Alabama Elec. Co-op. v. Alabama Power Co.

• Decision Date: 31 July 1948
• Docket Number: 3 Div. 497.
• Citation: 251 Ala. 190,36 So.2d 523
• Parties: ALABAMA ELECTRIC COOPERATIVE, Inc., et al. v. ALABAMA POWER CO.
• Court: Alabama Supreme Court

36 So.2d 523

251 Ala. 190

ALABAMA ELECTRIC COOPERATIVE, Inc., et al. v. ALABAMA POWER CO.

3 Div. 497.

Supreme Court of Alabama

July 31, 1948

A A. Carmichael, Atty. Gen., and Silas C. Garrett, III, Asst Atty. Gen., and Marion Rushton, J. M. Williams, Jr., and Rushton, Stakely & Johnston, all of Montgomery, for appellants.

Steiner Crum & Weil, of Montgomery, Powell, Albritton & Albritton and Robert B. Albritton, all of Andalusia, Martin, Turner & McWhorter and J. C. Blakey, all of Birmingham, and Edwin I. Hatch, of Montgomery, for appellee.

SIMPSON Justice.

This appeal brings up for consideration § 155, Title 55, Code 1940, and a review of certain proceedings transacted thereunder wherein the appellant Alabama Electric Cooperative, Inc., filed its petition before the Department of Finance of Alabama seeking the consent of the department to issue and deliver to the United States of America the Cooperative's notes aggregating $5,516,600 for the purposes enumerated in the petition. Review was brought before the circuit court by a petition for common law certiorari with prayer for a declaratory judgment and alternative writ of mandamus, which procedure is not questioned.

This appeal is from a final judgment of the circuit court in that review proceedings, which resulted in the vacating and annuling of an order of the Director of Finance, purportedly entered under authority of said § 155, wherein the consent of the Department of Finance was granted to issue the notes as prayed for in the Cooperative's petition. The circuit court in annuling and expunging from the record the said order of the Director of Finance ordered and adjudged that a previous order of the Chief of the Division of Local Finance of the State Department of Finance denying the Cooperative's petition and withholding the consent of the department for permission to issue the said notes to be the only legal, valid, and binding order.

The merits of the controversy and the right vel non to have the consent of the Department of Finance to issue the notes is not here for consideration. The matter is one of jurisdiction and the main question is to determine the authority and power of these public officials concurrently conferred by said § 155.

The section, with supplied emphasis, pertinently reads: 'No bonds or other evidences of indebtedness of * * * any electric membership corporation * * * shall be issued or sold until the consent to the issuance and sale thereof shall have been given by the department of finance, to be evidenced by the written approval of the director of finance or the chief of the division of local finance. * * *'

The appellant W. H. Drinkard was, when these proceedings were instituted, and is the duly appointed and acting Director of of the Department of Finance and J. P. Shaffer was, and had been for about eighteen months previously when the incidents hereafter noticed took place, the duly appointed and acting Chief of the Division of Local Finance of the Department of Finance. The particular matter under consideration, that is, the determination of whether or not the Cooperative would be given permission to issue the notes aforesaid, was properly within the jurisdiction of the Division of Local Finance as set up under Article 6 of the statute relating to the Department of Finance (Title 55, §§ 151-155, Code 1940) and during Shaffer's incumbency in that office all such matters had been handled exclusively by him, his orders having theretofore been the final ones of the department and entered without interference or direction from the Director of Finance, in whose whole department were many and various divisions under the supervision and control of said Director, including the Division of Local Finance.

After the filing of the petition by the Cooperative seeking consent to make the loan from the United States, the Alabama Power Company, a public utility largely concerned in the area in which the Cooperative proposed to expend the money to expand its operation, filed its petition for permission to and did intervene as an interested party in the proceeding to contest the petition. Thereafter the case proceeded between the Cooperative and the Power Company as a hotly contested case, with Shaffer, as the Chief of the Division of Local Finance, alone presiding and hearing the evidence adduced at the trial. The trial lasted two days and much testimony, with many exhibits, was presented at the hearing for the consideration of this official in determining whether the consent of the department should be given or withheld. Shaffer alone presided and heard the case. The Director of Finance, Drinkard, was in no way officially connected with the hearing.

This hearing took place October 6th and 7th, 1947, and on October 29th Shaffer, as Chief of the Division of Local Finance, in keeping with the usual practice and as the statute (§ 155) authorized, entered a formal written order in the case and placed it in the minute book of the department, as orders of this character were usually placed. This order denied the consent of the department for the issuance of the notes as prayed for by the Cooperative on the statutory ground that 'the issuance of said notes will not serve a public need and is not in the public interest.' This conclusion was rested on due findings of fact from the evidence taken at the hearing and was in accordance with the prescription of the statute which directs the basis on which the consent of the department must be granted in such cases (§ 155).

After the due enrollment of this order in the minute book of the Local Division of the department, Drinkard, as Director, took action in the case too. His first step was a purported order the same day and, according to the testimony of his secretary, prepared by her a few minutes after the enrollment of Shaffer's order. This order of Drinkard recited:

October 29, 1947

'In the Matter of the Petition of Alabama Electric Cooperative, Inc. Requesting Consent of the Department of Finance to Issue and Deliver to United States of America Its Note in the Aggregate Principal Amount of $5,516,600.00, after Conference with the Governor and the Chief of the Division of Local Finance, I Am Hereby Rendering My Decision in Favor of the Alabama Electric Cooperative, Inc., thus Overruling the Decision of the Chief of the Division of Local Finance.

W. H. Drinkard (Bill)

W. H. Drinkard (Bill) Director of Finance.'

Thereafter, dated the same day, though Drinkard testifies it was prepared the following day, another order with more formality was likewise signed by Drinkard to the same effect and purporting to grant consent to the Cooperative to issue the notes.

The present proceedings were instituted by the Power Company (appellee) to have these Drinkard orders expunged and annulled of record and Shaffer's order validated. The trial court acted favorably on the appellee's petition and ordered the annulment of both of Drinkard's orders and the reinstatement of the Shaffer order. Hence, this appeal.

Before reaching the main question, we are met at the threshold of the inquiry by the contention that the Power Company had no right to invoke the aid of the court in contesting the action taken by Drinkard; that the proceedings before the department were of an executive or legislative character and that the Power Company had no such interest or right as to give it standing in a court of Law to thus contest the action of the Director of Finance.

Not much stress was laid on this insistence on original submission, but the point is now urged in appellant's reply brief, and, were the question an open one in this jurisdiction, it might pose some difficulty. However, as we see it, the case of Alabama Power Company v. City of Fort Payne, 237 Ala. 459, 463, 187 So. 632, 635, 123 A.L.R. 1337, is completely decisive against the contention of the appellants on this issue. The present statute (§ 155) is in substance the same as the statute there construed, where this court, speaking through the late Justice Knight, said:

'We are confronted at the outset with the insistence that appellant had no such interest in the proceedings before the Public Works Board [now Department of Finance] as would confer upon it the right to intervene and contest the application and petition of the City of Fort Payne. We do not think there is merit in this insistence. The appellant showed by its petition that it owns property in the City of Fort Payne and operates there an electric distribution system. While there is absent from the petition a specific allegation that appellant is a taxpayer in said city, yet we know that one cannot own and operate such property without being a taxpayer.

'It appears that the appellant was a party to the record in the proceedings before the Board, and was so recognized by the Board. This then brings this case squarely within the principle and rule in the case of St. John et al. v. Richter et al., 167 Ala. 656, 52 So. 465. The record facts and the nature of the proceedings differentiate this case from that of Birmingham Electric Company v. City of Bessemer et al., 237 Ala. 240, 186 So. 569.'

To attempt to make a distinction, in principle, between that case and the instant one would be a distinction without a difference. Though the two statutes are not altogether identical, the rule theorized in the Fort Payne case would control both. The question is one of public interest. The money coming from the United States would be expended in constructing a power plant and lines, ultimately looking toward serving Power Company, as well as other, customers in that area. The Power Company, as a state taxpayer, is not only a member of that public, but has a peculiar interest more than the ordinary...