Thompson Co. v. Pennebaker

MORROW, Circuit Judge (after stating the facts as above). The ■defendant contends that the option contained in the original agree.ment between McMurray and the plaintiff, and assigned by the plaintiff to the defendant, was void, for the reason that the description of [853] the property intended to be conveyed is too uncertain to be ascertained, and the option furnishes no means or method for its ascertainment. The water rights were described by the location in certain sections of the public land, and were recorded in the public records of water rights in the counties where located, and the lands to be relinquished to the government of the United States were described as: “Sufficient lands in and about said water rights for the construction of a power house and right of way for Humo and transmission line purposes and for the development and maintenance of an electric, power plant.’’ The objection to this identification is that it is alleged in defendant’s answer that McMurray's possession of land was that of a homestead, and that at the time the agreement between plaintiff and defendant was executed, on April 25, 1905, the land was unsurveyed public land of the United States; but it also appears from defendant’s answer that, in pursuance of the terms of the agreement between it and McMurray, entered into on June 15, 1905, defendant “went into joint possession with said McMurray of said lands, and thereafter diligently prosecuted the work of developing the said water rights and lands for the purpose of erecting and operating an electric generating plant, and ever since has continued so to do until,” at the time defendant filed its answer on February 25, 1908. “defendant had expended upwards of $20,000 for said properties.” Aside from any question as to the right of the defendant, in face of such an allegation, to deny that there was a sufficient description of the property, we t hink the description in the agreement was .sufficient for all practical and legal purposes to identify the lands and water rights conveyed. The laws of the state of Washington provide for the appropriation of water flowing in any river, stream, or ravine, and require that notice of such appropriation in writing must be posted in a conspicuous place at the point of intended storage or diversion, and that a copy of such notice must, within 10 days after it is posted, he filed for record in the office of the auditor of the county in which it is posted. See sections 4091 and 4092, Ballinger’s Ann. Codes & St. Wash. (Pierce’s Code, §■§ 5131, 5132). It was recited in the agreement between plaintiff and McMurray that the water was appropriated by McMurray under the laws of Ihe state of Washington, and this is not denied by the defendant. It will be presumed, therefore, that a notice identifying the appropriation was posted and recorded, and, being referred to in the agreement., such notice was sufficient identification of the water rights, and the description in the agreement of the land “in and about said water rights” was a sufficient identification of the land. The next objection is that the option contained in the agreement between plaintiff and McMurray is void for the reason that the statute of the state of Washington authorizes the appropriation of water flowing in any river, stream, or ravine for irrigation, mining, or manufacturing purposes, but not for the “development and maintenance of an electric power plant,” mentioned in the agreement. As far as appears trom the record, the original appropriation by McMurray was for a purpose strictly provided by statute. After such appropriation had [854] been made, the water could be applied to any beneficial use. Section 4099, Ballinger’s Ann. Codes & St. (Pierce’s Code, § 5139). The development and maintenance of an electric power plant is clearly a beneficial use. The option is, therefore, not open to the objection that the appropriation is not within the statute. It is contended on the part of the defendant that the assignment of the McMurray contract'made by it to the Cascade Public Service Corporation'was not such an assignment as entitled plaintiff to recover, for the reason that it was not an assignment whereby defendant sold or otherwise disposed of the option. The explanation is made that, defendant not being strictly a public service corporation, it was not authorized under the laws of the state of Washington to exercise the power of eminent domain. It therefore-organized the Cascade Public Service Corporation, and retained the ownership of its stock and the control of the corporation, as it might do under the law of the state, in order that it might carry out its purpose with respect to the property. But this was the exercise of a right under the agreement, and the beneficial use of the option on the part of the defendant, and it was under this provision of the agreement that plaintiff charges in his complaint that it became entitled to recover in this action. It is next objected that McMurray had no title to the lands and water rights described in the agreement, and there was, therefore, no consideration for the promise of the defendant to pay for the assignment of the option held by plaintiff. Plaintiff had an option on McMurray’s appropriation and possession under the statute. This was a valuable right, capable of being assigned and transferred. Possessory rights on the public domain have always been recognized as transferable, and water rights can be transferred like other property. Weil on Water Rights, § 221. The option on the property held by the plaintiff was the right to purchase the right of possession to these water rights held by McMurray and the further right of possession of sufficient lands in and about said water rights for the construction of a power house, etc. These rights were assigned and transferred to defendant by plaintiff, and.thereupon defendant purchased McMurray’s right of possession and paid him $2,000 therefor, and at the same time entered upon its joint possession with McMurray and expended upwards of $20,-000 for the property. Defendant thereupon became obligated under the agreement to pay to plaintiff the sum of $10,000 for the option. It may be that the defendant did not acquire a complete and perfect title to the property from McMurray; but that was defendant’s affair. He acquired from plaintiff all the latter agreed to convey. Plaintiff conveyed his right to purchase McMurray’s rights, whatever they might be; and, defendant having purchased under the ag'reement, it cannot now defend on the ground that there was a failure of consideration. The judgment of the Circuit Court is affirmed.