United States v. Florea

• Court: U.S. District Court — District of Oregon
• Writing for the Court: William C. McCulloch, of Portland, Or., for defendant Multnomah County Drainage Dist. No. 1
• Citation: United States v. Florea, 68 F.Supp. 367 (D. Or. 1945)
• Decision Date: 17 December 1945
• Docket Number: Civil Action No. 1421.
• Parties: UNITED STATES v. FLOREA et al.

68 F. Supp. 367

UNITED STATES v. FLOREA et al.

Civil Action No. 1421.

District Court, D. Oregon.

December 17, 1945.

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.

William C. McCulloch, of Portland, Or., for defendant Multnomah County Drainage Dist. No. 1.

JAMES ALGER FEE, District Judge.

This is an action for condemnation of certain real property embraced within the limits of the Multnomah County Drainage District. The United States has specified in the complaint that the interest taken is the fee simple title. The answer of the defendant District contains the allegations hereinafter set forth in condensed form.

It is alleged that the defendant, Multnomah County Drainage District, is a municipal or public corporation, organized in order to reclaim swamp and overflowed lands within its territorial limits. Within its boundaries, under the law, there have been constructed certain reclamation works including a dike or levee, an extensive system of interior drainage, and a pumping plant, at an aggregate cost of $600,000 more or less. Through the construction, operation and maintenance of said reclamation works, the lands have been reclaimed and are being protected against overflow by water from the Columbia River. It financed the construction of these reclamation works through the proceeds of bonds issued. Of the bonds sold, an aggregate amount in par value of $238,000 remains outstanding and unpaid. No part of these bonds is in default.

The benefits accruing to each parcel of land from the reclamation works were duly assessed. The total benefits assessed to 8092.06 acres of land amounted to $692,392. The proceeds of annual assessments were used exclusively for the purposes of (a) operation and maintenance, and (b) bond service. These lands have received, are receiving and will continue to receive in the future, full benefits from the construction, operation and maintenance of these reclamation works. Without this process, the lands would be utterly valueless.

It is further alleged that the defendant District acquired prior to the commencement of this cause, and now owns and holds an indefeasible estate, interest, easement or right in the lands described, to the burden of which the full fee simple title to said lands long has been, is, and in the future will continue to be, subject. This estate, interest, easement or right in said lands is property.

It is clear that if by the condemnation proceedings, the United States has acquired or destroyed a property interest belonging to the Drainage District, or held in trust by it for the aggregate of landowners, there should be compensation therefor. So, there will be an attempt to discover whether the United States is taking a property interest over and beyond the fee simple title, and whether upon the facts outlined, the Drainage District must be compensated therefor.¹

There are two possible property rights which the United States might acquire or destroy: (1) The power to collect assessments, and (2) easements for drainage of land and protection by dikes. The power to collect assessments for benefits conferred upon a parcel of land is not an easement but must be equivalent to and judged as a covenant running with the land.

Under the state statutes,² a Drainage District may exercise powers relating to irrigation,³ drainage⁴ and diking⁵ of lands within its boundaries. The development of the law in relation to each of these fields is of importance in solving the questions above proposed, especially insofar as the resume throws light upon such functions with regard to the rights of the landowners affected collectively. A consideration of irrigation rights is first in order.

In the arid regions of the West, a novel body of law was created by the adoption of the customs of the miners relative to the appropriation of waters for use on non-riparian soil. The extension of the theory, somewhat modified, to lands apt for agricultural development by use of rarely available water, caused further doctrinal ramifications. Need and priority were the sole tests. The steel mold of ancient riparian law was broken. Necessity was the lodestar of public policy. Beneficial use of land and other potentials was vital. Where appropriation of water is recognized, a beneficial purpose must be served by all water used. An appropriation for a parcel of land where beneficial application is made, creates an incorporeal hereditament appurtenant to that parcel. This property interest ceases to exist by abandonment or inability to make beneficial use of the water, or by transfer of the water to another parcel. It is generally held that if an individual company or corporation covenants to deliver water to a specified piece of land, property rights appurtenant thereto in all lands and dams, ditches, pumps and other works belonging to the covenantor and necessary to accomplish diversion and application, is brought into existence. The efficacy of such a transaction depends not on the principles of real covenants, but upon the fact that real property has been transferred.⁶

As noted above, if the owner of the parcel promises to pay for the water delivered for use upon the land, the devolution of this burden depends not upon the law of easements, but upon the law of real covenants. The past history, policy and tendencies of these intensely interesting creations is discussed in a learned little book⁷ by Charles E. Clark formerly Dean of the Yale Law School and now Judge of the Court of Appeals of the Second Circuit. This acute analysis indicates that succession of estates of one of the parties to the covenant is the only proper meaning of the term "privity." In the same work, the illiberal treatment by some courts of the requirement that the covenant, in order to run, must touch and concern the land, is criticized.

This work is not cited nor analized by Lingle Water Users' Association v. Occidental Building & Loan Association, 43 Wyo. 41, 297 P. 385, which went against the current of the law relating to promises to pay for delivery of water to land.⁸ In that case there had been a sale of water rights which became appurtenant to the parcel as an easement or incorporeal hereditament. As a consideration, there was a covenant by the landowner to pay the purchase price for the water right together with annual assessments for operation and maintenance of the delivery system. It was expressly stipulated that the burden of this covenant should pass with the land. The court held, in a suit against a subsequent grantee, that the covenant to pay did not run with the land and that there was no obligation for arrearages. This is placed partially on the ground that the water rights were real property and that the obligation to pay the purchase price does not pass to a vendee without express assumption. The court, in an elaborate opinion, holds that the obligation to pay operation and maintenance does not pass.

This case seems to indicate the extreme hardships created by the times. In the depression period, for several years irrigated lands were generally unable to pay the charges of the elaborate works whereby water was delivered. Conditions prevented the growing of profitable crops in irrigated projects. The burden of payments for water rights caused defaults, moratoria and a scaling down of debts and charges. In many projects both the original charges and the maintenance and operation assessments were conceived to be ruinous. In such projects a serious burden would have been placed upon the few solvent persons who acquired land in the district if they had been required to pay charges which no one else expected to pay. The effect of the decisions noted was that there was opportunity given to scale down the original costs of the district and in the future the benefit of the water received and the burden of the payments were more nearly equalized.

Several years later, the Oregon court cited and by dictum approved of the Lingle case in Cabell v. Federal Land Bank et al., 173 Ore. 11, 144 P.2d 297, 301. There, as in the Lingle case, a private company had sold water rights and agreed to deliver water over the years. The original owner covenanted to pay for the water right which became an incorporeal hereditament appurtenant to the land. This covenant was stipulated to create a lien and to run with the land. The court held that there was no lien created on the whole tract of 160 acres since there was a water right for only 81 acres. The court also held that a subsequent grantee could not be held liable for the assessments in arrears. The land had received no deliveries of water during his occupancy. For several years water could not be beneficially used upon the land because it was overflowed by seepage, part of it being used as a duck pond. This factor would prevent the delivery of water to the land and would cause the destruction of the water right. The covenant to pay would then have no basis. The Oregon court would have upheld a lien for the assessments if proper basis had been shown. The court say: "We are of the opinion that the covenants of the contract do not run with the land," citing the Lingle case.⁹ This remark is made without discussion of a highly controversial subject and was not necessary for decision. The grounds are not indicated. It cannot be determined whether it was thought that the payment did not touch and concern the land.¹⁰ There was no discussion of privity, although the covenantor and covenantee were in a close mutual relationship in which real property was transferred and also an easement in the lands of the covenantee.¹¹ The salient point in the case is that the land no longer received benefit. Nothing in this case indicates that a covenant to pay might not be upheld under proper circumstances,¹² or that a property interest in land might not be created by an...