Court Opinion

ID: 9628662
Source: CourtListenerOpinion
Date Created: 2023-08-22 09:28:10.379517+00
Date Added: 2024-06-11T18:07:09.539889
License: Public Domain

CALLISTER, Justice
(dissenting).
I dissent. Many years prior to the decree of April 1, 1948, there existed a controversy as to the effect of the draft on or use of water from wells in the Huntsville area by the defendant, Ogden City, on the flow of the Ogden River and the effect thereof on the rights of prior appropriators, both Upper Valley Users and Lower Valley Users.
By stipulation dated July 23, 1929, the parties to the controversy agreed, among other things, that if and when a reservoir was constructed on the Ogden River, Ogden City would supply to the flow of the Ogden River a quantity of water from the reservoir equal to that being drawn from the wells. The stipulation, which was embodied in a court decree, was a settlement of the instant water rights, and was also for a trial period for gathering facts and information, and for reservoir construction.
The Ogden River Waters Users Association was incorporated on or about November 1, 1933, prior to the construction of the Pine View Reservoir. Its articles provide, among other things, that it was organized for the purpose of purchasing, condemning, leasing or acquiring water, water rights, and other property. It was empowered to incur indebtedness and to contract with the United States or other parties for the purchase, acquisition, or lease of water, water rights, etc. Water was to be furnished only to its stockholders and the stock was made assessable.
The Association did, by contract with the United States, acquire a storage capacity in Pine View Reservoir of 44,175 acre feet. As stated in the majority opinion, this would normally entitle each share holder to one acre foot for each share of stock that he owned. Ogden City owned 10,000 shares of stock.
By the decree of April 1, 1948, it was provided in paragraph (7)(a) thereof:
*194“In exchange for the water which by diversion from such wells Ogden City withholds from the other water users of such river, said City shall set apart the water to which it is entitled upon 4500 shares of the stock of Ogden River Water Users Association, to the use of the other water users of said Ogden River to be used by them at such times and in such manner as here- ' inafter set out, and shall be bound to ' make all payments for such water requisite to perfect the rights to the continued use of the water represented by said shares of stock. * * * ”
Thus, the Lower Users acquired the water rights upon the 4500 shares of stock in exchange for Ogden City acquiring a relatively firm supply of water from the wells.
Prior to the time the decree was entered, Ogden City was the owner of 10,000 shares of stock in the Association. It had thus acquired all of the rights and duties of a shareholder in the Association. If the Association had assessed each stockholder $1 per share, there is no question but that Ogden City, as owner of 10,000 shares of stock, would be required to pay $10,000. The fact that the Association then used the money assessed to purchase additional water would not remove the city’s duty to pay the assessment.
The agreement between the city and the Lower Users did not in any way remove the duties that existed between the city and the Association.. The city in effect assigned its rights as owner of 4500 shares of stock while retaining the duties of ownership. When the Association acquired new water these rights and duties attached. The agreement between the city and the Lower Users has effect only as between them. As between the Association and the city, the city must pay its share of the expense incurred in obtaining additional water. In turn the city has assigned its right to the use of 4%ooths of the water to which it becomes entitled. Thus the duties remain the same while only the rights have been assigned by virtue of the decree.
The majority opinion places great reliance on the use of the verb, “is” in the court decree, stating that this indicates plainly that the parties were thinking in terms of water then available to be dealt with. There is no evidence in the record as to the amount of water available at the time the decree was entered. Evidently, the writer of the majority opinion assumes that there was a full supply (44,175 acre feet) available at that time, and this writer shall make the same assumption.
Following the majority opinion’s reasoning to its logical conclusion, if the Lower Users are restricted to the water then avail*195able at the time of the decree and have no right to share in future acquisitions of water, then, by the same token, they should not share losses in times of short supply. In other words, the rights of the Lower Users to water would at all times equal that to which they were entitled at the time of the decree (4,500 acre feet). This regardless of additional acquisition of rights by the Association or the shortage of supply.
The foregoing reasoning is supported by the fact that under the decree Ogden City agreed to maintain these shares for the Lower Users “and to make all payments for such water requisite to perfect the rights to the continued use of the zvater represented by said shares of stock.”
Although the result reached by this process of reasoning is logical, it is unsound because based upon the false premise that the decree dealt only with water then available. The decree manifestly was for the purpose of apportioning future use of the water.
The logical conclusion is that the rights of the Lower Users in the 4500 shares of stock in the Association are the same as if they owned them outright — except for Ogden City’s promise to make all payments necessary to keep them in good standing. The Lower Users share pro rata in any increment in the water available to the Association and likewise any losses.
Such an interpretation does not place an .undue or unanticipated burden upon Ogden City. In order to secure the water from the wells, Ogden City was willing to assign its rights to the 4500 shares of stock and bear the expense of maintaining the water rights to which these shares are entitled. The Lower Users in exchange enabled the city to use the water from the wells by relinquishing rights to water to which they were entitled as prior appropriators.
A fallacy in the majority opinion is to treat the “power water” as new water in a class different than the water the Association was entitled to “on its shares based on the natural annual recharge of the basin.” First, the Association is not entitled to water by virtue of its shares. The right which the Association has is a storage right of 44,175 acre feet by virtue of its contract with the United States. Secondly, the arrangement with the Utah Power & Light Company was that the latter forego its right to the release of 15,015 acre feet of water, which is not new or additional water. Had this been new or additional water, it would have been necessary for the Association to secure a change application from the state engineer.
The so-called “power water” was already in the reservoir and came from the same source and under the same right as the other water. By its arrangement with *196the power company, the Association was merely endeavoring to exercise its storage capacity rights.
Under the decree Ogden City was hound “to make all payments for such water requisite to perfect the rights to the continued use of the water represented by such shares of stock.” Each share of stock is entitled to its pro rata share of the water stored in reservoir by virtue of the Association’s storage right. If it was necessary to pay the power company under the circumstances to take advantage, as far as possible, of the storage right, Ogden City should be required to pay the assessment upon the 4500 shares of stock, and the Lower Users should be entitled to their pro rata share of the “power water.”
The majority opinion maintains that an interpretation of the decree in favor of the Lower Users would be inequitable because, among other things, the Lower Users who were stockholders in the Association could encourage the Association to acquire additional water. This does not seem to be borne out by the record, for the lower court made a specific finding that there were only four shareholders among the Lower Users.
I would reverse the lower court and enter judgment in favor of the Lower Users.
HENRIOD, J., concurs in the dissenting opinion of CALLISTER, J.