
    Kellogg v. Sherrill, City Manager, et al.
    
      Municipal corporations—Street improvements—Ordinance passed establishing grade—Bonds voted for resurfacing, improving and widening street—Resolution passed determining to proceed, and contract awarded—New ordinance passed changing grade and ordering contract modified—Injunction —City manager cannot change contract—Section 4331, General Code—New contract necessary to change grade— Improvement at changed grade payable from bond issue— But damages for breach of contract not payable therefrom —Payments not limited to purpose of original grade ordinance, when—Decision upon use of bond proceeds premature, when—Counsel for plaintiff securing injunction entitled to attorney fees, when.
    
    1. Under Section 4331, General Code, city manager, as administrative officer, cannot change contract for street improvement pursuant to ordinance to conform to new grades of streets under guise of modification or alteration, and city manager and contractor were properly enjoined from modifying improvement to conform to changed grade.
    
      2. Establishment of street grades is legislative, and must be done by action of council, and, where contract for street improvement was authorized at certain grade, new contract let according to law was necessary to provide different grade.
    3. Where council passed ordinance establishing grade for street, and issuance of bonds for street improvement was approved by voters, and grade of street was subsequently changed by ordinance, it was error to enjoin payment out of bond issue money of costs and expenses in making improvement at changed grade.
    4. City cannot be permitted to pay damages for breach of contract for street improvements out of proceeds of bond issue voted for improvement.
    5. Where bond issue was voted for purpose of resurfacing and widening existing street, method of making improvement was within sound discretion of legislative and administrative officers', and it was error to enjoin use of proceeds of bond issue for any other purpose than improvement at grade originally set by ordinance.
    6. Where there was no proof of any attempt to use proceeds of bond issue voted for resurfacing and widening existing street for improvement at changed grade, decision on use of proceeds therefor would be premature.
    7. Plaintiff, succeeding in securing injunctive relief against modification of plans for street improvement, was entitled to allowance of counsel fees, and, in absence of showing to the contrary, award of $3,500 to plaintiff’s counsel was not error.
    (Decided January 10, 1927.)
    Error: Court of Appeals for Hamilton county.
    
      Mr. Harry B. Weber, for plaintiff in error.
    
      Mr. John D. Ellis, Mr. Edward F. Alexander, and Mr. Bert H. Long, for Sherrill.
    
      Messrs. Galvin S Bauer, Messrs. Taft, Stettinius & Hollister, and Messrs. Pogue, Hoffheimer & Pogue, for Bolán.
   Hamilton, J.

The questions involved here grow out of a proceeding to improve Kellogg avenue, a street in the eastern part of the city of Cincinnati, extending from Congress avenue eastwardly. It appears that in 1902, an ordinance was passed by the council of the city of Cincinnati, establishing a grade for á part of Kellogg avenue, at what is known as an' approximately 63-foot grade. In 1911 another ordinance was passed by council establishing a 63-foot grade for a part of the avenue which had been annexed to the city of Cincinnati after the passage of the 1902 ordinance. In 1919 council submitted to the voters the question of the issuance of $413,000 of bonds for the “resurfacing, improving, and widening of an existing street, to wit, Kellogg avenue.” The issuance of the bonds was approved by the voters. In March, 1925, council passed legislation determining to proceed with the improvement, and entered into a contract with the defendant John S. Bolán.

January 1, 1926, a new council took office, and appointed the defendant in error, Clarence O. Sherrill, city manager. The city manager, upon consideration, was of the opinion that the 63-foot grade was unnecessary, and, on his recommendation, council enacted a new ordinance, changing the grade of Kellogg avenue to a grade of approximately 55 feet, and passing legislation authorizing the city manager to arrange with the contractor for a modification of the contract in this respect.

Following the passage of this legislation, plaintiff in error, plaintiff below, filed an action against the city manager, Sherrill, and Bolán, the contractor. The petition prayed for an injunction enjoining the city manager and John S: Bolán from negotiating or making any modifications or alterations in the plans and specifications for the improvement, and from changing or altering the contract; asked to have the ordinance changing the grade to a 55-foot level declared null and void; asked that the defendants be required to specifically perform the contract; and sought to enjoin the paying out of any of the bond issue money as damages or expenses connected with such change of grade, the paying to the contractor Bolán of any money for any attempted change or modification of contract, and the paying of any damages by reason of his not being permitted to complete his contract.

The court, after hearing the case on the issues joined, found for the plaintiff, and entered an injunction, as prayed for, except as to the question of specific performance, which was denied. The court, in the decree, reserved the question of the allowance of attorney fees for further consideration. This question appears to have been reconsidered later by the court, and it awarded plaintiff’s counsel the sum of $3,500.

The plaintiff, Kellogg, filed a petition in error to the decision of the trial court, making the point of error the refusal of the court to grant a decree of specific performance of the original contract with Bolán. The defendant Sherrill, as city manager, filed a cross-petition in error, claiming error in the decree of the court in all respects except the refusal to grant specific performance.

Subsequent to the decree entered by the court below, the council of the city passed an ordinance cancelling the contract with Bolán. Prior to the passage of this ordinance cancelling the contract, plaintiff, Edwin E. Kellogg, filed an action against the members of council, praying an injunction against the members of council from the passing of such an ordinance. This case was heard, the injunction was refused, and, on appeal, that refusal was affirmed. The cancelling ordinance was duly passed, thereby breaching the contract with Bolan.

Plaintiff in error contends that all questions have become moot by virtue of the decision in the case of Kellogg v. members of council, in which an injunction against the passing of the cancelling ordinance was denied, and by the subsequent passing of that ordinance; that the only question that could be presented here, on the record in this case, Was the question of counsel fees.

Defendants in error contend that, in addition to the allowance of attorney fees the question is here on the right to pay out proceeds of the bond issue in the improvement under change of grade, and for error in the judgment, denying the right of the city manager to modify plans and specifications to the extent of changing the grade of a street, and altering the contract to conform thereto.

The right to the allowance of attorney fees depends on whether or not the court was correct in its decision on the other questions involved, or the material parts thereof. Owing to the situation in which the questions appear here we will not undertake to enter into a discussion of the law relative thereto, as some of the questions are moot. However, that the rule of res adjudicata may not interfere with subsequent action and rights, we will announce our conclusions of the law on the several points.

Counsel for the cross-petitioner in error, Sherrill, claimed the right of the city manager to modify the contract under Section 4331, General Code. We do not believe this section gives, or was ever intended by the Legislature to give, the right to the administrative officer to change contracts to conform to new grades of streets, under the guise of modification or alteration. The establishment of street grades is legislative, and must be done by action of council. The contract was authorized by council at a certain grade. To provide a different grade it would be necessary for a new contract to be authorized and let, according to law.

The court of common pleas was correct in enjoining the city manager and the contractor from making or attempting to make the modification and alteration of the improvement to conform to a change of grade.

We are of opinion, however, that the court committed error in enjoining the payment of costs and expenses in making the improvement, if made out of the bond issue money. It is true the city could not be permitted to pay damages for breach of the contract out of the proceeds of the bond issue. The bond issue was voted upon for the announced purpose of “resurfacing, improving, and widening of an existing street, to wit, Kellogg avenue,” and the bond issue was voted for this purpose. The method of making the improvement is within the sound discretion of the legislative and administrative officers, and, if the force and effect of the decree of the court of common pleas is to prevent the nse of the proceeds of the bond issue for any other purpose than to make the improvement at a grade of 63 feet, the court of common pleas committed error, and, as to this, the injunction will be modified. To hold otherwise would be to indirectly submit a referendum of each step in the proceeding to improve, after the time had passed for submitting the question. Moreover, any decision on the use of the proceeds of the bond issue is premature at .this time, since there is nothing to show that there is any attempt to use the proceeds of the bond issue for any purpose such as suggested in the record and recited in the decree. If and when an attempt should be made to use the proceeds of the bond issue, the question of the legality of the expenditure might be then raised.

On the question of the allowance of attorney fees, there is nothing in the record as to the value of the services, but it is clear that the plaintiff, having succeeded in securing injunctive relief under the statute, is entitled to an allowance of counsel fees. Considering the important questions involved, in the absence of any facts showing the contrary, we are of the opinion that the award for this purpose was not error.

The decree of the court of common pleas will be modified in the respects noted in this opinion, and, as modified, will be affirmed.

Decree modified and affirmed.

BuchWalter, P. J., and Cushing, J., concur.  