Court Opinion

ID: 5170651
Source: CourtListenerOpinion
Date Created: 2022-01-02 04:54:31.480684+00
Date Added: 2024-06-11T08:26:04.599233
License: Public Domain

SULLIVAN, C. J.,
Dissenting. — I am unable to concur in the conclusion reached by my associates.
The facts as to the location of the two water rights from one or both of which the rights, involved here were sold and conveyed to the grantors of the respondent, are substantially as follows:
One Morris, on August 7, 1877, filed his water right location in the recorder’s- office of Ada county, claiming sufficient water from Boise river to fill a ditch twelve feet wide on top from bank to bankj eight feet wide on bottom, and three feet in perpendicular depth. The location notice provides that said “water is to be used for milling, manufacturing, agriculture and for purposes of irrigating and subjecting waste and desert lands to settlement, use and cultivation, ’ ’ Such a ditch as therein described, with the usual fall, would perhaps carry 4,000 inches of water. The locator, Morris, died and in 1880 all of his right, title and interest to said water right and the ditches connected therewith descended to his widow and to W. H. Ridenbaugh, and it was so decreed by the probate court of Ada county. Thereafter on August 20, 1888, W. H. Ridenbaugh filed his water location notice with the recorder of said Ada county, claiming 30,000 inches of water of said river to be diverted from said river by means of a ditch thirty feet wide on bottom, fifty feet wide on top and eight feet deep, and it is stated in said notice that said water is to be used for irrigation, domestic, agricultural and mechanical purposes on the lands below the point of diversion, and it is also recited in said notice that said location of water is made as an additional one to that made by Morris on August 7, 1877.
*109Here we have at least 34,000 inches of water located for the irrigation and reclamation of lands in Boise valley, to be diverted at the same point from Boise river, through one canal system, to the lands to be irrigated. Prior to the' time that De Cloedt, the predecessor of the respondent, purchased the water rights consisting of one cubic foot each, involved in this case, the purchaser knew that the canal to convey such water to the lands intended to be irrigated was to be sufficiently large to convey said 34,000 inches of water to the lands intended to be irrigated. He purchased said water rights in 1889 at the time that Jones & Co., or the Central Canal & Land Co., was enlarging said canal.
It appears from the record that Frank De Cloedt and his brother were farming the land owned by the respondent in connection with other land owned by the brother at the time Jones & Co. were enlarging said canal in 1889. They sold to Jones & Co. a large amount of the products of the farm, and when they came to settle there was about sufficient due to pay for the Frank De Cloedt water rights, and that was the consideration given by Frank De Cloedt for the water rights that he afterward transferred to the respondent, the consideration for the two water rights being $1,280, or $640 for each water right consisting of a cubic foot of water per second of time.
Water right certificates or contracts of sale and purchase were made by the Central Canal & Land Co. with Frank De Cloedt for said two water rights, one on June 15, 1889, and two others for one-half of a water right each, on or about January 4, 1890. In said certificates the Central Canal & Land Co. agreed upon the surrender of those certificates properly assigned and indorsed to execute a good and sufficient deed in manner and form “as now adopted by skid company.” Thereafter on June 10, 1891, water right deeds were executed to said Frank De Cloedt by said Canal & Land Co. for the water rights represented by said certificates.
Said corporation, the Central Canal & Land Co., was organized under the laws of the territory of Wyoming, for the purpose of procuring water rights and canals for irrigating *110and reclaiming desert lands in the territory of Idaho. The water was to be sold or rented for the reclamation of such lands.
On October 1, 1888, Ridenbaugh and his associate sold and conveyed by warranty deed the water right located by said Morris and also the water right located by said Ridenbaugh consisting of about 34,000 inches,' to said Central Canal & Land Co. It will thus be seen that at least the greater portion of said 34,000 inches of water was to be used in the reclamation and irrigation of land in, about and below the land of the respondent, and the construction of canals of sufficient capacity to take said water from the point of diversion to and upon the lands intended to be irrigated was commenced some time before De Cloedt purchased the water rights referred to.
Thereafter said canal company sold and conveyed to one Morrill said water rights, canals and ditches. Said Morrill thereafter conveyed said property to the Boise City & Nampa Irrigation Land & Lumber Co., a corporation organized under the laws of the territory of Idaho, for the purpose of irrigating and reclaiming desert lands and for selling, leasing and renting water rights for any and every purpose.
It appears from the record that thereafter said water rights and ditches were sold at least twice at sheriff’s sale, but no question is raised on this appeal in regard to the effect of such sales.
Thereafter in 1905 the plaintiff, the Nampa & Meridian irrigation district, an irrigation district organized under the laws of the state, purchased said water rights- and canals. Thus it appears from the facts of the case that said water was located and appropriated principally for sale, rental and distribution for the reclamation of desert lands.
Said- deeds on their face convey to said De Cloedt said water rights for the consideration of $1,280, which rights were intended for the reclamation of 160 acres of land, and the consideration paid therefor would average eight dollars per acre for said 160 acres of land. Said deeds contain, *111among other stipulations, an executory contract, which is as follows: ‘
“The said first party agrees on its part to keep and maintain said canal in good order and condition, and in case of accident to, or breach in, or damage to the same, to repair the injury occasioned thereby as soon as practicable and expedient.
“The second party, his heirs, executors, administrators and assigns, agree to pay said first party, its successors or assigns, on or before the first day of May in each year hereafter, the sum of twelve (12) dollars on each water right covered by and granted by this indenture and agreement, and a proportional sum on each proportional part of a water right, as assessment for the management and maintenance of said canal for the ensuing year.....”
Those stipulations are no part of covenants that run with the title. The deed itself conveying the water right is an executed contract, while the stipulations above quoted have nothing whatever to do with the title conveyed and are merely an executory contract injected into the deed of conveyance.
By that executory contract the grantor agrees to keep the ditches or canals in proper condition each year, for which the grantor promises to pay twelve dollars per annum on the first day of May as his share of the “assessment for the management and maintenance of said canal for the ensuing year” for each water right. This assessment is for the management, up-keep and maintenance of the canal each year and is not a covenant that runs with the title so as to burden all of the remaining water rights and canal system with the expense of keeping the same up, provided it required more than twelve dollars per annum to maintain and keep said canals in proper repair.
Is it possible that under the law a canal owner, by a mere stroke of his pen or by entering into an executory contract, such as the one above recited, can so encumber a canal system and the water rights connected therewith with an obligation in favor of a part of the water owners thereunder, requiring other owners of water rights for all time and without com*112pensation to maintain and keep np the canals for the benefit of those who refuse to pay their proportionate part of the maintenance charges? Can a canal owner by entering into a contract, such as the one referred to, place such a heavy liability upon the remaining part of his property? I think not, especially when the water and canal system was located and constructed for a public use. Water appropriated for distribution and sale is ipso facto devoted to a public use, and a canal system through which such water is conveyed is also devoted to a public use.
Under our statute, which permits the acquisition of rights by appropriation of water for sale or rental, the water so appropriated becomes perforce publici juris. (Sec. 372, Kinney on Water Rights, and authorities there cited.)
Since Idaho became a territory, the legislature' has had the right to regulate and control the waters of the state, and as early as 1881 the territorial legislature enacted a law to regulate the right to the use of water for mining, agricultural, manufacturing and other purposes (see 11th Terr. Sess. Laws, p. 267), and the 19th section of that act is substantially the same as see. 3189 of the Revised Statutes of 1887, which section establishes the policy of the territory in regard to water located for sale or rental for irrigation purposes, and is in part as follows:
“In case any person, company or corporation has constructed a ditch for the purpose of directing the water of any river, creek, canyon, ravine or spring for the purpose of selling the water thereof for irrigating purposes, the owners or cultivators of land along the line of, and covered by said ditch or canal, are entitled to, and have the right to the use of water from said ditch or canal for the purpose of irrigating said land so owned or cultivated, in the following order: First, all persons through whose land said ditch or canal runs, are entitled to the use of the water thereof in the order of their location along the line of said ditch or canal..... Provided, that the owners or cultivators of such lands pay the usual and customary rates for the use of said water.”
*113And a canal owner at that time, whether a private person or a corporation, had no authority or right to grant to anyone a preferential right in regard to the maintenance and upkeep of the ditches or canals required for the distribution of such water from year to year. It is a monstrous proposition, to me, that by such an executory contract as was inserted id the deeds referred to, those who are not parties thereto •should be bound or the title to other property of the obligor be affected by such a contract, or that by entering into such a contract a transient bankrupt owner of a canal and water rights, having the right to sell water rights and distribute such water, could perpetually burden a part of such public water or an interest in the canal distributing the same with a preferential right in favor of certain parties and place the great burden of maintaining such canal on others.
Here is a mere deed to a water right containing an executory contract that is not a covenant running with the title, and my associates hold that it affects other property owned by the grantor although such other property is not mentioned in the deed. Said instrument ought to be construed as an ordinary deed to realty, since water rights are declared to be real estate under our statute, and an executory contract inserted in such a deed cannot, under the law, be permitted! to cast a burden upon other property or water rights of the grantor not mentioned in the deed. The deeds in question should be construed as deeds to realty and the executory contracts therein as contracts between the parties to them, and under the facts of this case and the law, they ought not to be so construed as to give a preferential right to anyone.
It is claimed that the grantor in said deeds had an absolute right to make said executory contract under the laws that existed at that time. While we might concede that the parties to those contracts could make them under the law, if they did it was a question between the grantor and the grantee, and the grantor could not cast the burden sought to be east in this case upon subsequent purchasers of water rights in said canal. Our constitution did not change the rule of law *114in regard to granting preferential rights that already existed in this state, since preferential rights could not be granted by persons or corporations who had located and appropriated waters for sale and rental prior to the adoption of the constitution. It has been recognized ever since Idaho became a territory that the waters belong to the people, that they are publici juris, and could only be used for irrigation upon the terms prescribed by the legislature, and the clear policy of the law was that no preferential rights should be granted and that no discrimination should be made against the users by the canal owners.
The provisions of the state constitution in regard to water rights did not make any changes in the customs and laws that prevailed in the state at the time the constitution was adopted, but merely amplified the law as it existed in relation to water rights and the sale and distribution of water. The' principles in regard thereto declared in the constitution had already been recognized by the territorial laws and the decisions of the courts to the effect that the water belonged to the public and that it could only be used for irrigation purposes upon the terms prescribed by the law and customs. As early as 1881 (Sess. Laws 1881, p. 272) the legislature provided, among other things, that the owners or cultivators of land along a canal were entitled to the use of water therefrom upon the payment of the usual or customary price therefor,— not a preferential price, but the customary price.
The water corporation that issued said certificates and deeds procured its rights for the purpose of serving the people to the extent of the water claimed by it and the capacity of its canals, under the laws of the then territory of Idaho, and it was clearly a public service corporation without any declaration of the legislature that it was so. The giving of preferential rights by public service corporations was contrary to, and in violation of, the public policy of the territory and the principles of common law. The Central Canal & Land Co. was charged with a public trust or duty, and in the absence of any specific legislation on the subject, it would, under the common law, be required to perform the service *115without giving preferential rights because of the public nature of the business, and because of the public nature of the business it is bound to serve all persons without discrimination or without giving to anyone a preferential right.
Judge Thompson, of the Central Law Journal (see 45 Law Journal, p. 278), has a well-considered article supported by numerous authorities in regard to the duties of corporations that serve the public. He there states that a great multitude of cases unite in holding that where a public corporation undertakes to perform a public service to individual members of the public, an obligation to perform is implied, whether the statutes of the state expressly require it or not. It is sufficient if such a duty clearly arises under the principles of the common law, and that such corporations are charged with what the court terms a public trust or duty, and in the •absence of legislation on the subject, it would for these reasons be required under the common law to perform them. And because of the public nature of the business, it is bound to serve all persons applying for its service without discrimination. He says: “The state cannot be supposed to have granted such a franchise to enable the grantee to destroy one person and build up another.”
Now, in the case at bar, the respondent, under his preferential right, is required to pay but $24 a year for canal maintenance for 160 acres, while other land owners similarly situated and without such a preferential contract are required now to pay annually $100 for the maintenance and up-keep of the canal, thus making a difference in favor of the respondent and others of $76 a year. The farmer without the preferential right would need to raise on his ranch $76 worth of products more than the one with the preferential right in order to keep even with him, provided other expenses were the same; and if the profits of the farm were very small, this difference of $76 might make the farm of the one a losing proposition and give the other a small profit, thus destroying one person to build up another.
I do not think it can be successfully denied that the Central Land & Canal Company who undertook to give this *116preferential right was a public service corporation. It certainly was charged with public duties. Its thirty-odd thousand inches of water at the rate of one cubic foot of water per second of time to eighty acres of land would serve about 50,000 acres of land, which, if distributed among farmers at the rate of eighty acres each, would supply more than six hundred farmers. And to say that a corporation that has undertaken to supply a community of six hundred farmers (who with their families no doubt would number over 2,000 people) with water for the irrigation of their lands, is not a public service corporation, certainly is not consistent with the rules of the common law or the statutes.
Counsel for respondent state in their brief that “A canal company at a time of financial need might receive sufficient consideration for a perpetual water right so that, the annual income from such water rights might thereafter be established in conformity with law.” Simply because a public service corporation may at some time be in distress would not justify it in granting a preferential right forbidden by both the common law and the statutes, and contrary to public policy.
It is suggested by the majority that this preferential contract was not prohibited by statute, and is therefore a valid, binding contract, and that being true, the federal constitution prohibits states from passing laws impairing the obligation of contracts.
In my view of the matter, this preferential contract, except as to the original parties to it, is absolutely void as to all subsequent purchasers of water rights from said canal system, and therefore does not come within said provision of the federal constitution which prohibits states from passing laws impairing the obligation of contracts. The contracts there referred to are legal, binding contracts, and said provision does not apply to contracts made against public policy or to contracts' that have no binding force or effect upon persons not parties thereto.
What are the facts in regard to this transaction ? The respondent ’s grantor procured these water rights at the rate of eight dollars per acre for 160 acres. By those deeds he *117simply acquired the right to the use of the water and thereafter no charge could be made for the use of such water and no charge is sought to be made in this action for the use of such water. But the charge here sought to be made is for the annual maintenance and up-keep of the canal which is costing other users annually fifty dollars per cubic foot of water, and defendant offers to pay but twelve dollars per cubic foot.
The grantor of the defendant has paid $1,280 for the right to the use of two cubic feet of water per second of time. The consideration paid, to wit, $1,280, was for the use of said water and the plaintiff irrigation district is not attempting to make respondent pay for the use of the water, but only for his proportionate share or part of the annual cost of management and maintenance of said canal system. Thé farmers included within said irrigation district are paying for the use of the water used by them by annual assessments made against their land, the proceeds of which go to pay the bonded indebtedness of said district created by the purchase of said water rights and canal system. That is the method and manner in which they pay for their use of the water. In addition to such payments, all users are assessed annually for the management and maintenance of the canal system. When said water-users pay off said bonded indebtedness they will have paid for the use of their water. They pay for such use by annual instalments, while the respondent’s grantor paid for his use of the water by making one payment of $1,280. After each has fully paid for the use of the water, he ought to pay his proportionate part of the cost of the annual management and maintenance of said canal system without any preference whatever, at least so far as other water-users from said canal are concerned.
Said deeds to De Cloedt contain the following stipulation:
“The said second party, his heirs, executors, administrators or assigns agree to pay said party, its successors or assigns, on or before the first day of May in each year hereafter, the sum of twelve dollars on each water right covered by and granted by this indenture and agreement, as assessment for *118the management and maintenance of said canal for the ensuing year. ’ ’
Could language be plainer in order to express just what said twelve dollars was agreed to be paid for annually? It is, “as assessment for the management and maintenance of said canal for the ensuing year,” and not as a part of the consideration for the use of water represented by said two water rights.
The right to the use of water is one thing and a very different thing from the cost of the management and maintenance of a canal system through which to conduct such water to the place of intended use.
That stipulation to pay the twelve dollars annually for the management and maintenance of said canal system is nothing inore or less than a personal contract between the canal company and De Cloedt and is entirely independent of the covenants of the deed conveying the title to the use of the water, and is only an ordinary contract of employment. It is merely an agreement by one party to perform certain labor for another annually each succeeding year for an agreed annual price. It in no manner affects the right or title to the use of the water and is not binding upon subsequent purchasers of water rights or the right to use water from that canal system.
In the case of Nampa & Meridian Irr. Dist. v. Gess, 17 Ida. 552, 106 Pac. 993, this court said:
“The company cannot, however, sell and dispose of free water rights, and thereafter claim a sufficient water rate from other consumers to pay it a profit on the free water rights thus disposed of. ’ ’
This rule is also applicable to free management and maintenance, or a preferential contract therefor.
So in the case at bar, a water corporation, such as the one under consideration, cannot perpetually give to one user of water through their canal system a right to flow water for a less price annually than is required to be paid by other water-users for doing so.
*119The majority opinion cites a number of decisions of this court as sustaining the conclusion reached by them, to wit: Knowles v. New Sweden Irr. Dist., 16 Ida. 217, 101 Pac. 81; Jackson v. Indian Creek etc. Irr. Co., 16 Ida. 430, 101 Pac. 814, and the same case on a second appeal, 18 Ida. 513, 110 Pac. 251; Nampa & Meridian Irr. Dist. v. Gess, 17 Ida. 552, 106 Pac. 993. However, as I view the matter, those authorities do not sustain the views expressed by the majority of the court and are not applicable to the question under consideration in the case at bar, and preferential rights for the management and maintenance of a canal system were not in issue in those cases.
In the Knowles-New Sweden case, Chief Justice Ailshie prepared the opinion, and in the very first paragraph he states: “This appeal involves the power and authority of an irrigation district organized under the laws of this state to levy assessments1 for the purposes of defraying the principal and interest on bonds issued for the purchase of an irrigation system against the lands of one who owned his own water right and privileges at .the time of the organization of the district and the levying of the assessment.” The main point considered in that case was the right of the district to levy an assessment for the purpose of paying the principal and interest on the bonds of said irrigation district issued for the purchase of the irrigation system against lands of one who owned his own water right. Of course, it would not be just and right to compel a person to pay for the use of water when the right to its use had been already purchased and paid for by him. In the case at bar the appellant irrigation district does not demand of the respondent that he pay the same assessment that other water-users are required to pay for the interest and bonds of said district, but it only demands, that he pay his proportionate part for the maintenance and repair of the system through which his water is conducted. So that case is easily distinguished from this case. In that case Knowles had agreed to pay a dollar per year for the maintenance and repair of the canals and no question was raised but that that amount was amply sufficient for that purpose. *120One dollar per inch for water was all that the appellant district demanded of this respondent for the maintenance and repair of the ditch. Had he paid that sum this suit would probably never have been brought. One dollar per inch is all that is now required to be paid by any of the water-users in said district for the maintenance and repair of the canal; but whatever the charge, it must be the same to each user and no preference ’given. No doubt if said canal is finally required to be lined with cement its entire length of about forty-two miles, the maintenance charge per annum will be increased.
The ease of Jackson v. Indian Creek Reservoir etc. Co., 16 Ida. 430, 101 Pac. 814, is not in point. It appears from the record in that case that the Orchard Irrigation Company constructed the Orchard Reservoir and Irrigation system about the year 1893 or 1894 and sold to the plaintiff in that case a water right for $1,200; that it was estimated the reservoir would hold sufficient water to irrigate 8,400 acres, and in disposing of said water rights to different parties it was intended and expected to put all on ;an equality in regard to the price of a perpetual water right and for the charges for maintenance and keeping the system in repair; that all of the contracts provided that ten cents per miner’s inch for all water used should be paid each season for the management and maintenance of said canal; that the company sold all of said water rights at fifteen dollars per acre for a perpetual water right; that a number of the purchasers commenced the actual use of the water from said reseiwoir; that about 1900 or 1901 the said Orchard Irrigation Company defaulted in the payment of its taxes and also permitted a judgment to be obtained against it under which judgment the reservoir and canal system were sold at sheriff’s sale, and in the default of the payment of taxes on the lands, the lands were sold for taxes; that in 1901 the Orchard company practically ceased to operate said canal; that from 1901 to 1907 the plaintiff’s lands were the only lands that were irrigated from said reservoir and canals; that said reservoir only furnished about fifty or sixty inches of water; during those years the *121plaintiff kept np the ditches so far as they were kept np. The Indian Creek Irrigation Company acquired title to the reservoir in controversy and certain lands through said execution sale and the tax sales referred to, and said action was brought by said corporation for the purpose of determining plaintiff’s right to the use of sixty inches of water from said canal. The main point urged against the validity of said contract was that it fixed the maintenance charge at ten cents per miner’s inch, and the argument made against that provision in the contract was based upon the provisions of sec. 6, art. 15, of the constitution, which is as follows: “The legislature shall provide by law the manner in which reasonable maximum rates may be established to be charged for the use of water sold, rented or distributed for any useful or beneficial purpose.” From those provisions it was argued that the power to fix the rates by contract was taken away and such power given solely to the legislature. This court there held that the legislature had by the enactment of sec. 3288, Rev. Codes, authorized the parties to contract with reference to the rate to be charged for furnishing water for irrigation purposes, and referred to the statute which provides for the fixing of rates by the county commissioners, and said:
“Whether that rate [the rate fixed by contract] can afterward be abrogated by the fixing of such rates under the statute by the board of county commissioners, we are not called upon to decide in this case, for the reason that it does not appear that such rates have ever been established by the board of county commissioners or in accordance with such statute.” '
The question of preferential rights was not raised in that case. Every user who had purchased water was entitled to it under the contract at the same price, to wit, ten cents per miner’s inch per annum; and while the court held that that contract was valid, it did not hold nor intend to hold that preferential rights could be granted.
In the ease of Nampa & Meridian Irr. Dist. v. Gess, 17 Ida. 552, 106 Pac. 993, it was held that the grant in a conveyance of a “free and perpetual use of water” does not obligate the *122grantor or his successors to perpetually bear and pay the expense and cost of maintaining and repairing the canal and delivering the water to the consumer, and is in line with my views as expressed in this opinion, that no preferential rights shall be granted by such a canal company.
In Leavitt v. Lassen Irr. Co., 157 Cal. 82, 106 Pac. 404, 29 L. R. A., N. S., 213, it was held that a water company ■having water appropriated for sale, rental or distribution, the use of which is a public use, cannot confer any preferential right to one consumer over another to the use of any part of its water; and that a corporation which has appropriated water for sale, rental or distribution is simply an agent of the public for the distribution of the water to such mehibers of the public as may apply for it and pay the legal charge for the services rendered.
In the case at bar, each of the users of water has paid for the use of their water, or are paying for it, and each ought, under the law, to be compelled to pay his proportionate share of the cost of the annual management and maintenance of the canal system.
The judgment of the district court ought to be reversed and the cause remanded for a new trial.