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[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 439 In Banc. Proceeding in the matter of the determination of the relative rights to the use of the waters of the Deschutes river and its tributaries, a tributary of the Columbia river. The estates of Clara L. Broughton, deceased, and George Broughton, deceased, and the Arnold Irrigation District filed with the state engineer and application for extension of time within which to complete necessary works and apply water to a beneficial use, as to the rights granted to the Odin Falls Land Company, and the Central Oregon Irrigation District filed objections to the granting of an extension of time. The Central Oregon Irrigation District appealed from the state engineer's order to the circuit court. The estate of Clara L. Broughton, deceased, moved to dismiss the appeal to the circuit court, but that motion was denied. From an order and decree of the circuit court reversing and setting aside the state engineer's order, the estate of Clara L. Broughton, deceased, appeals and the Arnold Irrigation District moves to dismiss the appeal.
MOTION TO DISMISS APPEAL DENIED AND DECREE REVERSED. FORMER OPINION ADHERED TO ON REHEARING. This is an appeal by the estate of Clara L. Broughton, deceased, from an order and decree of the circuit court for Deschutes county reversing and setting aside an order of the state engineer extending to the estates of Clara L. Broughton, deceased, and George Broughton, deceased, the time within which to perfect the inchoate water rights decreed to the predecessor in interest of those estates.
As a preliminary to the discussion of the merits of the appeal it is necessary to dispose of the motion of the respondent Central Oregon Irrigation District to dismiss the appeal of the estate of Clara L. Broughton, deceased, to this court, and the motion of that estate to dismiss the appeal of Central Oregon Irrigation District to the circuit court from the order of the state engineer. This requires a review of such facts as have bearing upon the questions thus presented.
On February 10, 1928, the circuit court for Deschutes county entered its decree in the matter of the determination of the relative rights to the use of the waters of Deschutes river and its tributaries. That decree was thereafter modified by this court on appeal: 134 Or. 623, 286 P. 563, 294 P. 1049. The decree of the circuit court entered May 2, 1931, on the mandate of the supreme court, awarded to Odin Falls Land Company, predecessor in interest of the estates above mentioned, among other things, "a date of relative priority of January 7, 1909," for a specified number of cubic feet per second of water for the irrigation of 1,057 acres of land as an inchoate right, with time allowed *Page 441 until and including October 31, 1935, in which to complete or perfect such right, or such further time as might be granted by the state engineer upon good cause shown.
Paragraph 65 of the decree last above referred to provides as follows:
"Certain claimants herein initiated rights of appropriation as described in preceding paragraphs, but have not perfected such rights. Such parties are entitled to a reasonable time in which to completely apply the water to a beneficial use. Such rights shall be perfected within the time which has been herein fixed in each case, or within an extension of such time which shall be allowed by the state engineer for good cause shown. Provided, however, at the time an application for extension is made to the state engineer, the party applying for such extension shall notify all interested parties. Upon the expiration of the time allowed for the completion of such inchoate rights, surveys of the land involved shall be made by the state engineer for the purpose of determining the extent to which such lands have been reclaimed and irrigated, and a supplemental order of determination shall be entered and filed with the circuit court limiting the rights of such parties to the quantity of water having been actually applied to beneficial use within the time allowed. Such supplemental order shall be reviewed by the court under proceedings the same as had upon the state engineer's original findings and order of determination. The extent to which such rights shall be deemed to be perfected shall be determined on the basis of the acreage which has actually been cleared and properly prepared for irrigation, and to which water has been beneficially applied in the production of crops, to the extent that such appropriations as have not been completed and perfected within the time allowed, each of such claimants shall be deemed to have waived and abandoned the right to any appropriation thereunder." *Page 442
The decree further awarded to Central Oregon Irrigation District water rights with priority date preceding that of the inchoate rights granted Odin Falls Land Company. That company's rights were also subsequent in time to the perfected water rights and inchoate rights granted to the other claimants in the proceeding for determination of relative rights.
Prior to the expiration of the time granted by the decree of the circuit court to Odin Falls Land Company, to-wit, until October 31, 1935, Clara L. Broughton and the estate of George Broughton, deceased, successors in interest to Odin Falls Land Company, filed with the state engineer under date of September 9, 1935, an application for extension of time within which to perfect the inchoate rights granted to Odin Falls Land Company, which application was granted by the state engineer on November 8 of that year.
On September 29, 1938, the estates of Clara L. Broughton, deceased, and George Broughton, deceased, filed with the state engineer an application "for an extension of time within which to complete the necessary works and apply the water to a beneficial use", as to the rights granted to Odin Falls Land Company. Arnold Irrigation District joined the above estates in making that application. The reason given therefor was that Arnold Irrigation District had entered into a contract to purchase from those estates the inchoate rights granted to Odin Falls Land Company.
The applicants for an extension of time served notice of such application upon Central Oregon Irrigation District and upon all other claimants who had been awarded either perfected or inchoate rights to the use of waters of Deschutes river. The only claimant *Page 443 who appeared at the hearing before the state engineer and filed objections to the granting of an extension of time was Central Oregon Irrigation District.
That district, respondent herein, in support of its motion to dismiss the appeal to this court, contends that the notice of appeal was not served upon all the adverse parties in the proceeding to determine the relative rights to the use of waters of Deschutes river. Section 7-503, Oregon Code 1930, cited and relied upon by the respondent irrigation district, provides that if an appeal is not taken at the time the order, judgment or decree is rendered or given, "then the party desiring to appeal may cause a notice, signed by himself or attorney, to be served on such adverse party or parties as have appeared in the action or suit".
The only decisions relied upon by the respondent are In reWaters of Chewaucan River, 89 Or. 659, 171 P. 402, 175 P. 421, and Laur v. Walla Walla Irrigation Company, 118 Or. 520,247 P. 753. In the latter case, motion was made to dismiss the appeal on the ground that the water master for the county in which the lands involved were situated was not served with notice of appeal. All that the court therein decided was that the water master was merely a nominal party, not interested in the result of the appeal, and therefore not an adverse party and not required to be served.
In the first case above cited the appeal to this court was dismissed for the reason that the notice of appeal was not served on all the claimants who had filed statements or proofs of claim for adjudication of water rights, with the board of control, as then required, but only on those who had filed in the circuit court exceptions to the order of the board of control determining and establishing the several rights to the waters *Page 444 of the stream concerned. This court, on petition for rehearing, said:
"We hold that when all other sections of the law have been complied with and under section 14 the claimant has made and filed his `statement' or proof of claim, he then becomes an actor and submits himself and his water rights to the jurisdiction of the court, and thereby appears in court for the purpose of having his water right adjudicated and to obtain his water right certificate, and that any such a claimant has appeared in and is a party to the proceeding within the meaning of section 550 of the code [now § 7-503, supra]."
The only party who filed any objections or appeared before the state engineer to contest the application of the Broughton estates for an extension of time was the respondent irrigation district, and that irrigation district was the only party who appealed to the circuit court from the order of the state engineer granting the extension or appeared before that court on such appeal.
It has hereinbefore been pointed out that the inchoate right granted to the predecessor in interest of the Broughton estates was subsequent in date to all other rights included in the former adjudication of relative rights to the waters of Deschutes river. The granting of an extension of time to the Broughton estates, within which to complete the appropriation of water to a beneficial use under their inchoate right, could not in any way affect the adjudicated rights of other claimants.
In the Chewaucan case this court noted that the appeal was from the whole decree adjudicating the rights to use of waters of the Chewaucan river. With reference to adverse parties, the court observed:
"We will suppose that this appellant is successful in securing a modification of the decree, so that it will *Page 445 acquire more water. If such is the result it will pro tanto lessen the amount which will flow down the stream and be open to future appropriation, not only to those parties who are served with notice, but also by those who are not served and who already have or may hereafter obtain access to the stream. The fact that appropriations for certain tracts of land, as related to all others involved, have been established by the decree does not deprive their owners of the right to make additional appropriations in the future, if water is there to be appropriated and can be applied to beneficial uses. This is true of both those below and those above any existing appropriator. Those below him are entitled to the water in excess of his appropriation; those above him are entitled, of course, to their original rights and also to appropriate water otherwise unappropriated and not necessary to fill his quota."
In contemplation of the foregoing excerpt, it may be said that all the other appropriators on the Deschutes river might, in regard to "the right to make additional appropriations in the future", be affected by the reversal of the circuit court's decree. However, those appropriators, with the exception of the respondent, did not appear in this proceeding, unless it can be said that because they appeared in the adjudication proceeding they are still in court for all purposes.
That part of the decree of the circuit court hereinbefore set out required an applicant for an extension of time to perfect his inchoate right to serve notice on all adverse parties. Such notice was served, and since none of the appropriators except the respondent irrigation district appeared to contest the application for an extension of time, it is our opinion that the appropriators who offered no objection cannot be considered as having appeared in this special proceeding, within the meaning of § 7-503, supra, and it was therefore *Page 446 not necessary for the appellant herein to serve upon them notice of appeal to this court. The motion to dismiss the appeal to the supreme court is therefore denied.
The motion of the Clara L. Broughton estate to dismiss the appeal of Central Oregon Irrigation District from the order of the state engineer to the circuit court is based on the following grounds: that the district is not an interested party to such proceeding and has no substantial rights involved; that the order of the state engineer dated February 27, 1939, granting an extension of time, is not a final order; that no appeal from such order is provided by statute; and that the making of such an order is discretionary with the state engineer and is therefore not appealable.
In view of that part of the decision in the Chewaucan case last above quoted, the irrigation district in the case at bar should be deemed an interested party, although its rights are prior to those of the Broughton estates, inasmuch as the refusal to grant an extension of time would make available to the district more water for future appropriation. Moreover, in serving the irrigation district with notice of the filing of application for an extension of time, the Broughton estates impliedly, at least, admitted that the irrigation district was interested in the action taken by the state engineer.
It is next urged that the order of the state engineer is not a final order, for the reason that the decree of the circuit court directs that upon the expiration of the time allowed for the completion of inchoate rights the state engineer shall make a survey of the land involved, for the purpose of determining the extent to which the land has been reclaimed and irrigated, and shall further make a determination of the quantity of *Page 447 water which has actually been applied to a beneficial use within the time allowed. It is contended that since this supplemental determination is by decree of the court made reviewable by the court, no appeal lies from any order of the state engineer made pending such supplemental determination by him.
For the purpose of understanding clearly the question thus presented by the Clara L. Broughton estate, and in order hereinafter to consider the appeal before us on its merits, it is advisable to refer to numerous sections of the water code.
Subdivision 6 of § 47-403, Oregon Code 1930, provides as follows:
"The state engineer shall have authority, and shall for good cause, shown upon the application of any appropriator or user of water under an appropriation of water made prior to the passage of this act, or in the cases mentioned in subdivisions 3 and 5 of this section, where actual construction work has been commenced prior to said time or within the time provided in law existing at the time of filing this act in the office of the secretary of state, to prescribe the time within which the full amount of the water appropriated shall be applied to a beneficial use, and in determining said time shall grant a reasonable time after the construction of the works or canal or ditch, used for the diversion of the water, and in doing so shall take into consideration the cost of the appropriation and application of such water to a beneficial purpose, the good faith of the appropriator, the market for water or power to be supplied, the present demands therefor, and the income or use that may be required to provide fair and reasonable returns upon the investment. For good cause shown the state engineer may extend such time."
Section 47-306, Oregon Code 1930, provides that the state engineer shall execute the laws relative to *Page 448 the distribution of water "and perform such other functions as may be assigned to him". Section 47-307, Oregon Code 1930, reads as follows:
"Any person, association or corporation who may deem himself, or itself, aggrieved by any order or regulation of the state engineer, shall have the right to appeal from the same to the circuit court of the county in which the property affected thereby, or any part thereof, is situated, which appeal may be carried from the circuit court to the supreme court, and which shall be governed by the practice in suits in equity."
If the state engineer was acting under the authority vested in him by subdivision 6 of § 47-403, supra, an appeal would lie to the circuit court from his order granting an extension of time to apply the appropriated water to a beneficial use. Any such order made by the state engineer would not be interlocutory in character, and an appeal could be taken immediately upon its being made. Otherwise, great hardship might result either to the applicant or to other appropriators.
It is urged by the Clara L. Broughton estate, however, that the state engineer's authority to extend the time was derived entirely from the circuit court's decree, which provided that the engineer might extend the time for good cause shown. We do not believe that the decree should be so interpreted. In our opinion, the state engineer was acting under the authority conferred upon him by subdivision 6, supra.
The views hereinabove expressed dispose of all the objections raised by the Clara L. Broughton estate to the jurisdiction of the circuit court to entertain the irrigation district's appeal from the order of the state engineer. The circuit court did not err in refusing to dismiss that appeal. *Page 449
ON THE MERITS The decree of the circuit court, entered in 1931 on the mandate of this court, granted to the Broughtons, successors in interest of Odin Falls Land Company, until October 31, 1935, to perfect their inchoate right to appropriate water for irrigating 1,057 acres of land. That time was extended in November, 1935, until October 1, 1938, apparently without any objection made. It is admitted by the respondent in its brief that "the appellant must be awarded a water right to irrigate 145.5 acres of land heretofore decreed as irrigated".
In the application of the two Broughton estates, filed in September, 1938, it is stated, among other things, that in the year 1936 the investigations which had previously been carried on by the United States reclamation service relative to the irrigation of lands in that locality were completed, "indicating that the project would probably be constructed, in which event the acquisition of the Odin Falls rights" was "an essential incident"; that in 1937 the construction of the Deschutes project appeared assured and in September of that year an action was instituted in the circuit court for Deschutes county for the condemnation of the Odin Falls water rights; that the resultant uncertainty as to the acquisition of the Odin Falls water rights by Central Oregon Irrigation District caused the applicants "to suspend, to a large extent, the further development of this property for the reason that the cost of said development would be thereby increased without tangible advantage to the owners and to the definite disadvantage of the purchasers."
Numerous objections to the granting of an extension of time were filed by Central Oregon Irrigation District with the state engineer, which we do not deem *Page 450 necessary to be mentioned here in detail. Hearings were held before the state engineer and on February 27, 1939, that official entered an order granting an extension of time to October 1, 1940. From that order we take the following statement of facts:
"Water for the irrigation of the lands in the Odin Falls ranch is diverted by means of a pump, belt-connected to a double propeller type turbine, and delivered to the lands through a 20-inch stave pipe. This water is delivered to the ditches by which it is carried to the lands at three main turn-outs located at elevations of about 60, 90 and 104 feet above the water surface at the pump intake. The length of the pipe-line to the 104-foot elevation is about 1,925 feet.
"The pumping plant, which appears to have been installed in 1920, when new and in good condition had capacity to deliver approximately 7.3 cubic feet per second through 1,925 lineal feet of 20-inch wood stave pipe against a static head of 104 feet. * * *
"It appears that the pumping plant and pipe-line have not been properly maintained and the maximum area irrigated in 1938 did not exceed 170 acres; that it will be necessary to install a new pumping plant and pipe-line if the irrigated area is to be materially increased, and that if the works now in place are to be continued in use considerable work and material will be required to place them in a reasonably serviceable condition.
"It appears that the plan for irrigating the land north of Crooked river in Jefferson county as set forth in the report of the United States reclamation service, dated July, 1936, provides for acquiring the water right awarded to the Odin Falls Land Company for power purposes and supplying electrical power for operating the pump. It also appears that the Central Oregon Irrigation District in September, 1937, filed a suit to acquire by condemnation all of the water rights awarded by the court to this company." *Page 451
The original complaint filed by Central Oregon Irrigation District for condemnation of water rights does not appear to be in the record. There is in evidence the amended complaint, filed in the later part of 1938. In this amended complaint it is alleged that the plaintiff is an irrigation district operating an irrigation system, delivering water to approximately 48,000 acres of land in Deschutes, Jefferson and Crook counties, and that it is necessary for such district to acquire the right to use the water granted to Odin Falls Land Company, in order that sufficient water may be obtained to irrigate the lands within the boundaries of the district.
An answer to the amended complaint was filed by the heirs of Clara L. Broughton, deceased, and the proceeding is still pending in court.
The order of the state engineer concludes thus:
"Considering only the physical condition of the irrigation works and the area of land to which water had been beneficially applied, it would appear that the application for an extension of time should be denied. However, when these are considered, together with the pending condemnation suit and the possibility of the final result of this suit, the plan to acquire the water awarded for power purposes in connection with the irrigation of lands north of Crooked river, and all evidence submitted, it is the opinion of the state engineer that sufficient good cause has been shown to warrant the approval of the application."
We concur in the reasoning of the state engineer in granting the extension of time. It was known as early as July, 1936, from the report of the United States reclamation service, that it was contemplated to acquire the water rights awarded to Odin Falls Land Company, for power purposes. In September of the following year condemnation proceedings were *Page 452 instituted by Central Oregon Irrigation District. That district offers the only opposition to the granting of the extension of time.
When the present proceeding was instituted the Broughton estates had remaining one year's time in which to consummate perfection of their inchoate rights. We cannot say to what extent completion of those rights was delayed or prevented by the report of the reclamation service, the negotiations by the irrigation district to purchase the Odin Falls water rights, and the subsequent institution of condemnation proceedings. Because of having hindered the Broughton estates in the development of their inchoate water rights, the irrigation district is not now in a position to complain of the delay.
It is not necessary to set forth what was actually done by the Broughton estates toward completion of their water rights, further than shown by the report of the state engineer, hereinabove quoted. We are of the opinion that the action taken by the state engineer in granting an extension of time should be upheld. The decree appealed from is reversed.
BEAN and KELLY, JJ., not sitting.