City of Bessemer v. Bessemer Waterworks

• Decision Date: 02 July 1907
• Citation: 152 Ala. 391,44 So. 663
• Parties: CITY OF BESSEMER v. BESSEMER WATERWORKS.
• Court: Alabama Supreme Court

44 So. 663

152 Ala. 391

CITY OF BESSEMER v. BESSEMER WATERWORKS.

Supreme Court of Alabama

July 2, 1907

Appeal from Circuit Court, Jefferson County; A. A. Coleman, Judge.

Bill by the Bessemer Waterworks against the city of Bessemer. From a decree denying defendant's motions to dissolve the preliminary injunction and to dismiss the bill for want of equity, and overruling demurrers, defendant appeals. Affirmed.

This was a bill praying to have an ordinance passed by said city attached to the bill as Exhibit D, declared null, void, and unconstitutional in so far as the same applies to this complainant, and to enjoin the said city of Bessemer, its officers and agents, from seeking to enforce said ordinance and from harassing, arresting, prosecuting, or interfering with complainant for charging and collecting, for water furnished by it for domestic purposes, sums not exceeding the maximum rate provided by the contract heretofore entered into between the city of Bessemer and the Bessemer Waterworks fixing such rate. Preliminary injunction was issued as prayed, and after motion made to dissolve the injunction the respondent entered a motion to dismiss the bill for want of equity. The cause was submitted upon respondent's motion to dissolve the preliminary injunction and to dismiss the bill for want of equity, both of which motions were denied.

Ben G Perry and Estes, Jones & Welch, for appellant.

Percy & Benners and Thoma T. Huey, for appellee.

DENSON J.

This bill is filed by the Bessemer Waterworks against the city of Bessemer. For the sake of brevity we shall in the opinion refer to the complainant as the "company" and to the respondent as the "city." The company was incorporated in Jefferson county in 1890, under the general incorporation laws of this state as they are written in the Code of 1886, and at once began to supply the city and its inhabitants with water through a system of waterworks owned and operated by it. A new charter was established for the city by an act of the General Assembly approved December 13, 1900. Acts 1900-01, p. 444. The express power of the city in respect to supplying it and its inhabitants with water may be found in the twenty-ninth section of the charter, in this language: "The mayor and aldermen of the city of Bessemer shall have full and ample power, jurisdiction and authority * * * to make, erect and repair public wells, cisterns, and establish fire plugs and hydrants, and to make all needful provision by contract, ownership of waterworks, or otherwise, for the supply of the city and the citizens thereof with water; and the board of mayor and aldermen shall have the power to regulate and prescribe the quality of water to be furnished, the rates to be charged therefor to the city and to private citizens and consumers within the city limits, and to pass all such by-laws, resolutions and ordinances as may be necessary and expedient to this end. * * * Provided, that the rates for water * * * that may be prescribed shall be reasonable."

It is fairly inferable from the averments of the bill, if not expressly averred therein, that in 1904 the company's plant, and necessarily the supply of water furnished by it, had come to be inadequate to meet the necessities of the city and its inhabitants. So in 1904 negotiations began between the company and the authorities of the city looking to the improvement of the company's system of waterworks and the betterment of its supply of water. The city proposed to the company that if it would improve its system of waterworks the city would enter into a contract with the company under which the company should supply the city and its inhabitants with water for a period of 30 years. The bill shows that the negotiations were pending for a period of 6 months, that during their pendency the cost of the necessary improvements was canvassed and considered by the company and the authorities of the city, and that in connection therewith accurate caiculations were made by the agents of the company and of the city as to the rates that should be charged for water to be furnished by the company, in order to afford the company a fair and just return on the value of its plant, including the cost of the contemplated improvements and betterments. The result of the negotiations was an ordinance contract entered into on the 20th day of August, 1904, between the city and the company. The ordinance was adopted on the 2d day of August, 1904. In it the contract proposed by the company is set out in full, and it ordains an acceptance and ratification of the provisions of the contract on behalf of the city, and authorizes and empowers the mayor to execute the contract in the name of and on behalf of the city. It was further ordained that the ordinance and contract should go into effect on the approval and publication thereof and the completion of all improvements provided for in section 3 of the contract. On the 20th of August, 1904, the ordinance contract was duly accepted and formally signed by the city, acting through the mayor, and by the company, through its president.

The bill shows that, relying on the contract as the binding agreement of the city, the company at an expense of $150,000 made the improvements provided for in the contract. By the terms of the ordinance the city granted the company the franchise and privilege of the use of the streets for the laying of its water mains, etc., and of supplying the city and the inhabitants thereof with water. The maximum rates at which water should be supplied are fixed by the terms of the contract, and the contract, in reference to its duration, provides as follows: "The term of this contract shall be 30 years from the date the contract goes into force, during which time all the provisions of this contract shall be binding on the parties hereto and remain in force." See Const. Ala. 1901, § 228. The contract is in 18 sections, and covers all matters usually embraced in such agreements; but those which have been specifically referred to are all that we need mention just now. On September 9, 1906, and after the company had been for some time supplying water under the contract, the mayor and aldermen of the city, without the consent of the company, passed an ordinance reducing the maximum rates which might be charged by firms and corporations furnishing or supplying water to the citizens of the city of Bessemer. This ordinance provides for the punishment by fine and imprisonment, one or both, of any person, firm, or corporation, or the agent of such corporation, having a franchise to furnish water to the inhabitants of Bessemer, who shall violate any of its provisions. It also provides that any person, firm, or corporation, having a franchise from the city of Bessemer to furnish water to the inhabitants of the city, who violates the ordinance, shall forfeit such franchise and all rights thereunder. But for the injunction, the ordinance, under the charter of the city, would have taken effect on the 30th of September, 1906. The passage of this ordinance was the cause of this litigation.

The bill was filed on the 29th of September, 1906, in the circuit court of Jefferson county, to enjoin the enforcement of the ordinance reducing the rates. On the exhibition of the bill to the judge of the Tenth judicial circuit, its prayer for a preliminary injunction was granted. The points of attack made on the ordinance by the bill are that the rates fixed therein are unreasonable and arbitrary, that it impairs the obligation of the company's contract with the city, that it deprives the company of its property without due process of law, and that it infringes complainant's franchise granted by the city. Motions to dismiss the bill for want of equity and because the complainant had a complete and adequate remedy at law, and to dissolve the injunction, on the same grounds and upon the additional ground (among others) that the bill sought to enjoin a threatened prosecution for a violation of the ordinance, were severally overruled; and a demurrer raising the same question as those presented by the motions, together with other questions respecting the sufficiency of the averments of the bill, was likewise overruled. This appeal is prosecuted from the decree overruling the motions and the demurrer.

In respect to the jurisdiction of the court, or, rather, to the question of complete and adequate remedy at law, section 638 of the Code of 1896 provides that the powers and jurisdiction of the chancery court (and the circuit court in this case sits as a court of chancery) extend "to all civil causes in which a plain and adequate remedy is not provided in the other tribunals." As a general proposition it is well and conclusively settled by this court that "courts of equity are without power to enjoin the commission of threatened crimes on the one hand, and to enjoin threatened prosecutions for the commission of alleged crimes on the other; that violations of state laws and violations of penal municipal ordinances, and prosecutions for both, stand upon the same footing in this connection; and that it is wholly immaterial that the statute or ordinance for the violation of which prosecution is threatened is absolutely void." Brown v. Mayor and Aldermen of Birmingham, 140 Ala 590, 37 So. 173, and authorities there cited; Old Dominion Co. v. Powers, 140 Ala. 220, 37 So. 195; Weller v. City of Gadsden, 141 Ala. 642, 662, 37 So. 682; City Council of Montgomery v. West, 40 So. 215. But it is insisted that the case made by the present bill presents an exception to the general proposition, in this: that the privilege granted the company under the contract of August 20, 1904, including the right to charge for water supplied at prices not exceeding the maxima fixed by...