Hickman v. Loup River Public Power Dist.

• Decision Date: 21 February 1964
• Docket Number: No. 35555,35555
• Citation: 126 N.W.2d 404,176 Neb. 416
• Parties: Petition of Max D. HICKMAN, Appellee, v. LOUP RIVER PUBLIC POWER DISTRICT, Appellant-Cross-Appellee, Impleaded with United States of America, Appellee, and Middle Loup Public Power and Irrigation District, North Loup River Public Power and Irrigation District, and Paul H. Dean, Receiver for North Loup River Public Power and Irrigation District, Interveners-Appellees-Cross-Appellant.
• Court: Nebraska Supreme Court

Page 404

126 N.W.2d 404

176 Neb. 416

Petition of Max D. HICKMAN, Appellee, v. LOUP RIVER PUBLIC POWER DISTRICT, Appellant-Cross-Appellee Impleaded with United States of America, Appellee, and Middle Loup Public Power and Irrigation District, North Loup River Public Power and Irrigation District, and Paul H. Dean, Receiver for North Loup River Public Power and Irrigation District, Interveners-Appellees-Cross-Appellant.

No. 35555.

Supreme Court of Nebraska.

Feb. 21, 1964.

Syllabus by the Court

1. Under section 81-6313, Comp.St.1929, now section 46-238, R.R.S.1943, the Department of Water Resources is authorized to extend the completion date for construction, fixed by the order granting an application for an appropriation of water, when such extension is made necessary by temporary interruptions by some unavoidable and natural cause.

2. The Department has authority to extend the time, if not beyond the final limit permitted by statute, although the application therefor was made after the time first fixed by it had expired.

3. An order of the Department in a matter over which it has jurisdiction is clothed with the presumption of regularity and validity.

4. The application of appropriated water to beneficial use operates as a condition subsequent which in fact fixes the extent of the right originally acquired.

5. An appropriator will not be permitted to retain the right to water which he does not put to a beneficial use and thus deprive others of its benefits.

6. The putting of appropriated waters to a beneficial use in an irrigation appropriation, where the requirements of beneficial use are spelled out in the statute, is ordinarily different than in an appropriation for power purposes where requirements constituting beneficial use are not specified.

7. In determining when an appropriation of water for the generation of hydroelectric power for sale to the public has been put to a public use, the courts will not close their eyes to the realities of business life.

8. In a consideration of applicable statutes, the history of the law of appropriation, and the public policy of the state, we hold that an appropriation of water for power for sale to the public is complete, and has been put to a public use, when the appropriator has fully complied with the controlling statutes, has constructed its power facilities and placed them in operation, and is ready and willing to deliver hydroelectric energy to users upon demand.

9. A completed appropriation of water for power purposes remains a valid appropriation to the full extent of its granted right unless restricted by a finding of abandonment or nonuser in a proper proceeding commenced under sections 46-229 to 46-229.05, R.R.S.1943.

10. Limitations on an appropriative right in the waters of a stream restrict the appropriator only, and do not amount to a grant to a junior appropriator or one having no appropriation at all.

11. Where the state has entered into leases with an appropriator of water for power purposes, and collected substantial annual payments thereunder for 25 years, based on the maximum rate of diversion and the maximum total head permitted in the approved applications, it constitutes an administrative construction supporting the validity of the appropriation.

12. An extension of time to put appropriated waters of a stream to beneficial use inheres in an extension of time to complete construction.

13. The grant of an applicaton by the Department to increase the total head of water at an appropriator's generating plants, without an increase in the rate of diversion from the stream, in no manner affects junior appropriators and they lack the legal capacity to raise the issue of its invalidity.

Neighbors, Danielson & Van Steenberg, Scottsbluff, Walter, Albert, Leininger & Grant, Columbus, for Loup River Public Power Dist.

John H. Evans, Broken Bow, for Max D. Hickman.

Theodore L. Richling, Omaha, for the United States.

Leo F. Clinch, Burwell, Hotz, Hotz & Taylor, Monsky, Grodinsky, Good & Cohen, Omaha, for interveners-appellees.

Heard before WHITE, C. J., and CARTER, MESSMORE, YEAGER, SPENCER, BOSLAUGH and BROWER, JJ.

CARTER, Justice.

This is an appeal from an order of the Director of the Department of Water Resources of the State of Nebraska in a proceeding brought by the petitioner Max D. Hickman to secure the cancellation and annulment of the appropriation rights of the respondent Loup River Public Power District arising out of application No. 2287 for 3,500 cubic feet of water per second of time from the Loup River for the development of power with a priority date of September 15, 1932, and application No. 2573 for an additional power head of 18 feet in using the water appropriated by application No. 2287, which was granted on April 21, 1936. Petitions of intervention were filed by the Middle Loup Public Power and Irrigation District, North Loup River Public Power and Irrigation District, and Paul H. Dean, receiver for North Loup River Public Power and Irrigation District. The final order of the Director of the Department of Water Resources determined that the maximum amount of the water appropriation under applicaton No. 2287 by virtue of the beneficial use made of water under its priority on or before August 24, 1937, was 506 cubic feet of water per second of time for the generation of hydroelectric power under a total head of water of 126 feet. The Loup River Public Power District has appealed to this court from the final order of the Director of the Department of Water Resources entered in the case on December 28, 1962.

We shall hereafter refer to the petitioner as Hickman, to the respondent Loup River Public Power District as Loup District, to the North Loup River Public Power and Irrigation District as North Loup District, to the Middle Loup Public Power and Irrigation District as Middle Loup District, and to the Department of Water Resources of the State of Nebraska and its predecessors as Department. The Director of the Department of Water Resources will be designated as director.

The case was previously before this court and the relationship of each of the parties to the litigation is set out in the opinion in that case. Hickman v. Loup River Public Power Dist., 173 Neb. 428, 113 N.W.2d 617. We shall only refer to their relationship briefly in considering the issues on their merits on the present appeal.

Hickman is the owner of an appropriation of the public waters of the Middle Loup River for the purpose of irrigation for 1.28 cubic feet per second of time with a priority date of October 23, 1939, which is junior to the claimed appropriation rights of Loup District. He brings the proceeding as a class action on behalf of himself and all junior appropriators of water for irrigation purposes from the Loup River and its tributaries, whose points of diversion are upstream from the diversion point of the Loup District and whose priority dates are subsequent to September 15, 1932, the claimed priority date of Loup District.

The interveners, although barred by section 46-238, R.R.S.1943, from bringing action for the cancellation and annulment of the appropriation right of Loup District because of the 1-year limitation therein contained, were permitted to intervene because of the reasons stated in the former appeal. The primary issue raised is the validity of Loup District's appropriation right and, if valid, the extent thereof.

An application for the appropriation of the public waters of the Loup River for the purpose of generating power with a priority date of September 15, 1932, and with a diversion rate of 3,500 cubic feet per second of time was duly filed with the Department on behalf of Loup District. A corrected application was subsequently filed on June 12, 1933. On March 22, 1934, the application was granted. The terms and conditions of the appropriation as contained in the application are as follows: The amount of the appropriation is 3,500 cubic feet per second of time with a priority date of September 15, 1932. The capacity of the plant was to be 49,500 horsepower. The maximum head or fall that it is practical to maintain at the average low water stage of the stream is 126 feet. The plant was to be completed on or before June 30, 1935, and would be put in operation by that date. The order of March 22, 1934, approving the application provided that the water appropriated shall be used for the purpose of developing power and unless unforeseen accident or delay beyond applicant's control shall intervene, (a) excavation or construction shall begin or or before August 24, 1934, (b) applicant shall proceed with diligence and prosecute the work of construction continuously to completion, the period for completion to expire on August 24, 1937 and (c) the time for applying the water to the beneficial use indicated is August 24, 1937. The appropriation was subject to described appropriations of Middle Loup District and North Loup District, about which there is no issue in this case. A lease for the public waters was required to be filed with the Department requiring the payment to the state of $10 for each one hundred horsepower for all water appropriated. The order lastly provided: 'The breach of any of the conditions herein recited shall be ground for cancellation and revocation of this water right in the manner and upon the terms and conditions provided by law, and in the absence of such law, then such cancellation or revocation shall be declared and become effective following the procedural requirements of Section 81-6309 of the Compiled Statutes of Nebraska, 1929.'

Section 81-6309, Comp.St.1929, provided the method by which the Department, after notice and hearing, can forfeit and annul an appropriation of water not being used for some beneficial or useful purpose, or having been so used at one time has ceased to be used for such purpose for more than three years. No proceeding under this statute was ever...