Trumbull Circuit Court.

now paid said L. M. Dennison to apply upon the amount necessary to make him equal with the other said stockholder, viz., Henry Hamilton, and so forth."

"Which is carried: Ayes, all; nays, none."

Without the vote of L. M. Dennison the resolution could not have been carried. He voted substantially to pay himself that sum.

On page 127 of the record, there is reference to two matters: First. It appears that there was present before the board Mr. Northway, who it is said was attorney for the company, and also Mr. Cole, who was present on a request of the board, and undertook to explain in his report as releree the finding of $3,457, cash on hand and in bank March 1, 1, but failed to show satisfactory figures. This question was continued to future meeting. Now, that is January 30.

February 6, the rest of the page that was offered in evidence: Board in session; present, the three Dennisons and Rice. Mr. Cole reported that his recollection was that the $3,457 was the amount borrowed of the First National Bank of Warren at the commencement of business March 1, 1884. On inquiring of said bank it is found that the amount of that note was $3,553.39, and the date of the note April 17, 1884. Now, then, on motion, it is ordered that L. M. Dennison be paid $2,238.37, balance due on account. Ayes, all; nays, none.

L. M. Denison testifies in regard to these payments in his oral testimony to the payment of the $7,500 and to the $2,200 subsequently paid upon his account.

Also, there is a resolution looking to the matter of David G. Dennison, and a payment upon the part of the directors of this corporation in order to relieve him of an amount found due, by the report of the referee, Cole.

As is said, it appears from the record in the case in which Mr. Cole acted as referee, that that, as it originally commenced, was properly an action for the settlement of the accounts of this corporation and the distribution of its funds.

In the account attached, and there is a statement attached, and among the statements attached is this: "By an amount and interest earned, for a compensation for money used by the stockholders named before, to-wit: A. K. Price, Henry Hamilton, D. G. Dennison, on April 13, 1879, these said persons owed the Hubbard Bank discount on their notes: Amount of notes $12,750. Amount of discount, $706.47; new note was given for this discount and carried along by the bank until $62.75 interest had accumulated, and then paid from the company's funds; amount $769.19. One-third of each debt belonged to L. M. Dennison."

Now, that is evidently a miscalculation. It would only be onefourth of the amount, and there appears to have been crowded in. every once in a while, in this case, the idea that because there was three taken out, that one-third of the amount was due to L. M. Dennison.

But one other remark and then I shall close. We are asked to have this cross-petition set down for trial. It there was no claim in the cross-petition which would constitute a separate cause of action in favor of Lemuel M. Dennison, then it would be error for us to set it down. There appears to exist, and I do not know whether I can make it plain or not, as we think, an error in the minds at least of the parties to this suit in supposing that because this corporation, The Hamilton Coal Company, as first they claimed, becoming a conditional endorser for Price,

Hamilton v. Coal Go.

and others, that therefore and because the Hamilton Coal Company has paid that endorsement, that Lemuel Dennison has a right to maintain an action against the coal company or against Price and others.

It should be remembered that whilst a corporation is composed of individuals who are natural persons, the combination of these persons in a corporate capacity as an official person, is entirely separate and distinct from individual members of the corporation. For instance: Instead of the Hamilton Coal Company being the endorser of these notes, suppose it had been John Stiles, and John Stiles had paid the money, then John Stiles would have to sue A. K. Price and others to recover money which he paid for their use. L. M. Dennison would have no right to sue them. His rights must be worked out through the corporation, and because of that fact, we should not set them down, but because of the two facts,-and we place it upon those two foundations alone; that is, the payment, and vote by the stockholders to pay Lemuel M. Dennison the two sums of $7,500, and of $2,238.37; and because of the directors, and he participating, they had endeavored to change the accounts as stated by the referee, Cole, in regard to D. G. Dennison, we think there has been such action upon the part of these trustees as called upon the court of equity to interfere, and for that reason a receiver may be appointed in the view of winding up the affairs of the company.

One remark, however, and that is merely in answer to a suggestion made in argument, and probably in the petition too in this case they asked that Lemuel M. Dennison be ordered to pay back this money or to pay it into the hands of a receiver. We are not disposed in advance to lay down the duties of the receiver. If the receiver when appointed thinks it necessary, either because the funds would be exhausted, or because he thinks that the funds might not be recovered, and it was necessary for him to proceed against Lemuel M. Dennison, then he can do so; but it there be sufficient funds and the receiver would be satisfied to take the credit of Lemuel M. Dennison, this court shouid not in advance, from any thing that has been shown in this testimony, make any directions in that regard.

There are many other things we might refer to, but it would be wholly unnecessary.

MUNICIPAL CORPORATIONS—RIVERS-CONTRACTS.

[Cuyahoga Circuit Court.]

*JAMES R. SPRANKLE V. Cleveland (City) et al.

1. ACT 90 O. L. 34-EFFECT ON SEC. 2702, REV. STAT. The act of February 9, 1893, 90 O. L. 34, amending the act of March 18, 1889, 86 O. L. 109, authorizing cities of the first class, second grade, to contract for dredging navigable streams within their limits, for not exceeding five years, and providing that "the amount to be expended for dredging shall not

Affirmed by the Supreme Court, 56 Ohio St. 759, unreported.

Miner G. Norton and Phillips, Ford & Crowel, for defendants in error, in the Supreme Court, cited:

Public improvements: Dibble v. New Haven, 56 Conn. 199.

Injunction: 3 Wait Act. & Def.; 2 High Injc. 1106, 1107; 20 Conn. 532, 538; & N. J. Eq. 203, 221; 82 Pa. St. 373; 44 N. H. 79, 92.

Cuyahoga Circuit Court.

exceed the current revenues for such purposes in each year" operates, in respect to such contract, and in such cities, to remove, or is in substitution for, the limitation upon power to contract of Sec. 2702, Rev. Stat., as to certificates that money is in the treasury and unappropriated.

2. CONTRACT UNDER 90 O. L. 34, DOES NOT PREVENT CONTRACT Under Sec. 1692.

It was not intended by the act of February 9, 1893, 90 O. L. 34, authorizing cities of the first class, second grade, to make dredging contracts, the amout to be expended not to exceed current yearly revenue therefor, to authorize cities to enter into contracts for the improvement of rivers which might require the expenditure of a large sum of money to be raised only by incurring debts. Therefore, the right to make such contracts under Sec. 1692, paragraph 19, Rev. Stat., the general power to improve rivers, etc., cannot be defeated by a contract under the act first referred to. One does not impinge upon or defeat the right to make the other.

APPEAL.

HALE, J.

In the case of Sprankle against the city of Cleveland we have reached a conclusion, which I will briefly announce.

It is safe to say that for some years, perhaps three or four, the city government of the city of Cleveland had under consideration the desirability of improving the Cuyahoga river, to better accommodate shippers and those engaged in the carrying trade of the lakes, at the port of Cleveland.

The consideration of this subject reached a definite plan, for the improvement of the river; that plan has received the sanction of all the departments of the city government who were authorized or required to take part in the proceedings, authorizing the improvements. So that the improvement contemplated has been legally authorized or at least no suggestion is made of any infirmity in the proceedings leading to the adoption of the flan and the impovement.

The proceedings have reached a point where it becomes necessary to provide the necessary practical means of carrying out and perfecting the doing of the work incident to this improvement, as authorized by the statute. The city, through its proper officers, or officer, has advertised for proposals for doing this work. Bids have been received, opened and considered, and it is alleged that the city, through its proper、 authorities, is about to enter into a contract for the doing of this work, with the lowest and best bidder who, in answer to a notice, put in proposals for doing the work. At this point, objection is made, and injunction sought against the city, to prevent the completion of the contract contemplated.

First, a suit was brought by Mr. Rooney, claiming that he held a contract with the city, made in April, 1895, under and by virtue of which he had the right to do this work now proposed to be given to another; that the city was under obligations to permit him to do the work, and to pay to him the stipulated price named in his contract for the work. That case was heard, and after as careful consideration as we were able to give it decided that he had no claim authorizing the court to enjoin the city at his suit. We supposed that if wrong in that holding, that an effort would be made to review that case in the Supreme Court and set us right, as we are always very anxious to be set right, when wrong. But that has not yet been done.

Sprankle v. Cleveland.

A citizen of the city, and a taxpayer, instituted another suit in the court of common pleas, the object being precisely the same as that sought to be accomplished by Mr. Rooney, to-wit, to enjoin the city from entering into this contract which is now proposed to be made.

It is true the plaintiffs in the two cases stand in different relations to the city and one may be entitled to the relief and the other not, but the main foundation relied upon, in both cases, is that the Rooney contract stands in the way of the proposed contract, and by making the contract under contemplation, the city would be providing by the second contract for work already provided for by contract; so that it becomes necessary in this action to examine again the Rooney contract, and interpret it as best we can.

It is undoubtedly true, that the power conferred upon a municipal corporation, to make this improvement, is contained in Sec. 1692, Rev. Stat., paragraph 19. That is the power generally given to the city, as found in that section, and that reads, among other powers conferred upon the municipality: "To construct, open, enlarge, excavate, improve, deepen, straighten, or extend any canal, ship-canal, or water-course located in whole or in part within the corporation."

The power thus conferred is to be exercised and carried out, in the manner provided for in other sections of the statute, certainly, to some extent.

Section 2702, Rev. Stat., provides: "No contract, agreement or other obligation involving the expenditure of money shall be entered into, nor shall any ordinance, resolution or order for the appropriation or expenditure of money, be passed by the council or by any board or officer of a municipal corporation, unless the auditor of the corporation, and it there is no auditor, the clerk thereof, shall first certify that the money required for the contract, agreement or other obligation, or to pay the appropriation or expenditure, is in the treasury to the credit of the fund from which it is to be drawn, and not appropriated for any other purpose."

That statute, we suppose, was intended to prevent the incurring of an obligation on the part of a municipality without the means at hand, to meet the obligation thus incurred.

As the statute stood, with the authority to do the work, as I have stated, under the one section, and the limitation as to the power to contract, as I have read in another, the improvement could not go forward, without the money being on hand with which to meet the obligation incurred by the contract.

In that situation, on March 18, 1889, the legislature of the state passed this act, found in 86 O. L. 109, Sec. 2668-1, Rev. Stat. : The council of any city of the first class, second grade, is hereby authorized and empowered to cause proposals to be advertised tor, for dredging any navigable stream within the limits of such city, for a period not exceeding five years, and are authorized to enter into a contract for such dredging for one or more years, not exceeding five; provided, that the amount expended each year for dredging shall not exceed the current revenue for such purposes in each year.'

Without this statute, it must be conceded, that the contract sought to be enforced here by Mr. Rooney, or relied upon in this case, by the plaintiff, could not legally have been made. Now how far did this stat

O. C. D.

CIRCUIT COURTS.
Cuyahoga Circuit Court.

ute remove the limitation existing under Sec. 2702, Rev. Stat.? It does not apply to all municipalities. It applied only to cities of the first class, second grade. What is the subject matter dealt with? Authorize and empower or cause proceedings to be had for dredging. It is only as to contracts for dredging, after the limitation of Sec. 2702, Rev. Stat., is removed. Every other contract, that this municipality as well as all others can make, involving the expenditure of money, can only be made when the provisions of Sec. 2702, Rev. Stat., have been complied with.

It is not every improvement of the river, clearly, that would fall I mean that contracts for the improvewithin the terms of this statute. ment of a river would not be authorized in the present state of the legislation, without complying with the terms of Sec. 2702, Rev. Stat. The limitation as to dredging contracts was taken away,-removed. But, in the judgment of the court, the other limitation was carried into that statute, that the expenditures of any one year should not exceed, in the language of the statute, the current revenues for such purpose in each year.

It was not intended, in the judgment of the court, by this statute, to authorize the city to enter into a contract for the improvement of the river, which might require the expenditure of a large sum of money to be raised only by incurring a debt of the city. And it was not intended to open up to the municipality the right to incur an obligation that should require the expenditure of money to be borrowed. In that we cannot agree with counsel, that the term here, "the current revenues of the year," involves money raised under the terms of another statute, by the issuance of bonds, and incurring a debt on the part of the city.

If these specifications had been made of this proposed work, prior to the Rooney contract, and by express terms included in the Rooney contract, as the legislation then stood, it would be absolutely without But it is said, by counvalidity, because not authorized by the statutes. sel, that although that may be so, that when subsequent legislation came, the contract being in existence, by subsequent legislation the city was It is authorized to borrow, and put into this fund a large amount of money, that fund and contract became operative. That we cannot approve. not in accordance with our judgment. We think, interpreting this contract, in view of the legislation that then existed, the known source from which the current revenues from year to year were provided, that no such improvements as the one now in contemplation could have been contemplated in that contract.

It is very clear that the widening of the river, could not, as the legislation then stood, or by virtue of any that has since been enacted, provide for the widening of this river, beyond its then banks. So that we are perfectly clear, that as to a large percentage of the proposed contract, it is certain it cannot and does not fall within the terms of the If there was any such attempt on the part of the city Rooney contract. it would be without validity.

The same limitation applies to what is termed in the contract "special dredging." Special dredging was to be done as required by the city. Now it is very clear that the city had no power to require "special dredging," involving the expenditure of money beyond the current revenues of the year.

In that view of the statute, interpreting the contract in view of the statute, it seems to us very clear, that a large percentage, at least, of