Public Utilities Commission v. Natatorium Co.

BUDGE, J. This is an appeal from an order of the Public Utilities Commission, in which the commission held that the Natatorium Company was a public utility, as to its sale of the use of hot water to certain inhabitants of Boise City for heating and domestic purposes. From the record it appears that in 1890, EL B. Eastman, Timothy Regan, W. H. Ridenbaugh and J. W. Cunningham acquired an option to purchase the SE. % of the SE. 14 of the SW.14 of section 12, T. 3 N., R. 2 E., B. M., in Ada county, adjoining Boise City on the east, from Robert Wilson, and, due to certain surface indications, began prospecting beneath the surface of said land to secure a flow of hot water. They drilled two wells about 400 feet deep and secured a flow of hot water, enough to fill two six-inch casings. When this land was purchased, on May 28, 1890, by the above-named individuals, it was deeded by Robert Wilson and wife to Eastman and Ridenbaugh. On April 27, 1891, Eastman and Ridenbaugh and their wives transferred this same property to the Boise Artesian Hot & Cold Water Company. On November 24 and 25, 1894, this company caused to be posted notices of location of a water right, as is more fully set out in the dissenting opinion written by Justice Dunn. This hot water was first diverted to the Natatorium, a bathing resort, and used' for bathing and heating purposes, some time prior to May, 1892. The first pipe laid from the hot-water wells to the Natatorium consisted of two sizes, a ten-inch pipe down to a tree in front of the Natatorium, where a six-inch pipe and a %-inch pipe were taken off to serve that institution with hot water. — 298 — The present Natatorium Company was incorporated on September 15, 1917. While the evidence is not the most satisfactory touching the amount of the flow of the wells used by the Natatorium, witness Drake testified that from the time the hot-water wells were completed in 1891 until the supply of hot water was increased approximately fifty per cent by pumping, about the year 1912, a six-inch main would carry all the hot water. This witness also further testified that it had been calculated that the Natatorium used eighty per cent of the flow of the hot-water wells. In 1891, the hot water was piped to the home of one Moore and Eastman. About 1891, 1892 or 1893, a portion of this hot water was conveyed through mains, some distance down what is now known as Warm Springs Avenue and Idaho Street, to the Boise City National Bank Building. On December 1, 1906, a sale of the Natatorium was made to the Boise Railroad Company, and on January 2, 1907, a correction deed was made to this same property. On September 17, 1917, one Miller, trustee, at a master’s sale, purchased the Natatorium. The Natatorium was subsequently repurchased by the appellant and is now owned by it. About the' year 1912, in order to increase the flow of natural hot water from these springs, air pumps were installed. Later on, these proving unsatisfactory, electric pumps were installed and the natural flow of hot water increased approximately fifty per cent. Gradually since the delivery of the first hot water to Moore and Eastman, residences in the vicinity of where the mains of the hot-water company now lie have been supplied with a portion of this hot water, for ■ heating and domestic use, until there are now a total of 276 users, 173 of whom were heating customers, 81 summer and 22 winter domestic users. It may be reasonably inferred that the maximum supply of hot water has been reached. These users of water were — 299 — not solicited, and there is no written contract fixing the tenure of their use. The arrangement would seem to be that the customers using the water pay for it annually in advance. Ordinarily there have been no changes made in the right to the use of this hot water by those who have used it. It has never been considered, so far as we have been able to ascertain from the record, as-an appurtenance :to the land or premises where used, or conveyed as such to subsequent purchasers of the premises where used. The quantity of hot water delivered and the method of 'its use has at all times been controlled by the appellant. It is not Contended that the use of hot water by the Natatorium is such a public use as brings the appellant corporation under the jurisdiction of the Public Utilities Commission. The question, therefore, for decision is whether the hot water distributed by the appellant to the various users thereof, exclusive of the Natatorium, has been dedicated to a public use. If this question is to be answered in the affirmative, the appellant company is a public utility and subject to the jurisdiction of the Public Utilities Commission. If these waters are public waters, the sale, rental or-distribution of the same would be a public use and subject to the regulation and control of the state in the manner prescribed by law, and the use of the same would be controlled under the provisions of art. 15, sees. 1, 2 and 3 of the constitution. If these waters are private waters, in the absence of an unequivocal intention to and dedication thereof to a public use by the appellant, the appellant would not be a public service corporation, and therefore subject to regulation as a public utility. Such dedication is never presumed. (Niles v. City of Los Angeles, 125 Cal. 572, 58 Pac. 190.) In my opinion the waters of these hot wells are not public waters, and were not when located by the original locators. Not being public waters, they were not subject to appropriation, except by the owners of the fee. — 300 — The evidence conclusively shows that the ground where these wells are now located was boggy or swampy, and at most the waters at that time were only seepage or percolating waters rising through the intervening soil. In my opinion there is sufficient evidence to justify the conclusion that no natural springs, streams and subterranean streams are cut off or interfered with by reason of the sinking of the wells and the gathering of the water at the depth found, into the pipes, or by reason of the use of pumps for the purpose of increasing the flow. This being percolating or seepage water, merely, rising out of the earth, without an outlet through any definite channel, and no part of any natural spring or stream, or • any subterranean stream or flow, was not subject to appropriation, except by the owner of the fee. It was the property of the owner of the land upon which it stood, and under .the well-recognized doctrine that percolating water existing in the earth belongs to the soil as a part of the realty, it may be used and controlled to the same extent by the owner of the land as the land itself. (Bruening v. Dorr, 23 Colo. 195, 47 Pac. 290, at 292, 35 L. R. A. 640.) The owner of the fee was the owner of the corpus of the water. The right to appropriate subterranean waters is not involved in this ease, as disclosed by the record, and the cases cited in support of the right to appropriate subterranean waters have no application. The constitutional provisions, namely, art. 15, secs. 1, 2 and 3, do not declare that all waters of the state are public waters and subject to appropriation. These waters were not appropriated at any time for strictly private use, but were diverted for use in the Natatorium, for the purpose of heating the building and to temper the water for bathing purposes. C. S., see. 5556, provides that all waters of the state when flowing in their natural channels, including the waters of all natural springs and lakes within the boundaries of the state are declared to be the property of the state, whose — 301 — duty it shall be to supervise their appropriation and allotment to those diverting the same therefrom for any beneficial purpose, and the right to the use of any of the waters of the state for useful or beneficial purposes is recognized and confirmed. This statute contains a limitation, in that it declares that the waters of the state consist of such waters only as flow in their natural channels, including the waters of all natural springs and lakes. This does not include percolating waters. C. S., see. 5572, is as follows: “The department of reclamation is hereby prohibited from issuing or granting permits to divert or appropriate the waters of any lake not exceeding five acres in surface area at high water mark, pond, pool, or spring in this state, which is located or situated wholly or entirely upon the lands of a person or corporation, except to the person or corporation owning said land, or with his or its written permission, executed and acknowledged as required for the conveyance of real estate.’ ’ This is a statutory recognition of the private ownership of any lake not exceeding five acres in surface area at high-water mark, and any pohd, pool or spring in this state, located wholly or entirely upon the lands of the owner of the fee, and expressly denies to the state the right to control the same, and denies the right of appropriation without the consent of the owner of the fee, and gives to the owner of the fee the exclusive right of appropriation or use. And this ownership in percolating waters cannot be taken from the owner of the fee against his will and without his consent, without compensation and in the manner as provided by law. I am not willing to subscribe to the theory that all waters within the borders of the state, which are found where nature places them, are public waters of the state, the property of the state and solely under the control of the state wherever found. To carry this doctrine to its logical conclusion, the owner of the fee who sinks a well upon his — 302 — premises and discovers water has but a qualified ownership in the soil and a limited right only to the use of the water found therein. Any person may condemn a right of way across the owner of the fee’s premises to the well and divert the waters of the well not then' being used by the owner of the fee, upon the theory that the water placed there by nature is the property of the state and subject to appropriation, for which the owner of the fee is entitled to no compensation except for the right of way. To hold to such theory is going beyond a safe and reasonable interpretation of the constitutional provisions heretofore cited and falls within no reasonable interpretation- of the right to appropriate public waters of the state as fixed by the statutes of this state. The ease of Le Quime v. Chambers, 15 Ida. 405, 98 Pac. 415, 21 L. R. A., N. S., 76, does not support this theory. That ease held in effect that percolating waters upon the public domain, when gathered, are subject to appropriation under our statute, and as such will be recognized and protected by the courts, but as will be observed in that opinion, that would not be the case if the land on which such waters were located had already been patented. An entirely different question would then arise, that is to say, had the land been patented prior to the diversion of such waters by the locator no right could have been acquired or no appropriation made of such waters by any person not the owner of the fee, without the latter’s consent. I think the correct principle of law is announced in the case of King v. Chamberlin, 20 Ida. 504, 118 Pac. 1099, where the court inter alia says: “In the first place, a land owner may use the surface of his land for any lawful purpose without let or hindrance from anyone. There is nothing unlawful in collecting and impounding surface and waste water; if he sees fit to turn his farm into a lake, he may lawfully do so, so long as he does not injure someone else in the process. Here the question of cutting off the flow of a natural stream or in any mánner obstructing a — 303 — watercourse or stream of water is in no manner involved. The waters collected by respondents were wholly surface and flood waters. They built their dams and dikes so as to collect the water in the winter and springtime, and thus hold it on their lands throughout the season.” In the instant case the water was collected beneath the surface of the soil and did not obstruct or interfere with any. watercourse upon the surface or beneath the soil. Whether the waters are collected on the surface or beneath the soil, the principle involved is the same, and further on in the opinion this court says: “This it is as lawful for them to do as it would have been to sink a well on their premises and collect therein either surface water or the waters percolating through the ground. .... The constitutional right to divert and appropriate water does not extend to private water..... “See. 3, art. 15 of the constitution, is dealing with the water of a natural stream and provides, among other things, as follows: ‘The right to divert and appropriate the unappropriated waters of any natural stream to beneficial uses shall never be denied,’ etc. See. 3253 of the Rev. Codes, which provides for making applications to the state engineer for permits to appropriate water, has reference to ‘public waters’ and ‘the waters of any natural stream, spring or seepage waters or lakes, or other public waters.’ Neither the statute nor the constitution ever contemplated authorizing one man to appropriate and divert the property of another. Both the constitution and statute were dealing with the public, unappropriated waters of the state as distinguished from private property. The entire legislation of this state, as well as the repeated decisions of this court, has been along the line of encouraging economy in the use of water and collecting and impounding the same. If a man collect and impound surface and flood waters from his own land before they reach any natural stream or channel and hold the same on his own land and premises, the fact that he may not use it for irrigation or any other commer — 304 — eial purpose does not render it any less his property or authorize anyone else to invade his property or appropriate and divert the same.” And in support of this principle, this court cites the base of Metcalf v. Nelson, 8 S. D. 87, 59 Am. St. 746, 65 N. W. 911, where that court had under consideration the right of a land owner to recover damages from one who entered upon his premises and diverted and carried away a large quantity of water from a spring located on his land. The court in passing upon that question said: “As the hidden water in the plaintiff’s soil belonged to him as a part of it, he might, by artificial means, separate it from the soil, and it would still belong to him. He might sink a well, into. which such water would work its way, and the accumulation in the well would still be his, and subject to his proprietary control. (Davis v. Spaulding, 157 Mass. 431, 32 N. E. 650, 19 L. R. A. 1021.) If the water which fills this spring is not subject to the law of ruuning streams, but to that of percolating water, did the plaintiff lose his ownership of it when it appeared upon the surface? If a cloud had burst on plaintiff’s land, and filled a cavity thereon with rain, it would, while so confined, belong to plaintiff, and we are unable to see why or how the question of ownership can be made to depend upon which way the water comes from. Suppose this percolating water appeared at the surface only at the point of the spring, and at once sunk away again into the surrounding soil, resuming its character of wandering, seeping water, would the plaintiff’s proprietary rights.come and go with the appearance and disappearance of the water? It must be remembered that we are not dealing- with a running stream, or with riparian rights, but simply with percolating waters which have combined and struggled to the surface on plaintiff’s land. We think the plaintiff had more than the ordinary usufruct in the water of this spring, so long, at least, as it was held in the spring. He might consume or dispose of it all if he chose. He might convey it away in pipes, or carry it off in tanks. If medicinal, he might — 305 — bottle it, and sell it for the healing of the nations. It would be inconsistent with the maintenance of such right in plaintiff to allow that the defendant or any other stranger had also the right, in hostility to the plaintiff, to take and carry away water from the same spring.” While it will be conceded that in California the eases passing upon the right to appropriate percolating waters are not in harmony, in a great number of decisions the supreme court of that state has held that percolating waters cannot be appropriated under the statutes of that state. (Southern Pac. R. Co. v. Dufour, 95 Cal. 615, 618, 30 Pac. 783, 19 L. R. A. 92; Hanson v. McCue, 42 Cal. 303, 10 Am. Rep. 299; Cross v. Kitts, 69 Cal. 217, 222, 58 Am. Rep. 558, 10 Pac. 409; Painter v. Pasadena L. & W. Co., 91 Cal. 74, 82, 27 Pac. 539; Gould v. Eaton, 111 Cal. 639, 644, 52 Am. St. 201, 44 Pac. 319.) There is a clear distinction between the right to appropriate the waters of a subterranean stream and the right to appropriate percolating waters which form no part of a subterranean stream. (Trustees etc. of the Village of Delhi v. Youmans, 50 Barb. 316.) I do not wish to be understood that the right to appropriate the waters of subterranean streams does not exist in this state, as well as the right to appropriate all waters of natural springs, streams or lakes. My position is that mere percolating waters or waters gathered together in wells upon the lands of the owner of the fee are not subject to appropriation by a third party, either under the constitution or statutes of this state. Neither am I in accord with the theory that it is incumbent upon the owner of the fee to establish the fact that the percolating water which is a part and parcel of the soil is not a part of a subterranean stream or basin or an underground lake. This burden rests upon the party seeking to make the appropriation. If I understand correctly the position taken by Justice Dunn in his dissenting opinion, it is to this effect, that had the appellant in this case, after driving the wells and — 306 — gathering the water into pipes, conducted the same to the Natatorium only, for the purpose of heating the building and furnishing water for bathing purposes, this would not have constituted a public use, subject to the control of the commission, but added to that fact the further fact that the water was conducted through mains and pipes into dwelling-houses and a number of residences and business houses of the city, and thus distributed and sold, the water was thereby dedicated to a public use, and appellant became a public service corporation and subject to the control of the commission. If the waters are public waters as distinguished from private waters, the act of distribution and sale under a franchise or otherwise may have constituted such a public use. But since the waters are not public waters, but private waters, the mere fact of distribution or the receiving of compensation for the use thereof, in the absence of an unequivocal intention to dedicate to a public use, would not be such a use as would make the appellant a public service corporation. And I am in accord with the views of Chief Justice Bice upon the point, namely, that the evidence submitted to the commission' does not disclose an intentional dedication of the hot water of the appellant company to a public use. The water being private water, it was private property and could not be impressed with a public use and subjected to the jurisdiction of the commission without the consent of appellant, express or implied, for to so hold would be in effect to take its property without due process of law. The mere fact that the appellant company filed notices of location or appropriation of the hot waters, in and of itself was not such an act as would constitute it a public service corporation, whatever its notice may have contained. Nor would the fact that it was authorized by its charter to devote the hot water to a public use. The waters of the wells belonged to the appellant as much as the land upon which they wrere located. The filing of the notice of — 307 — appropriation gave them no greater right than they had theretofore enjoyed. Appellant’s every act from the date of its first distribution of hot water up until the hearing before the commission clearly showed an intention upon its part not to dedicate the hot water of these wells to a public use, but it sought in every reasonable way to avoid such dedication. Its arrangements with users were from year to year. There was no written contract or sale or lease or undertaking upon its part to furnish a continual flow. It reserved the right to furnish whom it pleased and where it pleased. It did not hold itself out to the public as being ready and willing upon demand to furnish service of its hot water without discrimination. It nowhere appears that the public was entitled to the hot water as a matter of right .and not of grace, or that the appellant held itself out as being ready and willing to serve the public. Its contracts were all private contracts between the users of the hot water and the company, and were made to a selected class of customers, and the moment that such a status arose and so long as it existed it could not be held to be a public utility. As was said in Del Mar Water, Light & Power Co. v. Eshleman, 166 Cal. 666, 140 Pac. 591, at 596: “One may acquire and hold a water supply and waterworks, and thereby distribute and sell water for domestic use and irrigation or other purposes, without engaging in public service. It may make such sales to particular persons, and in such a manner that the public would not be entitled to it. The mere fact, therefore, that a company having such powers has acquired a water supply and constructed waterworks constituting a system which it is operating for compensation does not necessarily justify the conclusion that it is engaged in public service, or that its water is dedicated to public use. The only effect of the adoption of such articles by a corporation is to give it the capacity to engage in such public service if it so desires. After having become incorporated in this manner, it has the — 308 — power to engage in sneh service in the same sense that an individual has power to engage in such service. It may or may not do so, and until it does, it cannot be said to be subject to the jurisdiction of the Railroad Commission.” See, also, Thayer v. California Development Co., 164 Cal. 119, 128 Pac. 21; Allen v. Railroad Com., 179 Cal. 68, 8 A. L. R. 249, 175 Pac. 466; Stoehr v. The Natatorium Co., 34 Ida. 217, 200 Pac. 132; Story v. Richardson, 186 Cal. 162, 198 Pac. 1057, at 1059; Newell v. Redondo Water Co., 55 Cal. App. 86, 202 Pac. 914; Marin Water & Power Co. v. Town of Sausalito, 168 Cal. 587, 143 Pac. 767. Moreover, as is stated in Wyman on Public Service Corporations, vol. 1, sec. 200, pp. 167, 168: “Even one who has acquired a virtual monopoly is not forced into.public service against his will; it is only when he has held himself out in some way as ready to serve that he is bound thereafter to deal with all indiscriminately.” In my opinion the evidence in this case did not warrant the commission in reaching the conclusion that the appellant, either expressly or impliedly, dedicated to a public use the hot water owned by it, and failing to do this it is not a public service corporation, subject to the jurisdiction of the commission, and the commission erred in so holding. The order appealed from should be reversed, and it is so ordered. Costs are awarded to appellant. Lee, ;J., concurs.