Title: DEPT OF STATE LANDS v PETTIBONE
Citation: N/A
Docket Number: 83-281
State: Montana
Issuer: Montana Supreme Court
Date: June 18, 1985

No. 8 3 - 2 8 1 I N THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 5 I N THE MATTER OF THE ADJUDICATION OF THE EXISTING RIGHTS TO THE USE OF ALL THE WATER, BOTH SURFACE AND UNDERGROUND, WITHIN THE POWDER RIVER DRAINAGE AREA, INCLUDING ALL TRIBU- TARIES OF THE POWDER RIVER I N CARTER, CUSTER, FALLON, P R A I R I E , and POWDER RIVER COUNTIES, MONTANA, DEPARTMENT OF STATE LANDS, O b j e c t o r and A p p e l l a n t , -vs- WALTER PETTIBONE, DAVID and MELINDA B L I S S , ERNEST and PEGGY TOOKE, GIACOMETTE RANCH, P . J. RANCH, ELMER OEDEKOVEN, E. MIORY HUBBARD, CINCH BUCKLE RANCH, MALLET CATTLE COMPANY, ROBERT F . HARDY TRUST, ALVIN and HELEN IRION, HARDY LAND & LIVESTOCK COMPANY, and BALES RAPJCH, C l a i m a n t s and R e s p o n d e n t s . APPEAL FROM: T h e Water C o u r t s of t h e S t a t e of Montana, T h e Y e l l o w s t o n e D i v i s i o n - P o w d e r R i v e r B a s i n , T h e H o n o r a b l e W.W. L e s s l e y , C h i e f Judge. COUlJSEL OF RECORD: For A p p e l l a n t : L y l e M a n l e y argued, D e p t . of S t a t e L a n d s , I i e l e n a , Montana; John F. N o r t h , D e p t . of S t a t e L a n d s F o r R e s p o n d e n t s : John C a r r argued f o r B l i s s & B a l e s R a n c h , M i l e s C i t y , Montana F o r A m i c u s C u r i a e : A l b e r t W. Stone, U of M L a w S c h o o l , Missoula, M o n t a n a G o u g h , Shanahan, Johnson & W a t e r m a n ; R o n a l d F . W a t e r m a n argued f o r M o n t a n a S t o c k g r o w e r s A s s o c . , H e l e n a , M o n t a n a S u b m i t t e d : F e b r u a r y 2 1 , 1 9 8 5 D e c i d e d : June 1 8 , 1 9 8 5 F i l e d : -1UM 1 : 1985 C l e r k M r . J u s t i c e L. C. Gulbrandson d e l i v e r e d t h e Opinion o f t h e Court. The S t a t e of Montana a p p e a l s from t h e Powder R i v e r F i n a l Decree h o l d i n g t i t l e t o c e r t a i n w a t e r r i g h t s t o b e v e s t e d i n respondents. W e r e v e r s e . The S t a t e of Montana, Department o f S t a t e Lands, o b j e c t e d t o t h e p o r t i o n o f t h e Powder R i v e r P r e l i m i n a r y Decree t h a t awarded t i t l e o f c e r t a i n w a t e r r i g h t s t o t h e above-named r e s p o n d e n t s , a l l lessees o f S t a t e s c h o o l t r u s t l a n d s . A l l o f t h e f a c t u a l d i s p u t e s , a s t o flow, s o u r c e and p l a c e o f d i v e r s i o n and p l a c e o f u s e w e r e r e s o l v e d p r i o r t o t h e h e a r i n g on t h e S t a t e o b j e c t i o n h e l d November 24, 1982. The h e a r i n g was c o n f i n e d s o l e l y t o t h e f o l l o w i n g q u e s t i o n o f law: Does t i t l e t o t h e w a t e r r i g h t vest i n t h e l e s s e e o r t h e S t a t e o f Montana a s owner o f t h e l a n d where t h e w a t e r i s d i v e r t e d ? O n A p r i l 4 , 1983, The Water C o u r t s Judgment--The Powder R i v e r F i n a l Decree, was i s s u e d . It h e l d t h a t t h e t i t l e t o t h e w a t e r s d i v e r t e d on S t a t e school t r u s t l a n d s vests i n t h e lessee, and n o t t h e S t a t e . The S t a t e appealed t h i s p o r t i o n o f t h e F i n a l Decree. The a p p e a l was first heard by t h i s Court on J a n u a r y 13, 1984. Subsequently, by Order o f March 26, 1984, w e d i r e c t e d t h e p a r t i e s t o r e b r i e f t h e c a s e , and t o a d d r e s s c e r t a i n q u e s t i o n s . Because o f t h e broad s i g n i f i c a n c e o f t h i s c a s e , w e a l s o s o l i c i t e d amicus c u r i a e p a r t i c i p a t i o n . The p a r t i e s , and s e v e r a l a m i c i , submitted supplemental b r i e f s , and t h e m a t t e r was a g a i n heard on J a n u a r y 25, 1985. There a r e twenty-three w a t e r r i g h t s i n v o l v e d i n t h i s appea 1. They g e n e r a l l y f a 1 1 i n t o one o f t h e f o l l o w i n g c a t e g o r i e s : 1) Groundwater W e l l s : Four r i g h t s a r e from groundwater w e l l s . Three o f t h e w e l l s a r e on school t r u s t l a n d s , and used wholly t h e r e o n . One s t r a d d l e s t h e b o r d e r between a state-owned and privately-owned s e c t i o n , and i s used on both. 2 ) Developed S p r i n g s : Three r i g h t s a r e i n developed s p r i n g s f o r s t o c k w a t e r i n g . The s p r i n g s , and t h e i r u s e s , a r e c o n f i n e d t o t h e s c h o o l t r u s t l a n d s . 3) D i v e r s i o n s o f T r i b u t a r i e s : F i f t e e n r i s h t s a r i s e from d i v e r t i n s named o r unnamed t r i b u t a r i e s o f l a r g e r - c r e e k s . I n most, t h e a p p r o p r i a t o r h a s c o n s t r u c t e d a small dam on t h e t r i b u t a r y c r e a t i n g a s m a l l r e s e r v o i r f o r s t o c k w a t e r i n g . I n some i n s t a n c e s , w a t e r c o n t i n u e s t o flow from t h e reservoirs t o t h e l a r g e r c r e e k . One of t h e r i g h t s i n v o l v e s a draw o f w a t e r from t h e Powder R i v e r devoted t o i r r i g a t i o n , n o t s t o c k w a t e r i n g . T h i r t e e n o f t h e s e d i v e r s i o n s o c c u r wholly on school t r u s t l a n d s w i t h t h e u s e confined t h e r e o n . One r i g h t i s i n a r e s e r v o i r on s t a t e land t h a t s e r v e s b o t h t h e s t a t e s e c t i o n and an a d j a c e n t p r i v a t e s e c t i o n . The l a s t o f t h e s e r i g h t s i s a n a p p r o p r i a t i o n used f o r i r r i g a t i o n . I n t h a t c a s e , t h e d i v e r s i o n i s on s t a t e l a n d , and t h e u s e i s on b o t h s t a t e and p r i v a t e land. 4 ) Direct U s e : One r i g h t i s i n an undevelosed s p r i n s and i t s d r a i n a q e a d j a c e n t - t o a -creek i n t h e Powder ~ i v e r d r a i n a g e . The s p r i n g , and i t s u s e , i s confined t o t h e school t r u s t land. T h i s r i g h t h a s t h e o l d e s t p r i o r i t y d a t e o f any a t i s s u e h e r e , October 1, 1883. According t o t h e d e c r e e s a s s o c i a t e d w i t h t h e s e r i g h t s , e a c h i s e x e r c i s e d year-round; a l t h o u g h i n t i m e s of d r o u g h t , t h i s may n o t b e possi-ble. The l a n d s upon which t h e s e w a t e r r i g h t s l i e a r e t h o s e t h a t w e r e g r a n t e d t o t h e S t a t e o f Montana by t h e F e d e r a l Government i n t h e Montana Enabling A c t . A c t o f February 2 2 , 1889, ch. 180, 25 S t a t . 676. O r i g i n a l l y , t h e s e l a n d s w e r e set a s i d e i n t h e Montana T e r r i t o r y Organic A c t , A c t o f May 2 6 , 1864, ch. 9 5 , 13 S t a t . 8 5 , which provided t h a t s a i d l a n d s w e r e " r e s e r v e d f o r t h e purpose o f b e i n g a p p l i e d t o s c h o o l s " ch. 9 5 , s e c t i o n 14, 1 3 S t a t . 91 i n t h e Montana T e r r i t o r y . The Enabling Act granted t h e s e lands t o t h e s t a t e on t h e following t e r m s : "Section 10. That upon t h e admission o f each o f s a i d S t a t e s i n t o t h e Union s e c t i o n s numbered s i x t e e n and t h i r t y - s i x i n every township o f s a i d proposed S t a t e s , and where such s e c t i o n s , o r any p a r t s t h e r e o f , have been s o l d o r otherwise disposed of by o r under t h e a u t h o r i t y o f any a c t o f Congress, o t h e r lands e q u i v a l e n t t h e r e t o , i n l e g a l s u b d i v i s i o n s o f n o t less t h a n one-quarter s e c t i o n , and a s contiguous a s may be t o t h e s e c t i o n i n l i e u o f which t h e same i s taken, a r e hereby granted t o s a i d S t a t e s f o r t h e support o f common schools. "Section 11. That a l l lands h e r e i n granted f o r e d u c a t i o n a l purposes s h a l l be disposed o f only a t p u b l i c s a l e , and a t a p r i c e n o t less t h a n t e n d o l l a r s p e r a c r e , t h e proceeds t o c o n s t i t u t e a permanent school fund, t h e i n t e r e s t o f which only s h a l l be expended i n t h e support o f s a i d schools. But s a i d lands may, under such r e g u l a t i o n s a s t h e l e g i s l a t u r e s s h a l l p r e s c r i b e , be leased . . . " ch. 180, 25 s t a t . 679. The 1889 Montana C o n s t i t u t i o n accepted t h e s e lands and provided t h a t they would be held i n t r u s t consonant w i t h t h e t e r m s o f t h e Enabling Act, Montana C o n s t i t u t i o n of 1889, a r t . X V I I , sec. 1. The 1972 Montana C o n s t i t u t i o n continued t h e s e t e r m s , Mont. Const. a r t . X , sec. 11, ch. 1. See a l s o s e c t i o n 77-1-202, MCA (school lands held i n t r u s t f o r t h e support o f education) . The duty o f a d m i n i s t e r i n g t h e school t r u s t lands i s placed upon t h e Board o f Land Commissioners (Board). Section 77-1-202(l), MCA provides t h a t "The board s h a l l a d m i n i s t e r t h i s t r u s t t o s e c u r e t h e l a r g e s t measure o f l e g i t i m a t e and reasonable advantage t o t h e S t a t e . " Pursuant t o 77-1-301(1), MCA, t h e Department of S t a t e Lands, (DSL) under t h e d i r e c t i o n of t h e Board, " . . . h a s charge o f t h e s e l e c t i n g , exchange, c l a s s i f i c a t i o n , a p p r a i s a l , l e a s i n g , management, s a l e , o r o t h e r d i s p o s i t i o n o f s t a t e lands" The Department o f S t a t e Lands h a s a l s o promulgated r e g u l a t i o n s g o v e r n i n g t h e management, s a l e o r l e a s e o f s c h o o l t r u s t l a n d s . S e e g e n e r a l l y T i t l e 26, A.R.M. Each o f t h e r e s p o n d e n t s i s a l e s s e e o f o n e o r more s e c t i o n s o f s c h o o l t r u s t l a n d s . The DSL, by s t a t u t e , s e c t i o n s 77-6-115 and 77-6-301 and -302, MCA, and by r e g u l a t i o n S26-3.123, A.R.M., a l l o w s lessees t o d i v e r t w a t e r s on t h e l e a s e h o l d , d e v e l o p them, and p u t them t o u s e on o r o f f t h a t l a n d . None o f t h e r i g h t s a t i s s u e i n t h i s case w e r e p e r f e c t e d p u r s u a n t t o t h e a b o v ~ mentioned s t a t u t e s o r r e g u l a t i o n s . R a t h e r , t h e l e s s e e s c l a i m t h e s e r i g h t s a s " u s e r i g h t s , " which have l o n g been r e c o g n i z e d i n t h i s S t a t e , see Murray v. T i n g l e y ( 1 8 9 7 ) , 20 Mont. 260, 50 P. 723, and S t o n e , Montana Water Law f o r t h e 1 9 8 0 1 s , p. 3 , (1981 e d . ) These r i g h t s a r e a t i s s u e b e c a u s e o f t h e g e n e r a l w a t e r r i g h t s a d j u d i c a t i o n underway i n Montana. T h i s p r o c e s s began w i t h t h e p a s s a g e o f t h e Montana Water U s e A c t o f 1973, c h . 452, L. 1973. The l e g i s l a t u r e e n a c t e d t h e Water U s e A c t i n r e s p o n s e t o t h e c h a o s o f p r e v i o u s Montana w a t e r law. S e e S t o n e , - The Long Count on Dempsey: No F i n a l D e c i s i o n - i n Water R i g h t s A d j u d i c a t i o n , 31 Mont.L.Rev. 1 ( 1 9 6 9 ) ; S t o n e , Are There Any A d j u d i c a t e d Streams i n Montana? 19 Mont.L.Rev. - 19 ( 1 9 5 7 ) . I t set u p a s y s t e m o f g e n e r a l s t r e a m a d j u d i c a t i o n a d m i n i s t e r e d by t h e Department o f Natura 1 R e s o u r c e s and C o n s e r v a t i o n (DNRC) and a l s o p r o v i d e d , from t h a t t i m e o n , t h a t t h e s t a t u t o r y method was t h e e x c l u s i v e way t o a c q u i r e a w a t e r r i g h t . P r i o r t o 1973, t h e r e w e r e two p o s s i b l e ways o f p e r f e c t i n g a w a t e r r i g h t . F i r s t was t h e method p r o v i d e d f o r by s t a t u t e ; p o s t i n g a t t h e p o i n t o f d i v e r s i o n and f i l i n g a n o t i c e w i t h t h e c o u n t y c l e r k , Mont. Laws 1885, secs. 6 t h r o u g h 10; R.C.M. ( 1 9 4 7 ) , 89-810 t h r o u g h 814. Second was simply by putting the water to use, Murray v. Tingley, supra. The 1885 Act did not provide for any general adjudication of streams. Nor did it provide any mechanism by which actual uses, as opposed to claimed uses, could be ascertained. As Professor Stone, in Montana Water Law for the 1980's states, --- the problems the legislature addressed in 1973 were many: "It [the old water rights system under the 1885 Act] merely provided for isolated lawsuits between particular water users over their individual rights in isolated parts of streams. The statute resulted only in piecemeal litigation, often repetitive and among the same neighbors, over and over again disputing one another' s claims. [Citations omitted.] It did not lead to security in one's property rights nor to finality in determining the fair and legal distribution of water among neighboring claimants. "But not only were the individual water users ill-served by this failure to establish water rights; the public interest also required an inventory of the state's water needs so that future negotiations or dealings with downstream states could allocate the waters of our interstate rivers." Stone, supra at p. 4. The system of adjudication established by the 1973 Act soon encountered difficulties. First, it required the DNRC to physically inspect or discover all water rights. It soon became evident that this process would take a very long time. Six years after the 1973 Act was passed, the inspection and adjudication of the Powder River Basin, one of the smallest and relatively simplest in the State, was still in its initial stages. Second, the 1973 Act did not provide for the adjudication of federally reserved rights--presenting the spectre of concurrent, wasteful and possibly inconsistent litigation in the Federal Courts. Responding to the shortcomings of the 1973 Act, the 1979 Montana Legislature enacted Senate Bill 76, ch. 697 L. 1979. It established a system of water courts and put upon a p p r o p r i a t o r s and u s e r s t h e burden of f i l i n g claims f o r t h e i r r i g h t s . It a l s o provided f o r reserved water r i g h t s and set up a Compact Commission t o n e g o t i a t e t h e f e d e r a l and I n d i a n reserved r i g h t s . Ch. 697, sec. 27, I , . 1979. The Water Court system i s charged w i t h t h e f i n a l a d j u d i c a t i o n o f water r i g h t s . Rased upon t h e claims f i l e d by u s e r s and a p p r o p r i a t o r s , t h e c o u r t i s s u e s temporary p r e l i m i n a r y d e c r e e s c a t a l o g i n g t h e v a r i o u s r i g h t s and p r i o r i t i e s i n t h e r e s p e c t i v e b a s i n . A l l named o r a f f e c t e d p a r t i e s have, a t t h a t t i m e , an o p p o r t u n i t y t o o b j e c t t o t h e temporary p r e l i m i n a r y decree. I f no o b j e c t i o n s a r e r a i s e d , t h e temporary decree i s made f i n a l . Objections a r e heard and adjudged by t h e Water Court, with t h e r i g h t o f appeal t o t h i s Court. This i s t h e f i r s t appeal we have been c a l l e d on t o h e a r from a f i n a l decree o f t h e Water Court. I n reviewing t h i s , and subsequent f i n a l d e c r e e s , w e w i l l apply t h e same s t a n d a r d s o f review a s any o t h e r appeal from a D i s t r i c t Court o r d e r . The q u e s t i o n w e c o n s i d e r is: Who i s t h e owner o f a water r i g h t d i v e r t e d o r developed on school t r u s t land; t h e S t a t e o r t h e l e s s e e ? W e hold t h a t t i t l e t o t h e s e water r i g h t s v e s t s i n t h e S t a t e . The l e s s e e , i n making a p p r o p r i a t i o n s on and f o r school t r u s t s e c t i o n s , i s a c t i n g on behalf o f t h e S t a t e . I t is only through s t a t e a c t i o n t h a t t h e lessee i s on t h e land, and Montana law e x p r e s s l y provides t h a t t h e lessee s h a l l be reimbursed f o r a l l c a p i t a l expenditures made i n p u t t i n g t h e water t o b e n e f i c i a l use. The l e s s e e , under t h e t e r m s o f t h e l e a s e , i s simply e n t i t l e d t o t h e - use o f water appurtenant t o t h e school t r u s t land. The S t a t e i s t h e b e n e f i c i a l u s e r of t h e w a t e r , and i t s d u t y a s t r u s t e e o f t h e school t r u s t l a n d s p r o h i b i t s it from a l i e n a t i n g any i n t e r e s t i n t h e l a n d , such a s t h e a p p u r t e n a n t w a t e r r i g h t , w i t h o u t r e c e i v i n g f u l l compensation t h e r e f o r . The school t r u s t l a n d s a r e endowments by t h e United S t a t e s t o t h e S t a t e o f Montana f o r t h e b e n e f i t of t h e common s c h o o l s . A major p o l i c y o f t h e f l e d g l i n g n a t i o n was t o f o s t e r p u b l i c e d u c a t i o n by g r a n t s o f land t o newly admitted s t a t e s f o r t h a t purpose. Each o f t h e t h i r t y s t a t e s c a r v e d o u t o f t h e p u b l i c domain r e c e i v e d such g r a n t s , v a r y i n g i n t h e q u a n t i t y g r a n t e d , and t e r m s o f t h e g r a n t , a s n a t i o n a l p o l i c y and p o l i t i c a l winds d i c t a t e d . See g e n e r a l l y Woodgerd and McCarthy, S t a t e School T r u s t s and O i l and Gas Royalty R a t e s , ---- 3 Pub.Land L.Rev. 1 (1982). Montana was a d m i t t e d t o t h e Union i n 1889 a l o n g w i t h Washington, North Dakota, and South Dakota. The Omnibus Enabling A c t , s u p r a , r e f l e c t s t h e g e n e r a l p o l i c y o f Congress a s s e t o u t above. Even b e f o r e Montana j o i n e d t h e Union, g e n e r a 1 p r i n c i p l e s , e v o l v i n g from t h e j u d i c i a l review o f e a r l i e r e n a b l i n g a c t s , governing t h e s c h o o l land g r a n t t r u s t s w e r e w e l l s e t t l e d . I n two c a s e s , t h e T r u s t e e s o f Vincennes U n i v e r s i t y v. S t a t e o f Indiana ( 1 8 5 2 ) , 55 U.S. 268, 14 L.Ed. 267, and S p r i n g f i e l d Township v. Quick ( 1 8 5 9 ) , 63 U.S. 56, 1 6 L.Ed. 256, t h e United S t a t e s Supreme Court s e t o u t t h r e e i m p o r t a n t p r i n c i p l e s governing s c h o o l t r u s t lands: 1) t h a t t h e e n a b l i n g a c t s c r e a t e d t r u s t s s i m i l a r t o a p r i v a t e c h a r i t a b l e t r u s t which t h e s t a t e could n o t a b r i d g e ; 2) t h a t t h e e n a b l i n g a c t s w e r e t o b e s t r i c t l y c o n s t r u e d a c c o r d i n g t o f i d u c i a r y p r i n c i p l e s , and; 3) t h a t t h e e n a b l i n g a c t s preempt s t a t e laws o r c o n s t i t u t i o n s . See a l s o Andrus v. Utah ( 1 9 8 0 ) , 446 U.S. 500, 520, 523, 100 S.Ct. 1803, 1814, 1815, 64 L.Ed.2d 458, 472, 474, where t h e United S t a t e s Supreme Court r e a f f i r m e d t h o s e p r i n c i p l e s , h o l d i n g t h a t Congress imposed upon t h e s t a t e s a b i n d i n g and p e r p e t u a l o b l i g a t i o n t o u s e t h e g r a n t e d l a n d s f o r p u b l i c e d u c a t i o n . The c o u r t s have been v e r y p r o t e c t i v e o f t h e t r u s t c o n c e p t , and emphatic a b o u t t h e need t o p r e s e r v e t h e v a l u e o f t h e t r u s t corpus-the school l a n d s . The seminal c a s e i n t h i s r e g a r d i s Lassen v. Arizona ( 1 9 6 7 ) , 385 U.S. 458, 87 S.Ct. 584, 17 IJ.Ed.2d 515. I n Lassen, t h e United S t a t e s Supreme Court h e l d t h a t t h e Arizona Highway Department was r e q u i r e d t o f u l l y compensate t h e S t a t e Land Department ( a d m i n i s t r a t o r of t h e s c h o o l l a n d s ) f o r t h e v a l u e o f easements t a k e n a c r o s s s c h o o l l a n d s . The Court h e l d t h a t t h e Arizona Enabling A c t , ch. 310, 36 S t a t . 557 (1910) " c o n t a i n [ e d ] ' a s p e c i f i c enumeration o f t h e purposes f o r which t h e l a n d s w e r e g r a n t e d and t h e enumeration i s n e c e s s a r i l y e x c l u s i v e o f any o t h e r p u r p o s e ' " Lassen a t 467, 87 S.Ct. a t 589, 17 L.Ed.2d a t 522 ( q u o t i n g E r v i e n v. United S t a t e s ( 1 9 2 8 ) , 251 U.S. 41, 47, 40 S.Ct. 75, 76, 64 L.Ed. 128, 1 3 0 ) . I n S t a t e o f Utah v. Andrus (D. Utah 1 9 7 9 ) , 486 F.Supp. 995, t h e f e d e r a l d i s t r i c t c o u r t concluded t h a t t h e lessees o f s t a t e school l a n d s had an i m p l i e d r i g h t of a c c e s s t o t h e i r l e a s e h o l d a c r o s s a d j a c e n t f e d e r a l l a n d s . The c o u r t f e l t t h a t i f it h e l d o t h e r w i s e , " t h e v e r y purpose o f t h e s c h o o l t r u s t l a n d s would f a i l . Without a c c e s s t h e s t a t e could n o t d e v e l o p t h e t r u s t l a n d s i n any f a s h i o n and t h e y would become economically worth1 ess. T h i s Congress d i d n o t i n t e n d . I' 486 F.Supp. a t 1002. The Court i n Utah v. Andrus made it c l e a r t h a t any r e s t r i c t i o n on t h e u s e (i.e. a c c e s s ) o f s c h o o l t r u s t land t h a t e f f e c t i v e l y d e v a l u e s it c a n n o t b e s u s t a i n e d . T h i s Court h a s l i k e w i s e been emphatic i n p r o t e c t i n g t h e s c h o o l t r u s t . I n R i d e r v. Cooney ( 1 9 3 3 ) , 94 Mont. 295, 23 P.2d 261, w e f i r s t h e l d t h a t a l e a s e i s a n " i n t e r e s t " i n land. Then, a p p l y i n g t h e r u l e t h a t i n t e r e s t s i n s c h o o l t r u s t l a n d s c a n n o t be a l i e n a t e d f o r less t h a n f u l l v a l u e , w e h e l d t h a t t h e S t a t e musts a l s o o b t a i n f u l l v a l u e f o r a l e a s e t h e r e o f . See a l s o S t a t e e x rel. Galen v. D i s t . C t . ( 1 9 1 0 ) , 42 Plont. 105, 112 P. 706; Gladden Farms, I n c . v. S t a t e (Az. 1 9 8 1 ) , 633 P.2d 325; Arizona S t a t e Land Department v . S u p e r i o r Court (Az. 1 9 8 1 ) , 633 P.2d 330; C i t y o f S i e r r a V i s t a v. B a b b i t t (Az. 1 9 8 1 ) , 633 P.2d 333; S t a t e v. U n i v e r s i t y o f Alaska (Ak. 1 9 8 1 ) , 624 P.2d 807. I n J e r k e v. S t a t e Dept. of Lands ( 1 9 7 9 ) , 182 Mont. 294, 597 P.2d 49, w e a d d r e s s e d a s i t u a t i o n analogous t o t h e one a t b a r . The g e n e r a l q u e s t i o n p r e s e n t e d was how f a r t h e S t a t e could s u r r e n d e r i t s m a n a g e r i a l p r e r o g a t i v e s o v e r s c h o o l l a n d s w i t h o u t v i o l a t i n g t h e t r u s t . Montana law empowers g r a z i n g d i s t r i c t s t o manage and a l l o c a t e l a n d s w i t h i n t h e i r j u r i s d i c t i o n . T h i s i n c l u d e s t h e power t o g r a n t p r e f e r e n c e r i g h t s t o members i n t h e r e - l e a s i n g o f school l a n d s t h a t a r e w i t h i n t h e d i s t r i c t . The p l a i n t i f f i n J e r k e contended t h a t t h e p r e f e r e n c e r i g h t u n c o n s t i t u t i o n a l l y p r e v e n t e d t h e S t a t e from r e c e i v i n g f u l l f a i r market v a l u e f o r t h e land. S i n c e t h e e x i s t i n g lessee who e x e r c i s e d t h e p r e f e r e n c e r i g h t was n o t u s i n g t h e land (and t h u s n o t " f o l l o w [ i n g ] good a g r i c u l t u r a l p r a c t i c e s and mak[ing] improvements on t h e land" 182 Mont. a t 297, 597 P.2d a t 5 1 ) , w e h e l d t h e p r e f e r e n c e r i g h t was u n c o n s t i t u t i o n a l a s a p p l i e d . T h i s was because: "To a l l o w t h e p r e f e r e n c e r i g h t t o b e e x e r c i s e d i n t h i s c a s e would b e t o i n s t a l l t h e Grazing D i s t r i c t a s t h e t r u s t e e o f t h e land. I t , r a t h e r t h a n t h e Department o f S t a t e Lands, would d e c i d e who w i l l occupy t h e land b u t it would n o t b e bound by a c o n s t i t u t i o n a l o r f i d u c i a r y duty." 182 Mont. a t 297, 597 P.2d a t 51. See a l s o S t a t e e x rel. Thompson v . Babcock ( 1 9 6 6 ) , 147 Mont. 46, 409 P.2d 808 (upholding t h e Commissioner's d i s c r e t i o n a r y a u t h o r i t y t o a c c e p t l e a s e terms less t h a n t h e h i g h e s t b i d i n o r d e r t o e f f e c t u a t e s u s t a i n e d y i e l d c o n c e p t s and i n s u r e t h e long-term s t r e n g t h o f t h e t r u s t corpus) ; I n R e Montana T r u s t and Legacy Fund (1964), 143 Mont. 218, 388 P.2d 366. The Oklahoma Supreme Court i n Oklahoma Education Association v. Nigh (Ok. 1982), 642 P.2d 230 has a l s o addressed t h e same question a s t h i s Court d i d i n Jerke. The Oklahoma c o u r t went f u r t h e r and found s e v e r a l s t a t e s t a t u t e s l i m i t i n g t h e amount of i n t e r e s t t h a t t h e s t a t e could receive on school l a n d s , and c r e a t i n g p r e f e r e n c e s i n t h e r e - l e a s i n g o f school l a n d s , t o be u n c o n s t i t u t i o n a l . Most r e c e n t l y , t h e Washington Supreme Court upheld t h e f e d e r a l land g r a n t t r u s t i n holding t h e Washington F o r e s t Products I n d u s t r y Recovery A c t o f 1982, R.C.W. 79.01.1331-.1339, u n c o n s t i t u t i o n a l . The A c t was passed i n response t o t h e d e c l i n e o f t h e p r i c e s i n t h e f o r e s t products i n d u s t r y a t t h e t i m e . It allowed t h e Washington Department of S t a t e Lands t o r e l e a s e c o n t r a c t s p r e v i o u s l y e n t e r e d i n t o w i t h loggers and o t h e r f o r e s t products u s e r s because t h e i n d u s t r y stood t o l o s e a g r e a t d e a l , due t o t h e d e c l i n e i n p r i c e s , i f t h e c o n t r a c t s w e r e enforced. The Washington Supreme Court, i n Skamania County v. Washington (Wa. 1984) , 685 P.2d 576, d e a l t w i t h t h e c o n t r a c t s on school t r u s t land. Premising i t s argument by s t a t i n g : "Every c o u r t t h a t has considered t h i s i s s u e has concluded t h a t t h e s e a r e r e a l e n f o r c e a b l e t r u s t s t h a t impose upon t h e s t a t e t h e same f i d u c i a r y d u t i e s a p p l i c a b l e t o p r i v a t e t r u s t e e s , " 685 P.2d a t 580, t h e c o u r t found t h e a c t had v i o l a t e d t h e t r u s t by t r a n s f e r r i n g t r u s t assets--the c o n t r a c t r i g h t s - - f o r less t h a n t h e i r f u l l value and held it u n c o n s t i t u t i o n a l . 685 P.2d a t 583. See a l s o Torve and Handy, Skamania County - v. Washington: - - - A Case o f Divided L o y a l t i e s , F a l l 1984, Western Natural Resources L i t i g a t i o n Digest Commentary 7 . The above c a s e s e s t a b l i s h two main p o i n t s t h a t a r e important when c o n s i d e r i n g e i t h e r minor premise 1-eading t o our d e c i s i o n . F i r s t , an i n t e r e s t i n school land cannot be a l i e n a t e d u n l e s s t h e t r u s t r e c e i v e s adequate compensation f o r t h a t i n t e r e s t . Water t h a t i s appurtenant t o t h e school lands i s an i n t e r e s t f o r which t h e t r u s t must r e c e i v e compensation. Second, any law o r p o l i c y t h a t i n f r i n g e s on t h e s t a t e ' s managerial p r e r o g a t i v e s over t h e school lands cannot be t o l e r a t e d i f it reduces t h e value o f t h e land. I n t h i s c a s e , t h e DSL contends t h a t t o allow l e s s e e s t o develop p r i v a t e , personal r i g h t s on school lands would impermissibly reduce t h e DSL's a b i l i t y t o manage t h e s e lands f o r t h e i r h i g h e s t value. Section 70-15-105, MCA s t a t e s t h a t : "A t h i n g i s deemed t o be i n c i d e n t a l o r appurtenant t o land when it i s by r i g h t used w i t h t h e land f o r i t s b e n e f i t , a s i n t h e c a s e o f a way o r watercourse o r o f a passage f o r l i g h t , a i r o r h e a t from o r a c r o s s t h e land o f another." F u r t h e r , P r o f e s s o r W e l l s A. Hutchins, i n h i s t r e a t i s e Water R i h t s Laws i n t h e Nineteen Western S t a t e s Vol. I a t 455 L--- (U.S. Dept. of A g r i c u l t u r e , 1971) s t a t e s : "Of g e n e r a l a p p l i c a t i o n i n t h e West i s t h e r u l e t h a t an a p p r o p r i a t i v e r i g h t becomes appurtenant t o t h e land f o r t h e b e n e f i t o f which t h e water i s a p p l i e d . " I n Montana, t h e determination of whether water is appurtenant t o t h e land is one o f f a c t . Yellowstone Valley Co. v. Associated Mortgage I n v e s t o r s , Inc. (1930), 88 Mont. 73, 290 P. 255; see a l s o Hutchins, supra a t 459. Here, by s t i p u l a t e d f a c t s , it appears t h a t a l l o f t h e water r i g h t s a t i s s u e a r e used e i t h e r i n whole o r i n p a r t o n t h e school lands. A d d i t i o n a l l y , a l l of t h e lands i n q u e s t i o n a r e c l a s s i f i e d g r a z i n g lands under s e c t i o n s 77-1-401 t o -404, MCA, and t h e water appropriated on them is used f o r stockwatering o r o t h e r a g r i c u l t u r a l purposes. The water r i g h t s i n q u e s t i o n a r e appurtenant. This conclusion i s c o n s i s t e n t w i t h t h e g e n e r a l r u l e t h a t when t i t l e t o i r r i g a t e d p r o p e r t y i s passed, t h e water r i g h t s p a s s a s an appurtenance u n l e s s s p e c i f i c a l l y excepted. S e c t i o n 85-2-403, MCA; C a s t i l l o v. Kunnemann (Mont. 1982), 642 P.2d 1019, 39 St.Rep. 460; Adams v. C h i l c o t t (1979), 182 Mont. 511, 597 P.2d 1140; Schwend v. Jones (1973), 163 Mont. 4 1 , 515 P.2d 89. Respondents p o i n t t o no a u t h o r i t y e x p l a i n i n g why t h e r u l e i n regard t o l e a s e s o f land should be d i f f e r e n t than w i t h t h e s a l e o f land. W e b e l i e v e it should be t h e same--the p a r t i e s t o any such t r a n s a c t i o n may s p e c i f i c a l l y e f f e c t a severance, b u t a b s e n t such, t h e water r i g h t remains appurtenant, following t i t l e . It does n o t make sense f o r each succeeding t e n a n t t o walk o f f w i t h one water r i g h t a f t e r another. Respondents c i t e s e v e r a l c a s e s t h a t appear t o a r t i c u l a t e a c o n t r a r y r u l e . The f i r s t , Smith v. Denniff (1900), 24 Mont. 20, 60 P. 398, i s d i s t i n g u i s h a b l e i n t h e f a c t t h a t it concerned water a p p r o p r i a t i o n s made by s q u a t t e r s on t h e f e d e r a l lands who d i v e r t e d water f o r use on t h e p u b l i c doma i n . The school t r u s t lands w e r e withdrawn from t h e p u b l i c domain by t h e Montana T e r r i t o r y Organic Act, s u p r a , i n 1866, and none o f t h e r i g h t s a t i s s u e i n t h i s c a s e w e r e developed b e f o r e then. A s discussed above, school t r u s t lands a r e s u b j e c t t o a d i f f e r e n t set o f r u l e s than o t h e r p u b l i c lands. Secondly t h e y c i t e Hayes v. Buzzard (1904), 31 Mont. 74, 77 P. 423 f o r t h e r u l e t h a t t h e q u e s t i o n o f whether water i s appurtenant t o t h e underlying land t u r n s upon t h e i n t e n t i o n of t h e a p p r o p r i a t o r . Again, Hayes a r o s e on p u b l i c domain land, n o t school t r u s t land. This Court recognized t h a t d i s t i n c t i o n : "The l e g a l t i t l e t o t h e land upon which a water r i g h t acquired by a p p r o p r i a t i o n - - - made on t h e p u b l i c doiain - - - [emphasis added] i s used o r intended t o be used i n no w i s e a f f e c t s t h e a p p r o p r i a t o r s t i t l e t o t h e water r i g h t , f o r t h e bona f i d e -- [emphasis i n o r i g i n a l ] i n t e n t i o n which is r e q u i r e d o f an a p p r o p r i a t o r t o apply t h e water t o some u s e f u l purpose may comprehend a u s e upon l a n d s and possessions o t h e r than t h o s e o f t h e a p p r o p r i a t o r , o r a use f o r purposes o t h e r t h a n t h o s e f o r which t h e r i g h t was o r i g i n a l l y appropriated." 3 1 Mont. a t 81 77 P.2d a t 425, quoting Smith v. Deniff, supra. (See a l s o Ervien, 246 F. a t 280: "Congress d i d n o t i n t e n d t h a t t h e [school t r u s t ] lands granted and confirmed should c o l l e c t i v e l y c o n s t i t u t e a genera1 resource o r a s s e t l i k e o r d i n a r y p u b l i c lands held broadly i n t r u s t f o r t h e people. . . " ) Respondents' argument does n o t answer t h e s t a t e ' s concern w i t h meeting i t s t r u s t r e s p o n s i b i l i t i e s . Since an appurtenant water r i g h t i s an i n t e r e s t i n t h e land (see a l s o s e c t i o n 70-1-106, MCA; Yellowstone Co. v. Asso. Mtg. I n v e s t o r s , supra) it cannot be surrendered by t h e S t a t e without t h e t r u s t r e c e i v i n g f a i r market value. None o f t h e l e s s e e s a l l e g e d payment o f c o n s i d e r a t i o n t o t h e S t a t e a p a r t from t h a t r e q u i r e d by t h e l e a s e , and t h u s w e conclude t h a t t h e water r i g h t s appurtenant t o such l a n d s belong t o t h e S t a t e . The S t a t e argues t h a t v e s t i n g t i t l e i n lessees would v i o l a t e t h e t r u s t f o r a n o t h e r reason. I f a l e s s e e l o s t h i s l e a s e , b u t r e t a i n e d t h e water r i g h t , t h a t lessee would i n e f f e c t be a b l e t o c o n t r o l t h e use o f t h e land. In many c a s e s i n t h i s semi-arid a r e a , t h e c o n t r o l o f water means t h e c o n t r o l o f t h e land i t s e l f . Conceivably, t h e DSL, i n a d e s i r e t o i n s u r e t h a t t h e land had w a t e r , could f i n d i t s e l f i n t h e awkward positj-on of n e g o t i a t i n g with a former l e s s e e , who might be i n c l i n e d t o r e l e a s e h i s r i g h t only t o family o r friends--thus a s s u r i n g h i s re-entry. The former l e s s e e could " c h i l l " t h e bidding process by l e t t i n g it be known t h a t he would o n l y r e l e a s e h i s r i g h t a t an i n f l a t e d p r i c e . F i n a l l y , t h e former l e s s e e could conceivably d i c t a t e p o s s i b l e u s e s o f t h e land i n r e t u r n f o r t h e water. This s i t u a t i o n i s c l e a r l y repugnant t o school t r u s t p r i n c i p l e s . T h i s Court, i n J e r k e v. S t a t e Department o f Lands, supra, and o t h e r c o u r t s , see Oklahoma Education Assoc. v. Nigh, supra and S t a t e o f Utah v. Andrus, s u p r a , have c o n s i s t e n t l y held t h a t any infringement on t h e use o r management p r e r o g a t i v e s o f t h e S t a t e t h a t e f f e c t i v e l y devalue school lands i s impermissible. W e a g r e e , and f i n d t h i s t o be an a l t e r n a t i v e ground f o r our d e c i s i o n . Respondents p o i n t t o s e c t i o n 77-6-115, MCA, which s t a t e s i n p e r t i n e n t p a r t t h a t : " (1) The lessee o f s t a t e lands may a t any t i m e p r i o r t o 1 y e a r b e f o r e t h e e x p i r a t i o n o f h i s l e a s e make a p p l i c a t i o n t o t h e board f o r permission t o s e c u r e a water r i g h t t o t h e land under h i s l e a s e . . . I f t h e proposed plan meets w i t h t h e approval o f t h e board, permission s h a l l be granted t h e lessee t o secure t h e d e s i r e d water r i g h t f o r t h e land and t o p l a c e t h e same under i r r i g a t i o n . " ( 2 ) I f such w a t e r r i g h t becomes a permanent and v a l u a b l e improvement, then i n c a s e o f t h e s a l e o r l e a s e o f t h e lands t o o t h e r p a r t i e s , t h e former lessee s h a l l be e n t i t l e d t o r e c e i v e compensation i n t h e amount o f t h e reasonable v a l u e t h e r e o f , a s i n t h e c a s e o f o t h e r improvements, from t h e new l e s s e e o r t h e purchaser. " (3) These p r o v i s i o n s s h a l l n o t be s o construed a s t o make t h e s t a t e l i a b l e t o t h e l e s s e e f o r t h e payment o f t h e c o s t o r v a l u e o f such i r r i g a t i o n improvements." They contend t h a t t h i s s t a t u t e , i n e f f e c t , acknowledges t h e property i n t e r e s t o f t h e l e s s e e i n t h e water r i g h t , and f u r t h e r , t h a t i n subsection (3) t h e S t a t e denounces any interest i n t h e water by r e l e a s i n g i t s e l f from l i a b i l i t y f o r t h e c o s t o f i r r i g a t i o n improvements. Respondents a l s o p o i n t t o 526.3.123, A.R.M., which provides t h a t t h e S t a t e s h a l l reimburse d e p a r t i n g l e s s e e s f o r t h e reasonable v a l u e of t h e improvements made ( a s p e r s e c t i o n 77-6-115(2), MCA), and t h a t , " [ a l n y water r i g h t s h e r e a f t e r secured by t h e lessee s h a l l be secured i n t h e name o f t h e s t a t e o f Montana." They argue t h a t s i n c e 526-3.123 A.R.M. was n o t adopted u n t i l 1979, it does n o t apply t o t h e water r i g h t s i n t h i s c a s e because a l l o f them p r e d a t e it. They a l s o argue t h a t t h e p r o v i s i o n lends i t s e l f t o supporting t h e p o s i t i o n t h a t t h e S t a t e had acquiesced i n recognizing pre-1979 water r i g h t s i n lessees. Both o f t h e s e arguments a r e unfounded. F i r s t , none o f t h e a l l e g e d r i g h t s a t i s s u e i n t h i s c a s e w e r e p e r f e c t e d pursuant t o s e c t i o n 77-6-115, MCA o r 526-3.123, A.R.M. Neither p r o v i s i o n can be used a s d i r e c t a u t h o r i t y by respondents. For t h a t reason w e a r e n o t c a l l e d upon t o c o n s t r u e s e c t i o n 77-6-115, MCA. W e n o t e though t h a t it i s capable o f two i n t e r p r e t a t i o n s : f i r s t , a s applying t o water r i g h t s a s respondents argue; secondly, a s applying o n l y t o improvements, such a s d i t c h e s , r e s e r v o i r s , headgates, and o t h e r c a p i t a l p r o j e c t s , c o n s t r u c t e d " f o r " o r a t t a c h e d " t o " t h e land and n o t s u b j e c t t o being r e t a i n e d by t h e l e s s e e upon payment by a new lessee o r purchaser, a s i s t h e c a s e with o t h e r improvements t o t h e leasehold, a s contended by t h e S t a t e . The g e n e r a l r u l e i s t h a t whenever t h e r e a r e d i f f e r i n g p o s s i b l e i n t e r p r e t a t i o n s o f s t a t u t e , a c o n s t i t u t i o n a l i n t e r p r e t a t i o n i s favored over one t h a t i s not. United S t a t e s v. Clark (1980), 445 U.S. 23, 100 S.Ct. 895, 63 L.Ed.2d 171; Sutherland - on S t a t u t o r y Construction 545.11 (1984 e d . ) . In t h i s r e g a r d , we p o i n t t o t h e Skamania and Nigh, d e c i s i o n s holding s t a t u t e s u n c o n s t i t u t i o n a l because t h e y v i o l a t e d t h e school t r u s t p r i n c i p l e s e s t a b l i s h e d by t h a t s t a t e ' s Enabling A c t . I n t h e a l t e r n a t i v e , r e s p o n d e n t s a r g u e t h a t s e c t i o n 77-6-115, MCA, and t h e p r i n c i p l e s o f t h e Water U s e A c t s e t f o r t h i n s e c t i o n 85-2-101, MCA, and t h e p r i o r a p p r o p r i a t i o n d o c t r i n e , g i v e rise t o an implied s e v e r a n c e o f w a t e r from l a n d i n t h e school t r u s t land l e a s e s , and t h a t t h e S t a t e i s now estopped t o deny t h e s e r i g h t s because o f t h e long-standing and d e t r i m e n t a l r e l i a n c e by t h e lessees. A s we d i s c u s s e d above, t h e S t a t e h o l d s t h e s e l a n d s s u b j e c t t o t h e school t r u s t . The e s s e n c e o f a f i n d i n g t h a t p r o p e r t y i s h e l d i n t r u s t , s c h o o l , p u b l i c , o r o t h e r w i s e , i s t h a t anyone who a c q u i r e s i n t e r e s t s i n such p r o p e r t y do s o " s u b j e c t t o t h e t r u s t " Nat. Audubon S o c i e t y v. S u p e r i o r Court (Cal. 1 9 8 3 ) , 658 P.2d 709, 723. See a l s o I l l i n o i s C e n t r a l R a i l r o a d v. I l l i n o i s ( 1 8 9 2 ) , 146 U.S. 387, 13 S.Ct. 110, 36 L.Ed. 1018 (a s t a t e may n o t a b d i c a t e i t s t r u s t i n p u b l i c p r o p e r t y ) ; and Thompson v. Babcock, supra a t 54, 409 P.2d a t 812, ("[wlhen s t a t e land i s l e a s e d , it d o e s n o t r e l i n q u i s h t h e e n t i r e i n t e r e s t t h e r e i n " ) . The S t a t e h a s no power, a b s e n t adequate c o n s i d e r a t i o n , t o g r a n t t h e lessees t h e permission t o d e v e l o p non-appurtenant w a t e r r i g h t s , and e v e r y s c h o o l t r u s t l e a s e c a r r i e s w i t h it t h i s l i m i t a t i o n . Respondents' argument t h a t t h e y have d e t r i m e n t a l l y r e l i e d upon " r e p r e s e n t a t i o n s " by t h e S t a t e made through i t s laws and r e g u l a t i o n s , i s n o t p e r s u a s i v e . There h a s been no d e t r i m e n t . S e c t i o n 77-6-302, MCA p r o v i d e s t h a t lessors w i l l receive r e a s o n a b l e compensation f o r any improvements t h e y have made on t h e l e a s e h o l d i f t h e y r e l i n q u i s h t h e p r o p e r t y t o a new lessee o r p u r c h a s e r . F u r t h e r , t h e argument t h a t t h i s r u l e sets up d i s i n c e n t i v e s t o t h e development of o u r w a t e r r e s o u r c e s , c o n t r a r y t o t h e genera1 p o l i c y set o u t i n t h e Water U s e A c t of promotiong t h e b e n e f i c i a l u s e o f w a t e r , i s a l s o n o t p e r s u a s i v e . S e c t i o n 77-6-302, MCA a c t u a l l y i n s u l a t e s t h e d e v e l o p e r - l e s s e e from any market r i s k t h a t he would have t o b e a r i f making improvements on h i s own land. The Montana C o n s t i t u t i o n r e q u i r e s t h i s r e s u l t . A r t . I X , sec. 3 (1) , p r o v i d e s t h a t " a l l e x i s t i n g r i g h t s t o t h e u s e o f any w a t e r s for any u s e f u l o r b e n e f i c i a l purpose a r e hereby recognized and confirmed." T h i s p r o v i s i o n p r e v e n t s t h e S t a t e from a f f e c t i n g r i g h t s v e s t e d a t t h e t i m e t h e C o n s t i t u t i o n was adopted o t h e r t h a n t h r o u g h t h e e x e r c i s e o f C o n s t i t u t i o n a l l y provided powers such a s eminent domain, Mont. Const. A r t . 11, sec. 29, or t h e g e n e r a l p o l i c e power, and w i t h o u t a f f o r d i n g due p r o c e s s o f law, Mont. Const. Art.m, sec. H e r e t h e S t a t e , t h r o u g h t h e a d j u d i c a t i o n p r o c e s s , i s c l a i m i n g , and t h i s Court i s r e c o g n i z i n g r i g h t s " e x i s t i n g " a t t h e t i m e t h e 1972 C o n s t i t u t i o n was adopted-- A r t . I X , sec. 3 ( l ) merely r e a f f i r m s t h e s e r i g h t s . A s s t a t e d above, we h o l d t h a t t h e lessee, under t h e t e r m s o f t h e school t r u s t 'lease, i s e n t i t l e d t o t h e u s e o f w a t e r a p p u r t e n a n t t o t h e l e a s e d land. The S t a t e i s t h e b e n e f i c i a l u s e r t h e r e o f , and i t s d u t y a s t r u s t e e o f t h e s c h o o l l a n d s p r o h i b i t s it from a l i e n a t i n g t h i s i n t e r e s t i n t h e l a n d a b s e n t f u l l compensation t h e r e f o r . Absent such compensation, t h e t i t l e t o t h e w a t e r r i g h t s i n t h i s c a s e v e s t i n t h e S t a t e . A p p e l l a n t s and a m i c i have urged t h i s C o u r t t o f i n d t h a t s c h o o l t r u s t l a n d s b e n e f i t from a f e d e r a l l y r e s e r v e d w a t e r r i g h t a s o r i g i n a l l y recognized i n Winters v. United S t a t e s ( 1 9 0 7 ) , 207 U.S. 564, 28 S.Ct. 207, 52 L.Ed. 340, t o which t h e S t a t e h a s succeeded. I n o u r o p i n i o n , it i s p e r h a p s b e s t t o keep t h e r e s e r v e d r i g h t s d o c t r i n e c o n f i n e d t o s i t u a t i o n s where it a r o s e and i s most a p p r o p r i a t e ; a s an accommodation between f e d e r a l and s t a t e i n t e r e s t s . S i n c e t h e r u l e w e have s t a t e d i s s u f f i c i e n t t o settle t h e c a s e a t b a r , p r i n c i p l e s o f j u d i c i a l r e s t r a i n t counsel u s t o d e c l i n e r u l i n g f u r t h e r . This r u l e a p p l i e s t o a l l t h e w a t e r s a t i s s u e . Subject t o T i t l e 85, Chapter 2, P a r t 5, MCA, groundwater a p p r o p r i a t e d and used on S t a t e land should be t r e a t e d no d i f f e r e n t l y than s u r f a c e w a t e r s a p p r o p r i a t e d and used on t h o s e lands. The Montana C o n s t i t u t i o n , A r t . I X , sec. 3 , Mont. Const. and t h e Water U s e A c t , s e c t i o n 85-2-102(14), MCA, make no d i s t i n c t i o n between groundwater and o t h e r water r i g h t s . The Order o f t h e Water Court i s r e v e r s e d , and t h e c a s e remanded f o r t h e purpose o f modifying t h e Powder River F i n a l Decree i n compliance w i t h t h i s Opinion. W e concur: , / 1 J u s t i c e s Mr. Justice Frank B. Morrison, Jr. specially concurring: The majority opinion recalls to mind the old Montanan who said, "A moose is a cow designed by a committee." Indeed, this moose must have been designed by a committee. The only bright light which shines through this otherwise verbose and rambling epistle is the result. In that I concur. The majority opinion contains a good deal of judicial chaff including a rather lengthy recital of irrelevant historical data surrounding passage of the Montana Water Use Act of 1973. This effort effectively obfuscates the issues while impressing the casual reader that scholarship is the cornerstone of the majority's pronouncement. The issue in this case is quite simple and straight forward. At the time the federal government granted school lands to the state in trust for educational purposes, did the federal government include within the grant the right to develop water to achieve the educational purposes of the trust? If, as an incident of ownership, the state acquired, as appurtenant to the land, the right to develop water so that the purpose of the trust could be realized, then the state cannot alienate that property right in diminution of the trust res. The majority opinion initially indicates that the educational purpose of the trust cannot be realized without an appurtenant water right. With this I agree. However, in an apparent attempt to avoid interrupting the priorities of other appropriators, the majority seems to be saying that this appurtenant right did not spring into existence until it was developed by the lessee. This approach recognizes the priority of appropriators. In order to accomplish this objective the majority has created a fictional agency whereby t h e lessee, who develops t h e w a t e r , does s o on b e h a l f of t h e s t a t e . This nonsense i s engaged t o achieve a r e s u l t . The m a j o r i t y ' s e f f o r t t o s e c u r e unto school lands a s u f f i c i e n t amount o f water t o maximize t h e i r income p o t e n t i a l f o r t h e t r u s t , without d i s r u p t i n g p r i o r r i g h t s , could have been achieved on a more l e g a l l y sound foundation by simply holding t h a t t h e f e d e r a l government granted t o t h e s t a t e school l a n d s w i t h t h e appurtenant r i g h t t o develop water i n o r d e r t o maximize t h e i r income producing a b i l i t y . The c o u r t then could have held t h a t , under t h e p r i o r a p p r o p r i a t i o n d o c t r i n e , a p r i o r i t y d a t e did n o t commence u n t i l t h e r i g h t was developed. I n t h i s way, a t l e a s t , t h e m a j o r i t y would have recognized t h e p r o p e r t y r i g h t i n t h e s t a t e from t h e beginning which would g i v e a b a s i s f o r holding t h a t t h e lessee developed t h e r i g h t f o r t h e s t a t e . In t r u t h , t h e s e school lands w e r e withdrawn from t h e p u b l i c domain p r i o r t o any a p p r o p r i a t i o n . The f e d e r a l government granted t o t h e s t a t e , i n t r u s t f o r e d u c a t i o n a l purposes, land and t h e water necessary t o develop t h e land f o r i t s t r u s t purposes. L a t e r , when t h e p u b l i c domain was s e t t l e d a p p r o p r i a t i o n s were made b u t t h e a p p r o p r i a t i o n s only operated on t h o s e lands remaining i n t h e p u b l i c domain. S e t t l e r s who moved i n and appropriated could have obtained no water from school lands which r e s i d e d s a f e l y i n t h e t r u s t . I f i n d it u n f o r t u n a t e t h a t r e f e r e n c e i s made t o t h e "Winters Doctrine" o r t o f e d e r a l reserved r i g h t s . Apparently t h e r e i s some a n t i c i p a t i o n by t h e m a j o r i t y t h a t t h i s precedent w i l l e f f e c t t h e a d j u d i c a t i o n o f Indian w a t e r r i g h t s . Perhaps by analogy it w i l l . However, t h o s e c a s e s a r e n o t b e f o r e us. I concur i n t h e r e s u l t f o r t h e reason t h a t , a t t h e t i m e of t h e c r e a t i o n o f t h e school t r u s t , t h e f e d e r a l government conveyed to the state, not only the land, but the appurtenant right to develop water necessary for fulfillment of the trust purpose. I specifically disavow the remainder of the