STORIES OF STANISLAUS BY SOL ELIAS CHAPTER 15

STORIES OF STANISLAUS

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

Sol P. Elias

Modesto, Cal.

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CHAPTER XV

The Newspaper Fight for Irrigation

No history of the economic development of Stanislaus county would be complete without reference to the part taken therein by the press of Modesto. The newspapers of Modesto were consistently pro-irrigation from the beginning and continued unwaveringly, despite many odds, and at the risk of the loss of valuable patronage, to wage the fight till the end of the contest. The Modesto News and the Modesto Herald have been very large factors in the progress of not only the city of Modesto, but also of the county at large.

Notwithstanding the election of pro-irrigation directors in 1901 and though this success spelled the completion of the irrigation system, the phenomenal victory was largely due to the persistent activity of the Modesto News, under the management of James H. Maddrill, and of the Modesto Herald, under the editorship of T. C. Hocking. These papers, in season and out of season, fought the battle for progress with indomitable energy. Without bitterness and in language at once dignified but vigorous, with argument and illustration thoroughly convincing, these two leaders of public opinion, in their columns, in the days of intense strife, pioneered the way out of the difficulties into which the interminable litigation and public apathy had brought the Modesto District. Though there was a compact but small organization of business men and farmers, forcing the issues, and though the logic of events showed the trend toward compromise, the publicity and support given by these papers to the cause and to the men who championed it, were invaluable in the final conclusion.

It is certain that those of this era, when the district displays a completed and working system of irrigation and

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a prosperous development on every side, cannot understand the spirit and the stress of the conflict, when the passions of the contestants were inflamed and there was much bitterness manifested on both sides, and every expedient was utilized for the winning of the battle. This will be best illustrated by the polemic literature of the day, written under the circumstances of a divided community, both sides combating vigorously for the things that each deemed just, the stake being no less than the future prosperity of the community.

The following was the typical argumentative article that appeared in these papers prior to the election of 1901:

“Irrigation Question – Past and Present of Modesto District.

“A grave and most momentous issue is presented to the electors of the Modesto Irrigation District. Upon its correct determination depends the future prosperity of the entire community – the making of this part of the county rich and wealthy and its fertile lands, teeming with population and pulsating with industry, or the relegating of it to a position of stagnation, decay and retrogression. It is not too much to say that small and narrow minded considerations should not control, but that large and enlightened views should prevail.

The issue presented is: Shall the Modesto Irrigation District complete its system of irrigation works, bring water upon the acres of land contained in it, and render them fertile? or will the people permit by apathy and lethargy, the same condition to prevail as has heretofore obtained – a condition of fruitless litigation, frittering away the golden opportunities of progress and advance, resulting in the deterioration of prosperity, the piling up of taxes and debts that must, under the decision of the courts of last resort, be paid, and in the general stagnation of the town and country? It would seem that to a person of business sagacity or to one of ordinary intelligence, the statement of the issue would contain the proper answer.

It is needless to rehearse the conditions that have prevailed in the Modesto District during the past few years. They are in the minds of all who live or have property in the district. For not less than five years, absolutely nothing has been done toward the accomplishment of the purpose of the organization of the district,

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toward the attainment of the fruition of the high hopes of prosperity that prevailed in the beginning, toward the completion of the system of irrigation works. Not a spade has been put in the ground, not a ditch has been built. The ditches heretofore constructed, from non-use, must have necessarily fallen into decay. During all these years, there has been neither progress nor advance in the community. This condition of affairs has been brought about by the litigation that has been carried on by a few anti-irrigationists, and through the inaction of the large number of people favorable to irrigation. It is a result that always flows from long drawn out litigation, designed primarily to hinder and delay. That the remedy for this state of affairs lies with the electors of the district is unquestioned. Their votes must determine the future conduct of the district's officers. Their judgment must be for or against this deplorable condition – for stagnation or for progress.

The litigation pursued by the anti-irrigationists has been productive in nothing but delay and postponed hope. It, alone, has brought about the present condition, and it must ultimately prove unavailing, for there is always an end to litigation. The law will finally prevail. Upon every leading proposition, touching the vital issues involved, either legal or upon a question of fact, the decisions of the courts have uniformly been against the contentions of the anti-irrigationists. In numerous cases both in State and Federal courts, the Wright law has been held constitutional. Irrigation districts are declared to be public corporations. Proceedings under this act have been sustained. Under the supplementary law to the Wright act, there has been a decree in the Superior Court of this county to the effect that the Modesto Irrigation District was regularly organized. This is popularly known as the “Confirmatory Proceeding”. In the case of Tregea vs. Modesto Irrigation District (88 Cal. 334), these proceedings were approved and sustained. There is therefore a direct judicial judgment by the highest court of the State that the Modesto District is a perfectly valid and existing district. In the case of the People vs. The Linda Vista Irrigation District (128 Cal. 477) decided by the Supreme Court last May, the scope and effect of the “Confirmatory Act” was directly presented to and adjudicated by the court.

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That was an action brought in the name of the State by the Attorney General in the nature of quo warranto against the Linda Vista District. The State sought to secure a judgment declaring this district was never organized according to law and excluding it from all corporate rights, powers and franchises. There was no other point involved in the case. In this case the court held that the confirmation proceeding had was 'a proceeding in rem, the judgment in which is res adjudicata, binding on the whole world including the State, and is a bar to a subsequent proceeding by the State in quo warranto, assailing the validity of the organization of the irrigation district.' The confirmatory act was also held constitutional and valid. This decision followed others theretofore rendered by the same court. This decision is conclusive of the issues presented in the quo warranto proceeding in the Modesto Irrigation case, recently decided by Judge Prewett and now on appeal to the Supreme Court. In this decision and in later comments by him, Judge Prewett has stated that he expects that his judgment will be reversed and that the confirmation proceeding in the Modesto District, like that in the Linda Vista case, will be held to effectually bar the State. As both cases are identical in facts the decision following unbroken authority in the Modesto case, must necessarily be the same.

The most sweeping and far reaching decision, however, yet rendered in the litigation in which the Modesto District has been involved was that in the case of Herring vs. The Modesto District, delivered by Judge Morrow in the Circuit Court of the United States last June (95 Federal Reporter 705). The text of this decision, well considered and exhaustive, would prove profitable reading to every voter in the district. The facts are familiar to the public. Herring sued the district for the payment of 1176 interest coupons attached to 271 bonds in the sum of $500 each. Judgment was but recently given for him, and he has already applied for a writ of mandate to carry the judgment into effect, as heretofore stated in these columns. In this case, every defense that could be interposed to the payment of the bonds was set up by the attorneys for the anti-irrigationists. They were all swept aside. It was held that the plaintiff had the right to sue the district in the federal courts,

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that the Wright law being constitutional, the Modesto District is at least a de facto municipal corporation and its officers, de facto officers, that the legality of its organization cannot be collaterally attacked by an individual nor pleaded by the district itself for the purposes of defeating its obligations, that the determination of the Board of Supervisors that lands embraced within the district may be benefited by irrigation is conclusive and non-reviewable, that the exclusion of lands cannot affect the legality of the bonds. All of the alleged irregularities in the organization of the district were unavailing. In this case the confirmatory act and the two year statue of limitations are spoken of approvingly as substantial defenses to the public in dealing with the corporation.

These adjudications, referring only to the Modesto District, to which others involving the same and kindred points in other cases may be added, establish conclusively the positive legal and unquestioned existence of the Modesto Irrigation District as a public corporation under the law. They make the district a de jure organization. Under the decision and under the provisions of the code, none but the State can investigate the legality of the organization of a corporation or a district, and then only in a quo warranto suit. No other party can collaterally or directly attack the district. Under the Linda Vista District case, the confirmation proceeding is held to effectually bar the State. Hence the Modesto Irrigation District can never be legally assailed as to the regularity or legality of its organization, confirmation proceedings having been had. The legal existence of the district can never be questioned in any court by any person or litigant. As has been seen further the district is estopped (sic) to plead its own irregularity of organization as a defense in a suit to enforce payment of the bonds or the coupons thereon. These cases touch all the vital issues that can or may be raised in any contest in which the district may be involved.

Under the foregoing aspect of the legal condition of the district, aside from the question of public policy, what must be the answer to the issue now presented to the public? The district is a legal and existent organization. The bonds must ultimately be paid. If the directors, in response to a writ of mandate refuse to levy a tax, they will be in contempt

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of the federal court, and must take the consequences of the contumacious conduct, and a commissioner will be appointed by the court to levy and collect the tax. The property must pay. As the bonds and interest must be paid, why not have the irrigation works? And there is no escape from the ultimate payment of the bonds. Further litigation with its consequent delay would only postpone the day of payment, increase the debt, and make the load heavier and harder upon property owners. The vital points in the legal contest are now completely settled.

There is no question that the bondholders will show a disposition to approach a proposition for a compromise of the existing indebtedness of the district in a fair-minded and conciliatory spirit, and that a judicious compromise satisfactory to the district may be obtained. A compromise whereby perhaps the full cost of the works to be constructed may be remitted in interest and cash provided to complete the irrigation system, is not only possible but probable.

The policy of further delay is not only senseless but suicidal. Under all the circumstances and with prosperity waiting for the district's action, - why further delay its coming? The Turlock Irrigation District teaches the lesson – why not profit thereby? The beginning of work upon the Modesto District would signalize the advent of prosperity. It would mark a new era for the community. There would be progress and advancement – business activity. Modesto and its surrounding territory would become known as one of the most flourishing spots in the state. There would be population. The wheels of industry would revolve.

At the present time and under the prevailing conditions, both legal and local, the duty of the voter, regardless of previous conduct or opinion, is clear. It is the duty of the people to remove obstruction to the completion of the irrigation works. It is the duty of every voter who holds the public good sacred and who values prosperity, to vote for pro-irrigation directors – men pledged to carry on the affairs of the district in a businesslike and progressive manner – men pledged to begin and complete a system of irrigation for the district.”

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The following was the type of article that appeared prior to the refunding election of 1902:

“Modesto District – A General Resume of Irrigation Matters – Refunding Election Next Monday Decides Question of Advancement and Prosperity.

“The directors of the Modesto irrigation district have, in response to the almost unanimous desire of a large majority of the property owners, ordered the election for refunding of the district's indebtedness on Monday, January 13^th. This action was taken in pursuance of the terms of the compromise with the bondholders.

With the fair and equitable compromise that has been effected with the bondholders of the district, whereby the canal system will be completed within a year, refunding of the present indebtedness of the district is certainly the best solution of the problem. The refunding bonds are to run for 40 years, and no part of the principal will fall due for twenty years. The interest is reduced from 6 per cent to 5. Aside from the saving in interest and the large contribution to the cost of the canals by the bondholders, no part of the principal will probably fall upon the present holders of property. As posterity will reap largely the benefits that will follow a completed irrigation system – the enhancement of property values consequent on a diversification of industry bringing general prosperity and a notable increase of population – it is perfectly proper that part of the burden should fall upon those who obtain these benefits and who will thus be able to bear them. It is easily within the purview of prophesy to say that within twenty years, under a system of irrigation, the value of property in the Modesto District will have increased many times, with a thickly populated and a richly prosperous community. Within a few years following the completion of the irrigation system, the Modesto District will become widely known as one of the most active and progressive business centers in the state, teeming with a varied industry and enjoying a large degree of prosperity. The proposition, therefore, to refund the bonds of the district is sound business judgment, commending itself alike to the property owner as well as to the business man. It is the only business-like solution of the present condition of the affairs of the district.

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Aside from this, there is another point of view from which it may be said that refunding is not only feasible but urgently necessary to the property owners and the people of the district. The News has frequently explained the legal status of the Modesto District, and the points that have been determined with reference thereto. Several propositions have been conclusively established by the courts of highest resort, and these render refunding necessary as a matter of self-interest and self-protection. Upon every vital proposition advanced in the litigation in which the Modesto District has been involved, either legal or upon a question of fact, the decisions of the courts have uniformly been in favor of the validity of the organization of the district and of the bonds issued by it.

The Wright law, in numerous decisions, has been declared constitutional, and irrigation districts are held to be public corporations. In the decision in the case of Herring vs. The Modesto District (95 Federal Reporter 705), rendered by Judge W. W. Morrow last year, in which every defense that could be interposed to the payment of the bonds by the district was raised, the judgment was for Herring, representing the bondholders, and against the contention of the district. It was held that the district must pay its bonds, and that there was no escape from such payment, nor could there be an evasion thereof. All of the alleged defenses were brushed aside in this sweeping decision, notable alike for its broad grasp of the law as for its clear and lucid discussion of the legal principles involved. It was held that the bondholders had the right to sue the district in the federal courts, that the Modesto District, having been organized under a constitutional law – the Wright Act – is therefore a de facto municipal corporation and its officers de facto officers, that the legality of its organization could not be collaterally attacked by an individual nor pledged by the district itself for the purpose of defeating obligations which it incurred while acting as such de facto corporation, and that the determination of the board of supervisors that lands embraced within the district may be benefited by irrigation is conclusive and non-reviewable by the court. It was also held that the allegation in the answer of the district that it had derived no benefit from the work done constitutes no defense and is immaterial and that the exclusion of lands from the district under provisions of the law cannot affect the validity of the bonds.

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In the decision, the confirmation act and the two-year statue of limitations are spoken of approvingly as substantial defenses to the public in dealing with the district. All of the alleged irregularities in the organization of the district were swept away as untenable.

Under the supplemental law to the Wright act, popularly known as the “Confirmatory Act”, there has been a decree in the superior court of this county that the Modesto District was regularly organized, and is a valid organization. In the case of Tregea vs. The Modesto Irrigation District (88 Cal. 334), this decree on appeal, was sustained by the supreme court. The proceedings taken for the organization of the district were therefore sustained, and there is thus an adjudication by the supreme court of this state that the Modesto District is a perfectly valid and existing public corporation, possessed and endowed with all the franchises and rights, appertaining to a de jure body. In the case of The People vs. The Linda Vista Irrigation District (128 Cal. 477), the scope and effect of a confirmation proceeding was directly presented to and adjudicated by the supreme court. Following previous cases decided by the court, it was held by the supreme court that the confirmation proceedings had been a 'a proceeding in rem, the judgment in which was res adjudicata and binds the whole world, including the State, and is a bar to a subsequent proceeding by the State in quo warranto, assailing the validity of the organization of the irrigation district.' In this case, the constitutionality of the confirmatory act was also sustained. The recent case of People vs. Perris Irrigation District (132 Cal. 289), referred to in these columns a short time ago, is to the same effect. The Perris case in its facts is in all respects identical with the Modesto case now in the supreme court.

The effect of the adjudications involving positive principles of law, determination of all the legal issues involved in the Modesto District must readily be apparent to every property owner and person in this district. They establish the unquestioned legal existence of the Modesto district, as a public corporation under the law. Under the decision in the case of Herring vs. The Modesto Irrigation District, the district is estopped to plead its own irregularity of organization as a defense in a suit to enforce the payment of its bonds.

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In other words, the Modesto District, organized under a constitutional law, is a perfectly valid and existing public corporation, the legality and regularity of whose organization cannot be assailed in any way by the state, much less by a private party, while at the same time the district cannot escape or evade in any manner the payment of the bonds it has issued, all of the alleged irregularities in organization being unavailing as a defense.

The simple proposition, then, that confronts the district is the immediate payment of the bonds and the interest as it becomes due; or the refunding of the bonded indebtedness of the district, the refunded bonds running 40 years, no part of the principle payable for 20 years, with a reduction in the rate of interest, together with the contribution of three-fourths of the cost of the canal works by the bondholders, by which the Modesto District is enabled to complete its system of canal works.

These are the only alternatives before the people upon the issue involved in the coming election. There are no others. It is a question of immediate payment or the refunding of the district's indebtedness. The district certainly is not in a condition to make immediate payment, which a failure to refund will bring about. The Herring judgment recalled by the bondholders under the compromise, suggests what will follow an adverse vote on refunding.

Under the conditions prevailing in the district, both legal and local, sound business policy and judgment, together with self interest and self protection, justify and demand the vote of the refunding proposition. It is part of the compromise agreement. It is in harmony with an enlightened judgment. It will bring progress and prosperity to Modesto and its surrounding country.

Let all vote and work for refunding and thus bring the highest degree of prosperity to Modesto. Let the vote be unanimous.”

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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