Bench Canal Co. v. Sullivan

• Decision Date: 30 October 1928
• Docket Number: 1504
• Citation: 271 P. 221,39 Wyo. 345
• Parties: BENCH CANAL CO. v. E. J. SULLIVAN [*]
• Court: Wyoming Supreme Court

271 P. 221

39 Wyo. 345

BENCH CANAL CO. v. E. J. SULLIVAN ^[*]

No. 1504

Supreme Court of Wyoming

October 30, 1928

APPEAL from District Court, Big Horn County; CYRUS O. BROWN, Judge.

Suit by the Bench Canal Company against E. J. Sullivan. Decree for plaintiff, and defendant appeals.

Affirmed.

Brome &amp Brome of Basin, for appellant.

No lien may be created except by agreement, or some fixed rule of law. Frost v. Atwood, 73 Mich. 67; Jordan v National Shoe Co., 74 N.W. 567. Courts will not create them; Lowe v. Woods, 100 Cal. 408; Idaho Gold Mining Co. v. Winchell, 6 Idaho 729; Small v Robinson, 69 Me. 425. The only lien authorized by the Carey Act is found in Section 792, C. S. It does not authorize the creation of liens upon the lands of water users, for the payment of assessments upon unsold water rights under the project, and that is what was sought in the present action, which should be reversed and dismissed.

Ernest J. Goppert, for respondent.

Appellant succeeded to the rights of Big Horn Basin Development Company, the company that constructed the irrigation system. It was obligated to pay maintenance charges upon unsold lands under the project, at any time the properties should be taken over by a water user's corporation. The controversy in this action as between appellant and respondent water users' association, is whether appellant, as the successor in interest of the construction company, is obligated to pay maintenance charges assessed upon unsold lands under the project. An essential question is whether the assessment charges were properly levied by the corporation, known as the water users association, also as to their right to levy such charges. The record shows that maintenance charges were levied by the directors of Bench Canal Company; they are the managing board of the corporation. 14 C. J. 354, 5051 C. S.; Sears v. Water Co., 236 P. 503. Respondent has a lien upon appellant's rights in the irrigation system. 792 C. S. 14 R. C. L. 27; 17 R. C. L. 605. 3 Pomeroy Eq. Jur. Sec. 1233. Unsold land is bound for maintenance assessments whether water is used thereon or not. Fresno Co. v. Rowell, (Calif.) 22 P. 54; Chute v. Dist., (Wash.) 210 P. 674; Otis Co. v. Orchards Irr. Dist., No. 1, 216 P. 24. A water users' corporation may levy such assessments; Co. v. Water Users' Association, (Ariz.) 217 P. 947; Hall v. Water Co., 5 Idaho 551, 51 P. 110; Spokane Co. v. County, 199 F. 481; Childs v. Heitzel, (Idaho) 141 P. 81-82; Avenius v. Tidball, Judge, 252 P. 503. The liability of appellant as successor in interest to Big Horn Basin Development Company for the payment of assessments upon unsold lands was fairly established.

RINER, Justice. BLUME, C. J., and KIMBALL, J., concur.

OPINION

RINER, Justice.

This is a proceeding by direct appeal from a decree of the District Court of Big Horn County, adjudging a lien in favor of respondent for certain alleged delinquent assessments for irrigation system maintenance and operative charges upon sundry unsold water right contracts held by appellant for the irrigation of certain lands and their proportionate interests in the irrigation system operated by respondent. The decree also foreclosed the lien and directed a sale of the property to satisfy the same. The record discloses in substance the facts recited below.

The "Burlington" or "Bench" canal and irrigation system was originally constructed by the Big Horn Basin Development Company--hereinafter, for convenience, designated the "construction company"--pursuant to certain contracts entered into between it and the State of Wyoming, for the purpose of enabling said company to sell water rights for proportionate interests in its irrigation system to settlers upon various lands designated in such contracts. The project was initiated and administered under the legislation of this state, enacted to meet the requirements of the well known federal Carey Act relative to arid lands in western states.

The first of these contracts, of date September 29, 1896, contained the following provision, relative to the rights and obligations of the construction company and the purchasers of water contracts from it, upon the latter being vested with title, control and management of the irrigation system:

"Said Party of the Second Part (The Big Horn Basin Development Company) agrees to maintain and operate said canal until it shall have sold shares in said canal embracing ninety (90) per cent of the land herein described, susceptible of irrigation and reclamation, when it agrees to convey to the purchasers of shares in said canal, without further consideration than the consideration stipulated for in the contract of purchase, the shares contracted for and the control and management of said canal, together with all the rights and franchises thereto belonging, and to transfer said canal to such owners and holders of shares in good order and unencumbered; provided that said transfer may be made before the number of shares aforesaid in said canal have been sold, if the said Party of the Second Part so elects; but when said transfer shall be made, the said Party of the Second Part shall elect to donate or transfer, without further cost, to the owners and holders of shares in said canal, as aforesaid, all its unsold shares therein, or to retain such unsold shares, or any portion of them, on which shares so retained it shall be liable to assessment for the maintenance, repairs and superintendence of said canal to whatever proportionate amount the number of shares so retained bears to the whole number of shares in said canal."

The second contract, dated September 24, 1904, while covering some of the land mentioned in the first agreement, embraced a larger amount of other lands. It makes mention of previous dealings of the construction company with the State, relative to the selection by the latter of desert lands for reclamation pursuant to the act of Congress already mentioned, but does not, however, specifically refer to the contract of September 29, 1896. Concerning the subject with which the quoted clause of the earlier agreement deals, it provides that the construction company shall retain the control and management of the proposed irrigation system until ninety per cent of the water right contracts have been sold, and then:

"upon fully completing the sale, transfer and conveyance, as aforesaid, of such ninety per cent. interest in said system to said settlers, the said party of the second part will and shall relinquish to said settlers the control, direction and management of said system, and thereafter the same shall be exercised by such settlers in such manner as they shall deem proper, and said ninety per cent. interest in said system shall be held, owned and possessed by said settlers free and clear of any and all liens, charges or incumbrances which may have been placed thereon by said party of the second part."

Another contract between the State and the construction company was entered into on February 9, 1907, which included some of the lands mentioned in the second, but none of those described in the first contract, and was for the purpose of providing for the irrigation thereof from another source of supply, viz. the Greybull river. This contract definitely mentions the preceding agreement of September 24, 1904, and also embodies a clause similar to the one quoted above from that contract. Both of the agreements last mentioned declare that the construction company may insert in its contracts with purchasers of water rights, additional conditions and covenants as may be deemed advisable, not, however, contrary to law or the terms of these contracts.

After performing considerable work upon the contemplated irrigation project, the construction company became financially embarrassed, and its rights, under all the several agreements with the State, ultimately passed to certain trustees acting on behalf of its bond-holding creditors. Thereafter the respondent, having been incorporated for the purpose of taking over this particular property, these trustees, on January 6, 1912, conveyed to it all the right, title and interest held by them in the Bench Canal and certain water rights appertaining thereto. The instrument of conveyance, however, reserved to the trustees, their successors and assigns, "the rights to contract with others, water for all the lands that are susceptible of irrigation from the Bench Canal and described in the water permits" thus transferred. Finally, through conveyance and foreclosure proceedings--not here necessary to state in detail--these reserved rights were, on July 23, 1921, purchased by appellant.

After respondent had in this manner received the title to the Bench Canal and the water rights which served it, it assumed necessarily its management and operation, which heretofore had been vested in the construction company and the trustees aforesaid. Yearly assessments for accruing maintenance and operating charges of the irrigation system were by it ordered and levied proportionately upon the lands of all those holding water right contracts thereunder, including as well those of the unsold water right contracts, which, as we have seen, came finally to be owned by appellant....