Magruder v. Belle Fourche Valley Water Users' Ass'n

219 F. 72, 133 C.C.A. 524, 1914 U.S. App. LEXIS 1638
CourtCourt of Appeals for the Eighth Circuit
DecidedDecember 8, 1914
DocketNo. 4150
StatusPublished
Cited by34 cases

This text of 219 F. 72 (Magruder v. Belle Fourche Valley Water Users' Ass'n) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Magruder v. Belle Fourche Valley Water Users' Ass'n, 219 F. 72, 133 C.C.A. 524, 1914 U.S. App. LEXIS 1638 (8th Cir. 1914).

Opinion

SANBORN, Circuit Judge.

The appellant Frank C. Magruder is the manager of the Belle Fourche project and the appellant R. F. Walter was the project engineer and is the supervising engineer. They were defendants below, and the plaintiff was the Belle Fourche Valley Water’ Users’ Association, a corporation organized under the laws of South Dakota to represent and act for the holders of water rights in the project, to collect the lawful dues from them, and to guarantee the payment of these dues. The Belle Fourche project is a project for the storage of water and the irrigation of land under the Reclamation Act of June 17, 1902, and the acts amendatory thereof. 32 Stat. p. 388,. c. 1093. This is an appeal from an order refusing to set aside a restraining order and granting an interlocutory injunction' against thé defendants, forbidding them to exact frorn holders of water rights in the project charges alleged to be illegal, and from depriving them of the use of the water, of their rights to the water; and of their rights to their land because they failed to pay such charges.

The appellants assail the order on three grounds — that the association is not a proper party plaintiff, that the court below had no power to grant any relief upon the facts stated in the complaint, and that on the evidence the order was erroneous. Counsel for the appellants argue that the association was not a proper party plaintiff, because it had no interest in the suit, and was not one of a numerous class having a common interest in the subject of the suit, within the meaning of rule 38 in equity (198 Fed.xxix, 115 C. C. A. xxix). But rule 37 in equity (198 Fed. xxviii, 115 C. C. A. xxviii) provides that a party with whom and in whose name a contract has been made for thé benefit of another may sue in his own name without joining that other. On October 25, -1905, the United States made a contract, with this association, for the benefit of those who held or should there[75]*75after hold water rights under the Belle Fourche project, to the effect, among other things, that only those who were or should become shareholders of the association should be accepted as entrymen of homesteads on the public domain included within the project, ,or as applicants for rights to the use of water provided for irrigation thereunder, that the payment for water rights to be issued to the shareholders of the association should be divided into not less than 10 equal pay-' rnents, the first whereof should be payable at the time of the completion of the proposed works, or within a reasonable time thereafter, that the cost thereof should be apportioned equally per acre among those acquiring such rights, that the association would collect and pay to the United States, and did guarantee the payment, of that part of the costs of the works that should be apportioned to each of its shareholders and that parties otherwise eligible might, on the designation of the Secretary of the Interior, become members of the association. In the rules and regulations promulgated by the Secretary through the Director of the United States Reclamation Service we read:

“The execution of the contract between the water users’ association and the Secretary of the Interior may be regarded as the completion of the organization of the water nsers’ association. * * * The execution of this contract formally fixes the relation of the association to the government as the representative of the water users and as a medium of communication between the water users and the government.”

It is to prevent the violation of the law applicable to the construction and execution of the foregoing contract, and the alleged irreparable injury to the shareholders of the plaintiff and to the plaintiff that may result from such violation, that this suit was instituted. The contract was made in the name of the corporation for the benefit of its shareholders, who number about 600, and the association was clearly the proper party plaintiff under rule 37 in equity, and also because, as contractor to collect and as guarantor of the payment of the lawful charges against its shareholders for the cost of the works and the use of the water, and as the holder of the first lien upon the property of these shareholders under Laws S. D. 1909, p. 155, upon their water rights respectively for the repayment of their deferred payments which it should pay, it had a vital interest in preventing the levy or collection of unlawful charges against them, or their deprivation of their water rights or their property because they failed to pay such charges.

Did the amended complaint state facts sufficient to invoke the jurisdiction and power of a court of equity to grant relief? In the discussion of this question the allegations of the complaint must be taken to be true. Material averments of the complaint were that .these were the facts:

The shareholders of the plaintiff had applied for water and had been accepted as water users under the Reclamation Act, the contract of October 25, 1905, and written applications in accordance with its terms. They were either the owners of lands whose title had been vested in them, or homesteaders upon public lands irrigable under the project, and the owners of water rights for use upon such lands. [76]*76The project was conceived prior to 1905, and since that time the government has been constructing, but has never completed, the works. The contract of 1905 provided that the payments for the water rights to be. issued to the shareholders should be divided into not less than 10 equal payments, the first of which should be payable at the time of the completion of the works or within a reasonable time thereafter. Before these works were completed, and for each of the years 1908, 1909, and 1910, the defendants demanded of the shareholders the payment of an installment of $3 per acre of their alleged irrigable land on account of the construction of the works, and the payment of 40 cents per acre of such land on account of the operation and maintenance of the works, and before the works were completed, for each of the years 1910 and 1911, they demanded the payment of $3 per acre of their irrigable land for construction, and 60 cents per acre of such land for operation and maintenance. The lands of the shareholders on account of which these payments were demanded amounted to about 12,000 acres for the year 1908, about 12,000 acres for the year 1909, about 35,000 acres for the year 1910, and about 47,000 acres thereafter. Notwithstanding the demand of these charges, water sufficient to irrigate these lands was not furnished in. 1908, 1909, 1910, or 1911. The shareholders occupied these lands, prepared them for crops, and seeded them; but the crops generally failed from lack of water, and the shareholders generally lost much of their labor and expense. The defendants demanded of the shareholders 60 cents per acre of their irrigable land for operation and maintenance for the year 1913. This charge was made up in part of charges for services and other expenses not incurred or made in connection with the Belle Fourche project. Many thousands of dollars had been charged against the shareholders on account of the salaries of a large and expensive administration force annually as a part of these operation and maintenance charges.

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Bluebook (online)
219 F. 72, 133 C.C.A. 524, 1914 U.S. App. LEXIS 1638, Counsel Stack Legal Research, https://law.counselstack.com/opinion/magruder-v-belle-fourche-valley-water-users-assn-ca8-1914.