Santa Barbara County Water Agency v. All Persons and Parties

• Decision Date: 24 January 1957
• Citation: 47 Cal.2d 699,306 P.2d 875
• Parties: The SANTA BARBARA COUNTY WATER AGENCY, Plaintiff and Respondent, v. ALL PERSONS AND PARTIES, etc., Defendants, Maurice A. Balaam et al., Defendants and Appellants. L. A. 22761.
• Court: California Supreme Court

Page 875

306 P.2d 875

47 Cal.2d 699

The SANTA BARBARA COUNTY WATER AGENCY, Plaintiff and Respondent, v. ALL PERSONS AND PARTIES, etc., Defendants, Maurice A. Balaam et al., Defendants and Appellants.

L. A. 22761.

Supreme Court of California, In Bank.

Jan. 24, 1957.

Rehearing Denied Feb. 19, 1957.

Sherman Anderson, Los Angeles, and W. P. Butcher, Santa Barbara, for appellants.

Brobeck, Phleger & Harrison, Herman Phleger, Alvin J. Rockwell and John M. Naff, Jr., San Francisco, as amici curiae on behalf of appellants.

Vern B. Thomas, Dist. Atty., and Lawrence M. Parma, Deputy Dist. Atty., Santa Barbara, for respondent.

Edmund G. Brown, Atty. Gen., B. Abbott Goldberg and Adolphus Moskovitz, Deputy Atty. Gen., as amici curiae on behalf of respondent.

SHENK, Justice.

This is an appeal from a judgment for the plaintiff Santa Barbara County Water Agency confirming the validity of a so-called 'Master Contract' between the Agency and the United States, acting by and through the Bureau of Reclamation of the Department of the Interior, and five so-called 'Member Unit Contracts' between the plaintiff and each of five public bodies, namely, the City of Santa Barbara, and the Carpinteria, Summerland, Montecito and Goleta County Water Districts.

The plaintiff as petitioner commenced this proceeding on February 8, 1950, pursuant to section 11.10 of Santa Barbara County Water Agency Act, Act 7303, Stats.1945, p. 2780, amended by Stats.1949, p. 18, West's Ann.Water Code Appendix, § 51-1 et seq., to secure a judicial determination of the legality of the establishment of the Agency and its member units, and the validity of the Master Contract and the five Member Unit Contracts entered into by the Agency. Such a determination is required by article 35 of the Master Contract, by articles 36 of each of the Member unit Contracts, and by federal law, Omnibus Adjustment Act of 1926, § 46, 44 Stat. 649, 650, 43 U.S.C.A. § 423e. It is a special proceeding in rem and summons was by publication. It was brought against all persons having or claiming to have any interest in the formation of the Agency, in the proceedings of the various contracting entities leading to the execution of the contracts, in the operation of the proposed contracts and in the property affected thereby. A final judgment will foreclose further inquiry into the matters to which the judgment properly relates, and within its legitimate issues it will be binding on the world at large. Ivanhoe Irrigation district v. All Parties and Persons, Cal., 306 P.2d 824 and cases there cited. The answering defendants are Maurice A. Balaam, Ted R. Holden, William G. Sudden, W. G. Moore, R. E. Sudden, Charles E. Sudden and L. H. Crandall. The default of all other defendants was duly entered on May 1, 1950.

The petition alleged six causes of action each seeking the confirmation of one of the contracts involved. The defendants demurred to each count on both general and special grounds. The demurrers were overruled. The defendants' answer denied the validity of the formation of the plaintiff Agency, certain proceedings of the board of directors of the Agency leading to and including the signing of the Master Contract, the Master Contract itself, the proceedings of the respective boards of directors of the different member units leading to and including the signing of the respective Member Unit Contracts and the validity of each of the Member Unit Contracts.

The defendants also pleaded nine affirmative defenses to each of the causes of action. In substance it is alleged: (1) that provisions in the Member Unit Contracts authorized by the Santa Barbara County Water Agency Act, whereby the Agency will levy ad valorem taxes on all property in the Agency to establish a fund from which contributions will be made to the member units, violate the constitutional provisions against legislative gifts and authorization of the imposition of local taxes by special legislation, § 31, Article IV, and § 12, Article XI of the State Constitution; (2) that the Santa Barbara Water Agency Act purports to give the Agency the power to levy ad valorem taxes on all property in the City of Santa Barbara and the various county water districts in violation of the constitutional prohibition of the imposition of taxes on individuals or property within public corporations for municipal purposes, § 12, art. XI of the State Constitution; (3) that the Santa Barbara Water Agency Act is unconstitutional in that it subjects the defendants to taxation and assessment on lands which cannot possibly be benefited from the construction of the project; (4) that any determination, legislative or otherwise, that the defendants' lands will be benefited by the project is arbitrary and contrary to any rational view based on evidence of investigation; (5) that the contracts provide for no distribution of water to parcels owned by a single person in excess of 160 acres, but that the excess lands are nevertheless subject to taxation for project purposes; (6) that the contracts are impossible of performance and lacking in consideration; (7) that the contracts (except the City of Santa Barbara Member Unit Contract) purport to prohibit the exclusion from the district of lands not benefited by the project, without the consent of the Secretary of the Interior; that section 23202 of the Water Code condones such provisions, and that both the contracts, and section 23202 violate the Fourteenth Amendment of the Federal Constitution and constitute an unlawful delegation of legislative power under the State Constitution, § 1, art. IV; (8) that the provisions of section 9(c)(2) and 9(e) of the Reclamation Project Act of 1939, 53 Stats. 1187, 43 U.S.C.A. § 485h, pursuant to which the contracts purport to have been executed, constitute an unconstitutional delegation of power to the Secretary of the Interior, and (9) that those provisions of the contracts which provide that the United States is entitled to all waste, seepage, and return flow water derived from water supplied under the contracts to the member units through the Agency, are invalid under the federal reclamation laws and the law of the state which make such waters appurtenant to the lands irrigated.

The Agency demurred generally to each of the affirmative defenses and the demurrers were sustained.

The causes were tried on November 14, 1951, and a judgment was entered on October 22, 1952. The judgment declared (a) the legality of the organization and existence of the Agency, the City of Santa Barbara and the four county water districts, (b) the due execution of the six contracts, (c) the lawfulness of the contracts, and (d) that the defendants had waived and were estopped from asserting the illegality or unconstitutionality of the Agency and of the Santa Barbara County Agency Act. The defendants have appealed from all portions of the judgment. The Attorney General of the State of California has appeared as amicus curiae in support of the judgment, and the Di Giorgio Fruit Corporation has appeared as amicus curiae asserting the invalidity of the contract.

The County of Santa Barbara is situated in a semiarid portion of southern California. It has no common source of water supply that can serve the entire county but contains numerous non-contiguous watersheds. The county has grown greatly in population and developed an economy requiring full utilization and development of all available water supplies. For many years the county made investigations and engineering surveys of its water resources utilizing private, public and United States engineers for that purpose. Pursuant thereto, in June, 1945, a comprehensive water development plan for the county was submitted by the Bureau of Reclamation, and the Santa Barbara County Water Agency was formed by the Legislature in 1945 to carry out the plan. The Agency's boundaries are co-extensive with those of the county and the lands served by all member units lie within its boundaries.

Commencing in 1946 the Agency began negotiations for a water supply from the Cachuma Unit of the Santa Barbara County Project, described in House Document No. 587 of the 80th Congress, 2nd Session of April 1, 1948. That document reveals that the Cachuma Unit will consist of the Cachuma Dam and Reservoir on the Santa Ynez River, the Tecelote Transmountain Diversion Tunnel and the South Coast Conduit; that it is to be constructed, operated and maintained by the Bureau of Reclamation, pursuant to federal reclamation laws; that the water to be diverted for purposes of the project is unappropriated water to be appropriated under state law, and that the estimated cost of construction of the Cachuma Unit, exclusive of irrigation distribution works, is $28,610,000. This amount is to be reimbursed to the United States by payments for water in excess of the costs of upkeep, operation and maintenance over a period calculated not to exceed fifty years. It is apparent that what we have said in Ivanhoe Irrigation Dist. v. All Parties and Persons, Cal., 306 P.2d 824, is equally true in the present case, namely, that the relationship between the parties is that of debtor and creditor, contemplating a state project to be eventually owned and operated locally, and that the domestic water herein appropriated for beneficial use must be and can only be devoted to a use consistent with the purpose of the appropriation and the trust relationship existing between the United States and the water users entitled to service within the Agency.

The contracts in question are for the furnishing of domestic water by a purveyor thereof at a stipulated price. They do not involve the construction of distribution systems, as in the Ivanhoe and Madera cases. Ivanhoe Irrigation District v. All Parties and Persons, Cal., 306 P.2d 824; Madera Irrigation District v. All Persons, Cal., 306 P.2d 886. The Master Contract contemplates a supply of water for irrigation, municipal, domestic,...