Water Supply & Storage Co. v. Tenney

Mr. Justice Campbell delivered the opinion of the court. Among the errors assigned is one that the court below erred in sustaining the defendant’s motion to strike out the second reply to the fourth amended defense of the answer. Interesting as the question of pleading sought to be raised may be, inasmuch as the plaintiff was permitted, without objection from the defendants, to introduce in evidence, according to plaintiff’s own admission, the very matters attempted to be set up in this reply, the error is cured, if any there was, in sustaining the motion to strike. The construction placed by appellant upon that portion of the decree which awards to the defendant company its priority is that whenever there is a scarcity of water in the stream, the date of such priority takes effect, not from the beginning of the work, but from the date of its completion. Upon the other hand, the various contentions of the defendant corporation with respect to the merits of the case — 349 — are, first, that the decree of 1884 is itself absolute; that it determines the quantity of water to which defendant’s ditch in its entirety is entitled, and fixes with certainty the date of the appropriation as of the time of beginning the work, viz: in 1880; that, were this not so, and the decree merely a conditional one, or that, by .the terms thereof, the priority was to date only from the completion of the work, nevertheless, by reason of the acquiescence upon the part of the plaintiff company, and by its conduct in silently standing by and seeing the water commissioner make distribution of the water upon the basis of the decree as construed by said water commissioner, by which the. defendant’s priority over the plaintiff was acknowledged and recognized, the plaintiff is thereby estopped now from questioning the absolute verity of the decree, and must be held to have waived any superior rights, if any it ever had. The defendant further contends that, under its certificate of incorporation, plaintiff had no corporate power to acquire the water rights decreed to the Larimer county ditch; and that, under the evidence introduced in this case, even were the entire matter of the adjudication of water rights open for determination, the proof shows that defendant’s rights are superior to those of the plaintiff. Section 314 of the General Statutes of 1883 (Mills’ Ann. Stats, sec. 573) gives rise to another point of dispute between the parties, the plaintiff claiming that thereunder, unless the ditch or canal of the defendant company was completed within three years from the beginning of the work, the date of priority attaches as of the date of the completion, and not from the beginning, while the contrary of this proposition is maintained by the defendant, it being conceded that the work was not completed and the appropriation of water actually made until more than three years after the work was actually beguu, and until after the decree was rendered. Much of the evidence introduced by the parties was not pertinent to any issues that could properly be tried in this action. The only bearing some of this evidence had upon — 350 — any possible feature of the case related to issues that were settled and determined years before, when the original decrees were made. While both of the parties to this controversy base their rights in the main upon these decrees, nevertheless there would seem to be indications at the trial below that they supposed some of the matters there determined were still open for adjudication. It is conceded that the contingency anticipated by the decree above quoted (viz: that there might be a scarcity of water) had happened prior to, and continued to exist at, the time this action was begun. The language of this decree is not, in all respects, free from doubt; but we think the meaning of the district court may be given effect. It will be observed that when the decree was entered, but two miles of the ditch were completed, and for five miles more the work was only partially done. The upper two miles of the ditch was known as the “ Canon Line.” It was built through a rocky, precipitious canon, the sides of which were high, and much time was consumed in its construction. Work was begun on the first of April, 1880, and, according to the statement of the owners, the ditch was intended to be fifty-two miles long. In April, 1882, when the original decree was entered, no part of the ditch had been completed. The rights of these parties are not in any way settled by this original decree, but must be ascertained from the supplemental one of 1884, the portion ■of which applicable to descendant’s ditch has been set out in extenso in the statement of facts. The carrying capacity of the ditch, as then completed, was computed to be 307 cubic feet of water per second of time. Possibly the decree is susceptible of the interpretation that, if within a reasonable time from its entry, laterals were constructed at any point along the first two miles of the completed ditch, and lands were, within a reasonable time thereafter, irrigated therefrom, an absolute priority was given to such portion of the ditch to its full carrying capacity, to date from the time of the beginning of the work. Certainly, no more favorable interpretation in behalf of the defendant could — 351 — possibly be deduced from the language of the decree. But wlien we come to consider the character and nature of the country through which this completed portion of the ditch ran, and bear in mind that the evidence fails to show that any laterals have ever up to the present time been taken from this portion of the ditch, such an interpretation would be of no practical value to the defendants. Therefore, doubtless for this as well as other reasons satisfactory to themselves, the counsel for appellees insist that the limitation mentioned by which, in times of scarcity, the full priority is to be enjoyed from the then uncompleted portions of the ditch as of the date when the ditch was finished, and not from the beginning of the work, applies only to the storage of water in reservoirs. To us there seems to be at least two insuperable objections to any such interpretation: first, the language of the decree itself is against it, for this language is “ when said ,clitch and reservoirs are fully completed if there shall be a scarcity of water so that they cannot be filled, then the right to the full use of said priority in said ditch and reservoirs shall date from the time of their completion.” The language of the limitation certainly refers not merely to the reservoirs, but to the ditch. But if there was any doubt about this proposition, still when we consider that by section 2270 of Mills’ Annotated Statutes (Gen. Stats. 1883, sec. 1724) which confers the only authority for filling reservoirs, water for storage in reservoirs can be used only when not needed for immediate domestic and irrigating use, the language employed in the decree must be held to include the ditch as well as the reservoir. It is scarcely conceivable that the district court would deliberately enter a decree giving to a reservoir owner any priority to fill his reservoir which would conflict with any right of a ditch owner to use water for irrigation, even though the priority of the latter was junior in time to the construction of the reservoir. There may be some uncertainty as to whether, 'under our irrigation statutes, the district court in making these decrees — 352 — had the authority to give to any ditch any fixed carrying capacity before the water was actually applied to a beneficial use; but there scarcely can be any serious contention that the court had authority to give any definite decree in favor of a ditch not then completed, and, if such decrees were to be entered now, it is probable that the courts would require not only that the ditch be completed, but the water through it be actually applied to a beneficial use, before awarding to it any priority. In the conclusion to which we have come in this case, however, we have assumed (though not decided) that, in the decree before us, the district court has awarded to that portion of the defendant’s ditch not then completed a certain priority; but unless that priority antedates the priority given to plaintiff’s ditch, the plaintiff is entitled to prevail in this action. Giving to the decree, therefore, all the validity it purports to carry on its face, it is clear that as to such portions of the ditch as were finished after the decree was rendered, by the express terms of the decree the priority thereof was to be of the date of completion, and as the ditch owned by the defendant was confessedly not completed until several years after the date of the priority awarded the plaintiff, the latter’s rights are superior. If, therefore, the district court had the right to give to the completed portion of the ditch a certain priority to date from a certain time, and to enter the further and additional decree that water to the same capacity might be used through and by means of the uncompleted portions of the ditch, provided the same should be completed within a reasonable time (which we do not decide) the court, nevertheless, in this particular decree expressly limits the priority as to the then uncompleted portion to take effect as of the date of the finishing of the work. Neither has it been necessary that we definitely determine whether the legislature has the power which it assumed to exercise (Gen. Stats. 1883, sec. 314; Mills’ Ann. Stats, sec. 573) to prescribe a period of time within which work on an — 353 — irrigating ditch must he completed in order to entitle it to a priority dating from the inception of the work. This statute was' in force when the decree of 1884 was entered, and inasmuch as at that time more than four years had elapsed since work began, and only two miles of the ditch out of the total length of fifty-two miles was then completed, it may be true that the district court was guided by the provisions of the statute when it refused in entering the decree to carry back the priority of the North Fork ditch to the beginning of the work in 1880. But whether the district court thus limited the priority because of this statute, or whether upon general principles it held that due diligence in the prosecution of the work was not observed, is quite immaterial. The decree thus limiting the appropriation was pronouced by a court having jurisdiction of the subject-matter, of the persons, and to enter the particular judgment. It has not been appealed from, and cannot be set aside now, even though an erroneous conclusion was reached. With a view to determine its sufficiency we have carefully examined the entire evidence as to the alleged estoppel against the plaintiff; and we are satisfied that it is not sufficient to work a forfeiture of the superior rights which the decree conferred upon the ditch owned by the plaintiff company. Ordinarily, in times of scarcity of water, the ditches from the same stream and which are older in point of time than either of the ones involved in this case, more than consume the entire volume of water flowing in the stream; and in shutting down the head-gates of these two ditches at different times the water commissioner frequently did it so nearly simultaneously and with so little apparent discrimination in favor of one against the other that this, of itself, should not operate to divest the plaintiff of valuable property rights. While it is true that the plaintiff company did not make any formal protest or objection until within a short time before the bringing of this suit to the action of the water commissioner in regarding the priority of the defendant company — 354 — as superior to that of the plaintiff, yet, as a matter of fact, in conversations with the. water commissioner, the officers of the plaintiff company denied the correctness of the assumption by him, and asserted that their ditch was entitled to precedence. Only within a very few years prior to the time this suit was begun was this action of the water commissioner appreciably injurious to the plaintiff company, and within a reasonable time after it became apparent that the defendant company intended to insist upon its construction of this decree the plaintiff company began this suit for the purpose of settling the controversy between the parties. We fail to find in the evidence here any such acquiescence by the plaintiff, or recognition by it of a superior right in the defendant, that should now estop the plaintiff to allege the contrary. 2 Pomeroy’s Equity Jurisp. (2d ed.) § 817. But one additional point is made by the appellee which we deem it important to notice, that is, that the plaintiff company, under its certificate of incorporation, has not the capacity to receive by purchase the water rights belonging to the Larimer county ditch. The incorporators and stockholders of the plaintiff company are the same persons who were the water right owners under the old ditch. The certificate of incorporation of the new or plaintiff company specifies as its object “ to obtain an additional water supply for those then owning water rights in the Larimer county ditch.” For the new company to buy merely what its stockholders, as owners of water rights, already possessed, is said not to be purchasing an additional water supply. The point at best is technical, and there are several reasons why it is not tenable. In the first place, no direct issue has been made as to the power of the company to make this purchase, and we do not intimate that the objection is meritorious. As a matter of fact, the plaintiff company has received and recorded its deed of conveyance of this ditch and the water rights attaching thereto, and for years has been in possession of the property and exercised acts of ownership over it and enjoyed the benefits of the water flowing through the ditch. — 355 — In some of these cases, where the statute expressly prohibits certain designated persons from holding real estate, the distinction has been drawn between the power to take, and the power to hold, and that while the prohibited persons could not hold real estate, they might, by deed of conveyance, take and enjoy it until the sovereign power, by a proper proceeding, enforced the law. If, in this case, the plaintiff company has exceeded its powers, the state in a proper proceeding may punish it for exceeding its authority, but the defendant company is in no position here to complain of the alleged lack of power. Cal. State Tel. Co. v. Atl. Tel. Co., 22 Cal. 398 ; National W. & W. Co. v. Clarkin, 14 Cal. 544; Goundie v. Northampton Water Co., 7 Pa. St. 232; C., B. & Q. R. Co. v. Lewis et al., 53 Ia. 101; Nat. Bank v. Matthews, 98 U. S. 621; Cowell v. Springs Co., 100 U. S. 55; 2 Morawetz on Private Corporations (2d ed.), § 710, and cases cited. In his opinion and findings the learned district judge expressed grave doubts as to the correctness of his decision, and declared his dissatisfaction with any conclusion he might reach because of the lack of ample time needed for the disposition of questions so difficult and so important. With his findings and decree respecting the reservoirs, we are in accord, and the same are affirmed; as to the ditches, the findings and decree are reversed, and the cause remanded with instructions to enter a decree in favor of the plaintiff company, in accordance with the views herein expressed.