Case Title: Neal v. Hunt

Citation: 112 Ariz. 307, 541 P.2d 559

Docket Number: 

State: arizona

Court: Arizona Supreme Court

Date: 1975-10-16T00:00:00Z

Document:
112 Ariz. 307 (1975) 541 P.2d 559 Claude NEAL and Rita Neal, his wife, and Truxton Canyon Water Company, Inc., an Arizona Corporation, Appellants, v. Frank HUNT and Francis T. Hunt, his wife, Appellees. Frank HUNT and Francis T. Hunt, his wife, Charles S. Grigg and Blanche Grigg, his wife, and John L. Byers and Susan Byers, his wife, Cross-Appellants, v. Claude NEAL and Rita Neal, his wife, and Truxton Canyon Water Company, Inc., an Arizona Corporation, Cross-Appellees. No. 11729. Supreme Court of Arizona, In Banc. October 16, 1975. Rehearing Denied November 18, 1975. *309 Snell & Wilmer by Mark Wilmer, Phoenix, for appellants and cross-appellees. Bonn & Anderson by Jeffrey D. Bonn, Jennings, Strouss & Salmon by M. Byron Lewis, Phoenix, for appellees and cross-appellants. CAMERON, Chief Justice. This is an appeal and cross-appeal from an injunction granted by the Superior Court of Mohave County which limited defendants, Claude and Rita Neal, and the Truxton Canyon Water Company, Inc., to taking no more than three hundred gallons of water per minute from certain water wells located on property owned by them in the Truxton wash area, thirty miles east of Kingman, Arizona. We must answer the following questions on appeal: The facts necessary for a determination of this case on appeal are as follows. The land in question is located in the Hualapai Valley of Mohave County in northwest Arizona, an area of very limited rainfall. The terrain is one of high plateaus, low mountains and valleys. The washes of the area contain surface water during some parts of the year and there are a few springs and streams. The inhabitants depend for water mainly on deep wells drilled on their land. The land involved is located in a non-critical ground water area as defined under our water code. A.R.S. § 45-308. In 1957 defendant, with the exception of 74 acres, sold his ranch to Hollenbeck. In a separate agreement not mentioned in the deed or recorded, defendant Neal reserved the water rights to the ranch which he had sold except for enough water for the buyer to irrigate 40 acres of crops. The reservation read as follows: The ranch changed hands several times and in 1971 its owner Collins sold the ranch consisting of some 2,800 acres of deedland, 540 acres of State Leaseland, and 3,100 acres of Taylor Grazing land to the plaintiff Hunt. On 29 April of that year, and prior to the sale, Collins told Hunt *310 that defendant had some claim to water rights on the ranch. Collins did not show Hunt any document relating to any claim. Hunt searched the county records and finding no document of record concluded that the matter was only a rumor. The next day he purchased the ranch. A few weeks after the sale Hunt and the defendant met at a livestock show and defendant mentioned his water rights. Hunt once again searched for this document in the Mohave County records to no avail. At the end of May, 1971, some 15 years after the sale of the land, the defendant finally recorded the water agreement. Plaintiffs Mr. and Mrs. John L. Byers have 10 acres and plaintiffs Mr. and Mrs. Charles S. Grigg have 4 acres about 1 mile southwest of the Hunt ranch. Both of these families have wells located on their properties and use their well water for domestic and business purposes. Plaintiffs Mr. and Mrs. Frank Hunt use their Mohave property and well water for domestic and agricultural purposes. The Hunts, Griggs, and Byers' contend that if Neal is allowed to continue pumping the water level will soon drop forcing these families to sink deeper wells. The defendants want to mine the water and transport it off the land. Besides the Truxton Water Company the defendants' family owns or has dealings with several other family enterprises and has contracts to provide water to various subdivisions and developments in Mohave County as well as to the town of Kingman. The trial court, on 19 September 1973, entered findings of fact, conclusions of law, and decree permanently enjoining the defendants from removing percolating ground water to lands not overlying the common water supply in an amount greater than 300 gallons per minute. Conclusions of law 2, 3, 4, and 5 read as follows: From this the defendants appeal. The Hunts, joined by the Byers' and Griggs, cross-appeal contending that the trial court erred in allowing the defendants to withdraw 300 gallons per minute or any amount for use on land not overlying the common water supply. UNRECORDED WATER RIGHTS AGREEMENT A.R.S. § 33-412(A) reads in part: The term "hereditament" is a broad one, more comprehensive than either the term "land" or "tenement" and almost as comprehensive as the term "property." 73 C.J.S. Property § 7d at p. 167. In George v. Gist, 33 Ariz. 93, 263 P. 10 (1928), we indicated that water rights in land must be conveyed in a deed and not a mere bill of sale. We reaffirm that position. *311 Percolating waters, which are not subject to appropriation, are included within hereditaments as found in A.R.S. § 33-412. The trial court held that Hunt did not have actual knowledge of the 1957 agreement between defendant and Hollenbeck nor was there sufficient evidence to charge Hunt with constructive knowledge of the existence of the agreement prior to his purchase of the ranch. A long time ago this court said: Constructive and actual notice have the same effect. Arizona Land and Stock Co. v. Markus, 37 Ariz. 530, 296 P. 251 (1931). We believe that when Collins told Hunt, prior to the sale, that defendant had a water right claim this was sufficient to put Hunt on inquiry. We believe further that absent other notice, a search of the record was sufficient under the facts in this case. Defendant, in order to protect his interest, had an obligation to record the instrument and Hunt had an obligation, once Collins told him of defendant's possible water rights, to ascertain if they were correct. The difference is that Neal did nothing, while Hunt attempted, by looking at the record, to ascertain if this rumor was correct. We will construe recording acts so as to afford the greatest possible protection to the person who in good faith endeavored to comply with them. Phoenix Title and Trust Co. v. Old Dominion Co., 31 Ariz. 324, 253 P. 435 (1927). We believe Hunt acted reasonably under the circumstances by searching the Mohave County recorder's office. Finding nothing to confirm the existence of the agreement, he cannot now be charged with having had constructive notice of its existence. We believe that the trial court was correct in finding that Hunt was a subsequent purchaser for valuable consideration without notice and that the agreement between defendant and Hollenbeck was not binding upon Hunt. Davis v. Kleindienst, 64 Ariz. 251, 169 P.2d 78 (1946). SOURCE OF WATER Prior to statehood this court held that there was a presumption that underground waters are percolating in nature and if one asserts to the contrary then this must be affirmatively shown by clear and convincing evidence. Howard v. Perrin, 8 Ariz. 347, 76 P. 460 (1904). A quarter of a century later we had occasion to define the requirements for showing the existence of an underground stream or subflow: Additionally, it must be shown that there is a definite source of supply although there need not be continuously running water. The existence of a subterranean river is to be determined both by observation of the surface of the land as well as the utilization of scientific data. Maricopa County Municipal Water Conservation Dist. No. 1 v. Southwest Cotton Co., supra. In the case before us, Neal introduced evidence tending to show that the wells were fed by non-percolating waters. However, the trial judge concluded that he failed to overcome this presumption. With *312 this we agree. Our Court of Appeals has stated: LIMITING THE USE OF THE WATER In his findings of fact the trial judge stated: This court has stated in the strongest terms that the doctrine of riparian rights to water does not exist in Arizona. For example: And our statute reads: We have, however, been inconsistent in that while rejecting the doctrine of riparian rights as to surface and underground streams, we have adopted the doctrine of reasonable use as applied to percolating ground waters. This seeming inconsistency has been discussed as follows: Recently we held that the doctrine of beneficial use mentioned in our statute, A.R.S. § 45-101, is a part of the common law rule of reasonable use of percolating water. We stated: However, in allowing the City of Tucson to take water from the Marana Critical Ground Water Area and transporting it outside the area, the court went on to state: We therefore hold that in dealing with percolating waters and not surface waters or subterranean streams, and absent a showing of damage to, or impairment of, the water supply of another landowner within the same groundwater basin, a landowner may mine and remove, to an outside area, subjacent water from his land. In our State water is a precious and much needed commodity. The law should encourage the reasonable and beneficial use of this great natural resource, subject, of course, to the rules for its taking and distribution *314 which have evolved over the years. As we have stated: In the instant case the trial judge found that the pumping of 300 gallons of water per minute from the Neal well would not injure Hunt's water supply or that of his neighbors. Should the contrary be found to be true, the Superior Court of Mohave County retains jurisdiction and can correct the harm. We affirm the findings of fact, conclusions of law, and decree of the trial court. Judgment affirmed. HAYS and HOLOHAN, JJ., and EINO M. JACOBSON, Court of Appeals Judge, concur. STRUCKMEYER, Vice Chief Justice (specially concurring). I concur in the result. Note: Justice LORNA E. LOCKWOOD did not participate in the determination of this matter and Judge EINO M. JACOBSON sat in her stead.