State v. Laramie Rivers Co

• Decision Date: 19 April 1943
• Docket Number: 2224
• Citation: 136 P.2d 487,59 Wyo. 9
• Parties: STATE v. LARAMIE RIVERS CO
• Court: Wyoming Supreme Court

136 P.2d 487

59 Wyo. 9

STATE v. LARAMIE RIVERS CO

No. 2224

Supreme Court of Wyoming

April 19, 1943

APPEAL from District Court, Albany County; V. J. TIDBALL, Judge.

Action by the State and others, on behalf of themselves and others similarly situated against the Laramie Rivers Company, a corporation, and another for accounting, injunction against unlawful preferences in distribution of water and commingling of the waters of two irrigation systems, specific performance of contracts, and appointment of a receiver. From the judgment rendered, plaintiffs appeal.

Affirmed.

For the appellants, there were briefs by R. J. Jackson and Attorney General E. T. Kerr, of Cheyenne, and oral argument and re-argument by Mr. Jackson.

In this action, the plaintiffs are seeking injunctive relief for the protection of their claims as water users from irrigation systems operated by defendants. The trial court rendered judgment in favor of the plaintiff Ryan and found in favor of the defendants as to all other matters. Plaintiffs have appealed and seek a review of said decree. Defendant Pioneer Canal Company is one of the early irrigation projects. The company owned no land and was designed to supply water from its canal to the holders of stock in the company. The Board of Control adjudicated water rights used from the canal and an appeal was taken from their adjudication to the District Court of Laramie County and in that proceeding said court adjudicated water rights for 49,030 acres of land in a judgment entered on December 27, 1912, none of which land was owned by the company. Defendant Laramie Rivers Company holds an appropriation of storage water in Lake Hattie, from which rights have been sold to water users. Some of these rights sold under contract are for the irrigation of lands to which water rights were adjudicated by the 1912 decree. We have set out in our brief a detailed statement of the facts relating to the complicated nature of the water rights that have been transferred to the plaintiffs in this case as disclosed by the evidence taken at the trial. The defendant corporations have operated their company interests as a unit and distributed water under both systems without discrimination as to whether it was storage water from Lake Hattie of direct flow water from the Pioneer Canal. When there was a shortage of storage water in Lake Hattie, defendants attempted to use Pioneer Canal water for both systems and, when this practice was blocked by users of the Pioneer Canal water, a controversy arose which deprived defendants of their legal rights. The Water Commissioner of the district, an engineer of long experience from his employment in the State Engineer's Office, has never been able to clearly understand the various classification rights derived by users under the two systems of water distribution operated as a unit by defendants in this case and the writer of this brief has also experienced difficulty in that regard. For that reason, we have set forth in our brief a statement of the facts upon which each of the plaintiffs base their claims. There can be no question of abandonment where a water user is deprived of the use of water because of shortage of supply. Simmons v. Ramsbottom, 51 Wyo. 419. The Pioneer Canal Company is a common carrier of water. Section 122-421 W. R. S. 1931; Hamp v. State, 19 Wyo. 377. Holders of stock in that company are tenants in common under the priority right adjudicated to the company. Moss v. Rose (Ore.) 41 P. 666. The question of selling water rights away from land is involved in this case. It was held in the case of Frank v. Hicks, 4 Wyo. 502, and Johnston v. Little Horse Creek Co., 13 Wyo. 208, that this might be done. Page 97, Laws 1905 recognized such transfers if they could be made without injuring the rights of other appropriators but the practice was evidently prohibited by the enactment of Chapter 97, Laws 1909, providing that water rights cannot be detached from the lands for which they were acquired, without loss of priority. See also Scherck v Nickols, 55 Wyo. 4. The sole question before this court as we see it, is "Did the decree adjudicate Pioneer water to the defendants' land?". If it did, we believe the injunction should issue to compel defendants to deliver the water to these lands. A judgment is distinct from the findings of a court. 30 Am. Jur. 823, Sec. 7. The Pioneer Canal is a common carrier. Collett v. Morgan, 21 Wyo. 117. The mortgage indebtedness against this water system is the separate debt of the Laramie Rivers Company Caldwell v. Roach, 44 Wyo. 319; People v. Telephone Co. (Mich.) 224 N.W. 438. The case of State v. Tidball, 35 Wyo. 496, appears to be a case on all fours with the case at bar. Plaintiffs were entitled to the appointment of a receiver on the ground of insolvency. Sill v. Coal Co., 97 A. 617; 53 C. J. 56, Sec. 50. It is respectfully submitted that the judgment below should be reversed as to all of the plaintiffs except Helen Ryan and that the District Court should be directed to render judgment as prayed for in plaintiffs' amended petition.

For the respondents, there were briefs and oral argument by M. E. Corthell, of Laramie.

The Pioneer Canal Company was organized in 1879 by citizens of Laramie and vicinity and the original canal was constructed in that year to divert water from the Laramie River. The headgate was about 25 miles up the river from Laramie and the course of the canal generally paralleled the river for a distance of 30 miles down past the city of Laramie. It was constructed by a company that sold about 7,000 shares of stock for $ 1.00 per share, the proceedings of which were expended for the construction of the canal. Not much use was made of the canal until about 1884 when the Wyoming Central Land and Improvement Company was organized. This company purchased a body of railroad lands consisting of 620,000 acres and over a period of years made sales thereof to ranchmen. Some of the ranchmen took up desert land and homestead locations for irrigating and farming purposes under the Pioneer Canal, which was enlarged to carry more water. In 1908 another company was organized to build the Lake Hattie system. This company purchased the lands of the Wyoming Central lying under the two systems and also purchased the stock of the Pioneer Canal Company. The purpose of the new company was to merge the Pioneer Canal and its water rights with the Lake Hattie project and its rights. The upper part of the Pioneer Canal from the reservoir to Sodergreen reservoir was enlarged to carry water for the Pioneer Canal and also provide storage in Lake Hattie reservoir. Some storage was provided for Sodergreen reservoir. The Laramie Water Company, which owned the Lake Hattie system, was the predecessor of defendant, Laramie Rivers Company, and, after the decree entered in the Big Laramie adjudication, sold shares of stock of the Pioneer Canal Company. Most of the shares were sold under an arrangement made in 1908 with the Wyoming Central Company and the Pioneer Canal Company, to those who had theretofore used water from the Pioneer Canal. The price under this arrangement was $ 12.00 per acre. The sales began in 1912 and continued through 1920 and 1921. The total amount of stock sold was between six and seven thousand shares. After 1921, sales were discontinued. In 1925 defendant Laramie Rivers Company was organized and purchased the systems from the Laramie Water Company. The Pioneer Canal Company at or about the time of the adjudication increased its capital stock from $ 10,000.00 to $ 210,000.00 representing 21,000 shares at $ 10.00 per share. The Wyoming Central Company sold the Pioneer shares to the Lake Hattie Reservoir and Irrigation Company. The Laramie Water Company, after the adjudication of the Big Laramie River, sold some of its shares to users of water and, when the Laramie Rivers Company purchased the systems, it acquired the Pioneer Canal Company stock then held by Laramie Water Company, totaling some 13,700 shares. The boards of directors of the two defendant companies were elected annually and they employed the same management and operated the systems jointly until about the year 1932. Thereafter, because of complaints of Pioneer water users, the systems were operated separately and no Pioneer water was delivered to Lake Hattie rights. This suit was begun in 1935. The plaintiffs claim that they are entitled to water under the Pioneer Canal adjudication of the Laramie River and tributaries. Some of these plaintiffs are entitled to water from the Pioneer Canal. It is disputed that such rights were acquired by reason of the adjudication. The undisputed rights are recognized because they were acquired through some form of contract with the defendant, Pioneer Canal Company. Some of the plaintiffs claim water from the Lake Hattie reservoir and North Canal under contracts with either Laramie Water Company or defendant Laramie Rivers Company. As to these plaintiffs, the issues are mainly concerned with the question of alleged mismanagement in failing to take water for storage from the Laramie River and in failing to keep or maintain its irrigation system in condition to receive and carry water. The trial court found that plaintiff Ryan was entitled to water under the adjudication but as to all other issues judgment was rendered in favor of defendants. The plaintiffs' appeal from the judgment sets up 95 specifications of error. The first 63 grounds relate to the admission or exclusion of evidence. These grounds are not argued and may be considered to be abandoned. Specifications 64 to 78 are to the effect that the judgment is contrary to law as to each of the plaintiffs. Specifications 79 to 93, inclusive, allege that the judgment is contrary to the evidence and not...