West & Co v. Octoraro Water Co

• Decision Date: 29 January 1908
• Docket Number: 30,October Term,1905.
• Citation: 159 F. 528
• Parties: WEST & CO. v. OCTORARO WATER CO.
• Court: U.S. District Court — Eastern District of Pennsylvania

159 F. 528

WEST & CO. v. OCTORARO WATER CO.

No. 30, October Term, 1905.

United States Circuit Court, E.D. Pennsylvania.

January 29, 1908

W. H Surratt and L. L. Smith, for complainants.

Joseph T. Bunting and John G. Johnson, for defendants.

ARCHBALD District Judge. ^[1]

This is a bill brought by the complainants, who are citizens zens of Maryland, and owners there of a paper mill operated by water power developed from the Octoraro creek, to restrain the defendants, a Pennsylvania corporation, from diverting the waters of the stream. The Octoraro creek rises in the hills of Lancaster and Chester counties, Pa., and flows southerly into Maryland, emptying into the Susquehanna river about a mile below the complainants' mill. The stream drains an extended area of 216 square miles, 180 of which are in Pennsylvania, 151 of these being above the point at which the defendant company has located its Pine Grove pumping station and 23 square miles being above the pumping station at McCrea's Mills, on the west branch. The company was incorporated in July, 1903, under the laws of Pennsylvania by the merger and consolidation of seven other companies which had been similarly incorporated for the purpose of supplying water to the public in different townships of the two counties named, each of these companies being vested with the power of eminent domain, and the consolidated company, by statute, having the combined powers of all. The stream, with its several branches, is practically the only one available to the water company, and by resolution July 24, 1903, it decided to appropriate the whole of it, in line with which, by agreement with the Pennsylvania Railroad Company, the only customer which it so far has, it has contracted to deliver 60,000,000 gallons of water daily for the next 15 years. At present, however, its equipment falls far short of that, the capacity of the Pine Grove dam, being but 43,000,000 gallons, and the pumping station there, which is run by water power, being able to pump but 1,200,000 gallons daily from the stream, while the dam at McCrea's Mills has a holding capacity of but 1,000,000 gallons, and the pumping station, with one of its two sets of pumps working, is able to take but 3,000,000 gallons daily, these two stations in actual results, thus so far diverting from the stream not to exceed 3,200,000 gallons in every 24 hours. The only other reservoir is that at Mars Hill, with a capacity of 10,000,000 gallons, but other property has already been acquired by the company with a view to provide for increased storage; and with a change from water to steam power at Pine Grove-- 56 gallons of water going down the stream in order to raise 1-- there is a possibility there of an immense increase. The general average flow of the stream at the complainants' mill is variously estimated at from 100,000,000, to 200,000,000 gallons daily, and the average minimum flow, during the dry season, at some 15,000,000 or 20,000,000. This according to the complainants' proofs, is capable of developing 348 horse power, to which extent wheels have been installed by them, for the use of their plant. But according to the defendants, this is an over-installation, only 184 horse power being able to be safely or profitably relied on, which at times will go down to as low as 77 or 78, the quantity of water at present being taken from the stream by the defendants amounting to but 9 of 10 horse power. The complainants are not asking for damages to compensate for this diversion. They deny the right of the defendants, notwithstanding their charter, which, as it is said, has no extraterritorial force, to any use of the water other than that of an ordinary riparian owner, and assert their right to have it come down to them unimpaired. The defendants concede that they cannot appropriate the whole stream, nor divert more than a fair proportion of it; but this they claim the right to do, by virtue of their charter from the state of Pennsylvania, within the bounds of which over three-quarters of the watershed lies, professing a willingness to make compensation to the complainants for any damages which they may suffer, which they contend are not large

The questions which are so presented are novel and important, but it will not be necessary to go into them, in view of others by which the disposition of the case is controlled. It is charged by the defendants that the complainants are estopped by laches from asking more than to be compensated for the water taken; and on the other hand, it is claimed by the complainants that the defendants are concluded by the result of certain condemnation proceedings, instituted in the common pleas of Lancaster county, in which it was decided that they had no right as against the complainants to divert any of the waters of this stream. Either of these, if sustained, is decisive of the case, and they are consequently to be first discussed.

The charge of laches is based on the delay for over two years to file the present bill, during which large expenditures by the defendants were being made, and negotiations for a settlement were entered into. It appears, as to this, that as early as October, 1903, the complainants were aware that the defendants intended to take water from this stream, in consequence of which they retained Mr. W. U. hensel of Lancaster, Pa., to protect their interests, who in November following notified Mr. Bunting, the defendants' counsel that unless a settlement was effected with them, or their rights were otherwise protected, an injunction would be applied for by his clients. This, after some further correspondence, resulted in an interview December 18, 1903, at which Mr. Huey, representing the defendant company, made the proposition to pay the complainants $5,000, on the basis of taking 5,000,000 or 6,000,000 gallons daily from the stream. He said they were not going to take much, 'a mere drop in the bucket,' as he expressed it, amounting to but 10 horse power, which, out of the 350 which the complainants claimed to have developed at their works, he said would not be felt. The pumping station at McCrea's Mills, as he explained, had only 22 square miles of the watershed above it, and the one at Pine Grove only three-quarters of the whole drainage area, pointing out that, as the latter was to be operated by water power, there would always be a considerable quantity going down the stream, which would be ample most of the year except in a very dry season. The response of the complainants was that they wanted to be let alone, and that the only proposition which they would entertain, was to buy them out entirely, putting the value of their property at $250,000, which Mr. Huey said was out of the question. No agreement was thus reached at this meeting, nor at others which followed a few days later, each party adhering to the position originally advanced, the complainants expressing a willingness to sell at the price named, and the defendants offering to pay $5,000, on the basis of taking 6,000,000 gallons daily, with the understanding that when more was taken there would be further compensation. The matter drifted along in this shape some six months further, the defendants in the meantime, in May, 1904, having completed the work which they had undertaken at the McCrea's Mills station. Anticipating, in view of this, that the company would soon begin pumping, Mr. Hensel, in January, 1904, again called attention to the fact that no provision had been made for the protection of his clients, and notified the defendants that he should have to proceed for an injunction, unless this was promptly remedied. This led to further correspondence between counsel for the respective parties, in which it was asserted by counsel for the defendants that, as the company had the right of eminent domain, and the taking was in Pennsylvania, the only redress, even for owners of property upon the stream in...