Central Oregon Irr. Co. v. Young

• Decision Date: 03 April 1923
• Citation: 107 Or. 39,213 P. 782
• Parties: CENTRAL OREGON IRR. CO. v. YOUNG.
• Court: Oregon Supreme Court

213 P. 782

107 Or. 39

CENTRAL OREGON IRR. CO. v. YOUNG.

Supreme Court of Oregon

April 3, 1923

In Banc.

Appeal from Circuit Court, Deschutes County; W. N. Gatens, Judge.

Suit by the Central Oregon Irrigation Company against L. C. Young. Decree for plaintiff, and defendant appeals. Affirmed.

This is a suit in equity brought by the Central Oregon Irrigation Company, a corporation, against L. C. Young, a settler on a Carey Act project, to foreclose a lien on defendant's land for the purpose of enforcing the collection of $20 maintenance fee for the year 1921, $10 of which was payable on August 1st, and $10 on November 1st, of that year. A decree was rendered in favor of the plaintiff from which defendant appeals. The defendant by his answer denied plaintiff's right to collect the maintenance fee for the year 1921, upon the ground that at the time the fee became due and payable plaintiff had no legal right to collect it.

H. H De Armond, of Bend. and Henry S. Gray, of Portland (John A Laing, of Portland, on the briefs), for appellant.

W. Lair Thompson, of Portland (Stearns & Burdick, of Redmond, on the briefs), for respondent.

BEAN J.

The record shows the following facts, upon which defendant bases his defense: By the Laws of 1901, p. 378 (section 5576 et seq., Or. L.), the state of Oregon accepted the benefits of the Carey Act (U. S. Comp. St. § 4685). On May 31, 1902, a contract was entered into between the state of Oregon and the Pilot Butte Development Company for the reclamation of 84,707 acres of land in Crook and Deschutes counties; the state acting through the state land board and later through its desert land board. On March 14, 1904, the Pilot Butte Development Company, with the consent of the state land board, duly assigned and transferred its contract and all its rights thereunder to the Deschutes Irrigation & Power Company, which thereafter continued the construction and operation of the irrigation system until the spring of 1910.

In 1906, the Deschutes Irrigation & Power Company entered into a contract, No. 284, with the defendant L. C. Young for the irrigation of 20 acres of land described in the complaint. About October 27, 1910, the Central Oregon Irrigation Company, plaintiff, succeeded by purchase to all the property rights and contracts of the Deschutes Irrigation & Power Company including defendant's contract No. 284, and until about August 1, 1921, continued to operate the irrigation system and collect maintenance fees therefor.

By virtue of defendant's contract No. 284, as affected by a rule duly adopted, there became payable from defendant L. C Young maintenance fees for the year 1921, in the sum of $10 on August 1, 1921, and the further sum of $10 on November 1 1921.

The contract of June 17, 1907, between the Deschutes Irrigation & Power Company and the state land board, to which contract with all its benefits and burdens the plaintiff succeeded, contains, among others, the following provision:

"12. The party of the first part hereby agrees that it will turn over in reasonably good condition and repair and free from all incumbrances, except such rights to take from said system twenty-five cubic feet of water per second of time as may have been reserved by the Pilot Butte Development Company on sale and transfer of its rights and franchises to the party of the first part herein, and transfer and convey by a bargain and sale deed, all its right, title and interest in and to the irrigation works, including rights of way, headgates, canals, flumes, ditches and laterals specified in said contract of May 31, 1902, and for all reclamation works constructed under this contract, to a corporation of water users after ten years from the date hereof, provided that such corporation of water users shall have been duly and legally organized under the approval of the State Land Board. * * *"

Chapter 357, General Laws of Oregon 1917 (section 7322, Or. L.), provided, among other things, that an irrigation district could be organized in lieu of a water users' association such as referred to in section 12 above quoted. By virtue of this provision the Central Oregon irrigation district was organized to take over the project from the Central Oregon Irrigation Company.

Thereafter a suit was filed in the circuit court for Deschutes county by H. H. Deitrich and Central Oregon irrigation district, as plaintiffs, against Central Oregon Irrigation Company and the Desert Land Board of the State of Oregon, as defendants, to compel the Central Oregon Irrigation Company to turn over the project to the Central Oregon irrigation district as contemplated by section 12 of the contract of June 17, 1907, above quoted, resulting in a decree on July 9, 1921, requiring plaintiff herein to turn the irrigation system over to the irrigation district on August 1, 1921. That decree recites that the Central Oregon Irrigation Company reserved the right:

"To collect all unpaid maintenance fees, which are due at the time of the entering of this decree, and at its option to exercise the rights of collection thereof, by action at law or by foreclosure of the lien created by section 7 of said contract of June 17, 1907."

Defendant was one of the settlers in the Central Oregon irrigation district, and his land described in the complaint is located therein.

It is stated by defendant that the sole issue is as to the right of the plaintiff to collect such maintenance fees. The contract between the state and the Deschutes Irrigation & Power Company of June 17, 1907, contains the following provision:

"7. Until such time as the control and management of the canal system shall be transferred to a corporation or association of water users as herein provided, the party of the first part shall be entitled to make an annual charge to the purchasers of water rights for the maintenance of the canal system and for the delivery of water in the required amount as needed. * * * Said maintenance fee or charge, if not paid each year upon demand, shall constitute a lien upon each legal subdivision of such land, and such lien may be enforced by foreclosure and sale of said land in like manner as a mortgage upon real estate. * * *"

The following stipulation was entered into upon the trial:

"It is stipulated between the plaintiff and defendant by their respective attorneys that there are outstanding within the Central Oregon irrigation Carey Act segregation situated in Deschutes county and Crook county, Or., 952 contracts, divided into what is known as form No. 1, form No. 2 and form No. 3, consisting of 221 of form No. 1 contracts, calling for maintenance payable one-half June 1st, and one-half payable November 1st of each year; 204 No. 2 form contracts, calling for maintenance due August 1st and November 1st of each year, and 502 No. 3 form contracts calling for maintenance payable May 1st each year."

Defendant's contract No. 284 is what is known as "form No. 2." It is contended on the part of defendant that the decree of July 9, 1921, precludes the plaintiff from collecting the maintenance fees in question.

On behalf of plaintiff it is insisted that plaintiff, by virtue of its contract and the fulfillment thereof, is entitled to collect the maintenance fees in question for the season of 1921; that the defendant was not a party to the suit resulting in a decree on July 9, 1921; that the matter of maintenance fees was not an issue in that suit; and that the decree does not determine the rights of the parties herein.

Defendant's application and agreement for the reclamation is "subject to the annual maintenance charge of $1 per acre mentioned in the contract between the state of Oregon and the second party herein" (Deschutes Irrigation & Power Company). By the terms of the contract the company is required to keep and maintain the main canal and works in good condition and repair, and furnish water during the...