Redmond Realty Co. v. Central Oregon Irr. Dist.

• Decision Date: 08 July 1932
• Citation: 140 Or. 282,12 P.2d 1097
• Parties: REDMOND REALTY CO. v. CENTRAL OREGON IRR. DIST. et al.
• Court: Oregon Supreme Court

12 P.2d 1097

140 Or. 282

REDMOND REALTY CO. v. CENTRAL OREGON IRR. DIST. et al.

Supreme Court of Oregon

July 8, 1932

Department 1.

Appeal from Circuit Court, Deschutes County; T. E. J. Duffy, Judge.

Suit by the Redmond Realty Company against the Central Oregon Irrigation District, a municipal irrigation district, and others. From an adverse decree, plaintiff appeals.

Reversed.

George H. Brewster, of Redmond, for appellant.

Jay H Upton, of Bend (H. H. De Armond, of Bend, on the brief), for respondents.

Willis S. Moore, Asst. Atty. Gen. (I. H. Van Winkle Atty. Gen., on the brief), amicus curiae.

BEAN C.J.

This is a proceeding for a declaratory judgment under section 2-1401 et seq., Oregon Code 1930.

The Central Oregon irrigation district is a very large district located in Deschutes and Crook counties and furnishes water from the Deschutes river to approximately 48,000 acres of land, the water rights of which have been heretofore adjudicated. The system contains over 700 miles of ditches flumes, and laterals, on which there are living some 2,000 people. On account of the size of the system and the district, it is necessary to raise a large amount of money each year for the purpose of paying the operation and maintenance charges. Heretofore this money has been raised by levy and assessments. A large number of the landowners permitted the assessments on the land within the district to become delinquent; as a result, the taxes paid are not sufficient to meet the current bills and the warrants became some two years in arrears.

In order to re-establish the credit of the district, a plan was evolved to issue bonds for an amount sufficient to equal the outstanding warrants for the purpose of exchanging them for the warrants. The electors of the district, under the authority of section 48-501, Oregon Code 1930, authorized the issuance of bonds in the sum of $135,000, the amount of the outstanding warrants. Validation proceedings were instituted and carried through the circuit court in which the regularity of the entire procedure was confirmed, from which no appeal was taken. Application was made to the state reclamation board for certification of the bonds, which was refused; the Attorney General of the state advising that the issuance of the bonds for the purpose of paying outstanding warrants was not authorized by section 48-501, Oregon Code 1930.

It is sought in this proceeding to have the court interpret section 48-501 and section 48-1001, Oregon Code 1930, and declare that section 48-501 authorizes the board of directors to issue bonds for the purpose of paying outstanding warrants issued for purposes of operation and maintenance.

Section 48-501, Oregon Code 1930, provides in part that "Upon order of the directors duly entered an election shall be held to determine whether bonds in any amount the board may deem necessary shall be issued for any purpose necessary or convenient in carrying out the provisions of this act, including the refunding of outstanding bonds, ***" and provides for the notice and manner of holding the election, and a subsequent section provides for the issuance and sale of such bonds. It will be noticed that this section authorizes bonds to be issued for any purpose necessary or convenient in carrying out the provisions of the act, including the refunding of outstanding bonds. There is no provision for refunding outstanding warrants issued for operation and maintenance.

In Medford Irrigation District v. Hill, 96 Or. 649, 659, 190 P. 957, 960, it was held that the words "for any purpose," used in section 48-501, Oregon Code 1930, did not indicate a purpose which a district might deem necessary or convenient, but a purpose which the Legislature deemed necessary and convenient in view of all of the provisions of the act. In that case the court said: "We think the words 'for any purpose,' italicized above, together with the clauses following, indicate an intention upon the part of the Legislature that there should be some general plan or purpose adopted for the bringing in of water before a bond election, which purpose should be expressed in the order of the directors authorizing the election, and upon which the landowners can vote intelligently as to whether or not the bonds for that purpose shall be issued."

The whole scope of the acts embraced in section 48-501 et seq., and the several amendments thereto, seems to make provision for irrigation districts to construct or purchase an irrigation system and perform acts in connection therewith, issuing bonds to obtain funds for the payment therefor and for refunding outstanding bonds and making contracts with the United States. Section 48-601 et seq., provides for the certification of such bonds by the reclamation commission.

Section 48-501 reads in...