United States v. Aho

• Court: U.S. District Court — District of Oregon
• Writing for the Court: JAMES ALGER FEE
• Citation: United States v. Aho, 68 F.Supp. 358 (D. Or. 1944)
• Decision Date: 15 May 1944
• Docket Number: Civil Action No. 1337.
• Parties: UNITED STATES v. AHO et al.

68 F. Supp. 358

UNITED STATES v. AHO et al.

Civil Action No. 1337.

District Court, D. Oregon.

May 15, 1944.

Bernard H. Ramsey, of Portland, Or., Stanley R. Darling, of Eugene, Or., James Leavy, of Pasco, Wash., and Bert C. Boylan, of Portland, Or., for the United States.

Russell E. Sewall, Russell W. Sewall, and C. W. Pecore, all of Portland, Or., for defendant Beaver Drainage Dis.

JAMES ALGER FEE, District Judge.

This is an action for condemnation of certain real property embraced within the limits of the Beaver Drainage District. The United States has specified in the amended complaint that the interest taken is the fee simple title. There are set out in the answer to the amended complaint, to which a demurrer has been filed, allegations regarding the function of the District and its operations which are claimed to show a compensable interest owned by the District in the parcel taken. An outline of such statements follows.

The defendant, Beaver Drainage District, is a quasi municipal corporation organized under the statutes of Oregon¹ and is thereby the repository of specified functions with relation to over five thousand acres of land. Within its boundaries under the law, there have been constructed many main drainage canals and these have been kept free from silt and debris in order to facilitate the proper drainage of the lands. For the same purpose, the principal sloughs and other natural drainage channels were to be improved. The costs in a sum of over $25,000 have been assessed against the lands and have been "paid as taxes" by the owner.²

The system of drainage is constructed so that the waters from the lands, including the parcel taken by the United States, flow by gravity onto a parcel of land owned by the District,³ where an electric pump of capacity of 48,500 gallons per minute pumps the waters drawn off these lands over the dike or levee along the boundary of the District into a tributary of the Clatskanie River. The water table under the lands, including the parcel here involved, is lowered and maintained at a level sufficiently below the surface of the ground to permit the use of the land for agricultural purposes. Without this process, the lands would be utterly valueless. The average cost of maintaining and operating the system of drainage by pumping out the excess is one dollar an acre each year. The surface waters from the lands within the boundaries including the condemned parcel, flowed both before and after acquisition by the government and will in the future continue to flow onto the land, and through this pumping plant, of the District.

To the answer of the Drainage District, a demurrer has been interposed and thus the whole problem is before us for disposal. The individual defendants have accepted the amount tendered as the value of the fee simple title. The District, however, contends that it has a compensable interest over and above the amounts so received by the fee owners, but that it claims no part of the money paid to the individual defendants. As heretofore pointed out, the government must pay for all the interests destroyed or acquired by condemnation or the judgment will not vest title thereto.⁴

The theory of the Lands Division is that the assessments from year to year are an exercise of the power of general taxation by a Drainage District as a municipal corporation and political subdivision of the State, and that the United States could not be liable for any assessments made after title to the land was acquired. The basis of this position lies in the fact that property of the United States is not liable to taxation by the State of Oregon.

Notwithstanding the allegations of the answer then, it is the position of the United States that in paying the fair market value of the fee simple title to the owners, it takes the property condemned free from any obligation to pay the future annual assessments levied by the Drainage District. If these annual assessments stand upon the same footing as unsecured levies of state, county and municipal taxes to liquidate general obligations of such bodies, the result contended for is correct. But it is claimed by the District, first, that there is a distinction between such general levies and local assessments by these bodies incorporated for special purposes and, second, that in the incorporation of such bodies, the State of Oregon has given a specific right or franchise to levy assessments covering costs which bind the real property in the hands of all takers.

It has been consistently recognized that the reclamation of swamp and overflowed lands is of utmost importance to the communities involved and is touched with the public interest.⁵ In Oregon, districts are organized by the state in recognition of this public concern for the purpose of administering the law relating to drainage, diking or irrigation.⁶ There has been a finding of direct benefit to each parcel of land in this Drainage District.⁷ If the costs had exceeded the benefits to all the lands in the District, the plan would have been rejected and the District dissolved.⁸

Thus the plan originally adopted must be one which will be economically feasible for the affected lands, because the crops raised on the various parcels must bring enough on the market to pay the current assessments. The debts incurred by the District in the construction of the works and continued operation thereof are not obligations of the State of Oregon. Nor are these obligations of the District in any strict sense. The only source of payment is the owners of lands within the boundaries thereof. The duty of the District which may be enforced only by mandamus, is to levy the assessments.

The history of drainage and irrigation districts in the past few years has shown that these cooperative structures for specific purpose are subject to special dangers. If the plan of reclamation was not feasible because sufficient income was not collected for maintenance, the District would be unable to function in its essential capacity. If a portion of the lands became unproductive, and unable to bear the weight of assessments and the District did not receive income therefrom, it was in grave difficulty. This was emphasized in the depression where many parcels did not raise profitable crops, and the payments of assessments went into arrears, and the District was required to levy higher assessments which fell upon the better lands whereby these likewise became unprofitable. The burden of delinquencies spread in geometrical proportion. By such disasters these entities created for the public purpose of reclaiming lands, were rendered helpless and after the passage of the municipal bankruptcy act, many of them sought refuge under its aegis.

If the United States condemns a certain proportion of these lands and thereafter refuses to pay the assessments, like results will follow in this District. If the United States had taken the parcels covered by the main drainage canals, and the parcel which contains the disposal pumps, and thus prevented the disposal of the waters, the District would likewise have ceased to function, but there compensation would be paid not only to the District for the physical properties taken, but also to the District as representative of the individual owners for the destroyed easements. Each parcel of land in this District has appurtenant to it an easement in the ditches, pumps and other works.

The Districts in question were organized under state authority and include a definite quantity of land. The limits and boundaries are fixed by necessity since only a specific area of land can usually be benefited by irrigation, drainage or diking with one series of works. Besides, parcels of land not benefited cannot be subjected to the burdens of contribution. The physical properties of water dictate the boundaries of a Drainage District. No less imperatively, economic feasibility dictates the size and cost of the works. The initial plan for development of these works is dependent upon these factors All this points to the conclusion that the United States should pay the annual assessment to prevent disaster in projects created for a public purpose. But it is conceded that liability can neither be predicated upon need alone, nor solely upon public policy.

The United States has, however, often paid compensation to a public corporation where easements or functions exercised for the benefit of the public at large, or those within the boundaries of the municipality, were used or carried on at increased cost or inconvenience by virtue of displacement, although strict property rights may not have been involved.⁹

The status of incumbrances upon the real property is to be determined by the laws of the particular state in which the land is located.¹⁰ The statute of the State of Oregon relating to debts and obligations of Drainage Districts provides in part as follows:

"The board of supervisors shall each year make a computation of the whole amount of money to be raised by the district through assessments for the ensuing year for any and all purposes whatsoever in carrying out the provisions of this act, including maintenance and operation, estimated delinquencies on assessments; * * *."¹¹

It is further specifically provided by law that:

"Such bonds and the interest thereon and all obligations for the payment of money authorized and incurred by such district shall be paid by the revenue derived from the annual assessments upon the land and other real property within the district, and all the lands and other real property within the district shall be and remain liable to be assessed for such payments as herein provided and under and subject to the provisions of this act."¹²

These various practical considerations point to the theory that the State of Oregon was simply lending the machinery for tax collection to enforce the inherent duty raised by the situation of the particular parcel itself. We shall...