Andrews v. North Side Canal Co.

• Citation: 52 Idaho 117,12 P.2d 263
• Decision Date: 23 May 1932
• Docket Number: 5786,5791
• Parties: CHAS. H. ANDREWS, Appellant and Cross-Respondent, v. NORTH SIDE CANAL COMPANY, Respondent and Cross-Appellant; F. G. SMYTH et al., Respondents
• Court: United States State Supreme Court of Idaho

12 P.2d 263

52 Idaho 117

CHAS. H. ANDREWS, Appellant and Cross-Respondent, v. NORTH SIDE CANAL COMPANY, Respondent and Cross-Appellant;

F. G. SMYTH et al., Respondents

Nos. 5786, 5791

Supreme Court of Idaho

May 23, 1932

TAXATION-TAX DEEDS, VALIDITY OF-CAREY ACT CONTRACT LIENS-TAX LIENS PRIORITY OF-TAX EXEMPTIONS-WATER AND WATERCOURSES.

1. Statutes purporting to grant exemptions from general taxation should generally be strictly construed, exemptions never being presumed.

2. Appurtenancy of Carey Act water right was transferred from canal to land when title passed from United States to state and therefore water right was included as appurtenance in tax on land and passed under tax deed to land (C. S., secs. 3018 3096, 3100, 3101, 5556, and sec. 3099, subd. 14, as amended by Laws 1921, chap. 106, sec. 1; Carey Act (43 U.S. C. A sec. 641 et seq.).

3. Water right is separable appurtenance of land to which it is dedicated and on which it is used.

4. Carey Act water right dedicated to and used upon land pursuant to contract between Canal Company and settler becomes and remains, absent showing of separation, appurtenance to such land, and is "real property" in individual ownership (C. S., secs. 3018, 3060, 5556, 5580, and sec. 3101 as amended by Laws 1925, chap. 74).

5. Party seeking to invalidate tax deed for noncompliance with statutory requirements has burden to show resultant injury.

6. Absence of red ink delinquency entry of 1925 taxes on 1926 assessment-roll and of notation that 1925 taxes were unpaid on 1926 tax notice did not invalidate tax deed, as against lienholder (C. S., sec. 3235, and sec. 3228, as amended by Laws 1923, chap. 138, sec. 1).

7. Tax deed to unoccupied premises held valid, as against contention that failure to serve record owner with notice pending issuance of tax deed constituted fatal noncompliance with statute (C. S., sec. 3258, as amended by Laws 1925, chap. 33).

8. Form of notice mailed record owner pending issuance of tax deed, and whether it was written or printed, held immaterial (C. S., sec. 3258, as amended by Laws 1925, chap. 33).

9. That notice pending issuance of tax deed was posted upon premises, held to substantially comply with statute (C. S., sec. 3258, as amended by Laws 1925, chap. 33).

10. Notice pending issuance of tax deed, posted upon premises, held to substantially comply with statute (C. S., sec. 3258, as amended by Laws 1925, chap. 33).

11. Lienholder failing to request notice pending issuance of tax deed held not entitled thereto (C. S., sec. 3258, as amended by Laws 1925, chap. 33).

12. Lienholder failed to sustain burden of proving invalidity of tax deed by overcoming statutory presumption of validity (C. S., secs. 3261, 3262).

13. Carey Act operating company's lien for maintenance charges is inferior to lien of general taxes (C. S., sec. 3040, as amended by Laws 1925, chap. 107, sec. 2).

14. Tax deed conveys absolute title free of all liens and incumbrances previously attached (C. S., sec. 3263, as amended by Laws 1921, chap. 232, sec. 2, and sec. 3423, as amended by Laws 1929, chap. 216).

15. Carey Act operating company's by-law prohibiting transfer of stock upon company's books until stockholder's indebtedness to company has been paid held void in so far as inconsistent with laws of state (C. S., sec. 3040, as amended by Laws 1925, chap. 107, sec. 2; sec. 3263, as amended by Laws 1921, chap. 232, sec. 2; and sec. 3243, as amended by Laws 1929, chap. 216; and sec. 4707).

16. Certificate of Carey Act right appurtenant to land passed under tax deed regardless of operating company's by-law, or recitation of certificate (C. S., sec. 3040, as amended by Laws 1925, chap. 107, sec. 2; sec. 3263, as amended by Laws 1921, chap. 232, sec. 2, and sec. 3423, as amended by Laws 1929, chap. 216; and sec. 4707; Carey Act (43 U.S. C. A., sec. 641 et seq.).

As modified June 16, 1932.

APPEAL from the District Court of the Fourth Judicial District, for Gooding County. Hon. D. H. Sutphen, Judge.

Action to quiet title. Judgment for plaintiff. Plaintiff appeals and defendant, North Side Canal Company, cross-appeals. Modified and affirmed.

Decree affirmed. Costs awarded to appellant Andrews.

Bissell & Bird, for Appellant and Cross-Respondent.

A Carey Act operating company's lien for maintenance charges is inferior to the lien of general taxes. (C. S., sec. 3040, as amended by chap. 107, Sess. Laws 1925; Portneuf etc. Co. v. Brown, 274 U.S. 630, 47 S.Ct. 692, 71 L.Ed. 1243; Continental etc. Bank v. Werner, 36 Idaho 601, 215 P. 458; Kieldsen v. Barrett, 50 Idaho 466, 297 P. 405.)

A tax deed conveys absolute title to the grantee, free of all liens and incumbrances which may have attached prior to the date of such deed. (C. S., sec. 3263, as amended by chap. 232, Sess. Laws 1921; C. S., sec. 3423, as amended by chap. 216, Sess. Laws 1929; Heffner v. Ketchen, 50 Idaho 435, 296 P. 768; 26 R. C. L. 402.)

Under the circumstances involved in this particular case the by-law of the Canal Company, preventing the transfer of stock until obligations of the person in whose name the stock is registered are paid the corporation, is contrary to the general law, in that its enforcement would thwart the purpose thereof, and such by-law is therefore invalid. (C. S., sec. 4707; 14 C. J. 364; 1 Fletcher on Corporations, p. 990; Gaffney v. Royal Neighbors, 31 Idaho 549, 174 P. 1014.)

A Carey Act water right like that involved herein has no independent property existence, but is appurtenant to, part and parcel of, assessed and taxed with, and follows, the land, until legally separated therefrom. (C. S., secs. 3018, 3060, 3096, 5385, 5556, 5580; Leland v. Twin Falls Canal Co., 51 Idaho 204, 3 P.2d 1105; Hunt v. Bremer, 47 Idaho 490, 276 P. 964.)

The water right in question was assessed and taxed with the land, as an appurtenance, without being separately listed and assessed on the tax rolls. (Spring Valley Water Co. v. Alameda County, 24 Cal.App. 278, 141 P. 38; Gartlan v. C. A. Hooper & Co., 177 Cal. 414, 170 P. 1115; Ayer v. Grondoni, 45 Cal.App. 218, 187 P. 137; Spring Valley Water Co. v. Alameda County, 88 Cal.App. 157, 263 P. 318; North Side Canal Co. v. State Board, 17 F.2d 55, and authorities therein cited; C. S., secs. 3101, 3104, 3135; Parsons v. Wrble, 21 Idaho 695, 701, 123 P. 638.)

In seeking the address of a nonresident owner, in order to send him tax notices, the collector need not go beyond the tax records themselves. (Kehlet v. Bergman, 162 Cal. 217, 121 P. 918; Crouch v. Shafer, 177 Cal. 154, 169 P. 1019; Jacoby v. Wolff, 198 Cal. 667, 247 P. 195.)

Under the facts of this case a delay of two weeks in posting the notice of sale on the land was not serious or fatal. (Rice v. Rock, 26 Idaho 552, 144 P. 786; 22 R. C. L. 457, note 3; Hooker v. Bond, 118 Mich. 255, 76 N.W. 404; Haskel v. Reigel, 26 Okla. 87, 108 P. 367; Eberhard v. Purcell, 50 Idaho 393, 296 P. 593, and cases therein cited.)

Walters, Parry & Thoman and Wayne A. Barclay, for Respondent and Cross-Appellant.

The Canal Company, at the time the share of stock involved in this action was issued, had the right to provide by its by-laws that the same could not be transferred until all past indebtedness had been paid, even though this was not stated on the face of the certificate. (C. S., sec. 4730; Sess. Laws 1929, chap. 88, sec. 23.)

The plaintiff having acquired this stock, if at all, at a tax sale is not a bona fide purchaser thereof. (Harris v. Defenbaugh, 82 Kan. 765, 109 P. 681; German Sav. Bank v. Walker, 190 Iowa 1096, 181 N.W. 443; Rowland v. Klepper, (Tex. Civ. App.) 227 S.W. 1096; Black v. Banks, 237 Mo. 341, 37 S.W.2d 594.)

The statutory requirements as to the notice, contents of notice and time and manner of service of notice must be strictly complied with if a valid tax deed is to result. (37 Cyc. 1396, 1400; 26 R. C. L. 423, 431; Johnson v. Welch, 48 Idaho 284, 281 P. 748; Lyman v. Walker, 192 Iowa 982, 185 N.W. 607; Choat v. Phelps, 63 Kan. 762, 66 P. 1002; Carroll v. Bostwick, 22 Cal.App. 147, 133 P. 509; Knight v. Tucker, 28 Cal.App. 435, 152 P. 952; Kipp v. Danielson, 108 Cal.App. 624, 292 P. 155.)

BUDGE, J. Givens, Varian and Leeper, JJ., concur.

OPINION

BUDGE, J.

During the years 1925 to 1929, inclusive, John A. Dumbolton was the record owner of the SE. 1/4 SW. 1/4, Sec. 34, T. 6 N., R. 14 E., B. M., in Gooding county, comprising 40 acres, together with the appurtenances which included a water right evidenced by 40 shares of the capital stock of the North Side Canal Company, respondent and cross-appellant. The land and water right, classified as agricultural land, were duly assessed as an entity by the county officials of Gooding county during each of said years. The taxes so assessed were not paid and by reason of nonpayment therefor for the year 1925 the tax collector conveyed the property to Gooding county. On May 12 1930, the property was sold to Andrews, appellant and cross-respondent and deed was issued from Gooding county to him, and as owner and holder of the property under the tax deed brought this action to quiet title thereto. All defendants defaulted except the North Side Canal Company, which appeared and answered. The North Side Canal Company is a Carey Act operating company and the land involved is under its project and irrigated therefrom. This land, together with 40 acres adjoining, was originally owned by one Beck, to whom, on or about April 23, 1918, the North Side Canal Company issued and delivered a certificate for 80 shares of its capital stock, representing a water right equal to one share for each of said 80 acres. Each year from and including 1926 to and including 1929 the North Side Canal Company levied assessments for operation and maintenance...