Federal Land Bank of Spokane v. Union Central Life Ins. Co.

• Decision Date: 15 February 1934
• Docket Number: 5996
• Citation: 54 Idaho 161,29 P.2d 1009
• Parties: FEDERAL LAND BANK OF SPOKANE, a Corporation, Respondent, v. UNION CENTRAL LIFE INSURANCE COMPANY, a Corporation, Appellant
• Court: Idaho Supreme Court

29 P.2d 1009

54 Idaho 161

FEDERAL LAND BANK OF SPOKANE, a Corporation, Respondent, v. UNION CENTRAL LIFE INSURANCE COMPANY, a Corporation, Appellant

No. 5996

Supreme Court of Idaho

February 15, 1934

WATER AND WATERCOURSES-CHANGE IN PLACE OF USE-WATER RIGHT-CONVEYANCES-MORTGAGES.

1. Owner of two tracts can, by abandoning use of water on one tract and by applying water to exclusive use of other tract make water appurtenant to other tract, if rights of others are not interfered with.

2. "Water right" is real property which may be sold and transferred separately from land on which it has been used.

3. One taking mortgage on ranch and water right, had right, as against prior mortgagee of mortgagor's other ranch, to rely on record which showed water right taken was appurtenant to first ranch and which failed to show previous mortgage of water right (I. C. A., secs. 54-601, 54-812, 54-813).

4. Mortgagee of ranch and water right held not chargeable with notice of limitation on water right by fact that mortgagor's applications for loan, which it rejected showed lesser water right than that shown by record and stated land did not require surface irrigation (I. C. A secs. 54-812, 54-813).

5. Evidence required finding that mortgagee of ranch and water right originally appurtenant thereto, acquired right in good faith without actual or constructive notice of claim of another mortgagee under prior mortgage given by mortgagor on different ranch (I. C. A., secs. 54-601, 54-812, 54-813).

APPEAL from the District Court of the Fourth Judicial District, for Blaine County. Hon. D. H. Sutphen, Judge.

Suit to quiet title. Judgment for plaintiff. Reversed.

Decree reversed with instructions, and suit dismissed. Costs awarded to appellant.

McElroy & Chalfant and W. A. Brodhead, for Appellant.

Title to water must be conveyed as real estate. (Gard v Thompson, 21 Idaho 485, 123 P. 497.) A mortgage of realty is a transfer of realty. (Sec. 44-804, I. C. A.)

In case of San Bernardino Nat. Bank v. Jones, (Cal. App.) 271 P. 1103, the court said: "(8, 9) The purpose of the recording acts is that a purchaser of land 'may rely on the record title to the property, in the absence of actual knowledge of the title in fact, or of facts sufficient to put him on inquiry in respect thereto.' (23 R. C. L. 197.)"

"Where a party failed to present evidence within his power to produce, the presumption is that the evidence, if offered would be unfavorable." (Elam v. Elam, 294 Ill. 96, 128 N.E. 324; Cram v. Reynolds, 55 Utah 384, 186 P. 100.)

The rule is well settled that the owner of land with an appurtenant water right may reserve part of the appurtenant right from the conveyance.

In case of Harris v. Chapman, 51 Idaho 283, 5 P.2d 733, the court said: "As said in Harvey v. Deseret Sheep Co., 40 Idaho 450, 453, 234 P. 146, 147: 'It is certainly neither unlawful, nor unusual, for the owner of a parcel of land, with an appurtenant water right, to convey a part of the land together with a portion of the appurtenant water right.'"

Bissell & Bird, for Respondent.

An owner of a water right may permanently change its place of use from one tract of his land to another without resorting to formal, recorded conveyance, or without obtaining authority from the department of reclamation in the manner outlined in sec. 41-216, I. C. A., if the rights of others are not injured. (Federal Land Bank v. Union Cent. L. Ins. Co., 51 Idaho 490, 6 P.2d 486; First Security Bank v. State, 49 Idaho 740, 291 P. 1064; In re Department of Reclamation, 50 Idaho 573, 300 P. 492; Twin Falls Canal Co. v. Shippen, 46 Idaho 787, 271 P. 578.)

The term "injury" as used in these decisions applies to injury to the water right of another. (In re Department of Reclamation, supra; Federal Land Bank v. Union Cent. L. Ins. Co., supra.)

Appellant had notice that the Buller water was not needed on the Buller ranch and was being used elsewhere, or at least had knowledge of facts and circumstances sufficient to put a reasonably prudent man upon inquiry, and if it neglected to make such inquiry it must be presumed to have had actual notice of the change of place of use. (Guthrie v. Ensign, 36 Idaho 673, 685, 213 P. 354.)

A mortgagee is charged with notice of the actual, visible, physical facts on the premises. (Note, 41 A. L. R. 1442.)

MORGAN, J. Budge, C. J., and Givens, Holden and Wernette, JJ., concur.

OPINION

MORGAN, J.

This is a suit to quiet title to the right to the use of 600 miner's inches of water, being a part of a water right consisting of 750 miner's inches, adjudicated in what is known as the "Frost decree" and appurtenant to land referred to in this case as the "Buller ranch." Appellant bases its claim to the right to the use of this water on its title to the Buller ranch, acquired by the foreclosure of a mortgage executed by Martin Albrethsen and his wife, who owned it, and respondent bases its claim to the right to the use of part of it on its title to a portion of what is referred to as the "Kingsbury ranch," also formerly owned by Albrethsen and wife, acquired by the foreclosure of a mortgage executed by them in its favor and recorded prior to the execution of appellant's mortgage.

The case has been before the court heretofore and our former decision is reported in 51 Idaho 490, 6 P.2d 486, where a statement of many of the facts will be found. Such additional facts as are deemed necessary to an understanding of the case, as now presented, will be hereinafter stated.

The second trial resulted in a decree quieting title in respondent, plaintiff in the district court, to the right to the use of 150 miner's inches of the water. This appeal is from that decree.

In an effort to prove the water right was included in its mortgage respondent introduced in evidence the application made to it by Martin Albrethsen for a loan on the part of the Kingsbury ranch which he and his wife mortgaged to it, in which application he stated 354 inches of water belonged with that land. Accompanying that application is a certificate of an appraiser for respondent in which questions were asked and answered with respect to the water right appurtenant to the land, as follows: "How is water right represented? Irrigation Dist. Is it appurtenant to the land and shown on abstract? Yes. Or, is it represented by shares of stock in an Irrigation Company, and if so the number of shares considered in your appraisal and name of Company issuing same? 350 inches Decreed Wood River Valley Ir. Co." The abstract of title to the land mortgaged to respondent was not introduced in evidence. As pointed out in the former opinion, the water involved in this litigation was not disturbed by the irrigation district.

Martin Albrethsen was produced by respondent as a witness and in the course of his examination the following question and answer occurred: "Q. Now, if this land that you mortgaged had any water right in excess of one-hundred and five inches what water right were you mortgaging? A. That is all I understood that I did mortgage; you been cutting up the land that I did mortgage but you haven't mentioned the South half (S1/2) of the Northeast Quarter (NE1/4) of Section Eight (8), and that was covered by the mortgage. That was subirrigated the same as the Buller Land."

While the application made by Albrethsen to respondent for a loan contained representations that 354 inches of water was appurtenant to the land offered as security it does not show any part of the 600 inches claimed by appellant was so appurtenant, and the statement made by the appraiser to the effect that the water right was shown on the abstract and consisted of water furnished by an irrigation company, or district, indicates that no part of the right here in litigation was represented to him as being appurtenant to the land offered to respondent as security for a loan. Furthermore, this application was not recorded and the representations therein made do not appear to have been brought to the notice of appellant.

The record shows that after the purchase of the Kingsbury ranch with its appurtenant water right, Albrethsen sold portions of that land and water right and portions of the Buller water right, so that at the time he mortgaged what he still owned of the Kingsbury ranch to respondent he owned but 105 miner's inches of the water right which was appurtenant to that ranch when he bought it, and 600 miner's inches of the water right which was appurtenant to the Buller land when he bought it. Undoubtedly, in order to make up the amount of water Albrethsen represented to respondent as being appurtenant to the portion of the Kingsbury ranch he was offering as security for a loan, a portion of the Buller right would have to be included with what he still owned of the Kingsbury right.

As held in our former opinion, Albrethsen could, by abandoning the use of water on a tract of land belonging to him to which it was theretofore appurtenant, and by applying it to the exclusive use of another tract, also belonging to him, make it appurtenant to the last-mentioned tract if, in so doing, he did not interfere with the rights of others. Also, as pointed out in that opinion, the burden was on respondent to prove this was done.

The testimony introduced at the second trial, together with that introduced at the first, does not establish an intention on the part of Albrethsen and wife to take from the Buller ranch any part of its water right other than 150 inches thereof conveyed (to persons not parties to this litigation) by deeds wherein the water rights were fully described and the grantors' intention to so convey were fully expressed.

Assuming Albrethsen and wife could mortgage part of the Buller water right together with part of...