State v. Twin Falls Canal Co.

SULLTVAN, J. This is an action brought by the state of Idaho and H. T. West as plaintiffs, against the Twin Falls Land & Water Company, a corporation, and the Twin Falls Canal Company, a corporation, praying for a writ of mandate against the defendant corporations, requiring them to issue shares of water stock to the plaintiff West, who is a purchaser of state land under the irrigation project of said corporations, and also to issue shares of water stock to other land owners in the same status, and also praying for such other equitable relief as may be just. The plaintiff sets up substantially the following state of facts, and alleges that the Twin Falls Land & Water Co. is a corporation organized under the laws of the state of Utah and authorized to do business in the state of Idaho, its purpose being, to acquire water rights and to construct dams, canals, ditches and "a complete irrigation system and sell water rights in the state of Idaho under what is commonly called the Carey Act, an act of Congress approved August 18, 1894, and acts amendatory thereof (Vol. 6, Federal Stat. Ann., p. 397), and for the purpose particularly of constructing, operating and disposing of a Carey Act project in the state of Idaho, commonly called the Twin Falls South Side project. Said Twin Falls Land & Water Co. will hereafter be referred to as the Land & Water Company. The Twin Falls Canal Company is a corporation organized under the laws of the state of Idaho and authorized — 417 — to do business therein, with a capital stock of 240,000 shares, its object and purpose being to take and hold the title to and operate certain dams, canals, laterals and other works constructed by said Land & Water Company for the irrigation of the land included within said Twin Falls South Side project, which main canal takes water from Snake river at a ■point particularly described in the complaint, and to acquire from said Land & Water Company all its right to the appropriation of water made by said Land & Water Company for use on said South Side project, and to acquire, hold, maintain and distribute among its stockholders and others equally and ratably the water diverted from said Snake river pursuant to the appropriation of the said Land & Water Company, and to fix charges for said water among its stockholders and others using said water or entitled thereto, and to do other and various things more fully described in the complaint, the express purpose of said corporation being to receive from the said Land & Water Company the title to the canals, dams and franchises of said last-named corporation, and to manage them for its shareholders. Within said irrigation project, the state of Idaho owns school lands in considerable quantity, said land being dry and arid and practically valueless without water for its irrigation. On the 18th of June, 1910, the state of Idaho sold to the plaintiff West the N. W. % of the S. E. % °f Sec. 16, Tp. 11 S., R. 18 E. of B. M., and issued to him a certificate of sale of said school land. The application of the Land & Water Company for segregation of the land included in said South Side project under said Carey Act, bears date October 12, 1900, and proposes to irrigate, among other lands, the particular forty acre tract above described, and one of the prime reasons assigned by the applying company for the segregation, and one of the considerations which moved the land board to grant the segregation to said company, was that the state owned some 18,000 acres of land within the said project, and on the 2d day of January, 1906, the state of Idaho entered into a contract with the said Land & Water Company for the reclamation of the land owned by the state — 418 — under said project. The terms upon which water was to be sold by said Land & Water Company for the reclamation of the state’s land was $15.50 an acre, provided the applications therefor were made within one year after the date of the purchase of said land from the state; otherwise, $25 an acre. In the meantime the Land & Water Company had •made application to the state engineer for a permit to appropriate 3,000 cubic feet of water per second of time of the public waters of this state flowing in Snake river, for the purpose of irrigating lands embraced in the proposal above referred to, including the state’s school lands within said project, and the state engineer granted his permit to said company on condition that said company fulfill all the terms and conditions for the proposal for segregation, among which was the irrigation of the state’s land included within said, segregation. Moved by the above considerations, the state land board accepted the proppsal of the said Land & Water Company and took the necessary steps prescribed by said Carey Act to procure the segregation of said lands from the federal government. One of the provisions of the contract between the said Land & Water Company and the state was that there should be formed a corporation known as the Twin Falls Canal Company, to which corporation the Land & Water Company should convey its entire holdings, consisting of dams, canals, laterals, water rights, etc., and that shares of stock bargained for or contracted for with the Land & Water Company should be replaced by shares in said Canal Company, share for share. It was deemed necessary by the state to provide a convenient method of transferring the ownership and control of said dam and canal system and water rights, after its completion, from the said Land & Water Company to the purchasers of shares or water rights in said canal, and said Canal Company was formed as a holding company for that purpose. Pursuant to these considerations and in view of these contracts, the Land- & Water Company constructed its dam and irrigation works sufficient to divert the water applied for to — 419 — the state engineer, and in accordance with its contract, subsequently transferred all of its holdings to the Twin Falls Canal Company. At the time of turning over the said system to the said Canal Company, there remained unsold 42,174.51 shares of stock in the Land & Water Company, each share representing a maximum water right of one-eightieth of a cubic foot per second for each acre of la'nd remaining unsold, and there remained unsold at that time an amount of land sufficient to utilize said water and the shares of stock, among which land was the portion of said section 16 now owned by plaintiff West, and this amount of water stock was held in reserve to be applied to said land when it should pass into private hands. By the terms of the contract between the state and the Land & Water Company, the water appropriated was dedicated to the lands' segregated and to the school lands within the segregation. It is alleged that the land owned by plaintiff West cannot be irrigated from any other source than the ditches and laterals of the defendant company, and that the said land is worthless without water to irrigate it, and that the plaintiff West has requested the Canal Company to deliver shares of stock to him in accordance with its contract with said Land & Water Company and the state of Idaho and in accordance with the company’s dedication, and that said company has refused and still refuses to deliver water or to issue shares of stock to the plaintiff West. It is also alleged that the plaintiff is the real party in interest in this case and that he has no adequate remedy by suit at law. The defendant Land & Water Company failed to appear and answer, but the Canal Company appeared and filed a motion to strike out portions of the complaint, also a demurrer and an answer denying some portions of the complaint and alleging some new facts, and formally objecting to the jurisdiction of the court. It is admitted by the answer that there had been sold by the Land & Water Company 197,821.74 shares of water rights in said system, and it is averred that each share or water right so sold or delivered represents the right to re — 420 — ceive and have delivered to the holder of the same one-eightieth of one second-foot of water to be delivered within one-half mile of the place of intended use; that all of the water rights in said canal have been sold, and there now remains no water or water rights in the said canal system which can be sold by either of said defendants; that while there has been returned to this defendant from the Land & Water Company 42,174.51 shares of the capital stock (which number of shares are now in the treasury of the Canal Company), there is no water or water rights available under and by virtue of the said appropriation or otherwise or at all, and that for such reason the Canal Company cannot sell or dispose of said stock. The foregoing defense set up by the answer embraces the main contention in this case. It is first contended that this court has no jurisdiction to hear and determine this matter, and that -mandate will not lie to compel the Canal Company to issue shares of stock to the plaintiff under the issues made by the pleadings. Under the provisions of sec. 4977, Rev. Codes, mandate may be issued “by any court except a justice’s or probate court, to any inferior tribunal, corporation, board or person, to compel the performance of an act which the law especially enjoins as a duty resulting from an -office, trust or station.” In the case of Haugen v. Albina Light & Water Co., 21 Or. 411, 28 Pac. 244, 14 L. R. A. 424, application was made for a writ of mandate to compel the water company to furnish water to others than the original purchasers, and in the decision of the case the court discussed at considerable length the duty owed by public corporations to the public, and quoted with approval from 2 Morawetz Priv. Corp., see. 1129, as follows: “It may be laid down as a general rule, that whenever the aid of the government is granted to a private company, in the form of a monopoly or a donation of public property or funds, or a delegation of the power of eminent domain, the grant is subjéet to an implied condition that the company shall assume an obligation t-o fulfill the public purpose on account of which the grant was made.....The rule — 421 — applies to companies invested with special privileges, at the expense of the public, for the purpose of supplying cities with water.” And the Oregon court said: “The pipe was laid along the street and in front of the lot of the plaintiff under the franchise granted by the city, and by the terms of its incorporation, to supply water to the city and to its inhabitants. This being a public purpose, and the business of a public nature, the defendant must serve all alike, and for any discrimination mandamus is the appropriate remedy.” The canal corporation is not one organized for profit, but is one organized really for the purpose of performing a public duty. The stock of that corporation represents the right to the water, and a refusal to deliver the stock amounts to a refusal to deliver water and a refusal to perform the public duty for which the corporation was organized. Mandamus is therefore a proper remedy. (5 Thompson on Corporations, sec. 5775.) This action is in effect to compel the performance of a public duty. The canal corporation was organized under the supervision of the state for the purpose of carrying out a certain duty resulting from a trust, and if the facts warrant, this court has ample jurisdiction to compel the said canal corporation by mandate to perform the acts prayed for in the petition. The principal question for consideration is whether under the facts presented the court will compel the Canal Company to sell water rights to the purchasers of state lands. It is contended by counsel for the Canal Company that the water rights already sold in said system amount to 197,821.74 shares, which shares represent water rights amounting to 2,472.60 second-feet of water, and it is contended by counsel for the Canal Company that the Canal Company must deliver that amount of - water to its various stockholders one-half mile from the farm unit, or place of use; that said company owns a 3,000 second-feet water right; that that is the maximum amount of water which it can divert and convey, first, be — 422 — cause of prior appropriators using all of the water of Snake river, and second, because the main diverting canals will not convey more, the canals having only a 3,000 second-feet capacity; that the loss by evaporation, seepage, etc., from the head of the canal to the point of delivery and place of use is about thirty per cent of the water that enters the canal at its head, and thirty per cent of 3,000 is 900, thus leaving but 2,100 second-feet of water after deducting said loss, for use by all owners of water rights, and according to that computation, there has already been sold 372.6 cubic feet of water per second of time more than remains in said canal after deducting the thirty per cent loss, thus giving to the owners of water rights much less water than one-eightieth of a second-foot of water per acre, as provided by said contract. It is averred by counsel that as soon as the actual water right holders became the owners of the capital stock of the Canal Company, steps were taken to prevent the further sale of water rights by the Land & Water Company, and finally an agreement was made whereby the Land & Water Company transferred to the Canal Company the remaining unsold stock, in trust, which the Canal Company now holds, and refuses to sell said shares because there is no water to supply such shares, and for no other reason. Under the facts of this case and said contract entered into between the state of Idaho and the Land & Water Company, has the Canal Company the right to refuse to sell and issue the shares of stock claimed by the plaintiff West and the state? In order to determine this question, we shall have to consider at some length said contract and the law under which said contract was made. The Land & Water Company filed its proposal to construct said irrigation works under the provisions of sec. 1615, Rev. Codes. Under that section it is provided that the proposal shall state: “The source of water supply, the location and dimensions of the proposed works, the estimated cost thereof, the price and terms per acre at which perpetual water rights will be sold to settlers on the land to be reclaimed, said perpetual — 423 — rights to embrace a proportionate interest in the canal or other irrigation works, together with all the rights and franchises attached thereto.” The term “rights and franchises” as used in that section means water rights as well as all other rights, including dams, canals, ditches, laterals, etc., and. the interest which the purchaser of a water right has, not only in the irrigation works, but in the water rights as defined by that section of the statute, is a “proportionate interest.” Thus said statute contemplates that each owner of a water right has a proportionate interest in said entire irrigation works. Sec. 1617, Rev. Codes, provides that a permit to appropriate water must be obtained from the state engineer, which was done in this ease. Under the provisions of sec. 1618, the proposal and request presented by an applicant must be submitted to the state engineer for his report thereon, and under sec. 1619, if the project is approved by the state engineer, the matter is then presented to the state land board for approval, and if approved, by the provisions of see. 1621, proper application is made to the Department of the Interior for the withdrawal of the lands, and after the same are withdrawn the state may then enter into a formal contract for the construction of irrigation works with the party making the application. The proposal and request provided for by sec. 1615 must contain, among other things, the following matters: (1) A list of the lands by legal subdivisions included within such project; (2) A certificate of the state engineer that application for a permit to appropriate water has been filed in his office and his report thereon; (3) A statement of the source of the water supply; (4) The location and dimensions of the proposed works; (5) The estimated cost thereof; (6) The price and terms per acre at which water rights will be sold, said rights to represent a proportionate interest in the irrigation system; (7) The name of the company proposing to build the project if incorporated; (8) The purpose of its incorporation; (9) The names and places of residence of its — 424 — directors and officers; (10) The amount of its authorized and of its paid-up capital. The report which the state engineer, under the provisions of said sec. 1618, must make, is required to cover the following points: (1) Whether or not the proposed works are feasible ; (2) Whether the proposed diversion of the public waters of the state will prove beneficial to the public interest; (3) Whether there is sufficient unappropriated water in the source of supply; (4) Whether or not a permit to appropriate water has been approved; (5) Whether the capacity of the proposed works is adequate to reclaim the land described;.(6) Whether or not the proposed cost of construction is reasonable; (7) Whether the maps filed are in diie form; (8) Whether the lands proposed to be irrigated are desert in character. The report of the state engineer, being laid before the board, together with the proposal and request of the applicant, the next step in the procedure is the action to be taken by the state land board as provided by sec. 1619. If the report of the state engineer is favorable, the board may then approve or disapprove the application. If it approves the application, it may then enter into the contract with the construction company for the construction of the irrigation works. The term of the contract for the construction of the works is limited to'five years. Under the provisions of the statute, the completing of said works is supervised by the state and ultimately the works must be turned over to the settlers, thereby providing a kind of municipal ownership. Under the rules and regulations of the land board adopted October 16, 1909, the relation of the builder of the works to the project is set forth as follows: “The company entering into this contract with the state is related to the undertaking simply as a construction company,' whose duty it will be under the provisions of the state law and the terms of the contract to build a canal under the supervision of the state, the money spent in such construction being secured by the land which the canal is designed to irrigate.” — 425 — In the ease at bar a request and proposal for the construction of irrigation works was filed by said Land & Water Company with the state land board commissioners on the 12th of October, 1900. In that proposal it was stated that the South Side canal, the one here in question, would have a length of sixty-five miles; that the first section would be ninety feet wide on the bottom, gradually narrowing to sixty feet at Rock creek; that the slopes of the sides would be one and a half to one; that.the depth of the water would be nine feet; that the grade would be one foot in five thousand, and the capacity 3,000 second-feet. It was specifically provided in this proposal that the price at which shares should be sold to purchasers of state lands should not exceed $15.50 per share, a share being the amount of water for one acre of land. Accompanying that proposal was a copy of the water right location dated October 11, 1900, for 3,000 second-feet of the waters of Snake river. This proposal and request having been referred to the state engineer for report, that officer on October 12, 1900, filed his report, a part of which is as follows: “The land which it is proposed to irrigate is situated in the north part of Cassia and the south part of Lincoln county in the Snake River Valley. “The main body, about 240,000 acres, lies on the south side of Snake River from Twin Falls westward, while a smaller body of about 31,000 acres lies on the north side of the Snake from Twin Falls eastward, being tracts of desert land which until very recently were thought to be unreclaimable. Of the total area of about 271,000 acres, 20,000 acres are state lands, 2,700 are private lands and 248,676 acres belong to the public domain. The state is asked to apply for the segregation of these public lands under the provisions of the Carey Act. Of the vacant public lands, about 153,000 acres are surveyed. “These lands are favorably situated, almost surrounding the Twin and Shoshone Falls, two of the greatest waterfalls in the world. They are of excellent quality, and when reclaimed by irrigation should be very productive. — 426 — “The water supply will be obtained from the Snake river and will be adequate for the irrigation of these lands during all seasons. I have granted a permit to the Twin Falls Land and Water Company to appropriate 3,400 second-feet of the water of Snake river for the irrigation of the lands which they ask to have segregated, together with other lands which are susceptible of irrigation from the proposed works. “The South Side canal will be about sixty-five miles in length, ninety feet on the bottom at the head, and will have a capacity of 3,000 second-feet.” It will be observed from said report that the area of the land to be irrigated on the south side of the river under the canal system involved in this ease is about 240,000 acres, and that for the irrigation of this land, as shown by the water right notice, 3,000 second-feet had been provided; or, in other words, a water supply of one-eightieth of a second-foot for each acre of land was to be taken from Snake river at the point of diversion. The capacity of the canal also, as reported by the state engineer, conforms to the water right appropriation of 3,000 second-feet of water. The report of the state engineer was accepted and the land was finally segregated. A formal contract between the state and the United States was executed July 1, 1901. Some difficulties remained to be met by the Land & Water Company, but on January 2, 1903, a formal contract between the state and the Land & Water Company was executed. The first paragraph of this contract entitled “Purpose of Contract,” provides that the Twin Falls Land & Water Company should “Sell shares or water rights in said canal system from time to time as hereinafter provided, to the persons filing upon the lands hereinafter described and to the owners of other lands not described herein but which are. susceptible of irrigation from this canal system, said shares or water rights to be sold on the terms herein provided.” A list of the Carey Act lands in said project was attached to the contract, but the “other lands” referred to therein are the state lands and private lands mentioned- in — 427 — the report of the state engineer. These lands were also shown upon the map which accompanied the contract. There was, therefore, at the time of making said proposal and at the time of the execution of said contract between the state and the Land & Water Company no misunderstanding or doubt as to the amount of water to be diverted at the head-gate, or as to the amount of land to be irrigated under the South Side canal. The construction of said project was completed in the year 1909, and in the fall of that year the construction company conveyed to the Canal Company the irrigation system here in question, said Canal Company having been organized as a holding company for the owners of said water rights. Said conveyance was made after a report by the state engineer dated September 22, 1909, in which he recommended that the transfer of the system and works be made, with the understanding that the Land & Water Company turn over to the Canal Company, the new management, $7,500 in cash to make certain repairs specified and set forth; and the engineer further stated that his recommendation carried with it the approval of the system in its general condition. To recapitulate: The record shows a request and proposal presented by the Land & Water Company for the construction of said irrigation works; a favorable report by the state engineer; the approval of the report and proposal; the segregation of the lands by the United States; the making of the contract between the state and the construction company; the completion of the works and the final turning over of the canal system and water right after a favorable report by the state engineer to the defendant, the Canal Company. We have here, then, a contract made and completely executed. The conveyance of said system was accepted by the Canal Company. At the time of the transfer the construction company (The Land & Water Company) had not yet sold water rights for all of the lands under the canal system, and included in the lands not sold was a considerable portion of the school lands. The Land & Water Company thereafter continued to sell water rights from time to time. Under this — 428 — state of facts the Canal Company, which is a corporation composed of the settlers to whom the canal system had been conveyed by the Land & Water Company, on September 15, 1910, nearly a year after the completion of the canal, its acceptance by the state and its conveyance by the Land & Water Company by its proper officers, presented an application to the state land board requesting that said board pre-. vent the further sale of water rights by the Land & Water Company, which application and order of the board thereon are as follows: “To the Hon. State Land Board, Boise, Idaho: “We beg to call your attention to a section of the contract between the state of Idaho and the Twin Falls Land & Water Company made January 2d, 1903, wherein it says: “ ‘But in no case will water rights or shares be dedicated to any of the lands before mentioned or sold beyond the carrying capacity of the canal system, nor in excess of the appropriation of the water, as hereinbefore mentioned.’ “Owing to the fact that their appropriation is but 3,000 second-feet and after allowing 30 per cent for seepage and evaporation, there is left but 2,100 second-feet and that said land and water company has sold approximately 195,000 acres, we respectfully ask that no more sales of land be approved by you until after a thorough investigation has been •made by your board, and not then unless it is clearly demonstrated that there is yet water left for sale. “TWIN FALLS CANAL COMPANY, “T. WIGGLESWORTH, Pres. “G. E. HARLAN, Gen. Mgr.” “The board ordered that the Twin Falls South Side Land & Water Company be notified not to sell any more water until their water supply could be investigated by the board, at which time they would be notified. It was further ordered that the contracts entered into before this date would be approved.” On the 18th of November, 1910, the board entered an order rescinding the above order of September 15th so far as it ap — 429 — plied to the water rights sold to the state prior to the date of the order, but denied any modification as to other lands. After some further negotiations a settlement was arrived at between the Land & Water Company and the Canal Company, the substance of which was that if any further water rights were sold the' proceeds would be equally divided between the two companies. The refusal of the Canal Company to sell any further water rights and to issue any of said 42,174.51 shares of stock is based upon the facts that the appropriation for said entire project only amounts to 3,000 second-feet of water; that there are losses of thirty per cent by evaporation, seepage, etc., and that the requirement of the contract is for the delivery of one-eightieth of a second-foot of water within a half-mile of each 160 acre tract, and for that reason the water right has been exhausted by the sale of 197,821.74 shares of water rights in said system, as the appropriation amounts only to 3,000 second-feet for 240,000 acres of land, or one-eightieth of a second-foot for each acre of said land at the point of diversion from said river. In water appropriations and water permits the statute requires a statement of the amount of water to be appropriated at the point of diversion (sec. 3249, Rev. Codes). In Stickney v. Hanraham, 7 Ida. 424, 63 Pac. 189, the court said: “Under the law, water of all claimants must be measured at the point where such water is diverted from the natural channel of the stream from which it is taken. This is a matter of necessity demanded by public policy. It is the policy of the law to prevent the wasting of water.” It was certainly well known that there would be considerable waste of water from the point of diversion in carrying much of the water through hundreds of miles of canals and laterals to the place of use. On the other hand, by using what is known as the “coulee” system, much of the waste water of this entire system may be utilized over and over again, thereby largely offsetting canal losses by evaporation and seepage. Coulees are small, rocky depressions or draws cutting across the Twin Falls tract, generally in the direction of Snake river. These draws or coulees in the spring are — 430 — small natural waterways and are found at a distance of three or -four miles apart extending across said tract. They serve the purpose of furnishing drainage and also affording an opportunity of utilizing the drainage and waste water a second and' often a third time. During the process of irrigation the water runs off the irrigated lands situated on the ridges between the coulees and every two or three miles along their course there are dams placed across such coulees to take up the waste water and turn it into ditches for use again. The coulees are not used for waste water alone, but are used as main ditches as well. Being natural waterways, there is very little, if any, seepage or loss. They do not have ditch banks and can be easily utilized for the flow of water in the wintertime for the purpose of watering stock; so in many ways they are a very desirable and useful part of that canal system, particularly as there is little loss from seepage and because they afford an opportunity of utilizing the water over and over again. It has been estimated that by the use of this coulee system about twenty per cent of the water turned out by the canal upon the land is used a second or even a third time. This would give the same result as if the -main canal had twenty per cent additional water as well as capacity, and it is contended that twenty per cent of water thus saved, and the saving on account of there being no necessity for irrigating the public highways and other lands on which no crops are produced within said project, would nearly, if not entirely, offset the thirty per cent loss referred to. If that contention be correct, the said system would have water sufficient to give a continuous flow of one-eightieth of a seeond-foot of water to every acre of land within said project that is used for raising crops, and the engineers in designing the said irrigation system may have used this method of figuring as an offset to the seepage and evaporation losses. However, it is contended by counsel for the Canal Company that the contract with the Hand & Water Company was for the -delivery of one-eightieth of a second-foot of water, continuous flow, for each acre of land within a half mile of each — 431 — quarter section of land, and we will now consider the provisions of said contract and ascertain whether that contention is correct. In order to fully understand said contract, we must' take into consideration the facts and conditions and circumstances which confronted the parties at the time it was made, the general plan and design of said irrigation works and all of the stipulations of the contract. This court held in Burke Land etc. v. Wells, Fargo & Co., 7 Ida. 42, 60 Pac. 87, that in the construction of a written contract, if there is room for doubt as to its true meaning, the facts and circumstances out of which such contract arose should-be considered and the contract construed in the light of such facts and circumstances. It is the universal rule in the construction of contracts that the intention of the parties to the contract should be ascertained, if possible, and given effect. It certainly was clearly understood that said project contained 240,000 acres of land; that the appropriation of water was 3,000 second-feet at the point of diversion on Snake river, giving a constant flow of only one-eightieth of a second-foot per acre at said point of diversion. The contract was evidently made with the full knowledge that all of said 240,000 acres was not at the exact point of diversion. The Land & Water Company agreed, among other things, in paragraph 1 of said contract “to sell shares or water rights in said canal system from timé to time as hereinafter provided, to the persons filing upon the lands hereafter described, and to the owners of- other lands not described herein, but which are susceptible of irrigation from this canal system, said shares or water rights to be sold on the terms herein provided, and to transfer the ownership, management and control of said system to said purchasers of shares or water rights as hereinafter provided.” Paragraph 2 of said contract contains general specifications for the construction of said system, and contains, among other things, the following provisions: “The main canals of this system shall have a carrying capacity when completed sufficient to deliver simultaneously one socond-foot of water to every eighty acres of land described — 432 — in this contract, together with all other lands susceptible of irrigation from said canals as nearly as the same can be estimated and agreed upon between the state engineer and the engineers of the second party.” By the sixth paragraph of said contract the state agrees as follows: “ .... that it will not approve any application for or filing on said lands until the person or persons so applying shall furnish to the said board a true copy of the contract entered into with the said party of the second part for the purchase of sufficient shares or water rights in said irrigation works,” and the Land &■ Water Company agrees “that to the extent of the capacity of the irrigation works, and as rapidly as lands are opened for entry and settlement, it will sell, or contract to sell, water rights or shares for lands to be filed upon to qualified entrymen or purchasers, without preference or partiality other than that based upon priority of application.” The right to enter Carey Act land is governed by the provisions of sec. 1626, Bev. Codes, and in paragraph 7 of said •contract the state “agrees to sell the lands herein described to such persons as are or will be by law entitled to file upon the same for the sum of fifty cents per acre.” By the provisions of paragraph 8 of said contract, the Land & Water Co. agrees that “it will sell or cause to be sold to the person or persons filing upon any of the lands herein described or to the owner of othek lands not described herein, but susceptible of irrigation from its said canal system .... a water right or share in the said canal for each and every acre owned, filed upon or purchased from the state. Bach of said shares or water rights shall represent a carrying capacity in said canal sufficient to deliver water at the rate of one-eightieth of one second-foot per acre, and each share or water right sold shall also represent a proportionate interest in the said canal together with all rights and franchises based upon the number of shares finally sold in the said canals.” This paragraph of the contract is a specific promise to sell water for state lands. — 433 — The carrying capacity of the canal is 3,000 second-feet. The appropriation was for 3,000 second-feet. The plan of the operation of said irrigation system after its completion also provided for the formation of a corporation to take over the title and ownership of the irrigation system, the water rights being represented by shares of that corporation. That corporation, the Canal Company, was formed and the canal system turned over to it, as above stated. It is provided in said contract after the canal shall be turned over to the operating company, as follows: “ .... from and after the date of the formation of said corporation, the party of the second part shall sell to purchasers or owners of lands under the canal system, shares 'of stock of said corporation upon the same terms in all respects as hereinbefore provided for the sale of water rights or shares prior to the formation of such corporation.” In paragraph 9 of said contract it was provided that the certificates of stock in the Canal Company should contain the following provisions: “Shall each upon being issued to the purchaser or holder of land under the canal system be made to indicate and define in the contract or certificate, as the case may be, the amount of water, to wit: one-eightieth of. a second-foot, allotted to each acre represented thereby and a carrying capacity of the canal sufficient therefor; the water to be delivered from the canal during each and every irrigation season, said amount to be measured at or within one-half mile of the place of intended use in such quantities and at such times as the condition of the soil, crops and weather may determine, but according 'to such rules and regulations based upon a system of distribution of water to the irrigators in turn and by rotation as will best protect and serve the interests of all the users of water from this canal system. It is agreed that said system of distribution by rotation shall be devised by the said party of the second part and used by it during the period while it retains the management of said system, and that it shall meet the approval of the state engineer.” — 434 — By said paragraph one-eightieth of a second-foot of water is allowed to each acre, bnt that allotment under the appropriation of water would not be sufficient for a continuous flow unless measured at the point of diversion of said canal at Snake river, as it requires 3,000 second-feet of water to give one-eightieth of a second-foot to each of 240,000 acres of land. But it is clear from the whole contract that one-eightieth of a second-foot of water, or five-eighths of an inch, constant flow, could not be delivered within a half-mile of each 160 acre tract, for after deducting thirty per cent for waste of the 3,000 second-feet, there would be but 2,100 second-feet remaining to be distributed to 240,000 acres of land, leaving out of consideration the waste water utilized by said coulee system. Thus it is made to appear there would remain after said loss but seven-sixteenths of an inch per acre constant flow to be measured within a half-mile of each one hundred and sixty acre tract. The provisions to be contained in said certificates of stock, above quoted, if taken alone, may be a little obscure; but taking the whole contract together, it does not provide for a constant or continuous flow to each eighty acre tract of a cubic foot of water per second of time, for, as above shown; said water right and system were not sufficient to deliver a constant flow of that amount of water after deducting the loss of water occasioned by seepage and evaporation. The latter part of the last-quoted paragraph of said contract does not contemplate that a constant flow of a second-foot of water should be measured to each eighty acre tract within one-half mile of such land, but provides that it shall be measured “at or within a half-mile of the place of intended use in such quantities and at such times as the condition of the soil, crops and weather may determine, but according to such rules and regulations based upon a system of distribution of water to the irrigators in turn and by rotation as will best protect and serve the interests of all the users of water from this canal system.” Said provision clearly contemplates that the irrigators shall use said water “in turn” or “by rotation,” if that method will best protect and serve the interest — 435 — of all users of water from that system. It clearly appears that it would be impossible, under said appropriation and the canal system, to deliver continuously to each eighty acre tract within said project one second-foot of water per second of time, and the only way that each shareholder can have five-eighths of an inch of water for each acre of his land is “in turn” or “by rotation,” as above shown. It was agreed in said ninth paragraph of the contract “that said system of distribution by rotation shall be devised by the said party of the second part and used by it during the period while it retains the management of said system.” Thus it clearly appears that the distribution of water from said system was intended, if necessity required it, to be by “rotation” upon a plan to be devised by the Land & Water Company, which right it has transferred to the defendant, the Canal Company. By the tenth paragraph of said contract the Land & Water Company agreed as follows: “ To construct and until it shall convey and turn over the title and possession to the Twin Falls Canal Company, Limited, to operate said canal and main laterals so that water conducted through the same may be delivered at a point not exceeding one-half mile from any legal subdivision of 160 acres of land herein described, filed upon, owned or occupied as aforesaid and to be irrigated or reclaimed by the water conducted through said canals and main laterals.....It is hereby agreed that every purchaser of shares in said canal or holder of stock in said Twin Falls Canal Company, Limited, shall be entitled to have delivered for the irrigation of his land, its full amount of water as herein provided.” This stipulation cannot be complied with except by “rotation.” Paragraph 11 of the contract provided for an increase in the capacity of the canal and for an enlargement of the system under certain circumstances, also for the mortgaging of the system. Paragraph 12 provides for the maintenance of the system and the payment of any deficiency in maintenance by the construction company. Paragraph 13 provided for the completion of the work in five years and for a suitable — 436 — rate of progress during that period of time. Paragraph 14 provided for forfeiture in case of noncompletion of the work. Under the provisions of said contract, counsel for the Canal Company contend that water rights have been sold to the full carrying capacity of said system, and to sell any further water rights would be in violation of the provisions of paragraphs 6 and 8 of said contract. The provisions of said contract frequently refer to the canal capacity and provide that it must be sufficient to deliver to the users at least a cubic foot of water per second of time for each eighty acre tract, but do not provide for a continuous flow of that amount of water. The canal, under the terms of said contract, was' to have a carrying capacity at its head of 3,000 second-feet. It is not disputed that it has such capacity. The Canal Company now contends or claims that a larger canal should have been provided for, but as the canal is of the capacity provided for by the contract, a greater capacity cannot be insisted upon under the terms of the contract, and it is conceded that the present system is of sufficient capacity for the proper distribution of the 3,000 second-feet of water that was located and appropriated at the head of the canal for the reclamation of the land within said project. The engineer in designing said irrigation system must have taken into consideration the condition of the soil and climate, the amount of water necessary for the proper irrigation of all of said land included within said project required to be irrigated, and also the fact that there would be many thousands of acres in said project required for roads, highways, railroads, barnyards, stackyards, buildings, high points and rocky untillable land, land along fences, and other lands on which crops are not raised, which it is estimated would total about 25,000 acres. These facts were no doubt considered as well as the probable loss from evaporation, seepage, etc., in conducting the water to the place of intended use, and it was concluded that 3,000 second-feet of water at the point of diversion on said canal was sufficient for that purpose. The Land Department of the United States must have considered those facts before it came to the conclusion that said amount of water was suffi — 437 — cient to reclaim said land. If it had not come to that conclusion, it would not have segregated the land included in said project on the showing made by the state. The state land board must have concluded from those facts that the water appropriated was sufficient for the reclamation of said land or it would not have entered into said contract for the construction of said irrigation system. And further, there is nothing in the record to show that said amount of water is not amply sufficient to properly irrigate all of said land if used in- turn by the owners of the land or under a proper system of rotation. It is a well-recognized fact that in order to properly irrigate land, the irrigator must have a proper stream or head of water, and the question arises as to how much water is necessary to furnish a sufficient head or stream for that purpose. I think it will not be disputed that an inch to the acre, if measured out in a constantly flowing stream, is not sufficient for the proper irrigation of a small tract; so for the proper irrigation of small tracts of land there is needed a head or stream of water of sufficient size to be efficiently handled and flowed over the land. It is more convenient and economical to use water in as large heads or volumes as can be conveniently used by the irrigator. Much of the land in the Snake river valley is of the character or kind that unless you have a sufficient head of water to rush it over the land, the sandy and gravelly soil will absorb all of it and not permit it to pass on.over the land. Hence to successfully irrigate land, a sufficient head of water is required to flow entirely over the land. A second-foot of water, which consists of about fifty miner’s inches, is as small a stream or head of water as can be efficiently used in the irrigation of the lands in the Snake river valley, and it would seem' that that matter was considered when it was provided by said contract that a second-foot, or fifty miner’s inches, of water was sufficient for an eighty acre farm. The eighty acre farm was apparently the unit of measurement used in designing said irrigation system, and as appears from said contract, the contracting parties had in mind the rotation system, rather — 438 — than a continuous flow of water. Take, for instance, the forty acre farm, of which there are many within said project. The water right connected therewith would consist of one-half of a second-foot of water or twenty-five inches, and actual experience has demonstrated, and the history of irrh gation in the state shows, that forty acres cannot be successfully irrigated for the purpose of raising grain and hay crops with a constant flow of twenty-five inches of water, most of the soil being such that twenty-five inches is not a sufficient head to efficiently irrigate forty acres and carry the water entirely over the tract. Under the rotation system, if two farmers, each owning a forty acre tract, combine their water and each use it, say, ten days at a time, the eighty acres could be irrigated in less time and more efficiently than if each used twenty-five inches separately and continuously. On much of the land within the state but very little could be accomplished in irrigation with one-half of a second-foot or a twenty-five inch flow of water. The defense calls special attention to a part of paragraph eight of the contract, which is as follows: “But in no case will water rights or shares be dedicated to any of the lands aforementioned or sold beyond the carrying capacity of the canal system, nor in excess of the appropriation of the water as hereinbefore mentioned,” and contend that that provision prohibits the sale of water beyond the carrying capacity of the canal system or in excess of the appropriation of water; also that excessive water rights have already been sold because of the loss in the canal system of thirty per cent by seepage and evaporatipn, and that the water users have a right to one-eightieth of a second-foot per acre, continuous flow, to be measured at a point within a half-mile of each 160 acre tract, and that on account of this loss in the canal each water user cannot receive a constant flow of one-eightieth of a second-foot per acre. That provision of the contract prohibits water rights or shares to be dedicated to any of the lands included within said project or sold for any lands beyond the carrying capacity of the ditch, and also in excess of the appropriation of said 3,000 second-feet of water. It prohibits — 439 — the sale of more than one-eightieth of a seeond-foot per acre to any of said lands, and also prohibits the sale of any part of said 3,000 seeond-feet of water for the irrigation of lands outside of said project, as said contract clearly contemplates that said appropriation of water shall be devoted exclusively to the irrigation of lands within said project. The contention that it is impossible to furnish each settler continuously with one-eightieth of a seeond-foot for each acre is correct. Said contract provides for a ditch capacity of one-eightieth of a seeond-foot per acre and it also provides for a system of rotation instead of a continuous flow, and it does not appear that under a proper system of rotation there would be any difficulty in delivering one-eightieth of a second-foot per acre, or. amply sufficient water for the proper irrigation of such land. Counsel contends that rotation means trouble, expense and annoyance, and ought not to be forced without necessity, and that the rotation system is merely permissive, not obligatory. Under the provisions of paragraph 9 of said contract the water to be delivered from the canal during each season is required to be delivered in such quantities and “at such times as the condition of the soil, crops and weather may determine, but according to such rules and regulations based upon a system of distribution of water to the irrigators in turn and by rotation as will best protect and serve the interests of all the -users of the water from this canal system.” Said provisions are obligatory. A continuous flow is not obligatory. The Canal Company does not deny that under a proper system of rotation there would be ample water to properly irrigate all of said land, but contend that each user is entitled to a continuous flow. There is nothing in that contention. Under the contract the interest of the settler is a proportionate interest in the entire canal system and the water appropriation. If there is a loss, he must stand his proportionate part. Three thousand second-feet of water were appropriated for 240,000 acres of land, or one-eightieth of a second-foot per acre at the point of diversion. The contract required the canal to have in all of its parts a capacity of — 440 — one-eightieth of a second-foot per acre. The water was required to be delivered at a point within one-half mile of each 160 acre tract during the irrigating season; and the amount and manner of delivery was to be in such quantities and at such times as the condition of the soil, crops and weather may determine, and according to rules and regulations based upon a system of distribution in turn and by “rotation” such as would best protect and serve the interests of the users. The maximum amount of water provided for is one-eightieth of a second-foot per acre. The user’s right to water up to the maximum of five-eighths of an inch per acre depends upon his actual necessity for the production of his crops, and the only method under the contract by which he could receive that amount would be by the rotation system. It is suggested by counsel that the settler should be given substance under this contract and not shadow; water and not carrying capacity in the canal system. The settler is entitled to receive just what the contract entitles him to receive, — nothing more, nothing less. At the very outset, 3,000 second-feet of water, measured at the point of diversion, was appropriated for the irrigation of said 240,000 acres of land. If in the delivery of said water there is a loss of thirty per cent, the settler must bear his proportionate share of the loss, and if he insists on a continuous flow, he would only be entitled to seven-sixteenths of an inch per acre, as a loss of thirty per cent would reduce five-eighths of an inch to seven-sixteenths, save what is added by the collection of waste water under the coulee system. Under the rotation system, however, he no doubt would receive at least five-eighths of an inch per acre, and as we view it, could receive one inch per acre and would be able to irrigate his land in much less time with that amount than with five-eighths of an inch. While the rotation system may, as suggested by counsel for defendant, mean “trouble, expense and annoyance,” it nevertheless has its advantages and increases the duty of water. This court said in Helphery v. Perrault, 12 Ida. 451, 86 Pac. 417: — 441 — “Rotation in irrigation undoubtedly tends to conserve the waters of the state and to increase and enlarge their duty and service, and is, consequently, a practice that deserves encouragement in so far as it may be done within legal bounds.” The economical use of water in irrigation is of great importance to the state, and under the provisions of section 3293, Rev. Codes, the users of water are prohibited from using more than good husbandry requires for the crop or crops he cultivates. The duty of careful and economical- use of water is one that by statute as well as public policy is imposed upon every water user, and under the various Carey Act projects in this state provisions have been made for the conservation and best use of the water supply and to make it perform as high a duty as possible, and if the rotation system more nearly accomplishes that purpose, it should be adopted. In “Water Rights in Western States,” by Wiel, p.' 268, the author says: “The practice of rotation is becoming more frequent, by which several appropriators pool their rights and use the whole for periods of time, and this often accomplishes a more economical use of the water.” (See, also, Mills’ Irrigation Manual, sec. 87.) The use of water under the rotation system is approved by high engineering authorities. Buckley in his work entitled “The Irrigation Works of India,” p. 282, says: “The most wasteful system of irrigation possible is that under which all branch canals, distributaries, and village channels are in use continuously and the available supply is slowly dribbling into the fields. [This is the system insisted on by the defendant Canal Company.] For not only is the actual loss of water greater, but under this system there is also this further disadvantage, that the velocities in all the distributaries and minor channels are reduced and the silt in the water, which at these points of the system is nearly always advantageous to the fields, is largely deposited in the channels, and not carried on to the cultivated ground. The system of irrigation by rotation or by tatils, as it is called in Upper India, is of great advantage, not only in — 442 — checking the loss of water in the channel, but in teaching economical irrigation to the cultivators and in insuring an equitable division of the supply among the people.” Sir Hanbury Brown, in his work on Irrigation, pp. 214, 216 and 217, says: “When the supply of water is not in excess of the demand, an economical and just distribution depends more on correct methods of administration than on the perfection and completeness of the regulating works. All countries that have practiced irrigation on a large scale have found it necessary to adopt some system of ‘rotation’ whereby water is alternately supplied and withheld for fixed periods..... “The advantages of such a system are many. By concentrating the available supply in half or a third, or a less fraction of the canals, and giving the whole of it to the section whose turn it is to take water, the irrigation is made easy in consequence of the higher water levels produced in the canals. At the same time, in the other sections which are not receiving water, the danger of the canals causing water-logging of the soil is removed and they are either empty or .flowing at a low level. The crops require water at certain intervals, and not continuously. It is better for them, as soon as they have received a watering, that the water supply should be shut off from their neighborhood, so that all excess of water over and above that used up or absorbed, may be got rid of, and not be allowed to stagnate. Irrigation by rotation, moreover, is a system that conduces to economy of water. For the water is delivered just where and when it is wanted for irrigation, and is, therefore, not allowed to run to waste. The loss from evaporation and absorption is less, as the water is spread out over a less extent of canals.” (See, also, Wilson’s Irrigation Engineering, sec. 67.) The rotation system is recognized by the leading writers on irrigation and irrigation engineering as a most efficient and desirable method and as producing the highest duty of water of any method in use. Said contract provides for a ditch capacity sufficient to furnish to each land owner at least one-eightieth of a second443 foot of water for each acre of land. That amount of ditch capacity may be utilized by adopting the rotation system, but otherwise it could not be utilized, for after deducting a loss of thirty per cent from the 3,000 second-feet appropriated, there would not be sufficient water to fill the canal and its laterals to its full capacity at any considerable distance below its head; but by the rotation system, the full capacity of the ditches may be used by those who are using the laterals under said system. Said contract provides for rotation in the use of water, and this court held in Helphery v. Perrault, 12 Ida. 451, 86 Pac. 417, that where several parties agree among themselves to unite in interest and jointly apply as one applicant for water for irrigation purposes to use the same in rotation, that such a contract was legal and would be enforced by the courts although there was no statute providing for use by rotation. If each user cannot receive sufficient water for the irrigation of his land by a constant flow of his proportionate share of the water in said canal, but can receive sufficient by rotation, that system should be used. Recurring again to the rotation system, which is provided for by said contract, and conceding that there is a loss of thirty per cent by seepage and evaporation, and conceding that the coulee system referred to does not increase the duty of water, by the rotation system each land owner could receive more than his full quota of water more than half of the time during the irrigating season. To illustrate: Conceding that the loss is thirty per cent, there would remain in said canal 2,100 second-feet of water available for distribution among the land owners which would be sufficient to furnish each land owner ten days out of twenty with at least one inch of water to the acre upon the lands on which crops could be grown. However, be that as it may, it does not appear from the record but that there is ample water for the irrigation of every acre of said land; and even if there is not, under the provisions of said contract, each land owner owns a proportionate part of said irrigation system and said water, and in times of shortage he is only entitled to receive his proportionate share of the water. The water supply for — 444 — said system has been decided by the state authorities to be sufficient to amply irrigate all of the land within said project, and there is nothing in the record that contravenes that view. While it is made to appear that the settler cannot receive a constant flow of five-eighths of an inch of water or one-eightieth of a second-foot per acre, it is not made to appear that by a proper method of distributing the water in turn or by “rotation” that said 3,000 second-feet of water appropriated for said project is not amply sufficient to reclaim all of the land within said tract. And further, under said contract, the settler owns a proportionate share of said canal system and the water appropriated for the irrigation of the land within said project. (March 15, 1912.) [121 Pac. 1051.] For the reasons above given, the writ of mandate prayed for must issue, directing the Canal Company to sell and transfer to the plaintiff the shares of water stock applied for, for the irrigation of the land purchased from the state, and to furnish him water therefor. Costs of this proceeding are awarded to the plaintiffs. Ailshie, Presiding Justice, concurs. Petition for rehearing granted.