R-794



### OFFICE OF 

## THE ATTORNEY 

# GENERAL

AUSTIN.TEXAS

PRICE DANIEL ATTORNEY

GENERAL October 24, 1947

Hon. E. V. Spence, Chairman Board of Water Engineers Austin, Texas
OpinionNo. V-411

Re: Present status and relativepriority of certain applications pending before the Board of Water Engineers.

Dear Sir:

The facts and clrcmstances upon which your questionsare predicatedare, In part, set out in the opinion of the Court of Civil Ap eals In Clark v. Briscoe Irrlgati6nC-any, 200 S.‘W. (27 674, ing, from which we quote as follows: writ of error pend-

“This appeal is from a declaratory judgmentdecreeing in effect that the
owner of a pendt granted by the Board (Board of Water Engineers ,o,f the State of Texas) $n April 1940 authorizingthe appropriator (perndtteejto divert f&m
a Texas stream a specifiedamount of wa-, ter for the purpose of lrrlgatlngspeclfioally desctibed land (the right to which appropriation

has ripened Into a title), is not required to apply to the Board for authortty to substituteother lands for those des%gnatedin the permit, or to change the purpose of use of the water from irrigationto other lawful uses; the right of such appropriator being free of any regulationor control by the Board, so long
as the new use is a beneficialone authorized by law, and does not (1) result In an in-Hon. E. V. Spence - Page 2 -- v-411

creased appropriation

. . _ or taking a greater quantity of water than authorizedin the permit; or (2) impair the vested rights of other appropriators.

"The correctnessof this holding controlsthe decision of the case upon its merits.
"Substantially,

the facts are,these:
"April 6, 1940, the Board, upon his applicationand after due notice and hearing granted to R. T. Brlscoe a pent&t to 'divert,

approptiateand use' not exceeding 75,000 acre-feetper annum of the uuappropriated

waters of the Brazos River, In Fort Bend,County,,,%hen beneficially used for the purpose of irrigation, mini and munkcipaluse'

. 0 * o "$' August 13, 19 5, appellee f-fled

with the Board an application to amend the pezmdt so as to substituteother specified,lands

for those designatedin the permit and to change the purpose of use so as to includemlnlng,manufacturing, and municipal. After proper notice and hearing the Board denied this applicationon December 13, 1945. This suit was filed by appellee on January 8, 1946, against the Board and others, in which it sought the following relief:

"1. A declaratory judgmentdecreeing that it was not required to obtain an amendment of its permit from the Board as a prerequisite:

"a. To change the place of use of its waters in the manner alleged.

"b. To change the purpose of use of. Its waters to Includeminlng,.manufacturlng end municipal.

"2. In the alternative,if it,were held that an amendment of the permit was required,a declaratory judgmentdecreeing that the functionof the Board was purelyEon. E. V. Spence - Page 3 -- V-411

ministerial,

with no discretionto deny the application;

and that mandamus to compel approval of the amendmentbe awarded.



### “3. In the alternative,If the Board
were held to have any discretionin the matter, a decree that the refusal of the Board was ~agross abuse of.its discretion, and that mandamus Issue to compel approval of the application.

"4. A decree (a) as between appellee and defendantsother than the Board, and (b) a8 between appellee and the State that appelleehas the right to extend its canal and supply its appropriated waters to lrrlgate the lands described In the application and for Industrialand other lawful
uses in or near Texas City or elsewherein GalvestonCounty.


### “5. A dec~ree

quietingappellee's vested title fn its appropriated waters, and its right Inherent therein to change the.placeand purpose of use thereofwithout interferencefrom defendants,and that cloud upon its said title by~reason of claims of defendantsbe removed.
"Burlng the course of the trial (to the court without a jury) all testimony offeredby appellantsInsupport of their contentionthat the Board had properly exercisedwhatever discretionit had In deny- the applicationto amend the permit, was excludedupon objectionof appelleels counselupon the ground that the only Issue In the case was whether appellee had the right to use the water for other beneficialpurposes than those stated in the permit, and whether the Board had any discretionat all In such matters. This statementof appelleetscounsel and ruling of the court ellmlnatedfrom the case the alternativerelief sought under paragraphsHon. E, V, Spence - Page 4 - V-411

designated2 and 

### 3 above; and the court rendered judgmentdeclaratoryof ap-. pelleels rights as sought under paragraphs 1 and 4 above, and quieted the title of appellee as against other defendants than the Board as sought in paragraph 

### 5 above."

American Canal Company, togetherwith others, protested the above describedapplicationof Driscoe IrrigationCompany, and it was made a party defendant In the trial court. It became subject to those portions of the judgmentwhich run to the defendantsother than the Board of Water Engineers. Amerfean did not join In the appeal from this judgment.

On March 17, 1947, American filed Its pending applicationto change the purpose and place of use of its permittedwaters. On this same date, Briscoe filed
a Motion for Rehearing of the applicationdenied by you on December 

### 13, 1945.

Predicatedupon the foregoing, you desire our advice as to whether: (1) your Board may rehear Bristoe's application, (2) the effect upon American'spending applicationof fts failure toaIReal from the judgment of the trial court, and 

### (3)the relativeprlorlties between Briscoe and American as to their pending applications.

We will consider first the matter of rehearing, the Briscoe application.

The generalpolicy in Texas concerningrehearing of denied applicationsfor permits by admlnistratlve boards has evolved, for the most part, as the result of hearings conductedby Texas Railroad Commlsslonin connection tith Its Rule 

### 37. The law In this regard appears to be as follows:

1. Absent judicialascertaksuent, the Commissionmay rehear applicationscovering the same subject matter as often as it wishes. Its action on the prior applicationdoes not necessarilygovern any result it may reach on succeedingapplications. The applicant is not required to show that conditionshave changed in order to
secure rehearingby the Commission. Gulf Land Co. v,Hnn. E. V. Spence -- Page 5 - V-411

AtlanticReffnztng

Co., Sup. Ct., 131 S. W. (2) 73; nolla v. Mew Process Co., Sup. Ct., 104 S. W. 1106; Gulf Land Co. v. Atlantic, C.C.A., 113 F.

2. After judicialascertainment has been had on the merits of granting or denying the appllcation, although such ascertainment does not prevent the aggrievedparty from reapplying,nevertheless, unless conditionsare shown to have substantially changed, the Commission is bound by the court18 judgment. The Court in rendeting its judgmentlooks only to condltlonsas they existed at the tl.me of the Commission's decision and such judgmentIs binding on the subjectmatter only so long as conditionsthereafter do not change. The original jurisdiction In such
cases to determlne If conditionshave, In fact, changed
so as to warrant rehearingrests with the Commission. Magnolia v. Wew Process Co

. Ed ar v. Stanolind T. C. A., writ refused, gO.$.~?p~~ 65E: Rumble v. Tua& bow, T. C. A,, writ refused, 133 S.W. (2) 191; R. R. Commissionv. Wencker, Sup. Ct., 168 S.W. (2) 625; R. R. Commissionv. Humble, T. C. A., writ refused, 11 S. W. (2) 728; Gulf Land Co. v. Atlantic, 113 F. (23 902.

3. Pending judicialascertainment,the same rules Indicated In (2) above apply and the result ln such cases may be to render moot the pending litigation if the Commissionreverses its decision. The reversal must, of course, be based upon changed conditions: Stewart v. Smith, Sup. ct.; 83 S. Y. (2) 945; Stanollnd

v. Sklar Oil Co., T.C.A., writ refused, 179 S. W. (2) 376; Edgar v. Stanolind, supra; Hagnolla v. New Process co., supra.

A reading of the above cases shows that emphasis Is placed upon the fact that judicialascertainment has been had on the merits of the Commission's action In denying or granting the permit, and this appears to be the elementupon which a res adjudicataeffect is drawn from the Judgment and applied to the rehearingappllcation absent changed conditions. The very fact that judicial consideration extends only to conditionsas they existed at the time of the Conmtlsslonts decision and that the judgmenthas a res adjudicataeffect only so long
as conditionsdo not change Is indicativethat the conditions, circumstances and transactions

which are consideredby the Commissionin arriving at its decisionHon. E. V. Spence - Page 6 -- V-411

on the merits, are decisive in applying res adjudlcata to the rehearing. If the litigation, pending
or concluded,is not predicatedupon the merits of the Commlsslon*saction but upon Its ability or right to act at all, the situation,in our opinion, is taken completelyout of the above indicatedrules relating to permits subject to litigation. We have quoted at length from the opinion in the Clark case because we believe that the portions quoted show clearlythat both the trial and appellate courts have been concernedwith only the right and jurisdiction of your Board to entertainapplicationsto change purpose and place of use, and that the merits relating to your denial of Briscoels application have not been Involved. For the purpose then of applying the foregoing rules as they relate to rehearing of denied applicationspending litigation, we hold that these rules
are not applicableto the situationwhich confronts Briscoelsapplicationto rehear, and that Briscoe's denied applicationoccupies exactly the same status as though no suit had been filed. We, therefore,conclude that you may rehear said application without a finding of changed conditions.

We now consider the effect of the trial court's judgment on Americants pending applicationfor chang e.

The contentions

made in the trial court and.the relief grantedby it are set forth In those portions of the .opinion

of the Court of Civil Appeals heretoforequoted. Substantially,the trial court held that under existing law neither BPiscoe nor permitteesgenerallyare required to obtain from your Board amendmentsto existingpermits in order to change the place and purpose of use of permitted waters; that as between Briscoe and the Board and as between Briscoe and the other defendants, Briscoe ham right to extend its canal system and supplywater In the
manner sought by it; and that Brlscoels title to 50 000 ;z;f;;z of water be quieted as to all parties excipt

0

We assume for the purpose of this opinion, the contention

made by Briscoe relattve to the effect of such judgment,I.e., that as between Brlscoe and American, Briscoe obtained the exclusiveright to "extendand SupplY" and that Americanwas expresslydenied this right. We must decide, therefore, whether American is bound to thisHon. E. V. Spence - Page 

### 7 - V-411

constructionof the judgment through its failure to appeal.

In our optnion the effect of the judgment renderedby the Court of Civil Appeals, reversing and renderingthe judgmentIn all respects and affirming it only in so far as it quietedBriscoels title to 

### 50,000 acre-feetof water, had the effect of deleting for all purposes that portion of the judgmentupon which Brlscoels contentionsare based, not only for the beneftt of San Jacinto, Conservationand Reclamation District, the only appealingdefendant subject to the portion of the judgmentIn question,but also for the benefit of all non-appealing defendants,including American.

We recognize the general rule that where one party appeals from a judgment,the reversal as to him will not justifya reversal against the other nonappealingparties. 

### 3 T. J. p. 1112. This rule, however, is subject to the rule that where the judgment is entire and not severable,a reversal by the appellate court inures to the benefit of those who do not appeal. 

### 3 T.J. p. 1154, 5 C. J. S. p. '1423; Lockhart v. A. W. Snyder % Co., Tex. Sup, ct., 163 S. W. (2) 385, 3923 Valee v. Joiner, Tex. Corn. App., 44 S. W. (2) 983; Reeves v. McCracken,Tex. Sup. Ct., 

### 128S. W. 895; Irwin

v. Auto Flnance'Go., T. C. A.
on other grounds 60 S. W. (21 40 S. W. (2) 

### 87l, reversed 1 2; ffarrlson

v. Davis, Utah Sup. Ct., 54 P. 

### (2)439, 

### 44

. z

The foundationof the trial courtls judgment here was the absence of jurisdictionIn your Board over applicationfor change. The trial court having found
no jurisdiction

in your Board necessarilyfound that no admlnlstratlve

controlhad been provided covering this phase of our water law. It then performedwhat would eraipaFilybe the function of the administrative body bysupervising and allocating the right of change. Clearly, the allocationof right made by It is untenable if, in fact, your Board has jurlsalction in the matter. In our minds, the judgment is entirely dependentupon the question of jurlsdlct~on;

and since the court of Civil Appeals has overturnedthe trial court on this point, it necessarily follows that those portions of the judgmentwhich allocate the right as between certainparties is overturned whether such parties appeal or not. The major premise which held Briscoels right in place was removedwhen theHon. E. V. Spence - Page 8 - V-411

Court of Civil Appeals found jurisdiction over the subjectmatter in your Board, at which point we conclude that the attemptedallocationfailed for all purposes. For the reasons stated, the judgmentis not severableand inures to the benefit of American whose pending applicationIs in no way affectedby the judgmentin question.

The conclusions just arrived at result from analogy to legal principlesas those principleshave evolvedbased upon the relationship betueen trial and appellate court. Analogy to judicialrelatlonshLps may not be applicablein deciding the questionspresented here because the problem is one which, in its final analysis, involvesrelationships between judicial and administrative branches of government.

A relatedproblem confrontedthe United States Supreme Court in Federal Communication Commissionv, PottsvilleBroadcastingCompany, 309 U. S. 13% In that case, an applicant sought a permit for the construction of a broadcastingstation and was denied because of financial inability. This findingwas based upon mlsconceptionby the Cononission of Pennsylvanialaw. On appeal, the court pointed out the error and returned the
case to the Commissionfor reconsideration. In the meantime, other applicantshad applied for the same facilities; and their applications were set down with that of the denied applicant for hearing to determinewNch 'on
a comparative

basis in the judgmentof the Commission will best serve the public interest." The denied applicant clairnea priorityaa objected to the setting down of his applicationfor hearing on a comparative basis, He sought and obtainedmandamus to set aside the "comparative

basis" order of the Commission. With respect to this action by the Court of Appeals, Justice Frankfurtersaid:

"Thiswas not a mandate from court to court but from a court to an administrative agency. What is in issue is not the relationship of federal courts inter se - a relationship

defined largelyby the courts themselves- but the due observanceby courts of the distributionof authoritymade by Congress as between its power to regulate
commerceand the reviewingpower which it has conferredupon the courts under Article IIIHon. E. V. Spence - Page 9 -- V-411

of the Constitution. A review by a federal court of the action of a lower court is only
one phase of a elngle unified process. But to the extent that a federal court is authorized to review an administrative act, there is superimposed upon the enforcement of legislative

policy through administrative control a differentprocess from that out of which the administrative action under review ensued. The technkal rules derived from the interrelationship

of judicial tribunals forwing a hierarchicalsystem are taken out of their environment

when mechanicallyapplied to determine the extent to which Congressional power, exercised through a delegatedagency, can be controlled

rithln the limited scope of 'judicial

power' conferredby Congressunder the Constitution.

"

. . . "The Comndssionrs

responsibility

at all tlmes,ls to measure applications by the standard of 'publicconvenience,interest,or necessity.' The Commissionoriginallyfound respondent'sapplicationInconsistent with the public interestbecause of an erroneous vien regarding the law of Pennsylvania. The Court of Appeals laid bare that error, and, in compellingobedience to its correction, exhaustedthe only power wNch Congress gave it. At this point the Commissionwas again chargedwith the duty of judging the appllcation In the light of 'publicconvenience, interest, or necessity.1 The fact that In Its first dispositionthe Commissionhad committed
a legal error did not create rights of priority In the respondent,as against the later applicants,which it would not have otherwlsepossessed. Only Congress could confer such a priority. It has not done so. The Court of Appeals cannotwrite the principle of priority into the statute as an indirectresult of its power to scrutinizelegal errors in the first of an allowable series of administrative actions. Such an implicationfrom the curtailedrevleu allowed by the Communications Act is at war with the basic policy underlyingthe statute.Hon. 33. V. Spence - Page 10 --V-411

It would mean that~forpracticalpurposes the contingencies

of judicialreview and litigation,rather than the public interest, would be decisive factors in determining which of severalpending applications was to be granted."

No direct mandate from Court to Board is involved here as it was in the cited case, nor was the direct appellateproblem presentedhere involved In that
case. Nevertheless,the basic problem of judicialcontrol of adminAstrative discretionis Involvedhere, as it

was there. The*prfnciples announced in that ease with reference to controlby the judiciaryof administrative discretionlead us to conclude that since the trial court here has been found in error on the question of the Board's jurisdiction,

then it must follow that the attemptedexercise of administrative discretionby the court in allocating as‘betweenthe party defendantsthe right of change
was a matter beyond its province and was a matter which It could not decide unless it had correctlydecided the jurisdiction

question.

This conclusionIs confirmedby Borchard in his work on DeclaratoryJudgments,2nd Ed., p. 878, from which
we quote:

"The declaratory judgmentcannot and is not designed to cut down the statutory reotirementsfor administrative review. Again, no court by declarationor otherwise should attempt to control administratlve~ discretion,th h the exercise of ads&nistrativedisc;%& may~wellbe decreed either by declarationor mandamus. But' where administrative authority over a particular transactionor business is in dispute, and, the facts being established,the issue of jurisdiction is purely one of law, there Is no reason why the courts cannot make a declaration, although in some of these
cases an injunctionwould be refused." (Emphasisadded)

In addition, it appears to be settled in Texas that courtsmay not put themselvesIn the place of the administrative

body and exercise the discretion which the Legislaturehas committedto that body. The ruleHon. E. V. Spence - Page 11 - V-411

is thus stated in Railroad Commissionv. Shell, sup. ct. 1942, 161 s. v. (2) 1022:

"If the matter coveredby the order is one comm$ttedto the agency by the Legislatufe,and involves the exercise of its sound judgmentand discretionin the admzinistration of the matter so cominltted to It, the court will not undertake tcr

put itself in the position of the agency, and detenfdnethe wisdom or advisability of the particularruling or order in question,but will sustain the action of the agency so long as its conclusions
are reasonably supportedby substantial evidence. This is so because since the

See, also, Lone Star Qas Co. v. State, 137 Tex. 279 and Blair v. Trinity IndependentSchool District,TCA 1942, writ refused, 161 S. W. (2) 1030, 1033.

Consideration

will now be given to the aueetlon of priorltXes.

One of our purposes in citing ana quoting at length from Federal Colnmunications Commissionv. Potts-

_ vllle Broadcasting~ Co., supra, is the light which that case throws on the question of priorities. The Commisslonlsreresponsibility

there and the Board's duty here Is to measure applications

by the standard of public welfare. In that
case no prioritywas found to exist as between various applicants for the same facilitiessimply because one applicant had filed his applloationearlier than the others. Oni: C!ngreas could confer such priority and It had not

. In consequence

neither the Court nor the Commlselon had authorityto confer priority on that basis, the province of ~tfie court being the limited review confhrred upon it, and the province of the CommZssionbeing to
measure the applicationsin the light of public interest.Hon. E. V. Spence - Page’ 12 -iV;:Q,l I : ” ‘:-:,;:: :

In this State certain fs riotiities

are created by statute. For example,Art. 7 n'# V:C. S., sets up prioritiesbetween uses of water; Art. 7472, V. C. S., provideswlth reference to the originalapplicationto appropriate

water that the first in ,time is the first in right; Art. 7496, V. C. S., raises priorities in connection with presentations ; and Article 7523, V. C. S., provides that the right to appropriatejshall date from the filing of the application. In none of these articles do we find any inferenceto sustain a theory that prioritiesbased upon date of filing' exist between applications for change. As we b.ave.already~ pointed out in
our OpinionV-388, addressedto you,‘yourpHmary considerationas regards applicationsto change is the public welfare involved. Absent any statutorydirective, and we find none either express or Lmplled, that priorlties attach because of date of filing-andin view of the nature of your considerations, we advise you that no prioritiesbased upon date of,fil,lng exist between the various applicationsfor change.now pendgng relative to furnishing

water to the Texas City-Galveston area.

.~, For the same reasons,we conclude that no priorities exist~byreason of one applicanthaving applied first to extend his canal system in order to accomplishthe change, or his having first described,certain acreagewhich he desires to irrigateby reason of the change. Again we point out that your primarg consideration in the matter of change is the public welfare involved,and we know of no g00a reason, statutoryor otherwise, which binds you on grounds of priority to grant the applicationof one over the applicationof another. In our opinion,you are free to grant any or all of the pending applications within your sound discretionas to the arrangementwhich will best serve the public welfare.

(1) The general rule that, absent substantially

changed conditions,adminlstrative boards may not rehear denied applications In the face of concludedor pending judicialascertainmenton the merits of a Board18 decision, is not applicableunder the facts presented to the Board of Water Engin-+, since It is apparent that bothBon. E. V. Spence - Page 13 - V-411

the trial court and the Court of Civil Appeals were concernedthrough aeclaratory judgment,not with the merits of the Board of WaQer Engineers'decision, but only ppith

its right and &risdiction to hear at all.

applicationsfor change of purpose and place of use of permitted waters. Under such circumstances the Board may rehear the application without
a finding of changed conditions. Hagno- ;p&v. Wew Process Company, lOJ+ 9. W. (2)

. (2) Under the facts presented the judgmentof the trial court was entire and Inured to the benefit of non-appealing parties. Lockhart v. A. W. Snyder Ik co., 163 9. W. (2) 385. The result reacbed'isfiarther supportedby the rule that courtsmay not exercise the dlscretl.6n conferredby the Legislature upon administrative

bodies. Railroad Commlsslon V. Shell, 161 9. W. (2) 1022; Federal Communication Commlsslonv. Pottsvllle BroadcastingCo., 309 U. 9. 134.

(3) No prioritiesbased upon date of filing exist between applicationsto change purpose and place of use of permitted waters.

Yours very truly

ATTORE'EYG~ OF TREAS

R.DP:bt