State v. Twin Falls-Salmon River Land & Water Co.

• Citation: 30 Idaho 41,166 P. 220
• Parties: STATE and ROBERT RAYL, Plaintiffs, v. TWIN FALLSSALMON RIVER LAND AND WATER COMPANY, a Corporation, and SALMON RIVER CANAL CO., LTD., Defendants, and A. E. CALDWELL et al., Intervenors
• Decision Date: 17 December 1916
• Court: United States State Supreme Court of Idaho

166 P. 220

30 Idaho 41

STATE and ROBERT RAYL, Plaintiffs, v. TWIN FALLSSALMON RIVER LAND AND WATER COMPANY, a Corporation, and SALMON RIVER CANAL CO., LTD., Defendants, and A. E. CALDWELL et al., Intervenors

Supreme Court of Idaho

December 17, 1916

CAREY ACT LANDS-RECLAMATION OF-WATER APPROPRIATION FOR-INSUFFICIENCY OF-SCHOOL LANDS WITHIN CAREY ACT PROJECT-PURCHASER OF-RIGHT TO WATER FOR-RIGHT OF STATE-STATUTORY CONSTRUCTION-CONTRACTS-CONSTRUCTION OF-CAREY ACT-CONSTRUCTION OF-SUFFICIENCY OF WATER SUPPLY FOR CAREY ACT LANDS-WHEN AND BY WHOM DETERMINED-CONSTRUCTION CONTRACT-AMENDMENTS TO-ESTOPPEL-APPLICATION TO STATE.

1. Under the act of Congress known as the Carey Act and the amendments thereto (28 U.S. Stats. 372-422), and the statutes of this state applicable thereto, the state made application to the Secretary of the Interior for the segregation of about 150,000 acres of land within what is known as the Twin Falls-Salmon River, Carey Act project, which application was approved on the 10th day of April, 1908, and a contract was entered into between the United States government and the state on that date. The Twin Falls-Salmon River Land and Water Company was a corporation organized for the construction of a reservoir and canal system for the irrigation of said lands, and the state entered into a contract with said corporation on April 30, 1908, for the construction of the proposed irrigation works, whereby said construction company agreed to construct said works in accordance with certain plans and specifications; and it is provided, among other things in said contract, that shares of water rights should be sold to persons purchasing any portions of any state school lands within said project which were susceptible to irrigation and reclamation from said system, at a price not to exceed thirty dollars per share provided that said water rights were purchased within one year after the purchase of the lands from the state, and not exceeding forty dollars per share at any time thereafter. The construction company proceeded and constructed said works under the supervision of the state authorities. During the period of construction it was ascertained that the available supply of water for said project was less than one-half what it had theretofore been determined by the land Department of the government and the state authorities, and was agreed between the state and the construction company that not more than 80,000 acres of said Carey Act lands should be put on the market for sale and settlement. About 73,000 acres of said land were sold by the state to prospective settlers, about 14,000 acres of which thereafter became forfeited because the purchasers failed to comply with the law, thus leaving about 59,000 acres; and on later investigations of the available water supply for the lands within said project, it was ascertained that there was not sufficient water to reclaim the Carey Act lands which had already been sold. Thereafter on June 11, 1915, the state sold 160 acres of its school lands within said project to the plaintiff Rayl, and thereupon Rayl demanded of the construction company and also of the canal company that they sell to him a water right for said land, which they refused to do. Held, under the facts that the peremptory writ of mandate will not issue to compel said corporation to sell to him the water right demanded.

2. The construction company was permitted, under the law, to appropriate the water for said land for the purpose of transferring it to the settlers within said project for their use and benefit in connection with the irrigation system, it being intended that the settlers should ultimately own the entire project, the irrigation works and the water rights. The Construction Company was only a trustee in the appropriation of the water.

3. Under the provisions of sec. 1618, Rev. Codes, the state engineer is required to determine and report whether there is sufficient unappropriated water in the source of supply and whether or not a permit to divert and appropriate water through the proposed works has been approved by him, and whether the capacity of such works is adequate to reclaim the land described.

4. Sec 1619, Rev. Codes, provides that no request for the segregation of lands on which the state engineer has reported adversely as to the water supply, feasibility of the construction, the cost or capacity of the works, or as to the character of the lands sought to be irrigated, shall be approved by the board.

5. Held, that the entire plan is one of complete state supervision and control.

6. In carrying out the provisions of the Carey Act and the statutes of this state applicable thereto, there are three contracts required: One between the government and the state, known as the state contract; one between the state and the construction company, known as the construction company contract; and one between the construction company and the settlers, known as the settlers' contract.

7. The state acts in said matter as the agent or trustee for the settlers.

8. The general plan is that the cost of reclamation of such lands shall be assessed as a benefit against the land, to be paid by the settler, and that such benefit is assessed through the medium of the state board of land commissioners.

9. Under the provision of the Carey Act and the state law applicable thereto, the proper officers, both of the government and state, must determine in advance the sufficiency of the water supply, the character and kind of the system of irrigation that must be constructed, and the price to be charged the settlers for an interest therein. These things must all be done before the execution of the contract between the state and the construction company.

10. Where certain officers of the government and the state are authorized by law to pass upon matters of the character involved in this case, their decision is conclusive where no question of fraud is raised.

11. The time to ascertain whether the lands are of a character subject to segregation under the Carey Act and whether there is water available for their reclamation is prior to segregation.

12. The question of the sufficiency of the water supply for the irrigation of a certain tract of land must of necessity be a matter of approximate estimate.

13. Under the provisions of sec. 3289, Rev. Codes, any water company or corporation is forbidden to contract or sell more water than it is entitled to, and must not sell more water than it has.

14. By the terms of the state contract, the Construction Company agreed to sell shares of water stock "to the extent of the water rights to which it is entitled.... but in no case shall water rights or shares be dedicated to any land before mentioned or sold beyond the carrying capacity of the canal or in excess of the appropriation thereof."

15. Held, that the cases of State v. Twin Falls Canal Co., 21 Idaho 410, 121 P. 1039, and State v. Twin Falls Canal Co., 27 Idaho 728, 151 P. 1013, have no application to cases where the water supply is not adequate or sufficient and are not applicable to the facts of this case.

16. Under the provisions of sec. 3, art. 15, of the state constitution, the right to divert and appropriate the unappropriated waters of any natural stream to beneficial uses shall never be denied, and priority of appropriation shall give the better right as between those using the water.

17. The state in dealing with a Carey Act project is not dealing in its governmental capacity, but in its proprietary capacity-in its capacity as a private owner improving his own property.

18. The doctrine of equitable estoppel does not apply to the government when it is dealing or operating in its governmental capacity, but when it is operating in its proprietary capacity substantial considerations underlying the doctrine of equitable estoppel apply to the government as well as to individuals.

19. Under the facts of this case, held, that an estoppel arises against the state, as no good reason can be offered why the state in its dealings in this matter should not be affected by considerations of morality and right which ordinarily bind the conscience, since the action of a sovereign state ought to be characterized by a more scrupulous regard to justice and higher morality than belongs to the ordinary transactions of individuals, and it clearly appears from the facts of this case that the state should act with fidelity and integrity toward the settlers.

20. Since the state and Rayl knew that the water supply was insufficient at the time said state land was sold and purchased, an equitable estoppel arises against them, and held, under the facts and the law, that the state is not entitled to a priority of right for any of said water for the land sold to Rayl.

[As to estoppel of state to take inconsistent positions, see note in Ann.Cas. 1914A, 229]

Original application for a Writ of Mandate against the defendants requiring them to issue shares of water stock to the Plaintiff Robert Rayl, such water to be used in the irrigation of state school lands purchased by said Rayl within a Carey Act project. The alternative writ heretofore issued quashed and the peremptory writ denied.

Alternative writ quashed and the peremptory writ denied. Costs awarded to defendants.

J. H. Peterson, Atty. Genl., Herbert Wing and D. A. Dunning, Assts., T. A. Walters, Atty. Genl., and A. C. Hindman, Asst., for Plaintiffs.

The land owners have here agreed for a proportionate interest and certainly those who purchased subsequent to the state contract cannot be heard to say that the state land is not entitled to any water. The correct rule to be applied in this case is that the water user is only entitled to a proportionate amount of water and...