Slosser v. Salt River Valley Canal Co.

• Citation: 65 P. 332,7 Ariz. 376
• Decision Date: 01 June 1901
• Docket Number: Civil 737
• Parties: HENRY E. SLOSSER, Plaintiff and Appellant, v. SALT RIVER VALLEY CANAL COMPANY, a Corporation, Defendant and Appellee
• Court: Supreme Court of Arizona

65 P. 332

7 Ariz. 376

HENRY E. SLOSSER, Plaintiff and Appellant, v. SALT RIVER VALLEY CANAL COMPANY, a Corporation, Defendant and Appellee

Civil No. 737

Supreme Court of Arizona

June 1, 1901

APPEAL from a judgment of the District Court of the Third Judicial District in and for the County of Maricopa. Webster Street Judge. Reversed.

The facts are stated in the opinion.

W. H Stilwell, and Joseph H. Kibbey, for Appellant.

An appropriation is a diversion of water from a natural stream united with an application to a beneficial use. Wheeler v. Irrigation Co., 10 Colo. 582, 3 Am. St. Rep. 603, 17 P. 487; Farmers' High Line etc. Co. v. Southworth, 13 Colo. 11, 21 P. 1028.

"The right to use the water is the essence of appropriation. The means by which it is done are incidental." Offield v. Ish, 21 Wash. 277, 57 P. 809.

"The appropriation of water for a specific purpose qualifies such appropriation, by limiting the volume to the quantity necessary for such purpose." Colorado Milling Co. v Larimer Irr. Co., 26 Colo. 47, 56 P. 185; Ostman v Dixon, 13 Cal. 33; McKinney v. Smith, 21 Cal. 374.

"An appropriator of water from a stream already partly appropriated acquires a right to the surplus or residuum he appropriates; and those in whom prior rights in the same stream are vested cannot enlarge or extend their use of water to his prejudice." Proctor v. Jennings, 6 Nev. 83, 3 Am. Rep. 240; Cache La Poudre v. Water Co., 25 Colo. 144, 71 Am. St. Rep. 123, 53 P. 320; Water Co. v. Powell, 34 Cal. 109, 91 Am. Dec. 685.

"Intention is a most important factor in determining the validity of an appropriation of water. This fixes the limitation as to quantity of water necessary, according to acts, diligence, and needs of the appropriator." Colorado M. and E. Co. v. Larimer Irr. Co., 26 Colo. 47, 56 P. 185; Power v. Switzer, 21 Mont. 523, 55 P. 35.

"Water appropriated to public uses becomes subject to the public uses declared by the constitution [Cal.], without reference to the mode of its acquisition by either party, and right to continued use does not depend upon covenants of contracts." San Diego County v. Sharp, 97 F. 399.

"It is not determined by the size of the ditch, but by the amount actually applied to a beneficial use. Prior appropriation governs in New Mexico Territory and water-rights must be determined by it." Millheiser v. Long, 10 N. Mex. 99, 61 P. 113.

C. F. Ainsworth, and L. H. Chalmers, for Appellee.

OPINION

SLOAN, J.

The facts presented by the record are as follows: The Salt River Valley Canal Company is a corporation organized under the General Incorporation Act of the territory, and its articles bear date the sixth day of September, 1875. The articles recite that: "We, the undersigned, being desirous of forming a corporation for the purpose of supplying a portion of the valley lying upon the north side of the Salt River, and in the vicinity of the town of Phoenix, with water for irrigation and for milling, manufacturing, and mechanical purposes, under and in pursuance of the laws of the territory of Arizona, do hereby certify and declare as follows: First. That the said corporation shall be known by the name of the Salt River Valley Canal Company. Second. That the object of the said corporation shall be to carry on and conduct the business of supplying a portion of the valley lying upon the north side of Salt River, in the county of Maricopa and territory of Arizona, and in the vicinity of Phoenix, with waters for irrigation and for milling, manufacturing, and mechanical purposes, and to this end and for this purpose to purchase, construct, build, or dig such canals, ditches, or flumes as may be necessary to convey water from Salt River; taking it from said river at a point at or near the head of the old ditch used by the Swilling Irrigating Canal Company, and conveying said water to such point or points in the above-described valley of Salt River as may be necessary for the disposal of or use of said water. Third. The amount of capital stock of said corporation or company shall be twenty thousand dollars, which will be divided into forty shares, of the value of five hundred dollars each." It appears that prior to the organization of the Salt River Valley Canal Company a company known as the "Swilling Irrigating Company" owned and operated what was known as the "Swilling Canal," which had been constructed prior to the year 1871. It further appears that the incorporators of the defendant company were for the most part stockholders in the Swilling Irrigating Company, and that one of their purposes in organizing the defendant company was to purchase what was known as the "South Branch," or "Middle Extension," of the Swilling canal, the property of the Swilling Irrigating Company. After the organization of the defendant company the stockholders in the Swilling Irrigating Company whose lands were irrigated from this South Branch, or Middle Extension, of the Swilling canal, joined in a conveyance of the water-rights held by them in the Swilling canal, and of their interests in the Swilling canal, to the defendant company, and received in exchange therefor shares of stock in the defendant company to the amount of thirty-seven shares. As there were forty shares of stock in the defendant company, three shares were left undisposed of after the issuance of the thirty-seven shares in exchange for the water-rights and stock in the Swilling Irrigating Company. These three shares were subsequently sold by the company at public auction. In 1884 the capital stock of the Salt River Valley Canal Company was increased to fifty shares, and the additional ten shares sold to various persons. The shares of stock issued by the company were in the ordinary form used by corporations. These shares, however, were treated by the holders thereof and by the defendant company, as a corporation, as representing water-rights in the company's canal. Until the year 1888 each holder of a water-right was permitted to take from the canal and use as much water as his needs might require for the irrigation of the lands which he cultivated. In fact, during these years it does not appear that there was any scarcity in the amount of water available which made it necessary to put any limitation upon the amount of water which each holder of stock might use. During the year 1888, by resolution adopted by the company, each shareholder was limited to one hundred miners' inches of water, measured under two inches pressure, which he might have delivered to him through the company's canal under and by virtue of each share of stock. This amount was subsequently reduced to eighty inches per share. Prior to the year 1884 it was the practice of the company to sell water, as it was called, to others besides stockholders; a higher price for such service being charged to such purchasers as were not the holders of stock than to the shareholders. In 1884 the company, by resolution, adopted the policy of selling water to shareholders in the company and to those renting or representing shares in the company, and this policy has ever since that date been followed. Under this resolution of the company the practice grew up of shareholders from year to year renting their shares or parts of shares to others, and these lessees were permitted to purchase from the company water during the irrigating seasons upon the same terms and in the same amounts as were permitted to shareholders. The water-rights represented by the shares of stock were treated and regarded as not appurtenant to any particular lands, but were regarded as entitling the owner or lessee to purchase water up to the maximum amount to which each was entitled, and to apply the same upon any land he chose to cultivate during the irrigating season. One who was not a stockholder, and who desired water from the canal for purposes of irrigation, would lease a share or part of a share, and obtain an order from the owner thereof, and this order was honored by the company by the sale to the lessee of water for the irrigating season at the same rate which was charged the shareholder. An attempt was made in the year 1887 to change the policy theretofore adopted, and to divide each water-right represented by a share of stock into three, which would make, in all, one hundred and fifty water-rights. The resolution of the company upon this subject stated that its purpose was to distribute these water-rights by way of dividends to the shareholders, and this was called "creating water-rights." While the expressed purpose was that of "creating water-rights" by way of dividends, it is clear that the real purpose was that of abolishing the floating water-rights attached to shares of stock, and making them appurtenant to particular tracts of land. These water-rights in form were deeds of conveyance, and contained certain conditions limiting the amount of water which could be purchased annually by the holder thereof, and which he was entitled to have delivered to him, the manner of distribution of the water, the annual charge to be collected by the company, and other conditions establishing and fixing the rights and privileges which each holder should enjoy. The resolution of the company made it optional upon the shareholders to accept these water-deeds, and, as a matter of fact, the great majority of the shareholders declined to accept them.

The plaintiff, Slosser, is the owner of land described in his complaint, and this land is situated near the westerly end of the defendant's canal. Plaintiff purchased this land from one King Woolsey during the year 1877. At that time about ninety acres of this land had been cultivated. Plaintiff's grantors began the cultivation of this land in the year 1871, and water for this purpose was...