Logan Irr. Dist. v. Holt

• Decision Date: 11 January 1943
• Docket Number: 14917.
• Parties: LOGAN IRR. DIST. et al. v. HOLT, County Assessor, et al.
• Court: Colorado Supreme Court

133 P.2d 530

110 Colo. 253

LOGAN IRR. DIST. et al. v. HOLT, County Assessor, et al.

No. 14917.

Supreme Court of Colorado, En Banc.

January 11, 1943

Error to District Court, Washington County; H. E. Munson, Judge.

Suit by the Logan Irrigation District, a quasi municipal corporation the Iliff Irrigation District, a quasi municipal corporation and the Morgan-Prewitt Reservoir Company against H. H. Holt as County Assessor of Washington County, Chester Kincheloe as County Treasurer, and Vern Beck and others, as Board of County Commissioners, and ex-officio, as Board of Equalization of such county to restrain assessment of certain properties for taxation. To review a judgment refusing an injunction, plaintiffs bring error.

Marcus C. Leh and T. E. Munson, both of Sterling, for plaintiffs in error.

Chutkow & Atler and Irving Zveitel, all of Denver, for defendants in error.

Stoton R. Stephenson and George A. Epperson, both of Ft. Morgan, amici curiae.

Smith, Brock, Akolt & Campbell and R. A. Dick, all of Denver, amici curiae.

GOUDY, Justice.

This proceeding is here on writ of error for review of a judgment of the district court of Washington county refusing an injunction to restrain the assessment of certain properties for taxation.

Plaintiffs in error, the Logan Irrigation District, the Iliff Irrigation District, and the Morgan-Prewitt Reservoir Company, a mutual ditch company, are the owners of an irrigation system known as the Prewitt Reservoir System, consisting of an intake ditch from the South Platte River, the reservoir, and outlet ditches to carry the stored water to the lands of the various landowners for their exclusive use for irrigation under said system.

For a number of years the properties here involved were not assessed for tax purposes by Washington county, in which county the Prewitt Reservoir is located, but in 1939 the assessor of said county attempted to assess the following properties in that county owned by plaintiffs in error to-wit:

1. Approximately 220 acres of land;

2. Certain improvements, consisting of a house, bunkhouse, garage and barn, upon said land;

3. Certain personal property, consisting of agricultural implements, machinery, harness and mules.

After due protests to the county assessor and the board of county commissioners of Washington county, and the overruling of such objections, plaintiffs in error brought an action in the district court to enjoin and restrain the assessment of said properties, upon the theory that they were exempt from taxation under our Constitution and statutes.

The only issue raised at the trial was the question of whether or not the properties hereinabove mentioned are exempt from taxation; however, in the assignments of error and briefs, another issue is presented and discussed which we believe should be considered in connection with a determination of the principal issue--that is, are these properties exempt from taxation separate from the lands upon which the waters are used?

The instant case is of far-reaching importance and involves the question of what properties belonging to irrigation districts and mutual ditch companies may be taxed by counties in which portions of the physical works are situated, where such counties are other than those wherein the irrigated lands are located, including also the meaning of our constitutional grants of exemption from taxation, and exemption from separate taxation, and the effect of our statutes.

The evidence is brief, that of importance on this review being the testimony of the only witness, R. J. Wright, superintendent of each of plaintiffs in error, to the effect that all the land in question is adjacent to the reservoir, is a part of the reservoir site and is necessary and being used for the protection, operation and maintenance of the reservoir system; that most of the land is white sand, and a timber belt, grass and other growth are necessary to break the force of the wind and prevent destruction of the reservoir; that a fence is required to protect against stock, this fence being built as close to the reservoir as is practicable; that the improvements consist of a bunkhouse, barn, and the house in which the caretaker lives; that the caretaker devotes his entire time to the guarding and care of the reservoir system; that the implements and machinery are used exclusively for the repair of the reservoir and the cleaning of the ditches.

At the conclusion of the evidence a motion to dismiss was filed, and, after argument, the trial court held that the reservoir site properly includes all the land that is essential to operate the irrigation works; that an irrigation district is not a municipal corporation; that the only exemption available to plaintiffs in error is the constitutional one respecting ditches and flumes, and that while the Supreme Court has held that ditches and flumes include reservoirs, the beds thereof, and the ground upon which the dam stands, that the court has not indicated that the term 'ditches and flumes' as used in the Constitution meant adjacent land necessary for the maintenance of ditches and flumes; that it seems reasonable that said term as used in the Constitution, exempting such property from taxation, does not include other property necessary for upkeep and maintenance, and cannot be extended to include personal property so used; that the rule of construction is that where the Constitution exempts property from taxation, such provisions are to be strictly construed, and all statutes that extend the exemption beyond the strict letter of the Constitution are void; that land which lies outside the ditches, canals and flumes, and does not form a part of the land upon which the physical property of the ditch or reservoir is located, while in a sense necessary for the proper maintenance of the irrigation works, strictly speaking, is not a part of the reservoir, ditches, canals, or flumes, and therefore is subject to taxation.

Section 3, article X, of the Colorado Constitution provides, inter alia: 'Ditches, canals and flumes owned and used by individuals or corporations, for irrigating land owned by such individuals or corporations, or the individual members thereof, shall not be separately taxed so long as they shall be owned and used exclusively for such purposes.'

This provision also appears in our statutes in subdivision Seventh, section 22, chapter 142, '35 C.S.A.

Section 4, article X, of our Constitution, provides: 'The property, real and personal, of the state, counties, cities, towns and other municipal corporations and public libraries, shall be exempt from taxation.'

Section 389, chapter 90, '35 C.S.A., reads in part: 'The title to all property acquired under the provisions of this subdivision shall immediately and by operation of law vest in such irrigation district, in its corporate name, and shall be held by such district in trust for, and is hereby dedicated and set apart for the uses and purposes set forth in this subdivision, and shall be exempt from all taxation, * * *.'

Section 444, chapter 90, '35 C.S.A., contains the following: 'The board of directors may acquire, by use, appropriation, purchase or condemnation, property or rights of any kind, including rights of way, canals or reservoirs either projected, partly constructed or constructed, or the part or whole of any contemplated, projected, partly completed system of irrigation or water works, water rights, or any other property or right necessary or useful for carrying out the objects of said irrigation district, and the title to any such property so acquired shall vest immediately in said irrigation district in its corporate name and shall be held by said district in trust for, and is hereby dedicated and set apart for, the uses and purposes provided for in this subdivision, and shall be exempt from taxation; * * *.'

Counsel for plaintiffs in error urge that while an irrigation district is not strictly a municipal corporation, yet it is a quasimunicipal corporation--that is, it partakes of the qualities of a municipal corporation, and that it was intended to be included in the language of section 4, article X, of the Constitution, 'other municipal corporations.'

The irrigation district act of Colorado is patterned after the Wright Irrigation District Act of California. We upheld the constitutionality of our act in Anderson v. Grand Valley Irrigation District, 35 Colo. 525, 85 P. 313. In Fisher v. Pioneer Construction Co., 62 Colo. 538 163 P. 851, 854, we stated: 'Under our statutes an irrigation district is a public corporation. Its revenues are...