Board of Directors of Horse Heaven Irr. Dist. v. Mineah

• Decision Date: 02 September 1920
• Docket Number: 15724.
• Citation: 112 Wash. 325,192 P. 997
• Court: Washington Supreme Court
• Parties: BOARD OF DIRECTORS OF HORSE HEAVEN IRR. DIST. v. MINEAH et al.

192 P. 997

112 Wash. 325

BOARD OF DIRECTORS OF HORSE HEAVEN IRR. DIST. v. MINEAH et al.

No. 15724.

Supreme Court of Washington

September 2, 1920

Department 2.

Appeal from Superior Court, Benton County; John Truax, Judge.

Action by the Board of Directors of the Horse Heaven Irrigation District against E. D. Mineah, the Vermont Loan & Trust Company and others. From judgment for plaintiff, the trust company and others appeal. Affirmed.

A. E. Gallagher, of Spokane, for appellants.

Carroll B. Graves and Peters & Powell, all of Seattle, Thos. H Wilson, of Yakima, G. W. Hamilton, of Prosser, and M. M Moulton, of Kennewick, for respondent.

BRIDGES J.

The Horse Heaven Irrigation District was organized under the laws of the state of Washington, concerning irrigation. The district comprises more than 300,000 acres located in Benton Klickitat, and Yakima counties, in the state of Washington. These lands occupy a plateau partly bounded by the Yakima and Columbia rivers. Prior to the organization of this district, the Klickitat Irrigation & Power Company had made extensive researches, with a view to irrigating at least a part of the lands within the present district. After receiving reports of its engineers the board of directors of respondent district estimated and determined that it would cost $18,250,000 to carry out the project of bringing water to the district in quantities sufficient to irrigate the lands therein, and called an election for the purpose of determining whether the district should issue its bonds in the sum of $18,250,000 for the purpose mentioned. The vote at this election was favorable to the issuance of the bonds. Thereafter the district purchased for the sum of $200,000 all of the maps, plats, surveys, water rights, etc., of the Klickitat Irrigation & Power Company, and delivered to that company its bonds of the par value of $222,200 in payment therefor. As we understand it, most, if not all, of the remainder of the authorized bonds are still unissued and unnegotiated. This action was brought by the irrigation district for the purpose of having the court confirm the regularity and legality of all these bonds. The trial court found the bonds already negotiated, and those authorized to be issued, to be valid, and entered a judgment to that effect. From this judgment an appeal has been taken. A prior action had determined the regularity and legality of the formation of the district.

The appellants here do not contend that there was any fraud connected with the subject-matter of this action, nor do they contend that any of the proceedings concerning the election for the authorization of the bonds were irregular, but they do contend that the bonds are invalid for several reasons, which we will now consider.

1. Appellants contend that the adoption of a plan or system in intelligent form was a condition precedent to the right of the directors of the district to make any estimate of the amount of money to be raised, or to call an election to vote upon the bonds, and that such board had not so done. This contention is based upon that part of section 6430 Rem. Code, which provides that, for the purpose of construction, reconstruction, betterment, extension, or acquisition of the necessary property and rights the board of directors of any such district must 'estimate and determine the amount of money to be raised, and shall immediately thereafter call a special election.' The irrigation district statutes of this state are very liberal, and vest the board of directors of the district with large discretion. It seems to have been the intent of the Legislature to bind such boards with as few technicalities, and to surround them with as few limitations and restrictions, as possible. The statute does not require that the 'estimate' shall be based on any exact information or on any full and complete plans and specifications. It does not mean that before making such estimate the board must know and be able to point out the exact cost of the various items to be included within the estimate. It contemplates that the board shall have before it such information as that it may make a fair, honest, intelligent, and reasonably accurate estimate. Nothing more is necessary. Indeed, the statute makes provision for supplying additional funds in the event the amount estimated shall prove to be insufficient, and it anticipates that it may not be necessary to negotiate all the bonds which have been authorized.

Let us see if the estimate made by the board of directors meets the requirements thus stated. Many years prior to the making of such estimate, and, in fact, prior to the organization of this present district, the Klickitat Irrigation & Power Company made extensive surveys and investigations through competent engineers, with a view to bringing water to the lands in question. It had many plats, plans, and specifications, water measurements, water appropriations, water rights, and surveys, and much more useful information. Upon its organization respondent appointed an experienced and competent engineer to make surveys and investigations with a view to bringing waters to irrigate the lands within the district. After much intelligent investigation this engineer reported that the water to irrigate these lands must come from the Klickitat river, and could not come from any other source; that he had carefully checked the surveys and recommendations of the engineers of the Klickitat Irrigation & Power Company, and found them substantially correct, and recommended the purchase of all the maps, plats, survey notes, property, and rights of that company for the sum of $200,000. Thereafter the respondent, through its board of directors, appointed a board, consisting of two prominent and experienced engineers and two attorneys at law, for the purpose of checking the work of its previous engineer and reporting thereon to the board. After extensive investigation these gentlemen reported, confirming almost entirely the report of the board's first engineer, including his recommendation concerning the purchase from the Klickitat Irrigation & Power Company. They estimated that $18,250,000 would be necessary to carry out the project. Thereafter, possessed of all the information so obtained, the board of directors estimated and determined that the cost of the project would be $18,250,000, and called an election to vote on bonds of the district in that amount. Unquestionably the board of directors had such information as that it could honestly and intelligently, and considering the magnitude of the proposition, quite accurately, estimate the cost of the project.

Appellants chiefly rely on the case of Cullen v. Glendora Water Co., 113 Cal. 503, 39 P. 769; and the same case after rehearing in 113 Cal. 503, 45 P. 822, 1047. That case involved what is called the Wright Irrigation Statute of California (St. 1887, p. 29), from which our statute was originally largely copied. In that case the board of directors had made an estimate of the cost of irrigating the lands within the district. It appeared, however, that when the board made this estimate it had made no surveys and almost no investigation; it did not know from what source it could procure water; did not know whether it would undertake to purchase water rights already in use, or undertake to obtain the water from other sources, and, in fact, had no information upon which it could make an intelligent estimate. The court held that the estimate made by the board of directors was not that contemplated by the statute. It is manifest that there is a great difference between the facts of that and the facts in this case. This question, however, is not an entirely new one in this court. In the case of Hanson v. Kittitas Reclamation District, 75 Wash. 297, 134 P. 1083, this court considered the provision of the statute which we are now discussing. We said:

'It is pointed out that, by the provisions of the statute, the board of directors of the district, before calling an election for the issuance of bonds, must estimate and determine the amount of money to be raised by the districts and it is argued that no estimate other than a sham and fictitious estimate could be made by the board of directors for the reason stated in the allegation of the complaint from which we have quoted, namely, that there was no known source from which water for irrigation purposes could be acquired by the district except from the government of the United States, and as to this source an irreconcilable conflict in the laws between the state and federal government rendered it unavailable.'

After discussing whether it was probable that arrangements could be made with the government concerning obtaining water, we further said:

'It would seem, therefore, that the possibility of obtaining a water supply is not so remote or uncertain as to render it impossible for the board of directors of the district to make a reasonably accurate estimate of the cost thereof. It was not intended by the statute that the estimate be more than this. The board of directors could not, prior to making such estimate, safely enter into contracts for the purchase of water or the construction of irrigating canals and ditches. The law provides no other means for raising funds to meet expenditures for such purposes than the issuance and sale of bonds, and as the estimate of cost must be made before the issuance of bonds can be authorized by a vote of the district, common prudence dictates that no binding obligation be entered into for the expenditure of money prior to the time it is known with certainty that the money is forthcoming. We find, therefore, no reason for the conclusion that the bonds are void for want of a proper estimate. * * * The board of

...