Alabama Water Co. v. City of Attalla

Decision Date15 May 1924
Docket Number7 Div. 451.
Citation211 Ala. 301,100 So. 490
CourtAlabama Supreme Court

Appeal from Circuit Court, Etowah County; Woodson J. Martin, Judge.

Bill in equity by the City of Attalla against the Alabama Water Company, for specific performance of a contract to furnish water, and injunction to restrain the exaction of higher rates for service than those provided by the contract. From a decree granting the relief prayed, respondent appeals. Reversed and remanded.

Knox Acker, Sterne & Liles, of Anniston, Hood & Murphree, of Gadsden, and Eyster & Eyster, of Albany, for appellant.

Harwell G. Davis, Atty. Gen., and Hugh White, Asst. Atty. Gen., for Alabama Public Service Commission, amicus curiæ.

Goodhue & Lusk and E. O. McCord & Son, all of Gadsden, for appellee.


The primary question is: Did the trial court commit error in enjoining appellant from changing the rates for water supplied the inhabitants of the city of Attalla, and charging the rates fixed by the Alabama Public Service Commission? The contract between the city and the water company is of date September 30, 1916. The order of the Alabama Public Service Commission is of date October 1, 1921, and was sought to be made by authority of the act of October 1, 1920 (Gen. and Local Acts Sp. Sess. 1920, p. 38). The lease contract in question had not the approval of the Public Service Commission.

The suit is a collateral attack on the order of the Alabama Public Service Commission. The general rule of law is that such an order or judgment will be sustained on collateral attack unless the same be void. Acklen v. Goodman, 77 Ala. 521; Hamilton v. Tolley, 209 Ala. 533, 96 So. 584; Miller v. Thompson, 209 Ala. 469 Alexander v. Nelson, 42 Ala. 462. See also, Martin v. Hall, 70 Ala. 421, motion for summary judgment against constable and sureties on official bond; Wightman v. Karsner, 20 Ala. 446, challenging the order of court of commissioners of roads and revenue; Barron, Adm'r, v. Tart, 18 Ala. 668, motion by administrator to quash an execution and to retax costs. The distinction between a direct and a collateral attack for the purpose of avoiding or correcting a judgment or decree is adverted to in Hamilton v. Tolley, 209 Ala. 533, 96 So. 584; Miller v. Thompson, 209 Ala. 469, 96 So. 481; and authorities collected in Edmondson v. Jones, 204 Ala. 133, 85 So. 799.

The order of the Public Service Commission made the subject of this suit might have been reviewed by an appeal to the circuit court of Montgomery county in equity, and then by appeal to this court, as provided in section 62 of General and Local Acts Special Session 1920, p. 56. This procedure was not observed by the city of Attalla; and its bill praying injunction to prevent the Alabama Water Company collecting the rate fixed by the Public Service Commission is merely a collateral attack on the Commission's order fixing a different rate to be charged consumers of water furnished by that corporation.

The jurisdiction and powers of the Alabama Public Service Commission that are given expression in sections 17 and 18 of the act, supra, are:

"The Commission shall have general and exclusive power and jurisdiction to regulate and supervise every utility in respect to its rates and service regulations, and in respect of its franchises, licenses and contracts, in so far as they affect its rates and service regulations, and in respect of its financing and securities in accordance with the provisions and subject to the reservations of this act, and to do all things necessary and convenient in the exercise of such power and jurisdiction. Nothing in this act contained, however, shall be deemed to confer upon the commission power and jurisdiction to regulate and supervise in respect of rates and service regulations any utility owned and operated by any municipal corporation in the state. From time to time the Commission may make such recommendations to any municipal corporation which owns and operates a utility, as from its experience in the administration of this act may seem to the Commission necessary or advisable.
" Contracts with Municipalities and Utilities. Rates and service regulations may hereafter be established by contract between a municipality and utility for a specified term not exceeding thirty years, but only by and with the approval of the Commission to be expressed by its order."

The Commission's "powers and jurisdiction" are, among other things, declared in section 66 as follows:

" Powers and Jurisdiction of Commission. The rights, powers, authority, jurisdiction and duties by this act conferred upon the Commission shall be exclusive and in respect of rates and service regulations, shall be exercised notwithstanding any rights heretofore acquired by the public under any franchise, contract or agreement between any utility and municipality, county or municipal subdivision of the state, and shall be exercised, so far as they may be exercised consistently with the Constitution of the state and of the United States, notwithstanding any right heretofore so acquired by any such utility. Nothing in this section or elsewhere in this act contained is intended or shall be construed, (a) to limit or restrict the police jurisdiction or power of municipalities over their streets and other highways and public places or the power to maintain or the power to require maintenance of the same; (b) to limit or restrict any right or power, by contract or otherwise, of any municipality to require utilities to have and maintain the portions of highways used and occupied by them; (c) in respect of matters other than rates and service regulations, over which exclusive jurisdiction is conferred by this act upon the commission to affect existing right and powers or rights and powers hereafter acquired by municipalities under valid contracts with utilities; (d) in respect of matters other than rates and service regulations, to repeal any power of any municipality (1) to adopt and enforce reasonable police regulations and ordinances in the interest of the public safety, moral and convenience, or (2) to protect the public against fraud, imposition or oppression by utilities within their respective jurisdictions, or (3) to require the discharge by utilities of their respective duties within such municipalities, whether arising out of contracts with the municipality, or by statute or regulation by the commission or otherwise. Any utility accepting under the provisions of this act any rate or service regulation more favorable to it than provided by any ordinance or contract under which it claims rights from any municipality shall be held to waive any and all terms and conditions in such ordinance or contracts as to rates and service regulations in its favor and to submit the same in all respects to reasonable regulations by the state or its lawful agencies."

Proceeding on the assumption that the lease contract in question is subject to this general statute, we are dealing with the order of a Commission with general powers and jurisdiction which are exclusive in respect of rates, service regulations, etc. With this understanding of the powers and jurisdiction of the Public Service Commission, we may inquire of the procedure to an order or judgment in the premises. In section 28 is contained provisions for complaint and investigation by the Commission after notice and a hearing on complaint, or of its own motion whenever it deems that the public interest so requires. The order to be entered is thus indicated in the statute: "If upon such investigation and hearing the Commission shall find that any rate, service regulation, classification, practice or service is unfair, unreasonable, unjust or inadequate, or unjustly discriminatory, or unduly preferential, or unfairly competitive, or that the service is inadequate or cannot be obtained, it may fix and order substituted therefor such rate, service regulation, classification, practice or service as it shall determine to be just, reasonable, fair and adequate, and if the finding of the commission be that the rate, service regulation, classification, practice or service investigated by it, be just, reasonable, fair and adequate, it shall enter an order approving the same. Any such orders shall be final orders within the meaning of this act." Section 31.

Provisions of section 55 are that a substantial compliance by the Commission with the requirements of the act will give effect to its orders, etc.; and provisions of section 68 are:

"Every order of the Commission shall be in writing, and in cases of importance may be accompanied by an opinion, setting forth in brief the facts on which the commission has based its order."

The order of the Commission sought to be collaterally assailed recited, among other things, that the Commission had jurisdiction to act in the premises, stated the respective contentions of the parties, adverted to the salient provisions of the lease contract, found that the property belonged to the city of Attalla, and that its people are served by the said waterworks. It is further recited that evidence was offered of the reasonableness of the "rates in this case," of the expenditures by the water company and its predecessors, etc., and what the company had expended under the lease contract. It is then recited that the Commission found the disbursements required would aggregate the sum of $12,283.09. The "final order" is:

"Having regard for the terms of said contract as far as the general welfare will permit, it is therefore ordered adjudged, and decreed that-
"(1) That the city of Attalla is the owner of the waterworks plant at Attalla together with all extensions additions, betterments and improvements thereto, by the

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