17 Hun, 527, affirmed, 79 N. Y. 384; Starr v. Burlington, 45 Iowa, 87; Counterman v. Dublin Tp., 38 Ohio St. 515. Quinlan v. Myers, 29 Ohio St. 500, arose under a valid act, and I do not deem it necessary to consider -whether the case was properly decided. But I am further of opinion, that where lot owners have said things or done acts which were intended to and did encourage the officers and agents of the corporation in making the improvement under the statute, such statute is as to them valid, and should be enforced, and it is immaterial whether they actually knew that there was any defect in the law or the proceedings under it, or were, or were not, specially benefited by the improvement, beyond other owners of abutting lots.