Opinion
No. 40517
Decided December 13, 1967.
Municipal corporations — Sale of real property not needed — Charter requiring opportunity for competition — Sale arrangement precluding opportunity for competition, void.
Although Section 3, Article XVIII of the Constitution of Ohio, confers upon municipalities the authority to exercise all powers of local self-government, which includes the power to sell and convey real property not needed for municipal purposes, where a municipal charter expressly provides that in the sale of municipal real property not needed for public use opportunity for competition shall be given, and a public sale by the municipality of unneeded real property is made under a prior arrangement whereby a single purchaser is favored in such manner as to preclude a fair and unhampered opportunity for competition by others, such sale is in plain violation of the charter provision and is void.
APPEAL from the Court of Appeals for Montgomery County.
Upon the refusal of the Solicitor of the city of Dayton to do so, Charles F. Young, as a taxpayer (and personally interested), brought suit in the Court of Common Pleas of Montgomery County against the city and others, asking that a sale of real estate by the city be set aside and held for naught.
The pleadings consist of the amended petition, the answer of the city and the reply.
From the pleadings and the evidence presented at the trial, it appears that the city owned certain land within the municipality for which it had no present use and which was declared by the City Commission to be surplus property; that Harry and DeVora Mayo, husband and wife, owned adjacent land which the city did need to widen and improve Gettysburg Avenue; that the Mayos were informed by the City Solicitor prior to the advertised public sale of the city property that the city would pay the Mayos for their property an amount equal to the sum the Mayos would bid for the city property; that pursuant to such representation the Mayos successfully bid $2,000 at the public sale for the city's property (in fact they were the only bidders); that subsequently by ordinance of the Dayton City Commission such sale was approved; and that an exchange of deeds between the city and the Mayos followed in consummation of the transaction.
It was held by the Court of Common Pleas that the arrangement was authorized, lawful and without fraud, and judgment was rendered for the city.
An appeal on questions of law and fact to the Court of Appeals resulted in a decree which adjudged "that said sale and the deed from the city of Dayton to Harry Mayo and DeVora Mayo * * * is hereby rescinded and said conveyance is set aside and held for naught."
For a prior opinion of the Court of Appeals in this case, see Young v. City of Dayton, 116 Ohio App. 271, 188 N.E.2d 166.
The cause is now here for review and determination upon an appeal as of right and the allowance of the motion to require the Court of Appeals to certify the record.
Mr. Charles F. Young, in propria persona. Mr. James W. Drake, director of law, and Mr. Maurice J. Gilbert, for appellants.
In seeking a reversal of the judgment of the Court of Appeals, the city places strong reliance on Section 3, Article XVIII of the Constitution of Ohio, providing generally that "municipalities shall have authority to exercise all powers of local self-government." This includes the power to convey property no longer needed for municipal purposes. See Babin v. Ashland, 160 Ohio St. 328, 116 N.E.2d 580, paragraph six of the syllabus.
However, the Charter of the city of Dayton which governs contains the following provisions:
Section 84. "The City Purchasing Agent shall, in manner provided by ordinance, purchase all supplies for the city, sell all real and personal property of the city not needed or unsuitable for public use * * *."
Section 85. "Before making any purchase or sale, the City Purchasing Agent shall give opportunity for competition * * *."
Section 92. "All contracts, agreements or other obligations entered into and all ordinances passed, resolutions and orders adopted, contrary to the provisions of the preceding sections, shall be void."
Section 85 specifically states that before making a sale of real property opportunity for competition shall be given.
Under the evidence in this case, the sale of the city's property was conducted pursuant to a prior arrangement, whereby the Mayos were favored and placed in an advantageous position with the result that an exchange of properties actually took place in such a manner as to preclude fair and unhampered opportunity for competition in the purchase of the property by others, including Young who was interested in making the purchase. By the arrangement described, Section 85 of the City Charter was violated and the sale to the Mayos was void.
Such were the findings and conclusions of the Court of Appeals, with which we agree.
The judgment of the Court of Appeals is, therefore, affirmed.
Judgment affirmed.
MATTHIAS, O'NEILL, HERBERT and BROWN, JJ., concur.
TAFT, C.J., and SCHNEIDER, J., dissent.
There was an advertised public sale of the land sold to the Mayos. Hence, there was an "opportunity for competition" within the meaning of Section 85 of the Dayton Charter. Since there were no other bidders, there is no basis for concluding that there was any interference with that "opportunity for competition."
SCHNEIDER, J., concurs in the foregoing dissenting opinion.