King Hill Irrigation District v. Craster Farm & Orchard Co.

221 P. 839, 37 Idaho 89, 1923 Ida. LEXIS 216

Opinions

DUNN, J.

— In this . proceeding, which was commenced in the district court af Elmore county, appellants are resisting the assessment of $65 per acre upon their lands which was levied by the directors of the King Hill Irrigation District as benefits to said lands from the expenditure of a large amount of money, approximately $1,000,000, by the government of the United States in rebuilding, enlarging and improving certain portions of the canal system through which the lands of said irrigation district receive water.

King Hill Irrigation District embraces lands that were .formerly included in the King Hill Carey Act project. The reclamation of this project was undertaken pursuant to a contract made by the state of Idaho with the King Hill Irrigation and Power Campany. The estimated cost of the reclamation of the lands included in the project was $600,000, but after the expenditure of this sum and a million dollars besides it was found that the system was so imperfect that the state was unable to show that an ample supply of water had been actually furnished to reclaim the lands embraced in the project and therefore was unable to secure patents for the land claimants, including appellants herein. The King Hill Irrigation and Power Company was without further means to fulfill its contract. It had mortgaged to the Continental and Commercial Trust and Savings Bank its interest in the canal system constructed by it, its water appropriation, its contract with the state of Idaho and its lien upon the water right contracts and lands of the contract holders who had not paid up in full, for funds with which to construct the irrigation system, and having defaulted in its payment of interest the mortgage was foreclosed and all of the construction company’s interest in the mortgaged property, which was a lien thereon, was sold to the state of Idaho for $30,000. The deed conveying this interest to the state of Idaho was dated March 14, 1914. The appellants had paid in full for their water rights and thereby became the owners of such water rights and of a proportionate interest in the canal system. Their rights were therefore not affected by the foreclosure proceedings against the construction company.

In a memorial in 1915 the state legislature urged that Congress take over and complete the irrigation system because the same had not been completed in such a substantial manner as to entitle the state to patent to the land there under and at the same session appropriated $26,000 to assist in the maintenance of the irrigation system and furnishing water to settlers on the project. A like appropriation was made at the succeeding session of the legislature. While these appropriations by the state gave some temporary relief there was no hope that any assistance in the way of completing the canal system so as to reclaim the lands under it and make it possible to obtain patents could come from any other source than -the federal government. The situation of the settlers was desperate in the extreme. Appellants, though their water rights were paid for, were as helpless as any other owners in the matter of obtaining water to insure crops and thus make possible title to the lands claimed by them. Appellant company was the owner of a water right at the head of the eanál system, and of 1,200 acres of arid land near the lower end of the system at least 30 miles from the water, and the owner of one-twelfth of the intervening canal system which ■ was utterly inefficient to convey the water to the land. The other -appellants, with smaller interests respectively, were in a similar situation. The colossal proportions of the undertaking necessary to save the homes of the settlers as well as appellant company’s investment of $78,600 and the investments of the other appellants may be easily understood by the sum asked and received from the federal government, $1,000,000.

In this situation the irrigation district, which is respondent in this action, was organized by appellant company and the settlers. At an election held in September, 1917, authority was given to said irrigation district to enter into a contract with the United States for the reconstruction, repair and improvement of the irrigation works for the irrigation of the lands of the district. This proposition was adopted by more than a two-thirds vote of the settlers and was approved by decree of the district court. Pursuant to this vote the contract was entered into by the irrigation district, the state of Idaho and the United States government, and ..as a result of said contract all of the interest of the state of Idaho in said, canal system, which was a lien on approximately an undivided eleven-twelfths of the whole, was conveyed to the government of the United States.

Pursuant to this contract work was begun by the government about March, 1918, and prosecuted apparently with diligence. Assessments for benefits were made by the board of directors of the Irrigation District, notice given to the settlers, no objection made to such assessments and petition for confirmation thereof was filed in the district court of Elmore county, October 1, 1918; an amended petition was filed November 26, 1918. The answer of appellant company was filed May 21, 1919, and this constitutes the first objection appellant company offered to the operations of the irrigation district, when a large part of $1,000,000 had been expended for its benefit and that of the other land owners.

Manifestly the conveyance to the United States was an attempt to comply with the act of Congress of June 17, 1902 (32 Stat. 388), and the act of Congress of Feb. 21, 1911 (36 Stat. 925), both of which are referred to in the contract and require, in such contracts as this, that title to the irrigation works be vested in the federal government. While the interest of the state was only a lien, it having simply succeeded to the construction company’s interest, it fairly appears that all parties regarded the state as having title to the canal system. The contract voted on and approved by the settlers on the project, after due notice to appellant company and all others interested and without opposition from appellant company, contained the following:

“1. It is hereby agreed, that as soon as this contract shall have been duly authorized by the electors of the District, and the procedure in connection therewith' confirmed by the court as legal and regular, the State, acting through the said State Board of Land Commissioners of the State of Idaho, for and in consideration of the benefits to be derived by the State from the construction, repair and improvement of irrigation works on the said project by the United States, and the sum of One Dollar in hand paid, the receipt of which is hereby acknowledged, will duly and properly execute and place in escrow in the Overland National Bank of Boise, Idaho, .... a good and sufficient deed of conveyance, conveying to the United States all the right, title, and interest of the State in the said King Hill Project and the extension thereof known as the King Hill Extension Project, and the irrigation work in connection with said projects and all rights and appurtenances in connection with said projects or said irrigation works, including all water rights, water filings and water appropriations in connection therewith, the said deed to be delivered to the United States as soon as the operation of the said project shall have been turned over by the State to the District as herein provided, but in any event not later than December 31, 1918.

“2. The State will continue to operate said project and the works thereof so long as sufficient funds remain available for that purpose out of the funds appropriated by the Idaho legislature at the Fourteenth Session for use in connection with said projects, and when such funds are exhausted, and in any event not later than December 31, 1918, will turn over the operation of all the works of said project below the headgates and headworks at the head of the main irrigation canal controlling the division of water between the power plant and irrigation system, to the District to be operated by the District in the manner hereinafter provided, and will turn over the operation and control of the said headworks to the United States.”

In compliance with the foregoing provisions the works below the headgates were turned over to the district and the operation and control of the headworks to the United States.

The principal contention of appellants is that without first having acquired ownership of the canal system the irrigation district was powerless to levy a valid assessment of benefits on their lands.

Respondent’s reply to this is “That the said Craster Farm & Orchard Company has stood by and acquiesced in and encouraged the said King Hill Irrigation District in its or ganization and in all of the proceedings taken to improve, repair and reconstruct the works of said irrigation district and the expending of funds in and about such work, and has received large benefits on account of such repair, improvement and reconstruction of said works, and is now estopped from claiming that said King Hill Irrigation District is without any title or ownership in and to the irrigation system, or that it has no right to operate, repair and reconstruct said system, and that it has no right or power to assess the lands tributary to said system for the purpose of raising money to repair, improve and reconstruct said irrigation system.”

In all of these proceedings, of all of which appellant company had notice, there seems to be no question that it was assenting to everything that was done. At least there is nothing in the record to indicate the contrary. While it claims that the proposition that it relied on was that the irrigation district should purchase the canal system, the fact remains that it knew it was not purchasing the canal system, but was borrowing money from the United States to improve said system, to be repaid by assessments on the lands of the district, and it had ample opportunity to object to its method of procedure if it had chosen to do so before the expenditure of any money whatever by the United States government. The contract voted on and approved 'by the settlers on the project contained this paragraph:

“6. That subject to review and confirmation by the court, as provided by law, the Directors of the District will apportion the benefits of this contract equally per acre of irrigable land to each and every tract of irrigable land in said District for which water is to be furnished, but it is fully agreed and understood that the District as a whole is bound to pay to the United States the full amount herein agreed to be paid regardless of the default or failure of any tract in the District, or any landowners of the District in the payment of the assessment levied by the District against such tract, and the District will levy and collect extra assess ments and levies whenever required to make up for the default or delinquency of any tract of land or any landowners in the payment of assessments, so that in any event and regardless of any defaults or delinquencies in the payment of any assessments, the full amount due the United States shall be paid to the United States by the District when due.”

If it be conceded that the irrigation district ought to have .proceeded to acquire title to the canal system before entering into the contract with the federal government and before any of the funds obtained thereby were expended on the canal system and before attempting to levy the assessment for benefits, which we do not decide, we are of the opinion that under the situation disclosed by the record in this case it cannot be held that for this reason the assessments are invalid.

Appellants Summer & Falk, John J. McGinnis and R. R. Duffy expressly assented to the assessments levied by the irrigation district and thus have waived any right to object thereto. Judgment against these appellants should therefore be affirmed. While appellant Craster Farm & Orchard Company has not expressly assented to the levying of the assessments as the other appellants did, we think it is in no better position than they.

The irrigation system appears to have been owned by appellant company to the extent of about one-twelfth and by the other appellants herein, together with the settlers whose lands and water rights were subject to liens for the unpaid portion of their contracts, to the extent of about eleven-twelfths. The state’s interest is the lien held by the construction company, which was sold under foreclosure. So far as the appellant company is concerned it is shown by the testimony of W. B. Slick, one of its two principal stockholders, to have had actual knowledge of the work being done on this canal system by the federal government from its beginning down almost to the day of the trial. Speaking of the construction work done by the government, he said: “I would like to state that in most of these instances I have been there during construction and absolutely familiar with the conditions from time to time, from year to year, from the day that the first pick was ever struck in that ground till this present day, or the last week or so.”

The situation, then, is this: that the land owners of the district have, through the organization known as the King Hill Irrigation District, obtained a loan of approximately $1,000,000 from the United States and have permitted the expenditure of that sum for the improvement of the irrigation system of said land owners. Appellant company, as well as other owners, through its agents, had personal knowledge of every step taken by the government from the moment when the first work was done in rebuilding said, system. No land owner other than appellants is now com-' plaining, and appellant company, with full knowledge of the! contract with the United States, of the work that was being! done thereunder on the canal system in which it had a paid-up interest and of the fact that repayment of the loan from the United States must be made by assessments on the lands' „of the district, waited until the reconstruction and improve-' ment had been going on for more than a year and until aj vast amount of the appropriation had been expended for itsj benefit before offering the slightest objection. ¡

There is no evidence in the record that justifies a holding, that the lands of appellant company are entitled to an assessment different in amount per acre from the other irrigable lands of the district, and to hold that appellant company or any other land owner, under the facts disclosed in this record, may escape payment of assessments because the irrigation district has not acquired title to the irrigation system would be in the highest degree inequitable, especially in view of the fact that these parties have assented to a contract with the United States in which it was expressly provided that the assessments should be distributed equally per acre on all the irrigible lands of the district and that each acre of land should be bound not only for the original assessments against it, but for the assessments levied against every other acre of land in the district in ease the owner thereof should default in the payment of his assessments.

"We think there is no doubt that a timely objection made by the appellant company would have compelled the cessation of work until title to the interest of appellant company in the canal system had been acquired, and appellant would have been entitled to payment of the reasonable value of said interest at that time. When we consider appellant company’s helpless situation and that of all the other land owners on the project the reason it did not object is "not far ,to seek. Knowles v. New Sweden Irr. Dist., 16 Ida. 217, 101 Pac. 81, furnishes no parallel to this case. Not having spoken till practically all the benefits were secured, it is estopped to object to the assessments now on the ground that the district had not acquired ownership of the canal system. (Hemenway v. Craney, 36 Ida. 11, 208 Pac. 407.) It has no right to set off such value of its interest against ■the assessments in a proceeding of this kind, but would be damage it has suffered by the taking of said interest, the ■value to be reckoned as of the time when the interest was taken. to resort to an independent action for whatever

Complaint is made that findings were not made on all material issues. While the trial court might have made findings more specific than it did, practically all of the errors assigned by appellant so far as the findings are concerned were matters as to which there was no issue before the trial court, all of them having been admitted. In this situation the findings made by the trial court are sufficient to support the judgment.

Complaint is also made by appellants that the federal government holds liens on lands and delinquent water contracts entered into under the Carey Act project sufficient in the aggregate to pay the money advanced by the United States, and therefore resort should be had first to the collection of such liens before an assessment is levied. It is sufficient to say that when they were acquired by the state and turned over to the federal government it is well known that foreclosure of these liens would have brought practically nothing, and if anything could be realized now it is solely because of the government expenditure which has benefited appellants in the same proportion that it has the delinquents. Besides, if foreclosure were had appellants have no claim on anything that might be realized therefrom. If the government chooses for the present, or permanently, to waive this lien it does not concern appellants.

The irrigation law of this state provides for the issuance of bonds by an irrigation district for the construction or purchase of an irrigation system, and it also provides' for a contract by which funds may be obtained from the United States government. The latter method is the one adopted by the district in this case. In view of the conclusion that we have reached and the reasons therefor we find it unneces-, sary to set out in detail the procedure for obtaining a loan from the federal government in cases of this kind', oí to determine whether or not the procedure established by law has been strictly followed.

The judgment of the trial court should be affirmed as to all appellants, with costs to respondents.

Budge, C. J., and Wm. E. Lee, J., concur.

(December 31, 1923.)