Edinburg Irr. Co. v. Ledbetter

• Decision Date: 09 June 1926
• Docket Number: (No. 510-3944.)
• Citation: 286 S.W. 185
• Parties: EDINBURG IRR. CO. et al. v. LEDBETTER et al.
• Court: Texas Supreme Court

286 S.W. 185

EDINBURG IRR. CO. et al. v. LEDBETTER et al.

(No. 510-3944.)

Commission of Appeals of Texas, Section A.

June 9, 1926.

Error to Court of Civil Appeals of Fourth Supreme Judicial District.

Suit by A. Ledbetter and others against the Edinburg Irrigation Company, J. W. Hoit, and others, wherein defendant last named filed a cross-action. Judgment granting partial relief was affirmed in part and remanded in part by the Court of Civil Appeals (247 S. W. 335), and the Edinburg Irrigation Company and others bring error. Affirmed in part, and in part reversed and remanded.

Kennerly, Lee & Hill, George A. Hill, Jr., and Richard T. Fleming, all of Houston, for plaintiff in error Edinburg Irr. Co.

George P. Brown, of Edinburg, and Don A. Bliss, of San Antonio, for defendants in error.

Seabury, George & Taylor, of Brownsville, and Roy D. Buckley, of Mission, for Hoit.

Leroy G. Denman, of San Antonio, for American Nat. Ins. Co. and San Antonio Loan & Trust Co.

F. G. Moffett, of Mercedes, for Hidalgo Land Co.

NICKELS, J.

The case, as tried and as disposed of by the honorable Court of Civil Appeals, involved numerous issues as between various groups of the 132 parties plaintiff on the one hand, and some one or more of the eight parties defendant. After the writ of error was allowed, the controversies between all of the parties, except J. W. Hoit (who was an original defendant, but who sought relief against his codefendants by cross-action) and Edinburg Irrigation Company, W. E. Stewart, Stewart Farm Mortgage Company, W. E. Stewart Land Company, and Hidalgo Land Company, were settled by agreement. Various questions have been suggested as relevant to the issues which have been left in the case. They have all been considered, but only those of controlling importance will be discussed.

The transcript includes 612 pages, and the statement of facts is made up of 1,338 pages. This volume for the record, especially in view of the elimination of many original issues, precludes anything like a full statement of the case either from the standpoint of the pleadings or that of the evidence. The things which are deemed relevant and material will be stated in the course of the opinion.

In our opinion, whatever rights J. W. Hoit (and those for whom he acts) have in respect to water supply are governable by matters extrinsic the contracts of November 1, 1913, and October 27, 1919.

The material part of the agreement first mentioned is that wherein the La Lomita Irrigation & Construction Company undertook, in perpetuam, to vest in Hoit (then present owner) and in his successors in title the right to have water supplied to the so-called "Young lands" superior and prior to the existent or future right of other owners of lands "adjoining or contiguous to" the company's watering facilities; that is to say, in times of need, drought, and shortgage the "Young lands" should receive the entire water-supply if that should be necessary for proper cultivation, or, if the entire supply should not be thus required, the "Young lands" should have all that was desired, leaving only the remainder (without reference to its adequacy) to be supplied for other lands. A matter of secondary importance is embraced in those terms of the contract which declared existence of a "permanent water right" in respect to the "Young lands." That contract, as evidence of rights, is out of the way for reasons next stated.

The irrigation company, although its entire stock was owned by Hoit and Franke and wife (who directly or indirectly owned the "Young lands"), was quasi public in character, and was endowed with eminent domain privileges. Its chartered purpose was the construction and operation of facilities whereby water might be furnished "to all persons entitled," and because of its public utility aspects it was, by the state, given the right to take and exclusively appropriate water which theretofore belonged to the common fund. It had no power or right save what was given by the state in expressed terms or by implications too plain to be doubted. Railway Co. v. Morris, 67 Tex. 692, 699, 4 S. W. 156; Irrigation Co. v. Vivian, 74 Tex. 173, 11 S. W. 1078; Fertilizing Co. v. Hyde Park, 97 U. S. 659, 666, 24 L. Ed. 1036. The corporation belonged to that class from whose members general law and public policy take the power of making or performing a contract whose terms, if carried out, would inevitably result in undue discrimination. Raywood Co. v. Erp & Wright, 105 Tex. 161, 167, 146 S. W. 155; Borden v. Trespalacios Rice & Irrigation Co., 98 Tex. 494, 86 S. W. 11, 107 Am. St. Rep. 640; Imperial Irrigation Co. v. Jayne, 104 Tex. 395, 405, 138 S. W. 575, Ann. Cas. 1914B, 322; G., C. & S. F. Ry. Co. v. Morris, 67 Tex. 699, 4 S. W. 156. A mere grant of franchises and property rights such as are given these corporations does not in terms or by deduction include the privilege of so using the things granted by the state as to bring injury to some of its citizens in order that others may be enriched. There would be reason for doubting authority of the Legislature to make such grants, if attempted in expressed declaration, and it is most certain that a legislative effort to do that thing may not be implied from the mere use of general terms to delegate the power to be and to act as an irrigation corporation, and, as such, to take by exclusive appropriation waters which otherwise would remain common property. In this respect, whatever implications may be drawn are against existence of the power to discriminate, if, indeed, that power be not denied (as we think it is denied) in the words of the statute. In the legal sense, and despite the actualities, this lack of power was contemplated by the parties when the contracts of November 1, 1913 (and the other one upon which Mr. Hoit relies as confirmatory of his so-called priorities), were made, and what they manually injected into the evidence of those agreements as to priorities the law took out. Equity may not enforce that which is thus forbidden. And the contracts were, in legal effect, as if no attempt had been made to give the "Young lands" the preferences claimed. Raywood Co. v. Erp & Wright, supra.

Except as evidence of Mr. Hoit's right to preference and of the correlative duty of the corporation to discriminate, the 1919 contract is not material, and there is no occasion to give it further consideration.

The lawful provisions of the 1913 contract were terminated, we think, by the decrees, and sale under the decrees, in cause No. 3073, styled American National Insurance Company et al. v. Valley Reservoir & Canal Company et al., in the district court of Cameron county. The discriminatory terms already mentioned pro forma encountered the same fate, and that would have been their end in reality if they had ever (in an effective way) gotten into the contract. Plaintiff in error tendered that former suit, its decrees and sales, as adverse res judicata of whatever rights Hoit et al. obtained under the contract along with the defense that his cross-action and prayers for relief amount to a collateral attack upon the judgment and decrees of the Cameron county court. Mr. Hoit takes the positions, first, that the decrees mentioned are not rightly subject to an interpretation which would make them embrace the present subject-matter; and, second, that the decrees are void (and therefore subject to collateral attack) for lack of pleading essential for their support, if they be held inclusive of this matter. The reasons which impelled our conclusion will now be stated.

Section 94 of the decree entered on July 7, 1917 (called the "final decree"), reproduced, in substantial part, in the opinion of the Court of Civil Appeals, literally "abrogated, canceled and annulled" all "water contracts, water rights, easements, and franchises" theretofore "entered into by any of said parties," except "said water contract and deeds of the defendant Louisiana-Rio Grande Canal Company." By additional clauses that paragraph, in words, declared that "the purchasers at the sales made in accordance with this decree" shall "take the property or properties purchased free from all claims, liens, charges, easements, or franchises of any of the parties hereto, and free from any and all such liens, claims, franchises, charges, or easements of any water contract or deed conveying a water right heretofore entered into by any of the parties hereto, except said Louisiana-Rio Grande Canal Company's water contracts and deeds." The properties which were thus ordered to be sold included every facility and asset owned by the La Lomita Irrigation & Construction Company as well as those owned by the Valley Reservoir & Canal Company (another Texas irrigation corporation with which the first-named company had formed a merger of physical properties immediately subsequent to the making of the contract above mentioned). J. W. Hoit was a party defendant in the cause, and, of course, a party to the decree, and in the trial he appeared in person and by attorney. That he was amongst "said parties" whose "water-contracts," "water rights," and "easements" were being dealt with is the plain declaration of the substantive part of the decree, and that fact is made clearer, if a thing which is already clear may be made plainer, by the excepting clause wherein the "defendant Louisiana-Rio Grande Canal Company" and its "water contracts and deeds" are expressly excluded. Nowhere in the decree was Mr. Hoit adjudged to have any rights, and a general clause "in all things overruled" and denied any and all relief "prayed for by any of the parties hereto, of whatsoever nature," except where otherwise "herein specifically disposed of." The relief sought in the plaintiffs' petition included a requirement that each and every party set up and have adjudicated whatever rights he might have or claim in respect to the properties or any part thereof, or else be "forever debarred"...