Curtis v. La Grande Hydraulic Water Co.

Lord, J. — This is a suit to restrain the diversion of water from a natural water-course on the land of the plaintiff. The defense is three-fold: (1) Prior appropriation; (2) prescription; and (3) estoppel in pais: In substance, the facts are that the defendant constructed a dam across Mill creek upon lands owned by Green Arnold, and occupied the same, with his consent and authority, for the purpose of diverting water from said creek, which was effected by means of a pipe of a certain size inserted in the dam, and conveyed to the town of La Grande for the use of its inhabitants; that in June, 1887, the defendant constructed a new dam across said creek, some 1,000 feet above the old dam, upon lands owned by D. Chaplin, and removed the pipe which, had been formerly used and laid upon the lands of Arnold as a diverting pipe of the old dam, and inserted it in the new dam, and used and occupied all the lands necessary for that purpose, with the consent and authority of Chaplin and — 41 — Arnold; that in the year 1871, after such consent was given, and the pipe laid, and the land occupied for the purposes stated, Arnold sold a certain' described portion of his land, through which said creek ran, to one McComas, and McComas in 1876 sold the same to the plaintiff; but this portion of the land constituted no part of that upon which said dam had been constructed and pipe laid. It will be seen, then, that long before the plaintiff acquired any title to a portion of the land through which said creek flowed, she purchased it subject to whatever rights the defendant had acquired in the premises by virtue of the consent and authority of the grantor, Arnold, and the construction of the dam, laying of the pipes, etc., in pursuance thereof, to divert the water for the uses specified. Assuming that the license granted by Arnold, and the investment made by the defendant for its enjoyment, operated as an estoppel in pais, the contention of the plaintiff is that when the defendant removed the dam and pipe from the land of Arnold and constructed another dam and laid other or the same pipe on the land of Chaplin, the effect was to revoke such license, and to revive the rights of the plaintiff to have the stream flow through her land without interruption or perceptible diminution; that neither Chaplin nor Arnold, nor both, could authorize the change of location without the consent of the plaintiff, who is a party in interest, and that, when it was so done without her consent, it was an interference with her rights which equity will restrain by injunction. To avoid the effect of this contention, the defendant interposes (1) the defense of prior appropriation of the waters of the creek under the act of congress of July 26, 1866 (14 St. U. S. 253), that “whenever, by priority of possession, rights to the use of water for mining, agricultural, manufacturing or other purposes have vested and accrued, and the same are recognized and acknowledged by the local customs, laws and the decisions of courts, the possessors and owners of such vested rights shall be maintained and protected in the same ” etc. — 42 — While that act was passed a year later than the facts show the waters of the creek were diverted, yet it applies only to government land, and streams flowing through it. In these, under the circumstances indicated in the act, the prior appropriation of the water may operate to secure a vested right to divert it, which shall be maintained and protected. But it has no application to the lands of individual owners, and, as against them, can confer no right to divert the waters of streams flowing through their lands. The facts disclosed by this record show that the diversion took place, not from a stream upon and running through government lands, but from a stream at a point upon and running through the lands of Green Arnold, a part of which now belongs to the plaintiff, and through which a portion of that stream naturally runs, and that the permission to construct the dam, and lay the pipes by means whereof the waters of the creek were diverted from flowing, as was their wont, through it, was given by Arnold, and their possession and occupation for the purposes specified taken and used in pursuance of it. In Kaler v. Campbell, 13 Or. 596, both parties diverted the water at or near the same point, which was off their own lands; and at the time of the diversion and appropriation upon land belonging to the United States; but in the case at bar the diversion was from a stream upon private land, and done with the consent of the owner first obtained. Upon the facts, then, the doctrine of prior appropriation under the act of congress can have no application. The next defense urged is that the defendant has acquired the right by prescription to occupy the land, and divert the waters of that stream. It is true that the plaintiff practically admits that the company took possession and diverted the waters in the year 1865, and conducted it into La Grande by means of pipes, and that it has continued to so divert the waters of that creek and use the lands for that purpose ever since. But the facts show the waters were not so diverted and possession taken of the land to construct the dam and lay pipes as a matter of right against Arnold — 43 — or the plaintiff, but under the license or permission of Arnold in the year 1865, which prevented it being adverse. To acquire a right of prescription in the lands of another upon the presumption of a grant, the possession must be adverse, continuous, uninterrupted, and by the acquiescence of the owner of the land upon which the easement is claimed. If its inception is permissive or under a license from the owner, it cannot avail to work an ouster. To effect that result, the possession taken must be open, hostile, and continuous; “he must unfurl his flag on the land, and keep it flying, so that the owner may see, if he will, that an enemy has invaded his domains, and planted the standard of conquest.” Under this rule, an adverse possession cannot grow out of a permissive enjoyment; and so speak the decisions without a dissentient voice, including this court. (Springer v. Young, 14 Or. 285.) The next and main defense is that the defendant constructed its dam and laid the pipes on the land and diverted the waters for the uses specified, at the place designated on the stream, by the permission or under a license from Arnold, who was then the owner of the land through which the stream flowed, and that in consequence of large investments of money and labor expended in the construction of such dam and laying such pipes for the purpose of diverting the waters of that stream, the license has become irrevocable, or turned into an agreement which equity will enforce. The principle on which this contention is based is, that after one has acted on the faith of a parol license and made permanent improvements, the owner will be estopped from revoking his license to prevent injustice. The application of this principle of equitable estoppel after one has acted on the faith of a parol license is strongly resisted by some authorities, holding, in effect, that it operates to overturn the statute of frauds, and, for all practical purposes, to create an interest in land in disregard of the requirements of that statute. A license creates no interest in land. It is founded on personal confidence, and is not assignable; and — 44 — its continuance depends on the pleasure of the party giving it; and is revocable unless executed under such circumstances as would authorize the interference of equity to prevent injustice. At law a license could not have the effect to create an interest in lands upon the theory of becoming irrevocable by estoppel, as courts of law deal with the legal aspect of estates in land, and cannot enforce equities which grow out of an equitable estoppel against the owner of land. Judge Cooley seems to regard it as a serious reproach to the law that it should fail to provide some adequate protection against the injustice of a revocation after the licensee, in reliance upon the license, has made large and expensive improvements. (Maxwell v. Bridge Co. 41 Mich. 467.) But it is unnecessary for us to consider the effect of such a position at law, as it is only the equitable rights of the parties that are now under inquiry. An executed license is treated like a parol agreement in equity: it will not allow the statute to be used as a cover for fraud; it will not permit advantage to be taken of the form of the consent, although not within the statute of frauds, after large expenditures of money or labor have been invested in permanent improvements upon the land, in good faith, upon the reliance reposed in such consent. To allow one to revoke his consent when it was given or had the effect to influence the conduct of another and cause him to make large investments, would operate as a fraud and warrant the interference of equity to prevent it, under the doctrine of equitable estoppel. The ground of the jurisdiction is to prevent injustice or fraud. “Its effect,” said Chancellor Bates, “when applied, is to restrain a party from exercising his legal right; and this even a court of equity cannot do unless there has been on his part some conduct, declaration, or improper concealment misleading an innocent person to his prejudice, and rendering the assertion of the legal right as against such' person an act of bad faith amounting to constructive fraud. Moreover, it may be well added that, to warrant the interference of the court with the legal right or title of the party, the case — 45 — relied on to work the estoppel must be clear, beyond doubt, upon the facts; and the more stringently do these rules apply in a case * * * where the effect of the estoppel, if allowed, will be to convert what was originally a bare privilege, temporary and revocable, into an easement in the licensor’s land, perpetually binding it, and transmissible from the licensee.” (Jackson v. Railroad Co. 4 Del. Ch. 180.) The testimony of Green Arnold, a witness for the defendant, shows that he was the owner of the land, and gave the La Grande Water Company permission to take the water and the right of way for the use of his land for the construction of the dam and laying of the pipes. In order to show in what his permission consisted, he testified that he assisted in putting in the dam and starting the water-works; and, so far as he is concerned, he assents to the change of location from the place of diversion, and the removal of the pipes, etc., to the land of Chaplin. In short, it is clear that what was done by the company was done not only with his consent, but that he intended it to induce the construction of the works and the diversion of the water for the uses specified. Other testimony there is in corroboration of this, but further reference is unnecessary. Upon the undisputed facts, as between him and the defendant, if he were to attempt to revoke his license to use his land and divert the water for the purposes indicated, a court of equity would apply the doctrine of equitable estoppel and enjoin him. As against him and the plaintiff, then, who subsequently purchased a piece of the land through which the stream flowed, it may be assumed that the license is irrevocable so long as the interest created by it endures. By building the dam, laying the pipes, and making the diversion of the water, the defendant, by its act and the consent of Arnold, fixed the place on the land where the license was to be exercised and enjoyed; and the inquiry is, can it be exercised at any other place on the land of Arnold or above it, although with the consent and permission of its owner, without reviving the right of the plaintiff to have — 46 — the waters of that creek flow without interruption through her laud? What was the effect of a change of location which involved the abandonment of the use and enjoyment of the license upon the land of Arnold? The plaintiff purchased subject to the rights acquired by the defendant to divert the water and use the land under the license, which fixed the point of diversion on the stream, and the particular land to be occupied for that purpose, as definitely as if it were described in a deed; and it cannot be exercised at any other place. It is to that point, and the use of this land for the purposes specified, that the facts created an equitable estoppel, and rendered the license irrevocable, so long as the dam and pipes remained for the purpose for which they were constructed and laid. If these should be allowed to fall into decay and disuse, or be abandoned, the cause of the diversion ceasing, the waters of the stream would resume their accustomed channels and flow uninterruptedly through the plaintiff’s land. Neither Arnold nor Chaplin could give a right of diversion at any other . place against the consent of the plaintiff, who was entitled to have the waters of that stream flow through her land subject to the license created by the estoppel. When the license was abandoned at that point and place, the defendant had no right at any other to divert the waters of the creek without the consent of the plaintiff, through whose land it flowed. These parties might give their consent, and so far so good, to divert at some other place on their land; hut, as the exercise of such a right or privilege affected her rights in the premises, it could not be used and enjoyed by the defendant without her consent. It may not be amiss to say that we have omitted a detail of the facts, such as the incorporation of 1880, etc., because they are not essential, in the view taken, to the conclusion reached. It results that the plaintiff is entitled to the injunction prayed for, and $25 as damages and costs and disbursements; and it is so ordered.