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Imperial Valley Press.
VOL. VI NO WATER RIGHTS /Legal Opinion of Messrs. Stephens & Stephens [ Attorneys For Imperial Water 7 Company No. 1 /'Neither the Stockholders, Nor Persons Other Than Stockholders YYY Y Have Ever Made Any Appropriations of Water, or Done / Any Act Upon Which a Claim of Right Can Be Based* Say These Attorneys. . The discussion of the water rights "of the people of the Imperial Valley vhlch has been appearing In the Press for the" past four weeks has attracted [widespread attention and President Glejißon has secured from. Messrs. Ste phens and Stephens of Los Angeles, the attorneys for that company, the following opinion In regard to the mat ter under discussion. We take pleas ure In publishing this opinion for the gentlemen whose names are appended to it are not only high in the legal ■profession In this State but their opin ion covers many of the points we have, endeavored to make plain and largely substantiates our views In the matter. It will be observed that their argument Is put forth to prove, .First, that the California Development company filed on the water of the Colorado river un der the laws of California; second, that the California Development company and Mexican company are both one so far as the transactions with Imperial Water company No. 1 are concerned; third, that the California Development company had a right to contract with users to deliver water for a certain price and that upon the performance of their part of the contract they would be entitled to the payment agreed upon and that i the Board of Supervisors could have no right to set aside the contract and fix the price at which water must be delivered by the Cali fornia Development company to Im perial Water company No. 1: fourth, that Imperial Water company No. 1 Is Incorporated for the purpose of furnish ing water to Its stockholders ONLY at cost and that the Board of Supervisors has no right to set the rates at which the company shall furnish water to Its stockholders; fifth, that Water com >any No. 1 Is not authorized to furnish vater to others than Its own stockhold jrs and that' Its stockholders acquire heir rights only AS STOCKHOLD ERS of the company and not as users >f water. For, as Messrs. Stephens md Stephens themselves say, • neither he stockholders nor persons other than tockholders have ever made appropri tlons of water or done any act upon /hlch a claim of (water) right can be >ased." "The stockholder does, not wn the water until It Is actually dellv red to him on his land." "Nor has ny land owner ever owned any wate? rtilch he could request the water com any to carry." Sixth, that such orporatlon as Imperial Water corn any No. 1 Is not a mutual water corn any according to section 324 of ,the t IvII code of this State and that Its tock Is not appurtenant to the land, lefore discussing these points further c present the opinion of the attorneys id urge our reades to give It a most ireful reading: To the Board of Directors of Imperial Water Company No. 1, Imperial, Cal. Gentlemen': — It has been reported to us by Mr. Gleason, the president of your company, that there is at this time considerable discussion and difference of opinion in the Imperial Valley as to the nature,* source and extent of the water rights of the settlers of the valley, and particularly those within the dis trict of Imperial Water Company No. 1 ;? and Mr. Gleason has, in view of the conditions, requested us to furnish your board with a statement of the conditions and the rights of the various parties interested in the waters used within that district. The California Development company (and in speaking of the California De velopement company in this letter the use of that name may be construed as well to include the Mexican company — because so far as this discussion is con cerned, the Mexican company and the California Development company are one), while we have never seen a copy of its notice of appropriation, has, we assume, appropriated under the laws. of the state of California, certain waters of the Colorado river, either for the purpose of sale, rental or distribution, and has agreed to deliver perpetually a certain part of those waters to the Im perial Water Company No. 1. The constitution of the state of Cali fornia, section 1, article xiv, provides as follows : '' "The use of all water now appropri ated, or that may hereafter be appro priated, for sale, rental or distribution, is hereby declared to be a public use, and subject to the regulation and con trol of the state in the manner to be prescribed by law ; provided, that the rates or compensation to be collected by any person, company or corporation in this state for the use of wafer supplied to any city and cunty, or city or town, or the inhabitants thereof, shall be fixed annually by the boarp of supervisors, or city and county or city or town council, or other governing body of such city and county, or city or town by ordinance or otherwise, in the manner that other ordinances or legislative acts or resolu tions are passed by such body,- and eh all continue in force for one year and no longer," It will be observed from this provision of the constitution that where water is supplied by a corporation which has made an appropriation thereof to any city and county("city and county" as here used meaning the combined city and county government, such as the city of San Francisco) or city or town, the rates at which such water is sup plied shall be fixed annually by the board of supervisors or town council or other governing body, and a penalty is fixed for the failure of the board of supervisors to take such action. The California Developement company, in upplying the water to the Imperial Water Co. No. 1, is not, of course, sup plying water to any city and county, or city or town, or the inhabitants thereof, within the meaning of this provision of the constitution. The appropriation of water; by the California Development company, in the manner in which it has 'been appropriated, is, however, a use of water which is subject to regula tion and control of the state "in the manner prescribed by law." The legislature of the state of Cali fornia in 1880 did prescribe a law for '*■'■* AND THL IMPERIAL PRBSS EL CENTRO. CALIFORNIA. JUNE 16. 1906 the purpose of the regulation and con trol of waters appropriated and used for irrigation, as distinguished from waters supplied to cities, this act was super seded by the act of 18&5, which pro vides that whenever a petition of not less than twenty-five inhabitants who are taxpayers of any county of the state shall be presented to the board of super visors thereof to regulate and control the compensation to be collected by any appropriated watc, the b/>ard of super visors, after complying with a certain procedure for determining the projxjr maximum rate of charge, may fix the maximum rate which the corporation may charge. Subsequently, by act of 1897, this act of 1885 was amended as follows : "Nothing in this act contained (refer ring to theactof 1885) shall be construed to prohibit or invalidate any contract already made, or which shall hereafter be made, by or with any of the persons associations or corporations described in section 2 of this act, relat ing to the sale, rental or distribution of water, or to the sate or rental of ease ments and servitudes of the right to the flow and use of water; nor to prohibit or interfere with the vesting of rights un der any such contract." There is nothing in the constitution which renders invalid or in any way af- fects the contract which has been enter ed into by the appropriator of water for sale outside of cities or towns, and the user, and the amendment of 1897 of the act of 188J expressly recognizes the val idity of any contract which has thus been entered into between the user and the aporopriator. This question was directly involved in the case of the Fresno Irrigation and Canal company vs. Park, 129 Cal., 437. This was a case in which the Fresno Ir rigation and Canal Company, plaintiff in the suit, appropriated certain waters of the Kings river for the purpose of disposing of the waters and collecting annual rents and charges therefor. The predecessors in interest of the defendant entered into an agreement with the Fresno Canal etc. company under which they agreed to pay $100 a year for the use of the water for a given time. The defendant Park, successor in interest of the original contractors, refused to pay the amount-of the charge agreed upon, and action was brought by the Fresno Irrigation and Canal company for the purpose of collecting the amount due under the contract, it being admitted that if the predecessor in interest of the defendant was liable, thedefendant him self was liable, because of a provision in the contract making the charge a lien upon the land. We now quote portions of the decis ions of the court in this case, the appel lant being the defendant and owner of the land, and the respondent, the Fresno Irrigation and Canal company : ''The parts of the constitution relied on by appellants are sections I and 2 of article XIV. The first clause of section lis as follows : 'The use of all water now appropriated, or that may hereafte** be appropriated, for sale, rental, or dis tribution, 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 the 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 that the parts of the section other than the first clause need not be here considered-^-except so far ac they throw light upon the mean ing of section 2 and upon certain statu tory law. Now, there is nothing in the said first clause of section 1 above quot ed which, in itself, at all affects the val idity of the contract in question in the case at bar. The clause merely declares that the use of water appropriated for dirtribution, etc., in a public use, and that the state may by law regulate it. "Section 2, which is mainly relied on, ia as follows : 'The right to collect rates or compensation for the use of water supplied to any county, city and county or town, ur the inhabitants thereof, is a franchise, and cannot be exercised ex cept 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 ia this section, aa if 'franchise' were a negative word signify ing prohibition, instead of being, m it is, an aflirmative 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' ia a privilege granted— not a right taken away ; but the word was evidently employed in sec tion 2 mainly for the purpose of empha sizing the general declaration in section 1 that the use of water for sale, distribu tion, etc., is a public use, and with the notion, no doubt, that calling it a fran chise would make more clear and cer tain the intent to subject it to state reg ulation. In all other respects the mean ing 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 prescrib ed by law.' This is the language upon which the contention of appellants is ul timately 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 notcollect 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 it should be exercised, £ml that the de murrer should have been susta'ned be cause such statute was not set up in the complaint. The contention rests on the proposition that when the constitution was adopted in 1879, it immediately prohibited the owner of a water ditch from selling any water or making any contract about furnishing any water, or collecting any rentals therefor, until the legislature should enact a statute ex pressly conferring power to 'do these things; and, further that the consti u tion gave the legislature power, by inac tion, to utterly destroy all property in ditches and water rightaused for the distribution and sale of water. Tins proposition cannot be maintained ; and we do not think that any authority cited by appellants goes to the extent of clear ly and frankly declaring that to be the law, after a careful consideration of its full 'significance. "It was no doubt contemplated that the main evil to be remedied existed in A glance at this Map will show you pi — 1 frj \ \ / 1 \ 't*: V V^ i \ \ f i'-PBCyu \ EU CEINTRO ♦- Will become the MBTROROL.IS of the IMPERIALVALLEY Has been spent in building and permanent improvements in El Centro in the last five months. Come and see for yourself. This it) the town of PROGRESS El Centro Land Co. farm Lands for Sale I). H. CHAPLIN, Insurance OeMralA^nt Notary Public El Centro, CalKorqla cities and towns, where it wan feared that a corporation having practically a monopoly of furnishing water therein, would, by exorbitant charges, oppress the large number of email buyers who are compelled to have water constantly for domestic purposes. Therefore, itjiis 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 bodj shall be 'subject to peremptory process to compel action in the matter,' and to 'penalties' for not taking action. The section aleo provides that if the persona or corporations furnishing water in mu nicipalities shall collect 'condensation' 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 klkjwh, as other provisions of section 1 hljow, that the convention, when deal ing with the subject of water, had par ticularly in view the furnishing of water within municipalities, and determined that it would itself handle and legislate upon that branch of the subject sofaraa to leave little if any, power to the legis lature in the premises. But nothing of the kind appears in the constitution about water rights and ditches existing , and running through mining and agri cultural districts, etc., outside of munic ipalities. As to this latter class of prop erty, with respect to which private con tracts for compensation for the use of water had been the rule and apparently had been satisfactory to both purchasers and consumers, the convention, appre hending that there might come evils outside of municipalities somewhatsim ilar to thpso feared within tljem, took the precaution of declaring, so that such^ would be the law beyond question, that . the use of water appropriated for distri bution and sale phould be a public use and subject to the regulation and con trol of the state. But it left to the leg islature the power and discretion of reg ulating the sale of water outside of mu nicipalities if the time phould come when, in its wisdom, it thought such regulation was called for — or to al low the people to continue to freely con- Cuutinued on Fifth Page NO. 10