Town of Loxley v. Rosinton Water, Sewer and Fire Protection Authority, Inc.

• Decision Date: 02 November 1979
• Citation: 376 So.2d 705
• Parties: The TOWN OF LOXLEY, a Municipal Corporation v. The ROSINTON WATER, SEWER AND FIRE PROTECTION AUTHORITY, INC. 78-860.
• Court: Alabama Supreme Court

Page 705

376 So.2d 705

The TOWN OF LOXLEY, a Municipal Corporation v. The ROSINTON WATER, SEWER AND FIRE PROTECTION AUTHORITY, INC.

78-860.

Supreme Court of Alabama.

Nov. 2, 1979.

Fred K. Granade, Bay Minette, for appellant.

Greg F. Jones, Robertsdale, for appellee.

Drayton N. Hamilton, Montgomery, for Alabama League of Municipalities, amicus curiae.

EMBRY, Justice.

This appeal is by the Town of Loxley, Alabama, defendant below, from a judgment granting a permanent injunction against Loxley extending its water system to serve residents within the service area of the Rosinton Water, Sewer and Fire Protection Authority. We reverse.

Issue

The dispositive issue in this case is whether an incorporated Alabama municipality may extend its water system outside its corporate limits to provide water to residents within the service area of a water, sewer, and fire protection authority incorporated under the provisions of § 11-88-1, et seq., Code 1975.

The Facts

The facts in this case were stipulated. Loxley owns and operates a water distribution system which is the sole source of water for industrial and domestic use within its corporate limits.

Rosinton is a duly constituted authority organized pursuant to § 11-88-1, et seq., Code 1975. Rosinton has a designated service area of approximately 110 square miles which bounds Loxley on its north, east and west sides. Rosinton does not provide water service to any part of its service area at the present time and has not arranged financing for construction of a water service system. It has, however, completed a substantial portion of the engineering work and feasibility study necessary to the completion of its water system.

Loxley desires, and intends, to expand its water system so as to provide water service outside its corporate limits. A portion of the area which would be served by Loxley's expanded water system lies within Rosinton's designated service area. After Loxley had arranged financing for its water system expansion, Rosinton filed this action and obtained a permanent injunction preventing Loxley from providing water service within Rosinton's service area. The judgment granting that injunction reads in pertinent part as follows:

"It is, therefore, ORDERED, ADJUDGED and DECREED by the Circuit Court of Baldwin County, Alabama, as follows:

"1. The Town of Loxley, a Municipal Corporation, its agents, employees, servants or contractors, is permanently enjoined from expanding its water system so as to provide water service within the Rosinton Water, Sewer and Fire Protection Authority's service area shown by the record in this matter.

"2. The Town of Loxley may solicit residents of the Rosinton Water, Sewer and Fire Protection Authority's service area to determine if these residents desire Loxley's water service and may conduct water user's surveys in the Authority's service area without violating the terms of this injunction; and it may lay, construct and maintain water transmission lines within said area, but may not serve customers from such lines."

The Opinion

This case is of first impression in Alabama. Under present Alabama statutes, municipalities are authorized to expand, without restriction, their water and sewer systems outside their city limits. This authority has its origin in § 11-81-161(b) and § 11-50-5(a), Code 1975, which read:

§ 11-81-161(b):

"(b) Any county or incorporated municipality in the state that may now or hereafter own and operate a waterworks system, sanitary sewer system, gas system or electric system is authorized to improve, enlarge, extend and repair such system and to furnish the services, commodities and facilities of such system to domestic or industrial users or both within or without the limits of such county or municipality, as the case may be."

§ 11-50-5(a):

"(a) Any municipality in this state may construct, purchase, operate, maintain, enlarge, extend and improve waterworks plants and systems or any part or parts thereof, whether located within or without or partly within and partly without the corporate limits of such municipality. Such plants and systems may be purchased subject to encumbrances and to contracts to furnish water therefrom, the payment and performance of which may be assumed. Any municipality in this state may furnish and distribute, under contract, water to persons, firms and corporations in such municipality and to persons, firms and corporations in the territory surrounding such municipality, whether or not the territory surrounding such municipality is contiguous thereto."

Rosinton contends the above code sections do not give Loxley the right to extend and enlarge its existing water system outside its corporate limits if another governmental body or public corporation claims the right to serve the same area. Rosinton further contends that to hold a municipal corporation could extend, without restriction,...