City of Mobile v. Gulf Development Co.

• Decision Date: 21 January 1965
• Docket Number: 1 Div. 72
• Citation: 171 So.2d 247,277 Ala. 431
• Parties: CITY OF MOBILE et al. v. GULF DEVELOPMENT CO., Inc.
• Court: Alabama Supreme Court

Page 247

171 So.2d 247

277 Ala. 431

CITY OF MOBILE et al. v. GULF DEVELOPMENT CO., Inc.

1 Div. 72.

Supreme Court of Alabama.

Jan. 21, 1965.

Wm. R. Lauten, S. P. Gaillard, Jr., and Hardy B. Smith, of Gillard, Gaillard, & Smith, Mobile, for appellants.

Sullivan & Cameron, Mobile, for appellee.

COLEMAN, Justice.

Two appeals are presented in a suit for declaratory decree, allegedly brought pursuant to § 156 et seq., Title 7, Code 1940.

Complainant is Gulf Development Company, Inc., a corporation, sometimes referred to as Gulf. Respondents to the original bill are the City of Mobile, the members of the city commission, and the tax collector of Mobile County. The city and the commissioners will be collectively referred to as the city. The city has appealed from the final decree rendered May 18, 1962.

The Board of Water and Sewer Commissioners of the City of Mobile, a public body organized under Act No. 775, approved September 11, 1951, Acts of 1950-1951, Vol. II, page 1359, and the members constituting said board, filed a petition for intervention. They will be collectively referred to as the board or as intervenor. The court sustained complainant's demurrer to the petition. We find no order dismissing the petition.

The city filed a cross-bill making complainant and the board cross-respondents. The board answered and admitted the allegations of the cross-bill. Complainant demurred to the original and amended cross-bills and the court sustained and demurrer in both instances. We find no decree dismissing the cross-bill.

The board gave notice and security for costs of appeal from the decree sustaining the demurrer to the petition for intervention and also from the final decree. Complainant has moved to dismiss the appeal as to the board.

Averments of the bill are that: the legislature enacted Act. No. 18, Acts of 1956, page 279, approved March 16, 1956, and, by its terms, made the act effective June 2, 1956; the act enlarged the corporate boundaries of the City of Mobile; Section 3 of the act recites as follows:

'Section 3. Any area which is located within the boundaries of the City of Mobile, as set out in section one above, but which was not a part of the City of Mobile prior to the passage of this act fixing the above said boundaries, shall not be subject to assessment for ad valorem taxation by the City of Mobile until the said City of Mobile shall make available, furnish or cause to be furnished through any board whose members are appointed by the City of Mobile, to said area and the residents thereof the following municipal services: police protection, fire protection, garbage collection, street lighting, water service, sanitary sewer service, and street maintenance. The city commission of the City of Mobile, each year when it adopts an ordinance assessing real property within the City of Mobile for ad valorem taxation shall describe in said ordinance the area which was previously been subject to the city's ad valorem taxation and shall describe in addition thereto such other areas within the boundaries as set out in section one above in which the city commission is furnishing all of the above described services during the year for which said ad valorem tax is being levied; and said ordinance shall also describe the areas within the City of Mobile where all of said services are not being rendered and shall exempt such areas from city ad valorem taxation for said year. In no event shall city taxes be levied or collected on or with respect to annexed property served by existing water and/or sewer main and lateral lines (not including individual residential or commercial service lines) which were connected to the municipal system with the consent of the city or of the Board of Water and Sewer Commissioners prior to the date of this enactment, at the expense of the owners of such water and/or sewer lines, until the city, or the Board of Water and Sewer Commissioners of the city, shall have reimbursed the owners of such water and sewer lines for the cost of installing such lines, or shall have acquired such lines and paid a just compensation therefor; provided, that any such water and/or sewer lines which were released by the owners to, or otherwise acquired by, the City of Mobile or the Board of Water and Sewer Commissioners prior to the date of this enactment shall not be subject to the reimbursement or compensation provided for above.' (Emphasis supplied.)

We have emphasized that portion of Section 3 which was not a part of the advertised bill but was added by amendment during passage. This emphasized portion we will refer to as the reimbursement proviso.

Further averments of the bill are that complainant 'was the owner, subdivider and developer of the subdivisions and real property' described in Exhibit A attached to be bill; all said real property was outside the corporate limits of the city prior to passage of the act, but all said real property was by said act annexed to and brought within the corporate limits of the city; complainant, with consent of the board, at 'its own expense,' and prior to the enactment of the act, did install in the subdivisions and real property described in Exhibit A, water and sewer lines and did connect same to the municipal sewer and water system of the city; the cost of installation was $244,662.40; neither the city nor the board has acquired such lines nor paid or reimbursed complainant any sum whatever for the cost of installing such lines nor has complainant received or been paid just compensation for such lines.

Complainant further avers that: the city adopted four certain ordinances in 1958, 1959, 1960, and 1961, respectively, levying municipal ad valorem taxes on all real and personal property in a portion of the area annexed to the city by Act No. 18; part of the real property described in Exhibit A, of the bill, is located in the area described in Section Two of each of the ordinances for 1958 through 1961, and the remainder of the real property described in Exhibit A is in the area described in Section Two of the 1960 and 1961 ordinances; the pertinent pvovisions of said ordinances were adopted pursuant to Act No. 18.

Complainant further avers that the city did not comply with the act prior to levying ad valorem taxes on the annexed property, and complainant contends that Section Two in each of said ordinances is invalid because the act required complainant to be reimbursed and paid for its lines before the city could levy taxes in said annexed area; the tax collector has collected taxes for the city on the property in said area and the collection is illegal because the ordinances are invalid.

Complainant avers 'that an actual and justiciable controversy exists between the Complainant and the Respondents on which substantial property rights are dependent; that the Complainant is the owner of real property located in the City of Mobile, Alabama, and is a tax payer in said City.'

Complainant prays for temporary injunction to enjoin the tax collector from collecting taxes for the city on the real estate in the annexed area; that the court declare that the city has not complied with the act; that Secton Two in each of the ordinances be declared illegal and invalid; that the injunction against the tax collector be made permanent; that the city be permanently enjoined from further attempt to levy taxes on the annexed area until the city or the board fully complies with Act No. 18; and for general relief.

Process was served on the attorney general.

The city and tax collector demurred to the bill and demanded trial by jury. The court overruled the demurrers and this is assigned for error. The court struck the demand for jury and this is assigned for error.

Respondents, in answer to the bill, alleged that part of Act No. 18 is unconstitutional and void; admitted the adoption of the tax ordinances; admitted that the property described in Exhibit A of the bill is described in the ordinances as alleged, that the ordinances were adopted pursuant to Act No. 18, that the ordinances did levy taxes as alleged, and that the tax collector collected taxes for the city as alleged in the bill; denied the other averments of the bill; denied that complainant is vested with such right in or to the claims or the lands which will enable complainant to maintain this suit; and denied that complainant is entitled to relief as prayed.

The board obtained leave to file petition for intervention and did file such petition, praying to be allowed to intervene. We have not found the date on which the petition was filed, but complainant accepted service February 26, 1962.

On February 20, 1962, the board filed an answer to the bill whereby the board adopted the answer which respondents had filed.

Respondents filed a cross-bill seeking a decree declaring that: the reimbursement proviso in Act No. 18 is unconstitutional and void; the invalidity of the proviso does not invalidate the remainder of the act; Gulf is limited in its recovery in certain respects; Gulf is entitled to no compensation; Gulf has parted with its ownership of abutting property and streets in which said lines lie; Gulf has transferred any right to any refunds which may be due to grantees of lots abutting the streets in which the lines lie; Gulf is indebted to the board for connecting to its lines. Attached to the cross-bill as Exhibit B, is a letter from Gulf to the board, whereby Gulf requested the board to make 'the extension necessary to serve this area outside the City limits at our expense.'

Complainant's demurrer to the cross-bill contained fifty-five grounds. Sustaining complainant's demurrer to the cross-bill is assigned for error.

Respondents amended their cross-bill to allege that streets lying within the area described in the bill of complaint are streets dedicated to the public; that Gulf has no license from the city to maintain the lines within the streets; that the right to be served through...