APPEAL from a judgment of the Superior Court of the County of Maricopa. Howard C. Speakman, Judge. Judgment reversed and cause remanded, with directions.
Mr. M. L. Ollerton, for Appellant.
Messrs. Moeur & Moeur, Mr. Dudley W. Windes and Mr. Roy L. Herndon, for Appellees.
[41 Ariz. 198] ROSS, J.
The object of this suit is to test the legality of the action of the district's officers in accepting tax anticipation warrants from the purchasers [41 Ariz. 199] thereof, or their assigns, in payment of their district taxes.
The plaintiff is the owner and holder of one of 2,200 $1,000 bonds of the district upon which the interest is delinquent for the two fiscal years of 1931 and 1932. He claims that the practice pursued by the officers of the district in accepting tax anticipation warrants, issued and sold for the purpose of operation and maintenance, for district taxes levied and assessed for specific purposes, disables the district to pay matured interest coupons, and violates the law under which his bond was emitted, and seeks to enjoin the issuance of such warrants and also their acceptance in the payment of district taxes. The plaintiff's bond was authorized by the district in 1924, and bears the date of December 1st, 1924. Its validity is not questioned. The lower court sustained a general demurrer to the complaint, and, plaintiff electing to stand thereon, judgment was entered against him. He has appealed.
The question is one of construction of the provisions of the irrigation district law. It is quite fully and well briefed by both sides.
The corporation defendant is an irrigation district organized under chapter 149, Laws of 1921, and amendments thereof, and carried forward into the Revised Code of 1928 as article 2 of chapter 81, sections 3324 et seq. The bonds, of which plaintiff's is one, were issued and sold for the purpose of installing the district's
irrigation plant, consisting of canals, ditches, water and water rights, pumping facilities, power, etc., for some forty thousand acres of land. The management and control of the district's affairs and business, including its finances, subject to the provisions of law, are conferred upon its board of directors, elected by the qualified land owners of the district.(Section 3341.) It is made the duty of the board of directors on or before July 1st of each year [41 Ariz. 200] to make up a budget for the next fiscal year, including therein maturing bonds and interest, maintenance, operating and current expenses, with an additional amount to meet deficiencies in said items incurred in any previous year, fully itemizing such amounts for each specified fund into which the money of the district is divided by the district's treasurer, and to certify a copy thereof to the county board of supervisors of the county in which the district lands are located. (Section 3356.) A tax must be assessed and levied annually upon the real property of the district to meet bonds and interest. (Section 3354.) The tax is upon an acreage and not an ad valorem basis and the rate per acre is determined by the board of supervisors by adding to the gross amount of the budget certified to it by the district's board of directors fifteen per cent. thereof and computing on such total the tax on each acre in the district. The assessment and levy are made at the same time as the levy for state and county taxes and upon the regular state and county tax-roll and collected at the same time. (Sections 3358, 3359 and 3360.) The county treasurer is ex-officio treasurer of each irrigation district in his county and is required to receive, collect and receipt for all district moneys, and when for district taxes on the same receipt given for taxes for county purposes. (Section 3363.)
Section 3368 contains directions to the district's treasurer as to how he shall keep his books, and requires him to show therein the sources and purpose of every dollar collected or received by him and to apportion it among the several funds set up in the budget as follows:
"Every district treasurer by computations based upon certified estimates as returned to the board of supervisors, shall divide the money received from taxation on the lands of the district or from other sources, into district funds corresponding with the [41 Ariz. 201] purposes therein specified or for which they were paid. Moneys received on account of interest on the bonded indebtedness of a district shall be kept in an interest fund or account; moneys received on account of principal, on account of bonded indebtedness of district shall be kept in a bond account or fund; moneys received on account of release and discharge of lands in the district from the lien of the bonded indebtedness of the district shall be kept in a call or repayment fund or account; moneys received on account of maintenance, operation and current expenses for the district shall be kept in a maintenance, operation and a current expense account or fund; moneys received on account of the levy for outstanding or deficiency warrants shall be kept in a deficiency fund or account; and of any levy made for payment on completion of the irrigation works of the district shall be ...