Fresno Canal & Irrigation Co. v. Park

This is an action to enforce a lien against certain land of the defendants Adeline B. Park and her husband, William Park, alleged to have been created by a certain instrument in writing made -by and between plaintiff and one Perrin, who was said defendants’ predecessor in interest in the land. The other defendants are made parties as claiming some interest in the premises. Defendants demurred to the complaint, and their demurrer was overruled. They declined to answer and judgment was rendered for plaintiff, and they ap

These facts appear from the averments of the complaint: The respondent is a corporation organized in February, 1871, for the purpose of straightening, improving, etc., the natural channel of Kings river and its branches, and taking water therefrom by means of canals and ditches for various beneficial uses, and, among others, for the disposition of the waters and “collecting annual rents and charges therefor.” On March 28, 1892, respondent and one E. B. Perrin executed a written instrument, which was duly acknowledged by the parties and was recorded on the 31st of the same month. Plaintiff’s canals and ditches run through an agricultural region, and do not furnish water within any city, town, or municipality. The covenants of this instrument necessary to be mentioned here are as follows: The respondent, in consideration of a certain sum of money then paid it by Perrin, covenanted to furnish to the latter from its main canal, or from a branch thereof, all the water that may be required for the irrigation of a described piece of land then owned by him, for a certain number of years commencing May 28, 1892, “not exceeding at any time one cubit foot per second.” The respondent agreed to put a suitable gate in the bank of the canal at the most convenient point for the conveyance of water to Perrin’s land; and Perrin agreed to construct a ditch from the gate to his land at his own cost, etc. Perrin agreed that he would not use the water, or permit it to be used, on any land other than that described in the instrument, and would not permit it to run to waste, and would provide means to carry any surplus water back to the respondent’s canal. It was declared that the water to be thus furnished was intended to be an appurtenance to and to run with the land, that the right thereto was to be transferable only with the land, and that respondent was to be bound by the instrument only to subsequent owners of the land. Perrin covenanted for himself, his heirs, assigns, and successors in interest, for the payment annually to respondent of the sum of one hundred dollars on

The parts of the constitution relied on by appellants are sections 1 and 2 of article XIV. The first clause of section 1 is as follows: “The use of all water now appropriated, or that may hereafter be appropriated, for sale, rental, or distribution, is hereby declared to be a public use, and subject to the regulation and control of the state in the manner to be prescribed by law.” The rest of the section applies exclusively to cases where water is supplied to incorporated cities or towns, or to that other kind of municipality known as a consolidated “city and county,” so

Section 2, which is mainly relied on, is as follows: “The right to collect rates or compensation for the use of water supplied to any county, city and county, or town, or the inhabitants thereof, is a franchise, and cannot be exercised except by authority of and in the manner prescribed by law.” Appellants seem to lay great stress on the fact that the word “franchise” is used in this section, as if “franchise” were a negative word signifying prohibition, instead of being, as it is, an affirmative word denoting a grant. Whatever right a ditch owner had to sell and distribute water at the time the constitution was adopted, or afterward, was not destroyed because it was called in the constitution a franchise. The real meaning of “franchise” is a privilege granted—not a right taken away; but the word was evidently employed in section 2 mainly for the purpose of emphasizing the general declaration in section 1 that the use of water for sale, distribution, etc., is a public use, and with the notion, no doubt, that calling it a franchise would make more clear and certain the intent to subject it to state regulation. In all other respects the meaning and effectiveness of section 2 would be the same if the words "is a franchise, and” were not there.

But the serious questions arising out of section 2 are as to the meaning of the words “cannot be exercised except by authority of and in the manner prescribed by law.” This is the language upon which the contention of appellants is ultimately based, and which is to be seen prominently reiterated through the pages of their briefs. The contention really is, although somewhat thinly veiled, that respondent could not collect any rentals, or make any valid contract about the same, unless the legislature had passed a law—a “statute law,” as they say—• expressly giving the power and prescribing the manner in which

All the provisions of the constitution on the subject must be considered together, and in the light of the evils sought to be remedied and the condition of the property in ditches and the use of water at the time the constitution was adopted. The appropriation, diversion, distribution, and sale of water have been a prominent business in California since its first settlement by Americans. During its early American history its leading industry was mining, and the diversion of water from rivers and small streams to the localities where the mines were discovered was an absolute necessity to the business of mining. Consequently, immense sums of money were invested in water rights, and in ditches which were constructed at great expense in nearly every part of the mining regions. At later periods still larger ditches were constructed through regions devoted to agriculture, and water furnished, for compensation, for irrigation. In many parts of the state these ditches were as essential to farmers as those in the mountains were to miners. The amount of compensation to be paid for the water furnished was determined by the private contracts of the parties. Property and ownership in these ditches, and in the use of the water flowing therein for sale and distribution, in which millions of money have been invested, were as deeply founded and as thoroughly established in the law as property in any other thing capable of ownership: Such was the situation when the constitutional convention met in 1878. Is it possible that the convention intended to practically destroy, or confiscate, all this

It was no doubt contemplated that the main evil to be remedied existed in cities and towns, where it was feared that a corporation having practically the monopoly of furnishing water therein, would, by exorbitant charges, oppress the large number of small buyers who are compelled to have water constantly for domestic purposes. Therefore, it is provided with great detail in section 1 how compensation for water furnished within municipalities may be collected—it being provided, among other things, that said compensation “shall be fixed” annually by the “governing body” of the municipality, and that said body shall be “subject to peremptory process to compel action in the matter,” and to “penalties” for not taking action. The section also provides that if the persons or corporations furnishing water in municipalities shall collect “compensation” therefor otherwise than as established by the governing body, their franchise “and waterworks” shall -be forfeited to the municipality. Whether the latter clause could be enforced is a question not arising in the case at bar, but it shows, as other provisions of section 1 show, that the convention, when dealing with the subject of water, had particularly in view the furnishing of water-within municipalities, and determined that it would itself handle and legislate upon that branch of the subject so far as to leave

We do not deem it necessary to extend this opinion by noticing in detail the various authorities cited by counsel. There is no doubt that the numerous decisions of this court cited by respondent impliedly, at least, uphold contracts like the one here in question; although there is, perhaps, some force in the claim of appellant that in most of those cases the points here made may have been overlooked. Both sides cite cases from Colorado, some of which are favorable to respondent’s views,

The only act passed by the legislature touching the subject here under consideration which calls for special notice is the act of March 12, 1885. (Stats. 1885, p. 95.) There was another act on the subject passed March 12, 1880 (Stats. 1880, p. 16); but no action was taken under it, and it is very little discussed in the briefs of counsel. The later act of 1885 covers the subject, and supersedes most of the provisions of the act of 1880. In the act of 1885 the legislature does not, itself, undertake to prescribe any rule about compensation for water. It simply gives power of regulation to boards of supervisors in the event that they are petitioned to exercise such power by "not less than twenty-five inhabitants who are taxpayers,” etc. Upon such petition the supervisors are authorized to fix and regulate "the maximum rate at which any person, company,” etc., may sell, rent, or distribute water. The board or boards of supervisors in the county or counties in which respondent’s ditches are situated have, however, never taken any action under the statute, no petition for such action having been presented, and therefore there are no regulations of said boards to be considered; but appellants contend that respondent’s rights have been impaired or destroyed by some general provisions of the act. This contention, however, cannot be maintained. ■ The statute, even if it can be said to have any effect in the absence of any action by the supervisors, clearly contemplates only the fixing by the latter of “maximum rates.” Section 8 of the act provides that anyone selling water must do so at rates "not exceeding the established rate”; and section 9 provides that any such person whose water rates “have been fixed and regulated by a board of supervisors” who shall collect water rates "in excess of such established rates” shall be liable

There is no question in the case at bar about the power of the state to fix compensation, nor the right of a consumer to demand water at rates which have been established, nor the equal distribution of water among consumers of the same class, nor the right to the continued use of water under section 552 of the Civil Code. Something is said by appellants about the money paid by their predecessors at the date of the contract— which is called by them a “bonus”—but it is difficult to see how that matter can now be brought into view, as the only moneys here involved are the yearly rentals; and even if it were involved here the payments of part of the rental in advance would certainly not vitiate the contract. Neither do we see, so far as this case is involved, any profit in considering the distinction sometimes made between the ownership of the use of water ■and the ownership of its corpus; that distinction in no way affects the right of a ditch owner to divert and convey water for distribution and rental.

The situation arising out of the decisions of the federal courts above 'referred to is this: In two or three cases, and particularly in Souther v. San Diego Flume Co., considered in San Diego Flume Co. v. Souther, 90 Fed. Rep. 164 , and Lanning v. Osborne, 76 Fed. Rep. 319 , the learned judge of the circuit court of the United States for the southern district of California— for whose learning and ability as a jurist we have the very highest respect—expressed some opinions which are, no doubt, to some extent in discord with the views hereinabove expressed; but upon appeal in the Souther case to the United States circuit court of appeals the judgment of the lower court was reversed, and a decision made in accord with our views. (San Diego Flume Co. v. Souther, 90 Fed. Rep. 164 .) Afterward, however, the circuit court of appeals granted a rehearing in the Souther case, for what reason we do not know; and as that court has not yet rendered another decision in the case, the question, so far as the federal courts are concerned, is left undecided. We think,

Appellants cite a subsequent decision of that court in the case of San Diego Land etc. Co. v. Sharp, 97 Fed. Rep. 394 ; but the question was not there involved or decided.

The suggestion of appellants that the law as they construe it does not cover the comparatively few instances where water is appropriated to be used exclusively on the land of the appropriated, has no pertinency to the question here involved.

The judgment appealed from is affirmed.

Van Dyke, J., and Garoutte, J., concurred.

I concur in the judgment, and generally in the opinion of Mr. Justice McFarland. But while I agree with the construction given to the act of 1885, to wit, that it only prescribes the maximum rates and does not prohibit special contracts between the suppliers and the consumers

There is in the opinion an expression utterly foreign to any matter involved here, which I fear may be deemed a suggestion of a doubt as to the validity of the provision for a forfeiture contained in section 1 of article XIV of the constitution. Ho one is demanding a ruling upon that matter here, and there is therefore no occasion to reserve such question, if it be a question. If it were a matter for us I should say there is grave douht both as to the wisdom or justice of that provision, but I see no reason whatever to doubt its validity. A law prescribing a very excessive penalty sometimes secures practical immunity, and instead of securing the enforcement of the law, removes its sanction altogether.

Harrison, J., concurred in the concurring opinion.

Rehearing denied.