Butler & Thompson Co. v. City of Ashland

• Decision Date: 29 January 1924
• Citation: 109 Or. 683,222 P. 346
• Parties: BUTLER & THOMPSON CO. v. CITY OF ASHLAND ET AL.
• Court: Oregon Supreme Court

222 P. 346

109 Or. 683

BUTLER & THOMPSON CO. v. CITY OF ASHLAND ET AL.

Supreme Court of Oregon

January 29, 1924

In Bank.

Appeal from Circuit Court, Jackson County; C. M. Thomas, Judge.

Suit by the Butler & Thompson Company, an Oregon corporation, against the City of Ashland, a municipal corporation of Oregon, and others. The court dismissed plaintiff's complaint, and plaintiff appeals. Affirmed.

This is an appeal from a decree dismissing the complaint of the plaintiff. The plaintiff is a corporation, the owner of land within the boundaries of the defendant Talent irrigation district, and is also a taxpayer of the defendant city of Ashland. The defendant city of Ashland has found it necessary to augment its water supply. It now receives its water supply from Ashland creek, and the supply is inadequate during the dry season for irrigation purposes. The supply is sufficient for strictly household purposes. The supply of water appropriated by the city of Ashland from Ashland creek is diminished by the prior rights of the landowners who had appropriated water for irrigation and the Southern Pacific Company which had appropriated water for its engines and other purposes.

The Talent irrigation district is one of the earliest organized districts in Oregon. It has two units in successful operation. It has in contemplation a third unit to be supplied from Emigrant creek. The acreage within the boundaries of the third unit is not sufficiently large to justify the expense of impounding the waters of Emigrant creek. Sufficient water, however, can be stored in Emigrant creek to supply the third unit and also supply 600 acre feet to the city of Ashland, which will be ample for the purposes of irrigation within the city of Ashland.

The city and the district have agreed upon the terms of a contract whereby the city agrees to take from the irrigation district 600 acre feet to be delivered at the boundary of the city by the district. This quantity has been computed by the parties interested as the amount of surplus water over and above the needs of the district. The contract is tentative subject to the approval of the legal voters of the city and district respectively. The proposed contract is annexed to and made a part of the complaint. After the water has been delivered to the city at its boundary, the district loses all control thereof, and the city may use it for any purpose it sees fit. By the terms of the proposed contract the city is to pay to the district outright for the 600 acre feet. The amount to be paid is estimated at $105 per acre foot, but the contract provides that the city shall pay for the water the actual cost to the district for delivering to the city at its boundary the 600 acre feet. That is to say, the amount to be paid by the city of Ashland to the irrigation district shall bear the same proportion to the cost of the project of constructing the necessary works to impound the water and conduct it to the users within the district and boundary of the city, as the quantity of water so delivered to the city shall bear to the entire quantity of water made available by the improvements.

The contract further provides that the city shall bear its proportionate expense of maintaining the improvements, but is not to bear any part of the interest charged against the district, nor any expense incurred by the district on account of delinquent users of water within the district.

The contract further provides that in case of a shortage of water that the city of Ashland shall share pro rata with the users thereof within the said unit No. 3.

The plaintiff contends that the proposed contract is illegal in the following particulars:

"(14) That the common council of the city of Ashland, or the mayor and city recorder of the said city of Ashland, have no authority to enter into the said contract aforesaid.

"(15) That the officers of the Talent irrigation district, and the said Talent irrigation district, have no authority to execute and sign contract as set forth in said Exhibit A on behalf of the said district.

"(16) That the sale of water as contemplated in said contract is recited as being made under the authority granted in section 7337, Olson's Oregon Laws; that said contract by its terms allows the city of Ashland to use the water for any purpose it may see fit and without limitation or restriction that it shall be used for irrigation purposes only; that said section 7337 Olson's Oregon Laws contemplates the sale of water for irrigation purposes only and that therefore, the said contract would be illegal in the particular that it purports to sell water for other than irrigation purposes.

"(17) That in paragraph 9 of said contract, it is specified that in case of a shortage of water in the systems of the district, then, and in that event, the city shall only be entitled to its pro rata share during the period of such shortage; that the directors of the Talent irrigation district, or the Talent irrigation district, have no authority to stipulate that the city of Ashland shall be entitled to a pro rata share during the period of any shortage; and your complaint alleges that in the event of any shortage, that the stockholders in the Talent irrigation district would be entitled to have their irrigation wants fully satisfied prior to the city's receiving any water under said contract, and that on this account, in case of any water shortage, the contract would be valueless to the city of Ashland."

The defendant city of Ashland appeared by answer. The answer admits all the facts set out in the complaint, but denies the conclusions as set out in paragraphs 14 to 17, inclusive, and by way of affirmative matter alleges the following:

"That the city of Ashland, by its officers, has conducted and caused to be conducted a thorough investigation as to the best means of relieving such shortage of water and has determined that the most practicable manner of taking care of the situation economically and satisfactorily and providing for the future is, if possible, to secure from the Talent irrigation district sufficient water to furnish irrigation water to those desiring it and take care of the other uses of water in the city aside from domestic use such as supplying prior rights in Ashland creek, which is the stream from which the present domestic water supply is obtained, supplying water to the Southern Pacific Company for use in its water tanks and supplying water in the display fountains and for irrigation in the parks of the city."

The reply admits the allegations of the affirmative answer, but denies the legality of the contract. The defendant irrigation district appeared by general demurrer on the ground that the complaint does not state facts sufficient to constitute a cause of suit against the demurring defendant. The case was submitted upon the pleadings. The demurrer was sustained, and the plaintiff refused to plead further. Findings and conclusions were made and a decree rendered dismissing plaintiff's complaint.

The assignments of error are as follows:

"(1) That the court erred in sustaining the demurrer to the complaint interposed on behalf of the Talent irrigation district.

"(2) That the court erred in denying the relief demanded by plaintiff in its complaint, and in dismissing plaintiff's suit."

E. D Briggs, of Ashland, for appellant.

Wm. M Briggs, of Ashland, for respondents.

COSHOW J. (after stating the facts as above).

The appellant does not attempt to support its allegation that the defendant city is without authority to enter into the contract involved in this suit. That a city has authority to purchase water for its inhabitants is too well established to require citation of authorities. No further consideration will be given to that contention.

The appellant submits two questions by its appeal:

1. Is the contract illegal in that it contemplates the sale of water for all purposes instead of restricting the use of the water to irrigation purposes? We answer, no. No authority has been cited to that effect. We have not been able to find such authority. The proposed contract does not provide for the sale of water generally by the irrigation district. The irrigation district, by appropriating 600 acre feet of water for the city, will be able to construct the necessary works to enable it to supply the third unit of its territory with sufficient water at a price which the landowners can afford to pay.

If it be conceded that the irrigation district can sell the water at all, then it follows that it has no control over the water after it...