Waha-Lewiston Land & Water Co. v. Lewiston-Sweetwater Irr. Co.

• Decision Date: 19 December 1907
• Citation: 158 F. 137
• Parties: WAHA-LEWISTON LAND & WATER CO. v. LEWISTON-SWEETWATER IRRIGATION CO., Limited.
• Court: U.S. District Court — District of Idaho

158 F. 137

WAHA-LEWISTON LAND & WATER CO. v. LEWISTON-SWEETWATER IRRIGATION CO., Limited.

United States Circuit Court, D. Idaho, Northern Division.

December 19, 1907

Geo. W Tannahill, W. B. Heyburn, W. H. Batting, and Alfred A Fraser, for plaintiff.

James E. Babb, for defendant.

DIETRICH District Judge.

The Idaho statutes, establishing a system for the appropriation and distribution of water for irrigation and other useful purposes, provide that one desiring to divert water from a natural stream shall make application for a permit to the state engineer. Upon receipt of such an application, if the same is in proper form, the state engineer indorses his approval, and a public record thereof is made. The application so indorsed constitutes a license authorizing the applicant to divert water in accordance with its terms. It is further provided by law that if the holder of a permit, at the expiration of one-half the time set for the completion of the diverting works, shall not have completed at least one-fifth of the work of construction as contemplated in the application for such permit, any person holding any permit for the diversion of water from the same stream postdating the permit for the diversion of waters through such unfinished works may, on or before the date set for the completion of one-half of the work of construction, petition the state engineer to cancel the prior permit. This petition must set forth the facts in relation to the condition of the unfinished work, and must be certified to by a competent engineer. On receipt of such petition, it is the duty of the state engineer to make or cause to be made an examination of the works in question, and, if he is satisfied that less than such one-fifth of the work of construction has been done on such date, it is his duty to cancel the permit, and he must thereupon at once notify the holder of the permit by registered mail of such action, stating the reason of the cancellation. If, upon the other hand, he refuses to cancel the permit, he must in like manner notify the person filing the petition. Either party feeling himself aggrieved by the action of the state engineer may take an appeal to the district court of the county in which the point of diversion of the works in question is situated. 'Such appeal shall be within sixty days from the receipt of the notice of such action of the state engineer, and if the petitioner to such state engineer shall file the appeal the holder of the permit in question shall be the defendant, and if the holder of such permit which has been canceled shall be the appellant, the party who petitioned for such cancellation shall become the defendant in such appeal, and such appeal shall be perfected when the appellant shall have filed in the office of the clerk of such District Court, a copy of such petition to the state engineer and a copy of the decision of such engineer, certified by such engineer as true copies, together with the petition to such court setting forth the appellant's reason for appeal. ' I have quoted in full the statutory language relative to appeals; and it will be observed that no provision is made for pleadings in court after the appeal is perfected, and there is also an entire absence of any regulation of the mode of procedure or specification of the questions to be tried.

On August 6, 1904, the state engineer approved an application of Mary E. Godard to divert a certain amount of water from Soldiers' Meadow creek, in Nez Perce county, Idaho. This permit was afterwards transferred to the appellant, Waha-Lewiston Land & Water Company, a corporation, organized under the laws of the state of Idaho, and hereinafter referred to as the 'Idaho Corporation.' Thereafter, on the 25th day of October, 1904, the state engineer approved the application of one Lafe Pence to divert water from the same stream. This permit was by assignment transferred to the defendant, Lewiston-Sweetwater Irrigation Company, Limited, a corporation, organized under the laws of the state of Oregon, and hereinafter called the 'Oregon Corporation.' On February 28, 1907, this last-named company filed with the state engineer a petition for the cancellation of the permit first referred to, owned by the Idaho corporation. Acting in compliance with the statutes, the state engineer caused investigation to be made, and thereafter, on March 12, 1907, canceled the permit of the Idaho corporation, duly notifying the holder of the permit of his action. Thereupon, in pursuance of the statutes, the Idaho corporation appealed to the district court of Nez Perce county, Idaho, and caused the statutory record to be filed with the clerk of that court on the 26th day of April, 1907. On May 13, 1907, the Oregon corporation filed with the clerk of the district court of Nez Perce county a petition for the removal of the cause to this court, accompanied by bond, both petition and bond being in the usual form, and at the same time filed a demurrer to the 'Petition on Appeal' of the Idaho corporation. Thereafter an order was made by Hon. Edgar Steele, judge of said court, approving the bond, and directing that no further proceedings be taken in the state court. A transcript of the record was filed in this court upon September 9, 1907, and the Idaho corporation has made a motion that the cause be remanded to the state court, upon the grounds: (1) That this court has no jurisdiction to hear and determine the cause; (2) that the amount in dispute is not of a value in excess of $2,000; (3) that the record does not affirmatively show facts essential to confer jurisdiction; and (4) 'that this action involves a controversy under a state statute, and is statutory in its nature, and does not involve any question sufficient to confer jurisdiction upon the above entitled court, either by direct suit or by removal of this cause from the state court to the United States Circuit Court. ' Substantially only two questions were discussed at the argument, namely, the amount in controversy, and the question whether or not a proceeding of such peculiar origin and form is removable.

The first question may be summarily disposed of. The petition for removal in express terms alleges the jurisdictional amount. That the cancellation of the prior permit may be not only of great pecuniary loss to the Idaho corporation, but of great pecuniary value to the Oregon corporation, is obvious. It is to be assumed that there is not enough water to supply both permits, or the Oregon corporation would have no interest in attacking the validity of the permit of the other party; and, it being alleged that the value of the matter in dispute exceeds $2,000, and there being no denial of such allegation, the court, for the purpose of entertaining jurisdiction, must assume the allegation to be true.

The real question involved is the removability of a proceeding of this nature. By section 2 of the act of March 3, 1875 (18 Stat. 470, c. 137) as amended by the act of March 3, 1887 (24 Stat. 552, c. 373), and Act of August 13, 1888 (25 Stat. 433, c. 866 (U.S. Comp. St. 1901, p. 510)), it is provided that:

'Any other suit of a civil nature at law or in equity of which the circuit courts of the United States are given jurisdiction by the preceding section * * * may be removed into the Circuit Court of the United States for the proper district by the defendant or defendants therein, being nonresidents of the stat.'

Section 1 confers upon the Circuit Courts original jurisdiction concurrent with the courts of the several states 'of all suits of a civil nature at common law or in equity * * * in which there shall be a controversy between citizens of different states in which the matter in dispute exceeds, exclusive of interest and costs, the sum or value' of $2,000.

(1) Is this a 'suit of a civil nature at common law or in equity?' (2) If it be deemed to be such a suit, does it fall within the class defined in the language above quoted from section 1, and of which the Circuit Courts are thereby given original jurisdiction? (3) If the foregoing questions are answered in the affirmative, does the fact that the proceeding was in a sense initiated before the state engineer and came into the state district court by 'appeal' present an insurmountable obstacle to the removal?

The phrase, 'suits at common law and in equity,' cannot be construed to embrace only ordinary actions at law and ordinary suits in equity; but it was doubtless intended thereby to include all the proceedings carried on in the ordinary law and equity courts as distinguished from proceedings in military, admiralty, and ecclesiastical courts. Gaines v. Fuentes, 92 U.S. 10, 23 L.Ed. 524. In the majority opinion (page 20 of 92 U.S. (23 L.Ed. 524)) it is said:

'And a controversy was involved in the sense of the statute whenever any property or claim of the parties capable of pecuniary estimation was the subject of litigation, and was presented by the pleadings for judicial determination.'

See also, Justice Bradley's dissenting opinion on page 24 of 92 U.S. (23 L.Ed. 524).

In Weston v. City of Charleston, 2 Pet. 464, 7 L.Ed. 481, Chief Justice Marshall said:

'The term 'suit' is certainly a very comprehensive one, and is understood to apply to any proceeding in a court of justice by which an individual pursues that remedy which the law affords. Modes of proceeding may be various; but, if a right is litigated in a court of justice, the proceeding by which a decision of the court is sought is a suit.'

In Upshur County v. Rich, 135 U.S. 467, 10 Sup.Ct. 651, 34 L.Ed. 196, the earlier cases decided by that court are collocated and commented upon, and the principle was deduced therefrom that a proceeding not in a court of justice, but carried on by...