STORIES OF STANISLAUS BY SOL ELIAS CHAPTER 10

STORIES OF STANISLAUS

A Collection of Stories on the History and Achievements of Stanislaus County

Sol P. Elias

Modesto, Cal.

pg. 87

CHAPTER X

Modesto District

Failing to so stir up public sentiment as to secure their desired compromise with the bondholders and to procure legislation permitting the transfer of the irrigation works and franchise to private ownership, the members of the Defense Association launched another attack on the existence of the Modesto Irrigation District. In 1898, R. J. McKimmon, a former director, instituted an action in Quo Warranto against the district seeking to obtain a judgment dissolving it absolutely.

Though the sentiment of the district was opposed, the Attorney-General permitted the use of the name of the State for this action. When the complaint was served on the officers of the district citing them to show cause why this proceeding should not be instituted to test the validity of the bonds and the legal status of the district, the board of directors immediately adopted a set of resolutions that permission be given in the premises and that the district could show no good and valid reason why the proceeding should be protested. B. P. Hogin, C. C. Baker, L. A. Finney, and John Adams voted for these resolutions while F. C. Davis, pronounced irrigationist, opposed them. A copy of the resolutions was transmitted to the Attorney-General. In this matter the utility of an anti-irrigation board of directors was made manifest.

The title of this suit was “The People of the State of California, upon the information of W. F. Fitzgerald, Attorney-General of said State, on relation of R. J. McKimmon, plaintiff, vs. Modesto Irrigation District, claiming to be a public corporation, defendant.” The case was tried in the Superior Court of Stanislaus county before Judge Prewett, of Placer county, sitting in place of Judge Wm. O. Minor of this county.

pg. 88

Though Judge Prewett in the course of the trial had intimated that he believed that the statute of limitations barred the action, he nevertheless rendered judgment against the district. This action on part of the Judge was a great surprise to the friends of irrigation especially in view of the Court's previous decision in the case which seemed to foreshadow a favorable judgment.

The judgment, given in May, 1900, was as follows:

“It is hereby ordered, adjudged and decreed that the defendant, the Modesto Irrigation District, unlawfully and without right claims to be and acts as and usurps, intruded into and unlawfully exercises the functions of a public corporation, to wit, an irrigation district, and unlawfully and without right claims to be legally organized and existing as such irrigation district under and by virtue of the provisions of an act of the legislature of this State, entitled: “An Act to provide for the organization and the government of irrigation districts and to provide for the acquisition of water and other property and for the distribution of water thereby for irrigation purposes,” approved March 1, 1887.

“And it is further ordered, adjudged and decreed that the defendant, the Modesto Irrigation District, be and it is hereby excluded from and forever enjoined and restrained from exercising any of the corporate rights, powers, and franchises of an irrigation district; and that the same be and it is hereby abated.”

This decision was exactly what the members of the Defense Association desired. It furnished the incumbent directors with a pretext for inaction. It gave encouragement to the further institution of harassing suits. It afforded the anti-irrigation directors a satisfactory justification for their subsequent refusal to call an election for the officers of the district. It re-enforced the opposition to such an extent that they contemplated permitting the district to die a natural legal death. Though this judgment, for many months, was the chart and compass that guided the Directors antagonistic to the district, it later became a nullity in view of the decision of the federal court in the Fallbrook case.

In 1900 the Circuit Court of the United States for the Northern District of California rendered a decision in the suit of George Herring vs. the Modesto Irrigation District which was soon to play an important role in the district's affairs.

pg. 89

Herring was a foreign bondholder, representing $17,500 in interest on Modesto District bonds. He had instituted suit to force the Modesto District to pay this defaulted interest. All the defenses that the Defense Association could interpose to this suit – the points of legal attack against the district in the state courts – were interposed. In June, 1899, Judge Morrow had overruled the demurrers in such strong terms that the final outcome was little doubted. Judge Morrow's decision favored the bondholders on every point.

The Supreme Court of the United States had already in the Fallbrook case sustained the constitutionality of the Wright act. Following this case, Tregea vs. the Modesto Irrigation District was dismissed. The California State Supreme Court, in numerous decisions, had not only uniformly maintained the legality of this law, but had also upheld the regularity of the districts' organization. The Herring case was the first in which the courts were required to pass upon the regularity and legality of the bond issuers, so strenuously disputed by the anti-irrigationists. In this case this entire question was thoroughly considered. The Court was occupied for many days in the taking of the testimony principally introduced by the defendant represented by the Defense Association attorneys in the effort to demonstrate that the bonds were illegally issued.

The defenses relied upon were that the proceedings leading to the organization of the district were invalid because an alleged insufficient notice of application to the Board of Supervisors for the organization of the district was published, that several of the persons who signed the petition were not qualified to do so, and that therefore less than fifty valid signatures were attached to the petition. The main defense was that the bonds were exchanged for work and not for cash as required by the Wright Act. It was claimed that the various contractors had received these bonds in exchange for work and that therefore the alleged sales were fictitious. It was also claimed that he land embraced within the district was not susceptible to irrigation, that it had derived no benefit therefrom, and that the Wright Law was unconstitutional. Upon these alleged defenses the Court permitted a full inquiry. Judge Morrow held that they were not sustained and that Herring should have judgment for the defaulted interest.

pg. 90

The result of this decision was that the Modesto District would be compelled to levy taxes to pay the outstanding interest on its bonds amounting at that time to $150,000.

Though this decision narrowed the points of attack against the district, the majority of the board of directors continued to follow the predetermined course of inaction. They still refused to levy the taxes that the law required them to provide. The directors assumed that there would be no active opposition to this course of conduct. They affected to believe that they could thereby continue themselves in office and thus balk the irrigationists in their effort to clarify conditions and to bring the waters to the plains of Paradise Valley.

At the first meeting of this Board held in January, 1901, Director Frank C. Davis introduced a resolution providing for the holding of the general election for the officers of the district in February. There were present in addition to Mr. Davis the other directors, L. A. Finney, John Adams, C. C. Baker, T. K. Beard had previously resigned. This resolution failed to receive a second and therefore was lost. The Board had deliberately refused to issue, the call for the election that the law required. The directors who refused to give their official sanction to the election assigned as their reason that the litigation of the district had placed them in such a position that they did not feel justified in taking any action of any description.

The refusal of the board to call the election created a wave of indignation that swept throughout the entire district, and focused attention on the chaotic condition into which the anti-irrigationists had brought the district's affairs. Confronted with decision after decision that upheld the constitutionality of the Wright Law, the regularity of the proceedings taken under its provisions, and finally with the legality of the various bonds issued that the federal court would require the district to meet – the net result of thirteen years' litigation – those who favored irrigation at once counseled on the course to pursue to remedy the situation. It was admitted that the district's plight required drastic and herculean measures.

In this juncture, the Stanislaus County Board of Trade, composed of less than twenty-five men who occasionally met in one of the rooms in the rear of the old Rogers' Hall to discuss the affairs of the district and to promote means for their amelioration, became active.

pg. 91

This organization was led by that militant and veteran editor, T. C. Hocking. Its membership was composed of such ardent and active irrigationists as G. P. Schafer, L. L. Dennett, Dr. B. F. Surrhyne, M. S. Adams, J. R. Broughton, J. F. Tucker, Ora McHenry, George Perley, G. D. Plato, G. R. Stoddard, C. R. Tillson, J. W. Davison, W. H. Hatton, C. A. Stonesifer, P. J. Hazen, A. Hewel, James Johnson, and others. This Board of Trade, representing elements in the community that favored irrigation under the Wright Law, immediately formulated plans. W. H. Hatton and L. L. Dennett tendered their legal services gratuitously. To them, with the support of this small band of men, was delegated the task of circumventing the anti-irrigationists.

Previously in December, 1899, the executive committee of the Board of Trade had preferred charges in the Superior Court against L. A. Finney, C. C. Baker and John Adams, seeking to oust them from office on the grounds that these directors had refused to make the assessment prescribed by law, and that they had conspired together to prevent the completion of the districts' system of works. The complaint alleged their election, their qualification as directors, and that they had, as such directors, wilfully (sic) and intentionally refused to perform their duties as such directors. L. L. Dennett, W. H. Hatton and C. A. Stonesifer, three members of the Executive Committee, represented the prosecution. Judge Law, of Merced county, presiding in place of Judge Wm. O. Minor, in a lengthy opinion delivered in January, 1900, dismissed the proceedings, holding that the action was not well taken.

When, however, this board of directors refused to provide for the election, the Executive Committee of the Stanislaus County Board of Trade, represented by Attorneys W. H. Hatton and L. L. Dennett, instituted suit in the Superior Court to compell (sic) them to issue the call as required by the law. When on Saturday afternoon, January 12, 1901, Judge Wm. O. Minor, by previous arrangement with the attorneys, opened court, a petition was presented to him by Dennett and Hatton, representing R. C. Bailey, a taxpayer of the district, asking the Court to issue a writ of mandate citing L. A. Finney, C. C. Baker, John Adams and Frank C. Davis to immediately call the election or to appear in the Superior Court on the following Tuesday forenoon and show cause why they had not done so.

pg. 92

The writ was issued and each of the directors was served with summons at once. On the following Tuesday morning, the four directors appeared in court. Judge Lorigan, of Santa Clara county presided in place of Judge Minor. The directors were represented by Judge Van R. Patterson, of San Francisco, and C. W. Eastin, the attorney for the Defense Association. The complaint against the four directors was read. A desultory discussion ensured in which the Judge participated. The complaint set forth that Frank C. Davis was the only director who favored calling the election and that his resolution was defeated by the non-action of the remaining three directors. The allegations of fraud were stricken from the complaint. Judge Lorigan then stated that the case would occupy only one day in the trial and he guaranteed to try all the issues involved within that time, though the attorneys for the defendants assured the Court that several weeks would be required. Judge Lorigan overruled the demurrers of the directors and allowed their attorneys until the following Thursday in which to answer the complaint. He set the trial for the following Saturday at nine o'clock in the morning.

When Judge Lorigan convened court on the day of the trial, not only was the court room filled with interested spectators but the corridors were thronged with people, the case having attracted widespread attention. Judge Lorigan cleared the decks for a speedy trial by informing the attorneys that he would brook none of the delays usual in irrigation litigation, and confined the issues by stating the scope of the inquiry. The case for the plaintiff was ably and rapidly presented by Attorney Hatton for the plaintiff, R. C. Bailey. The hour of four o'clock in the afternoon witnessed the termination of this celebrated case. The writ of mandate was granted. The directors were compelled by this court action to call the election on the date prescribed by the law.

The selection of Judge Lorigan to try this most important case in the history of the Modesto Irrigation District was brought about by L. L. Dennett through affiliations in San Jose, his former home.

pg. 93

Judge Lorigan was an able jurist. He was peculiarly a man of courage on the bench. No better selection probably could have been made for this particular case. Subsequently elevated to a position on the Supreme Court of the State he became known as one of its noted members. Upon the occasion of his candidacy for this position, he received a most flattering vote in Stanislaus County.

Transcribed by: Jeanne Sturgis Taylor.

Source: Elias, Sol P., Stories of Stanislaus – A Collection of Stories on the History & Achievements of Stanislaus County. Modesto, CA. 1924.

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