OFFICE OF THE ATTORNEY GENERAL OF TEXAS 

AUSTIN 

Honorable W. Lee O*Daniel 

@overnor oi Texas 

Austin, Texas 

Deer Qovernor OlDanlelt Opinion No. O-8313 

Ret Whether or not the Qulf 

Coast Water Company ia a 

utility oompany "02 any 

kind or charaoter whatsoever* 

,/' 

,/ 

within the manin& of Seotlon 

3, Aots 1934, 4Srd Leg., 4th 

0. S., Ch. 7, page Z3. 

We reaeived ~your’ist+m dated June 15, 1940, requwtompany was lnoorporeted in 1931 

er to the publio for frrigation, 

The Company apparent8 of Art1016 1308, Reelaum* in its oherter 

go in eald article. It 

authority uuder it8 

which has been deolarad 

Se0 Gulf States Utllitlss 00.. 

rror Refucred). 

e been informed that the Gulf Oaaat Water Uoml.of Its water from the OoLorado RIveri that 

the oorogany has approximately ninety (90) oontraote for the 

furnishing Or water to rios famere for irrigation purpo444; 

that the oorapany furnished water yaerly to irrigatr approximately thirty thousand (30,000) aores of land; that the aoazpany owns 

pumping plants, oanelr, laterale, ditohes, eto., used in furnlsh- 
t 

Ronoreble I?, lea O*Denlel, paga 8 

fog water to Its ouetomere and that the company doer not own 

eny lntereat in the land farmed to rlae. 

Wa deem it neceeeary to quote e part of section 3, 

botcr 1934, 43ra Leg., 4th Oalled 866dlion, Oh. 7, at pccge 33 

alnoe your puery arises by 7irtua of the provleione of eala 

Aat. Said aeotlon reefla, in par6, as follower 

*That no gereon shall ho eligible for suoh 

appointment (to the boera of Qireators OS the Iawer 

Colorado River Authority) if he haa, during the precadlna three yearr berore his enrointmant been (IDIployeb: by en eleotrio pewer and-light company, gar 

Berore determining whether the dulf Ooaet water Company 

is a uttlltp oompany wlthln the meaning of the Aoh oreatlng tha 

l.ower Colorado River Authority, it 18 proper to ooneider the erldent intent of the legislature in eneating the6 per6 of the above 

mentioned AoQ. 

An inepeotion 0r sallate Bill le?. 8, Aete 43rd Leg., 

4th C. 8.. ch. 9, page 19, reveals that paver has been conferred 

upon the Lower Colorado River Authority, eating threugh it8 alreotore, to control, store, pre6brve, uee, dietribute and sell the 

weterm of the Colorado River, 60 develop, generate, dietribute 

and eel1 water power and sleatrloal enorgy, to oonstruct, meintaln, u8e ana operate tsoilitien, and meny ether poware toe numeroue to mention here. 

The legislature intended thaf the afreotore of the 

Lower Colorado Rirer Authority should be persons who would aot 

for the bent intereets of the.State. It there?ore sought to end 

did disqualify those persons from being appointed to the Board of 

Direotors of the Lower Colorado River Authority whho, at the time 

of egpointzent, had been employed by an utility oompsny within 

three (3) yeere preaeding the date o d e appolntmen6. This safeguard waar enaoted to insure as far (18 possible thet 6he affairs 

of the l,ower Colorado River Authority would be oarrlsd on to the 
Reuoxable 1. Lea OvDanlel, page 3 

best Interests or the State rather than for the Interest of 

private lndlvlduale. 

In this aouuectlan, It has been aalled to our attentlon that the Gulf Coast Water Corcpany has entered Into a aontraat with the Rorrd 0r Dlreators 0r the Lower Colorado River 

Authority for the purahase or water. It 1s r4aUlIy seen that 

it a alreator, Officer or other employee or the Gull boast Water 

Wapany 18 eligible for the appOintdcent la question, he rr,lght 

roll be mom Interested In seelug that the water oompany benefited rather than in protectInS the best interest8 or the Stste. 

Xn Title Xo. 188, Revised Clvll Lftatutee, we flhd the 

followl~ articles whlah we believe to be pertinent to the questlon herein involved. They are a8 followst 

*Artlalr 7466. Public rights 

=!fhe aonservatlon and develnpment or alt or 

the natural resourae8 or thla State, 1ncIkQlng the 

aontrol. etorlm. 9reaervatlon and dletributlon of 

Its stoim and rid water8, the waters 0r Its rivers 

and streams ior irrigation, power and all other use- 

?tul purposes~ the reuu2m6ffon ana Irrigation 0r it8 

aria, semi-arid and other lauds needing irrigation; 

the realarcatlon and drainage of its overflowed lands, 

and other lands needing drainage; the aonservatlon 

and deveIapuent~.of Its forest, water and hgd?o-aleatrla 

power! the navlgatlon of its inland aad aoastal waters, 

ana tha preservation and oonservatloh oil all snah 1)1- 

tural r46ources or the State dre each and all hersb 

dealared DubHa right4 and dufi~;s.~ Iunaerscorlng o&a) 

"Jirtlolo 7467. Property of the State 

*The watera Or the ordlasry flbw ana underflow 

and tlaes of, every ilowing river or netural stream, 

of all lakes, bays or am.6 or tFis Gull of Kexlco. 

and the eta&, fiood or rain watare or every rivb or 

natural stream. eanvon. ravine. ao~r4ssloa or watarshed, within the StkePot 'Paxa;, ai?4 h&by &cl&d 

and the right t the 

~roarlatldn in zhe 

manner and ior- the us& and piwp%ee-hereinafter provlaea, and icay be taken or diverted from its natural 

channel r0x any 0r the purpo64s expreesed la this 

chapter. Wen an appllaatlon 16 aadr ror approprlac 

510 
Honorable W. L. OrDaniel, ~680 4 

tion af suah water for mining purpoaea, the owner of 

the land through which the water flows and whlah 28 to 

be arpropristed ahell here the prior right to agpropriate dlamo, ana ehall be permitted to extrolse suah right, 

although nuah owner mey not hsts mde appl2oatlon prior 

to such eppliaation by another, and suah owner ahall have 

only ten days aftor the notice of application to appropriate muoh water In whlcah to exeraiss his prior right 

to appropriate, whiah he shall do by written application 

filed with the Board of Water Xn&mers within suah 

time.* 

"Artiale 7858. Possessory tight 

~till,ptrsana who owa or h0ia a passes6cry risht 

or title to land adJoining cr aont2@ous to any dem, 

re84rvoir, aanal, dltah, rlume or let4s%l, oonstruatoa 

and maintained under the provisiona ot this ahapter, 

and who shall have esaured B ri&t to the ~4% of water 

in mild aand dltoh, iluin6, ldtcral, ~4%~0lf, aam 

or lake, shali be entitled to be supplied iram suah 

aanal, dltah, flume, lateral., dam, nwrvolr or lake 

with nater ror irrl@tlon of suah Xand, and for mining, 

tilling, manufaoturlng, aevslopment 0r power, ana 

etoakralslng, In accordanct wl%h the tsrmr of hir or 

their oontract." 

"Artlale 7656. Failure to fasrqe upon pria*~ 

*ff the person, essoaletlon 0r persona, or oorport&ion owning or controlling rush wetek, and the 

person who own8 or hold8 a porssaaory rl&ht or tlfla 

to land aajofnlng or .co;lt2g~?us toany eanrrl, ditah, 

rliie or lateral, lake or remxvolr, aonstruat4d or 

maintained unQ,er the provl62ons of'this ahapter, fall 

to aerse upon a price for a permanent~viater right, or 

for the ~4 or rent@1 of the neeeasary water to lrrlgato 

the land or such person, or for mining, milling, m4nutaoturing, the aevslogment of power, or stook raising, 

wch person, assoaiation of pereon8, 03 aorporatlon 

#hall, nsver8helesa+ If h4, they or it, h4v4 or aontral 

any water not aontraated to othrrs, ttmnish the neoessary water to euah pareon to irrigate his lads or 

ror mining, milling, manufcaatuing, the development 

or power or atook ralalnq, at aueh prices as aball be 

reasonable and .just, and without d2aarlsinaflon.~” 
Honorable 2. lee O'Daniel, page 5 

WArticle 7565. Ford to fix rct68 

"The said Ecoard shall have Rower and eidhcrity, 

and it ~&till ?e its duty to fix reasonable rates for 

the furniSbiIl& 0r water for the puryoaes or any SWpose msntioned in this chapter." 

Urticle 7370. Rules and regulctians mate and 

published 

TWery p6rSon, aasooiation 0r persone, oorporatlon, 

or irrigation district, coneervlng or 8uyFlyIng water 

for any of the purpoaea authorized by this chapter; 

shall make and pu'bliah reeeonable rules and ngulatlonr 

relating to the method and manner of sqgly, u6e en4 

dietribution of rater, and prescribing the time and 

manner of making eppllaation for the une of water and 

payment therefor.W 

*Article 7883. Additional right or way obtained 

*Any person, asoooiatlon 0r pereons, aorpcration, 

irrigbtlm or water improvement distrlot, or any oity 

or town, may ale0 obtain the right 0r way over privatr 

lend8 and ale0 the lonae tar pumping plants, intakes, 

beadgates and atorace re8ervcslr8, by oondemnetlon, by 

causing the darr%iges for any Drivets property appTopried.ed 

by any euoh person, aoeooirtion 0r persone, oorpor2tioq 

water improvement or irrigation district or city or town, 

to be aasesscd end paid for as provided.by the Statutes 

0r thic Stctc and ae prcvided in Title 5Z 0r this Aot 

relating to 1 E. minent Domain* provided, however, that 

when the power granted by this section is eought to be 

exeroiaed by any person or aasoolaticn of persons, but 

net including irrigation oorporatlona, diatrfcte, cities 

or towns, he or they shall first make appliceEtion to the 

Doz~rd ci :vater Hnginsers for suoh condemnation and said 

Board shall make due inveatigotion entl if it deems advisable ahall give notioe to the party ownihg the land 

8oU@t to be oondemned, end after hearing, may institute 

such oondsnn!Jtion prooeedings In the name of the State d OL Texes ror the use an d benefit of said person or persons and eL1 others aimllwly aitunted, the coats of 

said cult and condamnation to be paid by the person or 

persons at whoose instance the same la Instituted in proportion to the benefit8 reoeived by each a6 fixad by 

eaid board and to be paid before use is m<ide of such 

oondemned rights of property; and thereafter all persane seeking to take the benefits of suoh condemnation 

proceedings shall make applioation therefor to the IW>rd 
Honorable E. Lee C'Daniel, Rags 6 

of Water Rnginviera and ii euoh appllotiticn is granted 

shall pay lees and clxrges 68 may be fixed by the 

Bocrd." 

The ?asr6 of Water Engineer8 is vested with broad powers in regulating the use o? water over whloh It has regulatory 

ocntrol. Reoause the Gulf Coast Water Company takes all of its 

weter out of the Colorado River and rdslla it to rioe farmers 

for t!le rurpoae of irrigating rios land, the raid oompmny is 

subject to regulation by the Roerd of Watsr Engineers ae provided in Title 128, Revised Civil Statutes. Artio1e 7555, 8upra, 

provides that the furnisher of water must supply water to *all 

persons who own or bold a possesscry right or title to land adjoining or oontiguoua to any den, rcwervclr, tanal, ditch, flume 

or letcrel* when they shall have asoured a rl ht to the use OS 

the water. \:e are lnforrced that some ninety 7 90) persona have 

secured the right to receive the water from the Gulf Coast Water Company. 

Artioies 7556 and 7557, provide, thst water must be 

supplied at suoh prices as shall be rsaeonebls andwlthout dieor#dntition. Artiole 755.5 $ivrs the Roard ot Water Engineers 

power end authority to fix reasonable rntes lor the use of the 

water. Article 7570 reqtirae the furnisher of water to make and 

publish reasnncble rules and regulations rslatiq to the manner 

and x&hod of supply, usa and distribution, and preeorlblng 

the time and manner OS making applloatlan for the use of water 

and ya~yment therefor, 

krtiole 9883 grants irrigation oonpanies th,s right 

of eminent doma:n. To make oertein that irrigation ocn5p4aie4 

had the right to condemn land under Artlols 7583, the 44th 

Xegislature, Reguler Eession, 1935, enaotsd Senate Bill Roe. 

155, Ch. 48, page 126, clarifying aaid article. The emergency 

oleuse of said Aot reads aa follows: 

"b00. 2. The Sect thet under the oodlfioation 

of 1925 the oodiilsrs, or else the printers, left a 

question unCer the new laws of 1925 as to the power4 

9f irrigation corpora,tions to oondtvmn lend, whioh 

power has a,lways been expressly reoognined in Texas, 

and it is necessary to clear up the question and it 

is vital to the agricultural development of this Stats, 

oreates an emargenoy and on imperative public neoeselty 
513 

Honorable W. Leo O*Daniel, page 7 

that the Constitutional Rule requiring bills to be 

read on three several days la each House be surpended, 

and the name is hereby suspended, and that thlrr Aot 

take effeot and be in foroe from and after its passage, 

and it is 80 eneoted.n 

In the oase of Colorado Canal Co., vs. KoFarland and 

5outhwel1, 94 8. W. 400, the Court of Civil ~ppealr went LIO far 

aI to sag that the possession of the right of anbent domain 

flxad the status of an Irrigation oompany as a quart publfa 

corporation regardlees of whether it exerolnes the power or not. 

Wr. Justice Dibrall, speaking for the Supreme Court 

of Texas in the oase of Raywood Rice, Canal and YillSng Co., vs. 

V, F. Erp.and W. E. @right, 105 Texae 161, said: 

*The granting of the power of eminent domain 

imposes a public service in return. No authority 

under our law exists ror conferring the power at 

eminent domain for private use. The moment suoh 

p-or is granted the grantee beoomm quasi publio 

in ohsraoter and while hi8 or Its funotlona are exerolaed for prorlt they must be exeroieed in the interent of the publio upon reasonable terme and without 

dlaerlm,fnation. * e en 

We quote from the oaee oi Amerioan Rio Wands Land and 

Irrigation Co., vs. Mercedes Plantation Ce., 155 8. W. 886, (rer023d ani3 atrimed 208 6. w. 9041, as followa: 

*Appellant oorporatlon wae organlsed and ohartsrsd under aeotion 11 o. El, p. 23, ot the dot8 of 1895 

(R. 5. ~1911, art. !&02 at seq.), and follows the language 

ot that aot In stating its purposes and powers. From 

these powers grow, by operation of law, ita duties, which 

cannot be #hanged or leeesnsd by Its intentions, In 

Borden t. Rio8 & Irrigation Co., 981 Tex. 404, %b 3. #. 

11, 107 Am. St. Rep. 640, the Supreme Court of this state 

held that euoh a oharter create8 a quasi publio oorporatioa whiah is oharged with duties to the publio aoamienaurate with the powers cand privileges oonferred upon it 

by law. The Leglslsture in the above sot has not very 

olearly doiined the rights of the publio nor the duties 

of the eorporatlon, but a aartful rtudy of the langur,go 

of the aot in the light of the well-eetablisbed prinoipies OS law makes clam the meaning. As aptly raid by 

the learned Judge who wrote the opinion in the Borden 

c 
Donorable W. I,ee O'Daniel, page 8 

Caee the powers of the corporation are oonferred to 

enae *i e It to approprlnte water and to convey it 'to all 

persons entitled to the 8me$* to *all persons who OWA 

or hold a poeeeseory right or title to land adjoining 

or con"uiguous to any canal,* etc., aAd *bho shall h:ive 

aacured a right to the use of water * * * in aooordance 

with the terms of their oontraot.' In case-of a shortage of water, a plan for prorating the supply is Fmvlded, and the sale of a permanent weter ri&t is made 

an easement upon the land which will ycos with the title, 

eto. It is further provided that in case no ecntreoi can 

be agreed upon between the conamer and ttre Irrigation 

company, the conauxer shnll nevertheless be entitled to 

water upon rez.scnable terms. Such lmgusge, aided by 

the rule ot law that only puhlio or quasi puhllo aorporations are endowed with the power of eainent dozmln, 

oan only bo understood to mean that out of the grant of 

power to the oor?oretlon ahall grow, ipso faoto, the 

right of the property owner to receive, upon reasonable 

texvca, a fair proportion of the water taken from the 

water ceurse and conducted through its oanals, and that 

the power of the corporetion to contract for the aupplp 

of water ia limited to such subjects a8 do not oonfllct 

with the righte of the parties ae rlxed by the law. 

In the Eorden Case the court, upon t,hla subject, aaid: 

*The power to oontrtot, here given to the owmr of the 

plant, oannot, if the business is to he regarded as 

affected with a publia interest, be reaognized a8 absolute and LIAoOAtrolled. Comon carriers aAd othera 

engaged in publio oallings h:ve the power to Cantreat, 

but it cexmot he 80 employed as to absolve them from 

their duties to the puhllo or to deprive other8 of 

their rights. Right8 hre evidently secured by this 

statute to those 80 eitubted 38 to be able to avail 

themselves of the water provfded for, and those rights 

it is the duty of the owners of the contemplated buslne38 to rospeot; ami the power to contract, under the 

well-recngnized principlea applicable to those oherged 

with auah duties, mu& be exercised in subordination to 

suoh duties aAd rights. Reasonable contracts are what 

this statute means, and not contrecte employed as 

evasions of duty.' 98 Tex. 511, 86 8. ?i. 15, 107 Am. 

St. Rep. 640.” 

See 8 a. 1. R. 968, 13 k. I. R, I.?27 and 44 Tex. Jur. 

339-369 for a full dlsousslon and oit&tioA of authOritio8 oonoerning the question of an irrigation company being a utility oom- 
. 

5513

Ronorable W. Lee O*Danial, pi-ee 9 

g-4. 

Fran the above oiteb authorities, It ie apperent 

that an irrigation oompany pamesses many of the attributes 

oommon to the more generally knowi utflity oompanies. Further, 

it seems to ua that there ere a6 many reeson~~, it not more, for 

alequalifying a director, of’ffoer or employee of an Irrigation 

oom~enp than there would be OS disqualifying e direator, offioer or employs of a gas or telephens oomgany. 

from e persoAa1 6teAdpoint, 

Certainly, 

it would seem that e person interested in e water oompeny is in a muoh better poaltlon to 

profit from the appointment in question than a person lnterested in a gas or telephone oompanl. 

For the reason* herein ststed~, ve are of the 

opinion that the Gulf aoast Water Company 18 a utility oompany rlthln the meaning of 8eotion 3, Aata 1934, &Ml Leg., 

4th a. a., ah. 7, p. es. It follewr that a director, ofifaer or other employee of said oompany is lnelig~bls to 

be appointed to the Emord of Direotora of the Lower aoloredo 

River Authority a8 provided in maid Aat. 

Tows very truly 

ATTORNRT QEW?AL OF T!XXAS 

Leo 8hoptaw 

LS:ZF 

OPlNlON 

GOMMI’lTEE: \