Grant Realty Co. v. Ham, Yearsley & Ryrie

• Decision Date: 08 June 1917
• Docket Number: 13225.
• Citation: 96 Wash. 616,165 P. 495
• Court: Washington Supreme Court
• Parties: GRANT REALTY CO. et al. v. HAM, YEARSLEY & RYRIE et al.

165 P. 495

96 Wash. 616

GRANT REALTY CO. et al. v. HAM, YEARSLEY & RYRIE et al.

No. 13225.

Supreme Court of Washington, En Banc.

June 8, 1917

Appeal from Superior Court, Grant County; Ralph B. Kauffman, Judge.

Action by the Grant Realty Company and others against Ham, Yearsley & Ryrie and others. From a decree dismissing the complaint plaintiffs appeal. Affirmed.

Cannon & Ferris, of Spokane, and Williamson & Luhman, of North Yakima (Mack F. Gose, of Pomeroy, of counsel), for appellants.

Merritt Oswald & Merritt, of Spokane, for respondents.

ELLIS C.J.

In this action, plaintiffs, claiming as bona fide subsequent appropriators, seek to quiet title to the waters of Moses Lake, in Grant county, as against defendant's claim as a prior appropriator. For a description of Moses Lake, its environs, and outlet, we refer to the very full statement in the case of State ex rel. Ham, Yearsley & Ryrie v Superior Court, 70 Wash. 442, 126 P. 945.

Defendant owns a large tract of land lying southwesterly and 14 to 20 miles from the southerly end of the lake. This is semiarid, but capable of being rendered very productive by irrigation. In the latter part of 1908, Wilbur S. Yearsley, vice president and treasurer of the defendant Ham, Yearsley & Ryrie, a corporation, conceived the idea of using the waters of the lake for irrigating these lands. Investigation was started, and, it being determined that the water could be put on these lands by gravity, the first notice of the appropriation of the waters of the lake by defendant was posted on January 20, 1909, and recorded on January 28th of that year. As investigation proceeded, subsequent notices were posted and recorded on February 8, 1909, and February 23, 1909, July 6, 1910, and July 8, 1910, respectively. Investigation was continued till in August, 1910, defendant's officers were convinced that there was water available to irrigate about 30,000 acres of land. Touching the cost, defendant's engineer made different estimates, varying in amount according to the number of acres to be watered under the respective estimates. The plan was to store in the lake the annual runoff of water, place an intake pipe below the water level, and conduct the water by gravity through 13 or 14 miles of open ditch, pipe, and flume to defendant's lands. At the time of the trial in this case, the engineer had made an estimate for a final plan designed to irrigate 12,000 acres, the total cost of which would be $55 per acre, or $660,000. This plan called for the submersion of a 6-foot intake pipe at an elevation of 1,032 above sea level; the water surface of the lake to be raised by a dam to an elevation of 1,038. By this plan the acreage could be increased to 20,000 without any additional cost per acre. Plaintiffs' experts placed the cost per acre much higher. For the purpose of securing the site for the dam, a condemnation action was commenced and a notice of lis pendens was filed on October 7, 1910. The suit was against the Northern Pacific Railway Company, the record owners of the land sought to be acquired, and R. F. Pettigrew, who held a contract of purchase from the railroad company.

On October 8, 1910, F. H. Nagle, manager of the corporations, plaintiffs in the case now before us, posted notices of appropriation of the waters of Moses Lake with the professed intention of purchasing and irrigating lands around the lake and selling such lands with the water to settlers. For this purpose, plaintiff Grant Realty Company was organized in March, 1911. Nagle testified that the appropriation of water and the work done by him was for the benefit of that company.

The condemnation action was tried in February, 1911, but the findings of fact and judgment entered thereon denying defendant's right to condemn were not filed until January 10, 1912. Hon. R. H. Steiner, the judge before whom it was tried, testified that he had no independent recollection as to when he announced his decision; but refreshing his memory from a book kept by the clerk, which was not introduced in evidence, he concluded that the decision was announced on May 29, 1911. G. M. Ferris, one of the attorneys for the railway company in the condemnation action and one of the attorneys for plaintiffs in the present case, testified that the reason that judgment was not entered until January 10, 1912, was that counsel for Ham, Yearsley & Ryrie requested of counsel for the railway company and Pettigrew 'that judgment be not entered in order that his time for appeal might not start to run.' No evidence was offered to the contrary.

Soon after the entry of that judgment, an application was made to this court for a writ of certiorari to review it. The writ was granted, and on October 10, 1912, an opinion of this court was filed reversing the action of the lower court and granting the right to condemn. State ex rel. Ham, Yearsley & Ryrie v. Superior Court, 70 Wash. 442, 126 P. 945. A petition for rehearing was filed, and the remittitur was not sent down until March 10, 1913. Meanwhile plaintiff in that suit, defendant here, continued its investigation as to the amount of water that would be available, and also constructed some of its ditch line. Yearsley, testifying from the books of defendant, stated that the amount expended in ditch construction was $6,123.00 since the condemnation action was commenced.

Turning now to the work done by plaintiffs, it was first actually started on March 26, 1911. Having become the owners of the land which defendant herein sought as a dam site, plaintiffs constructed a dam thereon to impound the waters for their own project. The intention was to irrigate as much land as the water available would supply. This, based upon knowledge acquired up to the time of the trial herein, was estimated at approximately 15,000 acres. The plan was for the Grant Realty Company, with a capital of $3,000,000, to purchase the lands, secure the water rights, and construct works. The land was to be divided into separate units each to be irrigated by a separate pumping plant. Later, the other plaintiff corporations, each with a capital of $1,000, were organized. To each of these subsidiary corporations was conveyed in return for its stock a tract of land forming a pumping or irrigation unit. These small corporations would sell the land to settlers and operate the plants. At the time of the trial there were eight of these pumping units constructed capable of serving a total of 3,282 acres. Approximately 700 acres were receiving water. In this work there had been expended $226,000, exclusive of the cost price of the land, but including salaries of a manager, bookkeeper, and stenographer amounting to $20,560, and traveling expenses amounting to $13,730.34.

Though the remittitur in the condemnation action was filed in the lower court on March 10, 1913, judgment of the trial court was not entered thereon until September 9, 1913. Defendant accounts for this delay by the statement that, Grant county being a small county, one jury a year usually does the work. This is not denied, and Judge Steiner's testimony tends to confirm it. In any event, shortly after the entry of the judgment on September 9th, the case was noticed for trial and a jury demanded. On October 2, 1913, plaintiffs herein first made their appearance in the condemnation action. On that date they moved to be substituted as parties defendant instead of the railway company and Pettigrew, upon a showing that they had acquired title to the property sought to be condemned. This motion was denied. On October 14th, they moved for leave to file an answer and again for substitution. These motions were also denied. On October 20th, they filed their answer and a motion to abate and vacate an order setting the condemnation action for trial. This answer was subsequently stricken and the motion denied. Thereafter, plaintiffs herein applied to this court for a writ to prohibit the trial court from proceeding with the trial of the condemnation suit without making the requested substitution, whereupon the hearing in the condemnation suit was continued to December 1, 1913. The peremptory writ of prohibition was denied by this court in an opinion filed on November 7, 1913. State ex rel. Grant Realty Co. v. Superior Court, 76 Wash. 376, 136 P. 144. 'That the learned superior court did not abuse its discretion in so controlling the order of the disposition of the two causes as to first cause the question of the right of the respective parties to the waters of Moses Lake to be determined, in view of the possible influence that the disposition of that question may have upon relator's [defendant's] right to acquire and hold the land by right of eminent domain.' State ex rel. Ham, Yearsley & Ryrie v. Superior Court, 81 Wash. 690, 695, 696, 143 P. 310, 312.

The case now before us was brought to trial, and on July 26, 1915, a decree was entered adjudging to defendant the prior right to appropriate the waters of the lake, and dismissing plaintiffs' complaint with costs. Plaintiffs appeal.

Appellants contend: (1) That respondent has not prosecuted its project in good faith, but merely as a speculation; and (2) that respondent by lack of diligence has lost its right to claim a priority of water right by relation under the statute, Rem. Code, §§ 6318 and 6319, as against appellants who are subsequent appropriators of the waters of the lake.

1. We shall devote little space to the question of good faith. Every extensive irrigation project is, in a sense essentially speculative. So far as the record shows, respondent's project is not more inherently speculative in its nature than that of appellants. Yearsley testified in substance that in the spring and summer of 1910 he entered into negotiations with Pettigrew...