McCook Irrigation & Water Power Company v. Burtless
| Decision Date | 03 April 1915 |
| Docket Number | 18965 |
| Citation | 152 N.W. 334,98 Neb. 141 |
| Parties | MCCOOK IRRIGATION & WATER POWER COMPANY, APPELLEE, v. PAULINE BURTLESS ET AL., APPELLANTS |
| Court | Nebraska Supreme Court |
APPEAL from the State Railway Commission. Affirmed.
AFFIRMED.
W. S Morlan, for appellants.
C. E Eldred, contra.
A complaint was filed by the McCook Irrigation & Water Power Company before the state railway commission against 18 holders of water-right contracts under its canal, setting forth that the annual maintenance fee due from water-right holders to the company under the contracts was $ 1 an acre per annum; that complainant has not sufficient income therefrom to enable it to keep up and properly maintain the canal; that an increased charge is necessary and that a charge of $ 2 an acre would be a reasonable rate, which it is entitled to receive. The prayer is that a hearing may be had and complainant be authorized to charge consumers an annual maintenance fee of $ 2 an acre, to be made to apply for water furnished for the year 1913.
The respondents filed an answer denying the jurisdiction of the railway commission of the subject-matter of the complaint, which it is said is within the jurisdiction of the courts. The answer also pleads the failure of complainant to furnish sufficient water in the irrigation season of 1913; that it carelessly and negligently allowed the canal to become filled with weeds and debris, and to be obstructed, so that it failed to carry the amount of water to which the respondents' lands were entitled. It also pleads a number of acts of misconduct on the part of certain directors of the corporation whereby it is alleged they obtained special privileges and advantages, and charges general mismanagement.
A hearing was had, and an order made allowing the complainant to increase its maintenance charges to $ 2 an acre per annum. The company was also required to set apart each year $ 4,500 for the operation, maintenance and betterment of the ditch and to place any unexpended portion of this amount in a reserve fund for use in emergencies. It was also ordered that a new set of books be opened containing certain specified entries, and that a daily record be kept during the irrigation season of the flow in the main canal and the distribution of water to the users. From this order respondents have appealed.
The principal contention of respondents is that the commission has no authority to make an order releasing complainant from the provisions of the contracts; that the order deprives the defendants of their property without due process of law, and impairs the obligation of their contracts contrary to the provisions of the Constitution of Nebraska, the Constitution of the United States, and of the fourteenth amendment thereof. It is also said that the order is not supported by the evidence, and that under the covenants in the water deeds the title to the canal was and should be in its customers, since the whole amount of available water rights had been sold. These contentions will be considered in different order than presented.
1. The evidence conclusively shows that the rate of $ 1 an acre per annum is insufficient to maintain the canal, even after deducting certain charges criticised by the respondents, and that unless the complainant is allowed to increase the rate it will be impossible to maintain the canal in a condition so that it will deliver water. The computations made by respondents and set forth in the reply brief, showing that the income is more than sufficient to meet expenses, are not accurate, since they include hundreds of dollars received from the sale of water rights. Such sums are no part of maintenance charges. The plan of the corporation, expressed in its deeds or contracts with holders of water rights, provides that, when the water rights to the capacity of the canal have been sold and paid for, the canal becomes, by certain acts of its officers therein specified, the property of the water-right holders. Under such provision the money paid for a water right represents pro tanto a portion of the capital of the corporation. When the rights have all been sold the title to the canal passes, but the title to the money remains in the corporation. It may not therefore be taken from the corporation without its consent to be used for maintenance. This is said, assuming, of course, that the prices paid have been fair and reasonable and not padded to such an extent that it is seen that at least a portion of the cost of maintenance should be met from the excess charge. In this case, however, no such condition appears as to any of the respondents. Under the order made by the railway commission complainant is not allowed to squander or dissipate any sum realized from the increase in rates in excess of that actually expended each year for the maintenance of the ditch. Its books are subject to inspection, and if it should prove when further repairs have been made to the canal, or a more specific and detailed system of bookkeeping used, that the rate now fixed is excessive, it can be reduced upon proper application being made to that body.
2. It is strongly insisted that the evidence shows that all the available water which could be furnished has been disposed of under existing water-right contracts; that for that reason the consumers own the canal, and the complainant as a stock corporation has no interest in the property. This question involves the ownership of the property, and is one which the railway commission has no jurisdiction to hear or determine. If the facts warrant, proper relief may be afforded by appropriate proceedings in a court of equity.
3. Respondents insist that if the existing rate is unsatisfactory to the company it cannot complain because it was competent, and under no restriction, when it fixed the rate, and that regulation can only apply on the complaint of waters users when they show the...
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