Idaho Irr. Co., Ltd. v. Lincoln County

Decision Date21 October 1915
Citation28 Idaho 98,152 P. 1058
PartiesIDAHO IRRIGATION COMPANY, LTD., a Corporation, Appellant, v. COUNTY OF LINCOLN and V. V. BOWER, Treasurer and Ex-officio Tax Collector of Lincoln County, Respondents
CourtIdaho Supreme Court

TAXATION-EXEMPTION-CAREY ACT - IRRIGATION WORKS - CONSTRUCTION COMPANY - STATUTORY CONSTRUCTION - ILLEGAL TAX - PAID UNDER PROTEST-RIGHT TO RECOVER BACK.

1. Held, under the provisions of the act of Congress known as the Carey Act and the statutes of this state in relation thereto, the state is authorized to enter into contracts with construction companies or others for the construction of irrigation systems for the reclamation of the lands referred to therein.

2. Under the provisions of sec. 1629, Rev. Codes, any person company or association furnishing water for any tract of land under the provisions of said Carey Act shall have a first and prior lien on the water right and land upon which such water is used, for all deferred payments for such water rights.

[As to lands that may be included in an irrigation district, see note in Ann.Cas. 1916A, 1222.]

3. Under the provisions of subd. 12 of sec. 1644, Rev. Codes all irrigation canals, ditches and water rights appurtenant thereto, when the owner or owners of such irrigation canals and ditches use the water thereof exclusively upon land or lands owned by him, her or them, situated wholly within this state, are exempt from taxation; provided in case any water be sold or rented from such canal or ditch, such canal or ditch shall be taxed to the extent of such sale or rental.

4. Under the provisions of paragraph N. of sec. 4 of the general revenue law (Sess. Laws 1913, p. 173), irrigation canals and ditches and water rights appurtenant thereto are exempt from taxation when no water is sold or rented from any such canal or ditch, only to the extent that the water conveyed by such canal or ditch is used to irrigate lands within this state. It is also provided in said section that in case any water be sold or rented from any such canal or ditch to irrigate lands within the state, then and in that event such canal or ditch shall be assessed for taxation to the extent that such water is so sold or rented.

5. Held, that since it is alleged in the complaint, and the allegation admitted as true by the demurrer, that no water has been sold or rented from the system involved except as water rights were sold to settlers under the provisions of the contract with the state, and that the unsold water rights, or the water represented thereby, has not been sold or rented, and that the appellant has no right or authority under the law to sell or rent the water and has not done so, therefore said irrigation works, ditches and canals are exempt from taxation.

6. Held, that the intention of the legislature in passing said exemption statute was to place ditches and canals from which water was sold or rented in one class, and those from which no water was sold or rented in a different class.

7. Held, that the assessment in the case at bar was not an erroneous assessment, neither was it made through clerical or other error, but that it was an assessment on property that was exempt from taxation and involved an illegal assessment and that the taxes paid under protest can be recovered in this action, under the authority of Shoup v. Willis, 2 Idaho 120 (108), 6 P. 124; Weiser National Bank v. Jeffreys, 14 Idaho 660, 95 P. 23, and Bengoechea v. Elmore County, 23 Idaho 397, 130 P. 459.

[As to condemnation proceedings against land for purposes of irrigation, see note in 102 Am.St. 831]

APPEAL from the District Court of the Fourth Judicial District for Lincoln County. Hon. Edward A. Walters, Judge.

Action to recover taxes paid under protest. Judgment for plaintiff. Reversed.

Judgment reversed and cause remanded, with instructions. Costs awarded to the appellant. Petition for rehearing denied.

B. W. Oppenheim, N.M. Ruick, A. L. Fletcher and V. P. Coffin, for Appellant.

The history, purpose and motive for the 1912 amendment to sec. 1644, Rev. Codes, may be found by reference to Spokane Valley Land & Water Co. v. Kootenai County, 199 F. 481, in which case exemption from taxes in Idaho was claimed for irrigation canals and water rights appurtenant thereto where the water was conveyed to and principally used within the state of Washington. Money paid under protest for taxes erroneously or illegally assessed can be recovered back. ( Shoup v. Willis, 2 Idaho 120 (108), 6 P. 124; Weiser National Bank v. Jeffreys, 14 Idaho 659, 660, 95 P. 23; Bengoechea v. Elmore County, 23 Idaho 397, 130 P. 459.)

Harlan D. Heist, for Respondents.

The company is the absolute owner of the property that has been taxed and not the settler. If appellant is to claim an exemption under the law, its complaint must show that the water conveyed by such canals or ditches is used to irrigate lands within this state, and all the water is actually used and owned by the appellant only for the purpose of sale.

"The consumers appear to be making the use contemplated by the constitution, but the ditch company is not; hence, the ditch is not used exclusively for the purpose of irrigating lands belonging to the owners of the ditch." (Murray v. Board of Commrs. of Montrose County, 28 Colo. 427, 65 P. 26.)

All exemptions from taxation are to be strictly construed and cannot be enlarged by construction. (Cooley, Tax., 2d ed., 205; Vicksburg etc. R. Co. v. Dennis, 116 U.S. 665, 6 S.Ct. 625, 29 L.Ed. 770, 37 Cyc. 892; Salisbury v. Lane, 7 Idaho 370, 63 P. 383.)

Plaintiff does not plead duress or fraud on part of defendant, and consequently we must assume the payment of taxes in question to have been a voluntary payment on part of the company.

"Assumpsit does not lie to recover moneys voluntarily paid upon a claim of right with full knowledge of all the facts." ( Brumagim v. Tillinghast, 18 Cal. 265, 79 Am. Dec. 176; Bucknall v. Story, 46 Cal. 589, 13 Am. Rep. 220; Cooper v. Chamberlin, 78 Cal. 450, 21 P. 14; Dear v. Varnum, 80 Cal. 86, 22 P. 76; Harralson v. Barrett, 99 Cal. 607, 34 P. 342; Jefferson County v. Hawkins, 23 Fla. 223, 2 So. 362; Evans v. Hughes County, 3 S.D. 244, 580, 52 N.W. 1062, 54 N.W. 603; Radich v. Hutchins, 95 U.S. 210, 24 L.Ed. 409; Dennehy v. McNulta, 86 F. 825, 30 C. C. A. 422, 41 L. R. A. 609.)

"Payments made with full knowledge of all the facts constitute voluntary payments, and cannot be recovered, and mistake or ignorance of law gives no right to recover." ( Walker v. St. Louis, 15 Mo. 563, 575; Douglas v. Kansas City, 147 Mo. 428, 437, 48 S.W. 851; American Brewing Co. v. St. Louis, 187 Mo. 367, 86 S.W. 129, 2 Ann. Cas. 821, 823; Pacific Coast Co. v. Wells, 134 Cal. 471, 66 P. 657.)

SULLIVAN, C. J. Budge and Morgan, JJ., concur.

OPINION

SULLIVAN, C. J.

This action was begun by the Idaho Irrigation Company, a corporation engaged in the construction of irrigation works under the provisions of the act of Congress known as the Carey Act, and under the statutes of this state applicable to said act, to recover from Lincoln county the sum of $ 1,623.54, that being the first half of the taxes assessed against 69.25 miles of canal which form a part of the distributing system of the irrigation works constructed by plaintiff under a contract with the state of Idaho. The tax was paid under protest in writing, the treasurer, as tax collector, being notified that action would be brought to recover back the sum so paid.

The complaint alleges that the principal object and purpose of the plaintiff corporation was to construct under a contract with the state of Idaho, pursuant to the provisions of said Carey Act, an irrigation system to reclaim upward of 100,000 acres of land lying mainly in Lincoln county. A copy of said contract and supplemental contract is attached to the complaint and made a part thereof.

It is alleged that pursuant to said contract plaintiff constructed an irrigation system consisting of impounding dam and reservoir and diversion dams located in Blaine county, together with many miles of main and subordinate canals and laterals in Lincoln county; that said construction is and was confined exclusively to the system to be constructed by the company in Lincoln county; except as otherwise provided in said contract; that in said contract with the state it is provided that shares of stock in what is denominated the "holding" or "operating" company may be sold and disposed of by the construction company to parties entering the lands to be reclaimed, said shares of stock each to represent an interest in proportion to the number of shares--not exceeding $ 150,000--which may be finally disposed of in the dams, canals, reservoirs and water rights and other rights and franchises of the plaintiff as constructor of said system.

It is alleged that by virtue of said contract said irrigation system belongs to the holders of said shares of stock already disposed of and to the holders of such shares of stock, if any, which might thereafter be disposed of to actual settlers, subject to the lien of the plaintiff under said act of Congress, the laws of this state and the said contracts with the state to secure the unpaid portion of the water rights so sold; that the owners and holders of such shares of stock constitute the only persons who use or are entitled to the use of water conveyed and distributed through said canal that no water is sold or rented or was or is allowed or permitted to be sold or rented from said canals or ditches so assessed for taxation; that the assessor of Lincoln county, in the discharge of his duties as he construed them, assessed the plaintiff for the year 1913 for certain portions of said irrigation system so constructed, to wit: 69.25 miles of...

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