#### W. S. GIBBS et al. v. DRAINAGE COMMISSIONERS OF MATTAMUSKEET DISTRICT et al.

(Filed 22 December, 1917.)

Drainage Districts — Assessments—Petition—Judgment.

Tbe State Board of Education, then tbe owner of certain lake bottom lands, joined in tbe petition with certain owners of outlying lands to form Mattamuskeet Drainage District, with provision in tbe petition that sueb outlying lands should not be taxed exceeding 15 cents per acre for benefits. Tbe Board of Education afterwards conveyed these lands to a corporation with provision that tbe outlying lands should only be taxed one-fourth of tbe necessary assessments for maintenance, etc. Tbe judgment creating tbe district decreed tbe establishment of tbe district under -the Laws of 1909, cb. 442, and 1909, cb. 509, wbicb contain no restriction upon assessments, except sucb as necessary to maintain tbe district. There was no exception taken to tbe judgment: Helé, tbe failure to except was a waiver of tbe right of tbe outlying land owners to claim tbe limit of tbe assessment as set out in tbe petition, wbicb under tbe judgment, is controlled by tbe statute and tbe restriction in tbe deed of tbe Board of Education.

Aleen, J., dissenting.

Appeal from Kerr, J., at chambers, 12 November, 1917, of Hyde.

This is an appeal from an injunction restraining tbe collection of an assessment for maintenance beyond 15 cents per acre as to lands outside of tbe lake bottom in Mattamuskeet Drainage District in Hyde.

Tbis district was organized in 1909 by tbe landowners around and outside of Lake Mattamuskeet in conjunction with tbe State Board of Education, then tbe owner of tbe lands constituting tbe bed or bottom of tbe lake, together with some lands not covered by water. Garter v. Gomrs., 156 N. C., 183.

Tbe drainage of tbis lake was undertaken to benefit over 50,000 acres of low lying land owned by individual petitioners lying around tbe lake and also to enable tbe State to redeem for arable purposes tbe bed of tbe lake of 48,830 acres. Tbe land lying around tbe lake on an average for two miles in its entire circumference was subject to overflow and after heavy rains was often flooded and was covered by water for considerable periods of time. As recited in tbe petition, “tbe lake when very full, as it now is and has been for several years, overflows tbe adjacent lands and makes a large part of them unfit for cultivation. Tbe lands lying without tbe bounds of said territory consist of large areas of swamp lands which are almost continually covered by water, and after excessive rains tbe water from these areas overflows tbe land within said proposed district, often almost totally destroying tbe crops and bringing great loss upon tbe residents and landowners of said proposed district.”

*6In tbe original petition, section 5, it was recited that tbe cost “of maintaining and keeping tbe drainage in effect shall not exceed 15 cents per acre for eacb acre included witbin tbe bounds of said district.” It bas been found necessary, in order to properly maintain tbe drainage' system, to levy a larger sum, and tbe plaintiffs, owners of some of tbe lands outside tbe edge of tbe former lake, seek to restrain tbe collection of a larger amount. From tbe judgment of tbe court granting a restraining order to that effect, tbe defendants appealed.

Ward & Grimes, H. 0. Garter, Jr., and Manning & Kitchin for plaintiffs.

Spencer & Spencer and Small, MacLean, Bragaw & Rodman for defendants.

Clark, O. J'.

Tbe original petition, sec. 5, contained’a provision that “tbe cost-of maintaining and keeping tbe proper drainage in effect shall not exceed 15 cents per acre for eacb acre included witbin tbe bounds of said district,” but this .provision was based upon tbe sanguine hopes of tbe petitioners and was omitted in all subsequent proceedings and is not embraced in tbe judgment creating tbe district nor referred to in any other proceedings subsequent to tbe petition. As is not unusual, tbe cost of constructing tbe drainage system and of maintenance bas exceeded the original estimate, especially since tbe great increase in tbe cost of labor and material. Doubtless tbe fact that original estimates often prove inadequate induced those whose intelligence and public spirit conceived this enterprise from incorporating such restriction in tbe judgment which is tbe charter of tbe drainage district. Exceptions were filed to tbe final report but none thereto, nor to tbe judgment, upon the ground that tbe restriction of assessments for maintenance to 15 cents per acre was not retained. Carter v. Comrs., 156 N. C., 183.

Tbe judgment creating tbe district decreed that it was “established under and in accordance with tbe provisions of cb. 442, Laws 1909, and ch. 509, Laws 1909.” Section 29 of tbe first-named statute gives to tbe commissioners of drainage districts, created under that act, power, without any other restriction therein than to make such assessments as “may be necessary to maintain” tbe district after its formation.

In January, 1911, tbe State Board of Education conveyed to tbe Southern Land Reclamation Company, a corporation, tbe lands owned by said board and embraced witbin said drainage district, containing 48,830 acres, and in tbe conveyance it is specified that tbe conveyance carries all the rights, privileges and obligations of tbe State Board of Education under tbe special proceedings for tbe establishment of tbe “Mattamuskeet Drainage District” under cb. 509, Laws 1909, “except *7tbe Southern Land Reclamation Company, its successors and assignees is to pay three-fourths of the cost of the maintenance as well as the construction of said drainage district.” This stipulation exempted the owners of lands outside of the lake bottom from the equality of assessment per acre according to benefit which would ordinarily lay upon them.

There are over 50,000 acres of lands owned by the other members of the drainage district which lie outside of that conveyed by the State as above. It follows, therefore, that whenever the drainage commissioners levy an assessment for drainage purposes three-fourths thereof must be levied upon the assignees of the State Board of Education, owners of 48,840 acres and one-fourth upon the 50,000 acres outside of the lake bottom, with the result that such outside lands will pay an assessment at a rate of slightly less than one-third of that levied upon the lake bottom lands. This should be sufficient protection for the plaintiffs against any abuse of assessment. It is not alleged herein that the assessment is levied in abuse of the power and discretion vested in the drainage commissioners of districts created under ch. 442, Laws 1909.

If there was any allegation sustained by proof, that the- assessment is in excess of what is necessary for maintenance, or in abuse of the powers conferred by ch. 409, Laws 1909, or that the levy was made arbitrarily, or from an improper motive to oppress any of the owners of the' lands lying outside of the lake district, an issue of fact would be raised for determination and upon sufficient proof the court would be justified in granting a restraining order to restrain the levy of such assessment, but even in such case the courts are always slow to enjoin pending such inquiry the prosecution of works affecting the public welfare, as this Court has often held.

The object of the injunction here sought is not to restrain the assessment of the tax for maintenance to prevent oppression to the plaintiffs (for 50 cents per acre per annum can not be oppressive to maintain the drainage of lands much of which will produce 80 to 100 bushels of corn per acre), but relying upon a recital in the petition or prospectus of the proceedings to restrict the taxation of the petitioners who are some of those owning lands outside of the district and thus throw vastly more than the burden, three times as much, which is now laid for the maintenance upon the owners of the lake bottom under the contract they agreed to in taking the conveyance of the State’s interest.

It is not alleged nor shown that the assessments are not in the proportion of one-fourth on those holding -lands outside of the lake bottom and three-fourths on the owners of the lake bottom, nor is it shown (though alleged) that the assessment is in excess of what is absolutely necessary for the maintenance of this great work.

*8Though there was an expression in the petition that “none of the lands in the district” should be assessed for maintenance more than 15 cents per acre, this was not followed up by any subsequent order in the cause nor by the decree establishing the district. Chapter 509, Laws 1909, provides that the State as owner of the lake bottom should pay only three times as much for establishing the drainage system as the owners of the lands in the rest of the district and should be liable for only three-fourths of the bond issue, but that after the district was established (sec. 4), “the cost of repairs and maintenance shall be borne equally by all the lands in said district.” The State Board of Education in its conveyance of the State’s interests, above set out, generously required that its assignee, the Southern Land Eeclamation Company, should pay three-fourths of the cost of maintenance also. This generosity is ignored and repudiated by the plaintiffs who seek to keep down their assessments for maintenance to 15 cents per acre, which would require the assessments levied upon the owners of the lake bottom to become many times triple the assessment upon themselves.

If the assessment upon the lands of those outside the lake should be restricted to 15 cents per acre, according to the stipulated ratio, the assessment upon the lands in the lake bottom would be only 45 cents per acre, and the sum raised from the entire assessment would be totally inadequate for maintenance, and this would cause the destruction of the work of so much importance to the public and upon which $600,000 have already been spent.

The plaintiffs waived the limit of 15 cents per acre for maintenance by acquiescence in the final report and also in the final decree establishing the district without incorporating such restriction, and.by assenting to the issuance of $500,000 in drainage bonds, whose .holders, though not parties to this action, will have their rights seriously impaired if there is not a sufficient fund raised for maintenance from time to time. This fund may be less or greater at different times, depending upon the season and the conditions as to labor, and material, which will vary. The only restriction as to the apportionment of the maintenance is that the amount assessed shall be necessary and that three-fourths shall be paid, and not more, by.the owners of the lake bottom, the assignees of the State’s interests and the other one-fourth by the rest of the district.

The plaintiffs have shown no equity which entitled them to the restraining order which besides seeks to disregard the ratio created by the decree establishing the district and the statutes chs. 442 and 509, Laws 1909.

Eeversed.

AlleN, J.,

dissenting: This is an action to restrain the levy and collection of an assessment of fifty cents per acre on the lands of the plain*9tiff in the Mattamuskeet Drainage District for maintenance and keeping tbe proper drainage in effect, the plaintiffs contending that the commissioners have no authority to levy an assessment in excess of fifteen cents per acre.

The State Board of Education was a party to the original petition filed for the formation and organization of the district, and it joined in the petition upon certain conditions and reservations set forth in a paper filed in the proceeding.

The petition to which the plaintiffs and the State Board of Education were parties, contains the following stipulations and agreements:

> “It is understood and your petitioners join in this petition with this condition attached, that the cost of this proposed improvement to the landowners in said proposed district, other than the State Board of Education, shall not exceed $100,000 for preliminary work of completing the drainage of said lake and district.

> “It is understood and the petitioners herein join in this proceeding upon the express condition that after the proper drainage of the said proposed district is effected as set out in this petition or as may be adopted by the proper authorities as provided for hereunder and by the laws authorizing sanie, then the cost of maintaining and keeping the proper drainage in effect shall not exceed fifteen cents per acre for each acre included within the bounds of said district.”

Mr. S. S. Mann, who was the attorney for the petitioners, files an affidavit in this action in which, after stating the conditions above set forth, he says: “That affiant sincerely believes that much opposition to said organization was allayed by the incorporation of the. conditions and limitations above set out, and that the organization of said district would have been impossible without these conditions and limitations. Affiant believes that a sufficient number of signatures to petition would never have been obtained without the incorporation of this feature of the organization.”

Upon this petition a judgment was entered establishing the drainage district as prayed for in the petition under and in accordance with the provisions of chapter 442 of Public Laws of 1909 and chapter 509 of the Public Laws of 1909.

Thereafter, upon the final report of the viewers being filed, the State Board of Education and other petitioners excepted to the report upon the ground that the estimate of the cost for the drainage of the district exceeded “the limit set in the petition in the cause,” and these exceptions were allowed and the viewers ordered to file a supplemental report eliminating some of the canals and curtailing their estimates so as to ’bring the cost within the limit set out in the petition.

The limitation of the assessment for maintenance to fifteen cents per *10acre, as set out in the petition, has been observed until recently, when the commissioners have increased the assessment to fifty cents per acre, and this action has been taken without authority from the court, and without notice to the plaintiffs.

In my opinion, the stipulation and agreement in the petition that the cost of maintenance shall not exceed fifteen cents per acre, is contractual,, and as it is not prohibited by any provision in the drainage act, is binding upon the parties, and that this stipulation entered into all subsequent proceedings.

It is certain that this is the construction placed upon the stipulations by the court and by all the parties as otherwise the exception of the State Board of Education and other petitioners to the estimates of the cost of construction would not have been allowed.

The case of McCracken v. R. R., 168 N. C., 62, is, I think, a controlling authority. In that case an election was to be held on the question of voting bonds in aid of a railroad and it was held that an agreement between the railroad company and a trust company as to the conditions upon which the bonds were to be delivered was binding, although there was no provision in the statute, authorizing the holding of the election and the issuing of the bonds, permitting such an agreement.

The judgment organizing the district has nothing to rest on except, the-petition which contains the limitations of fifteen cents per acre, and instead of assuming that the court disregarded this important provision, it should be presumed that it acted upon it. The limitation was doubtless omitted from the judgment because the petitioners relied on'mutual good faith, and if the State Board of Education, then a party to the petition, had retained its interest in the land, instead of selling to the Southern Land Reclamation Company, the agreement of the parties would have been observed, and this controversy would not have arisen.

It is probable the increased assessment is necessary to the success of the drainage district, although this is denied by the plaintiffs; but however this may be, it furnishes no sufficient reason for disregarding an agreement which was the inducement to the plaintiffs to join in the petition.