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ANNOTATION.

Irrigation district as municipality within the tax laws.

While not all public corporations by considerations affecting the abare municipal corporations, yet the stract status of an irrigation district terms seem sometimes to have been as by the purpose and context of the used as synonyms. Thus, in Fallbrook constitutional Amendment under conIrrig. Dist. v. Bradley (1896) 164 U. S. sideration, 159, 41 L. ed. 389, 17 Sup. Ct. Rep. 56, Without attempting to exhaust the and Tulare Irrig. Dist. V. Shepard authorities, a few cases have been add(1902) 185 U. S. 13, 46 L. ed. 779, 22 ed for the sake of their analogy, which Sup. Ct. Rep. 531, it was stated that have considered the question whether the California supreme court had held an irrigation district is a municipal that irrigation districts were public corporation for other purposes, and municipal corporations—citing Tur within the meaning of laws on subjects lock Irrig. Dist. v. Williams (1888) 76 other than taxation. Cal. 360, 18 Pac. 379; Central Irrig. In Indian Cove Irrig. Dist. v. Dist. v. De Lappe (1889) 79 Cal. 351, Prideaux (1913) 25 Idaho, 112, 136 Pac. 21 Pac. 825, and Re Madera Irrig. 618, Ann. Cas. 1916A, 1218, the court Dist. Bonds (1891) 92 Cal. 296, 14 said that it is settled law that irrigaL.R.A. 755, 27 Am. St. Rep. 106, 28 Pac. tion districts are public corporations, 272, 675. This latter case is cited and although not strictly municipal in the referred to in the reported case. (TUR sense of exercising govermental funcLOCK IRRIG. Dist. v. WHITE), ante, 72. tions other than those connected with An examination of these cases, how raising revenue to defray the expense ever, will disclose that all the court of constructing and operating irriheld was that they were public corpo gation systems and the conduct of the rations. It is probable that all that was business of the district. meant in those cases was, as was held Also, in People ex rel. Jones v. Carin the Fallbrook Irrig. Dist. Case, that diff Irrig. Dist. (1921) Cal. App. irrigation districts are public corpo 197 Pac. 384 (petition for enlargerations organized for municipal pur ment of boundaries), the court said: poses.

"It is no longer open to doubt that the An irrigation district has been held legal status of an irrigation district to be a municipal corporation within is that of a municipal corporation. the meaning of a constitutional pro Although its duties and powers are vision that “the legislature shall not of narrower scope in the subjects of impose taxes for the purposes of

their action than in the case of a city, county, city, town, or other municipal

or other general municipal organicorporations, but may by law invest zation, nevertheless the affairs conin the corporate authorities thereof, cerning which such district does act respectively, the power to assess and are those 'of a public corporation, to collect taxes for all purposes of such

be invested with certain political corporation." Gem Irrig. Dist. v. Van duties which it is to exercise in behalf Deusen (1918) 31 Idaho, 779, 176 Pac. of the state.' 887.

So, it has been held that irrigation With the exception of the case just

districts are quasi municipal corpocited and the reported case (TURLOCK

rations within the general election IRRIG. DIST. V. WHITE), there seem to laws of the state. Pioneer Irrig. Dist. be no cases involving the question v. Walker (1911) 20 Idaho, 605, 119 whether an irrigation district is a

Pac. 304. municipal corporation within tax laws. In Colburn v. Wilson (1913) 23

It will be observed that the decision Idaho, 337, 130 Pac. 381, an action to in the reported case (TURLOCK IRRIG. enjoin directors of an irrigation Dist. v. WHITE) is controlled as much district from attempting to carry out

17 A.L.R.-6.

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a certain alleged contract on the of any county, or mayor and common ground that the same was ultra vires, council of an incorporated city or it was held that an irrigation district town, or tribunal transacting the busiis a quasi municipal corporation, or ness of any municipal corporation" ganized for the specific purpose of shall fail to take a bond, such county, providing ways and means of irrigat- city, or town, or other municipal corpoing lands within the district and main ration, shall be liable to the persons taining an irrigation system for that furnishing labor, supplies, or material. purpose.

Brown Bros. v. Columbia Irrig. Dist. In Little Willow Irrig. Dist. v. (1914) 82 Wash. 274, 144 Pac. 74. Haynes (1913) 24 Idaho, 317, 133 Pac. And that an irrigation district is a 905 (confirmation of a bond issue), it municipal corporation within the conwas held that under the state law an stitutional provision which prohibits irrigation district, when once created the delegation of statutory powers in accordance with the statute, be conferred upon it is held in Merchants

a quasi municipal or public Nat. Bank v. Escondido Irrig. Dist. corporation.

(1904) 144 Cal. 329, 77 Pac. 937 So, an irrigation district has been (action to foreclose mortgage)-cited held to be a municipal corporation, and in the reported case (TURLOCK IRRIG. its property public property, and so Dist. v. WHITE, ante, 72). not subject to a mechanic's lien under On the contrary, in Middle Kittitas the statute. Storey & Fawcett v.

Irrig. Dist. v. Peterson (1892) 4 Wash. Nampa & M. Irrig. Dist. (1920) 32 147, 29 Pac. 995, it was held that an Idaho, 713, 187 Pac. 946 (action to irrigation district formed under the foreclose a mechanic's lien against provisions of an act entitled, “An Act the property of the irrigation district).

Providing for the Organization and Irrigation districts, under the act

Government of Irrigation Districts governing their organization, are and the Sale of Bonds Arising Therepublic corporations, and

by the

from,” was not a municipal corpoamendatory Act of 1915 are desig

ration within the meaning of art. 6, nated as municipal subdivisions of the

8, of the state Constitution. state, having the power of self-govern

And in Alfalfa Irrig. Dist. v. Collins ment and control in all matters per

(1895) 46 Neb. 411, 64 N. W. 1086, taining to the general purpose for which they are organized. Rathfon v.

which upheld the constitutionality of Fayette Oregon Slope Irrig. Dist.

an irrigation law which conferred (1915) 76 Or. 606, 149 Pac. 1044.

upon the district authority to levy An irrigation district is a municipal taxes, the court held that irrigation ity within the meaning of Rem. & Bal. districts are public, and not, strictly Code, & 1160, which provides that "if speaking, municipal, corporations. any board of county commissioners

J. H. B.

JOHN M. ANDERSON, Piff. in Err.,

V.
PETER W. DURR, Auditor, et al.

Ohio Supreme Court - July 8, 1919.

(100 Ohio St. 251, 126 N. E. 57.) Tax taxation at domicil of owner.

1. Membership in a stock exchange is taxable at the domicil of its owner, although it is in a state other than that where the exchange is located.

[See note on this question beginning on page 89.]

(100 Ohio St. 251, 126 N. E. 57.) - property - membership in stock ex - statutory authority for taxation. change.

3. A statutory provision for taxa

tion of all real and personal property 2. Membership in a stock exchange

in the state includes a membership in is property subject to taxation.

a stock exchange. (See 19 R. C. L. 1299.]

[See 10 R. C. L. 1300.]

ERROR to the Court of Appeals for Hamilton County to review a judg. ment reversing a judgment of the Court of Common Pleas in favor of plaintiff in a suit brought to enjoin the listing for taxation and the collection of taxes on plaintiff's membership in the New York Stock Exchange for certain years. Affirmed. Statement by the Court:

fer of membership may be made upAnderson brought suit against on the submission of the name of the defendants to enjoin the listing the candidate to the committee on for taxation and the collection of admissions, with the approval of the taxes on the plaintiff's membership transfer by two thirds of the entire in the New York Stock Exchange committee, subject to certain condifor certain years.

tions; that there is no general or The petition alleges that the other right to transfer or pledge plaintiff had been a member of that membership in the Exchange, and Exchange for five years last past; no right or privilege in connection that it is an unincorporated associa- therewith which may be exercised tion of persons whose object is to in the state of Ohio; that any memfurnish exchange rooms and other ber may be suspended from the facilities in New York city for the membership and made ineligible for convenient transaction of their busi- readmission, or may be expelled ness by its members as brokers; to from membership, by the vote of maintain high standards of com two thirds of the existing members mercial honor and integrity among of the governing committee, for cerits members; to promote and incul tain stated causes; that dealing cate just and equitable principles of upon any other Exchange in the city trade and business; that in sub of New York, or publicly, outside of stance the privilege conferred by the Exchange, either directly or inmembership is to trade at the Ex- directly, in securities listed or quotchange in New York city, and not ed on the Exchange, is forbidden; elsewhere, in certain securities list that no member has any certificate ed on the Exchange; that the gov or share of mernbership or interest ernment of the Exchange is vested in the assets, and the plaintiff has in a governing committee, composed not, in Ohio or elsewhere, any such of the president and the treasurer certificate or share which can be of the Exchange and of forty mem sold, transferred, assigned, or enbers; that no person can be admit cumbered or used; that the only evited to membership unless elected by dence of plaintiff's membership is a the entire vote of two thirds of the letter to him from the secretary fifteen members comprising the notifying him of his election; that committee on admission; that a per the Exchange owns no assets in son elected to membership must pay Ohio, and any property of any kind an initiation fee and must sign the belonging to it is wholly and perconstitution and pledge himself to manently in New York; that the abide by the same; that the dues of plaintiff is a copartner with Walter members are $50 semiannually, ex B. Powell, under the name of Andclusive of fines and assessments for erson & Powell, a firm formed for the gratuity fund, which is a plan the purpose of dealing in investand fund providing for the families ment securities, with an office in of deceased members; that a trans Cincinnati, and plaintiff and his co

partner, as aforesaid, have paid, the city of Cincinnati, and that the and will pay when due, all taxes defendant Durr intends to list said properly assessed against them; membership for taxation in Hamilthat the defendants will, unless en ton county, Ohio; and defendants joined, list the plaintiff's franchise deny every other allegation in the in said Exchange for taxation; that petition. the New York Stock Exchange has Further answering, the defendbeen in existence for almost 100 ants say that for many years the years, and membership therein has plaintiff has been engaged in the been declared not to be property business of broker and dealer in within the general property tax

tax stocks, etc., and has a large business laws of New York, and no attempt and clientele for the purchase and has been made, so far as plaintiff sale of stocks, bonds, and securities knows, to tax it in Ohio or else listed and dealt in on the New York where; and that the levying of taxes Stock Exchange, and that plaintiff on the plaintiff's privilege, if re has held himself out and represented garded as property, is an attempt to himself to said clientele and the publevy and collect taxes on property lic at large as furnishing proper, wholly outside of the state of Ohio, convenient, and ample facilities for and amounts to taking property the transaction of all kinds of inwithout due process of law in viola vestment business and the purchase tion of the Constitution of the state of all kinds of stocks and bonds; of Ohio and of the United States. that prior to April, 1911, plaintiff

The answer of the defendants ad- purchased a seat on the New York mits the membership of the plaintiff Stock Exchange, believing and inin the New York Stock Exchange tending that he would obtain addiand his residence in Hamilton coun tional facilities for the transaction ty, Ohio; that the Exchange is an of his business, increase his ability unincorporated association of per to serve his clients, and by virtue of sons whose object is as stated in the the ownership of such seat on the petition; and that the membership New York Stock Exchange would therein is secured as stated in the increase and extend such business; petition, and dues and assessments that the ownership of such seat on for the gratuity fund paid as there- the New York Stock Exchange has in stated.

in fact materially increased said Defendants admit that a transfer facilities and ability to serve the of membership may be made by sub- plaintiff's clients, and has served to mission of the name of the candidate increase his business, establish his to the committee on admissions, up position in the business world, and on approval, as the averments of the increase the profits arising from petition set forth; that the secretary said business; that defendants are keeps the ledger referred to, with informed, and so allege the fact to the names of all the members of the be, that plaintiff paid for said seat, Exchange; and that the only evi in addition to an initiation fee of dence of the plaintiff's membership $2,000 and annual dues, the sum of is to be found on the books of the $60,000, which was the recognized Exchange and in the letter from the market value for such seats, and secretary, as stated.

that such sum was so paid that Defendants further admit that plaintiff might secure the business the plaintiff is a copartner with advantages arising from such memWalter B. Powell, under the name of bership on the Exchange; that, in Anderson & Powell, and that the addition to the ordinary business partnership was formed for the pur- advantage connected with memberpose of, and said partners are now ship, there is an insurance feature engaged in, dealing in investment known as the “gratuity fund plan," securities listed on the New York whereby approximately $10,000 is Stock Exchange, with an office in contributed to the family of any

(100 Ohio St. 251, 126 N. E. 57.) member who dies in good standing; eral Code, and an investment within that there is a further security for the provisions of $8 5328 and 5372, the fulfilment of contracts made General Code. with Stock Exchange members, in For reply plaintiff denies that that the value of the membership of memberships are transferable by each member is first liable to the will, and says that such membersettlement of contracts made with ships are a personal privilege or liother members, thus insuring to the cense to buy and sell in meetings of extent of the value of such member the Exchange in New York city, ship the financial responsibilities of and not elsewhere; that such memthe members in their mutual deal. bership is not subject to execution, ings; that, subject to the acceptabil- and cannot be pledged or used as ity of the transferee by the members collateral, and cannot be willed, and of the membership committee, all denies that it is personal property memberships are transferable by within the definition of the secthe voluntary act of transfer, or by tions of the General Code referred will, and that in case of transfer by to. a member voluntarily, by death, or On the trial of the cause the conby the governing committee, the net stitution of the New York Stock proceeds are turned over and go to Exchange was offered in evidence the member of his estate; that such and a stipulation as to facts. The membership has a well-recognized court of common pleas entered a market value which is ascertainable decree and judgment for the plainfrom current quotations; and that, tiff. On appeal the court of appeals subject to the condition that each found in favor of the defendants, applicant must be at least twenty and dismissed the petition. This one years of age, a citizen of the proceeding is brought to reverse the United States, and pay an initiation judgment of the court of appeals. fee of $2,000, and be acceptable to two thirds of the entire member

Mr. Murray Seasongood, for plainship committee, such seats are

tiff in error: transferable for a consideration, at

Taxing statutes are to be construed

strictly against the taxing authority. the will of the member.

Gray v. Toledo, 80 Ohio St. 445, 89 Defendants further aver that in

N. E. 12; Cincinnati v. Connor, 55 the transaction of the business of Ohio St. 82, 44 N. E. 582; Ohio v. brokers in stocks and bonds a dif Harris, 144 C. C. A. 174, 229 Fed. 892; ferentiation is made between mem Gould v. Gould, 245 U. S. 151, 62 L. ed. bers and nonmembers, in that busi 211, 38 Sup. Ct. Rep. 53; Western U. ness is transacted by members on

Teleg. Co. v. Mayer, 28 Ohio St. 521; account of other members at a com

Board of Education v. State, 51 Ohio mission of not less than 3 of 1 per

St. 535, 25 L.R.A. 770, 46 Am. St. Rep.

588, 38 N. E. 614; Pretzinger v. Sundercent, while a commission of not less

land, 63 Ohio St. 132, 57 N. E. 1097; than f of 1 per cent is charged to Mutual L. Ins. Co. v. State, 79 Ohio St. nonmembers; that firms or copart. 305, 87 N. E. 259; Watterson v. Hallinerships in which one member owns day, 77 Ohio St. 150, 82 N. E. 962, 11 a seat are entitled to have business Ann. Cas. 1096. transacted at rates prescribed for The practical construction of doubtmembers; and that by reason of the

ful statutes is entitled to great weight, transferability and market value of

and will not be overturned except for said seat, and the manifest business

cogent reasons and only if it is clear advantages arising from such mem

such construction is erroneous. bership, and the additional facilities

State ex rel. Gentsch v. Hirstius, 25

Ohio C. C. N. S. 177. for the convenient and more profit

General words in a statute should able transaction of the business of

be limited by fair and reasonable conthe members, the ownership of such struction to the class within the seat constitutes personal property legislative intent. within the definition of g 5325, Gen Chisholm v. Shields, 67 Ohio St. 374,

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