Bennett v. Twin Falls North Side Land & Water Co.

• Decision Date: 07 July 1915
• Court: Idaho Supreme Court
• Parties: I. E. BENNETT, Plaintiff, v. TWIN FALLS NORTH SIDE LAND & WATER CO., a Corporation, and NORTH SIDE CANAL CO., LTD., a Corporation, Defendants

150 P. 336

27 Idaho 643

I. E. BENNETT, Plaintiff, v. TWIN FALLS NORTH SIDE LAND & WATER CO., a Corporation, and NORTH SIDE CANAL CO., LTD., a Corporation, Defendants

Supreme Court of Idaho

July 7, 1915

CAREY ACT LANDS-TAXATION OF-CONSTRUCTION COMPANY-WATER RIGHTS-CONSTRUCTION OF CONTRACTS AND STATUTES-TAXATION OF WATER RIGHTS-WATER RIGHT APPURTENANT TO LAND-APPURTENANT SEPARABLE FROM LAND-WATER RIGHT NOT TAXABLE.

1. Under a Carey Act project where a construction company has entered into a contract with the state to initiate the appropriation of water and to construct canals, ditches and reservoirs for the irrigation of the land within the project and has also the right to contract with settlers upon such lands to sell them water rights, and does contract with the settler or entryman to sell him a water right for his land and the settler agrees to pay for such water right in annual instalments, and thereafter when his land becomes subject to taxation his land is taxed and he fails to pay the taxes, and the land is sold at tax sale and a tax deed is thereafter issued conveying the land to the purchaser or his assignee such tax deed does not convey the water right purchased by the entryman of such land for the irrigation thereof.

2. Under the provisions of sec. 1629, Rev. Codes, the water rights referred to therein do not attach and become such an appurtenance to the land that the title to such water right is conveyed under a tax deed which conveys the title to the land where the purchase price of the water right has not been paid.

3. Under the provisions of sec. 3240, Rev. Codes, all of the waters of the state when flowing in their natural channels including the waters of all natural springs and lakes within the boundaries of the state, are declared to be the property of the state.

4. Under the provisions of secs. 4 and 5, art. 15, of the state constitution, the state has power and authority to direct and control the appropriation of the unappropriated waters of the state, and, when the requirements of the statute are complied with, the right gained by the appropriator is a right to the use of the water.

5. Under the provisions of sec. 3056, Rev. Codes, water rights are declared to be real property or real estate.

6. When one has legally acquired a water right, he has a property right therein that cannot be taken from him for public or private use except by due process of law and until a just compensation shall be paid therefor.

7. A water right is an independent right and is not a servitude upon some other thing, and is an incorporeal hereditament, being neither tangible nor visible.

8. The owner of a water right, by purchase or original appropriation, may sell the water right separate and apart from his land.

9. The provisions of sec. 1644, Rev. Codes, as amended by the Laws of 1913, p. 242, exempt from taxation such a water right as the one involved in this case.

10. Held, under the settlers' contract that the title to the water right does not vest in the entryman until he makes full payment for the same.

11. The provisions of sec. 1629, Rev. Codes, do not make the water right an inseparable appurtenance to the land, or such an appurtenance that a tax deed transferring the title to the land would also transfer the unpaid for water right.

12. Held, that the purchaser of a tract of Carey Act land at tax sale may be subrogated to all of the rights of the entryman so far as the water right is concerned, and may procure title thereto by making the payments provided for by the water contract and in accordance with its terms.

An original application for a writ of mandate to the defendants, commanding the Land & Water Company to immediately assign, transfer and set over to the plaintiff forty shares of the capital stock of the North Side Canal Company and to cancel a certain lien and commanding the Canal Company to deliver to the plaintiff certain water for the irrigation of the forty acres of land described in the petition. Alternative writ quashed and peremptory writ denied.

Alternative writ quashed and peremptory writ denied. Costs awarded to the defendants.

Paul S. Haddock, for Plaintiff.

In regard to the question as to who is the real owner of a water right represented by shares of stock in a water corporation, the courts have taken the view that the companies are in the nature of carriers, and that the real title to the water right rests in the owner of the land; that the most that can be said of the corporation is that whatever title it may hold is held in trust for the real and equitable owner, that is, the user of the water. (2 Wiel on Water Rights, chap. 57; Hard v. Boise City Irr. etc. Co., 9 Idaho 589, 76 P. 331, 65 L. R. A. 407; Creer v. Bancroft Land etc. Co., 13 Idaho 407, 90 P. 228; Nampa etc. Irr. Dist. v. Gess, 17 Idaho 552, 106 P. 993; 3 Kinney on Irrigation, 2651; Idaho Fruit Land Co. v. Great Western Beet Sugar Co., 18 Idaho 1, 107 P. 989.)

We agree that a water right is a property interest which may at any time be separated from the land to which it was originally appurtenant, provided that this separation must be made by the person owning the land and the water right, and that the separation must not be to the injury or detriment of some other person. (Hard v. Boise City Irr. Co., supra; Ramelli v. Irish, 96 Cal. 214, 31 P. 41; Union Mill etc. Co. v. Dangberg, 81 F. 73, 115.)

Our contention is that the water right was appurtenant to the land at the time the tax lien attached to the land, and from that time on the state and county government acquired such an interest in said land and its appurtenance to wit, its water right, and the owner no longer had the right to separate his land and water until the said tax lien was satisfied. A mortgagee would certainly have the right to object to a mortgagor separating the water right from the mortgaged land because the mortgagee's security would then be almost entirely gone. The same principle would hold good with a mechanic's lien, a tax lien or any other lien. Shares of stock in a mutual water corporation such as the North Side Canal Company is are appurtenant to the land and will pass with a conveyance of the land. (In re Thomas Estate, 147 Cal. 236, 81 P. 539; Bank of Visalia v. Smith, 146 Cal. 398, 81 P. 542.)

"Water rights are real estate for the purpose of taxation but should not be assessed separately from the lands to which they are appurtenant." (1 Wiel on Irrigation, p. 300.)

A tax deed conveys the appurtenances that were assessed and included in the tax certificate of sale, and it does not make any difference whether the appurtenances were recited in the tax deed or not. (Bank of Lemoore v. Fulgham, 151 Cal. 234, 90 P. 936.)

Longley & Walters, for Defendants.

A water right is an independent property right, and is not a servitude upon some other thing (Kinney on Irrigation & Water Rights, secs. 769, 770), and an incorporeal hereditament, being neither tangible nor visible. (Kinney, sec. 771; Custer Consol. Mines Co. v. City of Helena, 45 Mont. 146, 122 P. 567.) It is not an inseparable appurtenance to land. (Kinney, secs. 1015, 1016.)

A tax sale of public land which is exempt from taxation conveys no title to the purchaser. (Quivey v. Lawrence, 1 Idaho 313; Young v. Charnquist, 114 Iowa 116, 86 N.W. 205; McGoon v. Scales, 76 U.S. (9 Wall.) 23, 19 L.Ed. 545.)

If the water right does not become an appurtenance to the land, either under the state law or contracts of the parties, by what theory can the holder of a tax deed claim it? (Hailey v. Riley, 14 Idaho 481, 95 P. 686, 17 L. R. A., N. S., 86.)

SULLIVAN, C. J. Budge and Morgan, JJ., concur.

OPINION

SULLIVAN, C. J.

This is an original application to this court for a writ of mandate to the Twin Falls North Side Land & Water Company, a corporation (which will hereafter be referred to as the Land & Water Company), and the North Side Canal Company, a corporation (which will hereafter be referred to as the Canal or Operating Company), commanding them to deliver water from their canal system to the plaintiff and to deliver forty shares of the capital stock of the Canal Company to the plaintiff, and to release the lien upon plaintiff's land created by the water contract with the Land & Water Company.

A general demurrer to the complaint was filed by the defendants, and it is conceded that the facts admitted by the demurrer are correctly set forth in defendant's brief, and are as follows:

1. The corporate existence of the North Side Land & Water Company and the North Side Canal Company, the parties defendant.

2. That the Twin Falls North Side Land & Water Company heretofore entered into a contract with the state of Idaho, under and pursuant to the terms of the federal law known as the Carey Act, as well as the statutes of the state of Idaho relating thereto, and that under and by virtue of said state contract the Land & Water Company agreed to sell water rights or shares in the irrigation system to be constructed by it to every person making entry of lands upon the segregation. The contracts specifically provide that the water right and interest in the system should be paid for by the entrymen and as by the terms of the contract provided, and such right and interest to be evidenced by shares of stock in the Canal or Operating Company, such stock to be held by the Land & Water Company until at least 35% of the payments due have been made, when the owner shall become entitled to receive the stock and vote the same.

3. That the irrigation system has been constructed and fully completed and that the Land & Water Company have in all things complied with the state and settlers' contract both as to constructing the irrigation system contemplated therein, and making the...