Court Opinion

ID: 878555
Source: CourtListenerOpinion
Date Created: 2013-06-04 22:44:39.761602+00
Date Added: 2024-06-11T12:43:28.115845
License: Public Domain

No. 83-106
               IN THE SUPREME COURT OF THE STATE OF MONTANA
                                   1984

IN RE: PETITION FOR ORGANIZATION AND
ESTABLISHMENT OF AN IRRIGATION DISTRICT
IN RAVALLI COUNTY, TO BE KNOWN AS DALY
DITCHES IRRIGATION DISTRICT.

APPEAL FROM:    District Court of the Fourth Judicial District,
                In and for the County of Ravalli,
                The Honorable James B. Wheelis, Judge presiding.

COUNSEL OF RECORD:
         For Appellants:

               Loble & Pauly, Lester Loble I1 and Thomas Hopgood
               argued for Dept. of Natural Resources, Helena,
               Montana

         For Respondents:
               Larry Persson argued for Daly Ditches and other
               petitioners, Hamilton, Montana
               Recht & Greef; Charles H. Recht and Judy Loring
               argued for Skalkaho Creek Exchange Water Users,
               Hamilton, Montana
               Paul B. Smith, Boulder, Plontana
               Stanton Cooper, pro se, Hamilton, Montana
               Charles Likes, pro se, Hamilton, Montana

                               Submitted:   December 8, 1983
                                 Decided:   April 17, 1984

Filed:     APR i / 1984

                               Clerk
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.

     On   December   17,   1982,    the   District   Court,   Fourth
Judicial District, Ravalli County, entered its order and
decree establishing an irrigation district in Ravalli County
to be known as Daly Ditches Irrigation District.
     The appeals here are not concerned with the legality of
the organization of the district, but rather how the cost of
maintenance of the district shall be allocated or distributed
among members and water users.
                               I.

     Facts and History
     By   transfer   from the Montana      Department of Natural
Resources and Conservation, the district has become the owner
of certain irrigation ditches, waste ditches, distribution
1a.terals and three small reservoirs, all formerly known as
the Daly ditches water project.
     Two of the district's ditches, the Republican Ditch and
the Hedge Ditch divert water from the Bitteroot River.        These
ditches, 12.75 miles and 23.25 miles in length respectively
cross in their lonq courses Skalkaho Creek.      The district has
water users who own early water rights (that is to say early
in time of appropriation) to the use of waters from Skalkaho
Creek.    The district includes members whose lands are above
and easterly from the Republican and Hedge Ditches, and water
from these ditches cannot reach such members' lands.
     By   diverting waters   from Skallcaho Creek, irrigation
waters can be and have been brought to those higher lands.
Long ago an exchange system was worked out whereby the owners
of lands below the Hedge and Republican Ditches, who owned
early    rights to the use of waters          from Skalkaho Creek,
permitted the predecessors of the district to divert waters
from Skalkaho Creek     for distribution to the high               lands.
Under the exchange, the early Skalkaho water use owners
received an equivalent amount of water from the Republican
and Hedge Ditches, out of the Bitterroot River, delivered
without charge.
     The Republican Ditch was originally constructed by the
Republican Ditch Company prior to the year 1885.                In 1901,
the canal right-of-way and water right were conveyed to the
Ravalli Land and Irrigation Company.
     The Hedge Ditch was constructed for the most part by the
fabled   Montana   copper     king, Marcus    Daly.       All    of   the
rights-of-way   and   water    rights   to   the Hedge Ditch were
conveyed by Margaret P. Daly for herself and as executor of
the will of Marcus Daly to the Ravalli Land a.nd Irrigation
Company on December 20, 1901.
     Under a decree entered on July 29, 1916, in the Ravalli
County District Court, in cause no. 2149, entitled Ravalli
Land and Irrigation Company v. R. W. Nicol, et al., the
District   Court   decreed    the   rights   of   water    users      from
Skalkaho Creek through Ravalli Land and Irrigation Company.
The right of Ravalli Land and Irrigation Company to sell
water which it had appropriated came before this Court in
Brennan v. Jones (1936), 101 Mont. 550, 55 P.2d 697.                  This
Court made note of the exchange arrangement, stating:
    "It appears from the record that prior to the
    commencement of the original water rights suit, the
    corporati-on entered into an arrangement verbally
    whereby certain of the wa.ter users whose rights
    were based on appropriations out of Skalkaho Creek,
    and whose lands lay below the 'Republican1 and
    'Hedge' ditches, obtained from these two ditches an
    amount of water equal to their rights out of the
    Skalkaho, and in exchange the corporation diverted
     from the waters of the Skalkaho an amount of water
     equal to that delivered to the water users bel-ow
                                                .
     the two company river ditches.. . " 101Mont. at
     559, 55 P.2d at 698.

     In Brennan, it was noted by this Court that the water
commissioner in distributing the waters of Skalkaho Creek,
distributed first to the irrigation company the amount of its
prior rights, in accordance with the priorities of the 1916
decree, and also the amount of water adjudicated to various
water users to whom the company was delivering an equal
amount of river water from the Republican and Hedge Ditches.
The court further noted that the manner of taking waters both
by exchange and under the rights which the irrigation company

owned was handled the same way both before and after the
commencement and termination of the water right suit in 1916.
101 Mont. at 560-561, 55 P.2d at 699.
     On October 1, 1942, the Ravalli Land and Irrigation
Company deeded all of its right, title and interest in the
several    irrigation    ditches   owned   by       it, waste   ditches,
distribution laterals, and reservoirs to the State Water
Conservation Boa-rd.     The instrument of transfer recites the
following obligation on       the part of the water board            in
connection with the transfer:
    "Said second party further agrees that it will,
    without charge, supply water to those owners of
    land having decreed water rights from Skalkaho
    Creek, and whose lands lie west of and below the
    Republican and Hedge river Ditches, and whose wa.ter
    rights have been taken from Skalkaho Creek above
    such ditches for use on higher lands with an
    equivalent amount of water from said river
    ditches. "
     The    Montana     Department   of    Natural      Resources   and
Conservation    (DNRC) is the successor to the State Water
Conservation Board.      During the time that the state has owned
the Daly ditch project, it has sustained financial losses.
In 1979, the state legislature found that extensive cost of
repairs for the Daly ditch water project were now necessary;
it had operated at a loss since the state owned the project;
it would require increased subsidization from the general
fund for future operation; and the useful life of the water
project for the state of Montana had ended.          The legislature
therefore directed the DNRC to dispose of the project by
transferring or selling it, or else the project should be
abandoned.     Ch. 534, Laws of Montana (1979).
     Daly Ditches Irrigation District is being formed for the
purpose   of   taking over     from the DNRC the operation and
maintenance of the Daly ditch project.
     The District Court found that the DNRC has attempted
unilaterally to revoke its consent to the exchange agreements
by a letter of cancellation sent to individuals claiming
exchange user status, and unilaterally to cancel all exchange
agreements,     and   has   refused   to   deliver   water   from   the
Republican Ditch or any other ditch in exchange for Skalkaho
Creek water. (Findings No. 90, 93, 94.)
     Some of the Skalkaho Creek exchange vrater users have
petitioned to be members of the new Daly Ditches Irrigation
District; more have not.       In its order and decree of December
17, 1982, establishing the district, the District Court made
findings relating to the exchange of the use of such waters.
It found that the exchange water users (not all are below the
Republican and Hedge Ditches, as will be seen later) had
relied upon representations of the DNRC and its predecessors
that in exchange for the use of their water rights they were
to receive substitute water, miner's inch for miner's inch
without cost, and that in reliance thereon they had allowed
their   diversion     and   irrigation     distribution   systems   and
laterals to be impacted, crossed and intersected by the Daly
Ditches;     their     respective    systems       had     been     allowed    to
deteriorate       in   their    belief      that     the       DNRC   and     its
predecessors       considered     themselves       bound       to   supply    the
substitute water from the Bitteroot River.                      It found that
Skalka.ho Creek exchange water users had been damaged and
suffered detriment, at least those having tenth or superior
rights to use of Skalkaho Creek water.                    It found thzt the
actual cost for operation and maintenance of each ditch,
lateral, canal diversion, or improvement of the Daly ditch
water project could be determined by existing bookkeeping
practice.       It then made the following finding:
    "It is fair and equitable that the Skalkaho Creek
    Exchange water user individuals having tenth or
    superior water rights will receive water from the
    Daly Ditch Water Project on the exchange basis and
    receive a credit against the cost allocable to them
    for the operation, maintenance, replacement or
    reconstruction of Republican or Hedge diversions as
    well as on account of the purchase of water from
    Painted Rock Water Project.     This credit should
    exist for a fixed number of years. "   (Finding No.
    112.)

    The court made conclusions of law based on the findings,
and incorporated the same in its decree.                      The effect with
respect to cost is tha.t certain exchange water users who are
members    of    the   district     will    receive       a    credit, to     be
determined      later by    the     court   after     a       hearing, on     any
a.ssessment levied against lands of the water users by the
district, if the water user had a tenth or superior decreed
right out of Skalkaho Creek.
     It will be seen that the effect of the conclusions and
the order of the District Court is not explicitly that the
exchange water users who are members of the district shall
receive the use of water in exchange for the use of their
earlier decreed water rights on a cost-free delivery basis.
Instead the court will order a "credit" for a fixed term
against district assessments possibly varying from individual
to individual, the credit and the duration thereof to be
determined at a later hearing.      (Conclusion No. 16.)
     A   further legal effect of the order entered by the
District Court is that it did not deprive the exchange water
users of other remedies if they should decide not to become
members of the Daly Ditches Irrigation District.           The court
further provided that any individual who owned a decreed
right out of Ska.lkaho Creek and who is currently exchanging
Skalkaho Creek water    for Bitteroot River water under an
exchange agreement, and who does not opt to become a member
of the district may avail himself of such further remedies as
are provided by any valid agreement or as provided at law or
in equity.
      In other words, under the decree, exchange water users
have a choice.   They can come into the irrigation district as
members and their rights to credits on their assessments
shall be determined by their priorities in the Skalkaho Creek
decree of water rights.       Or they can remain out of the
district, and to preserve their rights, pursue such other
remedy as is provided at law or in equity.
      The court certified under Rule 54 (b) of the Montana
Rules of Civil Procedure that the decree was a final judgment
for the purposes of appeal.   We will now proceed to treat the
issues raised by the various parties on this appeal.
                              11.
      Issues raised by the appeal of the DNRC
1.   Whether the exchange users, and the issues presented by
the exchange users, are properly before the District Court.
       The DNRC contends that only one exchange water user,
Bernie E. Swift appeared at the hearing on the petition for
the    organization     of    the   district   to   contest   the   same.
Therefore, The DNRC contends that the District Court at such
hearing could not determine the issues raised with respect to
the exchange water users.
       Technically, the DNRC is correct.             Section 85-7-106,
MCA, provides that at the hearing "all interested persons"
whose lands or rights may be damaged "may appear and contest"
the orga.nizationof the district.
       Inherently, however, the District Court, in ordering the
district to be established, must determine what lands are to
be    included within the district.            Section 85-7-107, MCA,
relating to the court decision after the hearing, provides in
subsection (1)(b):
       "Lands which will not, in the judgment of the
       court, be benefited by irrigation from the works of
       the proposed districts;.       ..
                                    which have 9 u r t e n a n t
       water rights;.        . .
                             may not be included in the
       district unless the owner of such lands consents in
       writing to the inclusion." (Emphasis added.)

       The   District   Court was      careful not     to offend    that
statutory provision.         The court left open to the individual
decision of the water users who owned appurtenant decreed
rights to the use of waters from Skalkaho Creek the decision
to become members of the district.             Because of the District
Court's duty to determine what lands should be included in
the district, and which should be excluded, inherently it had
to treat the issues raised by the exchange water users,
whether the users appeared formally or not.
2.    Whether the DNRC or any other party has an obligation to
deliver water to the exchanae users.
        The statement of the issue negates itself.            If the
rights to use water are not exchanged, there is no exchange.
        The District Court found that the Hi-Line Ditch is a
part of the Daly ditch water project and of the proposed
irrigation district.         Its diversion in Skalkaho Creek is
located upstream from all other components or works of the
district.       The Court found that for the past 81 years the
DNRC and its predecessors have supplied water on an exchange
basis to the exchange users without reduction of amount based
upon stream flaw in the Skalkaho Creek; the only source of
water for the Hi-Line Ditch is Skalkaho Creek; the portion of
the water diverted by the project from Skalkaho Creek into
the Hi-Line Ditch is represented by the exchange water that
is delivered downstream to the exchange users through the
Daly ditch system from the Bitteroot River; without the
exchange water, there is insufficient water available to
continue irrigating the acreage being irrigated out of the
Hi-Line Ditch; the DNRC and its predecessors have for many
years    been    exchanging Skalkaho Creek     decreed waters       for
Bitteroot River waters up to and at least the seventeenth
decreed right; a diversion and distribution system existed
prior to the construction of the Daly ditch water project for
the diversion and distribution of Skalkaho Creek water to its
water    users;   the    reconstruction and   replacement of that
diversion and distribution system for delivery of Skalkaho
Creek    water    to    present   d.ecreed water   rights   users   is
financially not        feasible; the diversion and distribution
system for diverting and distributing Skalkaho Creek water to
its decreed users has degenerated, falling to disrepair and
non-use because the exchange users have relied upon the DNRC
and its predecessors to supply exchange water to them through
its ditch and canal system free of charge, in consideration
for the Skalkaho Creek water diverted by the DNRC for its own
use and benefit on         lands other than those owned by the
Skalkaho water exchange users.
       There does appear then to be an obligation, the exact
nature of which we do not here attempt to determine, on the
part of the newly-organized Daly Ditches Irrigation District,
if it intends to use the points of diversion and rights of
appropriation appurtenant to the lands of Skalkaho Creek
exchange users for the use and benefit of other land owners,
to provide substitute water in exchange to the exchange water
users.    Some of the exchange water users have petitioned to
become members of the new district; some have also contracted
with the DNRC for an exchange of their appurtenant right;
some have refused to contract and rely instead on their
appurtenant appropriation        rights; some have      rights which
though decreed may not be useful because of the lack of water
to supply the same, the District Court determining that those
below the tenth decreed right are of little real value.
Aware of these factors, the District Court sought a method to
recognize the rights of the exchange water users to obtain
water on a basis that would take into account the use by the
district of their appurtenant rights in the Skalkaho.           If the
exchange water users join the district, they will receive a
credit on their assessments to be determined at a later time.
If they do not join, the exchange water users have left to
them   all   legal   or    equitable   remedies   if   water   is   not
delivered to them.        The District Court was eminently fair in
handling the problem of the exchange water users and was
acting in accord with legislative authority.
       Section 85-7-1912, MCA, provides that any irrigation
district shall have the right to contract with the owner or
owners of the right to the use of waters in any stream for an
exchange of water, and to supply him or them with water from
the district system.     Section 85-7-2103, MCA, provides that
all irrigable lands in each irriga.tion district shall pay at
the same rate for all purposes for which the lands are
charged, "except such lands that are included within the
district because of the exchange or substitution of water
under the provisions of 85-7-1912."          The statutes contemplate
exactly what the District Court has done in this case.
       In a nutshell, the District Court recognized that some
form of obligation existed from the district to the exchange
water users.    In recognition of that obligation, it will give
a credit to the exchange water users at or above the tenth
decreed rights if they become members of the district.                If
the    exchange water   users     do   not   become members of       the
district,    the   newly-formed    district     has   the   option   of
contracting with     the exchange water users under            section
85-7-1912, or risking the pursuit by the exchange water users
of their remedies at law or in equity.
3.    Whether the languaqe in the deed to the State Water
Conservation Board is enforcible as a lien or as a covenant
running with the land.
       This is really a non-issue at the present time.               The
court amended it findings of fact and conclusions of law on
March 26, 1983.    It deleted Finding of Fact No. 99, which had
stated that the language of the State Water Conservation Deed
"is in the nature of a lien or covenant running with the land
. . ."    Later the District Court reinstated Finding of Fact
No. 99 on the basis that a clerical error had occurred, the
reinstatement taking place on April 25, 1983.                         The DNRC
contends        that    it   is    doubtful    whether       under    Rule   59,
M.R.Civ.P.,      the issue is before us.
        We have stated above that we will not now determine the
nature of        the obligation if any, which                is owed    to the
exchange wa.ter users.            In the stance of the case before us,
it is not necessary for us to reach that issue.                       If in the
future one or more of the exchange water users brings suit
against the DNRC or the district at law or in equity, it will
be   proper      at that     time       to determine the nature of the
obligation which the exchange water users cia-im.
      We    do    not    reach     in    any manner    the     extent of     the
obligations existing between the exchange water users and the
DNRC.      We have before us only the matter of the organization
and establishment of the Daly Ditches Irrigation District and
the rights and duties of the district and the exchange water
users as members towards each other.
4.   Whether further judicial proceedings are necessary to
determine the credit for senior exchange water users.
        Here,    the    DNRC      contends    that    no    further    judicial
proceedings are necessary to determine the amount of the
credit, although it admits that such hearings are necessary
for the duration of the credit.
      The issue is raised prematurely.                     Until the District
Court decides the amounts of the credits and their duration
we have no way of determining whether the District Court is
in error.
5.   Other issues.
      Other issues raised by the DNRC will be treated in
connection with other subjects hereunder.
        The appeal of Bernie A. Swift or the Skalkaho Creek
Exchange Water Users Association.
      The court found that Bernie A. Swift is a member of the
Skalkaho     Creek      Exchange    Water     Users      Association,    an
unincorporated association, and an officer of the Skalkaho
Creek    Exchange Water      Users Association,          Inc.,   a Montana
corporation, and that he did appear and testify on behalf of
the said unincorporated association and on behalf of the
members     of   the   successor corporation, including himself.
Bernie A. Swift also claims status as an exchange water user.
He owns 23 acres in Ravalli County and is the owner of
Skalkaho Creek water rights which are appurtenant to his 23
acre tract by reason of a decree entered in the case of
Ravalli Land and Irrigation Company v. Nicol, above referred
to.
      The court found that Bernie A. Swift has one right to
use of water from Skalkaho Creek which is ranked third in
priority among the decreed water rights and which allows him
8.85 miner's inches of water.         He further owns a second water
use right appurtenant to his 23-acre tract which is ranked
twelfth in priority among the decreed rights and which would
allow him 14.15 miner's inches of water.
      The    court      further    found    that   the    DNRC    and   its
predecessors have for many years and are presently exchanging
Skalkaho Creek         decreed waters      for Bitteroot River water
including the seventeenth Skalkaho right as described in
Ravalli Land and Irrigation Company v. Nicol.                The DNRC and
its predecessors have sold waters diverted from the Skalkaho
Creek to land owners other than the exchange users.
      The    court      found   that   Bernie A.    Swift had     received
sufficient water from the Daly ditch water project on an
exchange basis to irrigate his 23-acre tract all through the
irrigation season, though the exact amount of water he has
received is unknown, because there are no measuring devices
present.
      The court found that prior to 1971 and after each normal
irrigation system, Bernie A. Swift and his predecessors in
interest had diverted stock water to be used on the 23-acre
tract by means of a diversion called the Reeser Diversion.
However, in 1971 or 1972, the Reeser Diversion was damaged by
a flood and has been useless since that time except for a
small amount of stock water.            In 1974, the DNRC removed the
remainder of the Reeser Diversion, thereby preventing any
further diversion of the water at that point.                   The Reeser
Diversion has not been replaced by any party.                   Bernie A.
Swift uses water          from other sources, including subwater,
overflow water, and Smithy Creek water for his off-season
irrigation purposes.
      As evidence of the existence of agreements between the
exchange water users, including Bernie A. Swift and the DNRC
and its predecessors, the court took into consideration the
decree of the District Court in Brennan v. Jones, supra, the
fact that the DNRC attempted unilaterally to revoke its
consent      to   such     exchange    agreements      by   a   letter   of
cancellation, and a written agreement between Ravalli Land
and   Irrigation Company and Henry            and Daisy Gilmore that
called      for   the    exchanges     of   Skalkaho   Creek    water    for
Bitteroot River water.            In the Gilmore agreement it was
provided that if the exchange water was not delivered by the
project, the Gilmores would immediately become entitled to
their original Skalkaho Creek water rights.
       The District Court also found that the provision in the
deed     to     the       State   Water    Conservation   Board   was   a
representation by           the   DNRC    and   its predecessors to the
exchange water users upon which the exchange water users
relied       that   the    DNRC   and    its predecessors would    supply
substitute water or exchange water for the use of their water
rights on Skalkaho Creek for diversion to other lands.
       It is clear from the findings that without the use of
the water rights owned by the exchange water users, the Daly
Ditches Irrigation District would not have sufficient water
to deliver to its contract users.
       In spite of those findings, however, as we have noted,
the District Court did not make a final judgment respecting
the rights of the exchange water users.                As we have said,
they can join and become members of the irrigation district,
or they can remain outside the district and contract with the
district       for the      use   of    their water   rights.     If such
negotiations fail they may pursue any remedies at law or in
equity   .
       The principal argument on appeal of Bernie A. Swift, and
of the exchange water users is that the District Court erred
in providing a credit, if an exchange water user joined the
district, only to those holders of decreed rights ra.nked
tenth or superior.            Swift and his users contend that the
remaining holders of rights down to the seventeenth decreed
right should also be entitled to a credit.
       We regard, however, the action of the District Court in
establishing the tenth or superior right as a basis for
credit if the exchange water users become members of the
district as merely          setting terms         for membership of such
exchange water users in the district.                     The District Court
found in fact that the holders of water rights down to the
seventeenth right       had    been     supplied with           exchange water
without charge and "without reduction in volume based upon
the flow in Skalkaho Creek."                (Finding No. 65.)            We have
found it within the statutory authority of the District Court
to   make    that     determination         for    membership.           Section
85-7-107 (1)(a), MCA.
     Since the District Court reached no final judgment on
the rights and obligations between the district and the
exchange water users who are not members of the District, our
appellate powers do not reach the questions raised by Bernie
A. Swift and the water users as to whether the right to
receive substitute water is a covenant running with the land
or a lien.      Nor do we purport to determine here the amounts
of water     that the exchange water users are entitled                       to
receive under their decreed water rights.                    Those questions
are reserved for the future.
                                      IV.
     The Appeal of Stanton Cooper and Charles Likes
     Stanton       Cooper   and      Charles      Likes    objected      to   the
formation of the district.             Their predecessors had entered
into an agreement with Marcus Daly, the builder of the Daly
ditch   water    project,      and    particularly        the    Hedge    Ditch,
whereby Marcus Daly was allowed to construct the Hedge Ditch
in   part     in     approximately          the    same      place       as   the
Blodgett-Culler-Gril.1 Ditch, and in return Daly agreed to
transport Sleeping Child water in the Hedge Ditch.                    Sleeping
Child Creek is another water channel involved in the Daly
ditch water project.          Daly agreed to be responsible for the
maintenance of the combined Hedge and Blodgett-Culler-Grill
Ditches to the points of distribution to Cooper and Likes.
Before and after its junction with the Hedge Ditch, the
maintenance of the Blodgett-Culler-Grill Ditch rests with
Cooper and Likes.
      The court found that Cooper and Likes had established
water rights appurtenant to their land.
      Again, the court made no final judgment with respect to
Stanton Cooper and Charles Likes.        It provided in Conclusion
of    Law No.   12,   that water    shall be     conveyed   from the
conjunction of the Blodgett-Culler-Grill Ditch and the Hedge
Ditch to the places of dispersion on their property "under
conditions that may be agreed upon between the parties or may
be later decreed."      It found the same with respect to water
from the Mason Harmony Ditch, another ditch involved in the
project; the water shall be transported through the Hedge
Ditch for the benefit of Cooper, again under conditions that
may be agreed upon between the parties or later decreed.
(Conclusion No. 13.)
      Cooper and Likes have appeared in this action and on
appeal without counsel.      They have objected to the conditions
imposed upon them in the formation of the irrigation district
on the ground that under section 85-7-106 (1), MCA, they are
interested persons whose lands or rights would be damaged in
the   formation of     the   district.    They   request that    the
conditions imposed on their water right-of-way be settled
prior to the final formation of the district.
      The condition of the record for Cooper and Likes is much
the same as that for the exchange water users.        The court has
not made a definitive judgment with respect to their rights
but has left it to future negotiation or decisions.              The
District Court found however that Cooper and Likes have
established water rights which are appurtenant to their lands
and that there historically was transportion of their water
free of charge in the Hedge Ditch from its junction with the
Blodgett-Culler-Grill Ditch to the places            of dispersion.
     Absent a final judgment with respect to their water
right-of-way, we have nothing to review as an appellate court
respecting Cooper and Likes.
                              CONCLUSION
     In essence, the order and decree as amended by the
District     Court    is    affirmed.       The   organization       and
establishment of the Daly Ditches Irrigation District as
ordered by     the   court is affirmed.        Its provisions with
respect to membership in the district of holders of exchange
water use rights are affirmed.          The cause is remanded to the
District     Court   for   such   further   proceedings   as   may   be
necessary to determine the rights of the parties or other
interested persons.        Each party to this appeal shall pay his
or its own costs.

We Concur:

                                  1.
      Chief Justice
District Judge, sitting
for Mr. Justice John C.
Harrison