Mb. Justice Buknett
delivered the opinion of the court.
The priority and superiority of the defendant city’s right to use the water when it can use it being conceded by the plaintiff, the question is whether or not the leasing of the waters of Goodrich Creek to her neighbors is such a use by the city as will prevent the plaintiff from applying to her arid land, named in the complaint, the amount of water from that source permitted by the State Engineer. The plaintiff asks us to hold the defendant to the principle that the measure of the right of a water user is the actual beneficial use to which he puts the water, and that, although such person may be the prior appropriator, yet, subject to that right, a subsequent taker may employ the water in a beneficial way while the former is not using it. She maintains that her right in this respect is b valuable right, of which the city cannot deprive her to her injury by leasing to a stranger, and that by action of that kind the city has not established such a use of the water on its part as •would supersede her privilege in that respect.
By section 1 of the act of the legislative assembly, filed in the office of the Secretary of State February 19, 1903, Baker City, with which the present City of Baker is identical, was incorporated, and it was declared that the city may “purchase, or acquire by the exercise of the right of eminent domain; may receive and hold property, both real and personal, within or without said city, for municipal purposes, and shall have the right of possession and control of all buildings, parks, property, and of all tracts of land belonging to said city, and other property which has been or may hereafter be dedicated, or in any manner whatsoever obtained for public purposes of said city; and may manage, lease, sell, or dispose of the same for the benefit of the city; may receive bequests, gifts, and donations of all kinds of property in fee simple, in trust, or otherwise, * * with power to manage, sell, [37]*37lease, or otherwise dispose of the same, in accordance with the terms of said gift, bequest or trust, or absolutely, in case such gift, bequest, or trust be unconditional.” In subdivision 15 of section 174 of the same act, the council is declared to have power within the city “to provide the city with good and wholesome water, and for the erection of waterworks within or without the city limits, as may be necessary or convenient therefor, and to provide a fund for constructing and defraying the expenses of the same; to make all needful rules and regulations for the conduct and management of the same; to establish rates for the use and consumption of the water by the city, or the inhabitants thereof, including the people living along the line, or in the vicinity of the works outside of the city; to provide for the payment of water rates monthly in advance, and to shut off the water from any house, tenant, or place for which the water rate is not duly paid or when any rule or regulation is disregarded or disobeyed, and to make property liable for the water rent, rate, or charge, when the water is used thereon * * and to do any other act or to make any other regulation necessary and convenient for the management and conduct of such water system.” Special Laws 1903, p. 595.
Bearing in mind that the object of the corporation’ is for governmental purposes, and not for gain or emolument, we noté in the charter that the council is authorized to provide the city with good and wholesome water. This is the main purpose of the power conferred, and evidently contemplates that water shall be conducted to the city. Ancillary to that end is the provision allowing the erection of waterworks within or without the city limits, and the right to make regulations for the conduct and management of the same, and likewise to establish rates, charging not only the inhabitants of the city, but the people living.along the line, or in the vicinity of the works [38]*38outside the city, for the consumption of water. It would be a strained construction to say that this section means that the city has power to provide strangers with good and wholesome water in the first instance. By mentioning the inhabitants of the city in the same category with people living along the line, or in the vicinity of the work outside of the city it is plain that all three of those classes are included together, and are to be treated alike; and hence it would follow that the water should be conducted within the city, so that the inhabitants thereof would be subject to rates for its use and consumption in like manner as people living along the line, or in the vicinity of the work outside of the city.
Allusion has been made to the act of the legislative assembly, filed in the office of the Secretary of State February 16, 1911, wherein it is provided:
“That any incorporated city or town, within the State of Oregon, owning, controlling, or operating a system of waterworks * * for supplying water for its inhabitants, and for general municipal purposes * * shall have the right, and are hereby authorized and empowered to sell, supply and dispose of water * * from such system to any person, persons, or corporation, within or without the limits of such incorporated city or town in which such water * * system is operated, and to make contracts in reference to the sale and disposal of water * * from such system, for use within or without the corporate limits.” Laws 1911, p. 121.
This act evidently contemplates an established system actually supplying water to the inhabitants of a city, and really amounts to a legislative construction of the powers given to the municipal defendant by its charter granted in 1903. Although powers are amply conferred upon the city in the way of contracting and purchasing property, both within and without the city, yet they are all adjuncts to the main municipal purpose of the charter conferring governmental powers upon the city. It was [39]*39not designed that the city should embark in gainful occupations. Its interests as a proprietor are ancillary and subordinate to the main purpose of its existence, viz., local government. Although it has power to purchase and own property both real and personal and to contract with reference thereto, it would not be contended that the city would have a right under such provision of the charter, to engage in the millinery or shoe business, or anything of that nature not helpful or useful in the matter of government.
1, 2. Conceding its ownership of the miners’ appropriation, as stipulated, yet it is for municipal purposes that it acquired such property. When it undertakes to act with reference to that property as a private owner, it is subject at best to the same rules that affect a private person in a like situation. According to the modern accepted doctrine, it is the use of water, and not the water itself, in which one acquires property in general. Apparent exceptions to this are found in the drinking of water, and such other uses as actually change its form and substance, so that its identity as water is destroyed; but in the main it is the use only of water which is the subject of property. Even at common law, under which the doctrine of riparian rights most strongly prevailed, the owner diverting water for use in mills, or for other like purposes, was compelled to let it pass to his lower neighbor, undiminished in quantity and quality, except as it was naturally consumed by the processes employed. He only had the use of the water even under that regime.
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Mb. Justice Buknett
delivered the opinion of the court.
The priority and superiority of the defendant city’s right to use the water when it can use it being conceded by the plaintiff, the question is whether or not the leasing of the waters of Goodrich Creek to her neighbors is such a use by the city as will prevent the plaintiff from applying to her arid land, named in the complaint, the amount of water from that source permitted by the State Engineer. The plaintiff asks us to hold the defendant to the principle that the measure of the right of a water user is the actual beneficial use to which he puts the water, and that, although such person may be the prior appropriator, yet, subject to that right, a subsequent taker may employ the water in a beneficial way while the former is not using it. She maintains that her right in this respect is b valuable right, of which the city cannot deprive her to her injury by leasing to a stranger, and that by action of that kind the city has not established such a use of the water on its part as •would supersede her privilege in that respect.
By section 1 of the act of the legislative assembly, filed in the office of the Secretary of State February 19, 1903, Baker City, with which the present City of Baker is identical, was incorporated, and it was declared that the city may “purchase, or acquire by the exercise of the right of eminent domain; may receive and hold property, both real and personal, within or without said city, for municipal purposes, and shall have the right of possession and control of all buildings, parks, property, and of all tracts of land belonging to said city, and other property which has been or may hereafter be dedicated, or in any manner whatsoever obtained for public purposes of said city; and may manage, lease, sell, or dispose of the same for the benefit of the city; may receive bequests, gifts, and donations of all kinds of property in fee simple, in trust, or otherwise, * * with power to manage, sell, [37]*37lease, or otherwise dispose of the same, in accordance with the terms of said gift, bequest or trust, or absolutely, in case such gift, bequest, or trust be unconditional.” In subdivision 15 of section 174 of the same act, the council is declared to have power within the city “to provide the city with good and wholesome water, and for the erection of waterworks within or without the city limits, as may be necessary or convenient therefor, and to provide a fund for constructing and defraying the expenses of the same; to make all needful rules and regulations for the conduct and management of the same; to establish rates for the use and consumption of the water by the city, or the inhabitants thereof, including the people living along the line, or in the vicinity of the works outside of the city; to provide for the payment of water rates monthly in advance, and to shut off the water from any house, tenant, or place for which the water rate is not duly paid or when any rule or regulation is disregarded or disobeyed, and to make property liable for the water rent, rate, or charge, when the water is used thereon * * and to do any other act or to make any other regulation necessary and convenient for the management and conduct of such water system.” Special Laws 1903, p. 595.
Bearing in mind that the object of the corporation’ is for governmental purposes, and not for gain or emolument, we noté in the charter that the council is authorized to provide the city with good and wholesome water. This is the main purpose of the power conferred, and evidently contemplates that water shall be conducted to the city. Ancillary to that end is the provision allowing the erection of waterworks within or without the city limits, and the right to make regulations for the conduct and management of the same, and likewise to establish rates, charging not only the inhabitants of the city, but the people living.along the line, or in the vicinity of the works [38]*38outside the city, for the consumption of water. It would be a strained construction to say that this section means that the city has power to provide strangers with good and wholesome water in the first instance. By mentioning the inhabitants of the city in the same category with people living along the line, or in the vicinity of the work outside of the city it is plain that all three of those classes are included together, and are to be treated alike; and hence it would follow that the water should be conducted within the city, so that the inhabitants thereof would be subject to rates for its use and consumption in like manner as people living along the line, or in the vicinity of the work outside of the city.
Allusion has been made to the act of the legislative assembly, filed in the office of the Secretary of State February 16, 1911, wherein it is provided:
“That any incorporated city or town, within the State of Oregon, owning, controlling, or operating a system of waterworks * * for supplying water for its inhabitants, and for general municipal purposes * * shall have the right, and are hereby authorized and empowered to sell, supply and dispose of water * * from such system to any person, persons, or corporation, within or without the limits of such incorporated city or town in which such water * * system is operated, and to make contracts in reference to the sale and disposal of water * * from such system, for use within or without the corporate limits.” Laws 1911, p. 121.
This act evidently contemplates an established system actually supplying water to the inhabitants of a city, and really amounts to a legislative construction of the powers given to the municipal defendant by its charter granted in 1903. Although powers are amply conferred upon the city in the way of contracting and purchasing property, both within and without the city, yet they are all adjuncts to the main municipal purpose of the charter conferring governmental powers upon the city. It was [39]*39not designed that the city should embark in gainful occupations. Its interests as a proprietor are ancillary and subordinate to the main purpose of its existence, viz., local government. Although it has power to purchase and own property both real and personal and to contract with reference thereto, it would not be contended that the city would have a right under such provision of the charter, to engage in the millinery or shoe business, or anything of that nature not helpful or useful in the matter of government.
1, 2. Conceding its ownership of the miners’ appropriation, as stipulated, yet it is for municipal purposes that it acquired such property. When it undertakes to act with reference to that property as a private owner, it is subject at best to the same rules that affect a private person in a like situation. According to the modern accepted doctrine, it is the use of water, and not the water itself, in which one acquires property in general. Apparent exceptions to this are found in the drinking of water, and such other uses as actually change its form and substance, so that its identity as water is destroyed; but in the main it is the use only of water which is the subject of property. Even at common law, under which the doctrine of riparian rights most strongly prevailed, the owner diverting water for use in mills, or for other like purposes, was compelled to let it pass to his lower neighbor, undiminished in quantity and quality, except as it was naturally consumed by the processes employed. He only had the use of the water even under that regime. In modern times it is largely like the air or the sunlight, of which one may own, so far as ownership may be predicated of the same, only so much as he actually consumes.
3. Within the meaning of its charter, the city has not yet obtained the use' of the water of Goodrich Creek, although it has a right to acquire such use. Until it does [40]*40acquire it by conducting the stream to the city, thus providing the city and its inhabitants with wholesome water, it is not in position to use it within the scope of its corporate powers. Meanwhile the plaintiff, to. the extent of her subsequent appropriation, may use the water, ceasing when the city, in the exercise of its superior right, actually diverts Goodrich Creek into the corporate limits. This is on the principle that the city as a private owner, possessed of prior appropriations, is using the same as a private owner in leasing the same to strangers, and as such must be subject to the rules which govern private owners in like situations. Neither the city, nor, so far as appears in the record, its predecessors in title, had the right to engage in the business of supplying water for manufacturing or irrigation purposes, to be used by people to whom they would sell the same. Under the most favorable construction of private proprietary interest in the city, the municipality is holding the water as a private owner for its own purposes; and, while it does not use it for its private benefit, it must be subject to the use of any subsequent appropriator. In short, if the city would act with reference to the miners’ appropriations as if it were a private owner, as distinguished from a municipality, it must take the title cum onere and be subject to the rights of the subsequent appropriator to use the water while it is not in the use of the city. If it would exercise its charter powers over the water as a municipality it should conduct the water into the city, so as to provide the inhabitants with the same. So far as the waters of Goodrich Creek are concerned, it has not done this; and until it does so it cannot claim its full right as a municipality. Under the record, including the stipulations, as it appears before us, nothing here said is to be construed as impairing the right or title of the city to the appropriation already mentioned, or to continue its [41]*41.work of conducting the waters in question into the city, so it can use them for municipal purposes with the charter incidents of such use. The decree of the circuit court should be modified so as to quiet the title of the city to the waters of Goodrich Creek to the extent of 400 inches, miners’ measurement, under a six-inch pressure, subject to the right of the plaintiff to use the same to the extent of the permission granted her by the State Engineer until such time as the city shall conduct the water into its pipe line, and thence within the municipal boundaries for use by its citizens. Mann v. Parker, 48 Or. 321 (86 Pac. 598); Caviness v. La Grande Irrigation Co., 60 Or. 410 (119 Pac. 731); McCoy v. Huntley, 60 Or. 372 (119 Pac. 481); Cantrall v. Sterling Mining Co., 61 Or. 516 (122 Pac. 42).
The decree of the court below will be modified accordingly. Modieied: Rehearing Denied.