Sullivan v. Blakesley , 35 Wyo. 73 ( 1926 )

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OPINION 1. An irrigation district, reclaiming, as it does, desert lands in the state, and accordingly conferring a benefit not alone upon the private individuals within the district, but also upon the people of the state as a whole, is a public, rather than a private corporation. Kinney on Irrigation and Water Rights, (2nd ed.) sec. 1404; 40 Cyc. 817. The duty, and the right to determine the propriety of having such districts established, rests with the legislature under its general powers to provide for the welfare of the state. It might, in the absence of constitutional limitation, establish districts of this character by direct action, but by virtue of the requirement of the constitution that special legislation shall not be enacted where a general law may be made applicable, it must create such districts by general, rather than special laws. There can be no doubt that the irrigation district law of this state, referred to in the statement of facts, is a general, rather than a special law. Such districts have at times been designated as municipal corporations, and they might be such within the meaning of laws or constitutional provisions not now under consideration, but it is clear that they are not municipal corporations as generally understood. They are merely special state organizations for state purposes with limited powers, created to perform certain work which the policy of the state requires or permits to be done and to which the state has given a certain degree of discretion in reclaiming desert lands. In re Bonds of Orosi Public Utility District, (Cal. Sup.)235 P. 1004; Thaanum v. Irrigation District, 72 (Mont.) 221, 232 P. 528; People v. Sacramento Drainage District, 155 Cal. 373, 382; 103 P. 207; Reclamation District etc. v. County of Sacramento 134 Cal. 477, 66 P. 668. Nor are they subdivisions of any city, town, village or county in the state. Thaanum v. Irrigation District, supra. Hence our constitutional provision that no municipal corporation shall be organized without the consent of the electors therein does not apply. There is no special constitutional limitation that we know of, limiting the mode or method of the establishment of such districts, provided that it is done under a general law. It may be left to a board or commission, or the court. The legislature has seen fit to cause such districts to be created upon petition of a certain number of people owning or holding lands therein, and upon a hearing, after due notice, upon such petition by the district court. The method of thus establishing the districts is, we think, constitutional. Houck v. Drainage District, 239 U.S. 254, 36 Sup. Ct. 58;60 L. Ed. 266; In re Bonds of Orosi Public Utility District, supra; Fallbrook Irrigation District v. Bradley, 164 U.S. 112, 17 Sup. Ct. 56;41 L. Ed. 369; O'Neal v. Irrigation District, 44 Mont. 492, 121 P. 283, 19 C.J. 615. The functions of the districts are, under the law, performed by the properly constituted authorities thereof. The power to make improvements or to levy taxes therein is not in any way delegated, but is exercised by the districts themselves, through their own proper officials, except only that the proper counties and proper county treasurers perform ministerial duties in aid of the levy and collection of taxes and assessments. And even though irrigation districts should be held to be within the contemplation of section 37 of article 3 of the constitution, there is no delegation, we think, to any special commissioner, private corporation or association of any of the powers contemplated in that section. The exactions authorized to be made by such districts may, in a broad sense, be termed taxes, but they are distinguishable therefrom, for they are levied for local benefits to be spread on the property in the districts in proportion to the peculiar advantages accruing to each parcel therein from the improvement made. Whether in the form of special assessments or in the form of taxes, they are essentially assessments for local benefits and not levied for general governmental purposes, as are the taxes contemplated in the constitutional provisions mentioned and referred to in the statement of facts. 37 Cyc. 711, Thaanum v. Irrigation District, supra; In re Valley Center-Drain District, (Mont.) 211 P. 219, and cases cited; Madsen v. Irrigation District, 65 (Utah) 571, 239 P. 781; Nelson v. Board of Commissioners, 62 (Utah) 218, 218 P. 952; In re Bonds of Orosi Public Utility District, supra. The law on the matters above mentioned is so well settled that we need not elaborate thereon any further, and we answer that the irrigation district law of this state is not in violation of the first seven constitutional provisions set out in the statement of facts.

2. We come then to the consideration as to whether or not the legislation in question is in violation of section 13, article 15, of the constitution, which provides that no tax shall be levied except in pursuance of law and that each law imposing a tax shall state distinctly the object of the same, to which only it shall be applied. It is argued that it cannot be determined from the law, whether the object of the tax authorized thereby is to create a special tax lien against each parcel of property in the irrigation district, or a general tax lien against the entire property in the district, and whether or not the bonds authorized to be issued by the districts are general lien obligations of the district, and that hence, the law is in violation of the foregoing constitutional provision. The argument is far afield. Assuming, without deciding, that the section of the constitution just mentioned refers to assessments made in an irrigation district, there can be no question that a law authorizing them exists, and that such law specifically states the object of the tax, namely to pay for the construction of irrigation works and to pay the current expenses of the district. Counsel merely argue, not on the object of the tax, but on theeffect and extent thereof. We might accordingly very well pass this subject without anything further; but inasmuch as we are also asked whether the irrigation district law is in violation of section 33, article 1, that "private property shall not be taken or damaged for public or private use without just compensation," and inasmuch as a complete answer perhaps involves the subject matter referred to by counsel, we shall discuss it somewhat at length. The interpretation of the section of the constitution just mentioned has been referred to us evidently on the theory that it does not relate exclusively to matters of eminent domain, but is involved in matters of special assessments. As to whether that is true or not is treated at length by Page and Jones on Taxation by Assessment, in sections 102, 109-113. We shall not enter into a consideration of that phase of the subject, but shall, for the purposes of this case, assume that the section is applicable here. It has been held in Norris v. Montzuma Valley Irrigation District, 248 Fed. 369; 160 C.C.A. 379; American Falls Reservoir District v. Thrall, 39 Idaho 105,228 P. 236; Clancey v. Irrigation District, 121 Wash. 86, 208 P. 27; and Noble v. Yancey, (Ore.) 241 P. 335, that bonds issued by an irrigation district constitute a general lien obligation of the district. The contrary has been held in the case of Interstate Trust Company v. Montzuma, 66 Colo. 214, 181 P. 123, and Nelson v. Board, 62 (Utah) 218, 218 P. 952. And the Supreme Court of Colorado in the case just cited holds that to consider such bonds as general lien obligations of the district would be violative of both state and federal constitutions, presumably because of taking property without due process of law or taking property without just compensation. A like view is expressed in the minority opinion in Norris v. Montzuma Valley Irrigation District, supra. The difference in opinion as to the character of such bonds may, to some extent at least, be accounted for by the difference in the laws of the several states, and in order to arrive at the proper conclusion herein, it will be necessary to consider the laws of this state that bear upon the point in question.

Section 981, W.C.S. 1920, as amended by chapter 14 of the Sess. L. of 1923, provides that the bonds to be issued by the district shall be bonds transferable by delivery to the same extent as negotiable paper of the highest character, and that they shall constitute a lien upon the assessments for the repayment of the principal and interest. Section 973, W.C.S. 1920, as amended by c. 52, Sess. L. of 1925, provides that the assessments for construction may be paid at any time within thirty days after the confirmation thereof by the court, and that such payment shall relieve the lands, assessed respectively, from the lien thereof. There are, however, provisions for additional assessments. Section 971, W.C.S. 1920, contemplates supplemental reports of the commissioners and a hearing thereon after due notice. That section reads as follows:

"Said order of confirmation may, at the same or at any subsequent term of said court be revised, modified or changed, in whole or in part, on petition of the commissioners, after such notice as the court may require to parties interested. At any time prior to making the order confirming said report or thereafter, the court may permit the commissioners to present and file a supplemental report, or amend their report, as to any matter which, pursuant to the provisions hereof, was or might have been included in the original report presented by them, and after reasonable notice given to all parties interested, in such manner as the court shall direct, the court may, upon the hearing in said matter make such order as the case may require."

In any event, section 979, W.C.S. 1920, as amended by c. 14, Sess. L. 1923, specifically provides for additional assessments. The section, as so amended, reads as follows:

"If any assessment for construction, operation, maintenance or repair that the commissioners shall have reported to the Court is a smaller sum than is needed to carry out the purpose for which said assessment has been made, or if in any year an additional sum is necessary to pay the principal or interest on lawful indebtedness of the said irrigation district, further or additional assessments on the lands and persons benefited shall be made by the commissioners of said irrigation district under the order of the Court, or presiding judge thereof, upon such notice as the Court may direct, which further or additional assessment may be made payable in installments as specified herein, and shall be treated and collected in the same manner as the original assessments confirmed by the Court in said irrigation district."

Section 973, W.C.S. 1920, amended as above stated, however, limits the total assessments that may be made, as follows:

"All assessments provided for by chapter 75, Wyoming Compiled Statutes 1920, and acts amendatory thereto and supplemental thereof, together with all interest thereon and all penalties for default in payment of same and all costs of collecting the same, shall, from the date of the order of the court confirming such assessments until paid, constitute a perpetual lien in an amount not in excess of the benefits severallyassessed, upon all the land and other property against which such assessments shall be levied."

Section 2, chapter 14, Sess. L. 1923, provides for a report by the commissioners of the irrigation district to the court, showing an estimate of the current expense necessary for the year, and for the hearing by the court on such report. And the section further provides that:

"The commissioners shall add thereto such amount as may be necessary to meet the principal and interest on lawful indebtedness of the district maturing during the current year, together with the sum which in their judgment shall be sufficient to provide for possible delinquencies."

Section 975, W.C.S. 1920, as amended by chapter 14, Sess. L. 1923, provides for an assessment roll of the irrigation district on or before the first Monday in August in each year, which must contain the name of the owners, if known, together with a description of each tract of land in the district, the aggregate assessments of benefits confirmed by the court against the same, and the amount assessed against each tract of land for the current expenses —

"and to meet the principal and interest on the indebtedness of the district for the current year. All such assessments shall be apportioned on the aggregate assessment of the benefits last confirmed by the court."

We do not think, as contended by counsel, that these provisions leave in doubt the character or extent of the lien of the various assessments. The bonds, provided for by the statute, constitute a lien upon theassessments, and are in that respect somewhat dissimilar from the bonds discussed in the Washington, Oregon and Idaho cases heretofore cited. The provisions made for the assessments, however, make such bonds, in a limited sense, similar in character to those discussed in these cases. The legislature evidently intended to make the assessments a general lien against all of the assessed property in the district, within the limitation heretofore and hereafter mentioned, since it has provided for the levy in each year of an amount sufficient to meet the principal and interest that may fall due during that year, to be apportioned to all the lands to which benefits are assessed, just as payments of principal and interest are met on general municipal bonds. But there is a limitation. The assessments cannot be in excess of the benefits assessed against the several parcels of land in the district. The objection, accordingly, urged by the Colorado Supreme Court in the case of Interstate Trust Company v. Montzuma Valley Irrigation District, supra, does not, we think, hold good under the laws of this state, even if it were true that the principle there stated would apply in the absence of such limiting provisions of the statute. Made, as the assessments are, because and on the theory that they equal the amount of the benefits, they do not constitute a taking of property without due process of law or without just compensation, in the case of irrigation districts, any more than under a like situation in the case of municipal improvements generally, and it is well settled that in the latter case there is no violation of constitutional provisions in that regard. 28 Cyc 1104. It was held in Re Drainage District, 24 Wyo. 143, 161, 156 P. 610 that assessments made for the purpose of constructing drains are not in violation of section 33 article 1, of our constitution. Assessments made in drainage districts are similar in kind to assessments in irrigation districts. They are all based upon the same underlying principle. Fallbrook Irrigation District v. Bradley, supra; Board of Directors v. Tregea, 88 Cal. 334, 26 P. 236. It may, possibly, happen, as suggested, that the benefits assessed to all or part of the lands within the irrigation district, by reason of the construction of improvements, may become exhausted before the full amount of the cost of such improvement is paid. But it is not shown that such contingency will arise, and we are not called upon to anticipate it, any more than we are called upon to anticipate that the total cost of making the improvements might happen to be greater than the total amount of the benefits. Butters v. City of Oakland, 263 U.S. 162; 44 S. Ct. 62, 68 L. Ed. 228; Martin v. District of Columbia, 205 U.S. 135; 27 S. Ct. 440, 51 L. Ed. 743; Louisville Nashville R.R. Co. v. Barber, 197 U.S. 430, 25 S. Ct. 466; 49 L. Ed. 819. We answer, accordingly, that the irrigation district law of this state is not in conflict with either of the two constitutional provisions last herein discussed.

3. On May 23, 1926, the commissioners of the said irrigation district filed in the district court a petition for an order to change the name of said district from that of Greybull Valley Irrigation District to that of "Big Horn Basin Water-Conservation District," alleging that it would be advantageous in the sale of the bonds of said district to make such a change, and asking that such change be made, after due notice and hearing on the application. Notice of the hearing on said application was duly published for two successive issues in the Basin Republic, a newspaper printed in Basin, in Big Horn county, Wyoming, and in the Meeteetse News, published in Meeteetse, in Park county, Wyoming. The plaintiff herein appeared in that proceeding and filed objections to the change of said name, again alleging the unconstitutionality of the irrigation district law of this state, and objecting to the change of the name because it would be a step in the furtherance of the issuance of the bonds of said irrigation district. On the date set for the hearing, namely May 24, 1926, the application aforesaid was consolidated with the present case and was certified to this court for its opinion as to whether or not the change of name is permissible. No constitutional question is, we think, involved in that application. That is as far as we can answer the inquiry. We cannot, in this case, express our opinion as to whether or not the change may validly be made under the laws of this state, or whether it is proper, otherwise, that it should be made

POTTER, C.J., and KIMBALL, J., concur.