Case Name: SALT RIVER VALLEY WATER USERS' ASSOCIATION, a Corporation, Appellant, v. W. S. NORVIEL, as State Water Commissioner of the State of Arizona, and UNITED VERDE COPPER COMPANY, a Corporation, Appellees
Court: Arizona Supreme Court
Jurisdiction: Arizona
Decision Date: 1925-12-12
Citations: 29 Ariz. 360
Docket Number: Civil No. 2281
Parties: SALT RIVER VALLEY WATER USERS’ ASSOCIATION, a Corporation, Appellant, v. W. S. NORVIEL, as State Water Commissioner of the State of Arizona, and UNITED VERDE COPPER COMPANY, a Corporation, Appellees.
Judges: MoALISTER, C. J., and ROSS, J., concur.
Reporter: Arizona Reports
Volume: 29
Pages: 360–376

Head Matter:
[Civil No. 2281.
Filed December 12, 1925.]
[241 Pac. 503.]
SALT RIVER VALLEY WATER USERS’ ASSOCIATION, a Corporation, Appellant, v. W. S. NORVIEL, as State Water Commissioner of the State of Arizona, and UNITED VERDE COPPER COMPANY, a Corporation, Appellees.
Messrs. Kibbey, Bennett, Gust & Smith, for Appellant.
Mr. John W. Murphy, Attorney General, Mr. Earl Anderson, Assistant Attorney General, and Messrs. Anderson, Gale & Nilsson, for United Yerde Copper Company.

Opinion:
CHAMBERS, Superior Judge
(After stating the facts as above). — The record upon this appeal presents but a single question: Does the amended complaint state a cause of action? The appellees insist that it does not, and base their argument upon five propositions, stated as follows:
(1) The amended complaint shows upon its face that there was no application for a permit to make an appropriation of water, but it was for the transfer of the point of diversion of, and the more efficient and economic use of, water belonging to the applicant, and that the permit was issued in accordance therewith, and not for a new appropriation.
(2) The mere granting of a permit by the state water commissioner does not interfere with the rights of the appellant or its stockholders; it does not create any cloud upon their vested water rights; it is not any claim adverse to their vested water rights; and therefore does not constitute the basis for a cause of action.
(3) The amended complaint does not state a cause of action to quiet title in equity or otherwise, and it shows on its face that the appellant has no right to bring the action.
(4) The amended complaint shows that the appellant did not pursue the remedy provided by the state Water Code, which remedy is exclusive, and is adequate, full and complete.
(5) The amended complaint shows upon its face that, this being an independent suit and not an appeal, no cause of action is stated because the decision of the state water commissioner is conclusive as to all facts, and there are no allegations of mistakes of law or fraud.
Taking up these propositions in their order, we cannot accede to the proposition that the application shows on its face that it is not an application for a permit to make an appropriation of water, but is merely for the transfer of the point of diversion, and that the permit was issued for that purpose and not as a new appropriation. It does appear that one of the purposes of the permit is to change the point of diversion, and under the heading "Remarks" at the end of the application it is recited that:
"This is not a new appropriation of water, but includes water artificially developed by this claimant, and also transferred water, to both of which applicant already claims a right."
Notwithstanding this, the permit is entitled "Enlargement Permit," and at several places in the application it appears that the application is rather for an enlargement of its appropriation than merely for a change in the point of diversion. At any rate the complaint' substantially alleges that the appellant and its shareholders have appropriated all the normal flow of the Yerde River, so that any use, except as otherwise indicated in this opinion, by or on behalf of the United Verde Copper Company, would be adverse to the appellant.
Taking up the second proposition, the permit issued by the state water commissioner, which the apioellant asks the court to cancel, was issued under the provisions of chapter 164 of the Session Laws of 1919, as amended by chapter 64 of the Session Laws of 1921. Section 56 of this act provides:
"Nothing in this act contained shall impair the . vested rights of any person, association or corporation to the use of water."
Section 1 of the act contains a clause of similar import.
Cases somewhat similar in their nature have been before the courts of Idaho and Utah. In the ease of Lockwood v. Freeman, 15 Idaho, 395, 98 Pac. 295, the prior appropriator, having appropriated all the waters of a stream, was held to be entitled to a permanent injunction restraining a second appropriator from using the waters of the stream. The subset quent appropriator attempted to rely upon a license issued by the state engineer. The engineer stood in the same relation to the parties litigant as does the state water commissioner in this case. The court says:
"The state engineer has no authority to deprive a prior appropriator of water from any streams in this state and give it to any other person. Vested rights cannot thus be taken away."
The lower court in the case before us based its decision upon the case of Yates v. Newton, 59 Utah, 105, 202 Pac. 208. The state engineer had approved two applications to appropriate water for irrigation and power purposes. The trial court found that the respondents had appropriated all the available waters of the stream. The respondents had brought the action asking the court to adjudge them the owners of the waters sought to be appropriated by appellants, under their application approved by the engineer, and to restrain the appellants from asserting any claim or right to such water. The trial court granted the prayer of the complaint, but the Supreme Court reversed the ease. We quote from the decision;
"It seems to be the theory of respondents that the mere fact of the state engineer having granted to appellants a right to the use of five second-feet of unappropriated waters in said canyon will in some way interfere with or disturb the acknowledged rights of the respondents. . No order of the engineer can disturb those vested rights."
The Supreme Court was of the opinion that additional water might be developed, and further along says:
"However, as the engineer did not intend to grant and could not grant the appellants any rights that would disturb the rights of respondents, and it being the settled policy of this state to encourage the development of 'water and to conserve any water running to waste, the court should not have directed the engineer to cancel the orders approving the applications, but should have permitted the appellants to do whatever they may have concluded to be necessary to divert and conserve the waters of the canyon, if such can be done."
The same court in a later case takes up a question very similar to what we have here. Robison v. Green, 61 Utah, 434, 213 Pac. 1081. In that case the defendant had obtained an approval by the state engineer of his application to appropriate 20 second-feet of the waters of a creek. In approving the application, the engineer made an indorsement thereon that the ap proval was no guaranty that the amount of water called for was available. The application also expressly stated that no claim was made for water previously appropriated by others, but only for such water as might be saved from evaporation and seepage. The plaintiffs alleged and proved that they had appropriated all the waters of the creek. They alleged that the contemplated appropriation of water by defendant could not be made without great and irreparable injury to the plaintiffs, and that the approval of the application by the state engineer consti-. tuted a cloud upon plaintiffs ' title and to the use thereof.
The defendant relied entirely upon his application filed in the office of the state engineer and the engineer's qualified approval thereof. No evidence was offered that any water could be developed and saved, or, if developed and saved, how it could be segregated and applied without interfering with the rights of plaintiffs. The court upheld a decree of the trial court quieting the title of the plaintiffs as against the defendant under his application, modifying it only as to the right of the defendant to make a future application for water.
We - have the same situation here. The appellant alleges an appropriation of all the water, except in times of great floods, and sets up the issuance of the permit. The appellee demurs to.the complaint. By so doing it relies entirely upon the permit. While it is apparent that the main purpose of this complaint is the cancellation of the permit issued by the water commissioner, the complaint is sufficient in our judgment upon which to base an adjudication of the rights of appropriators in and to the waters of the Verde River as between the appellant and its shareholders and the United Verde Copper Company, and, if it be correct as alleged that the appellant and its share holders are appropriators of all the waters of the Verde River except in times of great flood, then it is entitled to a decree so adjudicating and canceling the permit as prayed. If it be true, as claimed by appellee, that this permit is for nothing more than a change in the point of diversion of a prior appropriation, then that appropriation can be fully established by a court decree and the permit can be modified. If there is any opportunity for the appellee to develop any additional water, it should be granted that right; and, if its use of the water for concentrating, smelting and manufacturing purposes does not appreciably lessen the quantity or interfere with its use for irrigation of the lands of appellant's shareholders, the appellee should have the right to divert and use what it actually requires for such purposes.
While the opinion in the case of Robison v. Green, supra, was published a few weeks before the decision of the lower court in the instant case, it is only fair to the learned trial judge who presided therein to state that the decision was not available in the digests at the time and was not called to his attention.
Upon the third proposition we might say that to deny the appellant in this case the right to bring the action in behalf of its shareholders would 'mean that enormous expense and serious complications would arise in attempting to make all the water users of the Salt and Verde Rivers parties to this litigation. In the public interest, if for no other reason, the appellant should be permitted to bring the action for and in behalf of its shareholders.
In Montezuma Canal Co. v. Smithville Canal Co., 218 U. S. 371, 54 L. Ed. 1074, 31 Sup. Ct. Rep. 67, it is held that certain canal companies and individuals, whether viewed as appropriators of water, or as mere carriers for others, sufficiently represented the users of the waters of the respective canals to cause such water users to be bound by a prior judgment in which the Montezuma Canal Company was the plaintiff suing for and in bphalf of its shareholders. The right of a carrying company to maintain an action of this nature in behalf of its stockholders who are the users of the water is upheld by the courts of Colorado, California and Washington. Thorpe v. Tenem Ditch Co., 1 Wash. 566, 20 Pac. 588; Arroyo Ditch & Water Co. v. Baldwin, 155 Cal. 280, 100 Pac. 874; Montrose Canal Co. v. Loutsenhizer Ditch Co., 23 Colo. 233, 48 Pac. 532. We think that in the public interest the same right should prevail in Arizona.
Appellee insists that an action to quiet title being a statutory action in this state, the plaintiff must always bring himself within the statute, and that in this case there is no allegation that the appellee United Verde Copper Company claims any interest in the waters of the Verde River adverse to the appellant. While it is true that the plaintiff in an action to quiet title must bring himself within the statute, it is not necessary that he should allege the adverse interest in the language of the statute. It is sufficient if it appears from the complaint that an interest is claimed by the defendant, and that such interest is adverse to the claim of the plaintiff. Arizona Mine Supply Co. v. Bolman, 15 Ariz. 504, 140 Pac. 490.
The fourth and fifth propositions deserve brief mention. The Water Code provides that the applicant for a permit to appropriate the waters of a public stream in the state of Arizona may appeal from the decision of the water commissioner to the superior court when a permit is denied. However, no hearing is provided for when prior appropriators object to the issuance of a permit. There is a pro vision in the "Water Code for a hearing where the commissioner undertakes, in the manner provided therein, to make a determination of the relative rights of claimants to the waters of a stream. There is no pretense that this was the procedure here. Under the procedure adopted in this case, the commissioner had no jurisdiction to settle and determine the relative rights of the appellant and appellee United Verde Copper Company in and to the waters of the Verde River. The appellant was before the water commissioner as a matter of courtesy. This appearance would not give the commissioner jurisdiction either of the subject matter or the parties for any purpose except to grant or deny the permit, and his orders can in no way interfere with vested rights. The commissioner having no jurisdiction to hear and determine the respective rights of the parties, it follows that no decision of the commissioner could be conclusive as to the facts.
The judgment is reversed and remanded, with instructions to overrule the demurrer to the amended complaint, and for such further proceedings as shall not be inconsistent with this opinion.
MoALISTER, C. J., and ROSS, J., concur.
Note. — Judge LOCKWOOD, being disqualified, the Honorable W. R. CHAMBERS, Judge of the Superior Court of Graham County, was called to sit in his stead.