199 F. 481 | D. Idaho | 1912
The plaintiff, a corporation organized under the laws of the state of Washington, brings this action to recover from the defendant county $5,056; the same being the aggregate of taxes paid by it under protest upon its irrigating canals in that county for the years 1909 and 1910. There are two causes of action. In the first, which relates exclusively to the taxes for 1909, it is shown that in that year plaintiff was the owner of 50 second feet of water in Eish Lake, together with a ditch by which the same is conveyed to East Greenacres, and there used for the irrigation of lands, all situate within the boundaries of Kootenai county, Idaho; also, of another water right to the amount of 250 second feet in the Spokane river, together with the dam and canal by which the water is diverted and conveyed from the river at Post Falls, Idaho, to the lands irrigated therefrom, such canal extending in a northwesterly direction about 18% miles, the first 5% miles thereof being in Idaho and the other 13 miles in the state of Washington. It is also averred that this Spokane river water is used partly for the irrigation of lands in Idaho and partly for the irrigation of AVashington lands. It is further made to appear that, prior to 1909, plaintiff, being the owner of lands susceptible to irrigation from both of its canals, sold tracts thereof to divers persons, together with perpetual rights to receive water from these canals, and that all of its water rights in Eish Lake were thus sold; that the waters of Spokane river, not so disposed of, were used by the plaintiff in the irrigation of its own lands; and that none of the water distributed through either system is rented or held for rental, or used except upon lands owned by the plaintiff or owned by the several persons to whom such lands were sold with perpetual appurtenant water rights. At all times mentioned
In its salient features the second cause of action, involving the taxes for 1910, is similar to the first, with the important exception that it relates only to the Spokane river system, the taxes upon which for that year, including penalties, amounted to $2,217.26.
The contention of the plaintiff is that all the property so assessed was exempt from taxation under subdivision 12 of section 1644 of the Revised Codes of Idaho, which is as follows:
“All irrigation canals and ditches and water rights appurtenant thereto, when the owner or owners of said irrigating canals and ditches use the water thereof exclusively upon land or lands owned by him, her or them: Provided, in case any water be sold or rented from any such canal or ditch, then, in that event, such canal or ditch shall be taxed to the extent of such sale or rental.”
The defendant demurs to the amended complaint, and the objections raised thereto will now be considered.
But what can he said in favor of such a policy where the water is used upon lauds beyond the reach of the Idaho revenue laws? By permitting its public waters to be carried beyond its borders
“The general language of statutes will be limited to such persons and subjects as it is reasonable to presume tbe Legislature intended it should ai>ply. Throughout the entire history of English and American law the courts have been ruling that the general words of statutes were to be restrained in import and application whenever the taking of them in a literal sense would lead to absurd and hurtful consequences.” State v. Smiley, 65 Kan. 240, 69 Pac. 199, 67 L. R. A. 903.
The case of State v. Holcomb, 85 Kan. 178, 116 Pac. 251, is very closely in point. By section 1 of article 2 of the Kansas Constitution, all property used exclusively for municipal purposes is exempt from taxation: The city of Kansas City, in Missouri, owned a water plant situate in the state of Kansas, which it claimed was exempt from taxation under this constitutional provision and the statutes enacted in pursuance thereof, for the reason that the plant was used exclusively for municipal purposes. The Supreme Court of Kansas, in rejecting the claim, said:
“It is true that the constitutional provision relating to taxation does provide that all property used exclusively for municipal purposes shall be exempt ; but the fact that the provision does not expressly say that the Constitution is made for Kansas is not a good basis for an inference that the framers were attempting to regulate and protect the municipalities of other states. The provisions of both the Constitution and the statutes in relation to exemptions from taxation must be understood as referring to Kansas and to the counties, municipalities, and families of Kansas, over which it has power of visitation and control.”
In the case of such corporations, strictly speaking, the legal title to the canal and appurtenant water right is in the corporation, whereas the water is used upon land belonging severally to the individual stockholders, and therefore there is not absolute identity of ownership of the irrigating system and the irrigated lands. No reason, however, is apparent why such a canal should, for the purposes of taxation, be differentiated from a canal directly held by the water users as joint owners thereof. The corporation but holds the naked legal title in trust for its stockholders, and the owners of the land as stockholders are therefore the beneficial owners of the canal, possessing all the powers of control and disposition incident to full ownership. It is therefore thought that, under a fair construction of the statute, such canals must be held to be exempt from taxation. But obviously there are material distinctions between such a system of ownership and one like that described in the amended complaint. The plaintiff here not only retains the legal title to the canals, but it reserves to
But if it be assumed that no other use can be made of the water, it does affirmatively appear that under the terms of its contracts or deeds • (Exhibit A) the plaintiff is entitled to receive a fee from each water user annually at the rate of $1.50 per acre, or $300 per second foot. To be sure, it is recited in the instrument that this fee is to cover cost of maintenance and operation; but, whatever may be the actual cost of maintaining and operating the system, this charge is absolute, and may become a source of substantial profit. The plaintiff alleges its ownership of a water right of 250 second feet in the Spokane river; but, if we assume the delivery of only 200 second feet, its annual income from this source alone would aggregate $60,-000, and it is doubted whether the presumption should be indulged that it requires $60,000 annually to maintain and operate an irrigating canal 18 miles in length, and to distribute therefrom to farmers along its course 200 second feet of water during the period of four months. May it not, with reason, be assumed that in establishing the annual maintenance and operating charge, the liability of the plaintiff to pay taxes was taken into consideration? But, however that may be, and whether the annual dues paid by water users are more than sufficient to pay the maintenance and operating charges or not, it is not made to appear that the result of a literal interpretation of the statute will necessarily be so absurd or unreasonable as to justify a strained construction, and, if we give to the language its natural and ordinary import, the case made by the complaint does not fall within the terms of the statutory provision. The landowners are not the owners of the canal; their right to use water is but an easement or servitude.
“The intention of the Legislature to grant the immunity must be clear beyond a reasonable doubt. It cannot be inferred from uncertain phrases or ambiguous terms. * * * If a doubt arise as to the intent of the Legislature, it must be solved in favor of the state.”
While there are to be found, in Empire Land & Canal Co. v. Board of Commissioners, 21 Colo. 244, 40 Pac. 449, and in Idaho Fruit Land Co. v. Great Western Beet Sugar Co., 18 Idaho, 1, 107 Pac. 989, certain expressions tending to support the plaintiff’s contention, the cases are wholly indecisive of the point under consideration. My conclusion is that, to the extent that the plaintiff has sold water rights, its canal systems are subject to assessment and taxation.
Each cause of action should also contain a clear averment of the amount of water used upon Idaho lands, and the amount, if any, used upon Washington lands, and also the amount, if any, used upon lands belonging to the plaintiff in Idaho, so that, in accordance with the views hereinbefore expressed, it may be determined upon the face of the pleading itself what part of the total amount paid as taxes was illegally exacted. There should also be an averment to the effect that in valuing the property the revenue officers made no allowance or exemption on account of water used by plaintiff upon its own lands in Idaho.
The three several objections, that the court is without jurisdiction, and that there is a defect of parties, and that there is a misjoinder of causes of action, are overruled. The plaintiff is given 20 days in which to serve and file a second amended complaint.