
    City of Cincinnati v. Dexter et al.
    
      Obligation of contract — Sale of railroad — Act of May 4, 1869, does not exclude alienation, of property — Validity of act of March IS, 1887, authorizing sale of property — Conditions of sale — Constitutional law.
    
    1. The act of May 4, 1869 ( 66 Ohio Laws, 80), under which the line of railroad known as the “Cincinnati Southern Railway’ ’ was constructed, does not require that the road be kept under lease perpetually by the board of trustees provided for by the act, nor exclude the power of alienation of the property by the proper municipal authorities, in aecoralance with appropriate legislation.
    2. The act of March 12, 1887 (84 Ohio Laws, 82), which authorizes the sale of railways constructed under the act above mentioned, is not in conflict with section 6, of article 8, of the constitution of this state, nor will a bona fide sale, made under its provisions, constitute a loan of municipal credit to the purchaser, or to any corporation that may obtain control of the road, though in making the sale, the parties contemplate that the road will pass into the hands of a corporation, and a per centum of the future gross earnings of the road is to be paid- as a part of its purchase price.
    3. Payment of the purchase-money in cash is not essential to a valid sale under the statue; the sale is authorized to be made upon terms of payment satisfactory to the designated municipal board.
    4. While the states of Kentucky, and Tennessee, each granted the privilege of constructing the railway within their respective territorial limits, and also certain franchises necessary to the operation and maintenance of the road, which add materially to its value, neither state acquired any property interest in the railway, nor is the consent of either necessary to its sale.
    5. It is not a ground of injunction in favor of the debtor, that the act or proceeding sought to be restrained will impair the obligation of his contract; as the creditor is the only party who can be injuriously affected, the remedy belongs to him.
    (Decided June 23, 1896.)
    Error to the Circuit Court of Hamilton county.
    The action below was brought by the corporation counsel of the city of Cincinnati, in its name, against Julius Dexter and others constituting the board of trustees of the sinking fund of that city, to restrain the taking of steps toward a proposed sale of The Cincinnati Southern Railway. The prospective purchasers are also parties defendant.
    It appears from the petition, that the line of railroad known as “theCincinnati Southern Railway,” extending from a point in the city of Cincinnati; through the states of Kentucky and Tennessee, to the city of Chattanooga in the latter state, was constructed by the city of Cincinnati, under the act of the legislature, of May 4, 1869, (66 O. L. 80). Under power conferred by that act on a board of trustees authorized to construct the road, ten millions of dollars were borrowed, and the bonds of the city therefor issued, which are secured by a mortgage on the line of railway and its net income, and by a pledge of the faith of the city to levy taxes sufficient with the net income, to pay the interest, and provide a fund for the payment of the principal at its maturity. The act authorized' the trustees to lease portions of the road, as the same should he constructed, and on its completion to lease the .whole of it on such terms and conditions as should be prescribed by the city counsel. Under subsequent legislation additional bonds were issued by the trustees, until the total amount exceeded eighteen millions of dollars; and for the security of these additional bonds the statute declares a mortgage shall exist without conveyance, of the same purport as that given to secure the first issue of bonds.
    Statutes were adopted by the legislatures of Kentucky, and Tennessee, which gave authority to appropriate property, and construct and operate the road in those states, respectively, and do all acts necessary thereto. These statutes also declare that a mortgage shall exist, without conveyance, upon the line of railway and its net income, as a security for the bonds issued by the trustees.
    By an act of the legislature of this state, passed February 24, 1876, (73 O. L. 13), authority was conferred on the board of trustees, under certain restrictions, to lease the whole line of the railway upon its completion; and, in 1881, it was leased, having then been completed, to the Cincinnati, New Orleans & Pacific Railway company, which is now operating the same. The lease is for a term of twenty-five years, expiring in 1906. The first issue of bonds matures in 1902, and, while the petition does not distinctly disclose when the later issues mature, it may be inferred that their time of maturity is the same as that of the first issue. It also appears that some donations were made to the road.
    On the 12th day of March, 1887, the general assembly of this state, passed the following statute (84 O. L. 82), supplementary to the above mentioned act Of May 4, 1869.
    “Section 1. Be it enacted by the General Assembly of the State of Ohio. That whenever a line of railway has been completed and leased under the act to which this is supplementary, and under the acts amendatory of and supplementary to such act, and the city council of the city owning said line of railway shall, by a resolution, passed by a majority of the members elected to each board thereof, declare it to be to the interests of said city that said line of railway shall be sold, it shall be the duty of the trustees of the sinking fund of said city to negotiate for a sale; and whenever said trustees of the sinking fund shall receive in writing from a responsible party, an offer to buy said line of railway at a price and upon terms of payment satisfactory to said trustees of the sinking fund, the written offer to buy shall be published twice a week for three consecutive weeks in not less than four newspapers, printed, published and of general circulation in such city, if there be so many, but not more than two of said newspapers shall be printed in the same language or be of the same politics; and in addition thereto such further publication and advertisement may be made as said trustees of the sinking fund may deem proper.
    “Section 2. Immediately upon making the first insertion of such advertisement as above required, said trustees of the sinking fund shall give notice in writing to the mayor of the city owning said line of railway; and the mayor of said city, within ten days after the receipt of such notice, is hereby authorized and required to issue his proclamation, which shall' state the price and terms of payment 'of the proposed sale, and shall declare to the qualified electors of said city the time of holding an election, which shall be within twenty days from the date of such proclamation, at which election the question of making such sale shall be submitted to a vote of the qualified electors of said city; said vote shall be taken at the usual place of holding elections in each ward of said city, and the ballots cast at said election shall have printed or written thereon the words ‘Por the sale of the railroad — Yes,’ or ‘Por the sale of the railroad— No;’ and such sale shall not be binding or take effect unless the majority of all the ballots cast at said election shall have written or printed thereon the words ‘For the sale of the railroad — Yes.’ The returns .of said election shall he made to the city clerk of said city, who shall canvass the same and report the vote to the common council, and if a- majority of the electors voting at such election shall have voted in favor of the making of the said sale at the price and upon the terms of payment proposed, the said trustees of the sinking fund are authorized to consummate such sale at the price and upon the terms of payment contained in such offer, and also to arrange and fix all the other terms and conditions of said sale, and formally and finally to agree upon the same and to execute a contract therefor. The mayor of said city and the president of the board of trustees of said line of railway shall, on behalf of said city, execute and deliver all deeds and other instruments in writing necessary or proper fully to carry out said sale; and the comptroller of said city shall sign his name and affix the seal of said’ city, and the secretary of the board of trustees of said line of railway shall sign his name and affix the seal of said board of trustees to all deeds and writing in attestation thereof; provided, that only one election shall be held under the provisions of this act. If at any such election the proposed sale, as submitted, receives a majority of the votes cast, then the sale shall be carried into effect as above provided.
    “Section 3. To enable said trustees of the sinking fund to arrange the terms of the payment of the purchase money, and to enable them to carry out any such sale, they hereby are authorized to issue the registered and coupon consolidated sinking fund bonds of said city in such sums and denominations as they may find expedient or necessary in retiring and refunding the outstanding bonds of said city which, are issued for the construction and completion of said line of railway, and for that purpose the said trustees of the sinking fund are authorized and empowered to execute,.sell or exchange said bonds in such manner and form as said trustees may determine.
    “Section 4. That section 2729c of the Revised Statutes of Ohio, as passed January 29, 1885 (2 Ohio L.), be and the same is hereby repealed.” “Section 5. This act shall take effect and be in force from and.after its passage.
    The petition then alleges that:
    “In pursuance of this act, the board of legislation of the City of Cincinnati, by a majority of the members elected to said board, did .on the 10th day of March, A. D. 1896, pass a resolution declaring it to be to the interest of said city that said line of railway, known as the “Cincinnati Southern Railway,” and extending from Cincinnati to Chattanooga,'be sold, which said resolution was concurred in by the board of administration of said city on the 13th day of April, 1896, and was approved by the mayor of said city on the 15th day of April, 1896, and is still in full force and effect. After the passage and approval of said resolution, the trustees of the sinking fund of said city did receive in writing an offer from the defendants, A. B.. Andrews and Henry A. Taylor, to buy said line of railway which said offer is as follows, viz:
    ‘To the trustees of the sinking fund of the city of Cincinnati:
    We, the undersigned, offer to buy the line of railway, of the Cincinnati Southern Railway, subject to the rights of the present lessees therein, at the price and upon the terms of payment following, to-wit:
    1. To pay in gold coin $19,000,000 on the first of October, 1996, with interest thereon, in gold coin, from October 1, 1896, at the rate of four per cent, per annum, payable semi-annually; such payment to be secured to the satisfaction of your Board by a first mortgage lien upon the said line of railway and upon the equipment of the Cincinnati, New Orleans and Texas Pacific Railway Company ; the mortgage to provide that the principal shall become due and payable in cash at any time the interest shall remain unpaid for 90 days.
    2. To pay in cash $1,440,000, in quarter yearly installments of $60,000 each, begining October 1, 1896.
    3. To pay in cash a sum equal to ten per cent, of the annual gross earnings of said line of railway in excess of $4,500,000 from and after October 1,1902.
    4. To pay the rental falling due after October 1, 1902, upon the following leaseholds, amounting to $5,808 per annum; from Sarah B. McLean to the city of Cincinnati, recorded in Lease Book 62, page 21, and from Francis T. White’s assignors to the city of Cincinnati, recorded in Lease Book 62, page 16, of the records of Hamilton county.
    We agree also:
    5. That general offices of said lire of railway shall be maintained in the city of Cincinnati.
    6. To indemnify and hold the city of Cincinnati harmless against all claims of the Cincinnati, New Orleans and Texas Pacific Railway Company for damages on account of alleged breach of any of the conditions or convenants of the present lease of the city to that company.
    7. In each and every year for eight years after the delivery of the deed hereunder to expend not less than $250,000 in betterments, including bridge renewals, upon said line of railway to be covered by said mortgage.
    '8. To secure the payment.of said $1,440,000 and the said expenditure of $250,000 per annum for eight years for betterments by the deposit of $2,000,000 in bonds satisfactory to your Board, which bonds shall be returned to us in proportion to payments as made from time to time.
    The deed shall be delivered on October 1, 1896, and the sale, whenever consummated, shall date as of that day; the rents to be payable to the city up to that day under the present lease.
    This offer is made by us individually, but with the intention of transferring • our interests to a corporation to be organized under the laws of one or more of the states of Ohio,. Kentucky and Tennessee, for the purpose of operating said line of railway, and. when such corporation shall have been organized to your satisfaction it is our intention to transfer to it all our rights under this offer, or its acceptance, whereupon our individual rights, interests and liabilities under this offer and its acceptance, and the contracts in pursuance thereof, shall vest in and rest upon the said corporation alone.
    Cincinnati, June 13, 1896.
    A. B. Andrews. Henry A. Taylor,
    
      This plaintiff says that said board of trustees of the sinking fund resolved that said offer was from responsible parties, and at a price and upon terms of payment satisfactory to said trustees, and ordered the clerk of said board to publish said offer in the newspapers of said city as provided by law, and they propose immediately upon making the first insertion of such advertisement to give notice in writing to the mayor of the city, and to take all the other steps contemplated by said act for the purpose of consummating a sale of said railway under said offer. Plaintiff says that all the bonds issued by the trustees, aggregating about $18,610,000, are still outstanding and unpaid, and that the first issue thereof, amounting to $10,000,000, is still a valid and subsisting lien upon said line of railway and jts net income, and for that reason said act of March 12, 1887, under which said trustees are proceeding is illegal and void, and in contravention of the constitution, and especially of section 28, article 2, thereof, and that said railway cannot be sold, if at all, until said bonds are paid, or until the consent of said bondholders has been obtained to said sale; and such consent has not as yet been obtained. Plaintiff says that there is no power conferred to sell said line of railway, because said act of March 12, 1887, is null and void. Plaintiff says that said line of railway can not be sold because the consent to such sale has not been obtained from the States of Kentucky and Tennessee, under the statutes herein referred to of said states. Plaintiff says that if said act of March 12, 1887, is valid, and if said line of railway can be sold,then said offer by said A. B. Andrews and said Henry A». Taylor is not in accord with the terms of said law, because it does not provide for a purchase price to be paid all in cash. Plaintiff says that said offer is invalid because it provides that the City of Cincinnati shall receive ten per cent, of the annual gross earnings of said line of railway in excess of $4,500,000 from and after October 1, 1902, which is in contravention of section 6, article 8, of the constitution. Plaintiff says that the trustees of the sinking fund, unless restrained by this court, will advertise said offer, which would be a misapplication of the funds of the corporation and an abuse of its corporate powers.
    Wherefore plaintiff prays that said trustees of the sinking fund may be restrained from advertising said offer, and for all other and further relief to which he may be entitled. ”
    A general demurrer to the petition was sustained, and the petition dismissed, by the court of common pleas. That judgment was affirmed by the circuit court.
    
      Frederick Nertenstein, Corporation Counsel, for plaintiff in error.
    The first act that was passed by the general assembly of Ohio providing for the construction of this railway was sustained by the supreme court of Ohio. Walker v. Cincinnati, 21 Ohio State, 14.
    When the city of Cincinnati proceeded to construct this road it was acting in its private capacity, having received a charter from the legislature to build a railroad in a certain manner. Bailey v. Mayor of New York, 3 Hill, 531.
    If the legislature granted a charter, then it was a contract; and if so, then any subsequent legislation impairing the obligations and rights growing out of such contract is invalid.
    
      “No state shall * * * pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts. ” * * * Constitution U. S., Art. I, section 10.
    “The general assembly shall have no power to pass retroactive laws, or laws impairing the obligations of contracts.” Constitution of Ohio, Art. II, section 28.
    The leading case upon this question is that of The Trustees of Dartmouth College v. Woodward, 4 Wheaton, 518; Trustees Bishop's Fund v. Rider, 13 Conn., 87.
    A reservation by the legislature to change, alter, repeal, or amend does not imply the power to alter or change the vested rights acquired by the corporation under the charter and add new parties without the consent of the corporators. Charters are contracts; Sage v. Dillard, 15 B. Mon., 340; Seibert v. Lewis, 122 U. S., 284; Green v. Biddle, 8 Wheaton, 84.
    It cannot be successfully claimed that the city of Cincinnati, under our present constitution, can build a railroad to sell, lending her credit to some corporation (Article 8, section 6). If the city cannot build a road to sell, then has she a right to sell the road after it is once constructed? What cannot be done directly, cannot be done indirectly. 23 Ohio St., 76.
    This road was built under the legislation of three states, Ohio, Kentucky, and Tennessee. It can only be dealt with in accordance with the terms of the laws of those three states. The original Ohio Law provided for a lease, and for a lease only. Oregonian Railway Case 130 U. S., 1; Thomas Railroad Case, 101 U. S., 71.
    
      A sale means that the purchase money shall all be paid in cash. Under the offer of the bidders the city does not receive one cent of cash. The bidders obligate themselves to pay nineteen millions of dollars in one hundred years, and interest at the rate of four per cent, from the date of the issue of the bonds, and two hundred and forty thousand dollars per annum, up to October 1st, 1902, in all, one million four hundred and forty thousand dollars ($1,440,000).
    The bid contemplates that the city should receive in perpetuity a sum equal to ten per cent, of the annual gross earnings of said line of railway in excess of four million five hundred thousand dollars from and after October 1, 1902. This provision of the bid is looked upon as a very valuable one, which may at some future date yield the city a large revenue. It has been said that for that reason the city is extending its aid in support of this railroad, and for that reason is in direct conflict with article eight, section six, of the constitution. Pennsylvania Cental R. R. Co. v. The City of Philadelphia 47, Pa. St., 189; State of Iowa v. County of Wapello, 13th Ia., 388; Smith v. Henry County, 15th Ia., 385; Ten Eyck v. Mayor, 15th Ia., 486; City of St. Louis v. Allen, 13th Mo., 415; Meyers v. County of Jackson, 14th Ia., 47.
    
      E. W. Kittridge, J. B. Foraker and Laiorence Maxwell, Jr., for defendants in error.
    The petition assails the statute upon the ground that it is in contravention of article 2, section 28, forbidding laws impairing the obligation of contracts, and of article 8, section 6, preventing any city from becoming a stockholder m any corporation, and from raising money for, or lending its credit to, or in aid of, any corporation.
    The latter is the section that was involved in the original case concerning the Cincinnati Southern Railway of Walker v. City of Cincinnati, 21 O. St., 14. The validity of the original act authorizing the constuction of this road, by the board of trustees, as a mere agency of the city of Cincinnati, which was the sole beneficiary of the trust, and became the sole owner of .the railroad' after it was constructed, is conclusively settled by that decision.
    The only question, therefore, that now arises, is whether the road, having been constructed, and operated, for many years under a lease which the legislature authorized by the act of March 18, 1881 (78 O. L., 58; Revised Statutes, S. & B. section 83367), the legislature is competent to authorize, and the city, as the owner, is competent to effect a sale of it.
    It is unquestionably true that the legislature cannot authorize a municipality to build a railroad merely as a speculation for the purpose of sale. Neither could the municipality be authorized to erect any public building, or water-works, or gas works, for the purpose of sale, and as a speculation. But this road, or other public works of the character mentioned, having been authorized and constructed for the ulterior public purpose which they are intended to subserve, can there be any doubt that the legislature may authorize the sale of such properties, upon such terms and conditions as that, while they continue to subserve these public ends, they shall become the property of private individuals or corporations?
    
      But it is said that the act of Ohio, of April 18, 1873 (70 O. L, 139), and the laws of Kentucky and Tennessee mentioned in the petition, created a statutory mortgage, without any conveyance, upon the railway and the “net income thereof” to secure the bonds, and that the city is therefore obliged to continue to operate the road until the bonds are paid, in order that the lien of bondholders upon “the net income thereof” may not be impaired. But this is the ordinary provision of railroad mortgages, which, in the event of default, secures to the bondholders the right, through the appointment of a receiver or other judicial proceedings, to have the income of the road, pending sale, as well as the corpus, after sale, applied to their debt. It does not prevent the mortgagor from selling the property, which will pass to the purchaser, subject to the same lien upon “the income thereof” as when it was in the possession of the mortgagor. In other words, it does not involve or imply a covenant on the part of the mortgagor to operate the road personally or through a lessee so as to produce an income. And in no event has the mortgagee a right to interfere with the"income or operation (except in the case of waste) until there is a default in the payment of principal or interest. Jones on Mortgages, section 670.
    The plaintiff’s first objection is that the offer is not for cash. But the statute expressly authorizes a sale “at a price and upon terms of payment satisfactory to said trustees.” Both -the price and terms of payment of the proposed sale” must be advertised by the mayor in his proclamation for the popular election, and the sale is to be consummated only “if a majority of the electors voting at such election shall have voted in favor of the making of the sale at the price and upon the terms of payment proposed.”
    Nor will the reservation of such further contingent payment convert the conveyance into a lease as distinguished from a sale; because the title is to be conveyed absolutely and in fee simple, without any reversion remaining in the city, which is the essential and distinguishing feature of a lease.
    It is well settled that such a condition may be lawfully annexed to a conveyance in fee. Van Rensselaer v. Ball, 19 N. Y., 100; Van Rensselaer v. Hays, 19 N. Y., 68.
    Next it is said that the city cannot sell the road without the consent of the states of Kentucky and Tennessee.
    It is true that those states have passed the acts set out in the petition, under which .the trustees, as trustees and agents of the city, have acquired the property of the road in those states. But the court will look in vain for any provision in those acts restricting the power of disposition of the city of Cincinnati, as the owner of the road, which it had or might acquire under the legislation of this state. It may or may not be that the purchasers of the property will need to seek further legislation in those states to facilitate their enjoyment of the title that they acquire from the city. But surely nothing is to be found that precludes the city from selling, or the other defendants from buying, the title of the city; and it is no concern of the plaintiff that the purchasers may not, for instance, ac- * quire by this transaction the right to exercise its power of eminent domain in the state of Kentucky.
   Williams, C. J.

One ’ contention of the plaintiff in error is, that the municipal authorities of the city of Cincinnati, the owner of the line of railway in question, cannot constitutionally be invested with the power to make a sale of the road, and the act of March 12, 1887, purporting to confer that power is, therefore, without validity; being, it is claimed, in conflict with section 6, of article 8, of the constitution of this state, which prohibits municipal corporations from raising money for, or loaning their credit to, or in aid of joint stock companies, corporations or associations, or becoming stockholders therein. In support of. this contention, the case of Taylor v. Commissioners, 23 Ohio St., 22, is relied on, where, in holding the act there under review, which was similar in some respects to the statute under which the road in question was constructed, tobe in contravention of the constitutional inhibition mentioned, stress is placed upon a provision that roads constructed under that act might be leased or sold before or after the completion of the whole, or any part thereof. That provision, it was there held, in connection with the general scheme of the act, gave the public authorities opportunity to accomplish by indirection, what the constitution was designed to prohibit; that it was within the purview of the act that roads or parts of roads built under it should, and would pass into the hands and control 'of railroad corporations, as their construction proceeded, and when completed become absorbed in the line or system of railroad operated by such corporation ; so that, the statute not only afforded opportunity for the public .authorities to raise money for, and loan their credit to, and in aid of the corporation, but that was the practical effect of the statute when put into operation. In distinguishing that act'from the one under which the railway here involved was built, the court, speaking of the latter, said : “The proprietary interest in the road when completed, is as fully in the municipality as that of any other of its public works. It is the road owned by the municipality that is authorized to be leased. The public use for which the road was built is to be preserved, and the power of leasing the right .to use and operate it is designed only as a mode of making such use available to the public. ”

The railway in question here, was built and acquired by the city of Cincinnati after the act of May 4, 1869, had been held valid, in the case of Walker v. Cincinnati, 21 Ohio St., 14. The constitutionally of the act is there placed upon the ground that the construction of an improvement of that kind, to be owned exclusively by the municipality, does not involve an alliance of public and private capital or credit, nor constitute a loan of municipal credit to, or raising money for, Or in aid of other parties, incorporated, or unincorporated, and, therefore, it is as competent, by legislation to authorize municipal corporations to construct improvements of that nature, and provide means therefor by taxation, when deemed essential to the public interests, as to authorize them to acquire and hold property for other needed public uses, and make other municipal improvements. True, the act only makes provision for leasing roads constructed under, its sanction, and does not, in terms authorize their sale; it may not have been deemed advisable at the time of its enactment to confer such authority. But, we think, it does not follow that the power to make a sale of the road must be denied for all time, though exigencies should arise which would seem to require the sale, or render it desirable and advantageous to the owner. A sale made in good faith and for a fair value, under such circumstances, cannot properly be characterized as a loan of the credit of the municipality, directly or indirectly to, or in aid of the purchaser. The power of dispositionis generally an inseparable incident of ownership ; and the ownership of this property by the city of Cincinnati is not different from that of other property belonging to it for other public uses, nor is its sale, by the duly constituted municipal authorities, when authorized by appropriate legislation, within the constitutional inhibition referred to, nor any of which we are aware,

It is further claimed, in this connection, that the contemplated sale, if consummated, will have the effect of making the city of Cincinnati interested as a stockholder in the company that shall obtain control of the road, or, constitute a loan of its credit to that company. This claim is based upon the third paragraph of the proposition of purchase, which stipulates that the purchasers, in addition to the other consideration named, will ‘ ‘pay in cash a sum equal to ten per cent, of the annual gross earnings of said line of railway in excess of $4,500,000 from and after October 1, 1902.” But it is obvious the stipulation cannot have the effect claimed for it, nor any other effect than to create an obligation to pay in the future, upon the happening of the specified contingency, an additional sum as part of the purchase price of the road.

Another contention of the plaintiff in error is, that the proposed sale will impair the obligation of its contract with the bondholders, and cannot be made without their consent, which has not been obtained. It is undoubtedly true that the law, under which the bonds were issued, entered into and became part of the contract with the holders, and any change in the law which affects their rights cannot be operative as against them without their consent. The precise claim here made is, that the statute under which the road was built and the bonds were issued, contemplates that the road shall always remain the property of the city, and under the control of the trustees, to be kept under lease by them, so as !to provide a net income which can be used in payment of the interest on the bonds, and assist in creating a fund for the payment of the principal; and, as the trustees provided for by the statute are trustees of the bondholders, as well as for the city, it is the right of the former to insist that the trust shall be controlled and executed by the agencies, and in the manner so contemplated.

The ownership of the road by the city, resulted from its construction by the city with its own means; and, as before observed, that ownership is not different from that of other property, the complete title to which is vested in the city, for public purposes. We find no requirement in the statute providing for the construction of the railway, that its proprietorship shall continue perpetually in the city, or that excludes its power to alien the same, when, and as may be provided by legislation thereafter enacted. Provision is made for leasing the road, but not requiring that it shall always be kept under lease; that might be impossible. That provision is evidently designed for the benefit of the municipality, as a source of income, and to enable it to relieve the tax payers to that extent by using the income in the construction of the road, and payment of indebtedness created therefor. The failure to lease the road, or derive a net income therefrom, does not relieve the city of its obligation, to any extent, to the bondholders ; nor, is it apparent how their security can be impaired on that account. The obligation is met, and is to be met by taxation, except in so far as any net income may be used in reduction of the amount required to be so raised; and as any net income must necessarily pass through the proper official agencies of the city, before reaching the bondholders, as must also the amounts raised by taxation, and the city is ultimately liable in the latter mode for the payment of the whole bonded indebtedness, principal and interest, the income, as a matter of security, rises no higher than the corporate liability of the city, since its application to that indebtedness can be enforced only by the enforcement of the corporate obligation to apply it; and complete payment can as well be made or enforced through the process of taxation alone.

Besides, by the proposition of purchase which the parties are desirous of completing, the offer is to buy the line of railway subject to the present lease which does not expire until after the maturity of the bonds; so that, the holders will have the benefit of whatever security or advantage there may be in keeping the road under lease, until the payment of the entire indebtedness, or default giving rise to the right of foreclosure. They will, therefore, be in no worse position if the sale be made, than they now are.

Again, the bondholders are not here interposing any objection to the-sale, nor complaining that it will result in any impairment of their contracts. It is unusual for a debtor to object to an act or proceeding on the ground that it will impair his obligation. It is not clear, to say the least, how he can sustain, or reasonably apprehend such irreparable injury as will warrant the interference of a court of equity in his behalf, by injunction. As the creditor is the only party who can be injuriously affected, the remedy belongs to him.

It is further contended that the proposed sale cannot be legally effected without the consent of the states of Kentucky, and Tennessee. The petition does not allege that .either of those states has any property interest in the line of railway, or any part of it, or in any of the appurtenances, or the income. The ownership of the entire property, it is conceded, is in the city of Cincinnati. Those states, throug’h their legislatures, have granted to the owner certain privileges and franchises which were necessary to the construction of the road, within their respective territorial limits, and are also necessary to its operation and maintenance. These franchises add materially to the value of the property. But our attention has been called to no legislation of either of those states which places any restriction upon the owner’s right of sale or disposition of the property, or which renders the consent of either necessary to its 'sale. If the purchaser is willing to assume the risks that may arise, if any shall, with respect to the continuance of the franchises granted by the legislatures of the states referred to, the city of Cincinnati can have no interest in their continued existence, provided the payment of the purchase price is well secured, for it can suffer no injury from that source. The offer shows this difficulty has received the attention of the proposed purchasers, and that the situation in that respect is fully appreciated by them.

In regard to any danger arising from that source to the security of the bondholders, it has already been observed they are making no objection here to the consummation of the sale; and inquiry into their rights will be in time when an objection comes from them.

Finally, it is claimed that the only sale of the railway which the act of March 12, 1887, authorizes, is a sale for cash. The authority conferred by the statute is to make the sale upon such terms of payment as shall be satisfactory to the sinking fund trustees, and ratified at the election held under the act. The act nowhere, in terms, requires the purchase price to be paid in cash. But, it is said, a sale imports a disposition of property for cash; and the payment of the price in cash is, .therefore, necessary to a valid sale under the statute. The payment, or agreement to pay the purchase price of property in money, is essential to a sale of it, as .distinguished from an exchange or bartér; but sales may be made on credit wholly, or partially, as well as for cash; and the statute under consideration excludes the idea that payment in cash is essential to a sale under its provisions, by authorizing the sale to be made upon terms of payment.

Whether the offer of purchase which the sinking fund trustees have declared satisfactory to them, is an advantageous one to the- city, or not, or whether it will be judicious to make any sale of the railway property, are questions with which the court is not concerned; their decision belongs, under the statute, to the proper official body of the city, and to its inhabitants who shall be called upon to express themselves at the election for which the statute makes provision. We see no valid legal objection to the steps thus far taken toward the accomplishment of the sale it is proposed to make, nor any to the statute under which they have been taken.

Judgment affirmed.  