Craig v. Smith

• Decision Date: 24 March 1921
• Citation: 196 P. 1038,33 Idaho 590
• Parties: JOHNSON CRAIG et al., Respondents, v. J. W. SMITH, Appellant
• Court: Idaho Supreme Court

196 P. 1038

33 Idaho 590

JOHNSON CRAIG et al., Respondents, v. J. W. SMITH, Appellant

Supreme Court of Idaho

March 24, 1921

CAREY ACT-SUBCONTRACTOR'S LIEN.

Held in this case, that the Canyon Canal Company, Ltd., had no right, title or interest in the main canal and right of way to which the lien of appellant attached.

APPEAL from the District Court of the Seventh Judicial District of the State of Idaho, for Gem County. Hon. I. F. Smith, Judge.

Action to quiet title. Judgment for plaintiffs. Affirmed.

Judgment affirmed, with costs to respondent.

S. L Tipton and Alfred A. Fraser, for Appellant.

It is a condition precedent to the existence of a water right under sec. 5639, C. S., that payment therefor shall have been made. (Bennett v. Twin Falls etc. Water Co., 27 Idaho 643 150 P. 336.) That section does not apply to nor include a mechanic's lien on the property and the defendant claims title to the canal under a foreclosure of his mechanic's lien.

The defendant has a lien upon the water right and ditch for the unpaid balance due on the purchase price of water right at the time the defendant's lien attached to said canal. (Smith v. Faris-Kesl Const. Co., 27 Idaho 407, 432, 150 P. 25.)

Before plaintiffs can invoke the equitable powers of this court they must do equity. The defendant owns the Canyon canal, having purchased under foreclosure of his mechanic's lien against the canal company; the plaintiffs cannot use the same without paying for its use.

Water rights and canal are separate and distinct rights. (Ada County Farmers' Irrigating Co. v. Farmers' Canal Co., 5 Idaho 793, 51 P. 990, 40 L. R. A. 485; Parke v. Boulware, 7 Idaho 490, 63 P. 1045; Swank v. Sweetwater Irr. etc. Co., 15 Idaho 353, 98 P. 297; Stocker v. Kirtley, 6 Idaho 795, 59 P. 891.)

Richards & Haga and J. M. Thompson, for Respondents.

The lien of a subcontractor on an irrigation system constructed under the Carey Act must in any event be limited to the interest or right of the construction company under the state contract and the Carey Act laws of the state and federal government. (Nelson-Bennett Co. v. Twin Falls Land & W. Co., 14 Idaho 5, 93 P. 789; Smith v. FarisKesl Construction Co., Ltd., 27 Idaho 407, 150 P. 25; Childs v. Neitzel, 26 Idaho 116, 141 P. 77.)

A Carey Act construction company acquires, builds or constructs nothing for itself, nor is it the owner of either the land, water or irrigation system, but is formed solely to construct the works, and holds the title in trust for the prospective entrymen under the proposed project and acts as a conduit for transferring the title to the water from the state to the entrymen. A lien claimant, or one purchasing under a lien foreclosure, could at most simply step into the shoes of the construction company and carry out the state contract, being subrogated to the construction company's rights thereunder. (Bennett v. Twin Falls etc. Water Co., 27 Idaho 643, 150 P. 336; Idaho Irr. Co. v. Lincoln County, 28 Idaho 98, 152 P. 1058; State v. Twin Falls S. R. Land & Water Co., 30 Idaho 41, 166 P. 220; Nelson-Bennett Co. v. Twin Falls L. & Water Co., supra; Smith v. Faris-Kesl Const. Co., Ltd., supra; State v. Twin Falls Canal Co., 21 Idaho 410, 121 P. 1039, L. R. A. 1916F, 236; State v. Twin Falls Canal Co., 27 Idaho 728, 151 P. 1013.)

A lien claimant, or one purchasing under the foreclosure of a lien, against a Carey Act project, can have no lien or claim on the unpaid balance due on the purchase price of or moneys to be derived from the sale of water rights. (Pacific Coast Pipe Co. v. Blaine County Irr. Co., 32 Idaho 705, 187 P. 940.)

A lien claimant contracting with a quasi-public service corporation will be held to have dealt with such company subject to its duties to the public and to its obligations as such, and a lien claimant will not be permitted to interfere with the carrying out of contracts necessarily entered into in performance of its public duties or the performance of its obligations. (Sammons v. Kearney Power & Irr. Co., 77 Neb. 580, 110 N.W. 308, 8 L. R. A., N. S., 404; Hewitt v. Great Western Beet Sugar Co., 20 Idaho 235, 118 P. 296.)

Under sec. 4, art. 5, of the constitution, and sec. 5639, C. S., when payment is made on a water right, the water right shall remain a part of the tract of land for which the same is purchased or made appurtenant, and the title to the use of said water cannot be affected in any way by any subsequent transfer of the canal or ditch property or by any subsequent foreclosure of any bond, mortgage or other lien. (Hewitt v. Great Western Beet Sugar Co., supra.)

DUNN, J. Rice, C. J., and McCarthy and Lee, JJ., concur. Budge, J., took no part in the opinion.

OPINION

DUNN, J.

This is an action brought by the plaintiff on behalf of himself and a large number of other persons similarly situated to quiet title to their respective water rights in the irrigation system now being maintained and operated by the Emmett Irrigation District.

No answer was filed by the defendant, but the plaintiff and defendant entered into a stipulation of facts, of which the material ones will be stated in the opinion. Judgment as prayed for was entered by the trial court and defendant has appealed.

In December, 1903, the Canyon Canal Co., Ltd., hereinafter called the canal company, entered into a contract with the state of Idaho through its state board of land commissioners for the construction of irrigation works for the reclamation of certain lands in Canyon and Boise counties. The canal company let a contract for a portion of the construction work to the Faris-Kesl Construction Co., a corporation, and the latter company sublet a portion of the main canal to one J. W. Smith, the defendant in this action. On completion of his subcontract, in order to secure a balance that was due him, Smith filed a notice claiming a lien as subcontractor on the main ditch and canal known as the Canyon canal situated in Boise and Canyon counties, state of Idaho, and described as a strip of land 100 feet in width and about 31 1/2 miles in length, commencing at a certain designated point in Boise county and running thence in a southwesterly direction to a certain designated point in Canyon county, upon which strip of land that certain main ditch or canal was constructed known as the Canyon canal. Notice of said lien was filed on Sept. 25, 1906, and on Nov. 2, 1906, foreclosure suit was begun. This foreclosure suit finally went to judgment Apr. 21, 1913, when the court decreed Smith to be entitled to recover from the said Faris-Kesl Construction Co. the sum of $ 18,051.51, and to a lien for said sum on all of the interest that the canal company and the Emmett Irrigation District as its successor had in the above-described strip of land and the ditch thereon at the time of the commencement of work thereon by the said Smith. The court further decreed that all the right, title and interest of the said canal company and the said Emmett Irrigation District as its successor in and to said canal and premises above described be sold to satisfy the amount of said lien.

An appeal was taken, and in affirming the judgment of the district court this court said that said "lien extends only to such right, title, and interest as the Canyon Canal Company, Ltd., had in the property at the time the lien of the respondent attached to it, subject to the lien, if any, now existing and to the extent that the same does exist, of that said mortgage made and executed by the said Canyon Canal Company to the American Trust and Savings Bank as trustee for the purpose of securing the payment of bonds of said canal company in the sum of $ 350,000." (Smith v. Faris-Kesl Constr. Co., 27 Idaho 407, 432, 150 P. 25, 33.)

Thereafter sale of said canal company's interest was made pursuant to said decree and at said sale said interest was purchased by J. W. Smith, the lien claimant and defendant in this action. By virtue of such purchase the defendant in this action claims to be the owner of said irrigation system.

It is admitted by the defendant that the said canal company at the time stated entered into a contract with the state of Idaho for the construction of the said canal under what is known as the Carey Act and the laws of this state enacted for the government of reclamation projects carried on under said Carey Act; and that after said canal company entered upon the construction of said irrigation system the lands theretofore segregated from the public domain to be reclaimed under said project were declared open to settlement by notice published as provided by law and that thereupon on or about the third day of July, 1905, one Katherine Maynard entered into a contract with the said canal company for the purchase of a perpetual water right, of a form approved by the state board of land commissioners and used by the said canal company in the sale of water rights, shares, and interests in its irrigation system, for the purpose of reclaiming 160 acres of land described as the NW. 1/4 of sec. 33, Tp. 7 North, Range 2 West, B. M., and that the consideration for the purchase of said water right of 160 shares stated in said contract and agreed upon between the said Katherine Maynard and the said canal company was $ 30 per share or water right, or a total of $ 4,800, to be paid in ten equal installments with interest as set forth in said contract; that the said Katherine Maynard on or about the third day of July, 1905 and immediately after making the said contract, entered the said tract of land above described and thereafter, and in full compliance with the provisions of the statutes of the state of Idaho relating to such matters, the said Katherine Maynard made proof of reclamation, residence and settlement on...