Culpepper v. Phenix City , 216 Ala. 318 ( 1927 )

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 seem to the commission necessary or advisable."

The privilege of making recommendations excludes the idea of authority to issue commands.

The chapters of the Code which respectively empower municipalities and regulate utilities in general are separate and distinct, and in no wise conflict with each other.

In Pilcher v. City of Dothan, 207 Ala. 421, 424, 93 So. 16,19, it was held that:

"The only source of information to determine whether a municipal government has fraudulently exercised or palpably abused its discretion, otherwise than as the result of corruption, is the records and proceedings of the governmental body, whose exercise of discretion is the object of attack."

This principle was reaffirmed and applied in Clements v. Com. of City of Birmingham. 215 Ala. 59, 109 So. 158.

The bill implies bad faith in the adoption of the bond election ordinance, in that the motive of the councilman was to compete with and injure a privately owned and operated water company, already adequately the territory to be additionally served; the additional municipal service being wholly unnecessary.

But there is nothing upon the face of the ordinance or of the municipal proceedings which in any way tends to support the theory of bad faith; and "the abuse of discretion, justifying interference with the exercise of a discretionary power, 'implies not merely an error of judgment, but perversity of will, passion, or moral delinquency.' " Pilcher v. City of Dothan, supra.

The separate and different regulatory treatment — the distinct classification by the Legislature of municipally owned and operated utilities and of other utilities — is not an unlawful discrimination, and is not a denial of the equal protection of the laws.

As said by the Supreme Court of Illinois:

"We have no disagreement with the general proposition argued by appellant that a municipal corporation which supplies its inhabitants with light, gas, or water does so in its capacity of a private corporation and not in the exercise of its powers of local sovereignty. * * * Such established principle can furnish no reasonable basis for appellant's argument in this case that such municipalities must be put in the same class with private corporations or persons operating public utilities, for the purpose of regulation and of fixing their rates and charges in operating such public utilities." Springfield Gas. El. Co. v. City of Springfield, 292 Ill. 236,126 N.E. 739, 18 A.L.R. 929.

On appeal the decision of the state court was affirmed in a carefully reasoned opinion by Mr. Justice Holmes, Id.,257 U.S. 66, 42 S.Ct. 24, 66 L.Ed. 131.

There is no merit in the contention that the bond election ordinance was adopted at a special meeting of the city council, as to which three of the councilmen had no notice, and were not present. The certified copy of the municipal proceedings in question, which is made a part of the bill, shows that the meeting was in fact an adjourned meeting from a regular meeting on the day before. The authorities hold, almost unanimously, that a meeting held pursuant to adjournment of a regular meeting is not a special meeting, but is itself a regular meeting, not requiring special notice to the councilmen. Chosen Freeholders of Hudson County v. New Jersey R. etc., Co., 24 N.J. Law, 718; Auburn v. Paul,84 Me. 212, 24 A. 817; 28 Cyc. 328, 329. And, nothing to the contrary appearing of record, the adjournment is presumed to have been regular. Chosen Freeholders of Hudson County v. New Jersey R. Co., supra.

Several other phases of the bill are not argued by counsel, and must be presumed to have been abandoned.

It results from the foregoing considerations that none of the phases of the bill are sufficient to justify the relief prayed, and the demurrers were properly sustained.

Affirmed.

ANDERSON, C. J., and THOMAS and BROWN, JJ., concur.