Brady Irr. Co. v. Teton County

• Decision Date: 06 December 1938
• Docket Number: 7881.
• Citation: 85 P.2d 350,107 Mont. 330
• Parties: BRADY IRR. CO. v. TETON COUNTY et al. (ACKROYD et al., Interveners).
• Court: Montana Supreme Court

85 P.2d 350

107 Mont. 330

BRADY IRR. CO. v. TETON COUNTY et al. (ACKROYD et al., Interveners).

No. 7881.

Supreme Court of Montana

December 6, 1938

Appeal from District Court, Teton County, Ninth Judicial District Hon. R. M. Hattersley, Judge.

Suit by the Brady Irrigation Company against Teton County and others to permanently enjoin the members of the Board of County Commissioners and the County Treasurer of Teton County defendants in their official capacities, from obtaining a tax deed to certain irrigation property owned by a codefendant in which James A. Ackroyd and others, holders of bonds issued by a codefendant, intervened. From a judgment for plaintiff Teton County appeals.

Affirmed.

E. L. Murphy, of Choteau, and Stephen M. Swanberg, of Great Falls, for appellant.

Church & Jardine, J. W. Freeman, and Ernest Abel, all of Great Falls, for respondent Brady Irr. Co.

Wood & Cooke, of Billings, for interveners-respondents.

ANDERSON, Justice.

This action was brought to secure a permanent injunction against the members of the board of county commissioners and the treasurer of Teton county to restrain them in their official capacities from securing a tax deed. The county was a party defendant. Judgment went against the defendants, and the county alone has appealed from the judgment.

In 1906 the Teton Cooperative Reservoir Company was organized as a corporation under the laws of Montana as a mutual company for the sole purpose of storing water and delivering it to its stockholders for irrigation, and not for profit. Its capital stock was divided into one thousand shares. Each share of the capital stock of this company entitled the holder to the use, during the irrigation season of each year, to a "1/1000th part of the waters, water rights and irrigation facilities and systems" of the company, including the right to lease, pledge, sell and dispose of such use.

A reservoir site was set apart by the Department of the Interior, and some 500 acres of land in addition was acquired by this corporation, on which a dam was constructed. Water was impounded in the reservoir and distributed to the stockholders. Following the construction of the reservoir, the taxing authorities of Teton county assessed and levied the usual property taxes on the lands owned in fee, the reservoir, site, dams, ditches, canals and other like property belonging to this corporation. As a result of the delinquency of some or all of these taxes, these authorities threatened to take a tax deed covering this property of the corporation.

The stock of this corporation is owned as follows: 804 shares by the Bynum Irrigation District, a public corporation, which was created under our irrigation district law; 156 shares by the plaintiff Brady Irrigation Company, and some 40 shares by certain individuals. Each holder of a share of the Brady Irrigation Company represents and controls 1/500th part of all of the waters appropriated and diverted by the corporation and is entitled to control the use of such waters subject to the rules and regulations of the corporation. The interveners are the holders of bonds issued by the Bynum Irrigation District.

The owners of the stock in the Teton Cooperative Reservoir Company do not own the equitable title to the property of that corporation, but their relation to it is one of contract. Hyink v. Low Line Irrigation Co., 62 Mont 401, 205 P. 236; Dyk v. Buell Land Co., 70 Mont. 557, 227 P. 71. These contracts give to the stockholder the right to receive, through the irrigation facilities of the Teton Company, his pro rata share of the water stored. The shareholder in the plaintiff company likewise has a contractual right to his pro rata share of the water received by that company. These rights, when used on certain lands, become appurtenant to such lands. Sec. 6671, Rev.Codes. The aggregate value of all of these rights is the total value of the property owned by the Teton Company, and its property has no other use than the storing and distribution of water in performance of these...