Empire Water & Power Co. v. Cascade Town Co.

HOOK, Circuit Judge (after stating the facts as above). [1] The first question in this case is whether the complainant, the Cascade Town Company, by it's ownership of lands in Colorado conveyed by patent of the United States, is possessed of riparian rights as at common law, free from public taking or restrictive regulation save by the exercise of the power of eminent domain. The lands were patented to complainant’s predecessors in title in 1880, 1889, and 1890, at which times sections 2339 and 2340, Rev. Stats. (U. S. .Comp. St. 1901, p. 1437), were in force and constituted the only legislation by Congress affecting water rights of public lands in Colorado. The former, which was taken from Act July 26, I860, c. 262, § 9, 14 Stat. 253, is as follows: “"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; and the right of way for the construction of ditches and canals for the purposes herein specified is acknowledged and confirmed; but whenever' any person, in the construction of any ditch or canal, injures or damages the possession of any settler on the public domain, the party committing such injury or damage shall be liable to the party injured for such injury or damage.” Section 2340, adopted from Act July 9, 1870, c. 235, § 17, 16 Stat. 218, provides that: “All patents granted, or pre-emption or homesteads allowed, shall be subject to any vested and accrued water rights, or rights to ditches and reservoirs used in connection with such water rights, as may have been acquired under or recognized by the preceding section.” Colorado was admitted as a state in 1876. Its Constitution (article 16, § 6) provides: “The right to divert the unappropriated waters of any natural stream to beneficial uses shall never be denied. Priority of appropriation shall give the better right, as between those using the water for the same purpose; but when the waters of any natural stream are not sufficient for the service of all those desiring the use of the same, those using the water for domestic purposes shall have the preference over those claiming for any other purpose, and those using the water for agricultural purposes shall have preference over those using the same for manufacturing purposes.” State legislation was afterwards enacted conforming to the constitutional provision and prescribing a system of administration. The patents issued by the United States to complainant’s predecessors in title were .qualified according to the provisions of the Revised Statutes above noted. [2, 3] It is urged by complainant that the United States, as the owner of the lands while they were part of the public domain, was possessed of “every right” with respect thereto, including the common-law right of a riparian owner to- have the water of a stream flow in its accustomed channel, regardless of its appropriation to beneficial uses, and that upon patent every such right passed to the patentee as property of which he could not be divested by the authority of the state without due process of law. This contention involves two assumptions which we think are inadmissible. Undoubtedly the title of the United States before patent was absolute, and Congress by legis [127] lative act could have established any rule it chose with respect to the ownership and use of the waters. The power of Congress to “make all needful rules and regulations respecting the territory or other property belonging to the United States,” conferred by the Constitution (article 4, § 3), is without limitation, and is free from state interference. United States v. Rio Grande, etc., Co., 174 U. S. 690, 703, 19 Sup. Ct. 770, 43 L. Ed. 1136. But this supreme power is an attribute of sovereignty, not one of ordinary proprietorship; and when in the disposition of the public domain lands are conveyed to private individuals no especial rights or exemptions, which might have been, but were not, prescribed, pass to the patentee. In the absence of anything showing the contrary, the government will be presumed to have taken the position of a private owner and to have intended that its conveyance as regards incidents of title not mentioned in the instrument should be construed according to the law of the state where the land lies. It lias been so held as to a patent of land bounded on a nonnavigable lake and the question whether the patentee took the adjoining submerged land (Hardin v. Shedd. 190 U. S. 508, 23 Sup. Ct. 685, 47 L. Ed. 1156), and we see no reason why the principle is not applicable here. With its supreme authority over the public domain, Congress could have prescribed any rule respecting the flow and use of waters, whether it conformed or not to the local customs, laws, and judicial decisions, but a patentee docs not impliedly succeed to all that might have been done. Nor is it correct to say that the title of the United States was as defined in the common law. On the contrary, it held the lands as a sovereign. Moreover, the common law of riparian ownership in all its features never obtained in Colorado. Snyder v. Dredging Co., 104 C. C. A. 136, 181 Fed. 62. It was unsuited to the region and would have tended greatly to prevent the very development which made the lands valuable. Express recognition of the local conditions and necessities is found in the acts of Congress above referred to and in the patents from which complainant derives its title. See 174 U. S. 690, 19 Sup. Ct. 770, 43 L. Ed. 1136. The national Constitution speaks in the terms of the common law, and that law has been qualifiedly adopted by statute in-many states. But there has been Do statutory adoption of it for the United States. There its acceptance rests on judicial construction proceeding upon historical reasons and a general sense of suitableness, and like that of the states, is qualified to a harmony with our institutions and conditions. It does not automatically applv over all the United States, its territories, and possessions as a blanket of unvarying thickness, but yields here and there to a universal recognition of necessity and propriety. For examples: Our test of the navigability of waters is not that of the common law (The Daniel Ball, 10 Wall. 557, 19 L. Ed. 999); and we have quite generally denied the doctrine of ancient lights. It would be as illogical to impose the English doctrine of flowing waters upon Colorado as it would be to say judicially that their climate and soil and the imperative needs of their people are the same. Referring to Montana and Wyoming and the use of waters of nonnavigable streams, Mr. Justice Holmes said, in Bean v. Morris, 221 U. S. 485, 31 Sup. Ct. 703, 55 L. Ed. 821: [128] “The doctrine of appropriation has prevailed in these ■ regions probably from the first moment that they knew of any law, and has continued since they became territory of the United States.” And so in Colorado. That rights may vary and be adjusted somewhat to the imperative necessities of natural conditions is also exemplified in Clark v. Nash, 198 U. S. 361, 25 Sup. Ct. 676, 49 L. Ed. 1085, 4 Ann. Cas. 1171, and Strickley v. Mining Co., 200 U. S. 527, 26 Sup. Ct. 301, 50 L. Ed. 581, 4 Ann. Cas. 1174. [4] We therefore turn to what is commonly called the Colorado doctrine. The waters of natural streams in Colorado are subject to state regulation, and may be appropriated to beneficial uses for domestic, agricultural, and manufacturing purposes. That is the prescribed order of preference in case of deficiency. .The defendants, who were enjoined, contemplated a use for manufacturing. In this branch of'the case the controversy was over the character Of complainant’s use, its relation to that proposed by defendants, and the extent of complainant’s appropriation and application of the water. It is urged that a use for a summer resort is not a beneficial use for either domestic or agricultural purposes. Counsel say that the views and standards of the early settlers were reflected in the state Constitution, and that it should be construed accordingly; that they did not plan for rest and recreation, and that to them “domestic” had to do with sustenance for man and beast, and cleanliness; and that “agricultural” related to the raising of crops. We think such a view is too narrow. If the commerce clause of the federal Constitution had been construed in that way, much of the growth of this country would have been arrested. In framing Constitutions wisdom frequently requires the use of general terms, which should be held as progressively adaptable to natural development and as open to embrace new instances as they arise and come clearly within the spirit of the provisions. Thus, in Lamborn v. Bell, 18 Colo. 346, 32 Pac. 989, 20 L. R. A. 241, the term “milling purposes” in the provision of the state Constitution authorizing the appropriation of private property was held broadly to include manufacturing purposes and specifically that of an electric power plant, though the milling of ore and grain was doubtless uppermost in mind when the Constitution was adopted. Places such as that described here, favored by climatic conditions, improved by the work of man, and designed to promote health by affording rest and relaxation are assuredly beneficial. They are relatively as important as sanitariums or hospitals, and should not be dismissed by calling them mere resorts for idleness. They are a recognized feature of the times, are important in their influence upon health, and multitudes of people avail themselves of them from necessity. Cascade is well described as' a place of this kind. With its railroad station, hotels, cottages, waterworks, park, roads, and trails and its 12,000 or 15,000 annual visitors, it is a summer city. That it is not an incorporated municipality, but is largely a private venture, is, we think, unimportant. Nor need the purpose to which the waters of the stream are devoted be a single one of those named in the classification in the Constitution. It need not be exclusively domestic nor exclusively agricultural. It [129] may be and is both, like that of the ordinary city with its homes, business places, parks, and public grounds. It is clear that complainant intended to appropriate the waters of the stream to its purpose. The intent was openly manifested by the extensive improvement of its property by buildings, roads, etc., in reliance, not only on the use of the water in the ditches that were constructed, but also' on the continued natural falls and flow of the stream. At this point, however, we experience the most difficulty with complainant’s case. The laws of Colorado are designed to prevent waste of a most valuable but limited natural resource, and to confine the use to needs. By rejecting the common-law rule they deny the right of the landowner to have the stream run in its natural way without diminution. He cannot hold to all the water for the scant vegetation which lines the banks but must make the most efficient use by applying it to his land. See Schodde v. Water Co., 224 U. S. 107, 32 Sup. Ct. 470, 56 L. Ed. 686, a case from Idaho, where a .landowner claimed the whole current of a stream to raise part of the water to his land. The case before us is exceptional, but we think complainant is not entitled to a continuance of the falls solely for their scenic beauty. The state laws proceed upon more material lines. Complainant also relies upon the distribution by the falls of moisture for the trees and other vegetable growth on its lands, which it has extensively improved. As we have said, its intent to appropriate the waters has been shown by its expenditures and improvements beyond what is served by its ditches. Bias there been that actual application which the law requires? Undoubtedly a landowner may rely upon an efficient application by nature, and need do no more than affirmatively to avail himself of it (Thomas v. Guiraud, 6 Colo. 530; Larimer, etc., Co. v. People, 8 Colo. 614, 9 Pac. 794); but the use in that way should not be unnecessarily or wastefully excessive. If all the water flowing over the falls, directly applied to the lands in the usual way of irrigation, would be required to produce the effect of the distributed mist and spray as now utilized, we think defendants would have no right to divert it for a manufacturing purpose. If nature accomplishes a result which is recognized and utilized, a change of process by man would seem unnecessary. But the trial court based its decision of this branch of the case largely upon the artistic value of the falls, and made no inquiry into the effectiveness of the use of the water in the way adopted as compared with the customary methods of irrigation. In all other respects the conclusions of the court were in accord with the views we have expressed. It may be that if the attention of the lawmakers had been directed to such natural objects of great beauty they would have sought to preserve them, but we think the dominant idea was utility, liberally and not narrowly regarded, and we are constrained to follow it. _ As to some other matters: We think the trial court has jurisdiction of the subject-matter of the case, that the necessary amount or value is involved, and that complainant’s bill is sufficiently broad for protection of its rights acquired by appropriation. The decree of the trial court is reversed and remanded for further proceedings in conformity with this opinion.