No. 13848
IN THE SUPREME COURT OF THE STATE OF MONTANA
1978
HOLMSTROM LAND COMPANY, INC., a
Montana Corporation,
Plaintiff and Appellant,
-vs-
MEAGHER COUNTY NEWLAN CREEK WATER DISTRICT,
Defendant, Appellant and Respondent,
and
WARD PAPER BOX CO., et al.,
Defendants and Respondents and
Cross-Appellants.
Appeal from: District Court of the Fourteenth Judicial District,
Honorable W. W. Lessley, Judge presiding.
Counsel of Record:
For Appellants:
Heath and Kirwan, Bozeman, Montana
Peter M. Kirwan argued, Bozeman, Montana
Patrick F. Hooks, Townsend, Montana
Loble & Pauly, Helena, Montana
Henry Lobleargued and Bruce Loble argued, Helena, Montana
John V. Potter argued, White Sulhpur Springs, Montana
Small and Hatch, Helena, Montana
Floyd 0. Small argued, Helena, Montana
Gary Spaeth argued, Helena, Montana
Robert T. Cumrnins appeared, Helena, Montana
For Respondents:
Berg, Angel, Andriolo and Morgan, Bozeman, Montana
Ben E. Berg, Jr., argued, Bozeman, Montana
Submitted: November 29, 1978
Filed: ..,,; 3 f.j73
.-
Mr. Justice Daniel J. Shea delivered the Opinion of the
Court.
This is a multiple appeal from the findings of fact,
conclusions of law and decree entered by the District Court,
Meagher County, adjudicating water rights to Sheep Creek and
its principle tributaries.
Sheep Creek, which is located entirely in Meagher
County, originates in the Little Belt Mountains. It flows
from the mountains in a westerly direction to a point where
it merges with the Smith River. Sheep Creek carries large
quantities of water for a relatively short period each year,
usually commencing in April and extending through the latter
part of June. During this heavy flow period, and at other
times during the year, many farmers and ranchers divert
Sheep Creek water by means of gravity flow systems and
utilize the water to irrigate their farm and ranch land.
When gravity flow systems are used, the water is removed
from a stream at a facility called a diversion point. The
water is then transported through an irrigation ditch to the
area to be irrigated. From 1935 to 1972, Holmstrom Land
Company maintained the first diversion point on Sheep Creek.
Holmstrom's diversion was located approximately 300 feet
(Ward)
upstream from Ward Paper Company's/ Mumbrue diversion.
In 1972 Ward built what we will refer to as the Mumbrue
Bypass. This concrete structure was built above Holmstrom's
diversion point and allowed Ward to divert Sheep Creek water
before it reached the Holmstrom diversion. The building of
the Mumbrue Bypass precipitated the present lawsuit. In October
1972, Holmstrom Land Company instituted a suit in Meagher
County District Court seeking an injunction prohibiting Ward's
use of the Mumbrue Bypass, and a decree establishing the rights
of all parties claiming water from Sheep Creek and its
tributaries.
In addition to Ward, Holmstrom Land Company joined:
Dean 0. Thorson, Virginia Thorson, Porter Fender, Elmer V.
Hanson, Walter Joyce, Axel M. Holmstrom, Jr., Rose Holmstrom,
the Montana Resources Board of the State of Montana (Resources
Board) and Meagher County Newlan Creek Water District (District).
The individual defendants were joined because they all
purportedly claimed vested water rights in Sheep Creek as a
result of having used its water for beneficial purposes.
The Resources Board and the District were joined as defendants
because they claimed existing rights in Sheep Creek pursuant
to filings under sections 89-121 and 89-810, R.C.M. 1947
(since repealed).
After extensive pretrial discovery and numerous motions
to dismiss, the case was set for trial before the District
Court, sitting without a jury. The trial was held over a
six month period, but only eight days of actual litigation
were involved (November 19 and 20, 1974; May 14, 15 and 16,
1975; July 29, 30 and 31, 1975).
At the conclusion of the trial all parties submitted
proposed findings to the District Court. Thereafter, on
February 3, 1977, the District Court entered findings of
fact, conclusions of law and a decree establishing the
relative rights and priorities of those parties claiming an
interest in Sheep Creek and its tributaries. These findings
were amended once to grant certain individuals additional
water rights. Thereafter, the District Court denied all
motions to further amend its findings.
On August 30, 1977, the District filed a limited notice
of appeal challenging the water rights granted to Ward and
Dean and Virginia Thorson. The District's notice of appeal
-3-
also indicated that the District would seek to expand the
water rights granted to it by the District Court. On September
9, 1977, Ward cross-appealed and challenged the propriety of
the water rights granted to the following parties: Holmstrom
Land Company, Dean and Virginia Thorson, Walter Joyce, Elmer
and
Hanson, Riverside Ranch Co., the Resources Board/the District.
On September 15, 1977, Holmstrom Land Company filed a
general notice of appeal and thus the entire decree is being
challenged in some respect.
The three parties filing notices of appeal have raised
numerous issues for our review. We group the issues raised
by the parties into four subheadings: (1) the sufficiency
of the decree entered by the District Court; (2) the sufficiency
of the evidence to support the awards granted to Ward,
Holmstrom Land Company, Thorsons, Joyce,Hanson and the
Riverside Ranch; (3) the propriety of the awards granted to
the District and the Resources Board; and finally, (4) the
sufficiency of the evidence to support injunctive relief in
favor of Holmstrom Land Company.
SUFFICIENCY - - DECREE
OF THE
The first issue to be discussed is the sufficiency of
the decree entered by the District Court. The District
argues that the water decree is insufficient because it
fails to specify: (1) the exact acreage to which the water
rights were appurtenant; (2) the seasonal and hourly limitations
which should be imposed on the various water rights; and,
(3) the exact location of the various diversion points.
Without this information, the District alleges the water
right decree will only foster further conflicts between the
parties using Sheep Creek. Holmstrom Land Company joins the
District in its claim that the decree is deficient.
There is no doubt that the decree adjudicating Sheep
Creek could have been more detailed. But, the question
before this Court is whether the decree satisfies the statutory
requirements, particularly section 89-815, R.C.M. 1947,
which provides:
"Rights settled - - action. In any action
in one
hereafter commenced for the protection of
rights acquired to water under the laws of this
state, the plaintiff may make any or all persons
who have diverted water from the same stream or
source, parties to such action, - - court may
and the
in - judgment settle the relative priorities and
- one
rights - - - to such action. When
of all the parties - --
damages are claimed for the wrongful diversion of
water in any such action, the same may be assessed
and apportioned by the jury in their verdicts, and
judgment thereon may be entered for or against one
or more of several plaintiffs, or for or against
one or more of several defendants, and may determine
the ultimate rights of the parties between them-
selves. In any action concerning joint water
rights, or joint rights in water ditches, unless
partition of the same kind is asked by parties to
the action, the court shall hear and determine such
controversy as if the same were several as well as
joint." (Emphasis added.)
The District Court's decree is sufficiently definite to
"settle the relative priorities and rights of all parties."
The decree designates the owners of the various water rights,
their priority dates, the amount of the awards in miners
inches and the source of the water. This information is
sufficient to allow a water commissioner to carry out the
District Court's decree.
We note that in the future, problems concerning the
sufficiency of decrees should not arise because our new
water laws will provide the District Court with precise
guidelines for their decrees. For example, section 85-2-208
MCA (formerly section 89-877, R.C.M. 1947) provides:
"Final decree. (1) The court shall, on the
basis of the preliminary decree and on the
basis of any hearing that may have been held,
enter a final decree affirming or modifying the
preliminary decree. If no request for a hearing
is filed within the time allowed, the preliminary
decree automatically becomes final, and the court
shall enter it as the final decree.
"(2) The final decree shall establish the exist-
ing rights and priorities of the persons named
in the petition for the source or area under
consideration.
"(3) The final decree shall state the findings
of fact, along with any conclusions of law,
upon which the existing rights and priorities
of each person named in the decree are based.
"(4) For each person who is found to have an
existing right, the final decree shall state:
" (a) the name and post-office address of the
owner of the right;
"(b) the amount of water, rate, and volume,
included in the right;
"(c) the date of priority of the right;
"(d) the purpose for which the water included
in the right is used;
"(e) the place of use and a description of the
land to which the right is appurtenant;
"(£1 the source of the water included in the
right;
"(g) the place and means of diversion;
"(h) the approximate time during which the water
is used each year;
"(i) any other information necessary to fully
define the nature and extent of the right.
" (5) The final decree in each existing right
determination is final and conclusive as to all
existing rights in the source or area under
consideration. After the final decree there shall
be no existing rights to water in the area or
source under consideration except as stated in the
decree. "
With section 85-2-208 MCA as a guideline, district courts
should have no difficulty determining what their final decrees
must contain. The present suit, however, was determined
under the old water laws and the decree entered by the
District Court must be measured against water right decrees
entered under those laws. We determine that it is sufficient.
SUFFICIENCY - - EVIDENCE TO SUPPORT VARIOUS AWARDS GRANTED
OF THE -
- - INDIVIDUALS
TO THE
The awards granted to Holmstrom Land Company, Ward, Dean 0.
and Virginia Thorson (Thorsons), Walter Joyce and Elmer
Hanson have been challenged by various parties to this
appeal. Though we must review the propriety of each of the
challenged awards, our review of the sufficiency of the
evidence is limited. See: Luppold v. Lewis (1977),
Mont. , 563 P.2d 538, 540, 34 St.Rep. 227.
We will begin our review with the water rights granted
to Ward. The District Court awarded Ward 1,200 miners
inches from Sheep Creek with priority dates in 1897, 1903
and 1906. This award is challenged by Holmstrom Land Company
and the District. The challengers (appellants) claim Ward
did not produce sufficient, competent evidence to support
such a large award from Sheep Creek. We find that Ward
produced sufficient evidence to support an award from Sheep
Creek, but not to the extent granted by the District Court.
Section 89-810, R.C.M. 1947 (repealed in 1973) provides:
"Notice of appropriation. Any person hereafter
-
desirinqto appropriate the waters of a river,
-- -
or stream, ravine, coulee, spring, lake, or
other natural source of supply concerning which
there has not been an adjudication of the right
to use the waters, or some part thereof, must post
a notice in writing in a conspicuous place at the
point of intended diversion, stating therein:
"1. The quantity of water claimed, measured as
hereinafter provided;
"2. The purpose for which it is claimed and
place of intended use;
"3. The means of diversion, with size of flume,
ditch, pipe, or aqueduct, by which he intends
to divert it;
"4. The date of appropriation;
"5. The name of the appropriator.
"Within twenty days after the date of appro-
priation the appropriator shall file with the
county clerk of the county in which such appro-
priation is made a notice of appropriation, which,
in addition to the facts required to be stated
in the posted notice, as hereinbefore prescribed,
shall contain the name of the stream from which
the diversion is made, if such stream have a
name, and if it have not, such a description of
the stream as will identify it, and an accurate
description of the point of diversion of such
stream, with reference to some natural object
or permanent monument. The notice shall be
verified by the affidavit of the appropriator
or some one in his behalf, which affidavit must
state that the matters and facts contained in
the notice are true."
The legislature has established an incentive or reward
for those parties who comply with the requirements of section
89-810. Section 89-814, R.C.M. 1947 (repealed in 1973)
provided :
"Record prima facie evidence. The record
provided for in sections 89-810 and 89-813,
when duly made, shall be taken and received in
all courts of this state as prima facie evidence
of the statements therein contained."
Based on this statute, a person who is claiming an
existing water right is allowed to introduce a notice of
section
appropriation which has been duly filed under/89-810, R.C.M.
1947, and said notice "shall be taken and received in all
courts of this state as prima facie evidence of the statements
therein." Relying on this statute, Ward introduced three
notices of appropriation which were filed by Ward's predecessors
in interest. These three notices established a prima facie
case for an award of 2,500 miners inches from Sheep Creek.
But, this prima facie showing did not completely discharge
Ward's burden of proof. Ward still had the burden of showing
that all the water claimed had been put to a beneficial use
over a reasonable period of time.
As we stated in Irion v. Hyde (1938), 107 Mont. 84, 95,
96, 81 P.2d 353, 358, statements made in notices of appropriation
are not completely dispositive for purposes of decreeing the
amount of a water right:
"The rights of the parties were not to be measured
entirely by what they claimed in their appropria-
tion notices. They were to be measured and
gauged by their beneficial use over a reasonable
period of time after they initiated the appropria-
tions. In establishing the prior right of the
plaintiffs consideration must be given to the
extent and manner of their use, the character
of their land, and the general necessities of the
case. 'To the extent of his appropriation his
supply will be measured by the waters naturally
flowing in the stream and its tributaries above
the head of his ditch, whether those waters be
furnished by the usual rains or snows, by extra-
ordinary rain or snowfall, or by springs or
seeDaae which directlv contribute.' (Beaverhead
x. J - -
- - .,- - -- ~ - - - -
Canal Co. v. Dillon - - 34 Mont. 135, 85
etc. Co.,
Pat. 880, 882.) It does not follow that plaintiffs
were entitled to 1,000 inches because they
designated that amount in their appropriation.
Neither does it follow that defendants were of
necessity entitled to the full amounts designated
in their appropriation notices. All of these
matters were subject to proof of use. (See Bailey
-
v. Tintinger, 45 Mont. 154, 122 Pac. 575; Peck v.
--
Simon, 101 Mont. 12, 52 Pac. (2d) 164.)"
The Irion decision requires that Ward, in addition to
establishing a prima facie case through the notices, must
also prove a "beneficial use over a reasonable period of time."
Inherent in this burden of proof is the responsibility to prove
the amount of water beneficially used. Ward proved a beneficial
use and also provided the trial court with sufficient evidence
to establish the amount of water beneficially applied. However,
the District Court granted rights larger than Ward's evidence
would support.
The evidence indicates that Ward and its predecessors
have continually used Sheep Creek to irrigate Ward's property.
It was established that grain crops could not be grown on
Ward's land unless water was available for irrigation purposes.
Ward's evidence shows that approximately 735 acres are used
now, and have in the past, been used for growing crops. This
is sufficient evidence to establish a beneficial use over a
reasonable period of time. See Hyde, supra. But, the
District Court erred in determining the extent of Wards
water rights in Sheep Creek, which were set at 1,200 miners
inches.
The most favorable evidence in Ward's favor came in as
Ward's exhibit no. 94. A portion of that exhibit states:
"The total direct diversion requirement from Sheep Creek is
equal to 21.8 + 3.6 = 25.4 C.F.S." (cubic feet per second).
This 25.4 C.F.S. figure converts into 1,016 miners inches of
water. See: section 89-818, R.C.M. 1947, now section 85-2-
103 MCA. Accordingly, the 1,200 miners inches awarded to
Ward by the District Court must be reduced by 184 miners
inches.
The Ward water rights have the following priority
dates: 1,000 miners inches with priority of September 10,
1897; 16 miners inches with priority date of September 29,
1903. With these modifications, the judgment in favor of
Ward is affirmed.
The District Court awarded Holmstrom Land Company 3,000
miners inches from Sheep Creek with a priority date of 1935.
Ward asserts that this award must be reduced for two reasons:
(1) the narrowest point in Holmstrom Land Company's ditch
will facilitate only 808 miners, inches and therefore the
3,000 miners inches granted to Holstrom Land Company must be
reduced to 808 miners inches; (2) alternatively, Ward asserts
that the award to Holmstrom Land Company must be reduced
from 3,000 miners inches to 1,400 miners inches because
Holmstrom's diversion facility can only divert a maximum of
1,400 miners inches. Ward relies heavily on Wheat v. Cameron
(1922), 64 Mont. 494, 502, 216 P. 761, where we stated: "[aln
appropriator cannot acquire a right to more water than his
ditch will carry, and it is manifest it cannot carry a greater
amount than that permitted by the headgate capacity."
-10-
The evidence supports a finding as the capacity of
the ditch to carry 3,000 miners inches of water but does not
support a finding that the Holmstrom Land Company diversion
point is capable of diverting 3,000 miners inches of water.
Therefore, it is necessary to reduce the award made to
Holmstrom Land Company.
Roger Perkins, an expert called by Ward, testified as
follows:
"Q. I am going to call your attention, Mr. Perkins,
to Sheep Creek in the area of the by-pass, the
Holmstrom diversion, and the Ward diversion. Did
water going down Sheep Creek pass by the by-pass
first as compared to the other installation. A.
Yes.
"Q. And from there where does it go? A. It then
flows under the highway. There are three culverts
under the highway.
"Q. Would you also refer to the alternate place
that it might flow instead of going under the high-
way in through the culverts? A. Yes, in times of
heavier flows there is a rock masonry dam immediately
adjacent to the highway where Sheep Creek can overflow
and run down the borrow pit of the highway.
"Q. And if it runs over that masonry dam, it event-
ually could get down, would it not, to the Ward
diversion in the Mumbme ditch? A. That is correct.
"Q. Now referring to the water that goes under
the dam, I mean under the highway through the
culverts, the water would flow down to where first?
A. It would flow to the point of the Holmstrom
diversion.
"Q. And if it passes by there eventually where
would it go thereafter? A. It then flows back
under the highway and down to a point of the Mumbrue
ditch diversion.
"Q. It flows under the highway again, is that
through culverts? A. That is through culverts.
"Q. Does Holmstrom have a dam at the point of his
diversion to raise the level of water and thus
divert it into his ditch? A. Yes, he does.
"Q. Would you describe that dam please? A. It's
just a rock dam, rock randomly placed in the stream.
"Q. Is it water-tight? A. No, it is not
water-tight.
"Q. Have you made any calculations as to how
much water, by use of the facility which he has
there now that Mr. Holmstrom could divert into
his ditch? A. Yes, I have.
"Q. Would you give us your calculations please?
Do you have any documents or work papers which
you use--you could use those and if they are
necessary we'll introduce them. A. First of
all, I took a look at the conditions associated
with the maximum recorded flow in Sheep Creek,
over 460 CFS. Of this 460 CFS approximately
90 CFS would flow under the highway. The remainder
would go over the rock masonry dam and down the
borrow pit adjacent to the highway.
"Q. That which would flow under the highway would
go down to the Holmstrom diversion, that would go
over the masonry dam would it not, is that correct?
A. Right, this is correct.
"Q. All right. A. Now of that maximum flow of 90
CFS recorded, of the 90 CFS that could flow under
the highway culverts during the maximum recorded
flow of Sheep Creek, 35 CFS at a maximum could be
diverted into the Holmstrom ditch. The remainder
would flow over the rock dam and continue down its
course in Sheep Creek.
"Q. That is because of the nature of that rock dam?
A. That is because of the nature of the rock dam."
Robert Wertz, one of the principal owners of Holmstrom
Land Company, was the only person to contradict Perkins'
testimony. Wertz testified that in 1954 or 1956, he estimated
the amount of water being diverted from Sheep Creek at the
Holmstrom Land Company diversion, and it was his conclusion
that the diversion point could divert at least 3,200 miners
inches.
The District Court, relying on Wertz's testimony,
awarded Holmstrom Land Company 3,000 miners inches from
Sheep Creek. Implicit in this award is a finding that the
Holmstrom diversion point is capable of diverting 3,000
miners inches.
This Courts function is to review the record to determine
whether there is substantial evidence to support the District
Court's findings and decree. As a general rule, we accept
all evidence in the record as true "unless that evidence is
so inherently impossible or improbable as not to be entitled to
belief." Strong v. Williams (1969), 154 Mont. 65, 68, 460 P.2d
90, 92. Our review of the transcript and the exhibits convinces
us that it is inherently improbable that the Holmstrom Land
Company diversion point is capable of diverting 3,000 miners
inches of water. Accordingly, we are not bound by the District
Court finding, and are entitled to review the evidence to
determine the proper award to be made to Holmstrom Land Company.
Strong, supra.
After an independent review of the transcript, we
conclude that the District Court shculd have granted an
award of only 1,400 miners inches (40 x 35 CFS) to Holmstrom
Land Company. The evidence presented by Perkins establishes
this as the upward limit of Holmstrom Land Company's water
right. Accordingly, the District Court must reduce the
Holmstrom Land Company award in conformity with this opinion.
We turn now to the award granted to Dean 0. and Virginia
Thorson. The District Court awarded the Thorsons 337 miners
inches from Sheep Creek, with a priority date of September
20, 1900. The court decree specified that Thorson's water
rights were "to be diverted from [the] Mumbrue Ditch."
The award to the Thorsons presents a somewhat unique
question for this Court. The record indicates that Ward's
predecessor in interest, D. P. Mumbrue, transferred and
conveyed the right to use 337 miners inches from Sheep Creek
to William Woolsey, Thorsons' predecessor in interest. This
conveyance took place in 1900, and was in exchange for a
right-of-way across Woolseys land. Thorson testified that
neither he, nor his predecessors in interest, have ever used
the full 337 miners inches for a beneficial purpose.
This Court has always recognized that a valid appropriation
may be sold separate from the land to which it is appurtenant:
"We are committed to the rule that the appropria-
tor of a water right does not own the water, but
has the ownership in its use only. (Creek v.
Bozeman Water Works Co., 15 Mont. 121, 38 P . Z 459;
Allen v. Petrick, 69 Mont. 373, 222 Pac. 451; Verwolf
- -x i n eIrr. Co., 70 Mont. 570, 227 Pac. 68;
v. ~ o w - - -
Tucker v. Missoula Light - - - Co., 77 Mont. 91,
& Ry.
250 ;
1
.
c
a
~ Maclay v. Missoula Irr. Dist., 90 Mont.
344, 3 Pac. (2d) 2 6 ~ c
8;ok Creek Ditch & Flume Co.
v. Miller, 93 Mont. 24-7-Pat. 0 1 U 7 4 ,
-
L. R. 200.) Likewise it is settled by the decisions
of this court that such a right is property which may
be disposed of apart from the land on which it has
been used. (Smith v. Denniff, 24 Mont. 20, 60 Pac.
398, 81 Am. St. ~ e ~ T 4 0 8 , L. R. A. 737; Lensing
50
v. Day & Hansen Securit Co., 67 Mont. 382, 215
r r .
~ ~ 3 9~ 9 c l a ~ d o ~ l a I Dist ., supra. ) "
a ;
Brennan v. Jones (1935), 101 Mont. 550, 567, 55
P.2d 697.
When D. P. Mumbrue traded a portion of his water right
to Thorsons predecessor in interest, he in effect sold 337
miners inches of his rights in Sheep Creek. But, it does not
necessarily follow that these 337 inches are still vested in
Thorson. Section 89-802, R.C.M. 1947, (repealed in 1973)
provided :
"Appropriation must be for a useful purpose--
abandonment. ~ h e p p r o p r i a t i o nmust be tor some
useful or beneficial purpose, and when the
- -
appropriator - - successor in interest abandons
or his
and ceases to use the water forsuch purpose, the
right ceases; but questions of abandonment shall
be questions of fact, and shall be determined as
other questions of fact." (Emphasis added.)
Review of the testimony convinces us that Dean 0 .
Thorson and his predecessors abandoned a large portion of the
337 miners inches conveyed to them by D. P. Mumbrue. Thorson
testified as follows:
"Q. How many acres of ground do you presently
irrigate from the Murnbrue ditch? A. At present,
accoruing to the measurement, the Soil Conserva-
tion measurement, there are 13 acres in this
tract here which we have irrigated continuously.
"Q. The 13 acres you are referring to on the
map is that 13 acres. A. This is true.
"Q. Now the other ground -- A. There is a
7-acre tract here which we haven't irrigated
for the past three years.
"Q. That is out of the Mumbrue ditch? A. Yes,
but if it wasn't for the ditch, it would irrigate
from Woolsey.
"Q. A total of 20 acres, isn't it? A. Yes."
Thorson also testified that there was no evidence that his
predecessors in interest had irrigated any more than twenty
acres from Sheep Creek. Seventy-five years of nonuse is
sufficient to provide "clear evidence" of abandonment.
This Court must therefore determine what portion of
Thorson's water right remains intact. Taking the evidence
in a light most favorable to Thorson, we determine that all
but 80 miners inches were lost through abandonment. It was
established that Thorson has used Sheep Creek water to
benefit 20 acres of his land. Additional testimony established
that it took up to 4 miners inches per acre to properly
irrigate land which is similar to Thorsons. This evidence
is sufficient to allow the granting of 80 miners inches to
Thorsons with a priority date of September 20, 1900. Therefore,
any award granted by the District Court in excess of 80
miners inches must be reduced to conform with the evidence
produced at trial.
We turn next to the water rights granted to Walter Joyce
and Riverside Ranch Co. (the successor to Elmer D. Hanson's
rights). The awards to Riverside and Joyce are contained in
the District Court's amended decree dated July 15, 1977.
The amended decree gave Walter Joyce three water rights from
Sheep Creek, totaling 1,000 miners inches, with priority dates
in 1907, 1912 and 1949. The same decree awarded Riverside Ranch
Co. the following water rights:
Amount Source Prioritv Date
260 inches Little Sheep Cr. Sept. 1888
50 inches Coon Creek Feb. 1903
300 inches Sheep Creek Sept. 1, 1897
150 inches Sheep Creek Jan. 16, 1903
500 inches Sheep Creek Nov. 19, 1892
100 inches Sheep Creek Sept. 3, 1935
80 inches Horse Creek June 10, 1928
Ward claims that all of the water rights granted to
Riverside and Joyce must be stricken because they are not
supported by the evidence. Riverside and Joyce argue that
Ward has no standing to challenge their water rights because
their rights do not conflict with those granted to Ward, and
alternatively, that the awards are supported by substantial
evidence.
We determine that Ward has no standing to challenge the
awards from Little Sheep Creek, from Coon Creek and from Horse
Creek, but that it does have standing to challenge the awards
from Sheep Creek. Rule 1, M0nt.R.App.Civ.P. provides that "a
party aggrieved may appeal from a judgment or order." To be
aggrieved by an order or judgment a party must have an interest
in the subject matter of the litigation which is injuriously
affected by the judgment or order. Estate of Stoian (1960),
138 Mont. 384, 393, 357 P.2d 41. Although Stoian was decided
before this Court adopted the new rules of civil and appellate
procedure, the new rules have not changed the definition of
"aggrieved." Thus, Ward must be able to show an interest in
the subject matter of the litigation which has been injuriously
affected by the judgment or order.
Ward has no interest in Little Sheep Creek, Coon Creek
or Horse Creek; therefore, that portion of the District Court
decree adjudicating those creeks cannot be challenged by Ward.
On the other hand, that portion of the District Court decree
which awards water rights from Sheep Creek to Riverside and
Joyce is appealable by Ward. Ward, an appropriator from
Sheep Creek, has an obvious interest in any water right granted
from Sheep Creek. A water right which has a priority date
earlier than Ward's water rights has a potentially injurious
affect on Ward because the earlier appropriator could force
Ward to forego his water until the earlier water right has been
completely satisfied. Ward is equally interested in any
award from Sheep Creek which has a priority date subsequent
to Ward's priority dates, because these later rights deplete
Sheep Creek and make it unlikely that Ward would ever be
-16-
able to increase his rights in Sheep Creek. Unquestionably,
Ward has an interest in this subject matter.
Getting to the merits of the water rights awarded to
Riverside and Joyce, we determine that some of the awards are
not supported by substantial evidence. Certain evidence upon
which the District Court relied, admitted over Ward's objections,
was clearly not admissible.
The exhibits introduced by Riverside and Joyce to support
their water rights were notices of appropriation filed pursuant
to section 89-810, R.C.M. 1947, which provides:
"Notice of appropriation. Any person hereafter
desiring70 appropriate the waters of a river,
or stream, ravine, coulee, spring, lake, or
other natural source of supply concerning which
there has not been an adjudication of the right to
use the waters, or some part thereof, must post
a notice in writing in a conspicuous place at the
point of intended diversion, stating therein:
"1. The quantity of water claimed, measured as
hereinafter provided;
"2. The purpose for which it is claimed and place
of intended use;
"3. The means of diversion, with size of flume,
ditch, pipe, or aqueduct, by which he intends to
divert it;
"4. The date of appropriation;
"5. The name of the appropriator.
tained in the notice are true. (Emphasis added.)
If the notice provided for in section 89-810 is duly
made and filed, then it "shall be taken and received in all
courts of this state as prima facie evidence of the statements
therein contained." Section 89-814, R.C.M. 1947. This Court
has strictly construed the provisions of section 89-814. We
have held that any nonconformance with section 89-810 renders
the notice of appropriation inadmissible as evidence:
"Many years after the use of the water through
this ditch, the then present owners of these
rights caused to be recorded a notice of their
water rights.. .. It is argued that these notices
were evidence, prima facie, of the extent of these
rights. The notices did not comply with the statute
as to the time of record (secs. 7102-7104 Rev. Codes).
If the statute was complied with, such notices were
prima facie evidence. (Wills v. Mones, 100
~ o n t .514, 50 P.2d 862.) Since these notices
- - comply with the statute - - -
did not -- as to the
time of their recording, they are of no
evidesiary value in provlng thea=unf or
- - -an appropriation. (Peck v. ~ i m o c
date of 101
Mont. 12, 52 P.2d 164.) " (Emphasis added.)
Galahan et al. v. Lewis et al. (1937), 105 Mont.
294, 298, 299, 72 P.2d 1018.
This Court reaffirmed Galahan in Shammel v. Vogl (1964),
144 Mont. 354, 396 P.2d 103. Under Galahan and Shammel, a
party cannot rely on defective notices of appropriation to
prove the extent of his water rights or their priority
dates.
In the present case, Ward properly objected to the
introduction of many of Riverside's and Joyce's notices of
appropriation because they were not filed within twenty days
of the date of appropriation. The notice of appropriation
contained in exhibit nos. 1, 3, 29, 30 and 36 was filed more
than 20 days after the appropriator took water from Sheep
Creek. This being so, each cannot be used as evidence to
establish the amount or date of any water right. Without
these notices, there is insufficient evidence to support
several of the awards made to Riverside and Joyce. We find
the following awards are not supported by the evidence and
must be stricken:
INADMISSIBLE PARTY AWARD SOURCE DATE
EXHIBIT NO.
Riverside
rfiPafgf side
Riverside 150 in. sheep Creek Jan. 16, 1903
Riverside 100 in. Sheep Creek Sept. 31, 1935
PROPRIETY - - AWARDS - - DISTRICT AND DEPARTMENT
OF THE TO THE
We turn now to the portion of the District Court decree
which established that the District had an existing right to
3,000 miners inches of Sheep Creek. The District is, and at
all times relevant hereto was, a corporation incorporated
pursuant to the Montana Water District Act. The District
plans to divert all available, excess water from Sheep Creek
and transport it through Holmstrom's irrigation ditch to a
multi-purpose reservoir in the Newlan Creek Watershed.
There, the water will be stored until it can be beneficially
used by the District or its customers. It is important to
note that the District has not actually diverted any water from
Sheep Creek; the District is only a prospective user of
Sheep Creek. We must determine whether the District complied
with the applicable statutes to establish its rights to future
use of the excess water.
The District contends that its 3,000 miners inches right
can be sustained under two alternative statutes. First,
that it obtained an "existing right" in Sheep Creek on or
about June 29, 1973, when the Resources Board assigned its
rights in Sheep Creek to the District. The ResourcecBoard's
rights in Sheep Creek stemmed from a July 25, 1969 filing
made by the ResourcgBoard under section 89-121, R.C.M.
1947. The District contends that the written assignment,
dated June 29, 1973, was effective to transfer the Resources
Board's existing rights to "all of the inappropriated water
of Sheep Creek and its tributaries" to the District.
The District's alternate claim, which was permissively
raised during trial, is predicated on a section 89-810 filing
made by the District on July 11, 1969. In the documents filed
with the Meagher County Clerk, the District claimed an existing
right to 75 cubic feet (3,000 miners inches) from Sheep Creek.
The only party challenging the award made to the District
is Ward. Ward contends that the District does not have -
any
existing rights in Sheep Creek and that the District Court's
findings to the contrary must be reversed.
We shall begin by discussing the District's rights under
section 89-121, R.C.M. 1947 (since repealed). Section 89-121
provided :
"Appropriation - waters--recording of notice--
of
date of right. In acquiring the rights and
--
administering the terms of this act herein
prescribed and established, the board shall
not be limited to the terms of the statutes
of the state of Montana relating to water
rights heretofore enacted; but, in addition
thereto, may initiate a right to the waters
of this state by executing a declaration in
writing of the intention to store, divert or
control the unappropriated waters of a parti-
cular body, stream or source, designating and
describing in general terms such waters claimed,
means of appropriation and location of use, and
cause said notice to be filed in the office of
the county clerk and recorder of the county where
the major portion of the means of diversion or
control will be located, which right shall vest
in such board on the date of the filing of such
declaration. It shall be the duty of the county
clerk and recorder of each county of the state
of Montana on presentation to receive, record and
index such declaration, without charge, in the
manner prescribed by law relating to notice of water
rights.
"A certified copy of the record of said declaration
shall be received as competent evidence in all
courts and deemed to be prima facie proof of all
matters therein recited.
"The priority of right shall - - continue
date and
from the- - of such filing or recording, provided
--- time
the means of actual appropriation shall be com-
--
i i E i i c m bytual work ot c o n s t r u c t i o n i ~ i ~ u r
(4) years - -the-
from - date of original recording.
Change in means or place of diversion or control
shall not affect the right of priority, if others
are not thereby injured."
Ward advances three arguments to support its claim that the
District did not obtain any existing rights in Sheep Creek by
the June 29, 1973 assignment. First, that the "Declaration
of Intention to Store, Control and Divert Water" which was
Board
filed by the Resources/ on July 25, 1969, was invalid because
it was executed by an agent of the ResourcesBoard rather
than by the chairman of the ResourceSBoard. Ward claims
execution of the documents by an agent was expressly prohibited
by section 89-135, R.C.M. 1947. Next, Ward argues that the
ResourcesBoard had no authority to assign its existing
rights in Sheep Creek. Ward argues that any assignment by
the ResourcesBoard would be an impermissible delegation of
its rights and authority. Finally, Ward argues that the
District and the ResourcesBoard do not have any existing
rights in Sheep Creek because they failed to commence actual
work of construction on - means - diversion within four
-- -a of
2.C.M. 1947
years from the date of the original section 89-12l/recording
We find that Wards third argument is dispositive for
purposes of interpreting section 89-121. Section 89-121
clearly states that "the means of actual appropriation shall
be commenced by actual work of construction within four (4)
years from the date of original recording." In this case,
the original recording took place on July 25, 1969. There
is no testimony in the record which establishes that any
actual construction took place on or before July 25, 1973.
Accordingly, the District cannot claim any existing rights
under section 89-121, R.C.M. 1947. Any findings or conclusions
inconsistent with this opinion must be stricken.
However the District also claims water rights by virtue
of section 89-810 et seq., R.C.M. 1947. Ward concedes that
the District properly filed its notice under section 89-810,
R.C.M. 1947. The chief controversy is whether the District
complied with the terms of section 89-811, R.C.M. 1947
(since repealed), which provided:
"Diligence in appropriating. Within forty days
after posting such notice, the appropriator must
proceed to prosecute the excavation or construction
of the work by which the water appropriated is
to be diverted, and must prosecute the same with
reasonable diligence to completion. If the ditch or
flume, when constructed, is inadequate to convey
the amount of water claimed in the notice aforesaid,
the excess claimed above the capacity of the ditch
or flume shall be subject to appropriation by any
other person, in accordance with the provisions of
this chapter."
We interpreted section 89-811 in the recent case of the
Department of Natural Resources v. Intake Water Co. (1976),
416,
171 ~ont.1558P.2d 1110. In the Intake decision, we clarified
the requirements and purpose of section 89-811:
"The purpose of section 89-811 is to require
reasonable diligence in completing the appropriation
or forfeiture of the priority of the appropriation
as of the day of posting the notice of appropriation.
What constitutes reasonable diligence must be
determined on an ad hoc, case-by-case basis. The
law in this area is summarized by a leading authority,
Clark, Waters & Water Rights, Vol. 6, § 514.1, pp.
308, 309, in this language:
"What constitutes due diligence is a question of fact
to be determined by the court in each case. Diligence
does not require unusual or extraordinary effort, but
it does require a steady application of effort-that
effort that is usual, ordinary and reasonable under
the circumstances.* * * So long as the applicant
prosecutes the construction of works in good faith
with a steady effort, he should be held to have
prosecuted with diligence." Intake, 171 Mont. at 434.
"We hold therefore that the meaning of the words '
* * *proceed to prosecute the excavation or con-
struction of the work by which the water appropriated
is to be diverted * * * ' is not confined to the
commencement of actual on-site excavation or construction
of the diversion works, but that it encompasses the
steady on-going effort in good faith by Intake to
prosecute the construction of the project under the
circumstances disclosed here." Intake, 171 Mont. at
436.
In the present case the District Court held that the
District had fully complied with the specifications contained
in section 89-811, R.C.M. 1947:
"That within the fort days following the District's
- -
postin-recordof a ---its said ~ o t i F o f - - -
Water
Kight, work done by and on behalf - - zstrict
----- of the
consisting of damsite investigations, engineering
decisions bygeologists, - project plan review
and
and recommendations federal agencies constituted
- sufficient commencement - - construction of
a of the
-- t e d a n d d i v e r t e d c o m p l y withthe require-
the work by which Sheep Creek waters were to b e
approprla --
ments of Section 89-811 R.C.M., 1947. That the actions
by a n d o n behalf of the District thereafter in making
surveys and geologic investigations, completing plans,
entering into cooperative agreements, soil testing,
core drilling, land and easement acquisition and
obtaining financing and entering into a contract for
the dam construction, which continued through the
dates of trial of this action, constitutes prosecution
of the construction of the project with reasonable
diligence sufficient to comply with the provisions of
Section 89-811 R.C.M., 1947.
"That a letter was written to Montana Water Resources
Board dated August 11, 1969, pointing out conflict
between the ~istrict' 89-811-filing-
s - - Board's
and the
89-121 filing, requesting the Board's release of its
filing to the District.
"That the Montana Water Resources Board replied by
letter dated August 15, 1969, agreeing to release
the Board's filing to the District when 'the project
reaches the construction stage.'
-
"That the District fullv com~liedwith legal require-
ments in posting and filing its Notice of Water
Ricrht Appropriation on July - -
- 11, 1969.
"That the District proceeded to prosecute the excavation
or construction of the diversion works within forty
(40) days after July 11, 1969, pursuant to Section
89-811 R.C.M., 1947."
It is, of course, this Court's duty to determine if
these findings are supported by substantial evidence and in
this regard the evidence must be viewed in the light most
favorable to the prevailing party in the District Court. It
is for the District Court to determine credibility and the
weight of the testimony.
The record discloses that the following activity took
place during the first forty days following the posting of
the District's notice of appropriation:
"(1) The District filed a copy of their notice
of appropriation with the Meagher County Clerk.
"(2) Raymond Smith, a design engineer for the
Soil Conservation Service (SCS) testified that
his agency was actively involved in the Newlan
Creek project during the first forty days after
the District posted its notice.
" (3) Frank Faranchek testified that the watershed
economist completed an economic report on the
overall project during the first forty days after
the District's posting.
"(4) Mr. Faranchek testified that engineering
reports reviewing the work done on the Newlan
Creek Watershed were submitted to his office on
July 11, 1969. Farancheck indicated that these
reports refined some of the cost estimates and
the technical data prepared for the project.
" (5) Mr. Faranchek also testified that data
was collected on the recent sales prices of
property around and near the Newlan Creek Reservoir.
This data was collected so the District might have
some working knowledge of the land prices which
would be involved in future condemnation or purchase
transactions.
"(6) It was also established that the District and
the Montana Department of Natural Resources were
corresponding during the first forty days in an
effort to clarify the District's rights vis a vis
the Department' s. "
We agree that the evidence produced by the District is
less convincing than the evidence before this Court in the
Intake case. But Intake also establishes that "what constitutes
reasonable diligence must be determined on an ad hoc, case-
by-case basis." Intake at 434.
We determine that the evidence is sufficient to support
the District Court's finding that the District had proceeded
to prosecute the excavation or construction of the work within
the first forty days of posting its notice of appropriation.
Therefore, the 3,000 miners inch existing right was properly
awarded to the District and is hereby affirmed.
We will now consider the "uncertain" right granted to the
Resources Board. At the outset we would note that the Resources
Board, like the District, can only claim an "existing right"
to Sheep Creek. An existing right is defined as: "a right
to the use of water which would be protected under the law
as it existed prior to July 1, 1973." Section 89-867(1),
R.C.M. 1947, now section 85-2-102(7) MCA. Section 36-
2.14J (1)-S1400 M.A.C., further provides: " (e) 'Existing
right', in addition to the definition given the term by
section 89-867(4) of the Act, includes any appropriation of
water commenced prior to July 1, 1973, - completed according
if
- - - -as it existed when- appropriation was begun."
to the law - - the
Since the Resources Board filed its notice of appropriation
on June 23, 1973, an existing right in Sheep Creek was
acquired on that date. However, under the law their right
would expire unless "the means of actual appropriation ...
[was] commenced by actual work of construction within four
(4) years from the date of original recording." Section 89-
121, R.C.M. 1947.
When the District Court entered its findings (February
3, 1977), the Resources Board had until June 23, 1977 to
begin work to comply with the statute. Accordingly, the
District Court was correct in awarding the ResourcesBoard an
uncertain right in Sheep Creek. Events subsequent to the
District Courts findings must be used to determine whether
the Resourcg,Board's existing right has become vested or has
expired. All we decide today is that the District Court did
Board
not err in awarding the Resources/ an uncertain right on
February 3, 1977.
-
SUFFICIENCY - - EVIDENCE TO SUPPORT INJUNCTIVE RELIEF
OF THE
The final major issue is the District Court's refusal
to enjoin Ward's use of the Mumbrue Bypass. As previously
stated, the Mumbrue Bypass was built by Ward in 1972; the
bypass allows Ward to divert Sheep Creek water before it
passes Holmstrom's diversion point. The original complaint
-25-
filed by Holmstrom alleged that the llumbrue Bypass injured
Holmstrom because it lowers the water level at Holmstrom's
diversion point, and thereby renders it less usable. Holmstrom's
complaint asked the District Court to permanently enjoin
Ward's use of the Murnbrue Bypass. Holmstrom now claims that
the District Court erred when it refused to enjoin Wards use
of the Mumbrue Bypass.
This issue is controlled by section 89-803, R.C.M. 1947
(not recodified) which provided:
"Point of diversion may- changed--change of
- be
use. ~ h eperson entitled to the use of water
may change the place of diversion, if others are
not thereby injured, and may extend the ditch,
flume, pipe, or aqueduct, by which the diversion
is made, to any place other than where the first
use was made, and may use the water for other
purposes than that for which it was originally
appropriated."
This Court long ago established that the burden is on
the party claiming to be injured to plead and prove that the
change in location will adversely affect him:
"While, of course, one may not change the point of
diversion any more than the place of use or the
character of use, to the prejudice of other
appropriators (Rev. Codes, sec. 4842), it does
not follow that any such change is to be taken, in
limine, as prejudicial. - - contrary, -
On the the
burden - - - party claiming - - prejudiced
is on the to be
- - change, to allege and prove the facts.
by such
(Hansen v. ~arsen,44 Mont. 350, 120 Pac. 229.)"
Lokawich v. City of Helena (1912), 46 Mont. 575,
Although Holrnstrom Land Company properly raised the
diversion issue in its original complaint, Holmstrom failed
to prove injury during the course of the trial. At most,
Holmstrom's testimony indicated that their "rock diversion"
might need to be revamped if the bypass was used; however,
this testimony does not show injury sufficient to warrant
injunctive relief. Accordingly, the District Court did not
err when it refused to enjoin the use of the Mumbrue Bypass.
The briefs of the parties have brought a number of
additional, minor issues to our attention. We have reviewed
these issues and find them to be without merit.
The judgment of the District Court must be modified to
conform to this opinion. As so modified, the judgment is
affirmed.
Jus
We Concur:
d i e £ Justice
Justices
IN THE SUPREME COURT OF THE STATE OF MONTANA
No. 13848
HOLMSTROM LAND CO., INC.,
a Montana corporation,
Plaintiff, Respondent and
Cross-Appellant,
MEAGHER COUNTY NEWLAN
CREEK WATER DISTRICT,
Defendant and Appellant,
and
F E N 2 1,980
WARD PAPER BOX C O - I et a l - I
Defendants, Respondents and of. S U P R E M E COURT
cross-~ppellants. STATE OF MONTANA
ORDER ON PETITION FOR REHEARING
In the petitions for rehearing, we are reminded that
even though there has been no compliance with the statutes
regulating appropriations by record, where water has actually
been diverted from streams and applied for beneficial use,
a right to the use of that water for beneficial use is established.
In discussing the effect of recording statutes in water
appropriation matters, this Court said in Murray v. Tingley
(1897), 20 Mont. 260, 268, 269:
"Questions of priority, however, as well as of the
original capacity, etc., of ditches, depended chiefly
on oral testimony,--on the memory of eyewitnesses,
often at fault through lapse of time. Confusion and
insecurity to vested rights resulted. To obviate this
as much as possible, the statute was enacted. It
required a notice of location to be posted at the
point of diversion, to apprise others who contemplated
the acquisition of water rights from the same stream
that the locator had taken his initial step to
appropriate water. It required a recorded notice of
appropriation, in order that a record might be supplied,
giving the history in detail of each appropriation, which
would inure to the benefit of their successors in
interest, as well as to the appropriator's, and
not leave them dependent upon the mere memory
of witnesses when conflicts should arise. In
enacting this law the legislature did not contem-
plate that one who failed to comply with the terms
of the statute, but who, in the absence of any
conflicting adverse right, had nevertheless actually
diverted water and put it to a beneficial use,
should acquire no title thereby. The essence of an
appropriation--a completed ditch, actually diverting
water, and putting it to a beneficial use--remained
the same as it had been before. The object of the
statute was to preserve evidence of rights, and also
to regulate the doctrine of relation back. It follows
that the statute controls this doctrine of relation
back, and that one who seeks to avail himself of it
since the passage of this act can only do so by a
compliance with the statutory requirements.
"Again, we are satisfied that the legislature did
not intend that one who failed to comply with the
statute, but who had nevertheless actually diverted
water, could be deprived of it by another who com-
plies with the statute at a time subsequent to the
former's completed diversion. (Citing cases.)"
As to Elmer Hanson (Riverside Ranch), and Walter Joyce,
although their written and posted notices are deficient, and
therefore not admissible in evidence to establish the dates
thereby of their beneficial rights in the waters in Sheep
Creek, the evidence is uncontroverted that each of these
parties did actually divert..fromSheep Creek, and use beneficially
upon their lands those waters. Their lands are downstream
from the other claimants, and their rights would be junior
to any of the other claimants, so therefore, there are no
adverse interests claiming this same water now being beneficially
used by Riverside Ranch and by Joyce. The evidence is further
clear that since 1949, the appropriation of waters for these
purposes by Hanson (Riverside Ranch) and Joyce has been
ongoing. Therefore, even though their evidence of earlier
diversion through the recorded notices is not admissible,
under the other evidence in this case, they have established a
beneficial use of waters from Sheep Creek at least since
1949. In the case of Riverside Ranch, this amounts to 1,050
inches and in the case of Walter Joyce, an additional 200
inches out of Sheep Creek.
Our original opinion therefore, of August 2, 1979 in
this case is modified to allow out of Sheep Creek 1,050
inches to Riverside Ranch and an additional 200 miners inches
out of Sheep Creek to Walter Joyce, each beginning June 1,
1949 which date is probably the latest first date for the
irrigating season for that year. As so modified, our opinion
of August 2, 1979 is otherwise confirmed, and the petitions
for rehearing are otherwise denied.
DATED this day of February, 1980.
~Chief
Justice
y -
- L
Justices @2