Hanes v. Idaho Irr. Co., Ltd.

• Decision Date: 19 March 1912
• Citation: 21 Idaho 512,122 P. 859
• Parties: VIRGINIA A. HANES, Respondent, v. IDAHO IRRIGATION CO., LTD., Appellant
• Court: Idaho Supreme Court

122 P. 859

21 Idaho 512

VIRGINIA A. HANES, Respondent, v. IDAHO IRRIGATION CO., LTD., Appellant

Supreme Court of Idaho

March 19, 1912

DAMAGES-EX DELICTO-EX CONTRACTU-CAREY ACT OF CONGRESS-STATE LAWS-CONSTRUCTION OF-CONSTRUCTION COMPANY UNDER CAREY ACT-CONSTRUCTION OF IRRIGATION WORKS-OPERATING COMPANY-CONTROL OF-SETTLER-MEASURE OF DAMAGES-INSTRUCTIONS.

(Syllabus by the court.)

1. Held, that this is an action on contract and not in tort.

2. Under the Carey Act of Congress and the statutes of the state in regard thereto, a plan or scheme is provided for the reclamation of desert lands, and where a construction company has entered into a contract with the state to construct an irrigation system for the reclamation of certain lands, and has agreed to organize an operating company to which said system and the water connected therewith shall be transferred, to be held for the settlers upon the lands included within said system, and has also reserved the right to furnish water to settlers prior to the time that said system is transferred to the operating company, and the construction company notifies the settler that it will furnish water for an irrigation season beginning on the 1st of April, and the settler prepares his land and purchases fruit trees and sets them out on said land, and the company fails to furnish water in accordance with its contract, it is liable for the damages sustained by the settler.

3. Under the provisions of the settler's contract, it is provided that interest from April 1st, 1909, at six per cent per annum, may be charged on balance of purchase price if water is available from the canals of the company for use during the irrigation season of 1909, and if not available for that season, that interest shall commence when water is available.

4. It is provided in said settler's contract that the state agreement and the laws of Idaho are made a part of such contract and they shall be regarded as defining the rights of the respective parties.

5. That provision of the state contract which authorizes the irrigation company to charge and assess the purchasers of water rights in said system not to exceed thirty-five cents per acre per season for each acre of land for which a water right has been purchased for maintenance purposes does not require the purchaser of a water right to pay such maintenance fee or charge until the same has been fixed by the company.

6. Held, under the provisions of said contract with the state that the construction company had the absolute control of the operating company at the time the damages sued for in this action occurred.

7. The construction company under the provisions of said contract with the state was authorized to operate said system prior to its being turned over to the operating company. Held, that if it undertook to do so and failed through its fault to furnish water as required by said contract, it was liable for damages to the settler in case he sustained any.

8. Under the provisions of sec. 1628, Rev. Codes, it is made the duty of a Carey Act irrigation company to notify the settler when water is ready for delivery, in order that the settler may improve his land and make the reclamation required in order to secure title from the state to his land.

9. The giving of such notice under the contract and law served to fix the time within which the settler must cultivate and reclaim his land, and also fixes the time, if water is furnished, when interest shall begin on deferred payments on his water contract, and it was the duty of the construction company to furnish the water after it had given the notice.

10. Under said state contract the construction company was required to supply water and an irrigation system.

11. Held, that in the operation of said canal and the furnishing of water the construction company was a quasi-public service corporation, and under the state contract the construction company was bound to construct its works in accordance with said contract, and damages resulting from a failure to do so may be recovered by the person injured, and if its system was constructed and it had water and had notified the settler that it was ready to deliver it and the settler was thereafter damaged by failure to get it, he may recover his damages.

12. Held, that the evidence is sufficient to sustain the verdict.

13. Held, that the instructions given by the court correctly stated the law.

14. The measure of damages for the destruction of apple trees for want of water, which have been planted and in a condition to grow, is what such destroyed trees were worth on the premises in their growing state at the time of the destruction, and in determining that question there may be taken into consideration the difference in the value of the land immediately before the trees were planted and the value of the land after the trees were planted, which increased value results wholly by reason of the planting of the trees in a growing condition and not an increase in the value of the land occasioned by anything else.

APPEAL from the District Court of the Fourth Judicial District for Lincoln County. Hon. Edward A. Walters, Judge.

Action to recover damages for failure to deliver water. Judgment for plaintiff. Affirmed.

Judgment affirmed. Costs of this appeal awarded to the respondent.

N. M Ruick, and F. T. Disney, for Appellant.

Corporations which supply water to their own members only are agents merely of the stockholders, and are not liable for damages for a failure to deliver the water to which a shareholder may be entitled. (Wiel on Water Rights, 3d ed., sec. 1261.)

Neither the Big Wood River Reservoir and Canal Co., Ltd., nor the Idaho Irrigation Co., is the owner of the water right, but is the mere agent of the parties entitled to the use of the water. (Slosser v. Salt River Valley Irr. Co., 7 Ariz. 376, 65 P. 332; Shorb v. Beaudry, 56 Cal. 446; Chatter v. San Francisco S. R. Co., 19 Cal. 219.)

The private character of the Big Wood River Reservoir & Canal Co. is disclosed in clauses 9 and 11 of the state agreement. It is in no sense a public service corporation, but merely a private agency for the purpose of operating and maintaining the irrigation system during the period of construction and afterward, and for the purpose of levying and collecting tolls for such maintenance and operation. (Wiel on Water Rights, 3d ed., sec. 1266.)

The instruction of the lower court as to measure of damages savors of prospective profits which are never allowed in cases of this character. (Crow v. San Joaquin & K. R. C & I. Co., 130 Cal. 309, 62 P. 562, 1058; Pallett v Murphy, 131 Cal. 192, 63 P. 366; Northern Colo. Irr Co. v. Richards, 22 Colo. 450, 45 P. 423; Wade v. Belmont Irr. Can. Co., 87 Neb. 732, 138 Am. St. 506, 128 N.W. 514, 31 L. R. A., N. S., 743, and note.)

R. V. Wilcox, A. M. Bowen, and Angel & Lamme, for Respondent.

Crops having been planted on the supposition,--warranted by the contract and notice,--that water would be available, which necessarily meant that the system would be properly constructed, the defendant was responsible for loss thereby, including the loss of the trees. (Crowder v. McDonnell, 21 Mont. 367, 54 P. 43; Spencer v. Hamilton, 113 N.C. 49, 37 Am. St. 611, 18 S.E. 167.)

Plaintiff is not a stockholder in the appellant company, but sues on a contract made with the appellant. The appellant is a corporation organized for profit, and, if it was under contractual duty to furnish water, could be sued directly for damages resulting from a failure on its part to do so. ( Candler v. Washoe Lake R. & G. Co., 28 Nev. 151, 6 Ann. Cas. 946, 80 P. 751; Sample v. Fresno T. & I. Co., 129 Cal. 222, 61 P. 1085; Smith v. Hicks, 14 N. M. 560, 98 P. 138, 19 L. R. A., N. S., 938; Watson v. Needham, 161 Mass. 404, 37 N.E. 204, 24 L. R. A. 287; Farr v. Griffith, 9 Utah 416, 35 P. 506.)

Respondent having planted her fruit trees on the faith of the notice that she would receive water, it became appellant's duty to furnish such water under her contract as stated in the notice, and appellant is now estopped from asserting a lack of duty on its part to make such delivery. (16 Cyc. 784 et seq.; Davis v. Surety Co., 139 Cal. 223, 72 P. 1001; City of Seattle v. Columbia etc. Ry. Co., 6 Wash. 379, 33 P. 1048; Radford v. Gaskill, 20 Mont. 293, 50 P. 854; Hall v. Solomon, 61 Conn. 476, 29 Am. St. 218, 23 A. 876.)

The only question is whether in an action on a contract for failure to deliver water the rule announced a proper measure of damages for destruction of trees in a growing state. The measure of damages is in all cases compensation, and "the inquiry must always be: What is an adequate remedy to the party injured?" (13 Cyc. 12, 34; Sutherland, Damages, sec. 45.)

The general rule is that the party injured by the breach of contract is entitled to recover all his damages, including gain prevented as well as losses sustained, provided they are certain, and such as might naturally be expected to follow the breach. (Hoge v. Norton, 22 Kan. 374; Hadley v. Boxendale, 9 Ex. 341; Wolcott v. Mount, 36 N.J.L. 262, 13 Am. Rep. 438, 38 N.J.L. 496, 20 Am. Rep. 425; Heilman v. Pruyn, 122 Mich. 301, 80 Am. St. 570, 81 N.W. 97; Dunn v. Bushnell, 63 Neb. 568, 93 Am. St. 474, 88 N.W. 693; White v. Miller, 7 Hun (N. Y.), 427.)

In some cases the rental value of the land has been held to be the proper rule as to the measure of damages for destruction of fruit trees. (Montgomery v. Locks, 72 Cal. 75, 13 P. 401; Missouri K. & T. Ry. v. Lycan, 57 Kan. 635 47 P. 526; Kansas City etc. Ry. v. Perry, 65 Kan. 792, 70 P. 876; Atchison etc. Ry. Co. v. Geiser, 68 Kan. 281, 1 Ann. Cas. 812, 75 P. 68; Mongollon G. & G. C. Co. v. Stout, 14 N. M. 245, 91 P. 724; Rowe v. C. & N. Ry. Co....