85 P.2d 350 | Mont. | 1938
This action was brought to secure a permanent injunction against the members of the board of county commissioners and the treasurer of Teton county to restrain them in their official capacities from securing a tax deed. The county was *332 a party defendant. Judgment went against the defendants, and the county alone has appealed from the judgment.
In 1906 the Teton Cooperative Reservoir Company was organized as a corporation under the laws of Montana as a mutual company for the sole purpose of storing water and delivering it to its stockholders for irrigation, and not for profit. Its capital stock was divided into 1,000 shares. Each share of the capital stock of this company entitled the holder to the use, during the irrigation season of each year, to a "1/1000th part of the waters, water rights and irrigation facilities and systems" of the company, including the right to lease, pledge, sell and dispose of such use.
A reservoir site was set apart by the Department of the Interior, and some 500 acres of land in addition was acquired by this corporation, on which a dam was constructed. Water was impounded in the reservoir and distributed to the stockholders. Following the construction of the reservoir, the taxing authorities of Teton county assessed and levied the usual property taxes on the lands owned in fee, the reservoir, site, dams, ditches, canals and other like property belonging to this corporation. As a result of the delinquency of some or all of these taxes, these authorities threatened to take a tax deed covering this property of the corporation.
The stock of this corporation is owned as follows: 804 shares by the Bynum Irrigation District, a public corporation, which was created under our irrigation district law; 156 shares by the plaintiff Brady Irrigation Company, and some 40 shares by certain individuals. Each holder of a share of the Brady Irrigation Company represents and controls 1/500th part of all of the waters appropriated and diverted by the corporation and is entitled to control the use of such waters subject to the rules and regulations of the corporation. The interveners are the holders of bonds issued by the Bynum Irrigation District.
The owners of the stock in the Teton Cooperative Reservoir[1, 2] Company do not own the equitable title to the property of that corporation, but their relation to it is one of contract. *333
(Hyink v. Low Line Irr. Co.,
This court said in the case of Hale v. County of Jefferson,[3]
In the case of Verwolf v. Low Line Irr. Co.,
We concede the rules announced in the cases of Barnes v.Smith,
While the general rule is that courts will not ordinarily look[7] behind the veil of the corporate entity, it at times becomes material "to consider what is this thing which is described as a `corporation.'" (Palmolive Co. v. King, 1933 Canada L.R. 131.) The Supreme Court of the United States has not hesitated, when the facts warranted it, in looking behind the veil of the corporate entity in tax cases, as is illustrated by the cases of Southern P. Co. v. Lowe,
The judgment is affirmed.
MR. CHIEF JUSTICE GODDARD and ASSOCIATE JUSTICES STEWART, MORRIS and ANGSTMAN concur. *335