Keller v. Magic Water Co.

• Decision Date: 01 April 1968
• Docket Number: 9965,Nos. 9958,s. 9958
• Citation: 92 Idaho 276,441 P.2d 725
• Parties: John E. KELLER and Frances J. Keller, his wife, and Alfred C. Keller and Roberta H. Keller, his wife, Plaintiffs-Appellants, v. MAGIC WATER COMPANY, Inc., a corporation et al., Defendants (Magic Water Company, Inc., respondent, and Kenneth W. Marshall, appellant). MAGIC WATER COMPANY, Inc., a corporation, Cross-Claimant, Respondent, v. John E. KELLER and Frances J. Keller, his wife et al., Cross-Defendants (John E. Keller, et ux., and Alfred C. Keller, et ux., appellants, and Kenneth W. Marshall, appellant).
• Court: Idaho Supreme Court

Page 725

441 P.2d 725

92 Idaho 276

John E. KELLER and Frances J. Keller, his wife, and Alfred C. Keller and Roberta H. Keller, his wife, Plaintiffs-Appellants, v. MAGIC WATER COMPANY, Inc., a corporation et al., Defendants (Magic Water Company, Inc., respondent, and Kenneth W. Marshall, appellant).

MAGIC WATER COMPANY, Inc., a corporation, Cross-Claimant, Respondent, v. John E. KELLER and Frances J. Keller, his wife et al., Cross-Defendants (John E. Keller, et ux., and Alfred C. Keller, et ux., appellants, and Kenneth W. Marshall, appellant).

Nos. 9958, 9965.

Supreme Court of Idaho.

April 1, 1968.

Albaugh, Bloem, Smith & Pike, Idaho Falls, for plaintiffs, cross-defendants and appellants Kellers (No. 9958).

Cunningham, Schwartz & Doerr, Twin Falls, for defendant, cross-defendant, and appellant Marshall (No. 9965).

Hepworth, Nungester & Felton, Buhl, for defendant cross-complainant and respondent Magic Water Co.

McFADDEN, Justice.

This action was instituted by plaintiffs John E. Keller and Alfred C. Keller and their wives to quiet title to certain waters of Salmon Falls Creek. Various parties were named as defendants, including appellant Marshall and respondent Magic Water Company. Respondent Magic Water Company answered and filed a cross-claim naming as cross-defendants the plaintiffs-appellants, appellant Marshall and others, who were also named as defendants in the Keller complaint.

The trial court entered its judgment and decree to the effect that respondent Magic Water Company has a prior and subsisting right to the waters of Salmon Falls Creek in the amount of 94.57 cubic feet per second (c. f. s.) with a priority date of May 2, 1953, subject only to its placing such water to a beneficial use within the time allowed by their permit as amended, to-wit: May 2, 1970. After entry of judgment, an appeal was taken by the Kellers (No. 9958). Marshall filed a separate appeal (No. 9965). This court ordered the appeals consolidated for briefing and argument.

In February 1953, the Evergreen Canal Company filed an application with the Idaho Department of Reclamation for a permit to appropriate 120 c. f. s. of the waters of Salmon Falls Creek for irrigation purposes. Notice of such application (I.C. § 43-203) was signed by the state reclamation engineer, service of which notice was acknowledged by the applicant. After more than forty days had elapsed, the application was approved by the state reclamation engineer, on May 2, 1953, and designated as 'permit No. 24128.' This permit provided that one-fifth of the work was to be completed on or before May 2, 1958. Magic Water Company is the successor in interest of the Evergreen Canal Company to permit No. 24128.

In the area involved herein, Salmon Falls Creek flows in a canyon from south to north. Magic Water Company constructed a dam across the creek in the bottom of the canyon, with a headgate near the west end of the dam. From this headgate a 48 corrugated iron pipe carries water to a concrete division box in which boards can be placed to control the water. Out of this division box, a 36 concrete pipe runs in a westerly direction to a junction box, west of the streambed, where another 36 concrete pipe conducts water down to a series of electric pumps, designated as Pump System A (Unit A). There the water is pumped to the top of the canyon wall where it is discharged into a pond and from there distributed by canals to water users. When boards are not placed in the division box, water discharges out of the box back into the natural channel of the creek.

There is a spillway on the east end of the dam where water can flow in the spillway channel and then back into the natural creek bed.

Seven 200 h.p. pumps were first installed at Pump System A in 1956, with a later addition of six 600 h.p. pumps. Pump System B was installed in May 1965, near Pump System A, west of the streambed. A small coffer dam was placed in the stream and the pumps in System B fed from that water. These pumps also raised the water to the top of the canyon wall, where the water was discharged into the same pond fed by System A.

It was stipulated that Magic Water Company had expended $112,000 to November 2, 1955; between November 2, 1955, and May 2, 1958, the sum of $290,000; and total expenditures to time of trial of $471,000.

Proof of completion of works was submitted to the state reclamation engineer by Magic Water Company in April 1965, following which an inspection of the works was made and a certificate of completion of works was executed by the state reclamation engineer on September 20, 1965, which instrument certified that the works were adequate to divert and convey 94.57 cubic feet per second of water.

On three occasions between the filing of the application for permit and the issuance of the certificate of completion of works, upon application of Magic Water Company, extensions of time for completion of works were granted by the state reclamation engineer.

The state reclamation engineer in March 1963, upon respondent's application, approved an amendment of the land list in the permit. Upon respondent's application, which sought to have the description of the point of diversion changed because of an error in the original description, in July 1964, the permit was amended to reflect the correct point of diversion.

On January 12, 1959, appellant Marshall filed an application for permit to appropriate 25 c. f. s. of the waters of Salmon Falls Creek, which permit was approved by the state reclamation engineer on January 20, 1959, as permit No. 27711. This permit required that one-fifth of the work be completed by January 20, 1964. Marshall assigned his right to appropriate 12 c. f. s. under this permit to appellant John E. Keller. Other assignments were made at various times by both Marshall and Keller. Following timely submission of proof under permit No. 27711, certificates of completion of works were issued in 1964, as follows:

To appellants Frances J. Keller and John E. Keller, et al, 10.5 c. f. s.

To appellant Marshall, 6.92 c. f. s.

To John W. Thomas (assignee of Marshall), 4.22 c. f. s.

August 12, 1964, the state reclamation engineer issued a license and certificate of water right to appellant Marshall for 6.92 c. f. s., with date of priority of January 12, 1959, for the lands described therein. On August 13, 1964, the state reclamation engineer issued a license and certificate of water right to the Kellers and Petersen for a total of 10.5 c. f. s., with priority date of January 12, 1959. Thereafter on December 5, 1964, John W. Thomas assigned his interest in Permit No. 27711 back to Marshall. No license or certificate of water right appears of record as to the 4,22 c. f. s. reassigned by Thomas to Marshall.

Although appellants Keller and Marshall separately appealed from the trial court's judgment and each filed separate briefs, the assignments of error of the respective appellants generally deal with identical issues. Hence the issues discussed herein are applicable to both the Kellers and to Marshall in their individual appeals.

Appellants (the term referring both to the Kellers and to Marshall, unless otherwise designated) assign as error the failure of the trial court to find that the original application for permit No. 24128, submitted by the Evergreen Canal Company, did not comply with the law. Appellants contend that the application for permit as filed by respondent's predecessor was fatally defective, because it did not contain any financial or other information regarding the incorporation or amount of stock of the applicant as required by I.C. § 42-202.

On May 2, 1953, the application was approved and designated as permit No. 24128. The trial court found as a matter of fact, and such finding is uncontroverted, that the Evergreen Canal Company failed to set out its financial condition upon the original permit. However, at the time of approval of the permit, the required notice of the application was forwarded to applicant. The application having been approved, and no showing to the contrary having been made, it is to be presumed that proof of publication of the notice was made as required by I.C. § 42-203, and that in passing upon the application the state reclamation engineer complied with statutory provisions concerning filing of protests to granting of the application. Mosman v. Mathison, 90 Idaho 76, 408 P.2d 450 (1965); Monson v. Boyd, 81 Idaho 575, 348 P.2d 93 (1959); Meservey v. Guilliford, 14 Idaho 133, 93 P. 780 (1908).

The record fails to disclose that any notice of deficiency in the application was ever served on the Evergreen Canal Company, or endorsed in the records of the Department of Reclamation. No timely objection was filed thereto as required by I.C. § 42-203. The trial court specifically found that no one was damaged by the omission of such financial information from the application. Appellants, whose appropriations have a priority date of January 20, 1959, appeared in the transactions at bar long after respondent Magic Water Company had expended large sums of money on the basis of the permit to appropriate.

It is thus concluded that under the circumstances, appellants have no ground to contest the alleged defect in the original application for permit, upon which respondent now bases its arguments. In addition to the statutory requirements, which alone would constrain us to rule in favor of respondent on this issue, principles of equity militate against the requested declaration of forfeiture, which is now being sought for the first time eleven years after original approval of the application. See Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743 (1946); Idaho Farms Co. v. North Side Canal Co., 24 F.Supp. 189 (D.Idaho 1938); Shive v. Barrow, 88 Cal.App.2d 838, 199 P.2d 693 (1948); Ainsworth v. Roubal, 74 Neb. 723, 105 N.W. 248, 2 L.R.A.,N.S., 988 (Neb.1905).

A more complex question is presented by the assignments...