Yuma County Water Users Ass v. Schlecht

• Decision Date: 30 April 1923
• Docket Number: No. 268,268
• Citation: 67 L.Ed. 909,262 U.S. 138,43 S.Ct. 498
• Parties: YUMA COUNTY WATER USERS' ASS'N et al. v. SCHLECHT et al
• Court: U.S. Supreme Court

262 U.S. 138

43 S.Ct. 498

67 L.Ed. 909

YUMA COUNTY WATER USERS' ASS'N et al.

v SCHLECHT et al.

No. 268.

Argued Feb. 28, 1923.

Decided April 30, 1923.

Mr. T. D. Molloy, of Yuma, Ariz., for appellants.

Mr. Assistant Attorney General Riter, for appellees.

Mr. Justice sutherland delivered the opinion of the Court.

The Yuma County Water Users' Association is a corporation organized primarily to represent the settlers on the Yuma irrigation project in Arizona in their dealings with the government. The other appellants are shareholders and owners of tracts of land under the project.

On April 8, 1904, the Secretary of the Interior received the report of a board of consulting engineers, made at his request, giving alternate estimates of the cost of the project, and recommending that $3,000,000 be set aside for construction. This report was followed by a letter from the Director of the Geological Survey, joining in the recommendation and, among other things, saying:

In general the reports indicate that, by means of construction of a dam across Colorado river and other works, it will be possible to reclaim upwards of 85,000 acres of land at a cost of less than $40 per acre. * * *

'The land is extremely fertile in character, the climate is somewhat tropical, and the products have such value per acre that it is believed that the cost of $40 per acre is not prohibitive.

'There are a large number of alternatives to be considered and difficult problems to be solved, but the matter has developed from the engineering side to a point where it is possible to consider the larger features, and to set aside provisionally a sufficient sum of money to carry out the work, contingent upon satisfactory arrangements being made with the owners of lands and vested rights and the complete solution of other matters now pending.'

The Secretary, on May 10, 1904, replied approving the recommendation. Correspondence ensued between the Water Users' Association and the officials of the Reclamation Service, and on May 28, 1904, a meeting between them was had. It does not seem necessary to give the details of this correspondence or of the meeting. It suffices to say that, throughtout, the officials declared that in their opinion the project would cost at the rate of about $35 per acre, and the water users joined in the enterprise under that belief. True, it was stated that this sum might be increased or lessened as the work progressed, and the opinion was otherwise qualified; but it was evidently thought that the cost would not depart from the figures given to any great extent, one way or the other. Thereupon the landowners subscribed for shares in the association, binding themselves to pay the cost of the project in proportion to their interests and pledging their lands as security to that end.

On May 31, 1906, the association, acting for its shareholders, entered into an agreement with the government by which it was stipulated: That the Secretary should determine the number of acres capable of irrigation under the project; that payments should be divided into not less than ten equal annual installments, the first payable at the time of the completion of the works or within a reasonable time thereafter and after due notice from the Secretary; and that the cost per acre should be equal throughout the district. And the association agrees 'that it will promptly collect or require prompt payment in such manner as the Secretary of the Interior may direct, and hereby guarantees the payments for that part of the cost of the irrigation works, which shall be apportioned by the Secretary of the Interior to its shareholders. * * *' The contract is silent as to the amount of the cost and nowhere suggests that it had already been fixed.

It does not appear that a definite plan of construction was determined upon until after the meeting in 1904; the report of the engineers contains no estimate in respect of the works as they were finally constructed; and no construction contract was made until June, 1905. In the process of construction, great and unexpected difficulties were encountered. The contractors finding themselves unable to proceed, abandoned their contract, and the government was forced to take upon itself the burden of completing the work. The ultimate cost was more than double what had been anticipated. The project was finally completed, as found by both lower courts, on April 6, 1917, and on that date public notice was given by the Secretary, imposing upon the water users a construction charge of $75 per acre. This notice complies with the provisions of section 4 of the Reclamation Act, 32 Stat. 388, 389, c. 1093 (Comp. St. § 4703), printed in the margin.¹

Appellants (plaintiffs) brought suit in the United States District Court for the District of Arizona to enjoin the defendants, who were officials of the Reclamation Service, from putting into operation the determination of the Secretary so as to exact a greater sum than $ 5.28 per acre. The court, after a trial, found in favor of the government and dismissed the bill, and its action was affirmed by the Circuit Court of Appeals (275 Fed. 885), from whose decree the case comes here by appeal.

The pleadings are voluminous, much testimony was taken at the trial, and a large number of errors have been assigned. After eliminating from consideration those matters which are clearly immaterial or without merit, two questions remain. They are:

(1) Whether the report, correspondence and statements made in 1904 constituted an estimate of the cost of the project and a public notice, under the terms of section 4; and, if not, whether the notice of 1917 may be so regarded?

(2) Whether the project was completed on April 6, 1917, within the meaning of the contract of 1906?

First. It is contended by appellants that the report of the engineers, the correspondence among the officials and with the Water Users' Association and the statements made at the meeting in 1904, taken together, constitute an estimate of cost binding on the government, and, though informal, a compliance with section 4 as to public notice. That it was the firm belief of the government officials that the cost of the project would not greatly, if at all, exceed $35 and acre, and that their opinion to that effect was given to the Water Users' Association, by the documents and statements referred to, does not admit of doubt. It seems clear that the water users relied upon these expressions of opinion, and it may be assumed that, if they had known in the beginning that the cost was to be as much as $75 per acre, they would not have...