Northern P. Ry. Co. v. John Day Irr. Dist.

• Decision Date: 02 January 1923
• Citation: 211 P. 781,106 Or. 140
• Parties: NORTHERN PAC. RY. CO. ET AL. v. JOHN DAY IRR. DIST. ET AL.
• Court: Oregon Supreme Court

211 P. 781

106 Or. 140

NORTHERN PAC. RY. CO. ET AL. v. JOHN DAY IRR. DIST. ET AL.

Supreme Court of Oregon

January 2, 1923

In Banc.

Appeal from Circuit Court, Morrow County; Gilbert W. Phelps, Judge.

Suit by the Northern Pacific Railway Company and others against the John Day Irrigation District and others. From a decree granting plaintiffs partial relief, both parties appeal. Affirmed.

This suit was instituted in the circuit court for Morrow county Or., by the Northern Pacific Railway Company, a corporation of Wisconsin, and others, against the John Day irrigation district and others. The defendant John Day irrigation district is a municipal corporation organized pursuant to the Irrigation District Law of this state. Joined with the plaintiff Northern Pacific Railway Company are other owners of land situate within the district. The codefendants of the John Day irrigation district are its directors, secretary attorney, and the engineers of the district, with whom the municipality had contracted for the making of preliminary surveys, plans, and estimates for a contemplated system of irrigation works.

The original complaint was filed on March 31, 1921. A demurrer having been interposed thereto and sustained, an amended complaint, with leave of court, was filed on August 1, 1922. The complaint, as amended, avers seven causes of suit separately stated. The first cause alleges the illegality of an assessment made by the district and attacks the constitutionality of the Irrigation District Law, and especially section 7328, Or. L., relating to assessments. The second cause further assails the assessment as illegal and void, and challenges the sufficiency of the notice of the hearing in the county court in the matter of the organization of the district. The third again objects to the assessment which is averred to be contrary to the provisions of the 6 per cent. tax limitation amendment, designated section 11 art. 11, of the Constitution of Oregon. The fourth alleges the absence of sufficient publication and proof of notice of equalization of the assessment. The fifth avers that the contract with Lewis & Clark, engineers, is ultra vires and fraudulent. The sixth alleges that a certain supplemental contract with the same parties is illegal, on like grounds. The seventh asserts that certain warrants were issued fraudulently and ultra vires to the directors, secretary and attorney, and seeks their cancellation.

John Day irrigation district, by an order of the county court of Morrow county bearing date July 12, 1919, was declared to be duly organized pursuant to the provisions of the Irrigation District Law of this state. Some time prior to May 27, 1919 a petition for the organization of the district, bearing date May 14, 1919, was circulated among owners of land situate within the boundaries of the proposed district, and was duly filed with the county clerk. Notices of the presentation of the petition for a hearing thereon were published in the counties of Umatilla, Morrow, and Gilliam, these being the counties in which the lands of the proposed district were situate. The affidavit of the printer of the "Arlington Independent," published in Gilliam county, is to the effect that notice of a hearing was published in the issues of June 14, 21, 28, July 5 and 12, 1919. The affidavit of the printer of the "Heppner Herald" shows the publication of the notice in Morrow county on May 27, June 3, 10, 17, 24, and July 5, 1919. Affidavit of the printer of the "Hermiston Herald," of Umatilla county, shows that the notice of hearing was published in Umatilla county May 31, June 7, 14, 21, 28, and July 6, 1919.

A special meeting having been called by the county court of Morrow county upon July 12, 1919, to consider and act upon the petition for the organization of the John Day irrigation district, the court found, upon the hearing, among other things, that the requisite number of owners of lands irrigated or susceptible of irrigation within the district had signed the petition, and "that the petition and notice of the time of presentation thereof have been duly published for the time and in the manner required by law." It further found that notice of the presentation of the petition, and the petition itself, had been published in each of the three counties, viz. Umatilla, Morrow and Gilliam, "once each week for at least four successive weeks before the time the same were presented for consideration." The court assumed that it had jurisdiction to consider the petition, and, after a hearing upon all the material allegations thereof, it entered an order defining the boundaries of the proposed district and directed that the county clerk give notice of an election to be held within the proposed district for the purpose of determining whether it should be organized as an irrigation district under the provisions of the Irrigation District Law. The notice was published and the election was had, at which the electors voted for the organization of the district. M. D. Clark, C. C. Clark, and John Kilkenny were elected directors. On September 2, 1919, after two of the directors had qualified, they met and elected C. C. Clark president, F. R. Brown secretary, and F. A. McMenamin attorney, for the district. John Kilkenny failing to qualify as director, Edward Reitman was, by resolution of the board of directors, selected in his stead.

On June 2, 1920, the board of directors entered into a contract with defendant John H. Lewis for the performance of the necessary investigation and surveys, to determine the feasibility of the project and the best method of putting water on the lands of the district. Lewis entered upon the discharge of his duties under his contract.

On September 7, 1920, notice having been given, a budget was adopted by the directors of the irrigation district. An assessment was ordered and levy made of 50 cents per acre on each of 225,000 irrigable acres of land situate within the district. Notice was given of the meeting of the board of equalization, as provided by statute, and the board met and equalized the assessments against the irrigable lands therein. The assessment roll was thereafter filed in the offices of the county clerks of Gilliam, Morrow, and Umatilla counties.

On March 31, 1921, the original complaint hereinbefore referred to was filed in the circuit court of Morrow county by the plaintiff Northern Pacific Railway Company and others, including some of the signers of the original petition for the formation of the district. To the suit filed by the plaintiffs, Lewis & Clark and John H. Lewis filed their answer. The other defendants joined in a separate answer.

As a result of the trial the court sustained the original Lewis contract as valid when made, but was of opinion that it should have been canceled or changed upon the discovery by the contracting parties that the district did not include necessary lands to make the proposed irrigation system economically possible. However, the court did determine that such knowledge was acquired by all of the parties not later than January 4, 1921, the date of the supplemental contract. The court ordered the cancellation of something like $40,000 in warrants issued to the engineers, but adjudged them to be entitled to payment of $20,000, and referred the matter of their additional compensation to the board of directors, with the right to sue if settlement could not be had. The plaintiffs state in their brief:

"Many of the warrants issued to the other defendants were canceled insomuch that there is but little additional relief now desired against the directors and secretary, but appellants feel aggrieved that all the warrants issued to the attorney were not canceled."

The plaintiffs appealed, and assigned as error that portion of the findings and decree opposed to their contention. Defendants Lewis & Clark and John H. Lewis did not appeal. The other defendants did appeal. Defendant Edward Reitman appeared in this court at the hearing, by his attorneys, Van Vactor & Butler, and moved that the appeal be dismissed as to him. A similar motion was made by M. D. Clark. The district. appearing by Sam E. Van Vactor, also asked that its appeal be dismissed.

L. B. Daponte, Geo. T. Reid, and C. H. Winders, all of Seattle, Wash., C. A. Murray, of Tacoma, Wash., Carter & Smythe, of Pendleton, and Woodson & Sweek, of Heppner, for appellants.

Harrison Allen, Griffith, Leiter & Allen, all of Portland, C. H. Finn, of La Grande, F. A. McMenamin, of Heppner, S.E. Van Vactor, of The Dalles, and I. H. Van Winkle, Atty. Gen., and Willis S. Moore, Asst. Atty. Gen., for respondents.

BROWN, J. (after stating the facts as above).

The defendants filed demurrers to the first cause of suit, and the court's ruling thereon is assigned as error. The plaintiffs contend that the Irrigation District Law, Act of 1917, c. 357, and especially section 24 thereof (Or. L. § 7328), violates section 1 of article 9 of the Constitution of Oregon, because it "prevents an assessment in proportion to benefits"; that the act is in violation of the Fourteenth Amendment to the Constitution of the United States for the same reason; that--

"The particular assessment in controversy is in violation of both of said constitutional provisions because it is arbitrary and without regard to proportionate benefits."

Article 9, § 1, Oregon Constitution, reads:

"The legislative assembly shall, and the people through the initiative may, provide by law uniform rules of assessment and taxation. * * *"

Among other things, the Fourteenth Amendment provides:

"* * * Nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the

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