Thirty Mile Canal Co. v. Carskadon, 33740

• Decision Date: 27 May 1955
• Docket Number: No. 33740,33740
• Citation: 70 N.W.2d 432,160 Neb. 496
• Parties: THIRTY MILE CANAL COMPANY, a corporation, Appellant, v. Clay B. CARSKADON and Marjorie Carskadon, his wife, Appellees.
• Court: Nebraska Supreme Court

Page 432

70 N.W.2d 432

160 Neb. 496

THIRTY MILE CANAL COMPANY, a corporation, Appellant, v. Clay B. CARSKADON and Marjorie Carskadon, his wife, Appellees.

No. 33740.

Supreme Court of Nebraska.

May 27, 1955.

Syllabus by the Court.

1. A mutual canal company organized under section 46-269, R.R.S.1943, is a creature of statute and possesses only those powers expressly or impliedly granted to it by such statute.

2. Where the Legislature has prescribed how assessments may be levied and collected by a mutual canal company, the method is exclusive and such company is without authority to prescribe other methods in its articles of incorporation and bylaws.

W. A. Stewart, Lexington, for appellant.

Beatty, Clarke, Murphy & Morgan, North Platte, for appellees.

Heard before SIMMONS, C. J., and CARTER, MESSMORE, YEAGER, CHAPPELL, WENKE, and BOSLAUGH, JJ.

CARTER, Justice.

This is a suit by the Thirty Mile Canal Company, a corporation, to foreclose certain liens against 100 acres of the lands of the defendants for maintenance and storage water charges for the years 1946 to 1952, inclusive, in the total amount of $1,350 and interest. The defendants denied the authority of the canal company to make valid levies and assessments against their lands, or that it acquired any lien on their lands in any amount. The trial court found for defendants and the plaintiff canal company appeals.

The canal company came into existence by the adoption of articles of incorporation on October 22, 1926. It is a mutual irrigation company organized under the provisions of sections 46-269 to 46-271, R.R.S.1943. It derives no revenue from its operation and conducts its business solely for the purpose of irrigating the lands of its members and stockholders. Section 46-269, R.R.S.1943, provides: 'Any corporation or association organized under the laws of this state for the purpose of constructing and operating canals, reservoirs, and other works for irrigation purposes, and deriving no revenue from their operation, shall be termed a mutual irrigation company, and any by-laws adopted by such company, not in conflict herewith, shall be deemed lawful and so recognized by the courts of this state; Provided, such by-laws do not impair the rights of one shareholder over another.'

Article III of the articles of incorporation provides as follows insofar as it relates to the issue before us: 'Shares of stock, water rights or right to use water from any canal or canals owned or operated by the Corporation shall be sold only to owners of land to which the water of such canal or canals can be applied, * * *. The shares of stock shall be represented by Certificates * * * and shall designate the number of shares of stock to which the holder of the certificate is entitled, and the correct description of the land to which such water shall be applied, and the certificate and rights of the holder thereunder shall not be transfered (transferred) to anyone not the owner of the land described in said certificate. * * * The failure or refusal of such a purchaser of land described in an outstanding certificate to have the shares of stock in such certificate represented, transferred to him, shall not deprive the corporation of its authority to make levies for the maintenance of the canals and works and enforce payment of the same an hereinafter provided, nor shall such failure or refusal prevent such levies from becoming liens upon said lands, it being thereby definitely and distinctly declared and understood and agreed that the ownership of stock shall follow the ownership of the land described in the certificate, and shall pass by deed, mortgage or other conveyance, voluntary or otherwise, to the grantee therein named, without mention of that fact or reference thereto, in the conveyance, provided, however than (that) an owner of land shall not be entitled to have such stock certificate transferred to him, so long as there shall remain unpaid any levy for maintenance made as hereinafter provided against the land described in his certificate of stock which is sought to be transferred.'

In Article IV of its articles of incorporation it is provided in part: 'The Board of Directors shall at its first regular meeting in each year * * * make an estimate of the amount of money necessary for the maintaining, operating and keeping in repair all of its works for one year following * * * and after such estimate shall have been entered upon the record book of the corporation, the Board of Directors shall make and enter upon its record book a levy upon lands described in each certificate (certificate) of stock outstanding * * * considering the number of acres of land described in such certificates, and the total number of acres described in all certificates outstanding; * * * and such annual levies and interest so made upon the lands under the provisions of these Articles, shall be and constitute separately and severally perpetual liens upon the lands against which the same are levied to secure the payment of the same, * * * and may foreclose the same in the same manner as mortgages are foreclosed under the laws of this State, and shall also constitute a personal debt against the owner of the land * * *; and such annual levies are to be made against the lands described in outstanding certificates and the payment thereof enforced as herein provided, whether the owner of the lands take water from the canal or not; nor can the owner of such lands surrender his stock or sell or dispose of the same and thereby divest the land of the lien for levies made hereunder against it.'

The defendants urge that the foregoing provisions of plaintiff's articles of incorporation as they relate to the creation...