Case Information
*1 OFFICE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN
Honorable W. Lee O*Daniel @overnor oi Texas
Austin, Texas
Deer Qovernor OlDanlelt Opinion No. O-8313
Ret Whether or not the Qulf Coast Water Company ia a utility oompany "02 any kind charaoter whatsoever* within the manin& of Seotlon ,/' 3, Aots 1934, 4Srd Leg., 4th ,/ 0. S., Ch. 7, page Z3.
We reaeived dated June 15, 1940, requwt- ~your’ist+m ompany was lnoorporeted in 1931 er to the publio for frrigation, The Company apparent- 8 of Art1016 1308, Re- elaum* in its oherter go in eald article. It authority uuder it8 which has been deolarad Se0 Gulf States Utllitlss 00.. rror Refucred).
e been informed that the Gulf Oaaat Water Uom- l.of Its water from the OoLorado RIveri that the oorogany has approximately ninety (90) oontraote for the furnishing Or water to rios famere for irrigation purpo444; that the oorapany furnished water yaerly to irrigatr approximate- ly thirty thousand (30,000) aores of land; that the aoazpany owns pumping plants, oanelr, laterale, ditohes, eto., used in furnlsh- *2 Ronoreble I?, lea O*Denlel, paga 8
fog water to Its ouetomere and that the company doer not own eny lntereat in the land farmed to rlae.
Wa deem it neceeeary to quote e part of section 3, botcr 1934, 43ra Leg., 4th Oalled 866dlion, Oh. 7, at pccge 33 alnoe your puery arises by 7irtua of the provleione of eala Aat. Said aeotlon reefla, in par6, as follower
*That no gereon shall ho eligible for suoh appointment (to the boera of Qireators OS the Iawer Colorado River Authority) if he haa, during the pre- cadlna three yearr berore his enrointmant been (IDI- ployeb: by en eleotrio pewer and-light company, gar Berore determining whether the dulf Ooaet water Company is a uttlltp oompany wlthln the meaning of the Aoh oreatlng tha l.ower Colorado River Authority, it 18 proper to ooneider the erl- dent intent of the legislature in eneating the6 per6 of the above mentioned AoQ.
An inepeotion sallate Bill le?. 8, Aete 43rd Leg., 4th C. 8.. ch. 9, page 19, reveals that has been conferred paver upon the Lower Colorado River Authority, eating threugh it8 alr- eotore, to control, store, pre6brve, uee, dietribute and sell the weterm of the Colorado River, 60 develop, generate, dietribute and eel1 water power and sleatrloal enorgy, to oonstruct, mein- taln, u8e ana operate tsoilitien, and meny ether poware toe nu- meroue to mention here.
The legislature intended thaf the afreotore of the Lower Colorado Rirer Authority should be persons who would aot for the bent intereets of the.State. It there?ore sought to end did disqualify those persons from being appointed to the Board of Direotors of the Lower Colorado River Authority whho, at the time of egpointzent, had been employed by an utility oompsny within three (3) yeere preaeding the date o d e appolntmen6. This safe- guard waar enaoted to insure as far (18 possible thet 6he affairs of the l,ower Colorado River Authority would be oarrlsd on to the t
510
Reuoxable 1. Lea OvDanlel, page 3
best Interests or the State rather than for the Interest of private lndlvlduale.
In this aouuectlan, It has been aalled to our atten- tlon that the Gulf Coast Water Corcpany has entered Into a aon- traat with the Rorrd 0r Dlreators 0r the Lower Colorado River purahase or water. It 1s r4aUlIy seen that Authority for it a alreator, Officer or other employee or the Gull boast Water Wapany 18 eligible for the appOintdcent la question, he rr,lght roll be mom Interested In seelug that the water oompany bene- fited rather than in protectInS the best interest8 or the Stste.
Xn Title Xo. 188, Revised Clvll Lftatutee, we flhd the followl~ articles whlah we believe to be pertinent to the ques- tlon herein involved. They are a8 followst
*Artlalr 7466. Public rights
=!fhe aonservatlon and develnpment or alt or the natural resourae8 or thla State, 1ncIkQlng the aontrol. etorlm. 9reaervatlon and dletributlon of Its stoim and rid water8, the waters 0r Its rivers and streams ior irrigation, power and all other use- ?tul purposes~ the reuu2m6ffon ana Irrigation 0r it8 aria, semi-arid and other lauds needing irrigation; the realarcatlon and drainage of its overflowed lands, and other lands needing drainage; the aonservatlon and deveIapuent~.of Its forest, water and hgd?o-aleatrla power! the navlgatlon of its inland aad aoastal waters, ana tha preservation and oonservatloh oil all snah 1)1- r46ources or the State dre each and all hersb tural dealared DubHa right4 and dufi~;s.~ Iunaerscorlng o&a)
"Jirtlolo 7467. Property of the State *The watera Or the ordlasry flbw ana underflow and tlaes of, every ilowing river or netural stream, of all lakes, bays am.6 or tFis Gull of Kexlco.
and the eta&, fiood or rain watare or every rivb or natural stream. eanvon. ravine. ao~r4ssloa or watar- shed, within the StkePot 'Paxa;, ai?4 h&by &cl&d
and the right t the ~roarlatldn in zhe manner and ior- the us& and piwp%ee-hereinafter pro- vlaea, and icay be taken or diverted from its natural channel r0x any the purpo64s expreesed la this chapter. Wen an appllaatlon 16 aadr ror approprla- c
Honorable W. L. OrDaniel, ~680 4
tion af suah water for mining purpoaea, the owner of the land through which the water flows and whlah 28 to be arpropristed ahell here the prior right to agpropri- ate dlamo, ana ehall be permitted to extrolse suah right, although nuah owner mey not hsts mde appl2oatlon prior to such eppliaation by another, and suah owner ahall have only ten days aftor the notice of application to appro- priate muoh water In whlcah to exeraiss his prior right to appropriate, whiah he shall do by written application filed with the Board of Water Xn&mers within suah time.*
"Artiale 7858. Possessory tight ~till,ptrsana who owa or h0ia a passes6cry risht or title to land adJoining cr aont2@ous to any dem, re84rvoir, aanal, dltah, rlume or let4s%l, oonstruatoa and maintained under the provisiona ot this ahapter, and who shall have esaured B ri&t to the ~4% of water in mild aand dltoh, iluin6, ldtcral, ~4%~0lf, aam or lake, shali be entitled to be supplied iram suah aanal, dltah, flume, lateral., dam, nwrvolr or lake with nater ror irrl@tlon of suah Xand, and for mining, aevslopment 0r power, ana tilling, manufaoturlng, etoakralslng, In accordanct wl%h the tsrmr of hir or
their oontract."
"Artlale 7656. Failure to fasrqe upon pria*~ *ff the person, essoaletlon persona, or oor- port&ion owning or controlling rush wetek, and the person who own8 or hold8 a porssaaory rl&ht or tlfla to land aajofnlng or .co;lt2g~?us to any eanrrl, ditah, rliie or lateral, lake or remxvolr, aonstruat4d or unQ,er the provl62ons of'this ahapter, fall maintained to aerse upon a price for a permanent~viater right, or for the ~4 or rent@1 of the neeeasary water to lrrlgato land or such person, or for mining, milling, m4nu- taoturing, the aevslogment of power, or stook raising, wch person, assoaiation of pereon8, 03 aorporatlon #hall, nsver8helesa+ If h4, they or it, h4v4 or aontral any water not aontraated to othrrs, ttmnish the neoes- sary water to euah pareon to irrigate his lads or ror mining, milling, manufcaatuing, the development or power or atook ralalnq, at aueh prices as aball be reasonable and .just, and without d2aarlsinaflon.~” *5 Honorable 2. lee O'Daniel, page 5
WArticle 7565. Ford to fix rct68 "The said Ecoard shall have Rower and eidhcrity, and it ~&till ?e its duty to fix reasonable rates for 0r water for the puryoaes or any SW- the furniSbiIl& pose msntioned in this chapter."
Urticle 7370. Rules and regulctians mate and published
TWery p6rSon, aasooiation 0r persone, oorporatlon, irrigation district, coneervlng or 8uyFlyIng water for any of the purpoaea authorized by this chapter; shall make and pu'bliah reeeonable rules and ngulatlonr relating to the method and manner of sqgly, u6e en4 dietribution of rater, and prescribing the time and manner of making eppllaation for the une of water and payment therefor.W
*Article 7883. Additional right or way obtained *Any person, asoooiatlon 0r pereons, aorpcration, irrigbtlm or water improvement distrlot, or any oity or town, may ale0 obtain the right 0r way over privatr lend8 and ale0 the lonae tar pumping plants, intakes, beadgates and atorace re8ervcslr8, by oondemnetlon, by causing the darr%iges for any Drivets property appTopried.ed by any euoh person, aoeooirtion 0r persone, oorpor2tioq water improvement or irrigation district or city or town, to be aasesscd end paid for as provided.by the Statutes thic Stctc and ae prcvided in Title 5Z 0r this Aot relating to 1 minent Domain* provided, however, that E.
when the power granted by this section is eought to be exeroiaed by any person or aasoolaticn of persons, but net including irrigation oorporatlona, diatrfcte, cities or towns, he or they shall first make appliceEtion to the Doz~rd ci :vater Hnginsers for suoh condemnation and said Board shall make due inveatigotion it deems ad- entl if visable ahall give notioe to the party ownihg the land to be oondemned, end after hearing, may institute 8oU@t such oondsnn!Jtion prooeedings In the name of the State d OL Texes ror the use an d benefit of said person or per- sons and eL1 others aimllwly aitunted, the coats of said cult and condamnation to be paid by the person or persons at whoose instance the same la Instituted in pro- portion to the benefit8 reoeived by each a6 fixad by eaid board and to be paid before use is m<ide of such oondemned rights of property; and thereafter all per- sane seeking to take the benefits of suoh condemnation proceedings shall make applioation therefor to the IW>rd *6 Honorable E. Lee C'Daniel, Rags 6
of Water Rnginviera and ii euoh appllotiticn is granted shall pay lees and clxrges 68 may be fixed by the Bocrd."
The ?asr6 of Water Engineer8 is vested with broad pow- ers in regulating the use o? water over whloh It has regulatory ocntrol. Reoause the Gulf Coast Water Company takes all of its weter out of the Colorado River and rdslla it to rioe farmers for t!le rurpoae of irrigating rios land, the raid oompmny is subject to regulation by the Roerd of Watsr Engineers ae pro- vided in Title 128, Revised Civil Statutes. Artio1e 7555, 8upra, provides that the furnisher of water must supply water to *all persons who own bold a possesscry right or title to land ad- joining or oontiguoua to any den, rcwervclr, tanal, ditch, flume or letcrel* when they shall have asoured a rl ht to the use OS the water. \:e are lnforrced that some ninety 90) persona have 7
secured the right to receive the water from the Gulf Coast Wa- ter Company.
Artioies 7556 and 7557, provide, thst water must be supplied at suoh prices as shall be rsaeonebls andwlthout die- Artiole 755.5 $ivrs the Roard ot Water Engineers or#dntition. power end authority to fix reasonable rntes lor the use of the water. Article 7570 reqtirae the furnisher of water to make and publish reasnncble rules and regulations rslatiq to the manner and x&hod of supply, usa and distribution, and preeorlblng the time and manner OS making applloatlan for the use of water and ya~yment therefor,
krtiole 9883 grants irrigation oonpanies th,s right of eminent doma:n. To make oertein that irrigation ocn5p4aie4 had the right to condemn land under Artlols 7583, the 44th Xegislature, Reguler Eession, 1935, enaotsd Senate Bill Roe.
155, Ch. 48, page 126, clarifying aaid article. The emergency oleuse of said Aot reads aa follows:
"b00. 2. The Sect thet under the oodlfioation of 1925 the oodiilsrs, or else the printers, left a question unCer the new laws of 1925 as to the power4 9f irrigation corpora,tions to oondtvmn lend, whioh power has a,lways been expressly reoognined in Texas, and it is necessary to clear up the question and it is vital to the agricultural development of this Stats, oreates an emargenoy and on imperative public neoeselty
513 Honorable W. Leo O*Daniel, page 7
that the Constitutional Rule requiring bills to be read on three several days la each House be surpended, and the name is hereby suspended, and that thlrr Aot take effeot and be in foroe from and after its passage, and it is 80 eneoted.n
In the oase of Colorado Canal Co., vs. KoFarland and 5outhwel1, 94 8. W. 400, the Court of Civil ~ppealr went LIO far aI to sag that the possession of the right of anbent domain flxad the status of an Irrigation oompany as a quart publfa corporation regardlees of whether it exerolnes the power or not.
Wr. Justice Dibrall, speaking for the Supreme Court of Texas in the oase of Raywood Rice, Canal and YillSng Co., vs.
V, F. Erp.and W. E. @right, 105 161, said: Texae
*The granting of the power of eminent domain imposes a public service in return. No authority under our law exists ror conferring the power at eminent domain for private use. The moment suoh p-or is granted the grantee beoomm quasi publio in ohsraoter and while hi8 or Its funotlona are ex- erolaed for prorlt they must be exeroieed in the in- terent of the publio upon reasonable terme and without dlaerlm,fnation. * e en
We quote from the oaee oi Amerioan Rio Wands Land and Irrigation Co., vs. Mercedes Plantation Ce., 155 8. W. 886, (re- ani3 atrimed 208 6. w. 9041, as followa: r023d
*Appellant oorporatlon wae organlsed and ohartsr- sd under aeotion 11 o. El, p. 23, ot the dot8 of 1895 (R. 5. ~1911, art. !&02 at seq.), and follows the language ot that aot In stating its purposes and powers. From these powers grow, by operation of law, ita duties, which cannot be #hanged or leeesnsd by Its intentions, In Borden t. Rio8 & Irrigation Co., 981 Tex. 404, %b 3. #.
11, 107 Am. St. Rep. 640, Supreme Court of this state held that euoh a oharter create8 a quasi publio oorpora- tioa whiah is oharged with duties to the publio aoamienau- rate with the powers cand privileges oonferred upon it by law. The Leglslsture in the above sot has not very olearly doiined the rights of the publio nor the duties of the eorporatlon, but a aartful rtudy of the langur,go of the aot in the light of the well-eetablisbed prinoi- pies OS law makes clam the meaning. As aptly raid by the learned Judge who wrote the opinion in the Borden c
Donorable W. I,ee O'Daniel, page 8
Caee the powers of the corporation are oonferred to enae e It to approprlnte water and to convey it 'to all *i
persons entitled to the 8me$* to *all persons who OWA or hold a poeeeseory right or title to land adjoining or con"uiguous to any canal,* etc., aAd *bho shall h:ive aacured a right to use of water * * * in aooordance with the terms of their oontraot.' In case-of a short- age of water, a plan for prorating the supply is Fm- vlded, and the sale of a permanent weter ri&t is made an easement upon the land which will ycos with the title, eto. It is further provided that in case no ecntreoi can be agreed upon between the conamer and ttre Irrigation company, the conauxer shnll nevertheless be entitled to water upon rez.scnable terms. Such lmgusge, aided by the rule ot law that only puhlio or quasi puhllo aor- porations are endowed with the power of eainent dozmln, oan only bo understood to mean that out of the grant of power to the oor?oretlon ahall grow, ipso faoto, the right of the property owner to receive, upon reasonable texvca, a fair proportion of the water taken from the water ceurse and conducted through its oanals, and that the power of the corporetion to contract for the aupplp of water ia limited to such subjects a8 do not oonfllct with the righte of the parties ae rlxed by the law.
In the Eorden Case the court, aaid: upon t,hla subject, *The power to oontrtot, here given to the owmr of the plant, oannot, if the business is to he regarded as affected with a publia interest, be reaognized a8 ab- solute and LIAoOAtrolled. Comon carriers aAd othera engaged in publio oallings h:ve the power to Cantreat, but it cexmot he 80 employed as to absolve them from their duties to the puhllo or to deprive other8 of their rights. Right8 hre evidently secured by this
statute to those 80 eitubted 38 to be able to avail
themselves of the water provfded for, and those rights it is the duty of the owners of the contemplated busl- ne38 to rospeot; ami the power to contract, under the well-recngnized principlea applicable to those oherged with auah duties, mu& be exercised in subordination to suoh duties aAd rights. Reasonable contracts are what this statute means, and not contrecte employed as
evasions of duty.' 98 Tex. 511, 86 8. ?i. 15, 107 Am.
St. Rep. 640.”
See 8 a. 1. R. 968, 13 k. I. R, I.?27 and 44 Tex. Jur. 339-369 for a full dlsousslon and oit&tioA of authOritio8 oonoern- ing the question of an irrigation company being a utility oom-
. 5513_5
Ronorable W. Lee O*Danial, pi-ee 9
g-4.
Fran the above oiteb authorities, It ie apperent that an irrigation oompany pamesses many of the attributes oommon to the more generally knowi utflity Further, oompanies. it seems to ua that there ere a6 many reeson~~, it not more, for alequalifying a director, of’ffoer or employee of an Irrigation oom~enp than there would be OS disqualifying e direator, of- fioer or employs of a gas or telephens oomgany. Certainly, from e persoAa1 6teAdpoint, it would seem that e person in- terested in e water oompeny is in a muoh better poaltlon to profit from the appointment in question than a person lnterest- ed in a gas or telephone oompanl.
For the reason* herein ststed~, ve are of the opinion that the Gulf aoast Water Company 18 a utility oom- pany rlthln the meaning of 8eotion 3, Aata 1934, &Ml Leg., 4th a. a., ah. 7, p. es. It follewr that a director, of- ifaer or other employee of said oompany is lnelig~bls to be appointed to the Emord of Direotora of the Lower aoloredo River Authority a8 provided in maid Aat.
Tows very truly ATTORNRT QEW?AL OF T!XXAS Leo 8hoptaw LS:ZF
OPlNlON
GOMMI’lTEE: \