Uhlmann v. Wren

• Decision Date: 15 April 1965
• Docket Number: No. 8243,8243
• Citation: 97 Ariz. 366,401 P.2d 113
• Parties: Ernest A. UHLMANN and Billie Uhlmann, husband and wife, et al., Petitioners, v. Honorable Laurance T. WREN, as Judge of the Superior Court of the State of Arizona in and for the County of Maricopa, and the Superior Court of the State of Arizona in and for the County of Maricopa, Respondents, and Salt River Project Agricultural Improvement and Power District, Real Party in Interest.
• Court: Arizona Supreme Court

Page 113

401 P.2d 113

97 Ariz. 366

Ernest A. UHLMANN and Billie Uhlmann, husband and wife, et al., Petitioners, v. Honorable Laurance T. WREN, as Judge of the Superior Court of the State of Arizona in and for the County of Maricopa, and the Superior Court of the State of Arizona in and for the County of Maricopa, Respondents and Salt River Project Agricultural Improvement and Power District, Real Party in Interest.

No. 8243.

Supreme Court of Arizona, In Banc.

April 15, 1965.

Snell & Wilmer, Phoenix, for petitioners Uhlmann, Rew and Leiber.

Leibsohn, Garrett & Goldstein, Dushoff & Sacks, Phoenix, for petitioners Kortz and Laff, dba Equitable Investments and Antonoff.

John E. Madden and John S. Schaper, Phoenix, for petitioner Ginn.

Kramer, Roche, Burch & Streich, Phoenix, for petitioners Ciruli, Park Central Investment Corp., and Park Central Farms.

Leo N. Smith, Tucson, for petitioners Verity, Teague and Patterson.

Evans, Kitchel & Jenckes, Phoenix, for petitioners Pilcher, Bradstreet, and Speer.

Jennings, Strouss, Salmon & Trask, Phoenix, for respondents and real party in interest.

Gentry, McNulty & Toci, Bisbee, for Arizona Electric Power Cooperative, Inc., amicus curiae.

Merle L. Hanson, City Atty., Melvin J. Mirkin, Asst. City Atty., Phoenix, for the City of Phoenix, amicus curiae.

LOCKWOOD, Chief Justice:

This case is here by Writ of Certiorari issued to the respondent, Superior Court of Maricopa County, Judge Laurance T. Wren, presiding. Petitioners are landowners whose property was the subject of eminent domain proceedings instituted by the Salt River Project Agricultural Improvement District, the real party in interest. After due notice and hearing, Judge Wren ordered that the District be let into immediate possession of the land. Such an order is authorized under A.R.S. § 12-1116, and under Art. 2, § 17 of our constitution, A.R.S., when the condemning agency is a municipal corporation.

The facts giving rise to this controversy are as follows: The District has entered into an agreement to purchase electrical energy from Colorado Ute Association, Inc., a Colorado association. This energy will be produced at steam-generating plaints in Colorado and New Mexico and will be delivered to the Federal Government in those states. In exchange, the District will take delivery of 144,000 kilowatts of electricity generated by the United States at the Glen Canyon Dam in northern Arizona. This exchange electricity will be sold to the District's customers in the Phoenix area. Petitioner's land is the site of a proposed tranmission line to accommodate the exchange power.

Petitioners challenge the validity of the transaction pursuant to which the District seeks to condemn their land. They contend that there is no statutory justification for the proposed undertaking.

This transaction for the development, purchase, and sale of power must find statutory justification in the provisions of § 45-903 of Chapter 4, which sets out the purposes of agricultural improvement districts and operates as a restriction on their lawful functions. Most of the powers relate to the District's principal functions of irrigation and drainage, only two paragraphs making specific reference to the development and distribution of power. These pertinent provisions of A.R.S. § 45-903 provide as follows:

§ 45-903. Purposes for which district may be organized.

'A. When five or more holders of title or evidence of title to agricultural lands which have at any time been recognized as within the exterior boundaries of a United States reclamation project and which are susceptible of irrigation by the same general system of irrigation words, desire to provide for the improvement of such lands, they may propose the organization of an agricultural improvement district under the provisions of this chapter for any of the following purposes:

* * *

* * *

'6. To provide new or additional means for the irrigation or drainage of all or a part of the lands or to provide power or a means of communication for the use of the owners or occupants of the lands.

'7. To reduce the cost of irrigation, drainage and power to the owners of the lands in the district by the sale of surplus water or power produced, owned or controlled by the district, and the construction, maintenance, extension, replacement, financing and refinancing of the works useful for such purpose. * * *'

If the transaction in question--and hence the condemnation--can be upheld under subsection A, paragraph 6 of section 45-903, the District must carry the burden of showing that the exchange power will be sold to consumers within the district. This is true because A.R.S. § 12-1112 provides as follows:

'Before property may be taken, it shall appear that:

'1. The use to which the property is to be applied is a use authorized by law. * * *'

However, nothing in the record indicates how much, if any, of the power will be used by those within the geographical boundaries of the District. On cross-examination, Mr. Glenn W. Brandow, the Associate General Manager of the District, testified that the load requirements of the District on which the proposed transaction was based were not broken down to reflect the power needs of those within the District as opposed to those outside the District. Thus, the transaction cannot be upheld under subsection A, paragraph 6. If such authority exists, it must be justified as an outside sale of surplus power, authorized by subsection A, paragraph 7 of § 45-903.

The issue of statutory construction presented for decision may be stated as follows Does the transaction in question qualify as a 'sale of surplus * * * power produced, owned or controlled by the district', 'to reduce the cost of irrigation, drainage and power to the owners of the lands in the district'?

Petitioners contend that the term 'surplus' refers to a 'natural' or 'incidental' surplus; that the Legislature contemplated excesses of power and power development opportunities arising in the course of a district's water-storage and irrigation activity; that to permit the sale of this excess would greatly enhance the efficiency of the entire system and reduce the cost of irrigation and drainage operations. Paragraph 7, it is urged, was thus adopted to avoid unnecessary waste for want of authority in the District.

On the other hand, respondents argue that the Legislature intended only to assure that electrical energy would not be sold in other areas so long as landowners within the District were inadequately supplied; that 'surplus' means any power beyond that needed in the district itself, regardless of whether it was produced as a result of the irrigation and drainage functions of the District.

Thus, it appears that the crucial difference between the two parties lies in their respective answers to the question of whether the District must show a relationship between its power operations and its irrigation functions in addition to the subsidy relationship existing between the use of the revenues from its power operations to reduce the cost of irrigation water to the District. The proper resolution of this question entails an historical analysis of the legislation authorizing the existence of the District and delineating its functions.

Historical Analysis

The early history of the Salt River Valley wherein the District is located, is traced in a publication of the Reclamation Commission entitled Reclamation Project Data, (Government Printing Office, 1961). We quote pertinent parts which read as follows:

'A large part of the Salt River Valley was irrigated and cultivated in prehistoric times, but abandoned before white men entered the valley. Irrigation of the valley by white settlers began about 1867. The river-flow was erratic, varying from a small stream to enormous floods. Shortly after settlement began, and especially during years of drought, the supply of water at low river stages was inadequate for the land in cultivation. River flows in excess of immediate needs or canal capacities were lost, due to lack of storage facilities. Maintenance of the brush and rock diversion dams also became a problem, for they were often washed out at the beginning of a flood and could not be replaced until the water was again low in the river. Years of good water supply were followed by years of drought, causing the loss of valuable vineyards and orchards. In 1895 a few of the farmers formed what they called the 'Farmers' Protective Association,' the prime purpose of the association being to secure legislation concerning water rights. * * *' Reclamation Project Data, p. 664.

The first legislative step for federal financial participation with private reclamation organizations was taken by Congress in passing the Act of June 17, 1902, 32 Stat. 388, known as the Reclamation Act, now codified as 43 U.S.C.A. § 371 et seq. The act set up a reclamation fund derived from the sale of public lands in Arizona, California, Colorado, Idaho, Kansas, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Utah, Washington, and Wyoming. This fund was:

'to be used in the examination and survey for and the construction and maintenance of irrigation words for the storage, diversion, and development of waters for the reclamation of arid and semiarid lands in the said States and Territories * * *.' 32 Stat. 388.

It is manifest from this statute, which was the inception of active federal reclamation legislation, that Congress adopted it as a deliberate policy for development of the West. Such development was unquestionably in furtherance of the national economic expansion. Reclamation of potentially productive areas located in vast portions of arid and semiarid lands by means of irrigation, would benefit not merely the individual land owners, but also the local district, and eventually the territories and states embraced within the reclamation statutes. ¹ Hence broad powers were granted...