New York Canal Co. v. Bond

• Decision Date: 10 May 1920
• Docket Number: 3429.
• Citation: 265 F. 228
• Parties: NEW YORK CANAL CO., Limited, v. BOND et al.
• Court: U.S. Court of Appeals — Ninth Circuit

265 F. 228

NEW YORK CANAL CO., Limited, v. BOND et al.

No. 3429.

United States Court of Appeals, Ninth Circuit.

May 10, 1920

Rehearing Denied July 6, 1920.

C. C Cavanah, J. B. Eldridge, and Frank T. Wyman, all of Boise Idaho, for appellant.

B. E Stoutmeyer and J. L. McClear, both of Boise, Idaho, for appellees.

Before GILBERT and HUNT, Circuit Judges, and VAN FLEET, District judge.

HUNT Circuit Judge.

The Canal Company appealed from a decree in favor of the appellees upon a motion to dismiss the complaint. The Canal Company is a mutual co-operative irrigation company. Bond and Weinkauf, appellees, are project manager and fiscal agent respectively, of the Payette-Boise Reclamation Project, and as the agents and representatives of the Secretary of the Interior of the United States are charged with the duty of managing the reclamation work of the project referred to and operating storage water furnished and delivered to the landowners from Arrowrock reservoir, in Boise river, Idaho. The suit is to restrain appellees from charging and collecting from appellant and its stockholders certain charges for the year 1918, made upon the water rights of appellant and its stockholders and water right holders, and from declaring a forfeiture of certain percentage of construction charges for storage water paid appellant under a contract between appellant and the United States, made July 1, 1918. The facts as alleged in the complaint are as follows:

The vested water rights of appellant and its stockholders are the right to divert and use through the New York Canal, under an appropriation dated March 23, 1900, a certain quantity of water, and the right to have the water carried through the canal upon paying the proportion of the maintenance and operation charge for the maintenance and operation of all of the operation of the canal transferred by appellant to the United States under a contract of March 3, 1906. Appellant alleges that under the contract of March 3, 1906, an operation and maintenance charge was to be made for delivery to appellant and its shareholders for their 'vested water rights' from the Boise river through the canal, then transferred by appellant to the United States, and that under the construction given to the contract by all parties the officers of the Reclamation Service delivered the vested water rights, and that for several years an operation and maintenance charge was paid according to the proportion of the operation and maintenance cost of operation for that part of the irrigation works so transferred by the appellant to the United States under the contract, but that in 1918 greater charges than the contract provided for were made by the appellees and the Reclamation Service.

In 1915, 1916, and 1917 appellant applied for water, and the agents of the United States made contracts with appellant, providing that the storage waters from the reservoir were to be furnished to the stockholders and water right holders of appellant to supplement their vested water rights during the latter part of the irrigation season, and certain charges were made each year, covering only the delivery and use of the storage water. On July 2, 1917, the Secretary of the Interior issued a public notice stating that water would be furnished after July 1st of each irrigation season to the lands of appellant and its stockholders in a specified manner, namely, that upon proof of ownership from the New York Canal Company, the water being subject to delivery by the United States under the contract of March 3, 1906, supplemental water rights would be furnished in certain quantities at $33 per acre of irrigable land, the water to be delivered after July 1st, in an amount sufficient to make the total water supply from all sources equal to the average water supply furnished after July 1st, to similar lands of the Boise project for which full water right was furnished from the project. The notice also stated that the operation and maintenance charge for delivery of water claimable on account of 'said vested rights of the New York Canal Company' should be at the rates provided in the contract between the United States and the New York Canal Company, and that the operation and maintenance charge for the delivery of 'such supplemental supply from the reservoir and other works of the United States' should be at rates determinable under section 5 of the Reclamation Extension Act (Comp. St. Sec. 4713e) and announced by public notices for the Boise Project.

It is averred that appellant and its stockholders were given to understand by the reclamation director and chief engineer, while pretending to act for the United States, but who was acting beyond the scope of his authority, and arbitrarily, that no further storage water would be delivered from the reservoir unless appellant executed before the expiration of July 1, 1918, a written contract, dated July 1, 1918, which appellant says it was forced by the then project manager and the director and chief engineer of the Reclamation Commission of the United States to enter into. The contract of July 1, 1918, was prepared by counsel for the project, and in order to secure the storage water, and to maintain crops, appellant pleads that it entered into the contract of July 1, 1918, but then insisted that the contract should only require appellant and its stockholders to pay the amount of the construction charge therein provided, and the amount of the operation and maintenance charge for the storage water furnished thereunder, and should not pay an operation and maintenance charge upon their vested water rights, as provided in the contract of March 3, 1906.

It is alleged that under paragraph 6 of the contract (hereinafter quoted) of July 1, 1918, appellant's shareholders are to continue to receive all their vested water rights at all times as they were entitled under the contract of March 3, 1906, and that all their vested water rights, if any, were reserved, except as not otherwise provided in the contract, as long as the same were available from the natural flow of Boise river, and that nothing contained in the contract of July 1, 1918, was to lessen or impair any of the vested water rights in any way unless by foreclosure; that by the contract a supplemental water right was to be a supplemental right from Arrowrock reservoir, and carried with it the right for water in an amount sufficient to make the amount of water delivered equal and similar in amount, as far as practicable, to the average water supply furnished after July 1, each year, to similar lands of the project for which full season water rights were furnished.

Paragraph 6 of the contract of July 1, 1918, is as follows:

(6) 'It is understood and agreed that the shareholders and water right holders of the company are to continue to receive all the vested water rights at all times to which they are entitled under said contract of March 3, 1906, and reserve all other vested rights, if any, not otherwise provided herein, as long as the same are available from the natural flow of Boise river, and nothing herein contained shall lessen or impair any of said vested water rights in any way, unless by foreclosure of lien for nonpayment as herein provided, and it is agreed and understood that the supplemental water right herein provided to be furnished for said New York water right lands shall be a supplemental right from said Arrowrock reservoir, and the measure of the supplemental or additional water right to be furnished by the United States to said New York water right lands under this contract shall be the use and benefit of sufficient storage capacity in Arrowrock reservoir to furnish a supplemental water supply delivered after July 1st of each year in sufficient amount to make the amount of water delivered to said New York water right lands equal and similar in amount, as nearly as reasonably practical, to the average water supply furnished after July 1st to similar lands of the Boise project for which full season water rights are furnished from said project, but in no event shall the United States be obliged to deliver such supplemental water supply for more acreage than the total contracted and paid for by the company under this contract.'

Paragraph 16 is as follows:

(16) 'In addition to the construction charge herein agreed to be paid, the company will pay to the United States an annual operation and maintenance charge, which will be determined and announced each year by the Secretary of the Interior in the manner provided in section 5 of the said Reclamation Extension Act of August 13, 1914 (38 Stat. 686). For the irrigation season of 1918, and each year thereafter until further notice, the operation and maintenance charge will be forty (40) cents per acre-foot for all water delivered to or for each of the several tracts of land described in the attached orders and certificates from whatever source after July 1st of...