Murray v. Board of County Commissioners

28 Colo. 427 | Colo. | 1901

Mr. Justice G-abbert

delivered the opinion of the court.

The contention of plaintiff in error is, that under the facts the Loutsenhizer ditch, by virtue of the provisions of the constitution and laws of the state, is exempt from taxation. The trial court held that it was not. Plaintiff in error claims that the ditch is owned and used by the Loutsenhizer Company and its co-owners exclusively for the purpose of irrigating lands owned by them.

From the pleadings and evidence it appears that the ditch company is a corporation organized and existing under the laws of this state, for the purpose of building and maintaining an irrigating ditch. Consumers under this ditch have acquired their rights by virtue of deeds from the company which provide that each water right purchased shall vest in the holder or owner (under stated restrictions) the right to the perpetual use of water ■flowing through the ditch of the company not exceeding one cubic foot of water per second; that the number of water rights which may be sold from the ditch shall be based upon the estimated capacity of such ditch system, and that when the practical carrying capacity of the ditch has been disposed of by the company, the system may be turned over, at its option, to the holders of water rights therein. By a supplemental agreement between the company and most of the holders of the water rights, it was agreed that when water rights equal to the amount of 160 cubic feet of water per second of time (or less, if the company should so elect), have been disposed of, it should, without further consideration, for the benefit of the purchasers of water rights, d'eed its canal, franchises and property to a new company in the manner provided in the original water deeds. The company has sold, approximately, water rights aggregating one-half of the estimated capacity of the ditch. It still retains the title to the ditch, and has made no offer to deed to the consumers, as provided in the water deeds or the supplemental agreement thereto. The company is still offering to sell water rights, and purposes enlarging its ditch so that its capacity may equal 160 cubic feet per second.

The constitution provides: “Ditches, canals and flumes, owned and used by individuals or corporations, for irrigating lands owned by such individuals or corporations,or the individual members thereof, shall not be separately taxed, so long as they shall be owned and used exclusively for such purpose.” Sec. 3, Art. 10.

In harmony with this provision, the legislature has provided “That all ditches used for the purpose of irrigation, and that only, where the water is not sold for the purpose of deriving a revenue therefrom, be and the same are hereby declared free from all taxation, whether for state, county or municipal purposes.” Sec. 2397, 1 Mills Ann. Stats.

In designating the property which shall be exempt from taxation, the statutes state: “* * * Ditches, canals, and flumes, owned and used by individuals or corporations for irrigating lands owned by such individuals or corporations, or the individual members thereof, shall not be separately taxed, so long as they shall be owned and used exclusively for such purpose * * * .” Sec. 3766 Mills Ann. Stats.

Exemptions from taxation are to be strictly construed, and cannot be enlarged' by construction, for unless the privilege Is limited to the very terms of the law under which it is claimed, its operation would be extended beyond what was intended. Cooley on Taxation, (2nd ed.) 205; 25 Enc. Law, (1st ed.) 157; Vicksburg, etc., R. R. Co. v. Dennis, 116 U. S., 665, 6 Sup. Ct. Rep., 625.

The proposition of counsel for plaintiff in error is, in effect, • that those owning water rights in the ditch are not charged for the use of water; that by virtue of the ownership of such water rights, they are owners of interests in the ditch, and that water is not furnished to any one except these consumers; hence, that it is used exclusively for irrigating lands owned by such consumers. The full material facts do not admit of this conclusion, True, the consumers pay nothing in the shape of an annual rental for the use of water, except such assessments as may be levied for the purpose of keeping the ditch in repair. Conceding that they own an interest in the ditch, they are not as yet the sole owners. The company is a co-owner with them; the title to the ditch is still vested in the corporation. It has reserved to itself the right to retain such title until the capacity of the ditch has been sold. It still has a large number of water rights which it is offering for sale. While it may be true that at some time in the future, the ditch will be owned exclusively by those using water therefrom for the purpose of irrigating lands which they own, or in which they are interested, that is not the condition at the present time. The evident purpose of the company in still retaining the title to the ditch is to derive a revenue from the further sale of water rights. That the purchasers of such rights may use the water in irrigating their lands only does not change the situation. The fact still remains that so long as the company is interested in the ditch with water rights remaining unsold, it is its purpose to make use of the ditch as a means through which to derive a profit from the sale of further water rights. The pro. vision of the constitution upon which the ditch company relies was adopted for the sole benefit of those canals which are exclusively used for irrigating lands owned by those who own the canal in whole or in part — Empire Canal Co. v. Rio Grande County, 21 Colo., 244.

The consumers appear to be making the use contemplated by the constitution, but the ditch company is not; hence,'the ditch is not used exclusively for the purpose of irrigating lands belonging to the owners of the ditch. In Empire Canal Co. Case, supra, the facts as deduced from the averments of the complaint are essentially different from those in the case at bar. It was there held that according to the statements in the complaint, the canal was used only for the purpose of irrigating lands belonging to the owners of such canal. The judgment of the district court is affirmed.

Affirmed.