In Re Lovelock Irrigation District , 51 Nev. 215 ( 1929 )

The Nevada irrigation district act is unconstitutional and void and in violation of secs. 20 and 21 of art. 4 of the Nevada constitution. The act is special in that it relates to particular assessments and taxes only. Its provisions affect individuals and not a class, and imposes special burdens. Collection and assessment of taxes, and the regulation of election for county and township officers must be governed by general laws. State of Nevada v. Consolidated Virginia Mining Company, 16 Nev. 432; State of Nevada v. California Mining Company, 15 Nev. 234.

The Nevada irrigation district act is in conflict with the Fourteenth Amendment to the Constitution of the United States by authorizing the levy of taxes without limitation and in excess of benefits conferred. Each tract of land must be assessed in proportion to the actual enhancement of its value by reason of the improvements, and it is universally conceded that a statute which does not direct the use of this method is invalid. In addition, no statute can legally assess the property of one landowner to cover deficiency incurred by reason of the nonpayment of taxes on other property. Interstate Trust Company v. Montezuma Valley Irrigation District, 181 P. 123; Nelson v. Board of Commissioners of Davis County, 218 P. 952; Sullivan v. Blakesly, 246 P. 919; In Re Walker River Irrigation District (Nev.), 195 P. 327.

The Nevada irrigation district act is also unconstitutional and void and in conflict with the Fourteenth Amendment to the Constitution of the United States in that it purports to make the lien upon the land in the district prior to other mortgages which already exist upon such property. Such is a deprivation of the contract and property rights of the prior lien holders. 37 Cyc. 1145.

The judgment and decree of the lower court holding that the contract for the construction of the proposed Oreana dam and control works between the irrigation district and Jasper-Stacey Company is erroneous and against the law, for the reason that it constitutes an attempt on the part of the district to sell its bonds in a manner not authorized by law. The Nevada irrigation district act provides that the bonds must be sold at public sale, after notice duly given, and to the highest responsible bidder. Roberts v. Taft, 116 Fed. 228; Guckenberger v. Dexter, 17 Ohio Cir. Ct. 115; State v. Columbia, 12 South Carolina, 370.

The judgment and decree of the lower court declaring the contract for the sale of a portion of the authorized issue of bonds legal and valid is erroneous and against the law for the reason that the contract provides that the bonds may be made payable in the State of New York. The legislature is not competent to authorize any office to perform any part of the duties without the state. Obviously payment of the principal and interest on the bonds in the State of New York requires the performance of a duty by one of the district officials outside of the State of Nevada. City of Los Angeles v. Teed, 112 Cal. 319, 44 P. 580. The constitutionality of the irrigation district acts adopted by all of the arid and semiarid western states have been so repeatedly attacked that courts of last resort now frequently dispose of the question by saying: "We hold the act constitutional." In Re Auxiliary Eastern Canal Irrigation District (Ariz.), 207 P. 615-616; McLean v. Truckee-Carson Irrigation District (Nev.), 245 P. 287, column 2. The constitutional objections raised by the appellant here were passed upon and held constitutional by this court in the McLean v. Truckee-Carson Irrigation District case, supra, and also in the case of In Re Walker River Irrigation District, 44 Nev. 321,195 P. 327. The leading case on the constitutionality of irrigation district acts is the case of Fallbrook Irrigation District v. Bradley, 41 L.Ed. 369, decided by the United States Supreme Court in 1896. This decision has been consistently followed in principle, not only by the United States Supreme Court, but by the state courts as well. We cite a few to indicate the unanimous attitude taken by courts generally upon this question: Lundberg v. Green River Irrigation District (Utah),119 P. 1041; Board of Directors v. Collin (Neb), 64 N.W. 1086; People v. Cardiff Irrigation District (Cal.), 197 P. 388; Nampa and Meridian Irrigation District v. Brose (Idaho), 83 P. 499.

In all the courts in which the question has been raised, with the exception of Colorado, it has been held that a bond issue is a general obligation against all of the lands of the irrigation district, and that additional taxes may be levied to meet a deficit caused by tax delinquencies unless, as in the case of Utah, the legislature has fixed a limit of an additional fifteen per cent of the amount of the tax necessary to pay the bonds to meet delinquencies. State v. Columbia Irrigation District (Wash.), 208 P. 27; Cosman v. Chestnut Valley Irrigation District (Mont.), 40 A.L.R. 1344; Noble v. Yancy (Ore.), 42 A.L.R. 1178; Rialto Irrigation District v. Stowell (Cal.), 246 Fed. 294-305; Norris v. Montezuma Valley Irrigation District (Colo.), 248 Fed. 369-373; American Falls Reservoir District v. Thrall (Ida.), 228 P. 236-243, column 2.

The provision of sec. 41 of the state tax law (1923 Stats. 362) that a tax deed shall convey "absolute title" to the delinquent tax purchaser "free of all encumbrances" is a direct expression of the legislature that state and county taxes and irrigation district assessments constitute a prior lien against mortgages or other then existing liens. Carstens Earles v. City of Seattle (Wash.), 146 P. 381, 385, 386. That the legislature has the constitutional right to so provide is admitted in the rule quoted by appellant (37 Cyc. 1145), and is so well established that we will not burden the court with additional citations upon the question.

The construction contract with Jasper-Stacey Company, dated December 23, 1927, provides for the payment of the work in bonds, as provided by the act. The board of directors, by resolution on May 2, 1927, declared its intention to sell all of its authorized issue of bonds, amounting to $1,287,000. The bonds were advertised for sale, but no bids were received. The board also advertised for bids for construction of the dam, but no satisfactory bids were received. The bonds remaining unsold, the contract with Jasper-Stacey Company was entered into for the construction of the dam and control works, payable in bonds. The approval of the contract by the state irrigation district bond commission was given on July 6, 1928. Therefore the board of directors followed each step and provision in the manner required by the act, and particularly sec. 21 thereof, for the entering into of the contract for the construction of the proposed dam and control works, such construction to be paid for in bonds in lieu of cash.

Inasmuch as our state constitution does not inhibit the payment of irrigation district bonds outside of the state, and the legislature has expressly authorized the payment of bonds at any point designated in the bonds (sec. 16, Nevada irrigation district act), the right of the district to so contract cannot, we think, be seriously questioned. The identical point raised by appellant here was decided by the supreme court of New Mexico in the case of Davy v. Day et al., 247 P. 842, column 2, p. 843.

OPINION The Lovelock irrigation district was organized March 1, 1926, pursuant to the Nevada irrigation district act (Stats. 1919, p. 84, as amended). At a special election held on December 18, 1926, bonds in the sum of $1,287,000 were authorized by a vote of 59 in favor to 1 against. On July 12, 1928, the irrigation district filed in the district court its petition, praying for the confirmation of its proceedings authorizing the issuance of bonds in the sum mentioned, for confirmation of its contract for a sale of a portion of its bonds, for confirmation of its contract for a construction of a dam and control works, for a confirmation of its acts and proceedings in denying certain petitions for exclusion of land from said district, for confirmation of the benefits as apportioned by said irrigation district, and for confirmation of all of its acts and proceedings had and taken in connection with the foregoing matters.

1. It is first contended that the irrigation act is special in its nature and violates sections 20 and 21 of article 4 of our state constitution. This question was decided adversely to the contention here made, in In Re Walker River Irrigation District, 44 Nev. 321, 195 P. 327, and on authority of that decision we hold that the contention is without merit. In Re Sutter-Butte By-Pass Assessment No. 6, 191 Cal. 650,218 P. 27. Upon authority of the Walker River Case we hold that the contention that the act is in violation of the Fourteenth Amendment to the Constitution of the United States is groundless. In the case cited, and in McLean v. Truckee-Carson Irrigation District, 49 Nev. 278, 245 P. 285, various authorities were cited, sustaining the constitutionality of similar statutes, in addition to which we call attention to Lundberg v. Green River Irr. Dist. (Utah), 119 P. 1039; In Re Auxiliary Eastern Canal Irr. Dist., 24 Ariz. 163, 207 P. 614; Board of Directors v. Collin, 46 Neb. 411, 64 N.W. 1086; People v. Cardiff Irr. Dist.,51 Cal.App. 307, 197 P. 388.

Counsel for appellant urges the unconstitutionality of the act in question, upon grounds not heretofore considered. He says: "The Nevada irrigation district act is in conflict with the Fourteenth Amendment to the Constitution of the United States, by authorizing the levy of taxes without limitation and in excess of benefits conferred. Each tract of land must be assessed in proportion to the actual enhancement of its value by reason of the improvements, and it is universally conceded that a statute which does not direct the use of this method is invalid. In addition, no statute can legally assess the property of one landowner to cover deficiency incurred by reason of the nonpayment of taxes on other property" — citing Interstate Trust Co. v. Montezuma Valley Irrigation District, 66 Colo. 219,181 P. 123; Nelson v. Board of Commissioners of Davis County,62 Utah, 218, 218 P. 952; Sullivan v. Blakesly, 35 Wyo. 73, 246 P. 919; In Re Walker River Irrigation District, 44 Nev. 321, 195 P. 327. In view of the fact that this is all that counsel says in this connection, we would be justified in assuming that he has but little faith in the position taken; however, we must dispose of his contentions. 2. As we understand from the language quoted, counsel raised two points, namely: (1) That the statute authorizes the levying of taxes without limitation and in excess of benefits conferred; and (2) that the statute illegally authorizes the assessing of the property of one landowner to cover a deficiency which may be incurred by reason of the nonpayment of taxes due on other property. The provision of the act (Stats. 1919, p. 84, c. 64) authorizing the levying of assessments provides as follows:

"Sec. 17. Whenever the electors shall have authorized an issue of bonds, as hereinbefore provided, the board of directors shall examine each tract or legal subdivision of land in the district, and shall determine the benefits which will accrue to each of such tracts or subdivisions from the construction or purchase of the works proposed for the district; and the costs of such works shall be apportioned or distributed over such tracts or subdivisions of land in proportion to such benefits. * * * Whenever thereafter an assessment is made, either in lieu of bonds, or an annual assessment for raising the interest on bonds, or any portion of the principal, or the expenses of maintaining the property of the district, or any special assessment voted by the electors, it shall be spread upon the lands in the same proportion as the assessments of benefits, and the whole amount of the assessments of benefits shall equal the amount of bonds or other obligations authorized at the election last above mentioned. * * *"

Since it is not pointed out by counsel wherein the irrigation law authorizes the levying of taxes without limitation and in excess of benefits conferred, it can hardly be expected that we will find it necessary to devote much time to answering this contention. We may observe, however, that section 17 of the act provides that assessments and levies shall be distributed over the land within a district in proportion to benefits to be received. This fixes the basis of taxation and limits it to benefits. Every court in the land which has been called upon to decide the question upholds such a legislative act. The lower court found that the assessments levied would not exceed the benefits which would be received. There is no merit in the point made.

3. We come now to the other contention, embraced in the quotation from appellants' brief — that the statute illegally authorizes the assessing of the property of one landowner to cover a deficiency which may be incurred by reason of the nonpayment of assessments due on other property. The section of the law applicable to this situation is section 27, as amended by Stats. 1925, p. 207, c. 127, sec. 4, which reads:

"* * * Said board may levy a tax upon the lands in the district either upon the same pro rata basis as benefits may have been apportioned, or otherwise, as the case may be, in order to secure such funds as may be deemed necessary to replace any deficit that may occur in a fund created for the repayment of a district obligation by reason of tax delinquencies. * * *"

4. Every other court in the Union which has had this question before it under a similar statute has taken a contrary view to that taken by the Colorado court, and even the circuit court of appeals in Norris v. Montezuma Valley Irr. Dist., 248 F. 369, 160 C.C.A. 379, in construing the Colorado statute, took a view contrary to that taken by the Colorado court. Of course, the supreme court of Colorado, in passing upon the statutes of its state, on other than federal questions, is the final authority.

5, 6. The Lovelock irrigation district, pursuant to the irrigation district act, was created for a public purpose, and it was an exercise of legislative discretion which authorized its creation, and this act must be held constitutional and valid, unless it is in conflict with some constitutional provision, state or federal. The levying of taxes for public improvements — state, municipal, and otherwise — has been encouraged and held legal for so long a time that the public mind is now thoroughly wedded to the idea. Even as far back as the time of Henry VIII, Parliament adopted a broad, comprehensive act authorizing the drainage of swamp land and kindred progressive and constructive public work (St. 23 Henry VIII, c. 5, par. 1 [1531]), and some of the states have authorized such public works at their own expense and under their direction, and all such acts, unless clearly in conflict with constitutional inhibition, have been upheld. What the state can do directly in such matters it may delegate to a local organization. If the act is constitutional, then all that is done in compliance with its terms is legal, and only that which is done in violation of its terms is void. As we have pointed out, our attention is not directed to any section of either the state or federal Constitution of which it is violative.

We do not think it incumbent upon us or proper that we should go into a critical analysis of the Colorado case to show that it is wrong in principle. There is ample authority to rest our conclusion upon to the effect that the proceedings had in this matter are legal. We think the opinion in State ex rel. Clancy et al. v. Columbia Irr. Dist., 121 Wn. 79, 208 P. 27, conclusively answers the contention made on this appeal. But that court does not stand alone in its view. The supreme court of Montana, in Cosman v. Chestnut Valley Irr. Dist., 74 Mont. 111, 238 P. 879, 40 A.L.R. 1344, took the same position. See, also, Noble v. Yancey, 116 Or. 356, 241 P. 335, 42 A.L.R. 1178; Rialto Irr. Dist. v. Stowell (C.C.A.), 246 F. 294.

7. The next point urged is that the act is unconstitutional, in that it gives priority to assessments which may be levied by the district to pay its obligations over prior mortgages and other contractual liens. There is no merit in this contention. The well-recognized rule is stated in 27 Ency. Law (2d ed.), p. 741: "It is within the constitutional power of the legislature to make the tax a lien superior to any of the other security, incumbrance, or lien arising either before or after the assessment of the tax." A long list of cases is cited in support of the text. See, also, 37 Cyc. 1143.

It is next contended that the judgment and decree of the lower court, holding that the contract between the irrigation district and Jasper-Stacey Company is illegal, for the reason that it constitutes an attempt to sell the bonds of the district in a manner not authorized by law. We think there is no foundation for this contention. Section 21 of the irrigation district act provides the manner in which the sale may be made. The findings of the court show that the bonds were sold in compliance with the terms of the act, and the evidence supports the findings.

8. It is next contended that the judgment and decree appealed from is erroneous, for the reason that the contract provides that the bonds may be made payable in New York. There is nothing to this contention. Section 16 of the irrigation district act provides that the principal and interest on the bonds shall be payable "at the place designated therein." This is not in conflict with any constitutional provision, and the contract, being in accord with the terms of the statute, is valid.

For the reasons given, it is ordered that the judgment and decree be affirmed.