Case Name: EASTERN OREGON LAND CO. v. DESCHUTES R. CO.; DESCHUTES R. CO. v. EASTERN OREGON LAND CO.
Court: United States Court of Appeals for the Ninth Circuit
Jurisdiction: United States
Decision Date: 1917-10-01
Citations: 246 F. 400
Docket Number: No. 2814
Parties: EASTERN OREGON LAND CO. v. DESCHUTES R. CO. DESCHUTES R. CO. v. EASTERN OREGON LAND CO.
Judges: Before GILBERT, MORROW, and HUNT, Circuit Judges.
Reporter: Federal Reporter
Volume: 246
Pages: 400–427

Head Matter:
EASTERN OREGON LAND CO. v. DESCHUTES R. CO. DESCHUTES R. CO. v. EASTERN OREGON LAND CO.
(Circuit Court of Appeals, Ninth Circuit.
October 1, 1917.)
No. 2814.
1. Public Lands &wkey;>79 — Eailroad Land Grants — Priorities.
Where S. in February, 1906, filed bis application to select certain lands as forest reserve lieu lands, wbieb applications were never dismissed or withdrawn until patents were issued in 1913, though the land was temporarily withdrawn from entry in the meantime, the rights of S. under such patents were superior to the right of a railroad whose profile under Act March 3, 1875, c. 152, 18 Stat. 482 (Comp. St. 1916, §§ 4921-4926), granting rights of way through the public lands, was filed in Í908 and approved in 1910.
2. Eailroads <S=»64(2) — Grants op Eights op Way — Evidence.
In a suit to restrain the construction of a railroad in which defendant alleged an agreement with complainant’s predecessors in interest and asked that if the bill was not dismissed the court determine the amount of damages sustained, evidence held, to show that conyplainant’s predecessors in interest did not undertake to bind complainant, who then had an option to purchase the land, by their agreement as to the right of way.
3. Eailroads <&wkey;64(2) — Grants op Eights op Way — Evidence.
In such suit, evidence held to show that it was a condition of the agreement between complainant’s predecessor and defendant and of complainant’s acquiescence therein that the railroad should be constructed at such a grade as to permit complainant to build a dam approximately 60 feet high, and that on the building of such dam it would be defendant’s duty to protect its own roadway from injury by the water stored by the ' dam by riprapping or building a retaining wall.
4. Eailroads <&wkey;64(l) — Agreements as to Eights op Way — Duty op Parties.
Under an agreement that a railroad company might build its road across certain land at such a height as to permit the landowner to build a dam on condition that the company would protect its own roadway by riprapping or building a retaining wall, it was the landowner’s implied duty in building the dam to use every reasonable precaution by the construction of a spillway or other engineering device to carry off flood waters.
5. Eailroads <&wkey;64(l) — Agreements as to Eights op Way — Duty op Parties.
Under L. O. L. §§ 6552, 6553, authorizing persons, companies, and corporations having title or possessory right to land to use and enjoy the water of any running stream to furnish electrical power and to condemn lands for sites for reservoirs for the storage of water, where the landowner had authority thereunder to acquire lands above the dam not owned by it at the time of the agreement for its reservoir and its water storage purposes, it would be defendant’s duty to perform the same duties respecting its roadway through such lands subsequently acquired by complainant, as it undertook to perform respecting the lands owned by complainant.
6. Eminent Domain <&wkey;316 — Costs—Persons Liable.
Where, in a suit to restrain the construction of a railroad, the answer asked the court, in case the bill was not dismissed, to determine the amount of damages to which complainant might be entitled, and no tender or offer to pay damages had been made prior to suit, the costs were properly imposed upon defendant as on the complainant in a condemnation suit; the answer having been framed in part as a suit for equitable condemnation.
Gilbert, Circuit Judge, dissenting.
Appeal from the District Court of the United States for the District of Oregon; Robert S. Bean, Judge.
Suit by the Eastern Oregon Band Company against the Deschutes Railroad Company. From the decree (213 Fed. 897), both parties appeal.
Reversed and remanded with directions.
In equity. Suit to restrain defendant railroad company from constructing, maintaining, or operating a railroad over certain lands owned by the complainant. Prom a decree restraining complainant from interfering with the maintenance and operation of the railroad over the lands in suit, and awarding complainant damages in the sum of if 1,000 as compensation for the value of a 200-foot right of way through certain of its lands, and costs taxed at $513.22, both parties appeal.
This controversy arises out of conflicting claims by the Eastern Oregon Land Company (hereinafter designated as the “complainant”) and the Deschutes Railroad Company (hereinafter designated as the “defendant”) to reservoir and water storage rights claimed by the complainant in the De-schutes river and along its banks and rights of way claimed by the defendant over and across certain lands owned by the complainant and through which flows the Deschutes river in Oregon. The lands are located, and for convenience of reference they may be classified as follows:
(a) North half of the southwest quarter (N. % of the S. W. %) of section 35, township 3 south, range 14 east, Willamette meridian; lot 2 (Ñ. W. % of the N.' E. %) of section 3, township 4 south, range 14 east, Willamette meridian.
(b) Southeast quarter (S. E. %) of section 3d, township 3 south, range 14 east, Willamette meridian; southwest quarter of the northeast quarter (S. W. % of the N. E. %), west half of the southeast quarter (W. % of the S. E. %)> and east half of the southwest quarter (E. % of the S. W. 14) of section 3; northwest quarter (N. W. %), and northwest quarter of tho southwest quarter (N. W. % of the S. W. 14) of section 10, all in township 4 south, range 14 east, Willamette meridian.
(c) Lot 1 (N. E. % of the N. E. 14) of section 3; northeast quarter of the southeast quarter (Ñ. E. % of tho S. E. 14) of section 9, all in township 4 south, range 14 east, Willamette meridian.
There are certain other lands mentioned in the complaint which, it has been found, the line of the defendant’s railroad does not cross or touch, and arc, therefore, not involved in this appeal. These lands are described as follows:
(d) West half of the southwest quarter (W. % of the S. W. 14) of section 27, township 3 south, range 14 east, Willamette meridian; southeast quarter of the northwest quarter (S. E. 14 of the N. W. %) of section 3; northwest quarter of the southeast quarter (N. W. 14 of the S. E. 14), northeast quarter of the southwest quarter (N. E. % of the S. W. 14), and northwest quarter of the southwest quarter (N. W. 14 of the S. W. 14) of section 9; northeast quarter of tho southeast quarter (N. E. 14 of the S. E. 14) of section 8, all in township 4 south, range 14 east, Willamette meridian.
The complainant sued to enjoin and restrain the defendant from constructing and maintaining its railroad along the Deschutes river over and across complainant’s lands described above. The original complaint was filed April 18, 1910; the amended complaint, November 12, 1913. At the time the original complaint was filed the defendant was engaged in the construction of its road through complainant’s lands and had its grade practically completed. ■The road wás located and the work of construction commenced while the land was claimed hy complainant’s predecessors in interest. These predecessors, so far as they are material to this controversy, were one J. H. Sherar, claiming the lands described in the preceding clauses (a) and (b) of this statement, and the Interior Development Company, claiming the lands described in the preceding clause (c), together with water power rights in the Deschutes river.
The Deschutes river flows through these lands in a deep gorge or canyon, and by reason of falls therein, the quantity of water, the uniformity of flow, and the steep and precipitous banks, the site is valuable for power purposes, provided (it is claimed by the complainant) a 60-foot dam, above ordinary low water in the river, can be maintained at the power site.
The defendant’s road runs along the side of the canyon and has been constructed upon a grade at and above the power site, which complainant claims will not admit of a dam 60 feet in height in the river without flooding the fills and embankments of defendant’s roadbed above such dam, and in times of high water endangering the road itself in that' locality, unless the same is properly protected.
The further claim of the complainant is that the defendant entered into possession of its right of way under oral agreements or understandings with its predecessors in interest to locate its road so as to permit and protect the maintenance of a 60-foot dam, above ordinary low water in the river, but, as the road has been actually built, no such dam can be safely constructed, unless the defendant is required to protect its own roadway above the dam ; and, as a consequence, the value of the water power is greatly impaired and damaged. It is alleged in complainant’s complaint that the defendant has at all times known that the lands in suit are valuable chiefly because of the fact that the Deschutes river flows through them, and in its course through these lands the flow of the river is so great that it can be advantageously used for the development of power. The prayer of the complaint is that the defendant be enjoined and restrained from constructing, maintaining, building, or operating a railroad over the lands in suit, and from interfering with plaintiff’s possession thereof.
The defendant’s answer admits that complainant has the legal title to the lands described in the complaint, but it is claimed by the defendant that the complainant acquired its title to such lands after the defendant had entered upon such lands and partly constructed its grade; that defendant entered into possession of its right of way under an agreement with the executors of the estate of J. H. Sherar, B. P. Laughlin. and the Interior Development Company, the predecessors in interest of the complainant in such lands described, in which agreement it was provided that, if the road should be constructed as high as the same could be conveniently raised without making the expense prohibitive and without interfering with the proper and convenient operation of the line, the damáge would be nominal; that Laughlin and the Interior Development Company at all times knew where the road was located, and at ¿11 times expressed approval of the height at which the line was proposed to be constructed and was being constructed, and never at any time objected to the defendant because of the height or manner in which said road was constructed or to the location thereof, until the line was practically completed across said lands; It is alleged in defendant’s answer that it has acquired by purchase certain lands and the right of way over certain other lands for railroad purposes along the Deschutes river, above the lands owned by the complainant; that complainant' has acquired no right to flow the waters of the river back upon any of the lands so acquired by the defendant or back or over or upon its right of way, or to raise the waters of the river above its natural flow; and the defendant charges that any dam which the complainant might construct across the Deschutes river, or the development of any power by the use of the waters of the Deschutes river by means of any such dam at or along or in the neighborhood of any of the lands described in the complainant’s amended bill as belonging to the complainant, will result in the flooding and overflowing of the defendant’s said lands so purchased for railway purposes. and will overflow the defendant’s right of way, causing great and irreparable injury and damage to the defendant and its line of road.
The answer concludes with the prayer that the bill of complaint be dismissed; but, in case the court should adjudge that the defendant was not entitled to have the bill dismissed, then the court was asked to determine the amount of damages sustained by. the complainant or to which the complainant might be entitled by reason of the location and construction of defendant’s line of road over and across the lands owned by the complainant, and that it be decreed that complainant shall make, execute, and deliver a good and sufficient deed therefor upon the payment by the defendant to the complainant of such sum as the court shall find.
Wirt Minor and Veazie, McCourt & Veazie, all of Portland, Or., and Charles S. Wheeler and John F. Bowie, both of San Francisco, CaL, for appellant.
A. C. Spencer, W. A. Robbins, and James G. Wilson, all of Portland Or., for appellee and cross-appellant.
Before GILBERT, MORROW, and HUNT, Circuit Judges.

Opinion:
MORROW, Circuit Judge
(after stating the facts as above). 1. With respect to the lands described as the north half of the southwest quarter of section 35, township 3 south, range 14 east, Willamette meridian, and lot 2 (northwest quarter of the northeast quarter) of section 3, township 4 south, range 14 east, Willamette meridian, the decree of the lower court provides that:
"The title of complainant to said property was acquired" subsequent to the acquirement of said right of way of defendant over said property, and the same is subject to such right of way, provided, however, that the right hereby decreed to defendant shall not be understood or considered to interfere with or deprive complainant or its successor in interest of the right to construct and maintain a dam for hydraulic purposes in the Deschutes river where it passes through such property, and installing in connection therewith appliances for the purpose of developing hydraulic and electric power for all purposes, provided the track or roadbed of defendant shall not thereby be flooded or damaged, or the operating of its road interfered with."
The first question to be determined is whether the title to the lands described in this part of the decree was acquired by the complainant prior to the defendant's claim of a right of way over such lands. It appears that one Joseph H. Sherar as early as 1871 bought the pos-sessory right of an occupant in certain public lands along the Deschutes river. The land was not at that time surveyed. After the public surveys were extended over that section of the country, Sherar made a homestead entry of the southeast quarter of section 34, township 3 south, range 14 east. At the time he made such entry he supposed that it included the falls of the Deschutes river at that point, and not until 1901 did he discover that the south line of his homestead did not run south of the said falls. He thereupon took steps to acquire title to the lands upon which the falls are situated, namely, lot 2 (northwest quarter of tíie northeast quarter) of section 3, township 4 south, range 14 east; and, in addition, the north half of the southwest quarter of section 35, township 3 south, range 14 east, and the southeast quarter of the northwest quarter of section 3, township 4 south, range 14 east. As the line of the defendant's railroad does not cross or touch the last-named tract of land in section 3, the title thereto is not involved in this appeal.
It will not be necessary to enter into detail concerning the steps taken by Sherar to acquire title to these tracts of land. It is sufficient for the present purpose to say that on the 13th day of February, 1906, Sherar filed a contest and protest againá't the application of one A. L,. Veazie on behalf of the Interior Development Company to select these lands under the act of Congress of June 4, 1897, as forest reserve lieu lands, with base in the name of the Santa Fé Pacific Railroad Company. Sherar's protest against the Veazie selection was on the ground that the lands were not at the time of the latter attempted selection vacant or unoccupied lands, but were in the possession of Sherar, who at that time, to wit, on the 13th day of February, 1906, presented and filed in the land office his application to select tire same lands as forest reserve lieu lands under the Act of June 4, 1897, with base likewise in the name of the Santa Fé Pacific Railroad Company. These applications were prosecuted in the land office, were never dismissed or withdrawn, and Sherar continued to. reside on the lands until his death in 1908. These selections by Sherar were finally approved by the Secretary of the Interior and ordered passed to patent on February 25, 1913, and on that day patents were issued thereon in the name of the Santa Fé Pacific Railroad Company for the use and benefit of the heirs and devisees of Joseph H. Sherar, who held the power of attorney from the Santa Fé Pacific Railroad Company to convey the selected lands. (Executors of J. H. Sherar v. A. L. Veazie, Attorney in fact for the Santa Fé Pacific R. R. Co., decision by Frank Pierce, First Assistant Secretary of the Interior, dated June 16, 1909. Not reported.)
These titles, evidenced by patents of the United States, were vested in the complainant at the time of the commencement of this suit. Upon the trial of the case it was stipulated that, prior to the issuance of patent by the United States for these lands to the Santa Fé Pacific Railroad Company for the use and benefit of the heirs and devisees of Sherar, the defendant had located and constructed its line of railroad over and across the said lands, claiming a right of way under the act of Congress approved March 3, 1875, entitled "An act granting to railroads the right of way through the public lands of the United States." This right of way (200 feet in width, being 100 feet on each side of the center line of the railroad track) is claimed by the defendant to1 have been acquired under that act by filing with the register of the land office at The Dalles, Or., on the 8th day of November, 1908, a profile of its road, and the approval of said profile by the Secretary of the Interior on the 20th day of June, 1910.
The right of way granted by the act was a right of way over public lands; not a right of way over private lands, or over possessory claims to the public lands. See section 3, Act of March 3, 1875, c. 152, 18 Stat. 482 (Comp. St. 1916, § 4923). It was the opinion of the court below that the subsequent approval of the prior application of the Santa Fé Pacific Railroad Company to' select such lands in lieu of other lands under the Act of June 4, 1897, c. 2, 30 Stat. 36, did not relate back to the date of the application and supersede the rights of the defendant acquired by ths approval of its map of definite location under the Act of March 3, 1875. This opinion was based upon the opinion of this court in Daniels v. Wagner, 205 Fed. 235, 125 C. C. A. 93; but that case was reversed in the Supreme Court on appeal (237 U. S. 547, 35 Sup. Ct. 740, 59 L. Ed. 1102, L. R. A. 1916A, 1116, Ann. Cas. 1917A, 40); the court holding that one who has done everything essential, exacted either by law or by the regulations of the laud department, to obtain a right from, the land office conferred upon him by Congress, cannot be deprived of that right, either by the exercise of discretion or by a wrong committed by the land officers. Under this decision the Sherar lieu land selections, being first in time, were first in right. Clarke v. Halverson, 45 L. D. 54.
It is further stipulated that'on April 26, 1906, all the lands in township 3 south, range 14 east, excepting any tracts title to which had passed out of the United States, should be temporarily withdrawn from any form of disposition whatever. The withdrawal was for the purpose of constructing irrigation works under the Act of June 17, 1902, c. 1093, 32 Stat. 388 (Comp. St. 1916, § 4700-4708). And on October 24, 1908, a similar order was made in section 3 of township 4 south, range 14 east. When these withdrawals were made, the title to- the Sherar lieu land selections had, by the doctrine of relation, passed out of the United States (Daniels v. Wagner, supra) and was in no way affected by the withdrawals.
It follows that a footnote to the Sherar patents, that the lands described were subject to all rights under an application of the Deschutes Railroad Company approved June 20, 1910, under the Act of March 3, 1875, for right of way, was ineffectual to convey to the Deschutes Railroad Company such right of way, as the title to the land had already vested in Sherar's heirs and devisees.
It is also stipulated that on December 30, 1909, and March 18, 1910, the lands embraced in the Sherar lieu land selections were included in the temporary power site withdrawals Nos. 66 and 125 by executive order of the President of the United States, stating that the same were "in aid of proposed legislation affecting the disposal of water power sites on the public domain." These withdrawals were canceled as to the lands included in the Sherar selections on February 25, 1913, in order to allow patents to issue upon said lieu selections. These withdrawals having been made subsequent to the Sherar selections, they in no way affected complainant's titles derived from the United States and based upon such selections.
The dam site owned by the complainant is located across the Des-chutes river and, as appears from the map, in lot 2 (northwest quarter of the northeast quarter) of section 3.
We are of the opinion that the court below was in error in that part of its final decree where it holds:
"That the title of the complainant to said property was acquired subsequent to the acquirement of said right of way of defendant over said property and the same is subject; to such right of way."
Under the law, as declared by the Supreme Court in Daniels v. Wagner, supra, the title of complainant to said property was acquired prior to the claim of the defendant to a right of way over the same, and the decree should have so provided.
We concur in part in the further holding of the court that what ever right the defendant has (a question to be considered later) "shall not be understood or considered to interfere with or deprive complainant or its successor in interest of the right to construct and maintain a dam for hydraulic purposes in the Deschutes river where it passes through such property and installing in connection therewith appliances for the purpose of developing hydraulic and electric power for all purposes," but we do not concur in the proviso that "the track or roadbed of defendant shall not thereby be flooded or damaged, or the operating of its road interfered with." The defendant having entered upon these lands without authority, except such as we shall refer to later, no conditions can be imposed upon the complainant to protect defendant's roadbed and embankments from the waters of the Des-chutes river. That condition rests upon the defendant as a duty incident to the maintenance of its right of way.
2. With respect to the lands described as the southeast quarter of section 34, township 3 south, range 14 east, Willamette meridian; the southwest quarter of the northeast quarter, the west half of the southeast quarter, and the east half of the southwest quarter of section 3; and the northwest quarter and northwest quarter of the southwest quarter of section 10, all in township 4 south, range 14 east, Willamette meridian — it was admitted by the defendant in its answer that the complainant was the owner of such tracts of land and that the defendant had located its road over and across the same. The court below awarded to the complainant the sum of $1,000 as compensation for the right of way taken by the defendant across said lands, and, upon the payment of that sum by the defendant before the. final decree, the court entered its decree in favor of the defendant as the owner of such right of way.
The original bill of complaint, filed April 18, 1910, alleged title in these and the other lands described, and prayed for an injunction restraining the defendants from entering upon and trespassing upon the same and from constructing or building a railroad over the same and from interfering with the possession of the complainant or its enjoyment of the lands, pending the determination of the suit. At that time the line of road had been graded through part of these lands, but no rails had been laid thereon. There is no evidence in the record as to the quantity of land occupied by the road or its value, but the defendant alleges that it agreed to pay the Sherar' heirs $1,000 for the right of way in case the holder of the option (the complainant) did not purchase the land. The complainant did purchase, and, upon this evidence as to an alleged agreement with the executors of Sherar's estate, the court assumed that $1,000 was a reasonable compensation to be' paid for the right of way; but the agreement was not in writing, and the evidence is clear that neither the executors of the Sherar estate nor their attorneys undertook to bind the complainant to this-agreement. On the contrary, the attorneys for the executors of the Sherar estate, in a letter dated August 25, 1909, addressed to J. W. Morrow, representing the defendant, said:
"The executors (of the Sherar estate) understand that if the persons (the complainant) who have agreed to purchase do not take the property (includes the lands above described) that your company will pay one thousand dollars- for the right of way. If the sale is consummated, as we assume it will he, then you are to settle with the purchasers for the right of way." Signed: Huntington & Wilson.
C. Monroe Grimes, one of the executors of the Sherar estate, testified that J. W. Morrow, representing the defendant company, came to him for the purpose of getting a right of way over the Sherar property and they went to Huntington's office and took it up with him; that Mr. Morrow was told:
"That if the Sherar estate did not negotiate a sale that was on at that time, that they should have the right of way to go through the property for one thousand dollars, hut m the event the sale toas made they would have to make their terms with the other people (the cornplamant)."
Mr. Morrow was further informed that the Eastern Oregon Hand Company was the purchaser with whom the executors of the Sherar estate were negotiating.
The prayer of the defendant's answer was that the court should determine complainant's damages by reason of the location and construction of defendant's line of road over and across the lands owned by the complainant, in the event the court refused to dismiss complainant's bill. The court refused to dismiss complainant's bill, and thereupon fixed the value of the right of way at $1,000; but in the understanding or agreement between the parties this valuation was coupled with the condition that compla,inant should have the right to build a dam in the river 60 feet in height, and the defendant should take care of its right of way above this dam. The evidence upon this question will be discussed in the following paragraph of this opinion.
3. With respect to the lands described as lot 1 (northeast quarter of the northeast quarter) of section 3, and the northeast quarter of the southeast quarter of section 9, township 4 south, range 14 east, Willamette meridian, the controversy relates to an agreement or understanding between the predecessor in interest of the complainant and the defendant concerning the height of a dam complainant proposed to place in the Deschutes river for the purpose of developing hydraulic and electric power, and the elevation of defendant's railroad above the river so as to permit such a dam. This controversy is not, however, confined to the lands above described; it relates, either directly or indirectly, to all the lands involved in this appeal, and particularly to lot 2 (northwest quarter of the northeast quarter) of section 3, township 4 south, range 14 east, adjoining lot 1, above mentioned.
The conclusion of the court below, as expressed in its final decree, is that it was understood and agreed by the defendant and the Interior Development Company, the owner of the tracts of land above mentioned at the time of said agreement with the defendant, and at the time of the entry thereon and the construction thereover of defendant's line of railroad, that the location of defendant's track should not interfere with or deprive the Interior Development Company or its successor in interest of the right to construct and maintain a dam in the Deschutes river where it flows through such property, for hydraulic purposes, and to install in connection therewith appliances for the purpose of developing hydraulic and electric power for all pun-poses. In this conclusion we concur. We think this agreement or understanding is fully supported by the evidence, and that the complainant acquired all the lands involved in this appeal with this agreement or understanding.
But the court adds a proviso to this conclusion, as follows:
"Provided, however, that the track and roadbed of defendant should not thereby be flooded or damaged or the operation of its road interfered with."
In other words, that whatever dam the complainant may build must be constructed at the peril of causing injury to the fills and embankments of the defendant's railroad and of being held responsible therefor in damages, without any obligation or duty on the part of the defendant to protect such fills and embankments and make them reasonably secure against the water above such a dam.
We have failed to find any evidence in the record supporting this clause of the decree with respect to these lands, or any of the lands involved in this appeal. It was certainly not an agreement or understanding as stated by either of the parties, and we do not think it is an inferable conclusion from anything that passed between them.
It appears from the evidence that the defendant ran a survey through this property in October, 1908, for its line of road. This line was located on the water grade along the river. It passed the dam site on lot 2 of section 3, at an elevation of approximately 20 feet above the low water in the river, and this elevation was maintained along the river with some little variation until the line passed out of plaintiff's lands, crossing the south line of the northeast quarter of the southeast quarter of section 9, township 4 south, range 14 east, at an elevation of about 20 feet above tire low water of the river. In' February or March, 1909, B. F. Laughlin, holding an option to purchase the Sherar lands for a water power proposition, visited J. P. O'Brien, the president of the Deschutes Railroad Company, at Portland, Or., for the purpose of obtaining information concerning the location of the line of the Deschutes Railroad along the Deschutes river through the Sherar lands. Laughlin testified that O'Brien told him that he wanted the witness to get all the interested people to (agree upon a price for a right of way on the river, and at the same 'time he guaranteed to protect the Sherar property to the fullest extent that it was possible. O'Brien called in Mr. Boschke, the chief engineer of the road, and asked him how they had run their grade on the river. Boschke replied that they had run it right along — a few feet from water. O'Brien told Boschke he would have to go back and rerun the line and save every foot of power for the Sherar property that could be saved; that they had examined the property with their engineer; and that they' might have to buy it before they got through, but to save every foot it was possible to save. Mr. Boschke remonstrated, said he would have to go back 12 miles. O'Brien told him it did not make any difference how far he had to go back; he must do it.
Mr. O'Brien testified, concerning this conversation with Mr. Laugh-lin, that the line of railroad had been located at that time. His recol lection was that there had been several surveys. One was on the grade close to the river, and there was another, his recollection was, 35 or 40 feet above the river. He said Laughlin asked him how high they could get up in the air at Sherar's. The witness said he did not know; that would be a question of cost. As a result of it, he sent for Mr. Boschke. He told Mr. Boschke to run a line there and see how far he could get up at Sherar's, without making the cost prohibitive. He asked Mr. Boschke if he had any idea, or if he could get any idea from the data he had in his possession at that time, as to how high he could go without making the cost prohibitive, and Boschke replied, "In the neighborhood of 58 or 60 feet." O'Brien asked Laughlin if that would be satisfactory at that height — along in there between 58 and 60 feet. Mr. Laughlin said he thought that would be satisfactory; that any height that they could go above where the line was laid at that time was going to help them out. O'Brien asked Laughlin about the right of way. Laughlin said he did not think there would be any question about the right of way; that he would be willing to give the right of way free. The witness told Mr. Boschke to make a survey so as to see how high he could get the line up there without the cost being prohibitive. His recollection was that they spent about $100,000 additional in constructing the line where it was afterward located, over and above the estimated cost of the line on the river grade. This additional expenditure, he said, was made to preserve the power site so they could operate it. It was simply a question of how far they could get up in order to give Laugh-lin the additional height, in order to develop his power.
Mr. Boschke, the chief engineer, testified, concerning this interview between Laughlin and O'Brien, that the line was then located on the water grade along the river. Laughlin wanted them to change the grade so as to enable them to build a power house at Sherar's Bridge. He did not remember exactly the height he thought he could make; it was 45 or 50 — perhaps 60 — feet. The whole thing hinged on starting up on a maximum grade and getting as high as they could. That was what his instructions were to do. His understanding was that, if the grade of the road was raised as high as it could be raised, the right of way would be given for a nominal sum, or something of that kind. The purpose was to put the road at such an elevation as to allow Laugh-lin to build as high a dam as possible.
A. Welch, the president of the Interior Development Company during 1908 and 1909, testified that he visited Mr. O'Brien in September, 1909, in company with Isaac Anderson. They went to find out how high the railroad would be at the Sherar Bridge. They were taken by Mr. O'Brien to Mr. Boschke's office, and the maps were shown and examined. The witness said:
"Tlien they asked about the right of way, and we told them that, if they would protect our filing, there would he no charges for the right of way. Wo specified the height of the dam as 60 feet, that we desired." They said they "had taken that into consideration. They showed us the maps of the railroad grades and heights, which showed, as I remember it, between 64 and 65 feet above low water. They had at that time already raised their levels to that height before we made a request for it."
Isaac W. Anderson testified, concerning this conversation with O'Brien:
"I went to see Mr. O'Brien in company witli Mr. Welcli. I cannot give the exact language of the conversation, of course. I can give you the general conversation. We were expecting to construct a water power plant there, and our talk with Mr. O'Brien was regarding the location of the road; it should be high enough to allow us to build, to put in those improvements, the required improvements, which included naturally a dam, and our plans were to build a dam CO feet high. We had the maps there and went over the maps with him, or with the engineer, and the understanding we had was that the line would be so located that a dam of that height could he built; and my recollection is Mr. O'Brien instructed, then and there, Mr. Boschke to so locate the line." Mr. O'Brien told Mr. Boschke "that the line should be built there, that we had the rights there, and they should be protected."
Mr. J. W. Morrow, the right of way agent for .the Deschutes Railroad Company, was present at the conference between Mr. Laughlin and Mr.' O'Brien. Mr. Laughlin was interested in having the railroad company elevate the grade of its road as far as possible, and something was said to Mr. Boschke as to what elevation they could get there, or to what elevation they could reach, and he got the impression and understood then that Mr. Boschke said he could reach an elevation of 60 feet, and witli.that elevation Mr. Laughlin was entirely satisfied. On August 9, 1909, Mr. Morrow called upon Mr. J. Monroe Grimes, the managing executor of the Sherar estate, to discuss the question of the right of way through the Sherar properties. Mr. Morrow testified that Mr. Grimes said that, so far as he was personally concerned, he would be very glad to donate the right of way; that the value of the property — its principal value — was as a power location, and that by the construction of the line of railroad it would enable them to develop the power plant; that, without it, it would be practically impossible to do so. He said, however, that in view of the fact that there were other heirs to the estate, and that they were widely separated, he could not reasonably satisfy them without some compensation, and they agreed that $1,000 should be paid for the right of way. They then went immediately to the office of Mr. Huntington, the attorney for Mr. Grimes, and the agreement was restated in his presence. Mr. Morrow testified further:
"I was told that some parties had an option on the property, and an understanding was had that, in case the sale was made, then I should have to deal, or I must deal, with the purchaser. At that conference, and with that understanding, it was agreed that the elevation of the line should be such that a dam 60 feet in height above low-water mark should be constructed. I, undoubtedly, had my profile with me at that time. I cannot recall exactly, but in all probability I did. I wouldn't go to solicit the purchase of a piece of right of way without the profile and map showing the location of the property; that is, it is not customary to do it, and I presume that I had it."
The witness testified that he was advised of the outstanding option on the Sherar property, and that on August 24th he met Mr. Walter S. Martin, the president of the complainant corporation, on the train coming from Salem, and the witness then learned that he, or his company, the complainant, was the prospective purchaser. The witness testified:
"We went into the matter pretty thoroughly; in fact, I think I broached this subject to Mr. Martin, and it developed that he was the prospective purchaser ; and 1 outlined to him the agreement that I- had reached with the Sherar estate representatives, and that agreement was entirely satisfactory to him. lie said that we could go on and build the line, and, as a matter of fact, when the thousand dollar consideration was mentioned, Mr. Martin wasn't at all Interested in that feature of it. I said to him, 'I have agreed to pay the Sherar estate a thousand dollars, and I will do the same thing by you.'
"To that Mr. MartiD simply said that it was satisfactory. He was perfectly satisfied to have us go on and construct our-line, and he was willing to carry out the agreement that I had had with the Sherar estate people."
On the next day Morrow wrote to Huntington & Wilson, attorneys for the Deschutes Railroad Company, as follows:
"Huntington & Wilson, Attorneys at Law, The Dalles, Oregon — Gentlemen: This will acknowledge receipt of your letter under date of August 25th confirming our conference and understanding over the contention with reference to the construction of our line through the Sherar's estate property, for which I thank you very much. And at the same time I am pleased to advise that I talked this matter over with Mr. Martin of the Eastern Oregon Land Company, who has expressed a willingness to have us go upon the land to construct our line."
This letter simply asserts that Martin had expressed a willingness to have the railroad company go upon the land and construct its line. It did not claim that Martin had consented to the railroad company constructing its line without regard to the terms that had been agreed upon concerning the protection of complainant's power plant, and there is nothing in the following correspondence upon this subject that gives to Mr. Martin's assent any waiver of such terms. Mr. Martin testified that the lands were required for hydroelectric possibilities, and, with respect to the interview with Mr. Morrow, he said:
"I remember that Mr. Morrow said that he thought the Deschutes river was an exceptional opportunity for the development of power and that we had a valuable property there. What I said in reply to the thing {right of way) was that, if they do anything in regard to the right of way which damages the power value of that property, they do so at their own peril, and, if they damage that property from the point of view of its power possibilities, we will feel free to retire from our contract."
This evidence, taken in connection with all the surrounding circumstances and conditions, indicates that the agreement or understanding of the parties was that the railroad was to be raised so as to protect the power plant to be located upon the lands now owned by the complainant, and the defendant was to protect such power plant by taking care of its own right of way through such lands.
The railroad was constructed along the Deschutes river and through the lands involved in this appeal, upon a maximum grade of eight-tenths of 1 per cent. Upon this grade the road reached an elevation above the sea of 779.6 feet at a point designated on the map as the "Interior Dam Sited' At this point the elevation of the river, in March, 1909, was 722.1 feet; making the elevation of the road above the river 57.5 feet. On April 3, 1910, the elevation of the river was 716.3 feet; the elevation of the road above the river being at that time 63.3 feet. On August 31, 1910, the elevation of'the river was 715.3 feet; the elevation of the road above the river being 64.3 feet. But it is plain from the testimony that, with the grade of the road as it has been constructed, a dam cannot be built at this point 60 feet in height above the river with safety to any interest connected with either the railroad or power plant properties without some method of protection on the part of the defendant; and we think the agreement to raise the elevation of the road to the grade to which it haá been carried was coupled with the agreement to protect complainant's power plant by taking care of its own right of way through such lands. If this was not the agreement, then the raising of the grade by the defendant was useless and accomplished no purpose. Besides, it is obvious that the duty of the railroad company to take care of its own right of way is the usual and the only practical method of using such right of way to advantage.
Upon this question we have a practical demonstration of what the grade should have been, by a railroad constructed at the same time and under similar conditions, just across the river. At the same time the Deschutes Railroad was being built up the south bank of the river, the Oregon Trunk Dine was engaged in building a railroad up the north bank of the river. The distance between the two roads at the dam site is 551 feet. As a result of the negotiations between complainant's predecessors in interest and the officers of that line of railroad for a right of way along the north bank of the river, that road constructed its grade at such an elevation that it passes the dam site at an elevation of 785.27 feet, or 5.6/ feet higher than the elevation of defend-: ant's railroad.
G. A. Kyle, the chief engineer of the Oregon Trunk Dine, testified in this case that he did not consider a railroad constructed past the dam site, especially if a 60-foot dam is to be built there, would be safe at any less elevation than 70 feet. He accordingly raised the Oregon Trunk Dine to that height above the river. He had examined the roadbed of the Deschutes Railroad Company at and above the dam site. He did not consider it would be safe to construct a dam at that point 60 feet in height with the railroad constructed as it is, unless they used a great deal of riprap on the present banks. If plenty of riprap was placed there, he thought the danger would be slight. Of course, it might cave out in a few places where the rocks are of volcanic ash— in fact, it is nearly all volcanic ash for a short distance, but that could be riprapped, he supposed, and made perfectly safe.
Mr. Boschke, the chief engineer of the defendant railroad, was asked:
"Q. Did Mr. Whistler (an engineer employed by the plaintiff to examine tlie lands in controversy as to their availability for power purposes) ever make any objection to you that your line wasn't high enough for the purposes for which his client wanted to use the property there? A. He spoke of the upper end, the way our grade lay, where the water came down, coming down the natural grade of the river, would reach the water, backed up from the dam; it would probably flood our grade in there. I said to him, that part of it, we would, readily change that when, the time came; when he had a dam there, hut I did not believe in spending any money to change that at this time.
"Q. How high a dam did you calculate could he built at the dam site without interfering with your road? A. I wasn't making any figures on the dam site at all, or the dam. I was building a railroad there, and building it as high as I could get up, starting at eight-tenths grade at the tunnel. I think a dam readily could be built there 60 feet or over without flooding our tract or right of way so as to interfere with our railroad, if the flood waters were properly taken care of."
In the course of the cross-examination of this witness concerning a previous affidavit made in the case, he was asked this question:
"Q. If the dam were constructed at the dam site only 60 feet in height, you have so built your railroad it would not affect your railroad at that place? A. No. I think it could be built there and protected, inasmuch as we would have to do more riprappimg at those places, I mean.
"Q. In your affidavit you say a dam can be built there 50 feet in height, without affecting your railroad? A. Of course, it can. That is only a nominal expense, a few thousand dollars to riprap those banks and make them safe, but we certainly wouldn't be spending that money now until there is a dam there to spend it for.
"Q. Then I understand, Mr. Boschke, that in your judgment a dam can be built at the dam site 60 feet in height, and it wouldn't affect your railroad as now constructed at all? A. I think so."
The witness was asked:
"Q. Then how did you expect to protect your railroad at the dam site? A. Build a retaining wall, or something like that. It is only a matter Sf a couple of feet there. It wouldn't be a hard job to keep out two feet of water."
The conclusion we draw from this evidence is that the defendant, in accordance with the agreement or understanding had between the original parties and the subsequent acquiescence of the complainant, has constructed its railroad through complainant's lands upon a grade that will permit the complainant to build a dam approximately 60 feet in height above the low water in the river, but that this agreement or understanding had this further condition, that, upon the building of such a dam, it would be the duty of the defendant to protect its roadway by riprapping, or by building a retaining wall along the river side of the fills and embankments of its right of way, so as to protect the same from injury by the water to be stored in the river and reservoir above such dam. This condition necessarily implies a duty on the part of the complainant, in the building of its dam, to use every reasonable precaution by the construction of a spillway, or other engineering device, to carry off such high water as may come down the river in flood seasons.
4. The defendant interposes the further objection to complain-, ant's proposed dam, that the defendant has acquired certain lands by purchase and the right of way over certain other lands above the lands owned by the complainant; that the plaintiff has acquired no right. to raise the water of the river so as to flow upon any of the lands so acquired by the defendant, or back or over or upon its right of way, or to raise the waters of the river above its natural flow o.r above its natural fall.
It appears from the evidence that the fall of the river between the dam site and the south line of the northeast quarter of the southeast quarter of section 9, township 4 south, range 14 east — the western limit of complainant's lands — is approximately 25 feet. If the complainant acquires no other lands on the river above the lands mentioned, this would be the limit of the plaintiff's right of reservoir or water storage and would correspondingly limit the height of the dam. But the statute of Oregon provides that persons, companies, and corporations having title or possessory right to the land, shall be entitled to the use and enjoyment of the water of any running stream within the state to furnish electrical power for any purposes, and may appropriate such waters, and shall have the right to condemn lands for certain uses, among others, for the sites of reservoirs for the storage of water for future use. Lord's Oregon Laws, § 6552, 6553. The complainant, having the right of eminent domain, has authority to acquire thereby whatever lands are necessary for its resérvoir and water storage purposes, as and for a public use. See Grande Ronde Electrical Co. v. Drake, 46 Or. 243, 78 Pac. 1031; Walker v. Shasta Power Co., 160 Fed. 856, 87 C. C. A. 660, 19 L. R. A. (N. S.) 725; Henderson v. Lexington, 132 Ky. 390, 111 S. W. 318, 22 L. R. A. (N. S.) 136.
The fact that the project is not now fully completed will not prevent the complainant from exercising its right to condemn; the right to complete a project so far completed is the essential right to condemn land for that purpose. When the project, corresponding to a dam 60 feet in height, is so completed, the defendant will be subject to the same conditions with respect to its right of way through such lands as it has undertaken to perform with" respect to the lands involved in this appeal.
5. The next objection to the decree comes from the defendant. The objection is that the court below treated the case as a condemnation suit and imposed the costs upon the defendant. The prayer of the defendant's answer was that, in case the court refused to dismiss complainant's bill, then it should determine the amount of damages sustained by the complainant, or to which complainant might be entitled by reason of the location and construction of defendant's line over and across said property. In other words, the defendant's answer was framed, in part, as a suit for equitable condemnation, and it was so treated by the court. The defendant made no tender and no offer to pay damages until after this suit was commenced. The costs were therefore properly imposed upon the defendant as the complainant in the condemnation suit.
6. The time has passed when a decree can be entered in this case based upon the conditions prevailing when the suit was commenced. The railroad has been built by the defendant and is now in operation through the lands involved in this appeal. The complainant acquiesced 'in the building of the road through its lands, upon the understanding and agreement had by the defendant with complainant's predecessors in interest concerning the proposed dam, 60 feet in height above ordinary low water in the Deschutes river where it flows through such lands. This agreement provided for the protection of this dam and its use for hydraulic purposes in connection with appliances for the development of hydraulic and electric power for all purposes. The de cree must therefore conform to the conditions prevailing when the decree was entered in the lower court.
The decree of the lower court is, accordingly, reversed, and the cause remanded, with directions to enter a decree': That the title to lands described as the north half of the southwest quarter (N. % of the S. W. %) of section 35, township 3 south, range 14 east, Willamette meridian, and lot 2 (N. W. % of the N. E. of section 3, township 4 south, range 14 east, Willamette meridian, was acquired by the complainant prior to the right of way claimed by the defendant. That the defendant entered upon and has occupied its right of way over such lands upon the condition that it would not interfere with, or deprive the complainant or its successors in interest of, the right to construct and maintain a dam for hydraulic purposes in the Deschutes river where it passes through.such lands, 60 feet in height above the ordinary low water in the Deschutes river, and the right to' install, in connection therewith, appliances for the purpose of developing hydraulic and electric power for all purposes; the defendant to protect such power plant and the appliances connected therewith by taking care of its own right of way through such lands by riprapping or by building retaining walls along the river side of the fills and embankments of its right of way, so as to protect the same from injury by the water to be stored in the river and reservoir above such dam; the complainant, in building its dam, to use every reasonable precaution by the erection of a spillway or other engineering device to carry off such high water as may come down the river in flood seasons. Upon the foregoing consideration, and the payment by the defendant to the complainant of the nominal sum of one dollar, in accordance with the agreement between the parties, the complainant will execute and deliver to the defendant a good and sufficient deed for the right of way through the lands described, 200 feet in width, being 100 feet on each side of the center line of the railroad track.
The decree will further provide: That the title to lands described as the southeast quarter (S. E. %) of section 34, township 3 south, range 14 east, Willamette meridian, and southwest quarter of the northeast quarter (S. W. % of the N. E. %), west half of the southeast quarter (W. % of the S. E. %), and east half of the southwest quarter (E. % 'of the S. W. %) of section 3, northwest quarter (N. W. %.), and northwest quarter of the southwest quarter (N. W. *4 of the S. W. %) of section 10, all in township 4 south, range 14 east, Willamette meridian, is in the complainant. That, in addition to the payment of $1,000 for the right of way through such lands, it shall be decreed, as a further consideration for such right of way, that the defendant shall not interfere with, or deprive the complainant or its successors in interest of, the right to construct and maintain a dam for hydraulic purposes in the Deschutes river where it passes through such lands, 60 feet in height above the ordinary low water in the Deschutes river, and the right to install, in connection therewith, appliances for the purpose of developing hydraulic and electric power for all purposes; the defendant to protect such power plant and the appliances connected therewith by taking care of its own right of way through such lands by riprapping or by building retaining walls along the river side of the fills and embankments of its right of way, so as to protect ithe same from injury by the water to be stored in the river and reservoir above such dam; the complainant, in building its dam, to use every reasonable precaution by the erection of a spillway or other engineering device to carry off such high water as may come down the river in flood seasons. Upon the foregoing consideration, and the payment by the defendant to the complainant of the sum of $1,000, in accordance with the agreement between the parties, the complainant will execute and deliver to the defendant, a good and sufficient deed to a right of way through the lands described, 100 feet in width, being 50 feet on each side of the center line of the railroad track.
The decree will further provide: That the title to lands described as lot 1 (N. E. % of the N. E. J4) of section 3, and the northeast quarter of the southeast quarter (N. E. of the S. E. J4) of section 9, all in township 4 south, range 14 east, Willamette meridian, is in the complainant. That the defendant shall not interfere with, or deprive the complainant or its successors in interest of, tire right to construct and maintain a dam for hydraulic purposes in the Deschutes river where it passes-through such lands, 60 feet in height above the ordinary low water in the Deschutes river, and the right to install, in connection therewith, appliances for the purpose of developing hydraulic and electric power for all purposes; the defendant to protect such power plant and the appliances connected therewith by taking care of its own right of way through such lands by riprapping or by building retaining walls along the river side of the fills and embankments of its right of way, so as to protect the same from injury by the water to be stored in the river and reservoir above such dam; the complainant, in building its dam, to use every reasonable precaution by the erection of a spillway or other engineering device to carry off such high water as may come down the river in floo'd seasons. Upon the foregoing consideration, and the payment by the defendant to the complainant of the nominal sum of one dollar, in accordance with the agreement between the parties, the complainant will execute and deliver to the defendant a good and sufficient deed to the right of way through the lands described, 200 feet in width, being 100 feet on each side of the center line of railroad track.
When the complainant has completed its project by'the acquisition of title to other lands above those to which it now has title, the defendant will be subject to the same conditions with respect to its right of way through such lands as it 'is now decreed to perform with respect to the lands involved in this appeal.
The costs on this appeal will be divided equally between the complainant and the defendant.