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Ramirez v. Electrical District Number Four

Supreme Court of Arizona

December 26, 1930

H. J. RAMIREZ, Appellant,
ELECTRICAL DISTRICT NUMBER FOUR, PINAL COUNTY, ARIZONA, E. E. ZOOK, EUGENE ANDERSON, A. B. HOUSER, CARL SOMMERFIELD, GIBB MACHAN, JUAN SALAZAR, and E. G. TROUTMAN, Constituting the Board of Directors of Electrical District Number Four, Pinal County, Arizona, and K. J. SEARGENT, Appellees

APPEAL from a judgment of the Superior Court of the County of Pinal. E. L. Green, Judge. Judgment affirmed.

Mr. Tom Fulbright, for Appellant.

Messrs. A. Van Wagenen, Sr. & Jr., for Appellees.


[37 Ariz. 361] ROSS, J.

This is an action by H. J. Ramirez to enjoin Electrical District No. 4 and its board of directors from consummating a sale of $250,000 in improvement bonds of the district to defendant K. G. Seargent. The case was heard upon the pleadings and a stipulation of facts. Judgment was entered for defendants and plaintiff appeals.

The Electrical District was organized November 5, 1929, under the provisions of article 3, chapter 81 (sections 3431-3466), Revised Code of 1928, or what is commonly referred to as the Electrical Irrigation District Act.

Page 615

A proposed bond issue of $334,000 was regularly voted by the qualified electors of such district on May 26, 1930, and the bonds about to be sold to Seargent are a part thereof. The bonds were advertised as provided by law, and Seargent's bid was the highest and best bid submitted.

The value of the taxable property within the district, according to the last assessment for state and county purposes previous to the twenty-sixth day of May, 1930, was $706,110.

It is contended by plaintiff that the $250,000 of the district's bonds exceeds the indebtedness permitted [37 Ariz. 362] under the Constitution and laws of the state. He first claims that the limitation of indebtedness that may be incurred by a county, city, town, school district or "other municipal corporation," under section 8 of article 9 of the Constitution, applies to defendant irrigation district. That section prohibits any of the enumerated corporate entities therein named from contracting an indebtedness to exceed four per centum of its taxable property, except at an election the property taxpayers, who are also qualified electors, give their consent previous to incurring the debt, in which event the indebtedness may be enlarged, by counties and school districts, not exceeding ten per centum of their taxable property, and by cities and towns not exceeding fifteen per centum additional. Does this section's prohibitions have application to an irrigation district organized under article 3, chapter 81, supra? If so, it must be because it is one of the "other municipal corporations." This general expression, following an enumeration of corporations classed as "municipal," has been variously construed, depending upon the nature of the question involved. For instance, in Bugbee v. Superior Court, 34 Ariz. 38, 267 P. 420, we held that an electrical district is a municipal corporation within the meaning of section 17, article 2, of the Constitution and entitled to exercise the right of eminent domain, following the Washington court's construction of a like constitutional provision. The considerations leading to such conclusion were that the privilege of eminent domain was not more necessary to a purely municipal corporation than to an irrigation district in securing rights of way for its canals, and that because thereof "municipal," as used in section 17, article 2, was construed to include irrigation districts.

The converse is true with reference to section 8, article 9, supra, for if "other municipal corporations" [37 Ariz. 363] includes irrigation districts, the latter are limited to a four per centum indebtedness of their taxable property with which to install their irrigation system, since "other municipal corporations" are not authorized, like counties, cities, towns and school districts are, to enlarge their indebtedness. Such a limitation of the indebtedness of irrigation districts would practically nullify the law authorizing their organization and operation. The estimated cost of installing an adequate irrigation system for Electrical District No. 4 is $334,000, or nearly fifty per centum of the value of its taxable property. It is common knowledge that the value of land requiring irrigation consists principally in the water supply. It is unreasonable to suppose or assume that the law would provide for the creation of an agency in the form of an irrigation district to reclaim the arid lands of the state and at the same time hamper such district with restrictions and limitations making it impossible to attain the objects of its creation.

The identical question, under a constitutional provision of the same import as ours, was early before the Supreme Court of the State of Washington in Board of Directors v. Peterson, 4 Wash. 147, 29 P. 995, 996. The court, in a remarkably well stated and reasoned opinion, came to the conclusion that an irrigation district did not fall within the classification of "other municipal corporation." While everything said in that opinion is in point, we quote only a portion thereof to indicate the general reasons for the conclusion reached:

"One of the essentials of a municipal corporation is that for the purposes for which it is organized it must affect all within its boundaries alike, and this is true, even although such corporation is constituted for a single purpose; for instance, a school district, though organized only for the purpose of providing means and furnishing facilities for the education of [37 Ariz. 364] its children, yet affects all the taxpayers of such district alike. The same may be said of a county. It has only limited powers, it is true, but those powers are to be exercised in the interest of all the inhabitants of the county alike. Such is not the case with corporations formed under the provisions of the act in question, for, while it is true that its powers and privilege are subject to the will of the majority of the electors therein, yet when it acts thereunder it does not equally affect all of its inhabitants. The act does not provide that its purposes shall be carried out by means of a tax on all the property within the district, but, on the contrary, expressly limits it to the real estate situated therein, and which is judged to be benefited by the improvement contemplated. It will thus be seen that, even if we are to hold that every corporation which the legislature sees fit to make use of for the purpose of aiding in the ...

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