242 F. 177 | 9th Cir. | 1917
(after stating the facts as above).
It is therefore obvious that the act of Congress which lies at the foundation of the case authorized the making of a contract by the United States, through the Secretary of the Interior, with any state in which are situated the specified desert lands, and the making of contracts by such states for their reclamation and irrigation; and such contracts were made in the instant case.
“When an ample supply of water is actually furnished in a substantial ditch or- canal, or by artesian wells or reservoirs, to reclaim a particular tract or tracts of such lands, then patents shall issue for the same to such state without regard to settlement or cultivation.”
Section 1629 of the Revised Codes of Idaho provides, among other things:
“Upon the issuance of a patent to any lands by the United States to this state, notice shall be forwarded to the settler upon such land. It shall be the duty of the board, under the signature of the president attested by its register, to issue a patent to said lands from the state to the settler. The water rights to all lands acquired under the provisions of this chapter shall attach to and become appurtenant to the land as soon as title passes from the United States to the state. Any person, company or association, furnishing water for any tract of land, shall have a first and prior lien on said water right and land upon which said water is used, for all deferred payments for said water right; said lien to be in all respects prior to any and all other liens created or attempted to be created by the owner and possessor of said land; said lien to remain in full force and effect until the last deferred payment for the water right is fully paid and satisfied according to the terms off the contract under which said water right was acquired.”
At all the times in question the right to appropriate and divert the unappropriated water of any natural stream of the state to benefi
That the laws of the state applicable to the appropriation and use of the nonnavigable waters of the state are controlling is, of course, clear; and that all parties contracting with respect to such waters and desert lands do so with at least the presumed knowledge of both the federal ■and state laws is also plain.
The record shows that, under those laws, the purpose and particulars of which, so far as pertinent, are set forth in the statement of flie case already made, certain named individuals, under permit of the state engineer, undertook to appropriate of the waters of Salmon river 1,500 cubic feet per second for the purpose of reclaiming and irrigating, under the legislation of Congress and of the state, 150,000 acres of desert lands, including not only desert lands of the United States embraced by the grant, but also certain school sections of desert land belonging to the state; their proposal and request to that end, dated August 12, 1907, being approved by the state board of land commissioners on the same day.
It appears further that all of the property, rights, and franchises acquired by those individuals under their appropriation and the said accepted proposal and request subsequently passed, with the consent of the state board of land commissioners, to the Twin Palls Salmon River Rand & Water Company, with which company that board, on behalf of the state of Idaho, on the 30th day of April, 1908, entered into a written contract pursuant to the act of Congress and the provisions of the state statute, which contract provided, among other things, in paragraph I, that the company would construct the irrigation works described in the proposal and request of August 12, 1907, and would sell shares or water rights in the system from time to time as provided in the contract, to the person or persons filing upon the government land embraced by the grant by Congress, and also to the owners of other lands susceptible of irrigation from the system or from any extension or enlargement thereof, such shares or water rights to be sold on the terms subsequently specified in the contract, and would also transfer the ownership, management, and control of the system to the purchasers of shares or water rights, in the manner also subsequently-provided for in the contract.
After describing, in paragraphs II and III, the reservoir, dam, ditches, canals, laterals, and rights of way pertaining to and being parts of
“The party of the second part (the construction company) is the owner of that certain water right evidenced by permit No. 2659 for 1,509 cubic feet per second of the waters of Salmon river in Twin Falls county, state of Idaho, issued by the state engineer of the state of Idaho, to be used for the irrigation of the lands described in Exhibit A herewith, together with other lands susceptible of irrigation from said system, which water right is hereby dedicated for use upon said lands, and it is agreed and understood that the dam here-inbefore mentioned shall be constructed so as to provide a reservoir for the impounding of 180,000 acre feet of water, which amount, in addition to the normal flow of the said stream during the irrigation period, has been determined to be sufficient to furnish two and three-fourths acre feet-of water per acre for each acre of land to be irrigated. And the second party promises and agrees to build and construct the canal and lateral system of sufficient capacity to deliver water to the users thereof at the rate of one-hundredth of a second foot per ácre for each acre of land to be irrigated.”
Paragraph V provides, in substance, that upon the execution of the contract, and when the actual construction of the canal is inaugurated, the state will, aftér notice given in conformity with law, throw open the lands covered by the grant, or a specified portion thereof, for settlement under regulations prescribed by its board of land commissioners; and by paragraph VI the state agreed not to approve any application for such lands until the person or persons applying therefor should furnish to the board of land commissioners a copy of the contract entered into by such person or persons with the construction company for the purchase of sufficient shares or water rights in the system for the irrigation of the lands applied for, such shares or water rights to be evidenced by stock in the Salmon River Canal Company, Rimited, which the contract provides the construction company should cause to be organized; and by paragraph VI the construction company further agreed as follows:
“That to the extent of the capacity of the irrigation works and to the extent of the water rights to which it is entitled as rapidly as the lands are open for entry and settlement, it will sell or contract to sell water rights or shares for land to be filed upon (to) the qualified entrymen or purchasers without preference or partiality other than that based upon priority of application, it being understood, however, that priority of application or priority of entry or settlement shall not give any priority of right to the use of water flowing through the canal against subsequent purchasers but shall entitle the purchaser to a proportionate interest only therein, the water rights having been taken for the benefit of the entire tract of land to be irrigated from the system. The priority of application upon the opening days shall be determined by a system to be devised under, the direction of the state board of land commissioners.”
By paragraph VII tire state agreed to sell the lands covered by the government grant to it to such persons as might be entitled to file upon the same, for the sum of 50 cents an acre, half of which should be paid at the time of the application for entry thereof made to the board of land commissioners, and the remaining half at the time of the making of final proof thereon.
By paragraph VIII, the construction company agreed that:
It would sell or cause to be sold to the person or persons filing upon any of the government lands embraced by the grant, or to the owners of any other*187 lands susceptible of irrigation from tlie system, by good and sufficient contract of sale with right of possession and enjoyment by the purchaser pending its fulfillment, “a water right or aliare in said canal for each and. every acre filed upon or purchased from the state or acquired from the United states. Kacii of said shares or water rights shall represent a carrying capacity in said, canal sufficient to deliver water at the rate of one-hundredth (Vioo) of one (1) cubic foot of water per acre per second of time and each share or water right sold or contracted to he sold as herein provided shall also represent a proportionate interest in said canal and irrigation works together with all rights and franchises therein based upon the number of shares finally sold in said canal; said irrigation system, however, is to be built in accordance with the plans heretofore filed with the board, which system, according to said plans, has been determined by the state engineer to have the carrying capacity hereinbefore mentioned. Such water rights or shares shall be sold to the person or persons aforesaid for the lands hereinafter described or for lands which are susceptible of irrigation from said system as follows:
“To the person or persons filing upon any of said lands at a price not exceeding forty dollars ($-10) per share to be paid for as follows:
“One-fifth (%) in cash at the time of sale and the remainder in five equal annual installments bearing interest at the rate of six per cent. (6%) per annum payable annually. To the person or persons purchasing any portion of sections No. 16 or 36, which are susceptible of irrigation and reclamation from this canal at a price not to exceed thirty dollars ($30) per share provided said water rights are purchased within one year after the purchase of the lands from the state and not exceeding forty dollars ($10) per share at any time thereafter; said payments upon said state lands to be made one-seventh (Vt) at the time of purchase and the remainder in six (6) equal annual installments with interest thereon at the rate of six per cent. (6%) per annum payable annually. In case the purchaser or entryman on desert lands, homestead lands or any lands other than those segregated under the Carey Act declines to purchase water rights within one year after the Carey Act lands are thrown open for settlement, the sum of two dollars and forty cents ($2.10) may be added to the price of water rights for each year’s delay or fraction thereof. No charge shall be made for water rights for lands taken by the right of way for any railroad filing its plat with the state board of land commissioners prior to June 1, 1908, and all entries of land shall be made subject to such right of way.
“This agreement shall not be construed to prevent the sale of shares or water rights on terms more favorable than those herein provided or to prevent the payment of installments on the purchase price in advance of maturity of the same at the option of the purchaser but in no case shall water rights or shares be dedicated to any lands before mentioned or sold beyond the carrying capacity of the canal or in excess of the appropriation of water therefor.”
Paragraph IX of the contract between the state and the construction company, after reciting the necessity of providing a convenient method for transferring the ownership and control of the system from the company to the purchasers of water rights and for the purpose of detemining their rights among themselves and between them and that company, and for the purpose of operating and maintaining the system, provided that, as soon as the granted lands should be thrown open for settlement, the construction company would cause a corporation, to be known as the Salmon River Canal Company, Rimited, to he organized, with articles of incorporation substantially as annexed to the contract, with an authorized capital stock of 150,000 shares, intended to represent'one share for each acre of land which might be thereafter irrigated from the system; the entire capital stock to be delivered to the construction company to enable it “to deliver to purchasers of water rights the shares of stock representing the same,” and one share
Paragraph X is as follows:
“The certificate of shares of stock of the Salmon River Canal Company, Limited, shall be made to indicate and define the interests thereby represented in the said system, to wit: A water right of one-hundredth of a cubic foot per second for each acre of land irrigated as provided in paragraphs IV and VIII of this contract and a proportionate interest in the said canal and irrigation works based upon the number of shares ultimately sold therein.
“While the party of the second part shall retain control of the said Salmon River Canal Company, Limited, water shall be measured to users from the place of diversion at the main laterals'of such irrigation system in such quantities and at such times as the condition of the crops and the weather may determine hut according to such rules and regulations, based upon a system of distribution of water to the irrigators in turn and by rotation as will best protect and serve the interests of all the users of water from said canal system.
“It is agreed that said system of distribution by rotation shall be devised by the party of the second part and used by the Salmon River Canal Company, Limited, in case the necessity arises during the period while it retains the management of the Salmon River Canal Company, Limited.
“The sale of the water rights to the purchasers shall be a dedication of the waters to the lands to which the same is to he applied. Water shall only be delivered through said system during the irrigation season, to wit, between April 1st and November 1st of each year. A domestic supply when necessary outside of the irrigation season shall be delivered under such rules and regulations and under such terms and conditions as shall be determined by said Salmon River Canal Company, Limited.” »
By paragraph XI the construction company agreed to so construct the system as that the water conducted through it should be available at a point not to exceed one-half mile measured in a direct line from each quarter section of land to be reclaimed and irrigated, and that it would construct and place in position all headgates and other devices for the control and measurement of the water in the main canals and reservoirs and in the main laterals; it being intended that the settler should, under the directions of the chief engineer of the construction company, furnish but one measuring gate or device for his own use, and that for each year after January 1, 1911, while the construction company retains control of the canal company, the latter should charge and assess the purchasers of water rights 35 cents an acre, which amount, if insufficient to maintain and keep the system in- repair, would be supplemented by additional funds by the construction company up to January 1, 1913, after which date the actual cost of maintenance should be paid by the settlers.
The contract also provided for the diligent and continuous prosecution of the work by the construction company, and its completion within five years, and for the right of the construction company to
Under and in pursuance of the contract between the state and the construction company, the latter caused to be organized a corporation called Salmon River Canal Company, Limited, and it caused to be prepared a printed form of a contract, one of which was executed with each of the settlers when purchasing their respective tracts of the desert lands, including the complainants. That contract recited the making of the contract between the construction company and the state; the fact that it had entered upon the construction of the irrigation system for the purpose of diverting the waters that had been appropriated ; that the state board of land commissioners had notified it that it might proceed to sell and contract for the use of the water; that the purchaser had made application to the company to be permitted to purchase the particular piece of land, which application had been accepted subject to the approval of the board of land commissioners, which approval had been given; and that for a certain consideration stated the construction company agreed that, in pursuance of its contract with the state, the purchaser should be entitled to a certain stated number of shares of the capital stock of the Salmon River Canal Company, Limited, the certificate of which company should be and was as follows:
“Salmon River Canal Company, Limited.
“.Shares. ., 19-...
“This is to certify.is the owner of.shares of the capital stoc-K of the Salmón River Canal Company, Limited.
“This certificate entitles the owner thereof to receive one-hundredth of a cubic foot of water per acre per second of time for the following described land:
in accordance with the terms of the contract between the state of Idaho and the Twin Falls Salmon River Land & Water Company and this certificate also entitles the owner to a proportionate interest in the dam, canal, water rights and all other rights and franchises of the Twin Falls Salmon River Land & Water Company, based upon the number of shares finally sold in accordance with the said contract between the said company and the State of Idaho. Salmon River Canal Company, Limited,
“By ---, President.
“Attest:-, Secretary.”
The contract with the settlers further provides that the water to which the purchaser is entitled and should receive through the irrigation system should be used upon and become dedicated and appurtenant to the specific piece of laud so purchased; and, further, that the laws of the state and the contract made with it by the construction company should be regarded as defining the rights of the respective parties
The contract between the construction .company and the settlers also contains provisions concerning the amount paid and to be paid for the water right, for the assignment by the purchaser of the stock in the canal company to the construction company as security, and the agreement by the purchaser that immediately upon transfer to him of the legal title to the land he would execute to the construction company a mortgage or deed of trust thereon as security for the performance by the purchaser of the provisions of the contract; such mortgage or deed of trust to be in such form as the state board of land commissioners should approve.
It is thus seen that the scheme devised to take the benefit of the congressional grant involved the legal appropriation of the necessary water, a proposed plan by the appropriator for the construction of the necessary irrigation system, which plan should have the approval of the state board of land commissioners, and subsequently the approval of the Secretary of the Interior. Upon the approval of the latter officer, the segregation from the public domain of that portion of the desert lands in Idaho embraced by the grant and included in the proposed reclamation project followed. The construction of the system necessarily required the furnishing from some source of the money with which to do the work; the compensation to the .construction company for the. liability assumed by it in procuring the required money and in doing the work must of necessity come from the 'sale of the lands and of rights to the appropriated water; 'and of that fact both Congress and the state were, of course, well aware, as is shown by the legislation that has been referred to. In the execution of the project, the contract between the state and the construction company, and the contract between that company and the settlers, were made. Manifestly, they are to be read together and in connection with the statutes of Congress and of the state, to which the contracts expressly referred. The construction company, the settlers, and the parties who furnished the money for the building of the system, receiving as security therefor the liens authorized both by Congress and the state, are therefore, each and all, charged with full knowledge of the laws and of the provisions of the contracts. The difficulties that have arisen grow out of the fact, discovered, unfortunately, too late, that, instead of the appropriation of the waters of the stream amounting in fact to 1,500 cubic feet per second, the supply, as shown by the record and according to the practical concession of the parties, was only about one-third of that amount — wholly insufficient for the reclamation and irri
Turning to the statutes (above referred to) of the state that owned the water that was authorized to be appropriated, it is seen that no user under such appropriation shall be entitled to the use of more water than can be beneficially applied on the land for the benefit of which the right is given. None of the decisions of the Supreme Court of the state that have been cited hold that the statute does not mean what it plainly says. We make this observation in view of the suggestion made in the opinion of the learned judge of the court below, where it is said:
“If the right granted is too great and the settler attempts to use water wnstefully, that is a matter of which the state and other appropriators upon the stream may complain; it is no concern of the defendants.”
The contracts of sale by the construction company cannot, in our opinion, be held to convey to the settlers a right to more water than can be beneficially applied on the land agreed to be conveyed to them.
The court below held and adjudged, as has been seen, that that company contracted with the state and the settlers to furnish them with water “at the rate of two and three-fourths acre feet per acre measured at the points of delivery from the system into the consumers’ laterals; and further that it would not sell rights in excess” of its available supply. The point of delivery thus adjudged by the court is in entire conformity with the express language of the contract between the state and the construction company, and in view of the fact, shown by the record and which is here undisputed, that the construction company has already sold water rights far beyond the available supply of water, we are also of opinion that the court below was entirely right in enjoining it from making any further sales.
We are, however, unable to find anything in either of the contracts justifying the court in adjudging that the amount of water agreed to be furnished to the settlers should he “at the rate of two and three-fourths acre feet per acre.” The only place in either of them where “two and three-fourths acre feet per acre” is mentioned is in paragraph IV of the contract between the state and the construction company, which we repeat:
“IV. The party of the second part is the owner of that certain water right evidenced hy permit No. 2650' for 1,500 cubic feet per second of the waters of Salmon river in Twin .Falls county, state of Idaho, issued by the stale engineer of the state of Idaho, to be used for the irrigation of the lands described in Exhibit A herewith, tog-ether -with other lands susceptible of irrigation from said system, which water right is hereby dedicated for use upon said lands and it is agreed and understood that the dam hereinbefore mentioned shall be constructed so as to provide a reservoir for the impounding of 1<S(),000 acre feet of water, which amount, in addition to the normal flow of the said stream during the irrigation period, has been determined to be sufficient to furnish two and three-fourths acre feet of water per acre for each acre of land to be irrigated. And the second party promises and agrees to build and construct the canal and lateral system of sufficient capacity to deliver water to the users thereof at the rate of one-hundredth of a second foot per acre for each acre of land to he irrigated.”
The word “determined,” so used, was evidently used in the sense of estimated; for in the nature of.things it could not then — in advance of even the beginning of any work or the actual diversion of any of the water — be known what would be the exact capacity of the system. It was necessarily but the estimate of the proposer of the plan approved by the state engineer and the state board of land commissioners, and subsequently by the Secretary' of the Interior in segregating the tract applied for from the public domain. How greatly all of them erred in their estimate is shown by the record in the case; the capacity of the system being, as has been said, only about one-third of what it was then thought it would be.
There is in the record no evidence even tending to show any fraud on the part of any one connected with the undertaking. And in so far as concerns the construction company, compensation for the responsibilities assumed by it and for its efforts could come only from the success of the enterprise; so, too, in respect to those who furnished the money with which to build the works, their security for the money loaned depended upon its success.
We are not sure that the latter concurrence can, in view of the many points discussed by the learned Chief Justice, be properly held to be a concurrence in his holding respecting the effect of the action of the Secretary of the Interior in approving the proposed plan that was adopted by the state officials and in making the segregation asked for by the state; but, so conceding, we feel bound to hold to the contrary in view of the express language of the grant authorizing the issuance of the government patents, providing, in effect, as we construe the two acts of August 18, 1894, and June 11, 1896, that an ample supply of water for the land be actually furnished as a condition precedent to the issuance of such patents. It is obvious that whether or not such a supply is actually furnished is a pure question of fact; and that all questions of fact in relation to all of the public lands are matters for the exclusive determination of the officers of the Rand Department has been so many times decided by the Supreme and other federal courts as to render the citation of cases unnecessary. To what extent the'Secretary of the Interior will, in determining the facts, take into consideration the approval of the plan by himself as well as by the state officials, and his order segregating the tract applied for from the public domain, will be for him to consider and determine.
But we cannot at all agree to the contention on the part of the appellants that no specific amount of water was sold to the settlers; for, turning to the contracts, it is seen that the construction company did, by paragraphs IV, VIII, and X of its contract with the state, in effect, expressly promise and agree that the water rights of the respective settlers should be “one-hundredth of a second foot per acre for each acre of land to be irrigated”; and by its contract made with the settlers it distinctly agreed that their respective water rights should be that specific amount, the certificate of stock in its holding and operating company (the Canal Company) delivered to such settlers expressly declaring that it “entitles the owner thereof to- receive one-hundredth, of a cubic foot of water per acre per second of time” for the irrigation of his land, and “also entitles the owner to a proportionate interest in the dam, canal, water rights, and all other rights and franchises of the Twin Falls Salmon River Rand & Water Company, based upon the number of shares finally sold in accordance with the said contract between the said company and the state of Idaho.”
We therefore regard it as clear that the water rights the respective
It therefore appears by the express declaration of tire contract between the parties that the specific amount of water sold to the respective settlers is not a constant flow of that amount, but to be delivered and received .in rotation; and such, as we understand, is the almost if not quite universal custom under similar systems of irrigation works. It may be that such amount so used may prove insufficient for the proper irrigation of these lands, but it is most obvious that the interests of all of the parties concerned demand the utmost care in the distribution and use of the water, to the end that the best results possible may be obtained. When the well-known fact is remembered that desert lands after cultivation can produce profitable crops with less water than when new, and that a very considerable quantity of the lands embraced within the present project have, according to the record, been abandoned, with the possibility that more may be, it is at least to be hoped that of the remainder a success may be made for all concerned.
The suggestion made on behalf of the appellees to the effect that their rights are prior to those of the settlers subsequently purchasing, and that they are entitled to have such subsequent purchases as conflict with their asserted rights annulled by a decree of the court, is .conclusively answered by this express provision of paragraph VI of the contract between the state and the construction company:
“That to the extent of the capacity of the irrigation works and to the extent of the water rights to which it is entitled as rapidly as the lands are open for entry and settlement, it will sell or contract to sell water rights or shares for land to be filed upon to the qualified entrymen or purchasers without preference or partiality other than that based upon priority of application, it being understood, however, that priority of application or priority of entry or settlement shall not give any priority of right to the use of water flowing through the canal against subsequent purchasers but shall entitle the purchaser to a proportionate interest only therein, the water rights having been taken for the benefit of the entire tract of land to be irrigated from the system. The priority of application upon the opening days shall be determined by a system to be devised under the direction of the state board of laud commissioners.”
It results from what has been said that those portions of the interlocutory decree appealed from which adjudge the settlers entitled to
