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Lorain Common Pleas.

good required the ordinance to be signed on that day. The mayor was ready and willing and able to perform his public duty in reference to this ordinance and the president of council had no legal authority to prevent the performance by the mayor of the duty he was elected to perform and which he was able, ready and willing to perform. Detroit (Mayor) v. Moran, 46 Mich. 213 [9 N. W. Rep. 252]; People v. Parker, 3 Neb. 409 [19 Am. Rep. 634]; State v. Graham, 26 La. Ann. 568 [21 Am. Rep. 551]; Wrede v. Richardson, supra; Watkins v. Mooney, supra.

For the foregoing reasons a decree may be entered granting the prayer of the petition in this case.

RECEIVERS.

[Hamilton Common Pleas, September Term, 1910.]

SAMUEL MORRIS V. NEWARK IRON & STEEL CO.

RECEIVER'S CERTIFICATES ISSUED TO COMPLETE CONTRACTS HAVE PRIORITY OVER SUBSEQUENTLY ISSUED CERTIFICATES.

When authority is given by the court for an issue of receiver's certificates for the purpose of completing contracts on hand, and subsequently a second issue is authorized for the purpose of continuing the business generally by the receiver, the holders of the first issue are entitled to priority in payment over the holders of the second issue.

[Syllabus approved by the court.]

J. M. Swartz and Jones & Jones, for plaintiff.

Flory & Flory and A. A. Stasel, for defendant.

SEWARD, J. (Orally).

This case is submitted to the court, generally, upon the question as to priority.

William E. Miller was appointed receiver for the Newark Iron & Steel Company, some time in 1902; at any rate, on January 31, 1903, this court made an order that the receiver complete the unfinished contracts which had been entered into by the company; and that, in order to do that, he issue not to exceed-and the words "not to exceed" are important in this case-six thousand dollars of receiver's certificates, to any person who might furnish the money to that extent. Those certificates were issued, and have come into the possession of some banks, who have filed answers in this case, setting up a claim to the fund in the hand of the receiver.

Some months afterwards-on June 12, 1903-an order was placed on the journal of this court authorizing the receiver to continue the business, and to borrow not to exceed $20,000 for that purpose. I do

Morris v. Iron & Steel Co.

not know whether that order resulted disastrously to this business or not, but certain it was that no profits were made out of the money that went into the institution.

The question is submitted to the court as to whether the holders of these certificates for $6,000 have a prior claim, in equity, to those who received the $20,000 of certificates-bearing in mind that these certificates were not issued until June, after the issuing of the first $6,000 of certificates, and were issued upon an application made by the plaintiff, Morris.

I will read the order of the court. It is in the brief of counsel, and I will not take up the time to go to the journal for it, because it is quoted accurately here. It reads:

"This day came the receiver, William E. Miller, heretofore appointed and qualified, and made application to the court to borrow the sum of $6,000 for the purchase of materials and the payment of wages to operate the plant of said defendant, now in his possession as such receiver, for the completion of the unfinished contracts of said company; and for the appointment of appraisers of the property of said company, now in said receiver's possession. And the court being of the opinion that it is to the best interest of said company and the creditors of the same, that said plant should be operated to the extent of the completion of said unfinished contracts, it is ordered that said receiver be and he is hereby authorized and empowered to borrow for that purpose not to exceed the sum of $6.000, for a period not longer than three months at a rate of interest not to exceed six per cent per annum."

The extent to which these certificates were to run cuts some figure in the case. They were to run not to exceed three months. After they had matured, the holders were entitled to their pay for the money advanced on their certificates.

The order provided:

"And to be payable on or before the expiration of said period; and that he issue to the lender of said money his receiver's certificates for the same, to be nonnegotiable and signed by him as receiver and dated as of the date of the execution thereof."

The balance of the order applies to the appointment of appraisers, who were appointed to appraise the material on hand.

The second order, as set forth in this brief, and copied from the record of the court, made June 12. 1903, reads:

"This day came the plaintiff and defendant, and on their motion. and for good cause shown it is ordered that the receiver, W. E. Miller, heretofore appointed in this case, be and he is hereby authorized and empowered to continue in possession of all the property and rights of

Hamilton Common Pleas.

the defendant and to control and operate the works of the said defendant company at Newark, Ohio, until the further order of the court, with general powers to employ laborers, purchase material, make contracts, and manufacture and sell all the articles of merchandise and steel products of the said company; to make such necessary repairs and betterments as in his opinion are required for the economical and successful operation of said works; that the said receiver be, and he is hereby authorized to collect by suit or otherwise all claims and demands of every kind and nature, due or owing to the said company, including all unpaid subscriptions to the capital stock thereof; and to compromise, adjust and settle all claims against said defendant company upon such terms, and in such manner as shall be agreed upon between him and the general creditors of the company.'

A part of that which I have just read reads like an original entry, appointing a receiver, and giving him power to settle up the business of the concern. But it is not.

"And that for the purpose of carrying into effect, fully, this order, said receiver is hereby authorized and empowered to borrow a sum of money, not to exceed $20.000, and to secure the same by receiver's certificates, pledging the same as security for the several sums so borrowed by him, and that the certificates so issued by him shall be a paramount lien and charge upon all the earnings as well as upon all material and supplies on hand or hereafter to be acquired by him, and upon all notes, accounts, claims, contracts and choses in action and money due or to become due to the said Newark Iron & Steel Co., or to the said receiver thereof, and upon all other property, real, personal and mixed, subject only to the lien on the real estate which was a valid and subsisting lien at the time of the filing of the petition for the appointment of a receiver herein, and that he make due and complete report of his proceedings hereunder to this court on the first day of October, 1903.”

This kind of an order surprised the court so much that the court went to its original memorandum on the docket that it had made at the time, and it found that this order was made June 9, 1903, and the order reads:

"Order allowing receiver to run plant and to borrow money not to exceed $20,000 on receiver's certificates, on condition that two notes, upon which plaintiff is surety, of $2,800 and $3,000, held by National Bank, Pittsburgh, and 166 shares of his stock is returned to him, or to his attorney. Entry not to go on until complied with."

Now, I do not know why this order was ever made, and I have always thought, and still think, that it is beyond the power of a court. where a corporation has gone into the hands of a receiver, to order the

Morris v. Iron & Steel Co.

receiver to continue the business, except insofar as it is necessary to complete unfinished contracts. I do not believe the court has any power to do it. That is, he has no power to order a receiver to continue the business of a corporation, generally, for the purpose of making money possibly (or, probably, of losing money) in the venture; and generally of losing it, because I never yet saw a business run at a profit under such circumstances or that made any money for anybody. The court was without authority to make this order, but it was made as the court has indicated. And the case is submitted upon the question of the priority of claims growing out of these orders.

It is not necessary to refer to any authorities in the matter. Counsel have presented ably prepared briefs, and the court has examined the authorities and is of the opinion that it exceeded its authority in ordering the $20.000 of certificates to be issued, and that the plaintiff's claim, or the claims of those who hold the certificates issued under the first order of the court, are prior in equity, and are entitled to be first paid out of the money in the hands of the receiver. And it may be so ordered.

Judge Swartz. What does the court mean by "the money in the hands of the receiver"?

The Court. Something was said about money in the hands of the clerk. That is what I mean. I simply hold that it is a prior claim, in equity.

TAXATION.

[Hamilton Common Pleas, December, 1909.]

CINCINNATI (CITY) v. R. K. HYNICKA, TREAS. ET AL.

1. GRAND DUPLICATE AS MADE UP BY COUNTY AUDITOR IS PRIMA FACIE CORRECT. A county auditor has power to correct all errors appearing on the tax lists; his grand duplicate is prima facie correct, and the burden of proof is on one attacking it to show that there are errors in its items.

2. POWER TO EXEMPT PROPERTY FROM TAXATION VESTED IN GENERAL ASSEMBLY. The sole power to exempt any ground from taxation is vested in the general assembly. There is no implied exemption, but it must be expressed in clear and unmistakable terms.

3. PUBLIC GROUNDS USED BY PUBLIC EXEMPT FROM TAXATION.

Public ground used "for public purposes" is exempt from taxation.

4. PUBLIC GROUNDS USED BY COAL COMPANY UNDER LEASE NOT EXEMPT FROM TAXATION.

The use by a coal company of river wharf ground which belongs to a city, for handling its own coal for its own customers at its own price, and in no way controlled by the authority of the state, is not for an exclusive public purpose within the meaning of the statute exempting from taxation public grounds used "for public purposes," and this is true notwithstanding the fact that the river coal so handled cheapened the price of coal generally by its competition with railroad handled coal.

Hamilton County

5. PUBLIC GROUNDS USED BY RAILROAD COMPANY FOR STORAGE PURPOSES NOT EXEMPT FROM TAXATION.

Public ground upon which is erected a warehouse operated by a railroad company, in which the freight handled is owned by various consignees, the charges fixed by the company, and the handling in no way controlled by the authority of the state, is not used "for public purposes" within the meaning of the statute exempting public grounds from taxation.

6. PUBLIC GROUNDS NOT NEEDED FOR PUBLIC PURPOSES MAY BE LEASED FOR PRIVATE PURPOSES.

Public lands of a city when not needed for public purposes may be leased by the city for private purposes, but such lease may be terminated at the will of the public whenever public necessity requires its use; and during such temporary diversion from public use such grounds are taxable. 7. PUBLIC LAND LEASED FOR PRIVATE TURPOSES CANNOT BE SOLD TO PAY TAXES. Public lands when used or private purposes to the profit of the city owning it cannot be sold by the state to pay taxes assessed against them, but if no remedy has been provided to enforce the collection of such a tax without a sale, it is the duty of the general assembly to provide one and the courts can give no relief, but can only point out the error.

S. SALE OF PUBLIC LANDS FOR TAXES WILL BE ENJOINED.

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An attempted sale of public ground to pay a tax properly charged against it will be enjoined.

[Syllabus approved by the court.]

D. V. Sutphin and Geoffrey Goldsmith, for plaintiff.

L. A. Ireton and W. M. Schoenle, special counsel, for auditor.
Alfred Bettman, Asst. Pros. Atty., and R. B. Smith, for defend-

DICKSON, J.

This action is brought by the city of Cincinnati, a municipal corporation under the laws of Ohio, against the county of Hamilton, Ohio.

The facts as developed during the trial appear in the opinion.

The city owns in fee, either by deed or grant or by perpetual lease, certain parcels of ground within the city limits and described in the pleadings. These grounds are public grounds owned by the public and all charged with public trusts. These grounds are held in trust for the use and benefit of the public.

In the month of February in the year 1905, the then auditor of Hamilton county placed on the grand duplicate these certain parcels of ground in the name of the city and charged against the same the taxes for the year 1904 and for the years prior thereto back to and including the year 1901-the time of the decennial appraisement-at the current rates of taxation levies for these years, and the same levies as charged against grounds owned by individuals. This auditor corrected various descriptions and placed various values against these various parcels upon the books in his office. In all there are nine parcels of ground in the nine separate causes of action in the petition. These taxes so charged not being paid, this auditor added the usual penalties, and caused the treas

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