McGuire v. Cincinnati , 35 Ohio Law. Abs. 423 ( 1941 )

OPINION

By MATTHEWS, PJ.

To decide this case it is unnecessary to start farther back than 1932, when the City of Cincinnati acquired the title to the real and personal property known as the Zoological Gardens. The power of the city to acquire, to own, and to operate it, is unchallenged— and, at this late date in the development of governmental functions, is unchallengeable. The purpose is public. The history of the Zoological Gardens prior to that date, while interesting, is immaterial. The reasons for the city’s determination to assume this service are equally unimportant. The fact is that it did acquire this property for the public in the exercise of its lawful authority as a municipal corporation under the laws of Ohio.

It is equally clear and unchallenged that the city having acquired this property, properly placed its control and operation under the jurisdiction of its board of park commissioners; as a governmental agency of the city. Indeed, one of the avowed purposes of this action is to strike down the present arrangement as an unconstitutional relinquishment by that board of its duty to control and operate it.

We, therefore, disregard the municipal legislation preceding the acquisition of the Zoological Gardens, and consider only the later municipal acts which this action challenge as an unconstitutional method of operating the property.

The City of Cincinnati entered into a contractual arrangement with the Zoological Society of Cincinnati, a nonprofit corporation, under the laws of Ohio, authorized generally to construct and maintain a museum for the preservation and' exhibition of living and dead animals, and other works of nature, and a museum of natural history, and “of maintaining a park in which such animals may be housed, kept and cared for”, where musical and other entertainments may be given, refreshments and recreation provided, and to promote interest in the preservation of the flora and fauna of the surrounding region. These general purposes are broad enough to include all the activities carried on under the name Zoological Gardens, but no doubt is left on that point because the articles of incorporation specifically provide that the corporation shall have the power to lease the Cincinnati Zoological Park upon such terms as may be agreed upon and to operate it for the use of the public “free from costs, charge, or expense” except such as should - be necessary to operate, preserve and improve it. In clear and unmistakable language it was provided in the articles that no incorporator, subscriber, trustee, director, or member should receive any compensation, gain or profit from the corporation, nor any return of any part of any sum contributed in dues or otherwise, and that no division of the property or the income therefrom shall ever be made to the members of the corporation. As a matter of fact, the management of the Zoological Gardens has been its sole activity.

It would seem that a corporation organized and pursuing this one purpose is not • only sanctioned by the general corporation laws, but that the purpose also brings it within the operation of §10193 GC, which authorizes municipalities and political subdivisions to deliver public land upon which to erect its buildings and carry out its purposes, without retention of any supervisory control by the municipality or political subdivision.

It is the arrangement between this corporation and the City of Cincinnati for the operation of the Zoological Gardens that is challenged in toto by this action, as beyond the power of the municipality and in violation of the constitution of Ohio.

As already stated, it is not disputed that Cincinnati as an Ohio municipality has the power to own and operate this park. It is equally clear that the Zoological Society of Cincinnati, a nonprofit corporation, is expressly authorized and has the power to own or lease, and operate such a park. But it is the contention that the constitution of Ohio will not permit them to cooperate in the operation of this park, notwithstanding each has power to operate it separately. The constitutional barrier to such cooperation is said to be §6 of Art. VIII of the Constitution of Ohio.

Before considering this constitutional provision, let us consider briefly the terms of the agreement between the City and the Zoological Society for the operation of this park. There have been three agreements for stated intervals, but we shall consider the last only, as it is the current one.

The parties themselves called their arrangement a contract in the writing-evidencing the terms. At no place is it referred to as a lease. There are provisions against waste and for quiet enjoyment which are customarily found in leases, but are equally appropriate in a contract authorizing the use of property without conveying any estate therein. However, the name and form of this arrangement are immaterial. The extent of the City’s relinquishment of control is the substantial and controlling consideration.

The contract provided that it should cover a period of five years during which the Zoological Society agreed “to operate and maintain to the satisfaction” of the Board of Park Commissioners the property known as the Zoological Gardens, should suffer no waste, should keep the property in proper repair and maintain the Zoological collection “to the satisfaction of the Board”, shall make no physical changes without the consent and approval of the Board, and then there was reserved to the Board of Park Commissioners representing the City the right to terminate the contract “at any time — if in its opinion this is necessary for the public health or safety, or if, in the opinion of the Board, the Society does not properly operate and maintain the property”.

The Society was obliged to account for all of the property at the termination of the contract, and to render a complete audit of its financial operations each year and at the termination of the contract.

Taking the terms of this contract in conjunction with the limitations upon the power of the Zoological Society precluding it from operating for a profit, it is clear that all revenue received by it from whatever source must be expended in operating, preserving, and expanding the Zoological Gardens, and that the Zoological Gardens as thus operated, preserved, and expanded are, and will be at all times the property of the City of Cincinnati in which the Zoological Society has not now nor shall have at any time any title or control that is not immediately and at all times subject to the superior power of the City, which can oust the Society at will and place the management in other hands. There is no contrary claim made by either the City or the Society. The contracting parties are agreed on its meaning. The Society makes no claim of a vested or property right under this contract or of any control of the Zoological Gardens independent of the supervisory power of the City through the Park Board.

Reverting now to the asserted constitutional and other infirmities in this arrangement, we notice the claim that it violates §6 of Art. VIII of the Constitution, which provides:

“No laws shall be passed authorizing any county, city, town or township, by vote of its citizens, or otherwise, to become a stockholder in any joint stock company, corporation, or association whatever; or to raise money for, or to loan its credit to, or in aid of, any such company, corporation, or association; provided, that nothing in this section shall prevent the insuring of public buildings or property in mutual insurance associations or companies. * * *”

In applying this section the Supreme Court has held that it precluded a township from constructing a section of a continuous railroad line, the other-parts to be constructed and owned by others, because the entire road was to be operated as a common enterprise. (Wyscaver v Atkinson, 37 Oh St 80), a city from expending money in enlarging a privately-owned waterworks system and then leasing it from the' private owner at a rent payable out of the receipts (Alter v Cincinnati, 56 Oh St 47), and a city from repairing the road-bed of a private corporation having a franchise to operate street cars over roads in the public streets but charged with the duty of keeping in repair the streets between and immediately outside the tracks (Cincinnati v Harth, 101 Oh St 344). Courts of other states having similar constitutional provisions have made similar applications. But in each of these cases it will be observed that a private interest was being served in addition to the public interest. They are in contrast to this case in which the municipality owns all the property over which it has complete control at all times. In each of these cases the distinction is pointed out. The case at bar satisfies the condition stated at page 64 in Alter v Cincinnati, supara, that “The whole ownership and control must be in the public.”

This case does not differ in principle from Walker v Cincinnati, 21 Oh St 14, which sustained the legislation authorizing the construction and operation of the Southern Railway under the management of a board of trustees. Speaking of §6 of Art. VIII, the court said:

“The mischief which this section interdicts, is a business partnership between a municipality or a subdivision of the state, and individuals or private corporations or associations. It forbids the union of public and private capital or credit in any enterprise whatever.”

It is true that the Supreme Court at a .later date held that legislation similar to that considered in Walker v Cincinnati violated the constitutional prohition against special acts conferring corporate power but that does not weaken the case as an authority on the meaning of §6 of Art. VIII, and it has not been weakened by any other Supreme Court decision. State ex rel v Cincinnati Street Railway Co., 97 Oh St 283, at 300.

In State ex Leaverton v Kerns, 104 Oh St 550, the court sustained an act (§9880-1 GC) authorizing counties to appropriate money for agricultural societies holding fairs. It was held to be an expenditure for a public purpose. We regard this case as sustaining a “grant-in-aid” of what in some aspects is a private enterprise on the ground that it is in the public interest. It was in substance a subsidy. The case at bar falls in a different category. All the expenditures, all the activities here relate to public property controlled by public authority and operated for a public purpose, through the agency selected and controlled by such public authority.

So we conclude that there is no inherent constitutional defeCt in the arrangement between the City and the Zoological Society.

And this conclusion disposes of the collateral issues, such as the appropriation of money to be expended on the Zoological Gardens and the furnishing of police services. There can be no legal objection to spending public money on public property and protecting it by police guards, and preserving the public peace at the same time.

The fact that private individuals have made gifts to the Zoological Society to be used in connection with the Gardens cannot affect the validity of the arrangement as such gifts when made are as much public funds as are the appropriations made from the public treasury for the maintenance of the Gardens.

The charging of an admission fee is also urged as illegal in itself, and because of the commingling of the fees with other funds. If the Zoological Society was engaged in other activities from which it derived revenues through admission fees, and had funds which it was free to use to promote those other purposes, this contention relating to the commingling of public with private funds would require us to determine whether the City would be authorized under the law to grant a subsidy — but there is no other activity, and no free funds with which public funds could be commingled. As the funds all belong to the municipality, whether they shall be kept in separate funds or commingled is entirely a matter of policy and not of power. And, likewise, the matter of financing the enterprise falls with:in the field of policy and not of power. 2t is for the policy making department and not the courts to determine whether the activity shall be financed by funds raised by taxation on all, or whether those who are especially benefitted shall be required to pay all or a part. There is no exclusion from the Gardens by reason of the imposition of a non-discriminatory admission fee, and the cases in which courts have denounced discriminatory rules of exclusion are inapplicable.

For these reasons, we find in favor of the defendants and a decree may, be prepared in conformity to this opinion.

HAMILTON, J., concurs. ROSS, J., dissents.