In re Waters of Willow Creek

• Decision Date: 26 May 1925
• Citation: 236 P. 487,119 Or. 155
• Court: Oregon Supreme Court
• Parties: IN RE WATERS OF WILLOW CREEK, ETC. v. ORCHARDS WATER CO. ET AL. [*] WILLOW RIVER WATER USERS' ASS'N ET AL.

236 P. 487

119 Or. 155

IN RE WATERS OF WILLOW CREEK, ETC.

WILLOW RIVER WATER USERS' ASS'N ET AL. v. ORCHARDS WATER CO. ET AL. ^[*]

Supreme Court of Oregon

May 26, 1925

In Bank.

Appeal from Circuit Court, Malheur County; Dalton Biggs, Judge.

Proceeding to determine rights of the Willow River Water Users' Association, the Orchards Water Company, and others, in the waters of Willow Creek and its tributaries. From the decree entered, the Water Users' Association and others appeal. Motions to dismiss appeals denied, decree affirmed in part and modified in part, and cause remanded, with directions.

In the month of May, 1909, C. T. Locey and J. P. Smith instituted proceedings for adjudicating the water rights of Willow creek and its tributaries. Willow creek is a tributary of Malheur river in Malheur county, Or. At that time the Willow River Land & Irrigation Company was engaged in the construction of an irrigation system for impounding and distributing the waters of Willow creek and its tributaries in order to irrigate the lands subject to irrigation by gravitation therefrom. That company submitted to the board of control its statement and proof of claim, from which it appeared that certain of the water rights had become vested through appropriation and use, while others were at that time inchoate.

On the 9th day of September, 1912, the state board of control made its findings of fact and order of determination in said matter. Among other things, this order provided that the Willow River Land & Irrigation Company should be allowed until the 1st day of January, 1918, within which to complete its said irrigation system and apply the impounded waters to beneficial use. To the findings thus made by the board, in due course certain exceptions were taken, resulting in a decree of the circuit court for Malheur county, from which decree appeals were taken to this court. This court approved the findings of the water board in the circuit court granting unto the said irrigation company until January 1, 1918 within which to complete the project and perfect the inchoate water rights. In re Willow Creek, 74 Or. 592, 144 P 505, 146 P. 475. On the 6th day of June, 1916, the circuit court for Malheur county entered its decree in the matter on the mandate of this court. By that decree certain of the water rights involved in this proceeding were fixed and determined, and the said inchoate rights were made subject to further determination at the expiration of the said period ending January 1, 1918.

In the spring of 1920 Hon. George T. Cochran, then state water superintendent, gave notice to all parties interested in said inchoate water rights to appear before the board at a date and time fixed in the notice and submit proof of the matters involved. During the interim, between the initiation of the first proceedings in the matter and the hearing which was held pursuant to said notice, the Willow River Land &amp Irrigation Company had been succeeded by the Moline Farms Company. The Willow River Land & Irrigation Company became bankrupt and passed out of existence. All of its property was sold by trustees in bankruptcy on the 24th day of May, 1913 and its entire interest in said project, together with its other properties, including whatever interest it had in the capital stock of the Orchards Water Company, was sold and transferred to William Butterworth, Douglas Smith, and Albert G. Lester by the trustees of Willow River Land & Irrigation Company, bankrupt. The said purchasers purchased and held said property in behalf of certain creditors of the bankrupt company, among which creditors said purchasers were numbered. On or about the 27th day of September, 1917, said purchasers transferred the properties so acquired by them to said William Butterworth, who afterwards, with others, under the laws of the state of Delaware, organized the corporation Moline Farms Company, one of the parties to this proceeding. This transfer was made on the 17th day of December, 1917.

On March 19, 1910, the Willow River Land & Irrigation Company entered into a contract with the Orchards Water Company, an Oregon corporation, by terms of which the Willow River Land & Irrigation Company agreed to convey to the Orchards Water Company, within five years from that date, by good and sufficient quitclaim deed, the said irrigation system, including all the right, title, and interest which the said irrigation company had or might thereafter acquire in and to the water of said Willow creek or its tributaries, and to all flood waters flowing therein. The said Willow River Land & Irrigation Company, in addition to owning the irrigation system, owned a large quantity of land subject to irrigation therefrom. This land, together with the water rights, was offered for sale in small parcels. The water right was to be evidenced by one share of the capital stock of the Orchards Water Company for each acre of land purchased. It was intended that the purchasers of land and water rights from the Willow River Land & Irrigation Company should become the owners of all the capital stock of the Orchards Water Company, and thereby become the owners of the entire irrigation system. The Orchards Water Company was organized for the purpose of distributing the water and maintaining the irrigation system, and all of the stock of that company was eventually to become the property of the water users.

After the Willow River Land & Irrigation Company became bankrupt about 1912, 44 purchasers from said Willow River Land & Irrigation Company associated themselves together as a voluntary association for their mutual protection, adopting the name of Water Users' Association of Willow Creek or Willow River Water Users' Association. Thereafter, in a number of instances in different proceedings growing out of the bankruptcy, notices were given and signed Willow River Water Users' Association, by A. A. Reed, president, and W. A. Eaton, secretary. In the original proceedings, particularly those instituted for the purpose of presenting claims and submitting proof for determining the land under said project to which water would become appurtenant and vested, the members of the Willow River Water Users' Association were not parties. The members of that association did not receive any notice of, or participate in, the proceedings adjudicating the water rights of said Willow creek.

In the supplementary proceedings, instituted, as aforesaid in 1920, for the determination of all the persons and land entitled to vested water rights under said irrigation system, notices were sent to the members of the Willow River Water Users' Association. These water users appeared by their attorneys, Nichols, Hallock & Donald, and filed a paper styled: "Protest, statement, and proof of claim of the members of Willow River Water Users' Association." This paper is subscribed by 44 persons, who are members of said association, and mentions in detail the claim of each member of said association describing the land, owned and claimed by him, entitled to the use of water from said system.

During the tortious course of this and the bankrupt proceedings the association of water users, or some of the members thereof, gave notice in detail of their interests, including a protest to the sale, a protest to the referee in bankruptcy, and a notice to Hon. J. H. Lewis, then president of the board of control, signing all of them Willow River Water Users' Association, sometimes by its president, A. A. Reed, and W. A. Eaton, secretary, and at other times by W. A. Eaton, secretary.

On the 10th day of March, 1913, some members of the association directed a notice to the prospective bidders for the purchase of the property of Willow River Land & Irrigation Company at a sale to be held on that date by the trustees in bankruptcy at Vale, Or., which notice was signed by 38 members without using the name of the association. These 38 persons are referred to, however, as members of said association in the formal claim presented in this proceeding by the 44 persons named as composing the Willow River Water Users' Association.

It is further stated in the claim of the Water Users' Association that the claimants served upon the said Orchards Water Company a signed communication which is signed by 23 individuals without designating themselves as Willow River Water Users' Association. The claim of the members of the Water Users' Association concludes with a prayer as follows:

"That said board by said order provide and direct that the lands of claimants herein described * * * be first served with an amount of water sufficient to * * * beneficially irrigate the same."

The claim of the Water Users' Association, including the exhibits, consists of 156 pages of printed matter. The Willow River Water Users' Association was not satisfied with the decree of the circuit court, and gave notice of appeal to this court, which was duly served upon all of the other parties to the proceeding. The notice of appeal described the appellants as "Willow River Water Users' Association, including all of the members thereof." The respondents, Orchards Water Company, Moline Farms Company, and G. J. Magenheimer, at the time this cause came on for hearing on the merits, filed a motion to dismiss the appeal of the Willow River Water Users' Association, specifying their grounds for said motion as follows:

"That the notice of appeal does not specify nor set forth the matters specified and required by statute, and particularly, in that said notice of appeal does not contain the names of the parties and does not sufficiently describe the decree appealed from; that as appears in the transcript the said association is an unincorporated association of individuals, and the names of those who are...