Cosman v. Chestnut Valley Irr. Dist.
| Decision Date | 14 July 1925 |
| Docket Number | 5731. |
| Citation | 238 P. 879,74 Mont. 111 |
| Parties | COSMAN v. CHESTNUT VALLEY IRR. DIST. et al. |
| Court | Montana Supreme Court |
Appeal from District Court, Cascade County; H. H. Ewing, Judge.
Action by W. H. Cosman against the Chestnut Valley Irrigation District and others. From a judgment of dismissal, plaintiff appeals. Affirmed.
Cooper Stephenson & Hoover, of Great Falls, for appellant.
Ralph E. Bancroft, of Cascade, and Gunn, Rasch & Hall, of Helena for respondent.
In the complaint in this action it is alleged, among other things that the plaintiff is the owner of land in the Chestnut Valley irrigation district; that the district has regularly issued and sold its bonds in the sum of $140,000; that in conformity with the statutory requirements the board of commissioners levied a tax for the year 1922 sufficient in amount to pay the interest on the bonds for the year 1923 that plaintiff paid the full amount levied uopn his lands, but because of delinquencies of other landowners in the payment of their assessments there was not sufficient money available to pay the said interest in full; that the lands upon which the assessment went delinquent were sold for county and district taxes in the manner provided by law, and the county treasurer issued to the commissioners of the district debenture certificates for the amount of the delinquent taxes; that the total assessment of unpaid interest for 1923 amounted to $4,200, and that the board of commissioners, conceiving it to be their duty under section 7232, R. C. 1921, issued warrants for said sum, drawn against the next district tax assessment and threaten to levy an assessment to pay said warrants; that because of delinquencies in the payment of the assessments again occurring, an insufficient amount was collected to pay the interest falling due on the bonds for the year 1924, the deficiency amounting to about the same as for the year 1923; and that the district commissioners threaten to make another issue of warrants drawn against the 1925 tax or assessment for the payment of such delinquent interest. Plaintiff asks that the district commissioners be enjoined from levying a tax or assessment against the lands of the plaintiff for the payment of the warrants already issued, and from issuing warrants to pay the delinquent interest maturing in 1924. A general demurrer to the complaint was sustained in the lower court. Plaintiff, having elected to stand upon the complaint, allowed a judgment of dismissal to be entered, from which judgment this appeal is prosecuted.
The question for decision is this: May the owners of lands in an irrigation district organized under the laws of this state who have paid the first proportional assessment against their lands be subjected to a later proportional assessment for the payment of delinquent interest on outstanding bonds, the delinquency being caused by the failure of part of the district landowners to pay the assessment levied against their lands? Or, putting it another way: Do the bonds of an irrigation district create a general obligation against the district in the sense that all the lands within the district are taxable for the payment of the said bonds and interest until the entire indebtedness is paid?
Plaintiff contends that the statute, by its own terms and general design, does not command the issuance and payment of the warrants; that since the tax is a special assessment, it therefore follows that each landowner within the district is taxable for the payment of only such proportion of the bonded indebtedness as his land bears to the entire irrigable area within the district and that when such proportional payment is made his lands are fully and finally released from any further lien of the bonded indebtedness.
Section 7169 of the act provides in part as follows:
"Every irrigation district so established hereunder is hereby declared to be a public corporation for the promotion of the public welfare, and the lands included therein shall constitute all the taxable and assessable property of such district for the purposes of this act."
Section 7210 requires the board of commissioners of a district upon the presentation of a proper petition "by appropriate order or resolution," to "authorize and direct the issuance of the bonds of the district" and to "provide for the levy of a special tax or assessment as in this act provided on all the lands in the district for the irrigation and benefit of which said district was organized and said bonds are issued * * * sufficient in amount to pay the interest on and principal of said bond when due."
Section 7213 provides:
It is further provided in this section as follows:
It will be noted from the foregoing that it is reiterated in the several sections of the act that payment of bonds is secured by a lien upon all the lands in the district, and that the duty is enjoined upon the commissioners to levy an annual tax or assessment sufficient in amount to meet the interest on said bonds promptly, and to discharge the principal at maturity. Now, the commissioners, if they are to make a levy sufficient in amount to meet the maturing obligations of said bonds, must of necessity take into consideration the delinquencies which inevitably occur in every system of taxation; hence the levy must always be for an amount somewhat larger than the payments which the law says must be made, the necessary margin depending upon an estimate of the amount of the delinquencies. Hughson v. Crane, 115 Cal. 404, 47 P. 120. But it will be noted from the provisions of section 7232 that if from any reason any assessment cannot or shall not be collected in time to meet any interest payments falling due, it is the duty of the commissioners to pay the interest out of any funds in the treasury of the district not otherwise appropriated or by interest-bearing warrants drawn against the next district tax or assessment.
The foregoing and other provisions of the statute clearly indicate an intention that the bonded indebtedness shall be a charge against all the lands in the district, and that all the lands in the district shall be taxed pro rata by irrigable acreage until the bonded indebtedness is fully discharged, regardless of delinquencies. That this is a correct interpretation of the legislative intent is fully confirmed when we recall that in 1917 an amendment was added to section 7213, which provided, in substance, that the lien of the bond issue should be specifically apportioned to each 40-acre tract, and each parcel of land separately owned, and that on the payment of the assessment levied against any particular tract or parcel of land, "thereupon said tract or tracts of land so paid upon in full shall be discharged from the lien of said bonds and further assessments or interest thereon." Section 8, chapter 153, Laws of the Fifteenth Legislative Assembly. As thus amended, the statute clearly provided in specific terms the very thing which plaintiff now contends is in the law; but in 1919 the Legislature saw fit to repeal the amendment of 1917 so that as it now stands and as it stood prior to the enactment of the amendment, it contains no provision whereby a landowner can, by paying his pro rata share of the assessment for his lands, be released from the lien of the bonded indebtedness, as is the case with drainage districts and city improvement districts. Section 6, chapter 116, Laws...
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