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Town of Stookey v. Water Co.

OPINION FILED MARCH 29, 1961.

THE TOWN OF STOOKEY ET AL., APPELLANTS,

v.

EAST ST. ST. LOUIS & INTERURBAN WATER COMPANY ET AL., APPELLEES.



APPEAL from the Circuit Court of St. Clair County; the Hon. HAROLD O. FARMER, Judge, presiding.

MR. JUSTICE SOLFISBURG DELIVERED THE OPINION OF THE COURT:

Rehearing denied May 17, 1961.

This action was brought by plaintiffs, the town of Stookey, and others, against the East St. Louis & Interurban Water Company, the city of Belleville and others, seeking a declaratory judgment and injunctive relief to prohibit the Water Company from furnishing water to residents of areas recently annexed to the city of Belleville. From a decree in favor of defendants, the plaintiffs appeal directly to this court asserting that we have jurisdiction because a franchise is involved as well as the validity of a municipal ordinance.

The plaintiffs are the town of Stookey, St. Clair County, and J.E. Weinel and Lucille Weinel acting for themselves individually and on behalf of all others similarly situated, who are owners and holders of waterworks revenue bonds issued and sold in 1952 by the town of Stookey, for the purposes of installing and constructing a waterworks distribution system in what was then barren farm land, but which is now developed into fully populated residential areas.

The original defendants to the suit were East St. Louis & Interurban Water Company, the city of Belleville, Belleville National Savings Bank, the Nisbet Corporation, and Chicago Title and Trust Company, Trustee. The latter three defendants were joined as parties to the suit by virtue of their interest in the proceedings arising out of their right to receive refunds accruing under extension agreements entered by the town of Stookey. However, at the commencement of the trial of the cause, defendant Nisbet Corporation was voluntarily dismissed from the suit and is not now a party.

On May 3, 1960, upon the verified motion of plaintiffs and after notice, the court ordered that a temporary injunction writ be issued against defendant East St. Louis & Interurban Water Company, enjoining and restraining it, during the pendency of this action, from furnishing water service to any of the domestic, industrial or commercial customers of the town of Stookey residing or located within the Pinecrest and Mitchell Place Subdivisions and all additions thereto, or elsewhere, and from offering to furnish such water service to any of such customers and from soliciting or accepting applications from any of such customers for such water service.

From the pleadings, stipulations and evidence, both oral and documentary, the following facts have been established and are undisputed:

In 1952, pursuant to "An Act in relation to waterworks systems, sewerage system and combined waterworks and sewerage systems in townships having less than 500,000 population," (Ill. Rev. Stat. 1959, chap. 139, pars. 160.31 et seq.), the town of Stookey adopted Ordinance No. 101 authorizing the issuance and sale of $285,000 in waterworks revenue bonds payable solely from the income and revenue to be derived from the operation of the Stookey Township Waterworks Distribution System. Thereafter the original distribution system was constructed and installed with the proceeds realized from the sale of said revenue bonds.

At the time of the trial of this cause, there remained outstanding $275,000 of such waterworks revenue bonds bearing interest at the rate of 3 3/4% per year, payable solely out of the revenues of the Stookey Waterworks Distribution System as originally constructed and all improvements and additions thereto, and said bonds are noncallable.

Prior to the approval, issuance and sale of the waterworks revenue bonds, the town of Stookey entered into a water supply agreement with defendant East St. Louis & Interurban Water Company, which agreement is also known as Stookey Ordinance No. 102. The purpose and function of this water supply agreement dated August 23, 1952, was twofold: (1) it provided Stookey Township with a continuing source of water for use and sale in its system; and (2) it expressly and specifically defined the territory within which Stookey should confine its operation with nonencroachment covenants on the part of both Stookey and the Water Company.

The said contract ordinance contained the following provisions:

"The Water Company hereby agrees that it will not solicit nor accept applications for water service from prospective customers located within that part of the Township of Stookey, County of St. Clair, and State of Illinois, outside the boundary lines of * * * which boundary line is as shown on map of Stookey Township attached hereto and made a part hereof. * * *

"Section 7. If the limits of the City of Belleville should be extended to include any of the territory in which the mains, pipe lines, and facilities of the Township have been installed, and from which service is then being rendered, and the Water Company is required by franchise or contract, or otherwise, to furnish domestic, industrial or public fire hydrant service in the territory so annexed to the City of Belleville, nothing in this contract shall be held to prevent the rendition of such service by the Water Company from its own water lines in the territory so annexed."

In 1957 annexation proceedings were instituted by which the area known as Pinecrest and Mitchell Place Subdivisions and the respective additions thereto were annexed to the city of Belleville. These areas were platted and developed and residences built therein subsequent to the creation of the Stookey Waterworks Distribution System. Water service by Stookey made the development of those areas possible and ...


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