Culpepper v. Phenix City

• Decision Date: 14 April 1927
• Docket Number: 4 Div. 289
• Citation: 216 Ala. 318,113 So. 56
• Parties: CULPEPPER v. PHENIX CITY et al.
• Court: Alabama Supreme Court

113 So. 56

216 Ala. 318

CULPEPPER v. PHENIX CITY et al.

4 Div. 289

Supreme Court of Alabama

April 14, 1927

Rehearing Denied June 2, 1927

Appeal from Circuit Court, Russell County; J.S. Williams, Judge.

Bill in equity by C.W. Culpepper against Phenix City and the Mayor and Treasurer of said city. From a decree sustaining demurrer to the bill, complainant appeals. Affirmed.

B. De G. Waddell, of Seale, for appellant.

Barnes & Walker, of Opelika, and Roy L. Smith, of Phenix City, for appellees.

SOMERVILLE J.

The matter of chief importance presented by the amended bill of complaint in support of its prayer for injunctive relief against the municipality--the prevention of the municipal bond issue as authorized by the municipal election--is found in complainant's contention that under the Public Utility Act of 1920 (Special Sess. Acts 1920, p. 38; Code 1923, §§ 9740-9824) the Public Service Commission "has general and exclusive power and jurisdiction to regulate and supervise" municipal corporations, in so far as they may undertake the construction and operation of public utilities with respect to their financing and securities (sections 9741, 9744, 9745).

This contention is based upon the principle announced by this court in the case of City of Montgomery v. Greene, 180 Ala. 322, 333, 60 So. 900, 903, wherein it was said:

" 'A municipal corporation, which supplies its inhabitants with water, does so in the capacity of a private corporation, and not in the exercise of the power of local sovereignty.' [ And] municipalities stand upon the same footing in this respect as would an individual or private corporation."

The sole point of application, however, was with respect to the duty of a municipal waterworks to those who were, or desired to become, consumers. There was manifestly no intention to say that a municipal waterworks is in all other respects to be governed and treated as an ordinary, privately owned and operated utility, under the Public Utility Act. And certainly, notwithstanding their common duties and liabilities in the operation of a utility and the service to be rendered the public, it is clear that, in determining upon the policy of that undertaking, and in providing the means and facilities therefor, the municipality is in no sense a utility, nor acting as a utility within the meaning and operation of the statute.

On the contrary, the governing body of any municipality in the state is authorized, at its discretion, to order and hold elections at which the qualified voters shall determine whether bonds shall be issued by the municipality in order, among other things, "to purchase or acquire waterworks and light plants, or to construct the same, or to provide the same by purchase and improvement or by improvement alone, *** whenever such governing board deems it necessary." Code 1923, § 2258. And "all municipal corporations shall have full and continuing power and authority to issue and sell bonds, when such issue is authorized by the election herein provided for," for numerous purposes, including those above named. Code, § 2259. Further, if the bond issue is voted at the election, the governing body of the municipality "shall issue the bonds" as prescribed. Code, § 2266. Succeeding sections provide for the execution and sale of the bonds by the municipality.

The authority to purchase or construct, maintain, and operate waterworks is expressly conferred on municipalities by sections 2001 and 2002 of the Code; and in the exercise of the power they are invested with a discretion. Pilcher v. City of Dothan, 207 Ala. 421, 93 So. 16.

It is inconceivable that the Legislature could have intended, in the face of these plain and positive provisions, to have included municipal corporations among the utilities which are subjected in these respects to regulation and control by the Public Service Commission. Very clearly the utilities thus subjected are those only which are privately owned and operated, and not those owned and operated, or to be owned and operated, by a branch of the government itself, and for the financing of which special provision has been otherwise made.

Inasmuch as the Municipal Code does not expressly confer on municipalities the exclusive authority to fix rates and make service regulations with respect to municipally owned and operated utilities, the Public Utility Act (Code, § 9741), out of abundant caution, reserves that authority to the municipalities; and, as if to make clear the independence of municipalities in these matters, it is provided that:

"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 article may

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