Court Opinion

ID: 3411976
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:29:49.232701+00
Date Added: 2024-06-11T13:39:35.225680
License: Public Domain

Respondent's petition for a rehearing in addition to again stressing the unconstitutionality of our construction of the statutes relative to the construction company's lien (which point has been sufficiently disposed of in the original opinion), urges that appellant became bound by a contract of November 1, 19261 to acknowledge, under the Portneuf-Marsh case,supra, respondent's lien as superior and continuing after its acquirement of the lands involved herein.
With regard to this contract the court found: *Page 766 
"That on or about November 1, 1926, the parties hereto entered into a certain written contract, to-wit, defendant's Exhibit 24, which fixed their respective rights and liabilities pertaining to the respective liens claimed by each. That by reason of the execution of said contract and by reason of all the facts and circumstances in this cue there is no estoppel against defendant's claims in this suit."
Neither the conclusions of the trial court or the decree indicate they were in any degree based upon this finding, and we did not so consider they were. It is significant that while the court found respondent was not estopped by the contract to assert its lien as continuing, the court did not find appellant *Page 767 
was estopped to urge the contrary and no such implication is inferable therefrom. However, in view of respondent's courteous urgency it is not amiss and perhaps necessary to affirmatively consider the effect, if any, of this contract.
Appellant's witness, Mr. Hurlebaus, its secretary and for a time respondent's assistant secretary, testified in regard to this contract that:
"Q. State to the Court, Mr. Hurlebaus, if the provisions of the original of this contract, Defendant's Exhibit No. 24, were carried out and performed?
"A. Certain portions of them were carried out, but the whole contract became dead eventually because there was a *Page 768 
limit of three years. Item '12' here is to start some action before the three years expired. We were back to our old procedure, which is the same which is shown in this book.
"Q. So you ended up following the same old practice that had prevailed?
"A. Yes sir."
The former procedure referred to by Mr. Hurlebaus was payment by respondent between 1926 and 1931 of maintenance charges on some if not all the parcels of land involved herein.
Respondent's witness, Mr. Parry (at different times counsel for the respective parties herein, separately and jointly, *Page 769 
with their full knowledge, acquiescence and approval), with reference to such payments made by respondent after the contract of 1926, and prior to 1931, stated:
"Q. It has been testified here that during the period of time up to 1931 that the defendant company has paid maintenance on all these lands originally involved in this suit, will you state the circumstances?
"A. Those payments were made for various reasons, it has been, or was the policy of the Bondholder's Committee all the time and was carried out by Mr. Shepherd and representatives in Idaho to affect — lean over backward, to preserve friendly relations with Canal Company, as Mr. Hurlebaus explained, *Page 770 
to get along as one happy family, having seen the sad experience of these other irrigation projects, where the construction company and the operating company continually fought each other. The Bondholders Committee has in many many instances gone beyond Their legal liability in making friends with the Canal Company and getting along with them.
. . . . . . . . . . . . . .
"Q. Would you say, Mr. Parry, what you consider their legal liability was?
. . . . . . . . . . . . . .
"A. When stated that, I was using that in a broad sense mostly as to this particular controversy — Going on, I said *Page 771 
there was a variety of reasons, as Mr. Hurlebaus testified, the question of the relative priority of these liens has been a question that has been argued and debated since I came to Idaho, and constantly before. The two companies tried for many years negotiating in an attempt to settle it. These payments were made at a time when we thought a settlement could be worked out. There has been a question of transfer involved —
"Q. By transfer, you mean what? *Page 772 
"A. Transfer of water stock off that part of the eleven thousand acres which the test of time would seem to show it would be impossible to farm economically, and there has been a constant discussion, and the defendant company has desired to have the right to transfer the stock off this worthless land established and supply water to other lands, and for a long time we believed that we could arrive at such an arrangement with the Canal Company.
"Q. Has that transfer required the consent of the Canal Company?
"A. Yes.
"Q. Has that consent been granted?
"Mr. STEPHAN: We object to this line of testimony on the grounds and for the reason it is improper sur-rebuttal.
"The COURT: You are speaking of transfer of this water from these lands to other lands?
"Mr. SNOW: Yes, and he said they were hoping to do that, and the question was, if the consent of the canal company was necessary, and he said, it was, and I asked if that consent had been granted?
"The COURT: Well, he may answer, I don't see it is very material.
"A. No, the consent has not been granted. About the time we quit paying this maintenance, we learned they were not going to grant that without litigation, and that is one of the main reasons we changed our policy."
Cross-examination of Mr. Parry on sur-rebuttal:
"Q. Mr. Parry, you were counsel for the Canal Company for a number of years?
"A. Yes.
"Q. Until what time?
"A. December 31st, 1936.
"Q. And as such you commenced the present action to foreclose this lien against what is now the Idaho Farms Company?
"A. In connection with Mr. Barclay, yes sir.
"Q. And you advised the directors of the Canal Company that they had no cause of action when they brought this suit?
"A. I repeatedly said in discussions that this was a debated *Page 773 
question — legal question, of their rights and I made that statement many times.
"Q. You had brought such suit before for the Canal Company?
"A. During the time I was counsel, and for a long time before our first foreclosure suits were filed on each piece of land —
"Q. When you started this suit, you considered so, in good faith, believing so as an attorney of this court, you had a cause of action?
"A. No, as I stated before, I stated it was a debated proposition and it was discussed in every meeting, we would take every step to preserve their lien, if any, on the land and water company.
"Q. When you started this action, were you attorney for the Bondholder's Committee, and Canal Company?
"A. Yes, and I so advised them.
"Q. You represented both the plaintiff and the defendant?
"A. Yes, and that was known by both sides all the time.
"Q. This transfer you speak of —
"Mr. SNOW: You appreciate, Mr. Parry is not counsel in this suit. You are not implying he is counsel in this suit?
"Mr. PARRY: I want to state this, when the members of the Canal Board approached me and employed me as their counsel I told them I was counsel for the Bondholder's Committee and if they wanted me to act for their company my first duties was for my first employer, and the employment was taken and terminated with this idea.
"Q. There was no serious controversy between them over the assessments over a long period?
"A. We argued and had two or three settlements set up."
It is thus apparent there is no real disagreement or conflict between Mr. Hurlebaus and Mr. Parry, who alone testified with regard to this contract, that neither party herein considered the contract binding to the extent that by it the controversy herein was settled or made conclusively dependent upon the Portneuf-Marsh case, supra, or that other divergent litigation had not ensued. Thus so far as this controversy is concerned critical interpretation of the contract or *Page 774 
its force is obviated because the practical construction placed upon the contract by the parties themselves through their conduct, virtually amounted to an abandonment thereof or at least a cessation of reliance thereon.
The original opinion is adhered to and the petition for rehearing denied. Costs awarded to appellant.
Ailshie, C.J., and Budge, Morgan and Holden, JJ., concur.
1 Defendant's Exhibit 24:
"THIS AGREEMENT, Made and entered into this first day of November, 1926, by and between NORTH SIDE CANAL COMPANY, Limited, a corporation, hereinafter designated as the party of the first part, and TWIN FALLS NORTH SIDE LAND AND WATER COMPANY, a corporation, hereinafter referred to as the party of the second part.
"WITNESSETH:
"THAT, WHEREAS, the party of the first part now owns and operates that certain irrigation system heretofore constructed by the party of the second part herein under the provisions of those statutes of the United States known as the Carey Act, and the Statutes of Idaho pertaining thereto, and commonly known as the 'North Side Project,' and
"WHEREAS, said party of the first part has, in the past, claimed and will hereafter claim liens for unpaid maintenance assessments of the kind and character provided in Chapter 138, Idaho Compiled Statutes of 1919, as amended by the Idaho Session Laws of 1925, Chapter 107, against those lands within said project whereon the annual maintenance assessments have not been paid or will not in the future be paid, and
"WHEREAS, the party of the second part or its assigns or successors in interest has claimed and will hereafter claim liens of the character provided for by Article V, Chapter 136, of the Idaho Compiled Statutes of 1919, and the Statutes of the United States of America, for unpaid construction charges against those lands whereon the construction charges have not been paid or will not be paid in the future, and
"WHEREAS, in many instances the parties hereto do now claim or will hereafter claim liens of the character above described against the same pieces or tracts of land, and
"WHEREAS, some uncertainty and confusion exists as to the relative priority of the liens of the parties hereto, and there is at present an apparent conflict between the decision and holding of the Courts of the United States of America on the one hand, and the Courts of the State of Idaho, on the other hand, as to this question of the relative priority of the said liens, and
"WHEREAS, certain litigation is now pending, both in the Federal Courts and the Courts of Idaho, between certain interests (not parties to this agreement) relating to the respective priority or constitutionality of said respective liens, or which may hereafter be instituted between the parties hereto or others, and which it is expected will be decisive of the present uncertainty as to the relative priority or constitutionality of said liens.
"NOW, THEREFORE, by reason of this situation and for the purpose of preserving and maintaining for each party hereto all of the legal rights, remedies, and privileges to which they may be entitled, and for the purpose of ultimately arriving at a settlement of the relative rights of the parties hereto with as little inconvenience and expense as possible, the parties hereto do hereby mutually covenant and agree as follows:
"(1) That the party of the first part shall cause to be released and discharged on the proper public records all liens or claims of liens by it claimed or filed against any and all lands within said North Side Project which shall come under the following classifications:
      "Where the party of the second part, its successors or assigns has heretofore, is now securing, or will in the future, secure title by foreclosure of Carey Act water contracts; or by foreclosure of a mortgage taken in lieu of a Carey Act water contract; or by deed taken in lieu of, or in extinguishment of, a Carey Act water debt.
"THAT the said releases mentioned above shall be executed and filed when the party of the second part, its successors or assigns, finally acquires title to any of the lands mentioned in the preceding paragraph.
"(2) That should the final decision of the Courts of the United States of America be in any case presenting for decision the issue of the relative priority or constitutionality of liens of the kind and character claimed by the respective parties hereto, whether by decision of the Supreme Court of the United States of America, or by the United States Circuit Court of Appeals (if the case be not appealed to the United States Supreme Court, or if said Supreme Court declines or refuses to take jurisdiction thereof) or by the United States District Court (if no appeal be taken therefrom) that a lien of the kind and character claimed by the party of the second part herein is prior or superior to a lien of the kind or character claimed by the party of the first part herein, that then and in that event the party of the first part will:
"(a) Cancel as against the party of the second part, its successors or assigns, and declare null and void, all sums of money, otherwise due it by reason of the assessments represented by the liens which have been released of record as provided in paragraph (1) hereof,
"(b) Cause to be released and discharged on the proper public record, all liens or claims of lien by it claimed or filed against all other lands within the said North Side Project, which come under the following classifications:
      "Where the party of the second part, its successors or assigns does, in the future, secure title by foreclosure of a Carey Act water contract; or by foreclosure of a mortgage taken in lieu of the Carey Act water contract; or by deed taken in lieu of and in extinguishment of a Carey Act water debt.
"That the releases last hereinabove mentioned shall be executed and filed when the party of the second part, its successors or assigns, finally acquires title to the lands mentioned in the last preceding paragraph, and at the same time satisfy the debt of the assessments represented by said liens insofar only as the party of the second part, its successors or assigns, is concerned.
"(3) That the party of the first part shall, at the time of making any of the releases mentioned in paragraphs (1) and (2) hereof, cause a stock certificate to be issued in the name of the party of the second part, its successors or assigns, as the case may be, covering the lands upon which such releases are executed.
"(4) That the releases agreed to be made by the party of the first part in paragraphs (1) and (2) hereof shall be made only in the event of foreclosure or voluntary deeds of the kinds mentioned in said paragraphs had or taken in an attempt to collect the original water contract debt and shall not extend or apply to any subsequent foreclosure resulting from resale of such lands and water rights.
"(5) That if the final judgment of the Courts of the United States of America, as defined in paragraph (2) above, be in a case defined as in paragraph (2) above, that a lien of the character of that claimed by the party of the first part herein be prior or superior to the lien claimed by the party of the second part herein, that then the party of the second part shall pay to the party of the first part all unpaid maintenance, together with accrued interest thereon computed at the rate of six per cent (6%) per annum from the date the same was due, levied and assessed against all lands within said North Side Project which come under the classification in paragraphs (1) and (2) hereof.
"(6) That if the final judgment of the Supreme Court of the State of Idaho should be, in any case presenting for decision the issues of the relative priority or constitutionality of liens such as are claimed by the parties hereto, identical with or concurrent with the final decision of the Courts of the United States of America (as defined in paragraphs numbers (2) and (5) hereof), then the liens of the party of the first part shall be released and disclosed or paid as the case may be, the same as provided in paragraphs numbers (1) and (2) and (5) hereof.
"(7) That in the event the final judgments of the Courts of the United States of America and of the State of Idaho should be, in cases presenting for decision the relative priority or constitutionality of liens of the kind and character claimed by the parties hereto, conflicting and/or opposite, that then and in that event either party hereto shall have and is hereby given the right and privilege to bring and maintain such legal action or actions as each may deem fit and proper for its purpose.
"(8) It is understood and agreed that in all foreclosure actions which have heretofore been brought by either party hereto, which are now pending, or which may hereafter be commenced, in order that clear title may be more readily obtained, that no contest or opposition will be made by the other party, and upon the final determination of the priority of the respective liens as herein defined, the unpaid maintenance with interest as aforesaid, will be paid by the party of the second part or the liens released by the party of the first part, as the case may be.
"(9) That it is the intent and the purpose hereof to hold the question of the relative priority or constitutionality of the liens of the parties hereto in status quo until and if the question is finally determined by a Court of competent jurisdiction as herein provided, such question to be so held without either of the parties hereto gaining or losing any rights, privileges, or advantages whatsoever, and with the full power and privilege to the parties to secure a final determination of such question, if the same is not determined in the litigation hereinabove mentioned, and to collect the full amount due according to the final determination of the priority the same as though each of the parties hereto had taken all and every necessary and proper step required by law to be taken or performed to initiate, preserve, and enforce the respective liens claimed by them.
"(10) It is mutually understood and agreed that the party of the second part has transferred and assigned certain of the water contracts and notes and mortgages taken in lieu thereof, to Continental and Commercial Trust and Savings Bank, a corporation, and to Twin Falls North Side Investment Company, Limited, a corporation, and that the title to various lands secured by foreclosure of water contracts or notes and mortgages taken in lieu thereof, or acquired by deeds given in lieu of foreclosure, have been taken in the name of said Continental and Commercial Trust and Savings Bank, and Twin Falls North Side Investment Company, Limited, and it is hereby mutually agreed that, wherever in this agreement the term 'Party of the second part' is used, it shall be deemed to describe and include the said Continental and Commercial Trust and Investment Company, Limited, a corporation, together with their successors and assigns forever, and that the said two last named corporations, as well as their successors and assigns forever, shall have and exercise every right and privilege herein specially given to the Twin Falls North Side Land and Water Company.
"(11) It is understood and agreed that the Twin Falls North Side Investment Company, Limited, where its interests may appear in the subject matter of this contract, shall be deemed and considered a successor in interest or an assignee of the Twin Falls North Side Land  Water Company, and entitled to whatever rights and privileges may be secured by an assignee or successor in interest of said Twin Falls North Side Land 
Water Company.
"(12) That in the event the relative priority or constitutionality of the respective liens claimed by the parties to this stipulation is not finally determined as specified, within three years from the date hereof, then and in that event either party may, at its option, proceed to institute such legal action or actions as it or they may deem fit and proper for the purpose of determining the relative priority or constitutionality of the liens herein defined.
"(13) It is understood and agreed that this agreement shall supersede certain prior stipulations heretofore entered into by and between the attorneys for certain of the parties hereto in certain litigation then pending, and this agreement shall fully operate to fix and determine the rights of the parties in relation to the subject matter hereof.
"(14) In case any question should arise between the parties hereto (or the consenting parties) as to a proper interpretation of this agreement or any part thereof, then either party hereto, or any consenting party, may resort to any Court of competent jurisdiction for the purpose of having the true and correct meaning of this agreement judicially determined.
"IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed in their names by their proper officials, all first duly authorized in the premises, and their respective corporate seals to be hereunto attached, all on the day and year first above written. (Which was duly signed and acknowledged.)