Case Name: HENRY DAVID et al. v. J. H. BROKAW et al.
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1927-05-17
Citations: 121 Or. 591
Docket Number: 
Parties: HENRY DAVID et al. v. J. H. BROKAW et al.
Judges: Burnett, C. J., and McBride and Rand, JJ., concur.
Reporter: Oregon Reports
Volume: 121
Pages: 591–603

Head Matter:
Argued March 22,
reversed May 17,
rehearing denied June 29, 1927.
HENRY DAVID et al. v. J. H. BROKAW et al.
(256 Pac. 186.)
For appellants there was a brief over the name of Mr, Lotus L. Langley, with an oral argument by Miss Manche I. Langley.
For respondents there was a brief and oral argument by Mr. E. B. Tongue.

Opinion:
COSHOW, J.
The question presented for solution is, "have the plaintiffs an irrevocable license or easement in the water of the spring belonging to the defendants!" There is no controversy about an oral agreement having been entered into between the parties. There is some dispute between them as to the terms of the oral agreement. If the agreement amounted to a mere license, it is revocable by the licensor at his pleasure. However, if relying upon the license plaintiffs have made material and permanent improvements the license has become irrevocable, if its revocation would constitute a fraud upon plaintiffs. Some authorities are to the effect that if the parties cannot be placed in the same position in which they were when the license was given the license is irrevocable. The nature and effect of a license of the hind under consideration has been the source of much litigation. Numerous cases are re ported in this and -other jurisdictions. In a recent case Mr. Chief Justice McBride expressed the law-in this language:
" In this jurisdiction it is well established that a license is irrevocable when the licensee in good faith and upon reliance of his agreement, makes such valuable and permanent improvements that it would amount to the perpetration of a fraud if the license were revoked." McCarthy v. Kiernan, 118 Or. 55, 61 (245 Pac. 727).
The leading case in this jurisdiction upon the question involved is Heisley v. Eastman, 102 Or. 137, 157 (201 Pac. 872). In an exhaustive opinion by Mr. Justice Harris, this court in page 157 of the official report, after reviewing many of the authorities, sums up its conclusion as follows:
" # * After an examination of our own precedents and a consideration of the conclusions announced in them and after an analysis of the reasons assigned for those conclusions, it is our view that neither the direct payment of a consideration nor the accrual of a benefit to the licensor nor participation by the lincensor is a sine qua non, although these elements when present either singly or in combination may strengthen the right of a licensee to invoke the aid of a court of equity to prevent the perpetration of a fraud upon him. An oral and gratuitous permission when acted upon by the expenditure of a considerable sum of money in the construction of valuable improvements, which have been made on the faith of such permission and would not have been made in the absence of such permission and would be either destroyed or materially lessened in value by a revocation of such permission presents a 'situation making the doctrine of equitable estoppel peculiarly applicable, especially when the limits of that doctrine are measured by the reasoning employed in our own precedents upon the subject of oral licenses; and this conclusion is in harmony with the views expressed by some other courts: Rerick v. Kern, 14 Serg. & R. (Pa.) 267 (16 Am. Dec. 497); Stoner v. Zucker, 148 Cal. 516 (83 Pac. 808, 113 Am. St. Rep. 301, 7 Ann. Cas. 706); 1 Williston on Contracts, 311; 17 R. C. L. 576, 579."
The determination of the instant case depends upon the -conduct and expenditures of the plaintiffs in reliance upon the oral agreement. Plaintiffs contributed nothing to the improvement of the spring. All of their expenditures consists of laying the pipe from its connection with the pipe of defendants leading from the spring and in the plumbing in defendants' residence. These expenditures in no degree or way benefited defendants. They were all made by plaintiffs for their sole benefit and use. They all belong to the plaintiffs and could be removed at their pleasure. They are, therefore, not permanent and are of comparatively small value.
The right to draw water from the spring of the defendants is an incorporeal hereditament and an agreement granting that right is within the statute of frauds: Raritan Water Power Co. v. Veghte, 21 N. J. Eq. 463; McCarthy v. Mutual Relief Assn. of Petaluma, 81 Cal. 584 (22 Pac. 933); Pifer v. Brown, 43 W. Va. 412 (27 S. E. 399, 49 L. R. A. 497, and extensive note 8, notes in pages 502, 522-524). Another valuable case is Lawrence v. Springer, 49 N. J. Eq. 289 (24 Atl. 933, 31 Am. St. Rep. 702), and valu able note beginning in page 712; Risien v. Brown, 73 Tex. 135 (10 S. W. 661); Dorris v. Sullivan, 90 Cal. 279 (27 Pac. 216); Curtis v. Noonan, 10 Allen (Mass.), 406; Legg v. Horn, 45 Conn. 409, 415; Van Horn v. Clark, 56 N. J. Eq. 476 (40 Atl. 203); Clark v. Glidden, 60 Vt. 702 (15 Atl. 358). A valuable case is Dillon v. Crook & Co., 11 Bush (Ky.), 321, where the legal principle involved herein is thus expressed:
"When an owner of an estate has by parol granted an easement therein, upon the faith of which the other party has expended money which will be lost and valueless if the right to enjoy such easement is revoked, equity will compel the owner to indemnify him on revoking the grant."
But the authorities in this state have held that the expenditures made by the licensee in reliance upon the license must be in permanent improvements and of material value. The right to take water from the spring would be an encumbrance upon defendants ' tract. Such a right might materially injure defendants. Before the court should thus permit the encumbrance of defendants' title it should be thoroughly convinced that not to do so would constitute a serious fraud upon plaintiffs. The expenditures made by plaintiffs in this case will not be lost by revocation of the license. The pipes laid by them and plumbing fixtures bought by them are not thereby destroyed nor taken from them. They received the value of their labor in the use of the water. It cannot be said that plaintiffs are defrauded by the revocation.
Much has been said in the argument regarding the great injury plaintiffs will suffer if not permitted to continue to draw water from said spring during the season for drying prunes. The evidence, however, of plaintiffs as well as defendants convinces us that the spring does not flow sufficient water to supply plaintiffs during prune drying season. It is a fact that both plaintiffs and defendants were compelled to haul water in order to have a sufficient supply during the prune drying season in 1923. There was not a sufficient water flow from the spring to answer the requirements of defendants much less for the necessities of both parties. We gather from the evidence that the plaintiffs have been compelled to haul water during every prune drying season since they have lived where they now reside.
On the premises occupied by plaintiffs were two wells, neither of which supplied water during the entire season. The water in both wells was exhausted every summer. Plaintiffs claim that they filled one of said wells and abandoned it upon the advice of defendants. That advice was gratuitous. It was of no benefit to defendants whatever. Defendants were entirely indifferent as to what was done with the wells and what was said in that regard was a mere suggestion which plaintiffs were under no obligation to adopt and for which defendants cannot be held responsible. Plaintiffs were not induced to fill the well by defendants.
The permit granted by the State Water Board cannot aid plaintiffs. If there is a surplus of water flowing from the spring which plaintiffs may appropriate the permit will authorize the plaintiffs to appropriate .2 of a cubic foot of water per second. That permit, however, cannot grant to plaintiffs any interest in defendants' improvements or authorize them to appropriate for their own use any of defendants' property. If the spring flows water in excess of the amount used by defendants heretofore and such surplus water can be impounded by plaintiffs they may do so. But the State Water Board cannot take the private property of one person and transfer it to another. Defendants would not be allowed to waste the water nor to prevent the excess over defendants' needs from flowing in its natural channel from the premises so that the same may be captured and appropriated by the plaintiffs. The permit cannot be used to strengthen the license claimed by tbe plaintiffs prior to April, 1902. It was not obtained in reliance upon said license, bnt, on the contrary, was obtained after said license bad been revoked by defendants and is evidence tbat plaintiffs were not relying upon tbe license given them by defendants.
We have discussed tbe issues involved as though tbe contract between tbe parties constitute a license because tbe case was presented on tbat theory in the Circuit Court as well as in this court. Our opinion is tbat tbe contract does not constitute a license. It is a contract for sale or rental of water. Tbe spring rises on tbe land of tbe defendants and tbe water was impounded by tbe defendants without any contribution from tbe plaintiffs. Tbe water flowing from the spring belongs to tbe defendants: Or. L., § 5797; Morrison v. Officer, 48 Or. 569 (87 Pac. 896); Hildebrandt v. Montgomery, 113 Or. 687, 690 (234 Pac. 267).
"A license in respect of real property is an authority or permission to do a particular act or series of acts upon the land of another without possessing any interest or estate in such land." 37 C. J. 279.
Plaintiffs bad no authority to do any act on defendants' land. They received tbe water from tbe end of a pipe laid by tbe defendants from tbe spring to tbe county road near tbe then residence of tbe defendants. They took no part in appropriating the water from tbe spring but purchased or rented tbe water flowing through tbe pipe belonging to tbe defendants and conveying water from a spring belonging to tbe defendants. Defendants bad been using tbe water thus appropriated by them for about three years before plaintiffs were permitted to attach their pipe to tbe aqueduct of tbe defendants.
The learned circuit judge correctly ruled that the water flowing from the spring could not be adjudicated in this case. There is neither suitable pleading nor sufficient evidence to adjudicate the water. There appears to have been no attempt to measure the flow from the spring.
We do not deem-the matter of time of payment of any great importance. It is not claimed by plaintiffs that the license was revoked by defendants during the time when plaintiffs were entitled to the water by reason of rental paid. Plaintiffs rest their case .upon an irrevocable license by operation of equitable estoppel. Plaintiffs never tendered payment of the rental until they filed their complaint in this suit. They never complained of the amount charged them but willingly paid the increase from $10 to $15 yearly. When the rent was demanded from them they did not refuse to pay nor did they claim that the rent was not due. They promised to pay. Plaintiffs claimed to have had the money ready for defendants but depended upon the defendants going some distance to Forest Grove to receive that rent. It was the duty of the plaintiffs to take the rent to defendants' residence in order to make a tender as plaintiffs claimed in their complaint.
By paying the annual rental for a number of years and by their conduct in promising to pay the rental for 1924, plaintiffs acknowledged the ownership of the spring and water therefrom to be defendants'. Plaintiffs were indebted to defendants in a small amount for some other services. Defendants offered to cancel their claim against plaintiffs for water rent and other services for the pipe which plaintiffs had laid. Defendants thereby acknowledged the ownership of the pipe laid by plaintiffs to be the latter s'. Our conclusion is that the expenditures relied upon by plaintiffs as constituting an equitable estoppel preventing defendants from revoking the license are not of such permanent nature or of sufficient value to constitute any license, much less an irrevocable license or easement. The expenses incurred by the plaintiffs in reliance upon that agreement were in no way different from such expenditures habitually made by persons purchasing water for household purposes from those who have it to sell. Plaintiffs did no more than to lay a pipe from the main belonging to defendants to plaintiffs' residence and to install such plumbing as plaintiffs' needs required in their own residence.
All of these expenditures were for personal property belonging to the plaintiffs, of no service whatever to the defendants, solely for the benefit of plaintiffs and do not constitute such expenditures as operate to change a contract for the rental or sale of water into an easement or irrevocable license. The testimony of defendants is undisputed that when defendants offered to accept the pipe laid by the plaintiffs and cancel defendants' indebtedness against plaintiffs the latter refused to accept said offer for the reason that plaintiffs would use the pipe to procure water from some other source. We believe the equities are with the defendants. The decree of the Circuit Court is reversed and one will be entered here dismissing plaintiffs' complaint.
Reversed and Decree Entered. Rehearing Denied.
Burnett, C. J., and McBride and Rand, JJ., concur.