Idaho Fruit Land Co., Ltd. v. Great Western Beet Sugar Co.

• Citation: 105 P. 562,17 Idaho 273
• Parties: IDAHO FRUIT LAND COMPANY, LTD., a Corporation, Respondent, v. THE GREAT WESTERN BEET SUGAR COMPANY, a Corporation, Respondent, ELMORE COUNTY IRRIGATED FARMS ASSOCIATION, a Corporation, Appellant
• Decision Date: 23 November 1909
• Court: United States State Supreme Court of Idaho

105 P. 562

17 Idaho 273

IDAHO FRUIT LAND COMPANY, LTD., a Corporation, Respondent, v. THE GREAT WESTERN BEET SUGAR COMPANY, a Corporation, Respondent, ELMORE COUNTY IRRIGATED FARMS ASSOCIATION, a Corporation, Appellant

Supreme Court of Idaho

November 23, 1909

RECEIVER-JURISDICTION TO APPOINT-IRRIGATION CORPORATIONS-FOREIGN CORPORATION.

1. Where a plaintiff alleges that it has acquired an interest in an irrigation system by the purchase of water rights therein and the irrigation company owning such system becomes insolvent and is unable to protect and care for its property and comply with its contracts with the plaintiff to furnish water, the district court or the judge thereof has power and jurisdiction to appoint a receiver for such irrigation company to preserve and care for and operate its property pending the litigation as to the plaintiff's interest in said property.

2. Where a foreign corporation appropriates water for sale rental or distribution, and builds a system for the purpose of selling, renting and distributing such water, the right to collect rental or compensation, for the use of water supplied by such system, is a franchise; and where such corporation leases such system to another corporation engaged in the appropriation and distribution of water for rental and sale and the latter corporation becomes insolvent and permits the system to become in disrepair and unfit to be used in the distribution of such water, the court has jurisdiction and power to appoint a receiver of the entire property of both corporations, pending litigation to determine the interest a purchaser of water may have acquired in such system.

3. Upon an application for the appointment of a receiver of a foreign corporation, where the title and possession of such corpora- tion to property is attacked, it is error for the trial court to refuse to consider the answer of such foreign corporation, on the ground that it has failed to comply with the laws of this state regulating foreign corporations doing business within the state.

(Syllabus by the court.)

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

An action to determine the interest of plaintiff in an irrigation system and for the appointment of a receiver of such property pending such litigation. Appeal from the order appointing a receiver. Judgment affirmed.

Order affirmed. Costs awarded to respondent.

E. M Wolfe, for Appellant.

As this action is not brought to enforce a contract, it would not come within the inhibition of sec. 2653, Rev. St., as amended by the Laws of 1903, p. 49. (See War Eagle Con. Min. Co. v. Dickie, 14 Idaho 534, 94 P. 1034; Katz v. Herrick, 12 Idaho 7, 86 P. 873.)

The court should have considered appellant's answer as well as the plaintiff's complaint, and finding therein a full and complete denial of every material allegation in the complaint was without jurisdiction to appoint a receiver. (Sweeney v. Mayhew, 6 Idaho 455, 56 P. 87.)

J. G. Watts, and Wyman & Wyman, for Respondent.

The constitution, art. 15, sec. 1, declares that appropriation of waters for sale, rental or distribution is a public use, and the first concern of the courts is to see that the public gets the benefit of that use, and if it becomes necessary for the courts to take charge of the distribution of water, in order that the public may have the use to which they are entitled, the courts will not hesitate to take such charge. The water is exclusively dedicated to the public. (Wilterding v. Green, 4 Idaho 773-779, 45 P. 134.) The constitution also declares, art. 15, sec. 2, that the right to collect rates or compensation for the use of water is a franchise. Art. 11, sec. 15, prohibits the legislature "from passing any law permitting the leasing or alienation of any franchise so as to release or relieve the franchise or property held thereunder from any of the liabilities of the lessor or grantor, or lessee or grantee," etc.

Appellant cannot, in the face of the constitutional provisions above quoted, ask this court to relieve its franchise and property from the burden placed upon it by the lessee.

STEWART, J. Sullivan, C. J., concurs, Ailshie, J., concurs in the conclusion.

OPINION

STEWART, J.

On March 18, 1909, the judge of the district court, in and for Elmore county, appointed a receiver to take charge of the following property:

"That certain water right to the waters of Little Camas creek, amounting to 500 cubic feet per second, the notice of which is dated the twenty-seventh day of October, 1902, and recorded in book 18 of Water Rights, at page 112; also a water right to the waters of Wood creek to the extent of 100 cubic feet per second, the notice of which is dated the twenty-fifth day of October, 1902, and is recorded in book 18 of Water Rights, at page 113; also a water right to the waters of Lime creek to the extent of 200 cubic feet per second, notice of which is dated the twenty-fifth day of October, 1902, and is recorded in book 18 of Water Rights, at page 114; also a water right recorded in the name of Daniel W. Greenburg to the waters of Cat creek and Camas creek to the amount of 500 cubic feet per second, notice of which is dated the thirteenth day of April, 1902, and is recorded in book 18 of Water Rights, at page 79, all in the records of Elmore county, state of Idaho; also a certain reservoir on Long Tom creek in said Elmore county, capable of empounding about 2,600 acre feet of water, which said reservoir is located in sections 13, 14, 15, 22, 23, 24, 25, 26, 27, 34, 35, 36, township 1 south, range 7 east, and in sections 1 and 2, township 2 south, range 7 east, and in sections 30 and 31, township 1 south, range 8 east of Boise meridian; also a certain reservoir on Little Camas creek, capable of empounding about 16,000 acre feet of water, which reservoir is situated in sections 9, 10, 11, 15, 16, 21, and 22, township 1 south, range 9 east of Boise meridian; also a conduit or canal connecting Little Camas reservoir with Long Tom reservoir; and also the various distributing canals which take the water from Long Tom reservoir, or from the canyon at the mouth of Canyon creek and distribute it to the water users under said system, all of the above property being known as the Great Western Beet Sugar Company's Irrigation System; also those certain water rights on Rattlesnake creek and Canyon creek known as the water rights of the Elmore County Irrigated Farms Association, and the Mountain Home reservoir, having a capacity to empound about 5,130 acre feet of water, and to the canals and ditches which take the water to the water users under said reservoir and canals; also that certain right to the flood waters of Long Tom acquired by the Great Western Beet Sugar Company by actually empounding the flood waters of said creek in the Long Tom reservoir above described."

From this order the Elmore County Irrigated Farms Association appeals. The action was brought in the district court by the Idaho Fruit Land Co., Ltd., a corporation, plaintiff, against the Great Western Beet Sugar Co., a corporation, and the Elmore County Irrigated Farms Association, a corporation, defendants.

In the complaint the plaintiff alleges that it is a corporation organized under the laws of the state of Idaho, with its principal place of business at Mountain Home, Elmore county that the defendant Great Western Beet Sugar Company is a corporation organized under the laws of the state of Washington, and ever since about the year 1902 has been doing business in the state of Idaho, at Mountain Home in said Elmore county; that the defendant, the Elmore County Irrigated Farms Association, is a corporation organized under the laws of the state of Washington, and ever since about the year 1901 has been doing business as such corporation in Elmore county, but has had no officers or place of business or designated agent within said county; that the plaintiff, the Idaho Fruit Land Company, is the owner of a large tract of land, to wit, about one thousand acres, and that there are a large number of other land owners, to wit, about three hundred, who own lands aggregating in all about forty thousand acres, and that all of the owners of said lands are owners of water rights entitling them to the use of water from the irrigation system described in the complaint and are the joint owners of said system; that about the year 1902 the Great Western Beet Sugar Company proposed to build an irrigation system for the irrigation of said lands, and to raise money for such purpose by the sale of water rights to land owners, and by inducing others to come there and purchase and appropriate under the land laws of the territory to be irrigated, and to purchase water rights for the irrigation of lands, and represented that when the system was completed and the water rights sold thereunder were paid for, the irrigation system would become the property of the land owners who had purchased water rights from said irrigating system; that in pursuance of the general plan, the Great Western Beet Sugar Company located certain water rights and purchased other water rights, and between the years 1902 and 1907 sold and disposed of about forty thousand acres of water rights for land located, upon the promise and inducement of the company as above stated; that the Beet Sugar Company, from the funds so raised from the sale of water rights, constructed certain reservoirs for the impounding of water and canals and laterals for the distribution of said water, but that the same are not of sufficient size or so located as to supply more than twenty-five per cent of the purchasers to whom water rights were sold; that the Irrigated Farms Association has a legal title...