Tregea v. Modesto Irrigation Dist

On March 7, 1887, the legislature of the state of California passed an act (St. Cal. 1887, p. 29) whose scope and purpose were disclosed in the first section: 'Section 1. Whenever fifty, or a majority of freeholders owning lands susceptible of one mode of irrigation from a common source, and by the same system of works, desire to provide for the irrigation of the same, they may propose the organization of an irrigation district under the provisions of this act, and when so organized such districts shall have the powers conferred, or that may hereafter be conferred, by law upon such irrigation districts.'

This act was amended in 1889 and 1891 (St. Cal. 1889, p. 15; St. 1891, pp. 53, 142, 147, 274), the amendments looking to a mere perfection of the system. In a general way, it may be remarked that the system contemplated was substantially this: Upon petition of the requisite number of inhabitants of a proposed district, and publication of notice, the board of supervisors of the county in which the district, or the larger portion of it, was situated was required to examine into the matter at a regular meeting, and, after its determination, to give notice and call an election, at which all the electors of the proposed district were entitled to vote. If two-thirds of the votes cast were in favor thereof, an order was to be entered on the minutes of the board declaring the proposed district organized into a municipal corporation. Provision was made for directors, three or five in number, to be elected from separate division, or from the district at large, who constituted the governing board of the new corporation. They had charge of the construction of the irrigation works, of the levy of taxes, and the borrowing of money. They were authorized to submit to the voters the question of issuing bonds for a specified amount, such bonds to be the obligations of the district, and to be paid by taxation in the ordinary manner of discharging municipal obligations. Section 12 reads that 'the use of all water required for the irrigation of the lands of any district formed under the provisions of this act, together with the rights of way for canals and ditches, sites for reservoirs, and all other property required in fully carrying out the provisions of this act, is hereby declared to be a public use, subject to the regulation and control of the state, in the manner prescribed by law.' This was simply carrying into the statute the language of the state constitution (section 1, art. 14), which is as follows:

'Section 1. The use of all water now appropriated, or that may hereafter be appropriated, for sale, rental, or distribution, is hereby declared to be a public use, and subject to the control and regulation of the state, in the manner to be prescribed by law.'

The constitutionality of this law has been settled in the case of Irrigation Dist. v. Bradley (just decided) 17 Sup. Ct. 56.

On February 16, 1889, two acts were passed (St. Cal. 1889, pp. 18, 21), for changing the boundaries of irrigation districts, by taking in adjacent territory, or excluding some of the territory within the original boundaries. On March 16, 1889 (St. Cal. 1889, p. 212), a further act was passed, authorizing action in the courts at the instance of the board of directors for a judicial determination of the validity of the proceedings in respect to the issue of bonds, and this, if desired, before the bonds had been actually disposed of. The purpose of this act is thus stated by the supreme court of California, in the opinion filed in the present case:

'As the validity of the bonds when issued depends upon the regularity of the proceedings of the board, and upon the ratification of the proposition by a majority of the electors, it is matter of common knowledge that investors have been unwilling to take them at their par value while all the facts affecting their validity remain the subject of question and dispute.

'To meet this inconvenience, for the security of investors, and to enable the irrigation districts to dispose of their bonds on advantageous terms, the supplemental act under which this proceeding was instituted was passed.'

In the summer of 1887 the Modesto irrigation district was organized, under authority of the act of March 7, 1887. The conformity of the proceedings taken in its organization to the requirements of the act is not denied. The area of the district as organized was 108,000 acres. The board of directors, after estimating and determining that $800,000 were necessary for the proper construction of the irrigation works, ordered a special election to be held on December 14, 1887, to enable the voters of said district to pass upon the question of the issue of bonds to that amount. The election was had, and resulted in a large majority in favor of the issuing of the bonds. Out of 515 votes cast, 439 were in the affirmative. On January 3, 1888, the board of directors met at a regular meeting, and ordered the bonds of the district to the amount of $800,000 to be issued in the manner and form prescribed by law. On or about June 4, 1889, certain parties owning tracts of land within the boundaries of the irrigation district proceeded, under the terms of the exclusion act, to petition for an exclusion of their lands from its limits. These proceedings culminated in an order of July 20, 1889, excluding a tract of 28,000 acres, and leaving only 80,000 acres within the district. On July 31, 1889, no bonds having as yet been issued under the order of January 3, 1888, the board of directors entered a new order for the issue of bonds to the amount of $400,000. The resolution which was passed described the denomination and form of the bonds thus to be issued, and directed that notice be given that sealed proposals would be received up to September 3, 1889, for the purchase of such bonds. On August 1, 1889, the day after the entry of the last order, a petition was filed by the board of directors in the superior court of Stanislaus county, seeking a judicial determination, in accordance with the act of March 16, 1889, of the validity of the proposed issue of bonds. The petition as filed set forth only the order of July 31, 1889, for the issuance of bonds to the amount of $400,000, and asked that they be declared valid. In these proceedings, Tregea, a resident of the district, appeared, and filed an answer. The case, as between the board of directors and Tregea, came on for trial on October 21, 1889; and after the testimony had all been received, and during the argument, the plaintiffs were permitted to amend their petition so as to include therein the order of the directors of January 3, 1888, for the issue of $800,000 in bonds, and a prayer for the confirmation thereof. No one had notice of this amendment except the defendant, Tregea. He demanded that, in consequence of such amendment, a trial should be had de novo; but the court overruled his application, granted leave to file an amended answer, and permitted further evidence only in respect to the new matter set out in such amended pleadings. On November 29, 1889, written findings of fact and conclusions of law were filed, and judgment entered, which judgment was in the following language:

'Wherefore, by reason of the law and the finding aforesaid, it is ordered, adjudged, and decreed that the proceedings by and under the direction of the board of supervisors of said county, which are recited in the said findings, which were had for the organization of said irrigation district, the boundaries of which are described in said finding, including in said proceedings the election in said finding mentioned, which was held for the purpose of determining whether said proposed district should be organized as an irrigation district, be, and the same hereby are, approved and confirmed; and it is further ordered, adjudged, and decreed that the proceedings had by and under the direction of the said board of directors, which are recited in said petition and said findings, which were had for the purpose of the issue and sale of the bonds of said district to the amount of eight hundred thousand dollars, including in said proceedings the said election mentioned in said petition and findings, which was held for the purpose of determining whether the bonds of said district should be issued, also the proceedings by and under the direction of said board, which are recited in said findings, by which a certain tract of land in said findings described, which was included within the boundaries of said district as it was organized as aforesaid, was excluded from said district, and by which the boundaries of said district are defined and described as said boundaries were and remained upon and after the exclusion from said district of said tract of land, which said boundaries are in said findings described, and also the proceedings by and under the direction of said board by which it was ordered that bonds of said district to the amount bonds of said district to the amount of four of eight hundred thousand dollars of said bonds, be offered for sale in the manner provided by law, be, and each and all of said proceedings is and are hereby, approved and confirmed; and it is further ordered, adjudged, and decreed that the said Modesto irrigation district, ever since its organization as aforesaid, has been, and now is, a duly and legally organized irrigation district, and that said irrigation district possesses full power and authority to issue and sell from time to time the bonds of said irrigation district to the amount of eight hundred thousand dollars.'

The defendant appealed from this judgment and decree to the supreme court of the state, which, on March 19, 1891, modified the decree of the superior court by striking out so much thereof as confirmed the order of January 3, 1888, for the issue of $800,000 of bonds of the district, and, as so modified, affirmed it. The opinion of that court is found in 88 Cal. 334, 26 Pac. 237. To reverse this judgment of the supreme court of the state, the defendant sued out a writ of error from this court.

Mr. Justice Harlan, Mr. Justice Gray, and Mr. Justice Brown dissenting.

Thomas B. Bond, for plaintiff in error.

C. C. Wright, A. L. Rhodes, John F. Dillon, and Benjamin Harrison, for defendant in error.

Mr. Justice BREWER, after stating the facts in the foregoing language, delivered the opinion of the court.