Hamilton Common Pleas.

Supreme Court in recent decisions, and is clearly a general law and administrative in its character. Yet in these respects, at least, the circuit court might well hold, as they did, that it was justified by the decision of the Supreme Court in State v. Franklin Co. (Comrs.), 35 Ohio St. 458. Such an act was upheld in that case in both of these particulars, and was a rule for subsequent legislative action and for judicial interpretation of similar acts until entirely overthrown and a new rule established. Hixson v. Burson, 54 Ohio St., 470 [43 N E. Rep 1000]; State v. Commissioners, 54 Ohio St., 333 [43 N. E. Rep. 587].

That State v. Commissioners, supra, involved the question of the nature of legislative functions as applied to legislation of this kind is shown by the express and solemn act of the Supreme Court in overruling that case. Such was the opinion of Judge Thompson, in Loeb v. Columbia Tp. (Trustees), 12 O. F. D. 349 [91 Fed. Rep. 37]; and of the Supreme Court of the United States in the same case on error, Loeb v. Columbia Tp. (Trustees), 13 O. F. D. 000 [179 U. S. 472; 21 Sup. Ct. Rep. 174], in which this very act was under consideration.

The bondholders were, therefore, when they took these bonds and parted with their money in exchange for them, advised by the decision of the Supreme Court of Ohio and by the circuit court that at least the act was not of an administrative character and was not a general law. They were innocent purchasers without notice of these infirmities, and every consideration of justice requires that they be protected against such an application of subsequent decisions as would be, in effect, a fraud upon them; a fraud proceeding from the very fountain of justice.

That such a retrospective effect shall not be given to subsequent decisions is the settled rule of the Supreme Court of the United States and the courts subordinate thereto. on the ground that when contracts have been entered into on the faith of the judicial construction of a statute, "the construction becomes, so far as contract rights acquired under it are concerned, as much a part of the statute as the text itself." Douglass v. County of Pike, 101 U. S., 677, 687; Burgess v. Seligman, 107 U. S., 20 [2 Sup. Ct. Rep. 10]; Louisville Trust Co. v. Cincinnati, 10 O. F. D. 112 [76 Fed. Rep. 296; 22 C. C. A. 334; 47 U. S. App. 36]: Loeb v. Columbia Tp. (Trustees), 12 O. F. D. 349 [91 Fed. Rep. 371; Loeb v. Columbia Tp. (Trustees), 179 U. S. 472 [21 Sup. Ct. Rep. 472]; Gelpcke v. Dubuque (City), 68 U. S. (1 Wall.) 175; Geene Co. v. Conness, 109 U. S. 104 [3 Sup. Ct. Rep. 69]; Stevens v. Pratt, 101 Ill. 105; Harmon v. Auditor, 13 N. E. Rep. 161 [123 III. 122; 5 Am. St. Rep. 502]; Harris v. Jex, 55 N. Y. 121 [14 Am. Rep. 285]; Commis sioners v. King, 13 Fla. 451; Hardigree v. Mitcham, 51 Ala. 151; Menges v. Dentler, 33 Pa St. (9 Casey) 495 [75 Am. Dec. 616]; Geddes v. Brown, 5 Phila., 180; 1 Kent Com. 467.

Bank v. Columbia Tp..

The rule is more broadly stated in Olcott v. Supervisors, 83 U. S. (16 Wall.) 678, in which it is said:

"I a contract when made was valid under the constituton and laws of a state, as they had been previously expounded by its judicial tribunals, and as they were understood at the time, no subsequent action of the legislature or the judiciary will be regarded by this court as establishing its invalidity."

And in Ralls Co v. Douglass, 105 U. S. 728, 731, wherein this language is used:

"The bonds involved in this suit were all in the hands of innocent holders when the law of the state was so materially altered by its courts. In our opinion the rights of the parties to this suit are to be determined by the law as it was judicially construed to be when the bonds in question were put on the market as commercial paper.

The Supreme Court of Ohio adopts the rule (Lewis v. Symmes, 61 Ohio St. 471 [56 N. E. Rep. 194]) and says, in the syllabus of that case:

"The rule that retrospective operation should not be given to a change in judicial opinions respecting the constitutional validity of legislative enactments can be invoked only to avoid the impairment of the obligation of contracts which have been entered into pursuant to statutory provisions and in reliance upon former adjudications respecting their validity."

It would seem, from the language of Judge Shauck in the opinion in that case, that the rule is to be narrowed in its application to cases in which, after rights have been acquired by contract in pursuance of the provisions of a particular statute and in reliance upon a judicial determination of the validity of the same statute, judicial opinion has changed with respect to that or similar laws.

That the Williams avenue law was not general and was not administrative was undoubtedly decided by the circuit court in State v. Columbia Tp. (Trustees), supra, is clear from a perusal of the opinion of the court. Whether or not the claim was made in the case that the act conferred corporate power does not appear clearly in the opinion, but is fairly to be inferred from the court's statement of the history of the case. The action was in mandamus to compel the trustees to proceed under the act. The petition states all of the substantial provisions of the act. The defendant filed a general demurrer. It "was sustained by the court (common pleas) upon the ground that the act in question was uncons itutional, and the petition was dismissed. The case comes into this court on error based on this ruling." The case stood in the circuit court exactly as it had in the common pleas, and, on the demurrer, every objection possible to the law was an issue. It is immaterial, therefore, that the circuit with certain infirmities of the law. when the opinion was announced.

court, in their opinion, dealt only The entire law was before them The judgment of the circuit court

Hamilton Common Pleas.

"is conclusive upon all questions within the issue, whether formerly litigated, or not." Harmon v. Auditor, 13 N. E. Rep. 161 [123 Ill. 122, 133; 5 Am. St. Rep. 502]; Beloit v. Morgan, 74 U. S. (7 Wall.) 619.

On the two questions, whether or not the law was general in its nature and of a character administrative rather than legislative, the decision of the circuit court could not, under the authorities cited and under the rule stated in the syllabus of Lewis v. Symmes, supra, be overthrown by any subsequent change in judicial opinion concerning that act in these respects, or any other act involving the same questions. And if the court is right in holding that the circuit court, in State v. Columbia Tp. (Trustees), supra, also decided that the act did not conier corporate power, then, for the same reason, no change in the opinions of the Supreme Court on that question could affect the rights. acquired by bondholders relying upon the validity of that decision.

But if the court is wrong in holding that State v. Columbia Tp. (Trustees), supra, did decide that the act did not confer corporate powers, it then becomes necessary to discuss, de novo, the question whether the act confers corporate power within the meaning of Sec. 1, Art. 13, of the constitution. The question is one of difficulty and is not free from doubt.

The Supreme Court of the United States, in Loeb v. Columbia Tp. (Trustees), 21 Sup. Ct. Rep. 174, 180 [179 U. S. 472], hold, in unequivocal language that Columbia township is a municipal corporation. The question was:

"Whether the defendant township is a corporation within the meaning of that clause of the judiciary act of August 13, 1888, Chap. 866, 25 Stat. at L. 433, 434, Sec. 1, which excludes from the cognizance of the circuit court or district court of the United States 'any suit, except upon foreign bills of exchange, to recover the contents of any promissory note or other chose in action in favor of any assignee, or of any subsequent holder, if such instrument be payable to bearer and be not made by any corporation, unless such suit might have been prosecuted in such court to recover the said contents if no assignment or transfer had been made.''

The argument was that, as a township is suable on account of liabilities incurred by it, citing Harding v. New Haven Tp. (Trustees), 3 Ohio 227; Concord Tp. (Trustees) v. Miller, 5 Ohio 184; Wilson v. Trustees, 8 Ohio 174, that it constituted, by Sec. 1376 Ohio Rev. Stat.. "A body civil and corporate for the purpose of enjoying and exercising the rights and privileges conferred upon it by law; it shall be capable of suing and being sued, pleading and being impleaded," and that the Supreme Court of Ohio had declared that a township is created for purposes of local administration, and is a corporation, citing Fairfield Tp. (Board of Ed.) v. Ladd, 26 Ohio St. 210, 213, and Lane v. State, 39 Ohio St. 312, 314. It is true that in Lane v. State, supra, Judge Okey, in announcing the opinion of the court that an indictment charging the

Bank v. Columbia Tp.

defendant with having voted twice at a certain election was fatally defective in that it did not designate the election at which the defendant voted, said:

"The words may also refer to a township election, for townships are corporations (Sec. 1376 Rev. Stat.,) and each township was authorized (Sec. 1442 Rev. Stat.) to hold an election on April 2, 1883. Washington, which is in Union township, Fayette county, was also a municipal corporation (Sec. 1552 Rev. Stat.)."

This distinction made by Judge Okey between a township and a municipal corporation runs through all of the Ohio decisions on the subject, as will be shown. And inasmuch as the language of the act "any corporation" might be broad enough to cover a township in Ohio for purposes of jurisdiction of the federal courts, this court may, without presumption, suggest, in view of the controlling decisions of our own Supreme Court, that it was not necessary for the court in Loeb v. Columbia Tp. (Trustees), supra, to declare that an Ohio township is a municipal corporation. Under our decisions a township is not a municipal corporation.

In Hamilton Co. (Comrs.) v. Mighels, 7 Ohio St. 109, 118, it is said:

"Municipal corporations are called into existence either at the direct solicitation or by the free consent of the people who compose them. Counties are local subdivisions of a state, created by the sovereign power of the state, of its own sovereign will, without the particular solicitation, consent, concurrent action of the people who inhabit them. The former organization is asked for, or at least assented to by the people it embraces; the latter is superimposed by a sovereign and paramount authority. A municipal corporation is created mainly for the interest, advantage, and convenience of the locality and its people; a county organization is created almost exclusively with a view to the policy of the state at large. *** With scarcely an exception, all the powers and functions of the county organization have a direct and exclusive reference to the general policy of the state, and are, in fact, but a branch. of the general administration of that policy."

To the same effect is Hunter v. Mercer Co. (Comrs.), 10 Ohio St. 515, 520, in which it was decided that county commissioners could not sue on the bond of a defaulting county treasurer.

In Finch v. Board of Ed., 30 Ohio St. 37, 46, in which it was held that a board of education is not liable for negligence, in the absence of express legislation, it is said:

"City and village school districts constitute a part of the state policy in promoting and fostering common schools, and have become state. agencies in the school system of education contemplated in the constitution. *** Owing to the very limited number of corporate powers conferred on them, boards of education rank low in the grade

Hamilton Common Pleas.

of corporate existence, and hence are properly denominated quasi corporations. This designation distinguishes this grade of corporations from municipal corporations, such as cities and towns acting under charters or incorporating statutes. *** This superior grade, from the nature of their organization, benefits received, and power to raise needed funds, are held responsible, by the common law, for private personal injuries."

In State v. Cincinnati, 20 Ohio St. 18, 34, it was held that this provision of the constitution applied as well to municipal as to private corporations. In the opinion of the court holding that it did, it is said:

"In looking over all the provisions of our constitution

it will be seen that they make no distinction, as respects legislative power in the creation of them, and in the conferring of powers upon them, between any classes of corporations proper."

And at nage 37 this most significant language is found:

"And here I might properly stop," says Judge Brinkerhoff, “yet, for the purpose of excluding a possible conclusion, I will, on my own individual responsibility, say one word more. It may be asked: Do we intend to include township and county organizations in the category with municipal and other corporations proper? The question is not involved in the present case, and so is not properly before us; but it it were, I apprehend the answer to it would readily be found in the case of Commissioners of Hamilton County v. Mighels, 7 Ohio St. 109, where it is held that a county is not properly a corporation, but that 'it is at most but a local organization, which, for purposes of civil administration, is invested with a few functions characteristic of a corporate existence.'''

And this language is found in New London Tp. (Trustees) v. Miner, 26 Ohio St. 452, 456:

"It is settled that neither the township nor its trustees are invested with the general powers of a corporation."

State v. Powers, 38 Ohio St. 54, decided two points: Common school districts and hoards of education are not corporations within the meaning of the section of the constitution under consideration, and that laws "regulating the organization and management of common schools must have a uniform operation throughout the state." This case was overruled with respect to the second point decided. State v. Shearer, 46 Ohio St. 275 [20 N. E. Rep. 335]. But the first point decided was not referred to in the syllabus or opinion of State v. Shearer, supra. Hence it is a law of the state and has not been directly overruled by any subsequent decision in which the Supreme Court has reported its opinion.

The importance of the language of Judge McIlvaine, in State v. Powers, 38 Ohio St. 54, 61, is so great that it may properly be set out at some length.