
    REFUNDING BONDS — GOLD BONDS.
    [Hamilton Circuit Court,
    January Term, 1895.]
    Swing, Cox and Smith., JJ.
    
      City of Cincinnati ex rel. v. Anderson et al., Sinking Fund Trustees.
    1. Refunding of Street Improvement Bonds.
    Section 2729a, Revised Statutes, which excludes street improvement bonds from the-classes of bonds to he refunded, relates to improvement bonds issued by the city which are redeemed by moneys collected by assessment on the property abutting on the improvement, but does not apply to bonds' issued for street improvements by the city., for which no secondary liability rests on any property for their payment.
    2. Power of Municipal Corporations.
    Except as to incidental powers such as are essential to the very life of the corporation, the presumption is that the state has granted in clear and unmistakable terms all it is designed to grant at all. Doubtful claims to power are resolved against the corporation.
    3. Power of City to Issue “ Goud ” Bonds.
    The power to issue gold bonds not being expressly granted, and it not being essential that the bonds should be made payable in gold in order that they may be sold, it cannot be an implied power for the city to make them payable in gold.
    4. “ Doedar ” Defined.
    Section 2729a, Revised Statutes, authorizing the issue of bonds by the city of Cincinnati to the amount of twenty-six millions of “ dollars,” dollars must be defined to be the unit of value of money, as enacted by congress, consisting of a legal tender currency dollar redeemable in gold or silver coin of the United States, and a bond payable in gold, excluding the payment of such bond in legal tender currency or silver coin, would be a limitation on the “ dollars ” used in the statute, which is not authorized without express legislation to that effect.
    Error to the court of common pleas of Hamilton county.
    
      
       The judgment in this case was affirmed by the Supreme Court, September 25,1895; unreported.
    
   Swing, J.

This cause is in this court on error to the judgment of the court of common pleas. In that court plaintiff in error brought an action for an injunction. It was sought to enjoin the defendants, the sinking fund trustees of the city of Cincinnati, from issuing the bonds of said city for the purpose of redeeming certain other bonds hitherto issued by said city in the sum of $2,973,000. It was alleged that said defendants had no power to issue said bonds, for two reasons : 1st. That the statute did not authorize the refunding of the bonds proposed to be refunded, for the reason that they were street improvement bonds; and, 2d, That the bonds proposed to be issued provided that said bonds should be paid principal and interest in gold.

The defendant filed a demurrer to plaintiff’s petition, which demurrer the court of common pleas, without argument, sustained, and thereupon plaintiff brought the cause into this court on error to the judgment of the court of common pleas in sustaining said demurrer.

' Whatever power the defendants have to issue the bonds in question, is contained in section 2729a, Revised Statutes, which is as follows: “That the sinking fund commissioners in cities of the first grade of the first class for the purpose of refunding the bonded debt, exclusive of street improvement bonds of the city for which said trustees act, at a lower rate of interest, and for the purpose of buying the fee-simple of real estate held by the city under perpetual leases * * * shall have power to make and issue the bonds of such city with coupons or registered, due in fifty years, and redeemable thirty years from date, bearing interest at a rate not greater than b per centum per annum, payable semi-annually, to an aggregate amount not exceeding $26,000,000 * *

■Tlie bonds in question proposed to be redeemed were issued under a special act of tbe legislature authorizing the improvement of the streets of said city with granite blocks, asphalt and other material, and it is urged that the above section prevents the refunding of such bonds.

The words of the section certainly would cover such bonds if there was any reason to think that they were intended to embrace them. But we are of the opinion that the street improvement bonds covered by the statute are the bonds issued by the city for street improvements, and which said bonds are to be redeemed by moneys collected by assessment on the property abutting on the improvement. Having collected the money by assessment to pay the bonds which the city had in the first instance issued, it certainly could not be contemplated that the bonds should be refunded when the city had the money in its treasury for their payment. But the bonds in question were wholly the debt of the city, with no secondary liability resting on any. property for their payment, and they should only be paid like any other debt of the city by a tax on all the property of the city, and they differed in no respect from any other bonded indebtedness of the city. We see no reason why bonds issued by the city for street improvements which are in every respect like other bonds issued by the city, should not be refunded while such other bonds might be. And there beinga class of street improvement bonds which in reason should not be refunded, the city having collected the money to pay the same, we feel assured that it was the intention of :he legislature that the provision of this section prohibiting the refunding of street improvement bonds was intended to apply to the latter, and not the former.

Have the defendants the power to make the bonds payable, principal and invest, in gold?

Spear, Judge, at p. 121, in 45 Ohio St., in a few words defines the limits of :he powers of municipal corporations. He says: “Indeed, it is conceded by the earned counsel for plaintiff that the power to pass the ordinance does not exist mless it has been expressly granted by the legislature or is clearly implied, and :here is no doubt that this is the law. Power to enact such an ordinance would rot be inherent in the council. Except as to incidental powers such as are essential to the very life of the corporation, the presumption is that the state has granted in clear and unmistakable terms all it is designed to grant at all. Doubt-:ul claims to power are resolved against thé corporation.”

The law authorizes the issuing of “ bonds” to the extent of “twenty-six nillion dollars.” It does not in terms authorize the issuing of bonds payable in jold. Is the power to issue bonds payable in gold an incidental power essential to die very life of the power granted herein to the corporation? If not, the word ‘ gold ” can not be read into the law.

The word “dollar,” the only word used in the law which limits the word ‘bond,” may be defined to be the unit of value of money as enacted by the congress of the United States, and at the time of the passage of the law in question is well as at the present time, the dollar of the United States consisted of a legal ;ender currency dollar redeemable in gold or silver coin of the United States, and :he gold coin and silver coin of the United States. So that a bond of the city of Cincinnati, payable in dollars, might be paid either in legal tender currency, or jold or silver coin, and therefore a bond payable in geld “dollars” would De a limitation on the “ dollars ” used in the statute, in that it would exclude the aayment of said bond in legal tender currency or silver coin.

That the insertion of the "word “gold” makes a material limitation on the vord “dollars” used in the statutes is not denied, the very object in making the Donds payable in gold being to make that limitation, the claim of the defendants ?eing that it would be wise for them to do so, as"it would enable them to dispose )f the bonds to better advantage. Whether it would be wise or not to make this imitation, is a matter we have nothing to do with, the only question for our consideration being whether the legislature has granted the power to the defendant :o so act. We are unable to see how it can be claimed that it is essential to the power to issue bonds that they should be gold bonds. The court will tab notice of the fact, which everybody knows, that the city of Cincinnati can ver readily sell its bonds payable in “dollars.”

The power to issue gold bonds not being expressly granted, and it not beín essential that the bonds should be made payable in gold in order that they ma be sold, it cannot be an implied power to make them payable in gold..

It therefore seems to us that there is no authority given in the statute for th defendants to issue gold bonds. That the legislature never intended to grar this power it seems to us clear when the acts of the legislature at other times i; relation to issuing bonds are considered.

Section 8307, passed in 1869, authorizes the city of Cincinnati to issue bone in the sum of ten million dollars for the purpose of building the southern rai road. In 1875 the legislature authorized the said city to issue six million dollai bonds for the completion of said road — said bonds to be payable in “gold” or lav ful money. In 1878 the legislature authorized said city to issue two million do lars in bonds payable in “ coin ” or lawful money. In the same year the legist; ture authorized a further issue of two million dollars in bonds payable in “ coin or lawful money.

In 1880 the legislature authorized said city to issue bonds for three hundre, thousand dollars, payable in “coin” or lawful money. >

The intention of the legislature in each of these acts, it seems to us, is plan especially when considered together. The first issue of ten million dollars c bonds, which is the same wording as the present act, did not authorize the cit to issue gold or coin bonds. But the next act (1875) did in express terms at thorize the issue of gold bonds, thus clearly indicating that the legislature did nc intend that gold bonds should be issued unless it gave the authority in exprei terms. This is further shown by the three succeeding acts in which the city i authorized to issue “coin ” or lawful money bonds. Clearly under these acts gol bonds could not have been issued, for “coin” meant much more than gold; . meant gold and silver.

It is entirely proper that in considering these acts we should take notice c the discussion in the public press and the acts of the trustees and others inter ested in disposing of these bonds, which led to the legislature- authorizing th bonds to be made payable in “gold” and “coin.” There was no question bu what it was thought necessary that in order that the bonds might be made paj able in gold or coin, that there should be the express grant by the legislator authorizing it, and that the authority to issue bonds payable in “dollars ” wouli not be sufficient.

As bearing on the question at issue, we think the recent acts of the govern ment of the United States throw some light. The government desired to issu; bonds to the extent of $65,000,000. The law of congress authorized the issue c bonds payable in “coin.” The secretary of the treasury wanted to issue bone payable in “gold coin,” claiming that by doing so a saving of more than $15,000 000, would be made. But he did not claim that under the law he had the rigl to issue gold coin bonds. The President, by special message to congress, aske authority to make the bonds payable in gold coin, which congress refused t grant, thus showing that both the executive department of the government, an congress, placed an interpretation on the law, that when the word coin was usee there being two kinds of coin, it meant both kinds of coin, and that it could nc be limited by making them payable in one kind.

Two decisions have been cited to us, the 87 Ala., 240, and the court of a] peals of Kentucky, reported in the Ky. Taw Rep., 856, which held a contrar doctrine ; and while we recognize the fact that these decisions call for the ver highest consideration, it seems to us that the reasons upon which they are bas - are not applicable to the cases decided, and that they are contrary to the views c our own supreme court, as above cited.

Fred. Hertenstein, City Solicitor, for City.

Thornto?i M. Hinkle, for Sinking Fund Commissioners'.

Under tlie laws of our. state millions of bonds have been issued within the ast thirty years. They have been “dodar” bonds, and so far as we a. e aware, lone have been issued payable in gold or coin except such as have been expressly uthorized to be so issued, and this is the first time that the right has been sserted as far as our knowledge goes. The interpretation placed on acts similarly rorded in our state, covering so long a period under like circumstances, is cer-ainly entitled to great weight.

While it might be to the advantage of the city in this particular instance to ssue these bond payable in gold, we think it contrary to the policy of our state s expressed in its acts hitherto, and we should very much doubt the wisdom of. uch policy, for it would certainly lead to a great deal of confusion to have gold. ionds, silver bonds and currency bonds ; for it certainly must be desirable for the tate that all its bonds should be of equal value, and that they should all be pay-ble in the unit of value as fixed by the congress of United States as being a egal tender. Certainly it is not to the interest of the state that it should aid ini asking a distinction in the value of its bonds. Whether the condition of the :ountry is such that the distinction cannot be prevented must be a source of egret to all. But, however that may be, the power to make the change must be ibtained from the legislature, for it seems clear to us that it has not been granted >y it.

The judgment of the court of common pleas is reversed, and the cause re-handed with instructions to overrule the demurrer, and unless the defendants lesire to further plead, that an injunction be granted.  