Wheatland Industrial Co. v. Johnson

• Decision Date: 18 November 1947
• Docket Number: 2369
• Parties: WHEATLAND INDUSTRIAL COMPANY, a Corporation, and WYOMING DEVELOPMENT COMPANY, a Corporation, Plaintiffs and Respondents, v. EDITH S. JOHNSON, as County Treasurer of Albany County, Wyoming, and THE BOARD OF COUNTY COMMISSIONERS of Albany County, Wyoming
• Court: Wyoming Supreme Court

186 P.2d 377

64 Wyo. 120

WHEATLAND INDUSTRIAL COMPANY, a Corporation, and WYOMING DEVELOPMENT COMPANY, a Corporation, Plaintiffs and Respondents, v. EDITH S. JOHNSON, as County Treasurer of Albany County, Wyoming, and THE BOARD OF COUNTY COMMISSIONERS of Albany County, Wyoming

No. 2369

Supreme Court of Wyoming

November 18, 1947

APPEAL from District Court, Albany County; JAMES H. BURGESS, Judge.

Action by the Wheatland Industrial Company and another against Edith S. Johnson, as County Treasurer of Albany County and the Board of County Commissioners of Albany County involving the question whether irrigation works of the plaintiffs situated in Albany County by means of which water was supplied for land located mostly in Platte County was taxable in Albany County. From an adverse judgment defendants appeal.

Affirmed.

For the Defendants and Appellants, the cause was submitted upon the brief and also oral argument of Mr. Lenoir Bell of Laramie Wyoming.

POINTS OF COUNSEL FOR APPELLANTS

The law of Taxation of Water Rights provides that water rights and reservoir rights originating in this state shall be assessed and taxed as real estate. Water rights originating within this state and appurtenant to and beneficially used in connection with lands within this state shall be assessed and taxed with the lands. Water rights and reservoir rights originating within this state, and not appurtenant to and beneficially used in connection with lands within this state and taxed with said lands shall be separately listed and assessed for taxation at the true value thereof, at the place of origin of such water rights or reservoir rights. For the purpose of taxation they shall include the proportionate interest in any ditch, dam, reservoir, and the storage capacity therein necessary to the use and enjoyment of such water right, and such proportionate interest in such ditch dam, reservoir, and storage capacity therein shall not be otherwise taxed. Sections 32-1501, 32-1502, 32-1503 and 32-1504, W. C. S. 1945.

Section 32-1504 recognizes the proportionate interest that water rights and reservoir rights have in irrigation works for the purpose of taxation. It is not the policy of the law that property otherwise taxable should escape taxation. Water rights not appurtenant to taxed lands may, no doubt, in some circumstances be property subject to taxation. Verstraten vs. Board, 35 Wyo. 67; Wyoming Central Irr. Co. v Farlow, 19 Wyo. 68.

For the Plaintiffs and Respondents, the cause was submitted upon the brief of Mr. James A. Greenwood of Cheyenne, Wyoming, and Mr W. B. Jones of Wheatland, Wyoming, and oral argument by Mr. Greenwood.

POINTS OF COUNSEL FOR RESPONDENTS

The subject of taxation embraced in the Wyoming statutes is the method of taxing water rights and reservoir rights, and not the taxation of instrumentalities necessary to the use and enjoyment of water rights and reservoir rights. Sec. 31-1504 W. C. S. 1945 plainly states, and such instrumentalities are enumerated in this statute to include "any ditch, dam, reservoir and storage capacity therein."

Water rights appurtenant to lands are usually taxed with the lands, and not listed or valued separately. Water rights not appurtenant to taxed lands may no doubt in some circumstances be "property" subject to taxation. See: Wyoming Central Irr. Co. v. Farlow, 19 Wyo. 68; 114 P. 635, 116 P. 1021; Northside Canal Co. v. State Board (D. C.) 8 F. 2nd. 739; Verwolf v. Low Line Irr. Co., 70 Mont. 570, 227 P. 68; Utah Metal &Tunnel Co. v. Groesbeck, 62 Utah 251, 219 P. 248. An entry-man of lands under a Carey Act project must have a contract for a water right with the company that has undertaken to furnish the water for reclamation of the lands. Wyo. C. S. 1920, Sec. 788. This water right becomes appurtenant to the land when title passes from the United States to the State. C. S. Sec. 794. While the legal and equitable title to the lands is still in the United States, and the lands, therefore, not taxable, the water rights may, perhaps, be treated as separate from the land and as "property" of value subject to taxation. Ver Straten v. Com'rs. 35 Wyo. 67, 1926.

Water rights are real estate for the purposes of taxation, but should not be assessed separately from the lands to which they are appurtenant. 284 P. 300.

A water right by appropriation is not only real estate, but has all the dignity of and is, an estate fee simple or a free hold. Wiel--Water Rights in the Western States. Vol. I 3rd Ed. P. 301, Sec. 285.

BLUME, Justice. RINER, C. J., and KIMBALL, J., concur.

OPINION

BLUME, Justice.

This case involves the question as to whether or not certain irrigation works of the Wyoming Development Company and the Wheatland Industrial Company, plaintiffs herein, situated in Albany County, Wyoming, by means of which water is supplied for land located mostly in Platte County, Wyoming, are taxable in Albany County.

The essential facts herein appear to be in substance as follows: Many years ago and before the appropriations hereinafter mentioned were made, the Wyoming Development Company acquired the ownership and control of 58,813 acres of land in what is now known as Platte County in this state. The land was not productive without artificial water, so on May 15, 1883, the foregoing company undertook to appropriate 633 cubic feet of water per second of time by direct flow from Laramie River in Albany County. The diversion works to accomplish this purpose are probably located in Sec. 35, Twp. 23 North, Range 72 in Albany County, although the record is confusing on that point. See report of the State Engineer in 1894, pages 136 to 137. The exact location is not important herein. The water was conveyed thence by tunnel, creeks and canals onto land, most of which, as already stated, is in Platte County. The Board of Control adjudicated the rights of appropriators from Laramie River at its meeting in March 1903, and awarded the foregoing company 633 cubic feet of water per second of time by direct flow for the irrigation of the 58,813 acres above mentioned, with a priority numbered 17. The lands were specifically described. This adjudication so made to the aforesaid company was approved by decree of the District Court of Laramie County, Wyoming, on December 27, 1912.

The foregoing appropriation of water by direct flow was insufficient to properly irrigate the lands above mentioned for the whole irrigating season, and the irrigation of some additional lands was contemplated. So about January 1898 the Wyoming Development Company obtained from the State Engineer Permit No. 1724 to permit the storage of water from the Laramie River in Albany County as a supplementary supply for the irrigation of the lands heretofore mentioned, and of 4747 acres additional land, making a total of 63,560 acres. Pursuant to this permit the Wyoming Development Company impounded the water of Laramie River in Albany County in what is known as Wyoming Development Company Reservoir No. 2, and conveyed the water thence into Platte County, except water for some 200 acres of land in Albany County, which is taxed separately in that county. The reservoir appears to be located in Sec. 6, Twp. 21, Range 73 in Albany County. The Wyoming Development Company on December 22, 1902, transferred this reservoir to the Wheatland Industrial Company under the condition and limitation, however, whereby the water accumulated and stored in the reservoir should be available for irrigation of the lands of the Wyoming Development Company and others.

Albany County, in 1933 and subsequent years, assessed the tunnel, dam and other irrigation works connected with the appropriation by direct flow of 633 cubic feet of water, and also the irrigation works connected with reservoir No. 2 above mentioned, including the land submerged thereby. Assessments against these irrigation works had apparently also previously been made and the taxes levied had been paid. Protests, however, on the part of the foregoing companies were lodged with the county, protesting that the taxes levied were illegal. The companies refused to pay the taxes levied for 1933 and subsequent years, and this action was brought against the County Treasurer and the Board of County Commissioners of Albany County, to have the assessments and the levies made against these irrigation works declared invalid. The trial court found for the plaintiffs, the companies above mentioned, and on October 7, 1946, entered the following decree:

"WHEREFORE IT IS ORDERED, ADJUDGED AND DECREED that Albany County, Wyoming, acting through the County Treasurer of Albany County and The Board of The County Commissioners of Albany County, Wyoming, their successors in office, their agents and representatives, or otherwise, be, and they are, hereby perpetually enjoined from taxing, or attempting to tax, the following described properties: said water right Priority No. 17 of May 23, 1883, and said reservoir right with Permit Reservoir No. 1724, dated January 29, 1898, including the diversion dam, tunnel, tunnel canal and ditches used to divert water from the natural channel of the Laramie River, and the Wyoming Development Company Reservoir No. 2 dam and spillways, and the land constituting the area of said reservoir No. 2 to an elevation level of sixty-nine hundred sixty-four (6964) feet, being the high-water line of said area required to impound water to a depth of thirty (30) feet at the location of the control tower of said reservoir, together with the storage capacity therein, located in Albany County, Wyoming, and used to capture and impound water from the Laramie River under said reservoir right; and all easements and other instrumentalities necessary to the use and enjoyment of said water right and...