San Luis Power & Water Co. v. Trujillo

• Decision Date: 16 October 1933
• Docket Number: 13109.
• Citation: 26 P.2d 537,93 Colo. 385
• Parties: SAN LUIS POWER & WATER CO. v. TRUJILLO, County Treasurer.
• Court: Colorado Supreme Court

26 P.2d 537

93 Colo. 385

SAN LUIS POWER & WATER CO. v. TRUJILLO, County Treasurer.

No. 13109.

Supreme Court of Colorado, En Banc.

October 16, 1933

Rehearing Denied Nov. 6, 1933.

Error to District Court, costilla County; John I. Palmer, Judge.

Action by Fred Trujillo, as Treasurer of the County of Costilla against the San Luis Power & Water Company, to obtain a declaratory judgment. Judgment for plaintiff, and defendant brings error.

Judgment affirmed.

L. H. Larwill and D. K. Wolfe, Jr., both of Denver (Malcolm Lindsey, of Denver, of counsel, and Hughes & Dorsey of Denver, of counsel, on petition for rehearing), for plaintiff in error.

John B Barnard, of Pueblo, and E. H. Ellithorp, of Alamosa (Clarence L. Ireland, former Atty. Gen., Paul P. Prosser, Atty. Gen., and George A. Crowder, Deputy Atty. Gen., of counsel), for defendant in error.

HOLLAND, Justice.

We will herein refer to the plaintiff in error as the water company and the defendant in error as treasurer.

In April, 1931, the treasurer filed this action to obtain a declaratory judgment to the effect that the Sanchez reservoir and its appurtenances, being the irrigation system of the water company, is subject to taxation for the years beginning with 1907 to date. He alleged the corporate existence of the water company as a Colorado corporation at all times doing business in Costilla county, with its principal office in that county; that, for profit, said company was the operating owner of the Sanchez system of reservoirs, ditches, and other enumerated reservoirs, ditches, canals, and like appurtenances; that the water company was the owner since 1907 of certain water and water rights that it then and thereafter acquired and used in connection with domestic and allied irrigation purposes, all in Costilla county; that during all the years, from 1907 to 1931, all of the properties of the water company have been omitted from the assessment roll of Costilla county, and that the assessor of Costilla county has refused to assess said property; that section 7321 of the Compiled Laws of Colorado 1921 makes it the duty of the treasurer in such cases to assess the property and charge all arrearages which should have been assessed in former years. He further alleged that the water company made the claim that the Sanchez system was not taxable, separate and apart from the lands irrigated thereby under section 3, article 10, of the Colorado Constitution and section 7198, Complied Laws of 1921.

The treasurer makes the contention that these constitutional and statutory provisions do not apply, because the water and water rights of the Sanchez system were not used exclusively for irrigating the lands of the owners of said system, but that the company rented and leased same to the owners of lands upon a yearly rental basis and that water users were not the owners of the system or its water rights.

After general and special demurrers were overruled, the water company answered, presenting more fully the issues raised by demurrer, and alleged that, under the company contracts used for water rights and corresponding interests in the reservoir system, its system and water and water rights are not taxable under the State Constitution and statutes, and further that the water rights were already assessed in connection with the lands to which same were pertinent, and that a separate assessment would constitute double taxation; and as a third defense it raised the constitutionality of the Declaratory Judgments Act (Laws 1923, p. 268), and alleged that the facts stated in plaintiff's complaint are not sufficient to warrant the court in entering a declaratory judgment, and attached to its answer Exhibits A and B, being forms of water contracts used by the water company. The treasurer replied admitting that the lands irrigated by the water from the Sanchez system are valued for the purpose of assessment as irrigated lands, and that the valuation of nonirrigated lands is much lower in Costilla county. The water company demurred to the reply, which was overruled, and filed written motion for conclusions of law by the court which wad denied, and, on motion of the treasurer, the trial court entered judgment on the pleadings, to which the water company assigns error.

Three questions are Before us for determination: First, the constitutionality of the declaratory Judgments Act. Second, Would the taxation of the Sanchez system be double taxation? Third, Are the water users fractional owners of the water rights and owners of an interest in the system so as to bring the system, its water and water rights, within the statutory and constitutional prohibitions against separate taxation of irrigated works?

Those sections of the Constitution and the statutes involved here are as follows:

Article 10, section 3, of the Constitution of the state of Colorado: 'All taxes shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws, which shall prescribe such regulations as shall secure a just valuation for taxation of all property, real and personal; Provided, that the personal property of every person being the head of a family to the value of $200 shall be exempt from taxation. 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.'

Section 7321, Compiled Laws of 1921: 'If any taxable property shall be omitted in the assessment of any year or series of years, and not listed upon the assessment roll, when discovered it shall be assessed by the assessor for the time being and inserted on the assessment roll, and all arrearages of taxes which should have been assessed and paid in former years charged thereon, or in case of the failure or neglect of the assessor the same shall be assessed by the treasurer, any by him inserted in the warrant with the arrears of taxes as provided for 'additional assessments.' The provisions of this section shall include omissions made by the state board of equalization (tax commission), as well as by the county assessor.'

Section 1 of the Colorado Declaratory Judgments Act, approved March 20, 1923 (Laws 1923, p. 268), confers jurisdiction on courts of record 'to declare rights, status, and other legal relations whether or not further relief is or could be claimed. No action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for. The declaration may be either affirmative or negative in form and effect; and such declarations shall have the force and effect of a final judgment or decree.' Section 2 provides that: 'Any person interested under a deed, will, written contract or other writings constituting a contract, or whose rights, status or other legal relations are affected by a statute, municipal ordinance, contract or franchise, may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status or other legal relations thereunder.' Section 3: 'A contract may be construed either Before or after there has been a breach thereof.' Section 6: 'The court may refuse to render or enter a declaratory judgment or decree where such judgment or decree if rendered or entered, would not terminate the uncertainty or controversy giving rise to the proceeding.' Section 7: 'All orders, judgments and decrees under this Act may be reviewed as other orders, judgments and decrees.' Section 8: 'Further relief based on a declaratory judgment or decree may be granted whenever necessary or proper.'

We will first determine the constitutionality of the Declaratory Judgments Act, since the judgment in this case was obtained under that act. This court, on a number of occasions, has been called upon to determine propositions presented under the Declaratory Judgments Act, but in those cases the act has never been attacked upon constitutional grounds. Some courts have been slow to recognize the constitutionality of declaratory judgment acts, generally upon the theory that judgments thereunder would be no more or less than advisory opinions, the rendering of which is a nonjudicial function except when specially authorized, and upon the broad general theory that the proper office of the judiciary was to redress wrongs. It has been said in that connection that the practice of allowing controversial parties to seek and have declaratory determinations of their interests by the courts would congest the work of courts, but that objection is speculative and not sound, for the basic...