Wyatt v. Larimer & Weld Irrigation Co.

18 Colo. 298

• Court: Supreme Court of Colorado
• Decided: January 15, 1893
• Status: Published

Opinions

Mr. Justice Goddard

delivered the opinion of the court.

• The right to the relief demanded in this action is predicated upon, and must be determined by, the terms of the contracts entered into, by the respective parties; and while those contractual rights are analogous to the rights guaranteed by the constitution to appropriators of water, the action involves only the construction of private contracts between the ditch company and the plaintiffs, and no constitutional question is involved in the decision of the case. The jurisdiction of this court by appeal, therefore, depends solely upon the question whether the action relates to a freehold.

It is strenuously insisted by counsel for appellees that an action must involve a freehold to enable this court to entertain jurisdiction, basing this claim upon the third subdivision of section four of the act establishing the court of appeals, above cited. When construed with other sections of the act, we think the word “ involve,” as used in that section, must be held to be synonymous with the word “ relate,” and the jurisdiction of this cpurt may be invoked upon an appeal from a judgment of the district court or of the court of appeals in actions that relate to a freehold. It is therefore necessary to ascertain and define the nature and kind of property claimed by plaintiffs in tbe water rights in question, and whether the nature and extent of their interests therein constitute freehold estates, and whether this action relates thereto. A freehold is defined as “ Any estate of inheritance or for life in either a corporeal or incorporeal hereditament existing in or arising from real property of free tenure.” 2 Black. Com. 104.

An incorporeal hereditament is “ Anything, the subject of property which is inheritable, and not tangible or visible.” 2 Wood. Lect. 4.

“ A right issuing out of a thing corporate (whether real or personal), or concerning or annexed to or exercisable within the same.” 2 Black. Com. 20; 3 Wash. R. P. 401.

• “ The right of a party to have the water of a stream or water course flow to or from his lands or mill, over the land of another, is an incorporeal hereditament, and an easement, or a prsedial service, as defined by the civil law.” Cary v. Daniels, 5 Metc. 238.

The plaintiffs allege a right'to have a certain quantity of water flow through the irrigation company’s ditch. This right is an easement in the ditch. It is a right annexed to realty, and, being a perpetual right, is an incorporeal hereditament descendible by inheritance to plaintiff’s heirs, and, hence, a freehold estate.

The subject-matter of the action is this estate. The acts threatened by defendants will, if carried out, materially diminish this estate and permanently depreciate the value of the water rights.

The object of the action being to enjoin or prevent such diminution, or, in other words, to preserve the estate of the plaintiffs, the necessary result of the decree will be, — one party will gain and the other lose a material portion of such estate. The action, therefore, relates to a freehold, and this court, under the statutory provisions above cited, has jurisdiction to review the judgment of the court of appeals.

• The decision by the court of appeals in this case was rendered by a divided court. We are unable to see wherein the discussion by the learned judge writing the majority opinion touching the constitutional status of irrigation companies in this state was essential to the decision of the questions involved in the case. But, inasmuch as the views expressed in that opinion are so at variance with numerous decisions of this court, we feel impelled to express our disapproval thereof, and our adherence to the doctrine heretofore announced by this court in relation to the status of canal companies organized for the purpose of carrying water for general purposes of irrigation. We adhere to the doctrine that such a canal company is not the proprietor of the water diverted by it, but that “ it must be regarded as an intermediate agency existing for the purpose of aiding consumers in the exercise of their constitutional rights, as well as a private enterprise prosecuted for the benefit of its owners.” Wheeler v. N. C. Irrigation Co., 10 Colo. 582; Farmers’ H. L. C. & R. Co. v. Southworth, 13 Colo. 111; Strickler v. City of Colo. Springs, 16 Colo. 61; Combs v. Agricultural Ditch Co., 17 Colo. 146.

The appellants allege that, by the terms of their contracts, when the company shall have outstanding water right contracts sufficient to cover the amount of water that the company’s canal is able to furnish, the right of the company to enter into further contracts is at an end; and that such limit has been reached.

The company insists that it has the right to dispose of water rights up to the estimated capacity of-its canal to carry water. The rights of the respective parties are therefore to be measured and determined by the construction of the contracts in question; and the controversy, as above stated, involves only their contractual rights.

The status of the defendant company could in no aspect affect these rights. Its duty to these plaintiffs would be the same whether that duty was to furnish water under their contracts as proprietor or carrier of water.

It is advanced in argument by counsel for appellees, and asserted in the opinion of the court of appeals, that the complaint is obnoxious to demurrer because wanting in certain data essential to a fair construction of the questions involved, in this, that it contains no statement of the size, grade, etc.; in other words, fails to state the cubical dimensions of defendant’s ditch, and also fails to state the adjudicated priority of such ditch.

It does not appear to us that these matters are essential to the determination of this controversy, but that the facts alleged fairly present the rights of the respective parties for adjudication.

It is alleged that by reason of prior appropriations the water of the Cache la Poudre river, from which the ditch takes its supply, can furnish water to this ditch in an amount only equal to the three hundred and sixty-six and one half water rights now outstanding and in force for the past two years ; and that the water allotted to those rights has been required to irrigate the lands they cover ; that there is not sufficient water not otherwise appropriated from the river to enable defendant- company to furnish any more water rights, and that the company has disposed of, and there is now outstanding, water rights equal to and in excess of its ability to furnish water.

If, therefore, such conditions limit the right of defendant company to dispose of further rights, as claimed by appellants, and the company carries out its admitted purpose and disposes of additional water rights, it would-violate its contract obligations, and it is immaterial what the number of its priority may be, or the size or dimensions of its ditch.

The appellees admit the inability of the irrigation company to furnish water in excess of the water rights outstanding during the irrigation season, but insist, notwithstanding that fact, that it has the right to dispose of water rights up to the estimated carrying capacity of its ditch. This issue is fairly presented by the allegations in the complaint.

The vital and controlling question, therefore, and the only one the decision of which is properly invoked -by the issues presented, is- — what is the true intent and meaning of the contracts entered into between the irrigation company and these plaintiffs ? In order to determine this the terms used must be read in the light of the circumstances surrounding the parties at the time of their execution, the subject-matter thereof, and the purposes and objects to be accomplished thereby.

The company is the owner of the canal whereby it proposes to divert water from the Cache la Poudre river for the use of the farmers owning land capable of being irrigated therefrom.

The quantity of water necessary to irrigate a given quantity of land was well understood by the contracting parties. Each water right to be disposed of is defined by the company in its printed forms as “ A water right to the use of water flowing through the canal of said company, each water right representing one and forty-four hundredths cubic feet of water flowing through a weir per second.”

This quantity of water is necessary to irrigate eighty acres of land. Each consumer, having in view the cultivation of his land, and knowing the quantity of water necessary therefor, contracts for water to that end, and purchases a definite number of such water rights. That this definite quantity; may be insured to him, except such diminution as may arise from temporary causes, certain conditions are inserted in the contracts, among which are the sixth, seventh and eighth conditions set out in the complaint.

The sixth condition provides a limit to the number of such water rights the company may dispose of. It in no way changes or circumscribes the water right as defined in the granting clause. The language used therein pertinent to this inquiry is:

“ The company agrees that when it shall have sold, and have outstanding and in force a number of water rights equal to the estimated capacity of the company’s canal to furnish water ” it will issue stock, etc.

The controversy arises upon the meaning to be given to the words “ estimated capacity to furnish water.” Appellees contend that they mean the carrying capacity of the canal. Appellants insist that they plainly import its furnishing capacity — its ability to supply and deliver water. It appears that some element of uncertainty existed that experience was necessary to decide. It certainly did not arise from the want of data to determine the physical capacity of the canal. Its cubical capacity was susceptible of definite measurement; its grade was easy of ascertainment, and by mathematical computation its carrying capacity could be determined, and no estimate of that fact was necessary.

But, since it appears from the allegations of the complaint that other ditches with earlier appropriations derived their supply from the Cache la Poudre river, it was a matter of uncertainty how much water could be obtained by the company’s canal after their supply had been taken; and the furnishing capacity of its canal could be ascertained only by experiment, or estimated, that is, approximated, by taking into consideration all the factors upon which its ability to furnish water depended, which necessarily involved taking into consideration the very material fact, to wit, the probable amount of water it could obtain.

The seventh condition affords but little aid to this investigation. It is inserted for the purpose of relieving the company from any liability on account of the inability of its canal to carry and distribute a volume of water equal to its “ estimated capacity,” in case of unavoidable accident and when, by reason of drouth, such volume becomes insufficient.

This would indicate that the company recognized an obligation to deliver a definite amount of water under normal conditions, and that the capacity of the canal was dependent upon the water supply.

If, as contended, the rights sold were not definite rights, and onty represented fractional parts of whatever water might flow in the canal, no liability could accrue under these or any other conditions, and this provision was useless.

The eighth, or prorating, condition seems to be in harmony with the construction we have given to the sixth, and recognizes the estimated capacity of the canal as limited by the supply of water to be had under permanent and normal conditions, and recognizes the water rights outstanding as rights definite in amount and in the aggregrate equal to such supply. Its language is, “ It is further agreed that if by reason of any causes the supply of water shall be insufficient to fill and flow through said canal, according to its estimated capacity, or if from any other cause, as aforesaid,- beyond the control of said company, the supply shall be insufficient to furnish an amount equal to all the water rights then outstanding, the said company shall have the right to distribute such water as may flow through its canal to the holders of such water rights pro rata,” etc. -

If the carrying capacity of the canal was to be the criterion instead of its furnishing capacity, why use the words “ estimated capacity” in this provision? It would have been enough to say, “ If insufficient to fill and flow through said canal; ” but the words “ estimated capacity ” being used, and the failure of supply arising from temporary causes such as unforeseen accident, drouth, etc., affording the reason for prorating, the supply under normal conditions is the recognized factor that limits the number of water rights to be sold and measures the estimated capacity of the ditch to furnish water.

It is not to be presumed that the consumers of water under the company’s canal, having in view the acquirement of the use of water for a particular purpose, and one that required for its successful accomplishment a given quantity of water, understood that they were to receive an ■ indefinite fractional part of the water that might flow through the irrigation company’s canal, instead of the definite quantity specified in the granting clause of their contracts, unless such understanding is plainly inferable from the language used by the contracting parties, and should not be inferred from doubtful or ambiguous terms.

If the company intended to dispose- of a definite number of water rights, regardless of the amount of water it could supply, fair dealing would require it to so specify and define the rights sold as a fractional part of the water flowing in its canal.

In the light of the purpose, therefore, to be accomplished, we think the words “ estimated capacity,” limited and modified as they are by the words “ to furnish,” must be construed as meaning the ability of the canal to supply or deliver water.

With this construction, the contracts in question are fair, legal and equitable. If appellees’ contention is correct, and the irrigation company by the terms of these contracts have the right to dispose of definite water rights, and by ambiguous expressions in subsequent provisions reserve the power to render them uncertain and indefinite in quantity, by disposing of water rights admittedly in excess of its ability to furnish water, they are not only inequitable and unfair, but clearly illegal under the decision of this court in F. H. L. C. & R. Co. v. Southworth, 13 Colo. 129, wherein it is said :

“ A contract to carry more water than has been lawfully diverted would be unlawful; and to prevent injuries resulting therefrom, or to recover damages in case the injuries are suffered, ample legal remedies exist.”

If the terms of a contract admit of two meanings, one of which would render the contract unlawful and the other lawful, the latter construction must be adopted. Bishop on Contracts, sec. 392.

If it be conceded that the term “estimated capacity” is, as used in these contracts, of doubtful meaning, the appellants’ contention is sustained by well settled rules of construction. The printed blanks upon which the contracts are written were prepared and the words therein were selected by the company; and, if of doubtful import, must be taken most strongly against it.

“Doubtful words and provisions are to be taken most strongly against the grantor, he being supposed to select the words which are used in the instrument.” Adams v. Frothingham, 3 Mass. 361.

In Noonan v. Bradley, 9 Wallace, 395, it is said:

“ Where doubt exists as to the construction of an instrm ment prepared by one party, upon the faith of which the other party has incurred obligations or parted with his property, that construction should be adopted which will be favorable to the latter party; and where an instrument is susceptible of two constructions — the one working injustice and the other consistent with the right of the case — that one should be favored which upholds the right.”

The acts of the company in relation to these contracts are persuasive, if not of controlling weight, in their interpretation. It is alleged in the complaint, “ That defendant, The Larimer and Weld Irrigation Company * * * by reason of the premises, heretofore for 'two years and more last past has refused to execute any additional water right contracts, though often requested so to do by divers persons, and except for the wrongful conspiracy hereinafter set forth, has persistently and consistently, through its authorized agents, admitted that it could not dispose of any more water rights without violating its duty to present water right owners and users.”

As announced in McPhee v. Young, 13 Colo., p. 80 :

“ In the construction of a written contract the intentions of the parties are to be first sought in. the instrument itself. If the intent and meaning of the parties is not clearly disclosed by the language therein employed, then competent evidence bearing on the construction of the instrument by the parties themselves, as by their acts and conduct in its performance, may be considered for the purpose of ascertaining their understanding of its terms.”

In the case of Chicago v. Sheldon, 9 Wallace, p. 54, it is said:

In cases where the language used by the parties to the contract is indefinite or ambiguous, and, hence, of doubtful construction, the practical interpretation by the parties themselves is entitled to great, if not controlling, influence.”

In whatever aspect these contracts are considered, whether upon the plain import of the language used or by regarding certain terms as of doubtful meaning, their interpretation must be favorable to the contention of the appellants.

It sufficiently appearing by the allegations of the complaint that appellants have certain well defined rights that will be materially impaired if defendants do the acts threatened, wre think it states a cause of action clearly cognizable by a court of equity.

The demurrer to the complaint should have been overruled. The judgment of the court of appeals is reversed, with directions to reverse the judgment of the district court of Weld county, and remand the cause to that court for further proceedings in accordance with this opinion.

Reversed.