263 F. 734 | D. Idaho | 1919
The suit relates to the Payette-Boise reclamation project, near Boise, Idaho, an enterprise undertaken by the government about 1906, under the provisions of the Reclamation Act and amendments thereto (32 Stat. 388, 33 Stat. 706, 33 Stat. 1032, 34 Stat. 116, 34 Stat. 519, 36 Stat. 592, 36 Stat. 835, 36 Stat. 902, 36 Stat. 917, 36 Stat. 925, 37 Stat. 265, 38 Stat. 686 [Comp. St. § 4700 et seq.]). The individual defendants are the manager and other local officers of the project, and the corporations are irrigation districts organized under the state laws. The plaintiff is a corporation organized by the settlers upon the project, at the request of the Reclamation Service, with general ’ authority to represent and act for the
“That upon the determination by the Secretary of the Interior that any irrigation project is practicable, he may cause to bo lei.-contracts for the construction of, the same, in'such portions or sections as it may be i>raetical>le to construct and complete as parts of the whole project, providing the necessary funds for such portions or sections ore available in the reclamation fund, and thereupon he shall give public notice of the lands irrigable under such project, and limit of area per entry, which limit shall represent tile acreage which, in the opinion of the Secretary, may be reasonably required for the support of a family upon the lands in question; also of the charges which shall be made per acre upon the said entries, and upon lands in private ownership which may be irrigated by the waters of the said irrigation project, and the number of annual installments, not exceeding ten, in which such charges shall be paid and the time when such payments shall commence. The said charges shall be determined with a view of returning t.o the reclamation fund the estimated cost of construction of the project, and shall be apportioned equitably.”
The precipitating cause of tire present litigation is doubtless a notice published by the Secretary of the Interior on July 3, 1917, purporting to He the notice authorized by this section that the settlers would he required to pay, as the cost of their water rights, at the rate of $80 per acre. Many of the plaintiff’s stockholders or members had been irrigating their farms from the partially completed system for several years, and, it appearing that water would be furnished for the season of 1918 only to those who executed applications by which they consented to pay such price and agreed to certain other conditions therein expressed, plaintiff, acting upon behalf of the water users, filed its bill to restrain the officers from enforcing the requirement. Certain temporary injunctive relief was granted, but that is no longer of importance for the cause is now submitted upon the merits.
Questions of jurisdiction and of the capacity of the plaintiff to maintain the action have heretofore-been ruled adversely to the defendants, and I am not disposed again to consider them. Identical issues were raised in the Belle Fourche Case, and with the conclusions there reached and heretofore stated I am content.
The principal question botli of law and of fact relates to the justness of the charge for water lights. In considering it we must, of course, recognize the rule that, in so far as the action of the Secretary in establishing the price involves the exercise of a discretion conferred upon him by law, it is not subject to review in the courts.
The first and most sweeping contention of the plaintiff is that upon July 2, 1917, the Secretary was wholly without power to establish rates, for the reason that the time had passed for taking such action, and further that the authority conferred by law, especially by section 4, above quoted, had been once exercised and was functus officio. It urges that under this section the cost is to be estimated and public notice of the apportionment thereof given before the construction
The project was first set on foot in 1904 and 1905, and construction work was carried on more or less continuously from 1906 up to 1917. The original plans were altered from time to time and certain units were added and others abandoned. In 1917 the system as finally decided upon was substantially'complete. Many settlers went upon the public lands included in the project as early as 1905 and 1906, made improvements thereon, and procured title thereto under the provisions of the act. A full supply of water for some of the lands and a partial supply for others has been furnished from the system, though incomplete, for a number of years. One of the claims of the plaintiff is that in the earlier years, especially in 1904, 1905, and 1906, representations were made by officers of the government to owners of land within the contemplated project, and to prospective settlers upon .the public lands embraced therein, that the cost would not exceed $25 or $30 per acre, and that these representations, considered together with the proceedings before and taken by the Secretary in letting the first contract, constitute the “estimate” and “public notice” authorized by the statute. The evidence upon this issue took a wide range, and I do not attempt to set forth a detailed analysis; in the main ultimate conclusions must suffice.
The Arrowrock dam was not thought of until long after the project was undertaken, and, of course, its cost in no wise entered into the computation upon which the earlier estimates were based. It is inconceivable that the construction of this new feature, which was to add so much, to the efficiency of the service, would have been urged by the fanners or undertaken by the Reclamation Service at an estimated cost approximately equal to that of the rest of the system, but for the assumption that: those for whose benefit the work was to be done would make reimbursement for the outlay. Both expressly and by implication the written agreement of February 13, 1906, between the plain till" and the Secretary of the Interior, strongly militates against the plamtifPs contention. In short, from all the evidence I find that tlie understanding, in substance, was that the provision of tlie act requiring the estimate to be made before commencing construction work and before settlement would be waived, and that the settlers would pay the actual cost when and after that should be determined, instead of the estimated cost to be determined by the Secretary in advance. And no reasons are apparent why we should decline to give effect to such an understanding. True, the Secretary acts in a representative capacity, and his duties are prescribed by statute. So boih parties are bound by the law — but only by die mandatory or substantive provisions thereof. Procedural directions intended for his benefit, the settler may waive, and in such waiver the Secretary may acquiesce, so long as the interests of the government are not prejudiced.
As already indicated, the basic principle of the law is that the settler shall pay the cost of what lie gets, and, reciprocally, shall get that for which he pays. Under the prescribed procedure, this ideal is not likely to be perfectly realized, especially in respect to any given project considered by itself. The actual cost will rarely, if ever, precisely correspond to the estimate; an approximation is all that can be expected. Hence, in agreeing to dispense with a preliminary estimate and to
No ground for the contrary view is to be found in the contract of February 13, 1906. By the first clause of paragraph S (the language chiefly relied upon by defendants), the plaintiff “guarantees the payments for that part of the cost of the irrigation works which shall be apportioned by the Secretary of the Interior to its shareholders.” It is that part of the “cost,” not of an “estimate,” which the Secretary may apportion. If any light were needed to make the meaning plain, it could be had by referring to the preceding paragraph, which pro-
And so the matter stood for -several years, the landowners resting under their obligations as subscribers for the plaintiff’s stock to purchase water rights upon the terms stated. But when, as construction work progressed, it became evident that rights would cost greatly in excess of what was at first anticipated, and when, as may be fairly inferred, these landowners became convinced that their requirements were less than was originally thought, they sought to withdraw from their' obligations. In the case of the Riverside District there was the additional consideration that in 1910 it was very uncertain when, if ever, the project would furnish the water required, and another way had opened up by which the district could supply its needs. Accordingly, a petition was presented to the Secretary of the Interior by the landowners praying that they he relieved from their obligations to take water, and upon January 10, 1910, the plaintiff’s board of directors passed a resolution (ratified and confirmed.o-n February 8th, to cure certain defects), approving the petition and recommending that it be granted, and in due course favorable action was taken by the Secretary.
The plaintiff now contends that its board was without the power to grant such a release, and that-therefore the action taken was void, and such landowners are still bound and should have apportioned to them their share of the cost of the project. To what extent the other subscribers .’who are still members o*f the plaintiff company suffered by
The equitable considerations supporting similar releases of landowners in the Pioneer and the Nampa and Meridian districts, it must ■ be conceded, are not so strong. These districts embrace lands easily within the range of the constructed unit of the project system, and the releases were executed at a time when water was known to be available. The circumstances are these: As time went on, ground water from deep percolation on irrigated lands of the valley, including those upon the project and within the districts, became a serious menace, making it necessary to provide extensive drainage facilities. For such purpose co-operation between the several organizations was highly desirable, and accordingly, after considerable negotiation, contracts were entered into by the government with the two districts severally, the plaintiff joining therein. The Pioneer contract was executed February 27, 1913, and upon June 15, 1915, was modified by a supplemental agreement. The- Nampa and Meridian contract bears date June 1, 1915. Both contracts cover the subjects of drainage and a supplemental supply of water for the irrigated lands of the districts. In each there is a provision for the construction by the government of a drainage system to serve both project and district lands, with an apportionment of a part of the cost thereof to the district, and an agreement by which the government is to sell and the district is to buy at a stipulated price a certain portion of the storage water held in the Arrowrock reservoir; delivery thereof to be made in the river at the dam. By appropriate resolution, the plaintiff’s board authorized its officers to join, and they did join, in the execution, more particularly for the purpose of assenting to the provision thereof rescinding the 1906 agreements establishing the value of the old water rights at $14 per acre, and releasing subscribing landowners in the districts from their contracts individually to purchase project rights.
It will fie observed that, in so far as it is a question only of the power of the plaintiff’s board to assent to the release of the subscribing landholders from'the obligations of their contracts, the two transactions are not essentially different from that in the case of the Riverside district. In point of wisdom-or business.prudence, it is to be conceded the action taken does not so readily commend itself; but still it was within the scope of the board’s authority, and it is not for us to weigh the considerations for and against, for the purpose of determining whether it was provident or improvident. In brief, therefore, upon this
Returning now to the principal inquiry: If, as we have found, the understanding was that the settlers were to pay the actual construction cost, and if, as was expressly stipulated in the contract of February 13, 1906, the cost is to “be apportioned equally per acre,” obviously two prime factors enter into the computation of the just charge to he made for water rights, the total cost of the project and the number of acres to be irrigated. But chiefly because of the defendants’ assumption that the charge per acre is a matter exclusively within the discretion of the Secretary and that any action he may take is beyond the range of judicial inquiry, these factors are left in great obscurity. The official records are inadequate, and the Secretary, apparently the only officer qualified to testify, while submitting to interrogation, failed to give the requisite additional information. No record of any character appears to have been made of the Secretary’s findings if any he made, upon which presumably his public notice was based, and for some unexplained reason the public notice, while containing a declaration of the cost of the Arrowrock dam, is silent touching the cost of any other feature or of the project as a whole. True, the books in the office at Boise and at Washington disclose the expenditures which have been made by the Reclamation Service in this part of the state, but there is no segregated construction account covering fully and exclusively expenditures upon the project. Consequently, upon resort to these records, items are found which clearly relate to the project, and others which are quite as dearly not chargeable against it, and still others of doubtful status. In short, we are advised by no record of any kind what the Secretary assumed to be the cost of the project, or what capital items of expenditure as shown by the hooks he deemed to be chargeable, and what items, if any, he rejected. True, counsel for the defendants, apparently appreciating the strain in this branch of the case, offered the testimony of officers and employes of the Reclamation Service touching the actual cost, exclusive of items of expenditure conceded not to he chargeable against the project, and
The record touching the acreage to be served is likewise indefinite and inconclusive. The public notice describes the lands as being in certain townships, and refers for a more specific description to what are designated as farm unit plats on file in the local land offices at Boise, Idaho, and Vale, Or. These plats, it appears, cover an aggregate of approximately 143,000 acres, 43,000 in the Nampa and Meridian Irrigation District, and 100,000 upon the outside. (There is a discrepancy in the record touching these figures, but the precise amounts are immaterial.) To this extent the facts would seem to be sufficiently disclosed by a record both permanent and accessible; but, while it is thus shown that the system is to be available for the irrigation of these lands, there has been no declaration, and there is no assurance, as to the extent of its availability for such purpose. Not to its full extent, the evidence conclusively shows, for the Reclamation Service has already contracted or proposes to contract to deliver to the Pioneer and other irrigation districts, for stipulated prices, various amounts of water stored in the Arrowrock reservoir, aggregating approximately one-ninth of its total capacity, and' to stockholders of the New York Canal additional storage and canal capacity of the estimated value of $430,000, and there are suggestions in the evidence of plans for the further extension of the system to irrigate other lárge tracts of land not included in the 143,000 acres; but to what extent it is intended to burden the existing storage and distributing units for this purpose is not made clear. If then the settlers upon the 143,000 acres pay at the rate of $80 per acre, or an aggregate of approximately eleven and a half million dollars, what will they get?
The act plainly contemplates that, when the settlers reimburse the government for its construction outlay, they will be the beneficial owners of that for‘which they have paid, but with nothing of record to disclose for what they have paid, upon what can they base a claim to the ownership of any specific part of or interest in the system, or how could they protect themselves in the event of a threatened diversion to other uses of water which they need for the irrigation of their lands ? Even in the case of the Arrowrock reservoir, the cost of which has been formally declared to be $4,750,000, they would be at a loss to establish their proportionate interest, for they would "be wholly unable to prove what part of the $80 per acre is by the Reclamation Service deemed to be applicable to the cost thereof; and as to the other units their difficulties would be still greater, for there has been no announcement of their cost. Nor are the settlers assured of any specified service. A landowner’s rights in an irrigation system are generally measured in one of two different ways. He either has an undivided interest, with the right to receive á ratable proportion of the water available, whatever that may be, or he is entitled to receive a specified
It must be borne in mind that in its activities the Reclamation Service is not limited to projects which will furnish an adequate supply of water for full irrigation; a partial supply may be put to heneficial use and may he highly desirable, and whether a project will be undertaken which will furnish only a partial supply is a matter for administrative discretion. It follows that there is no representation or agreement to be implied from the mere fact that a project is undertaken that the settler thereon who pays the established acreage charge will have a full or adequate water right. Here the contract of February 13, 1906, provides for no specific amount. Paragraph 3 is to the effect that the “aggregate amount” of water rights sold “shall not exceed the number of acres of land capable of irrigation,” by means of the water supply available, and that the Secretary “shall determine the number of acres so capable,” “his determination to be made upon due and expert considerations of all available data, and to be based upon and measured and limited by the beneficial use of water.” But whether we construe this obscure passage as a guaranty o C a full and sufficient right for all land to be irrigated, with authority in the Secretary to determine the duty of water, in the manner provided, or as providing that only such acreage shall be included as is capable of, and will be benefited by, irrigation, it is without any important bearing at the present juncture, for it is not contended, as I understand, that the Secretary has exercised such authority — whatever it may be — at least, not in such a manner as to conclude the government and give reliable and permanent assurance to the settlers. Obviously, if a- high duty is given to the available water supply, a greater acreage will be served, and the acreage charge will necessarily be less than in the case lower duty is established. Nor does the public notice of July 3, 1917, contain any guaranty, except in the case of the stockholders of the New York Canal, who apparently are assured of a certain measure of service.
Turning to the application which under the notice the settler is required to make, and which, when accepted,'may be deemed to be a contract conclusive of all matters -which it covers, we find a provision to the effect that the measure of ffie water right purchased shall be “that quantity of water which shall be beneficially used for the irrigation” of the lands, “but in no case exceeding the share, proportionate
It would seem that, even where the course prescribed by the statute is pursued and the cost is estimated and the acreage charge announced in advance of construction, there should be a record describing the area to be irrigated and specifying the works which the settlers will have when they have paid the required charge; otherwise, the Reclamation Service could do much or little and still demand full payment of the charge. But here, where in effect the settlers said to the Reclamation Service to go ahead and construct a system and they would reimburse the government for its actual outlay, the reasons for definitely and conclusively advising them what they are paying for and will have are even stronger; plans have become physical realities, and that which was contingent has become certain. Contrast the condition of the settlers with that of the landowners in the irrigation districts. The Pioneer District perhaps is a-typical case. For the use of its landholders it has entered into a contract for a supplemental supply of water to be delivered from the Arrowrock reservoir. It is to pay therefor the sum of $354,667, and for that consideration it is to- be entitled to receive a definite, expressly stipulated portion of the water stored in the reservoir. - In other words, the total cost of the reservoir is declared to be $4,750,000, and it will receive a supply of water bearing the same relation to the total supply of the reservoir as 354,667 bears to 4,750,000. Thus the farmers in this district are assured that at all times they will receive approximately one-thirteenth of all the water stored in the reservoir. The settler, upon the other hand, is assured only of a ratable portion of such water in the reservoir as some officer may from time to time determine is available for the 143,000 acres of
It is not fanciful to suggest that the availability of the system for supplying the 143,000 acres may be indefinitely reduced. The record speaks, not only of existing and proposed contracts for furnishing water, but it also strongly intimates that in some quarters at least it will be contended that the charge fixed by the Secretary is not sufficient to return to the government its entire outlay, and that it will be necessary to extend the service to other units-to make up the deficit, and plans have already been formulated for at least one such extension. When is there to be at! end, and what fractional part of the system will be left for the 143,000 acres of land? Why not put these settlers upon an equal footing with the holders of privately owned lands, and advise them of the cost of that for which they are asked to pay, and assure them of what they will have when they have fully paid the consideration? Such a course it is thought the act plainly implies and all parties contemplated when the project was undertaken. To exact from, the settlers the execution of the proposed application would he to require them to agree to pay a definite, fixed sum for something the cost of which is not known and the value of which may be changed and, reduced from time to time at the will of the other party to the transaction. It is not thought that they can be lawfully required blindly to enter into such an undertaking. That for which they pay should be as clearly defined as that which they pay, either by the express terms of the application or by apt reference to an accessible, permanent record. Manifestly, until it is known what interest or right in the system the settler is to get, there can be no intelligent appraisement of the amount he should pay in satisfaction of his undertaking to reimburse the government for the actual cost, and consideration of that question must be deferred.
“If within one year from the date of this notice all of the irrigable lands of the Boise project shown on said farm-unit plats are duly pledged in accordance with law and the regulations of the Secretary of the Interior, to return the payment of tlio construction and operation and maintenance charges, either through individual contracts, water users association contracts, or through irrigation districts duly organized and confirmed by judicial decree, then the said construction charge of §80.00 per irrigable acre will be reduced to §70.00 per irrigable acre.”
It appears that prior to the issuance of the notice, namely, by the contract of -June 1, 1915, between the Nampa and Meridian Irrigation District and the Secretary (the plaintiff joining in the execution thereof for certain purposes), the government agreed to deliver to the district the full amount of water which all the project lands therein, aggregating about 43,000 acres, will he entitled to receive, the basis of
It is also suggested that some of the lands will probably become swampy, and consequently will not pay the acreage charge; but it is not shown that drainage is impracticable, and, as the notice plainly states, future drainage facilities may be provided for out of the maintenance fund. Within reasonable limits, it would seem entirely proper, in computing the area against which it is practicable to charge the cost of the project, to make an allowance for shrinkage due to the unwillingness or inability of the owners of some of the lands to- purchase water rights. What allowance, if any, the Secretary made upon this account, does not appear; but if we assume as correct the only theory advanced by,the defendants in explanation and justification of the distinction in acreage charge, namely, that because of the percentage of the 100,000 acres which will not take water rights, whatever may be the reason, the return from the remainder at $80 per acre will not exceed the return which the entire 100,000 acres would yield at $70 per acre, what view shall be taken of the rights and obligations of those who do purchase water rights? Upon the theory suggested, it follows as a matter of course that the Secretary found that, at the rate of- $70 per acre for the entire 143,000 acres, the return would be sufficient fully to reimburse the government; for it will not he presumed that he failed to perform his duty by knowingly charging against the 43,000 acres in the district an amount less than the construction cost, or permitting the other 100,000 acres to escape a considerable part of the construction cost by the formation of irrigation districts as suggested in the notice.
If, therefore, according to the estimate on which the difference in rates is based, 87,500 acres out of the 100,000 take and pay for water rights at the rate of $80 per acre, the full construction charge for
“And I do hereby grant, bargain, sell, convey and confirm to the United States of America and its successors in charge of the project all rights of way for ditches, canals, flumes, pipe lines, telegraph and telephone transmission lines, or other structures now constructed by or under the authority of the United States for or in connection with the said project, and all rights of way that may be or become necessary and suitable and that may be required for the prosecution and operation of the said project, and Cor the construction, maintenance and operation of ditches, canals, flumes, pipe lines, telegraph and telephone transmission lines, or other structures that may be constructed by or under authority of the United States and its successors in charge of the project, for and in connection with said project.”
Upon the record I am inclined to think that the portion which operates as a grant of presently occupied rights of way is within the spirit of the understanding which has prevailed between the parties during the construction period, and therefore ma.y properly be required. The balance of the provision purports to be a floating grant in perpetuity, not only to the government, but to its successors in control of the project. Such a grant is inherently harsh, especially where it relates to lands which are to be improved. These farms are to be held in comparatively small tracts, and presumably are to be intensively cultivated and highly improved. Why hold over the owner the perpetual menace of injury incident to the cutting of a drainage or irrigation canal through his small holding, however highly improved it may be, at such a place as the person in charge of the project may see fit to select, and without compensation? The project is substantially finished, and if in time, for more efficient operation or more economical maintenance, it is thought desirable to add to or alter the works, why impose upon the single individual the burden of furnishing a right of way to be used for the benefit of the project as a whole? It is suggested that the paragraph
■ “The measure of tTie water right for said land is that quantity of water which shall be beneficially used for the irrigation thereof, but in no case exceeding the share proportionate to irrigable acreage, of the water supply actually available, as determined by the project manager or other proper officer of the United States, or of its successors in the control of the project, during the irrigation season, for the irrigation of lands under said unit.”
Apparently, it is the contention of counsel for the plaintiff that this latter clause purports to authorize the project manager or other officer to determine the duty of water, that is, in any specific case and at any given time, to decide whether or not the landowner is in need of water, and, if so, how much water he reasonably requires. But in this view I cannot concur. The authority conferred is to determine the amount of water “actually available * * * for the irrigation of lands under said unit.” The infirmity of the provision is its indefiniteness. If it he assumed that the reference to “said unit” can be made certain by an appropriate descriptive phrase entered into the blank left in the heading apparently for that purpose, by what rules, principles, or considerations is -the officer to be guided in determining the amount of water available for such “unit”? There is no intimation in the application itself of what a unit is, or what relation it sustains to the project as a whole, or how, if at all, water is assigned or apportioned to it,- and no standing rule or regulation is referred to. That being the case, how could the officer intelligently determine what water is available for the unit? If the unit is not entitled to all of the water in the system, then what part thereof, and why; and upon what basis is the water to be apportioned? The application executed and accepted constitutes a contract, and by its terms the rights and obligations of the parties are to be measured. But how could a court enforce a provision of this character, or protect a party in the enjoyment of the rights it
While thus holding that the plaintiff is entitled to a measure of relief, I shall not presently direct the entry of final decree or prescribe the precise scope and form thereof. If the general considerations which I have deemed to be controlling meet with approval, there may be a disposition to obviate at least some of the objections to the form of the applications now required; it would not be strange if, in an adversary proceeding such as this, considerations have been presented which were overlooked in the routine of departmental administration, necessarily ex parle. The Secretary is not, at least in name, a party to the suit, and besides I have no disposition to direct just what action shall be taken or prescribe precise forms of application or in any wise to invade the province of administrative discretion. Entry of final decree will therefore he deferred for a reasonable time.
Entry of decree will be deferred until the September term, unless defendants move for an earlier disposition. In the meantime they may, if they so desire, upon notice, make a showing of what, if anything, has been done or will be done to meet the objections I have held to be valid. The injunctive order now outstanding reasonably protects the rights of the parties, and it will be continued in force until further order.