Custer Consol. Mines Co. v. City of Helena

• Decision Date: 09 February 1916
• Docket Number: 3590.
• Citation: 156 P. 1090,52 Mont. 35
• Parties: CUSTER CONSOL. MINES CO. v. CITY OF HELENA (SPOKANE RANCH & WATER CO., INTERVENER).
• Court: Montana Supreme Court

156 P. 1090

52 Mont. 35

CUSTER CONSOL. MINES CO. v. CITY OF HELENA (SPOKANE RANCH & WATER CO., INTERVENER).

No. 3590.

Supreme Court of Montana

February 9, 1916

Appeal from District Court, Broadwater County; Roy E. Ayers Presiding Judge.

Action by the Custer Consolidated Mines Company against the City of Helena, in which the Spokane Ranch & Water Company intervened. Judgment for plaintiff, and defendant and intervener appeal. Reversed and remanded.

Lincoln Working, H. S. Hepner, and Walsh, Nolan & Scallon, all of Helena, for appellants.

R. Lee Word, of Helena, Hartman & Hartman, of Bozeman, and James A Walsh, of Helena, for respondent.

SANNER J.

The subject-matter of this suit is the right of the respondent to the use and enjoyment of 50 inches of the waters of Beaver creek, Broadwater county, this state, as of date October 1 1865. It was found and decreed by the district court that the respondent has such right subject to certain prior rights of the appellant city of Helena, but superior to certain other rights of said city to such waters. The question presented upon this appeal is whether the record justifies this award to the respondent.

The respondent asserts as the basis of its claim that it is now, and for many years last past it and its grantors have been, the owners and in possession of the "H. & H." and "Custer" mines, with mill sites and other real estate situate in the valley of Beaver creek, for which water is needed for irrigation, domestic, and mining purposes; that on October 1, 1865, the Murray Placer Mining Company made due appropriation of 1,000 inches of the waters of said Beaver creek for placer mining and other beneficial purposes; that in 1881 said appropriators were desirous of crossing the lands now owned by the respondent, with a ditch known as the Indian Creek ditch, for the purpose of carrying the waters so appropriated to certain places of intended use, and in consideration of permission so to do given by James H. Halford and George W. Cleveland, then the owners of said premises, sold and conveyed to such owners "a perpetual right to use and of the use and enjoyment of 50 inches of the waters of said Beaver creek so appropriated as aforesaid and to be conveyed through the said ditch then in course of construction"; that the ditch was constructed and used for the purposes intended, and from it Halford and Cleveland took and used the 50 inches of water so conveyed to them "for irrigation on part of the lands aforesaid, for domestic purposes, for the use of stock, and for other beneficial purposes," so that the said water became appurtenant to said lands; that said lands and water right have by mesne conveyances become vested in respondent; that since 1881 the respondent and its predecessors in interest have continuously used said 50 inches of water for irrigation, stock, domestic, and other useful purposes, which use has been open, notorious, exclusive, and adverse as against the city of Helena and its predecessors in interest under a claim of right.

The appellant Spokane Ranch & Water Company is merely a lessee, and its rights are entirely bound up in that of the appellant city of Helena. The latter contests the award to the respondent as unjustified, because: (1) There is not sufficient proof of the alleged conveyance to Cleveland and Halford; (2) if such conveyance was made, it was never recorded, and cannot prevail over the claim of the city as a bona fide purchaser; (3) if such conveyance was made, there is not sufficient proof to show that Cleveland and Halford were ever divested of the right so conveyed; (4) neither evidence nor finding warrants any claim of title by prescription.

1. It is conceded in the pleadings that the Indian Creek ditch was constructed in 1881 by persons who then held a right as of October 1, 1865, to 1,000 inches of the waters of Beaver crook. These persons are alleged in the complaint to be the predecessors in interest of both the respondent and the city, while the answer admits that they were the predecessors in interest of the city. The evidence on behalf of the respondent tends to show that these persons were John Murray and Joseph McElroy, calling themselves the Murray Placer Mining Company; that the Indian Creek ditch crosses the lands of the respondent, which lands were in 1881 the property of James Halford and George W. Cleveland; that Charles S. Muffly, the respondent's managing officer and immediate grantor, saw on several occasions among the archives of the property--first in 1904--a deed bearing date in the year 1881, written by the hand of John Shober, of Helena, and duly acknowledged, which purported to be executed by the Murray Placer Mining Company, John Murray, and Joseph McElroy, and to "grant, bargain, sell, and convey" to James H. Halford and George W. Cleveland 50 inches of water out of the Indian Creek ditch for the consideration of $1 and permission given by Halford and Cleveland to cross the lands with the Indian Creek ditch, which deed was never recorded, was abstracted from the archives of the property, and cannot be found; that in 1905 Walter Larsson saw in the possession of Mr. Muffly, and read, a deed written in longhand on legal cap paper, which purported to convey 50 inches of Beaver creek water "from the owners of the Indian Creek ditch to the owner of the Custer mine," signed by John Murray and another, running to Cleveland and another; that in 1881 John Shober, then a practicing attorney at Helena, drew in longhand, and either witnessed or took the acknowledgment of, a deed executed in his presence, signed by John Murray, Joseph McElroy, and perhaps others, as grantors, running to George W. Cleveland, James Halford, and perhaps other as grantees, for some right to water from Beaver creek, in consideration of the grantees allowing Murray to cross their lands with a ditch which he was then constructing; that at some time within 11 years after 1881, 1882, or 1883 Isaac Harrington, while cleaning out the Indian Creek ditch saw a pipe in the Indian Creek ditch at the Custer mines property, and, on reporting that fact to Murray, was told not to disturb it, as Murray had, through a deed written by John Shober, granted 50 inches to the Custer mine, and for him (Harrington) to always respect that right. It is arguable, of course, that these references are not to the same instrument; in which event we have the interesting alternative that more than one grant of the character claimed is suggested. We think, however, that the rational conclusion is that they do relate to one transfer; that the evidence, taken as a whole, meets all the requirements exacted by this court in Capell et al. v. Fagan, 30 Mont. 507, 77 P. 55, 2 Ann. Cas. 37, and that, if accepted, it justified the finding of a conveyance such as the respondent claims.

2. In our opinion, the pleadings do not permit a question that the city of Helena, by purchase in March, 1901, became vested with the record title to the entire 1,000-inch right above referred to, and out of which the unrecorded grant asserted by the respondent is carved. The conveyances to the city were duly recorded, and at the time of such purchase and recordation there was not anything of record to show that any such grant had been made. Presumptively, therefore, the city acquired the entire right (Rev. Codes, § 4684), and such is actually the case unless the city had, or was chargeable with, notice of that grant (Rev. Codes, § 4687).

There is no claim of actual notice by the city of the unrecorded grant under which the respondent claims. The plea is that the predecessors of the respondent, immediately after the grant to them of the 50-inch right, "constructed a ditch and pipe lines tapping said Indian Creek ditch, by means of which said 50 inches of water were diverted from said ditch" and conveyed to the lands, mills, and concentrators now owned by the respondent; that said ditch and pipe lines "were prominent, open, and visible to any person passing along or in view of said Indian Creek ditch"; that at the time of the purchase by the city such possession and use of said 50 inches of water was open, notorious, and visible, and the city, by exercising reasonable diligence, could have learned that such possession and use were under a claim of right, and by proper inquiry could have ascertained the extent and nature of such...