Mielke v. Daly Ditches Irr. Dist.

• Decision Date: 16 January 1987
• Docket Number: No. 85-617,85-617
• Citation: 225 Mont. 172,731 P.2d 927
• Parties: Percy A. MIELKE and Deborah G. Mielke, Plaintiffs and Respondents, v. DALY DITCHES IRRIGATION DISTRICT and Board of Commissioners of Daly Ditches Irrigation District, Defendants and Appellants, DALY DITCHES IRRIGATION DISTRICT and Board of Commissioners of Daly Ditches Irrigation District, Third-Party Plaintiffs and Appellants, v. The STATE of Montana and Department of Natural Resources and Conservation of the State of Montana, Third-Party Defendants and Appellants.
• Court: Montana Supreme Court

Page 927

731 P.2d 927

225 Mont. 172

Percy A. MIELKE and Deborah G. Mielke, Plaintiffs and Respondents, v. DALY DITCHES IRRIGATION DISTRICT and Board of Commissioners

of Daly Ditches Irrigation District, Defendants

and Appellants,

DALY DITCHES IRRIGATION DISTRICT and Board of Commissioners

of Daly Ditches Irrigation District, Third-Party Plaintiffs and Appellants, v. The STATE of Montana and Department of Natural Resources and Conservation of the State of Montana, Third-Party

Defendants and Appellants.

No. 85-617.

Supreme Court of Montana.

Submitted Dec. 9, 1986.

Decided Jan. 16, 1987.

Larry Persson argued, Hamilton, for Daly Ditches.

Candace West argued, Helena, for Dept. Natural Resources.

Jeffrey H. Langton argued, Hamilton, for Mielke.

SHEEHY, Justice.

The Daly Ditches Irrigation District, the State of Montana and the Department of Natural Resources and Conservation (DNRC) of the State of Montana appeal herein from a final decision of the District Court, Fourth Judicial District, County of Ravalli, which held that the plaintiffs Percy and Deborah Mielke have a first priority water right for irrigation from Gird Creek on the basis of adverse use.

We determine under the facts of this case that the Mielkes have failed to establish the requisite elements to acquire the prescriptive water right which was accorded to them by the District Court.

The plaintiffs Mielkes are residents of Ravalli County, Montana, and own farm lands of which 98.44 acres produce crops by irrigation. They obtained irrigation water through a lateral ditch owned by them and a headgate on Gird Creek which diverted water from the creek through their lateral. Gird Creek is a part of the Daly Ditch Irrigation District system.

In July, 1983, the Daly Ditches Irrigation District locked the headgate through which Mielkes diverted water from Gird Creek to irrigate their lands. This caused the Mielkes to commence an action in District Court against the defendant Daly Ditches Irrigation District. In their complaint, the Mielkes alleged that they were the owners by appropriation of 200 inches of water from Gird Creek and they asked for an injunction against inference by the District with their water right. The District filed its answer, generally denying the allegations of the complaint, pleading affirmatively that the water rights have been transferred by a predecessor so as to sever the water rights from the land and counterclaiming against the Mielkes for fees for the 1983 irrigating season.

The Mielkes responded to the counterclaim and affirmative defenses by general denial, and by alleging affirmatively that they had an adverse use right to irrigation water for 98.44 acres. The Mielkes further contended that Contract No. 90, which provided water to the Mielkes at the rate of $1.25 per acre-foot was perpetual in its terms and that the State had wrongfully raised the fees during the period the State operated the project.

The State of Montana and the DNRC were brought into the action as third party defendants by the District on a claim of indemnity.

The Daly Ditches Irrigation District (sometimes referred to as the Daly Ditch Project) is a water project located in Ravalli County. The project consists of several irrigation ditches and systems designed to supply water to irrigable lands near Hamilton, Montana, on the east side of the Bitterroot River. Historically, the Daly Ditch Project came into existence as a result of the acquisition of lands and water rights around the turn of the century by the Butte copper king, Marcus Daly.

Mielkes' present farm lands were first described as part of lands passing by patents issued to Winfield Sherrill and Jacob Sherrill, dated 1889 and 1895, respectively. In 1888, Jacob Sherrill filed in the county records a notice of appropriation for 600 miner's inches of water from Gird Creek, claiming an original appropriation date of 1864.

In June, 1890, Winfield Sherrill and the Estate of Jacob Sherrill conveyed title to the land with the appropriated water right to James C. Flanner. In September, 1890, Flanner conveyed title to the land and the water right to James W. Hamilton. Hamilton, in turn, conveyed the same to Marcus Daly in October, 1890.

In December, 1901, the Estate of Marcus Daly conveyed the various ditch and water rights acquired during Daly's lifetime (including the waters of Gird Creek) to Ravalli Land and Irrigation Company. On the same date, the estate conveyed many parcels of land (including what is now the Mielkes' property) to Bitterroot Stock Farm, another corporation. The land deed to Bitterroot Stock Farm specifically excepted and reserved therefrom all water rights, water ditches and rights-of-way for ditches which attached to or were part of the lands conveyed. In legal effect, then, Daly's lands were conveyed to the Bitterroot Stock Farm. The water rights, ditches and easements for ditches, which were formerly held by Daly as appurtenant to the lands were separated and conveyed to Ravalli Land and Irrigation Company.

In 1920 and 1934, John Kalberer (Mielkes' predecessor in interest) purchased land from the Bitterroot Stock Farm. At the same time, he also entered into water contracts with the Ravalli Land and Irrigation Company for the purchase of water to irrigate his purchased lands. The water contracts were designated as Contract or Account No. 90.

In 1946, Mielkes purchased the lands from Kalberer, and took from him an assignment of Contract No. 90 for the irrigation water. Mielkes currently irrigate 98.44 acres. Under Contract No. 90 with Ravalli Land and Irrigation Company, Mielkes purchased (after Mielkes sold off 10 acres) water to irrigate 50 acres.

While Kalberer was still the owner of the lands, in 1943, Ravalli Land and Irrigation Company had conveyed all of its right, title and interest in its water rights, ditches, easements, headgates and other structures to the State of Montana. The State, under the Water Conservation Board (now DNRC) took over all the water company's water contracts as part of the Daly Ditch Project. The State had come into the picture as a part of a depression-era effort to establish public work programs through the encouragement of construction of public works. On April 23, 1943, Ravalli Land and Irrigation Company executed a deed, dated October 1, 1942, conveying all of the Ravalli Land and Irrigation Company's right, title and interest in the Daly Ditch project to the State Water Conservation Board. From that date, the Water Conservation Board, and its successor DNRC, undertook operation of the Daly Ditch Water Project and continued to perform the water contracts with purchasers such as Mielkes through the 1982 irrigation season.

Prior to 1942, the Estate of Margaret Daly (holder of about 1,250 acres) and the Bitterroot Stock Farm (holder of about 2,700 acres), as successors in interest of Marcus Daly, had not contracted with Ravalli Land and Irrigation Company for the purchase of water though these holders had continued to use water from the project on lands not sold by the Stock Farm. At the time of the take-over by the State and prior thereto, the Estate of Margaret Daly and the Bitterroot Stock Farm negotiated contracts with Ravalli Land and Irrigation Company similar to the water purchase contracts held by other water users on the project beginning February 1, 1942.

This project was the only state-owned water project that the State directly operated, maintained and repaired. In this it was unique among all the other projects owned by the State, as other state projects were operated and maintained by the various water users associations. The Daly Ditch Project, however, was never self-supporting; that is, it was never paid for wholly by the water users. From 1943, until the project was given up by the State, the debts exceeded credits by some $600,000.

In 1979, the legislature directed the DNRC to dispose of the Daly Ditch Project and to cancel and write off accounts receivable carried on the books of the Department. The legislature further directed that if the DNRC was not able to dispose of the project as provided by law, then the Daly Ditch Project should be abandoned prior to January 1, 1983. By quitclaim deed dated December 23, 1982, the DNRC transferred all of its right, title and interest in and to the Daly Ditch Project to the Ravalli Water Users Association. By quitclaim deed dated December 31, 1982, Ravalli Water Users Association transferred all of its right, title and interest in and to the Daly Ditch Water Project to the Daly Ditches Irrigation District. That District, which is the defendant in this case, is now the operator of the Daly Ditch Project.

The water contract assigned by John Kalberer to Percy A. Mielke is one of the water contracts taken over by the State of Montana as a result of the transfer from the Ravalli Land and Irrigation Company to the State Water Conservation Board. The State of Montana furnished water continuously to Mielkes under Contract No. 90 from 1946 through 1982 by means of the Daly Ditch Project. Mielke terminated his payments as billed in 1980, though he had previously paid in every year since 1946. The Mielkes received water for irrigation from the project for the irrigation seasons of 1981 and 1982, but made no payment. By letters dated in 1982, the Mielkes asserted that they were not claiming contract water but were claiming water under an 1864 water right and therefore they had no obligation to pay any further water charges under the water contract.

The Mielkes had originally petitioned to join the Irrigation District, but have since withdrawn their petition and refused to join the District. Based on their refusal to join the District and their failure to make payments, the Irrigation District locked the headgate that diverts water to the Mielkes' property. By stipulation, during the pendency of this litigation, irrigation waters have been supplied to the Mielkes.

The...