Holbrook Irr. Dist. v. Arkansas Valley, etc., Land Co.

• Decision Date: 31 December 1931
• Docket Number: No. 460.,460.
• Citation: 54 F.2d 840
• Parties: HOLBROOK IRRIGATION DIST. v. ARKANSAS VALLEY SUGAR BEET & IRRIGATED LAND CO. et al.
• Court: U.S. Court of Appeals — Tenth Circuit

54 F.2d 840 (1931)

HOLBROOK IRRIGATION DIST. v. ARKANSAS VALLEY SUGAR BEET & IRRIGATED LAND CO. et al.

No. 460.

Circuit Court of Appeals, Tenth Circuit.

December 31, 1931.

A. W. McHendrie, of Trinidad, Colo. (Marion F. Miller, of La Junta, Colo., and Forrest C. Northcutt, of Denver, Colo., on the brief), for appellant.

Henry C. Vidal, of Denver, Colo. (William V. Hodges and D. Edgar Wilson, both of Denver, Colo., on the brief), for appellees.

Before COTTERAL and PHILLIPS, Circuit Judges, and JOHNSON, District Judge.

COTTERAL, Circuit Judge.

The appellant, the Holbrook Irrigation District, a Colorado corporation, brought this suit on November 26, 1921, in the district court of Bent county, Colo., to obtain a decree, awarding appellant a priority over the appellee, the Arkansas Valley Sugar Beet & Irrigated Land Company, a New Jersey corporation, in taking water for irrigation purposes from the Arkansas river in Colorado. The parties have their respective headgates in water districts 17 and 67, both districts being located in irrigation division 2.

The suit was removed to the federal District Court for Colorado, on the petition of appellee, which alleged diversity of citizenship between these parties and a requisite amount in controversy. Appellant's motion to remand the suit to the state court was denied. The cause was then tried on the merits and resulted, on December 29, 1930, in a decree finding a priority for appellee in the use of 500 cubic feet of water per second, and dismissing the bill.

The two questions involved in this appeal are whether there was error in the refusal to remand the suit, and in the award of priority to appellee. The parties are designated herein as the Holbrook and the Amity.

At the trial there was an agreed statement of facts and oral testimony. The material facts are undisputed. As the trial court found, there were statutory adjudications of priority in the district court of Bent county for the parties in their districts. On April 8, 1905, there was decreed to the Holbrook in district 17, priority No. 10, as of date September 25, 1889, for 155 cubic feet of water per second, and No. 24, as of date August 30, 1893, for 445 cubic feet per second. On July 1, 1895, there was decreed to the Amity in district 67, priority No. 7, as of date February 21, 1887, for 283.5 cubic feet per second, and on October 14, 1918, priority No. 1918-3, as of date April 1, 1893, for 500 cubic feet per second, in a proceeding which was supplemental to and a continuation of the general proceeding for adjudication of priorities in district No. 67.

The court further found that on April 1, 1893, the Amity took the first patent steps toward appropriating water under the decree of October 14, 1918, that they were notice to all other water users or claimants, and that due diligence was used in the enlargement of the Amity canal and the necessary use of 500 cubic feet of water for irrigation purposes.

The conflict between the parties arose from the fact that the use of 500 cubic feet of water by the Amity for irrigation purposes precluded the Holbrook from the use of its award of 445 cubic feet of water, also necessary for such purposes. Seniority was decreed to the Amity, dating from April 1, 1893, which was held to be valid as compared with Holbrook's priority dating from August 30, 1893. It was also decided that the facts were insufficient to subordinate the Amity to the Holbrook or estop the Amity from exercising its priority.

Neither party here was a party to the statutory adjudication in favor of the other. Interdistrict disputes were not authorized therein. Ft. Lyon Canal Co. v. Nat. Sugar Mfg. Co., 68 Colo. 36, 189 P. 252.

The foregoing will suffice for an intelligent review of the denial of the motion to remand the suit. That question has two phases, one regarding diversity of citizenship and the other the jurisdiction of the federal court over the controversy.

The joinder of the individual defendants was insufficient to defeat jurisdiction. They had no actual interest in the controversy and were concerned only as water officials in the distribution of water as decreed. They were not indispensable parties and not even necessary parties. But only indispensable parties are to be considered in determining jurisdiction. Jones v. Box Elder County, 52 F.(2d) 340 (10 C. C. A.). There was diversity of citizenship between the real parties in interest.

In determining whether, when priorities are decreed in different districts, a federal court has jurisdiction to determine the conflict between them, it is only necessary to consider whether this is a civil suit at law or in equity between citizens of different states, and a sufficient amount is in controversy. In such a case, a federal court has original jurisdiction and a suit may be removed to that court from a state court. Sections 41 and 71, title 28, U. S. Code (28 USCA §§ 41, 71).

It is contended that there is no removable controversy because this suit is merely supplemental to a main action. But it is not of that character, and there is no statute in Colorado which authorizes supplemental proceedings for the determination of conflicting priorities arising in different water districts. The plaintiff itself invoked the equity jurisdiction of the state court by virtue of a statute, which requires an independent suit for that purpose. Section 1784, Comp. Colo. Laws 1921. If the state court had jurisdiction to adjudicate the conflict in this suit, then the federal court, on removal, had jurisdiction over the controversy. Substantive property rights are involved. They were subject to adjudication in a state court and likewise in a federal court, where the jurisdictional facts exist. Henrietta Mills v. Rutherford County, 281 U. S. 121, 50 S. Ct. 270, 74 L. Ed. 737; Commissioners v. St. Louis S. W. R. Co., 257 U. S. 547, 42 S. Ct. 250, 66 L. Ed. 364; Hughes Fed. Prac., vol. 4, section 2276. The motion to remand the suit was properly overruled.

The Amity canal has apparent priority in the adjudication as of date April 1, 1893, over the Holbrook as of date August 30, 1893. To avoid such priority, the Holbrook contends that: (1) The Holbrook has priority because it became vested and invulnerable more than four years before the commencement of the proceedings for the Amity decree of 1918; (2) the Amity decree was by its own terms and by law rendered in excess of jurisdiction as against a priority dating earlier than February 11, 1906; (3) the assertion of the Amity priority was barred by limitation after four years from the date of the Holbrook decree of April 8, 1905; (4) the Amity was estopped to claim priority.

The state of Colorado has enacted statutes forming a comprehensive scheme for the control and allotment of waters for irrigation purposes. Statutory proceedings were authorized for the adjudication of priorities. They are codified in Compiled Colorado Laws 1921. The district court of the proper county has exclusive jurisdiction to adjudicate priorities in each district. Section 1752. Such adjudication is subject to reargument or review for two years. Section 1789. The decrees are binding until by separate suit priorities as between the parties in different districts are otherwise determined, but a suit to determine them must be brought within four years after a final decree in a water district. Section 1784. By section 1785, it is provided:

"After the lapse of four years from the time of rendering a final decree, in any water district, all parties whose interests are thereby affected shall be deemed and held to have acquiesced in the same, except in case of suits before then brought, and thereafter...