Atchison, T. & SF Ry. Co. v. Elephant Butte Irr. Dist.

• Decision Date: 20 March 1940
• Docket Number: No. 1932.,1932.
• Citation: 110 F.2d 767
• Parties: ATCHISON, T. & S. F. RY. CO. v. ELEPHANT BUTTE IRR. DIST. OF NEW MEXICO.
• Court: U.S. Court of Appeals — Tenth Circuit

110 F.2d 767 (1940)

ATCHISON, T. & S. F. RY. CO. v. ELEPHANT BUTTE IRR. DIST. OF NEW MEXICO.

No. 1932.

Circuit Court of Appeals, Tenth Circuit.

March 20, 1940.

W. C. Reid, of Albuquerque, N. M., (E. C. Iden, of Albuquerque, N. M., and Holt & Holt, of Las Cruces, N. M., on the brief), for appellant.

Edwin Mechem, of Las Cruces, N. M., for appellee.

Before PHILLIPS, BRATTON, and HUXMAN, Circuit Judges.

PHILLIPS, Circuit Judge.

The Elephant Butte Irrigation District¹ was organized in 1917 under ch. 60, N.M. St.Ann. 1915, as amended by ch. 100, N.M. S.L. 1915 and ch. 21, N.M.S.L. 1917. Within the exterior boundaries of the District at the time of its organization there were approximately 111,000 acres of land. Much of it was neither irrigable nor cultivable.

On June 15, 1918, the District entered into a contract with the United States under the provisions of the Act of Congress approved June 17, 1902, 32 Stat. 388, and acts amendatory thereof and supplemental thereto. Under the contract, the United States agreed to expend certain specified sums for the construction of drainage works for the lands of the District and for "the modification and extension of the system for the distribution and delivery of water for the irrigation of the irrigable lands of the District" and to operate and maintain the project.

The contract provided that for reimbursing the United States for any work done on the lateral system, the District might collect either from the lands of the District as a whole, or, in the discretion of the board of directors of the District,² from the unit of the project for the benefit of which such works had been constructed.

Article 6 of the contract, in part, provided that the United States would operate and maintain the system and divert and distribute the water for the irrigation of the District lands at an annual rental charge equal to the cost of operation and maintenance, plus 10 per cent; that the District would pay an aggregate annual storage charge equal to 50 cents per acre for the total area within the District actually irrigated until the time specified by the Secretary of the Interior,³ pursuant to article 7 of the contract, for the beginning of the payment of construction charges, and that thereafter the rental charges should apply only to lands not designated by the Secretary as subject to construction charges.

Article 7, in part, provided that when the Secretary should determine a specified area of irrigable lands should commence the payment of construction charges, he should render a statement to the District designating the area and the amount of construction charges payable therefor.

Article 11, in part, provided that after rendering any such statement, the Secretary would announce the rates for operation and maintenance due from the District for the lands designated and the District would pay the United States the amount due therefor.

Article 13, in part, provided that the Secretary, should he deem lands temporarily incapable of successful cultivation on account of "seepage, alkaline or other conditions," might notify the District that such lands would be relieved from the amounts payable on account thereof for a specified period or until further notice and, thereupon, the District should exempt such lands from assessment or levy during the period determined by the Secretary and that the Secretary, should he deem any lands of the project permanently insusceptible of reclamation on account of seepage or other conditions, might contract with the District for the severance of the water rights from such lands.

Since the organization of the District, the Atchison, Topeka and Santa Fe Railway Company⁴ has been the owner of certain lands lying within the exterior boundaries of the District, which lands the Railway Company has used exclusively for right of way purposes. The Secretary has never determined that the lands of the Railway Company were subject to construction charges pursuant to article 7 of the contract nor designated such lands as subject to operation and maintenance charges. The Board, at its annual meetings held in the years 1919 to 1931, inclusive, did not determine the lands of the Railway Company to be, nor designate them as subject to assessments and levies for such years as provided by § 21, ch. 20, N.M.S.L. 1919, and by § 3, ch. 39, N.M. S.L. 1921, nor otherwise attempt to subject such lands to taxation during those years.

From 1925 to 1931, inclusive, all lands within the exterior boundaries of the District, except the lands of the Railway Company, were assessed for current and miscellaneous expenses.

Since 1925 it has been the practice of the United States Reclamation Service annually to classify the lands in the District subject to construction, operation and maintenance charges, and to furnish to the District a list of such lands setting forth the names of the owners, a description of each owner's land and the portion thereof subject to such charges and the portion thereof exempted therefrom. In making up such classification, the Reclamation Bureau has uniformly classified lands which could not be benefited by irrigation as suspended lands exempt from charges for construction, operation and maintenance.

The Secretary has never included the lands of the Railway Company in such lists and classification.

Except as to the lands of the Railway Company, it has been the practice of the Board to accept the classification made by the Reclamation Bureau in the absence of claims that particular lands classified for taxation should be exempted. When claims for exemption were made, they were investigated and if allowed, the classification was modified accordingly.

In 1931, O. C. Payne, an assistant engineer of the Reclamation Service, acting pursuant to directions of the Board, made a survey, map and classification of the irrigable lands of the Railway Company within the District.

In 1932, the assessor-collector of the District undertook to assess the lands of the Railway Company for current and miscellaneous expenses and operation, maintenance and construction charges for the years 1919 to 1932, inclusive. He set up such lands on the tax rolls on the basis of the Payne survey and classification and extended the levies for such years, respectively, against such lands.

At its annual meetings in the years 1932 to 1936, inclusive, the Board caused the lands of the Railway Company to be listed on the tax rolls on the basis of the Payne survey and the levies for such years, respectively, to be extended against such lands.

The Railway Company did not appear before the Board at its stated annual meetings in the years 1932 to 1936, inclusive, and show cause why its lands should be exempted from taxation.

The lands of the Railway Company, because of the railway use, fills, ditches, and soil conditions during the years 1919 to 1936, inclusive, were incapable of cultivation and were not and could not be irrigated.

The District brought this action against the Railway Company to recover the taxes levied for the years 1919 to 1936, inclusive. From a judgment in favor of the District, the Railway Company has appealed.

Sec. 19, ch. 109, and § 19, ch. 140, N.M. S.L. 1909, carried into ch. 60, N.M.St.Ann. 1915, as § 2968, provided that the assessor of any county embracing the whole or a part of an irrigation district should assess and enter upon his tax roll annually the names of the owners, description and area of each tract of land in the district in his county, subject to taxation, and deliver certified lists thereof to the county commissioners of his county and to the county commissioners of the county wherein the office of the district was then located. The section contained the following proviso: "Provided, That in no case shall any land be taxed for any purpose under this chapter, which from any natural cause cannot be irrigated by the irrigation system of said district, or is incapable of cultivation." Ch. 140, N.M.S.L. 1909, and ch. 60, N.M. St.Ann. 1915, were amended by ch. 100, N.M.S.L. 1915, and ch. 21, N.M.S.L. 1917, to provide for cooperation between irrigation districts and the United States Government under the terms of the Reclamation Law and acts amendatory thereof and supplemental thereto. Sec. 2968, supra, was neither repealed nor amended by ch. 100, or ch. 21, supra.

Sec. 2, ch. 21, supra, provides for the filing of a petition with the board of commissioners of the county embracing the largest acreage of the proposed district praying that such board of county commissioners define and establish the boundaries of the proposed district. Sec. 4, ch. 21, supra, provides that when the petition is presented and it appears that the prerequisites of the statute have been met the board of county commissioners shall proceed to define the boundaries of the proposed district from the petition and from such application for the exclusion of lands therefrom and the inclusion of lands therein as may be made in accordance with the statute, and further provides "nor shall any land which will not in the judgment of the board be benefited by such proposed water system be included in such district if the owner * * * thereof shall make application at such hearing to withdraw the same."

The Railway Company made no application for the withdrawal of its lands pursuant to the above provision.

Sec. 2968, supra, was amended by § 22, ch. 20, N.M.S.L. 1919, and § 4, ch. 39, N.M. S.L. 1921. As finally amended, it provides that the county assessor of any district embracing the whole or any part of an irrigation district shall enter upon his tax roll annually the name of the owner, description and area of each tract of land in the district in his county, subject to taxation under the act, and deliver certified lists thereof to the county commissioners of his county and the secretary of the irrigation district on or before July first of each year; that if the board of directors has...