No. 80-465
IN THE SUPREME COURT OF THE STATE OF MONTANA
MANUEL CASTILLO, JR., and DEBORAH J.
CASTILLO, and GARRY A. COTANT, SHARYL
COTANT,
Plaintiffs and Appellants,
VS.
DELBERT B. KUNNEMANN,
Defendant and Respondent.
Appeal from: District Court of the Sixth Judicial District,
In and for the County of Park
Honorable Jack D. Shanstrom, Judge presiding.
Counsel of Record:
For Appellants:
Berg, Coil, Stokes & Tollefsen, Eozernan, Montana
Ben E. Berg, Jr. argued, Bozeman, Montana
For Respondent:
Loble and Pauly, Helena, Montana
Lester Loble I1 argued, Helena, Montana
Wellcome and Frost, Bozeman, Montana
A1 Frost argued, Bozeman, Montana
Swandal, Douglass & Swandal, Livingston, Montana
For Amicus Curiae:
Donald D. MacIntyre, D.N.R., Helena, Montana
Submitted: November 30, 1981
Decided: Hht 3 f4$2
FileNAP,
. 3 - 1982
Mr. J u s t i c e Frank B. Morrison, J r . , d e l i v e r e d t h e Opinion o f
t h e Court.
A p p e l l a n t s , Manuel and Deborah C a s t i l l o and G a r r y and
S h a r y l C o t a n t , a p p e a l from a n o r d e r o f t h e S i x t h J u d i c i a l
D i s t r i c t C o u r t , P a r k County, e n t e r e d on O c t o b e r 8 , 1980.
The o r d e r d e n i e d a p p e l l a n t s ' r e q u e s t f o r a n i n j u n c t i o n
p r e v e n t i n g r e s p o n d e n t , D e l b e r t Kunnemann from d i v e r t i n g
c e r t a i n water. On September 29, 1981, t h i s C o u r t i s s u e d a n
opinion r e v e r s i n g t h e D i s t r i c t Court, holding i n favor of
a p p e l l a n t s C a s t i l l o and C o t a n t . A p e t i t i o n f o r rehearing
was d u l y f i l e d . W e r e v e r s e our o r i g i n a l p o s i t i o n and, with
modification, a f f i r m t h e D i s t r i c t Court.
I n 1 9 7 6 , D e l b e r t Kunnemann owned a 1 , 2 7 5 - a c r e r a n c h
l o c a t e d i n t h e S h i e l d s V a l l e y , P a r k County, Montana. Kunnemann
owned two w a t e r r i g h t s on t h e S h i e l d s R i v e r from which h e
drew w a t e r t o i r r i g a t e h i s r a n c h . Kunnemann's w a t e r r i g h t s
stemmed from a n a p p r o p r i a t i o n o f 240 m i n e r ' s i n c h e s made by
a T h i r z a G r a n n i s o n J u n e 1, 1880, and from a n a p p r o p r i a t i o n
o f 450 m i n e r ' s i n c h e s made by a J o h n McNiven on August 1 4 ,
1893. Two main d i t c h e s , named a f t e r t h e r e s p e c t i v e o r i g i n a l
w a t e r r i g h t s a p p r o p r i a t o r s , G r a n n i s and McNiven, w e r e u s e d
t o t r a n s p o r t t h e w a t e r from t h e S h i e l d s R i v e r t o Kunnemann's
property.
On December 30, 1 9 7 6 , Kunnemann s o l d a 230-acre p a r c e l
of h i s ranch t o J a k e Franks. The w a r r a n t y d e e d c o n v e y i n g
t h i s p a r c e l t o Franks contained t h e following w a t e r r i g h t
grant:
" T o g e t h e r w i t h 230 m i n e r ' s i n c h e s o f t h e
waters of t h e Shields River appropriated
by J o h n McNiven and b e a r i n g a p p r o p r i a t i o n
d a t e o f t h e 1 4 t h day o f A u g u s t , 1 8 9 3 , and
related ditch rights."
J a c k F r a n k s s u b d i v i d e d t h e 230-acre p a r c e l i n t o t w e l v e
s m a l l e r t r a c t s of l a n d . The C a s t i l l o s p u r c h a s e d a 20-acre
t r a c t from F r a n k s on March 4 , 1977. The c o n t r a c t f o r deed
between Franks and C a s t i l l o s d i d n o t c o n t a i n a s p e c i f i c
water r i g h t g r a n t b u t r a t h e r the following general g r a n t :
" T o g e t h e r w i t h t h e t e n e m e n t s , h e r e d i t a m e n t s and a p p u r t e n a n c e s
thereunto belonging." The C o t a n t s p u r c h a s e d a 9.114-acre
t r a c t from F r a n k s on November 8 , 1979. The w a r r a n t y deed
g i v e n by F r a n k s t o t h e C o t a n t s c o n t a i n e d t h i s language:
" T o g e t h e r w i t h a l l and s i n g u l a r t h e t e n e m e n t s , h e r e d i t a m e n t s ,
a p p u r t e n a n c e s , w a t e r r i g h t s and w a t e r d i t c h e s , i f a n y ,
thereunto belonging."
The f o l l o w i n g diagram d e p i c t s t h e l o c a t i o n of t h e
p r o p e r t y r e t a i n e d by D e l b e r t Kunnemann, t h e F r a n k s s u b d i v i s i o n ,
t h e C a s t i l l o and C o t a n t p r o p e r t i e s , and t h e G r a n n i s and
McNiven d i t c h e s : (See Drawing on Next Page)
Kunnemann
Property
No i n t e r c o n n e c t i n g l a t e r a l d i t c h e s e x i s t between t h e
~ c ~ i v e in c h and t h e C a s t i l l o and C o t a n t p r o p e r t i e s .
d t When
J a k e F r a n k s s o l d t h e s u b d i v i s i o n t r a c t s between t h e McNiven
d i t c h and t h e C a s t i l l o and C o t a n t p r o p e r t i e s , he d i d n o t
r e s e r v e any easements t h r o u g h which l a t e r a l d i t c h e s c o u l d b e
b u i l t t o t r a n s p o r t w a t e r from t h e McNiven d i t c h t o t h e
C a s t i l l o and C o t a n t p r o p e r t i e s .
During t h e 1977 and 1978 i r r i g a t i n g s e a s o n s , Kunnemann
a l l o w e d C a s t i l l o t o t a k e w a t e r from t h e G r a n n i s d i t c h t o
i r r i g a t e hay c r o p s . I n 1980, Kunnemann blocked t h e G r a n n i s
d i t c h n o r t h of t h e C a s t i l l o p r o p e r t y , t h u s d i v e r t i n g a l l of
t h e w a t e r f l o w i n g i n t h e G r a n n i s d i t c h o n t o Kunnemannls
land.
A s a r e s u l t of Kunnemannls d i v e r s i o n of t h e G r a n n i s
d i t c h , C a s t i l l o s and C o t a n t s f i l e d a c o m p l a i n t on J u l y 1 4 ,
1980. They s o u g h t t o e n j o i n Kunnemann from i n t e r f e r i n g w i t h
t h e f l o w of w a t e r i n t h e G r a n n i s d i t c h .
The D i s t r i c t C o u r t e n t e r e d a r e s t r a i n i n g o r d e r on J u l y
2 2 , 1980, p r e v e n t i n g Kunnemann from d i v e r t i n g t h e G r a n n i s
d i t c h water. A show c a u s e h e a r i n g on t h e c o m p l a i n t was s e t
f o r August 5, 1980.
On August 5 , 1980, t h e p l a i n t i f f s , C a s t i l l o s and C o t a n t s ,
and t h e d e f e n d a n t , Kunnemann, a p p e a r e d w i t h c o u n s e l and
presented testimony. Following h e a r i n g , t h e D i s t r i c t C o u r t
i s s u e d f i n d i n g s of f a c t and c o n c l u s i o n s of law on September
9, 1980.
The D i s t r i c t C o u r t found t h a t t h e C a s t i l l o s , C o t a n t s
and t h e i r p r e d e c e s s o r i n i n t e r e s t , J a k e F r a n k s , n e v e r had
p o s s e s s i o n of t h e G r a n n i s d i t c h o r G r a n n i s w a t e r r i g h t s .
The c o u r t found t h a t J a c k Franks c o u l d n o t convey t h e ~ r a n n i s
d i t c h o r water r i g h t s a s appurtenant t o t h e C a s t i l l o o r
C o t a n t p r o p e r t y b e c a u s e such r i g h t s had n e v e r been l e g a l l y
attached a s appurtenant. The c o u r t f u r t h e r found t h a t
s e c t i o n 85-2-403, MCA, imposes no d u t y on t h e s e l l e r of r e a l
p r o p e r t y and a p p u r t e n a n t w a t e r r i g h t s t o f i l e a n o t i c e of
such s a l e o r t r a n s f e r w i t h t h e Department of N a t u r a l R e s o u r c e s .
Based on t h e s e f i n d i n g s t h e D i s t r i c t C o u r t d i s s o l v e d t h e
r e s t r a i n i n g o r d e r g r a n t e d pending t h e o r d e r t o show c a u s e
and d e n i e d t h e p l a i n t i f f s ' motion f o r an i n j u n c t i o n .
On September 1 8 , 1980, C a s t i l l o s and C o t a n t s f i l e d a
motion t o amend p u r s u a n t t o Rule 59 ( g ) , M.R.Civ.P. On
October 8 , 1980, t h e D i s t r i c t C o u r t e n t e r e d a n o r d e r denying
t h e motion. C a s t i l l o s and C o t a n t s a p p e a l from t h i s o r d e r .
Dispositive issues i n t h i s case are:
1. When Kunnemann deeded t o F r a n k s and e x p r e s s l y
g r a n t e d t h e McNiven r i g h t s , d i d Kunnemann i m p l i e d l y r e s e r v e
t h e Grannis r i g h t s ?
2. I f Kunnemann e f f e c t i v e l y r e s e r v e d t h e G r a n n i s
r i g h t s and s e v e r e d them from t h e l a n d t o which t h e y had been
a p p u r t e n a n t , d i d e x i s t i n g law r e q u i r e him t o o b t a i n a p p r o v a l
of t h e Department of N a t u r a l Resources p u r s u a n t t o t h e
p r o v i s i o n s of t h e Montana S u r f a c e and Groundwater A c t ,
s e c t i o n s 85-2-101, e t seq., M A
C?
3. What e f f e c t d o e s f a i l u r e t o a p p l y t o t h e Department
of N a t u r a l Resources f o r p e r m i s s i o n t o s e v e r have upon a
conveyance?
P l a i n t i f f s i n t r o d u c e d a d e c r e e e n t e r e d by t h e S i x t h
J u d i c i a l D i s t r i c t C o u r t i n c i v i l c a s e no. 2717, Henwood v .
Hobson, which a d j u d i c a t e d w a t e r r i g h t s of T h i r z a G r a n n i s on
t h e Shields River. This decree determined t h a t t h e a p p r o p r i a t i o n
of 240 m i n e r ' s i n c h e s made by T h i r z a G r a n n i s on J u n e 1,
1880, was a p p u r t e n a n t t o t h e f o l l o w i n g l a n d : "The S o u t h
h a l f of S e c t i o n Nine, a l s o a l l of S e c t i o n S e v e n t e e n , Township
One S o u t h , Range Ten E a s t . " The t r a c t of l a n d which C a s t i l l o
p u r c h a s e d from t h e F r a n k s ' s u b d i v i s i o n l i e s i n t h e s o u t h
h a l f of t h i s p a r t i c u l a r s e c t i o n n i n e .
A d d i t i o n a l l y , Kunnemann t e s t i f i e d t h a t t h e l a n d which
C a s t i l l o u l t i m a t e l y p u r c h a s e d had t r a d i t i o n a l l y been i r r i g a t e d
by w a t e r from t h e G r a n n i s d i t c h . T h i s t e s t i m o n y was c o n f i r m e d
by Dan D i n s d a l e , s o n o f t h e p r e d e c e s s o r i n i n t e r e s t of
D e l b e r t Kunnemann, and by A l b e r t P a l m e r , a h i r e d hand who
had i r r i g a t e d t h e p r o p e r t y . Both men s t a t e d t h a t o n l y w a t e r
from t h e G r a n n i s d i t c h had been u s e d t o i r r i g a t e t h e l a n d
which C a s t i l l o s u b s e q u e n t l y p u r c h a s e d .
I n L e n s i n g v . Day and Hansen S e c u r i t y Co. ( 1 9 2 3 ) , 67
Mont. 382, 384, 215 P . 999, 1000, t h i s C o u r t s t a t e d t h a t ".
. . a w a t e r r i g h t a c q u i r e d by a p p r o p r i a t i o n , and u s e d f o r a
b e n e f i c i a l and n e c e s s a r y p u r p o s e i n c o n n e c t i o n w i t h a g i v e n
t r a c t of land, i s an appurtenance. . ." S e c t i o n 70-17-
1 0 1 ( 1 1 ) , MCA, e s t a b l i s h e s t h a t d i t c h e s a r e a n e a s e m e n t which
may a t t a c h t o l a n d . S e c t i o n 70-15-105, MCA, p r o v i d e s t h a t a
". . . t h i n g i s deemed t o b e i n c i d e n t a l o r a p p u r t e n a n t t o
l a n d when it i s by r i g h t u s e d w i t h t h e l a n d f o r i t s b e n e f i t
. . ." I t i s c l e a r t h a t b o t h by d e c r e e and b e n e f i c i a l u s e ,
t h e Grannis water - d i t c h r i g h t s w e r e appurtenant t o
and
C a s t i l l o ' s land.
However, e v i d e n c e c o n c e r n i n g w h e t h e r t h e G r a n n i s w a t e r
and d i t c h r i g h t s w e r e a p p u r t e n a n t t o t h e C o t a n t p r o p e r t y i s
not so clear. No d e c r e e was a d m i t t e d which d e c l a r e d s u c h
r i g h t s appurtenant t o t h e Cotant property. Kunnemann d i d
t e s t i f y t h a t h e u s e d t h e G r a n n i s d i t c h and G r a n n i s w a t e r t o
i r r i g a t e t h e l a n d s s o u t h of t h e C a s t i l l o p r o p e r t y . Cotants
p u r c h a s e d a 9.114-acre t r a c t of l a n d which b o r d e r s t h e
C a s t i l l o p r o p e r t y immediately on t h e s o u t h . A a e r i a l photo
n
of t h e a r e a showed t h a t t h e G r a n n i s d i t c h r u n s d i r e c t l y
through t h e Cotant property. Due t o t h e p r o x i m i t y of t h e
C o t a n t p r o p e r t y t o t h a t owned by C a s t i l l o s , t h e e v i d e n c e
s u p p o r t s a f i n d i n g t h a t t h e C o t a n t p r o p e r t y would have been
i r r i g a t e d a t t h e same t i m e t h e C a s t i l l o p r o p e r t y was i r r i g a t e d .
W f i n d t h e G r a n n i s r i g h t s t o be a p p u r t e n a n t t o b o t h t r a c t s .
e
Kunnemann conveyed t h e McNiven w a t e r r i g h t t o g e t h e r
with r e l a t e d d i t c h r i g h t s . W hold t h a t r e l a t e d d i t c h
e
r i g h t s r e f e r t o t h e "McNiven d i t c h . " S i n c e Kunnemann h e l d
two w a t e r and d i t c h r i g h t s , namely t h e G r a n n i s r i g h t s and t h e
McNiven r i g h t s , t h e q u e s t i o n becomes whether conveyance of
t h e McNiven r i g h t s i m p l i e d l y r e s e r v e d t h e G r a n n i s r i g h t s . We
now h o l d t h a t s u c h a n i m p l i e d r e s e r v a t i o n was e f f e c t u a t e d by
t h e conveyance i n q u e s t i o n .
S e c t i o n 28-3-702, MCA, provides a s follows:
" A l l t h i n g s t h a t i n law o r u s a g e a r e c o n s i d e r -
ed a s i n c i d e n t a l t o a c o n t r a c t o r a s n e c e s s a r y
t o c a r r y it i n t o e f f e c t a r e i m p l i e d t h e r e f r o m
u n l e s s some of them a r e e x p r e s s l y mentioned
t h e r e i n , i n which c a s e a l l o t h e r t h i n g s of
t h e same c l a s s a r e c o n s i d e r e d t o be e x c l u d e d . "
Under t h e p r o v i s i o n s of t h e above-quoted statute, the
w a t e r r i g h t n o t s p e c i f i c a l l y mentioned would be e x c l u d e d .
Furthermore, such an i n t e r p r e t a t i o n e f f e c t u a t e s t h e i n t e n t
of t h e p a r t i e s . I n Lensing v . Day and Hansen S e c u r i t y Co.,
s u p r a , t h i s c o u r t s a i d a t pp. 384-385:
" I n a conveyance of a w a t e r r i g h t o r any o t h e r
p r o p e r t y , it i s t h e i n t e n t i o n of t h e p a r t i e s ,
s o f a r as t h e same h a s been l a w f u l l y e x p r e s s e d ,
which must c o n t r o l t h e c o u r t s i n a c o n s t r u c t i o n
of t h e i n s t r u m e n t by which t h e p r o p e r t y i s con-
veyed. The g e n e r a l r u l e s of c o n s t r u c t i o n o f
l e g a l documents a p p l y t o t h e i n s t r u m e n t now
under c o n s i d e r a t i o n . The f a c t t h a t a w a t e r
r i g h t i s i n v o l v e d does n o t add t o o r i n any
way change t h o s e r u l e s . "
~ p p l y i n g e l l e s t a b l i s h e d r u l e s o f c o n s t r u c t i o n , and
w
t h e p r o v i s i o n s of s e c t i o n 28-3-702, MCA, q u o t e d above, w e
now h o l d t h a t r e s p o n d e n t Kunnemann e f f e c t i v e l y r e s e r v e d h i s
G r a n n i s w a t e r r i g h t and t h e r e l a t e d G r a n n i s d i t c h r i g h t .
The n e x t i s s u e f o r r e s o l u t i o n i s whether t h e Montana
S u r f a c e and Groundwater A c t , s e c t i o n s 85-2-101, et seq.,
MCA, a p p l i e s t o water r i g h t s perfected p r i o r t o t h e e f f e c t i v e
d a t e of t h e Act. D i t c h r i g h t s a r e c l e a r l y n o t governed by
the applicable statutes. The Act i s comprehensive l e g i s l a t i o n
designed t o ". . . p r o v i d e for the administration, control,
and r e g u l a t i o n of w a t e r r i g h t s and e s t a b l i s h a s y s t e m of
c e n t r a l i z e d r e c o r d s of - w a t e r r i g h t s . "
all S e c t i o n 85-2-
1 0 1 ( 2 ) , MCA, (emphasis added) . Under t h i s A c t , an a d j u d i c a -
t i o n p r o c e s s of a l l w a t e r r i g h t s e x i s t i n g p r i o r t o J u l y 1,
1973 was i n s t i t u t e d . S e c t i o n s 85-2-211 t h r o u g h 85-2-243,
MCA. A d d i t i o n a l l y , a p p r o p r i a t i o n s of w a t e r r i g h t s a f t e r
J u l y 1, 1973 c o u l d o n l y be made t h r o u g h a n a p p l i c a t i o n and
p e r m i t p r o c e d u r e governed by t h e Department of N a t u r a l
Resources and C o n s e r v a t i o n . S e c t i o n s 85-2-301 t h r o u g h 85-2-
317, MCA.
P r i o r t o 1973, Montana c a s e law c o n s i s t e n t l y h e l d t h a t
a w a t e r r i g h t c o u l d be t r a n s f e r r e d and d i s p o s e d of a p a r t
from t h e l a n d t o which it was a p p u r t e n a n t . However, s u c h
t r a n s f e r could n o t adversely a f f e c t o t h e r vested r i g h t s .
See S h e r l o c k v. Greaves ( 1 9 3 8 ) , 106 Mont. 206, 76 P.2d 87;
Lensing v . Day and Hansen S e c u r i t y Co., supra.
The S u r f a c e and Groundwater Act made such t r a n s f e r
s u b j e c t t o review a s follows:
" ( 3 ) Without o b t a i n i n g p r i o r a p p r o v a l from
t h e d e p a r t m e n t , a n a p p r o p r i a t o r may -
-not
s e v e r -l-r = p a- - -a n a p p r o p r i a t i o n
al o rt of
r i g h t ---- n d t o which - - a p p u r t e n -
from t h e l a it i s
ant,
- ... The d e p a r t m e n t s h a l l approve t h e
proposed change i f i t d e t e r m i n e s t h a t t h e
proposed change w i l l n o t a d v e r s e l y a f f e c t
t h e r i g h t s of o t h e r persons. I f t h e depart-
ment d e t e r m i n e s t h a t t h e proposed change
might a d v e r s e l y a f f e c t t h e r i g h t s o f o t h e r
p e r s o n s , n o t i c e of t h e proposed change s h a l l
be g i v e n i n a c c o r d a n c e w i t h 85-2-307. If
t h e d e p a r t m e n t t h e n d e t e r m i n e s t h a t an o b j e c -
t i o n f i l e d by a p e r s o n whose r i g h t s may be
a f f e c t e d s t a t e s a v a l i d o b j e c t i o n t o t h e pro-
posed change, t h e d e p a r t m e n t s h a l l h o l d a
h e a r i n g t h e r e o n p r i o r t o i t s a p p r o v a l o r den-
i a l o f t h e proposed change. Objections s h a l l
meet t h e r e q u i r e m e n t s o f 85-2-308 ( 2 ) and h e a r -
i n g s s h a l l be h e l d i n a c c o r d a n c e w i t h 85-2-309."
S e c t i o n 85-2-403, MCA. (emphasis a d d e d . )
Respondent c o n t e n d s t h a t t h i s p r o v i s i o n was n o t i n t e n d e d
t o govern w a t e r r i g h t s p e r f e c t e d b e f o r e t h e J u l y 1, 1973,
effective date. However, s e c t i o n 85-2-403(3) does n o t
c o n t a i n s p e c i f i c l a n g u a g e which p r e c l u d e s i t s a p p l i c a t i o n t o
w a t e r r i g h t s p e r f e c t e d p r i o r t o J u l y 1, 1973. Other p r o v i s i o n s
c o n t a i n e d i n t h e S u r f a c e and Groundwater Act - c o n t a i n such
do
p r e c l u s i v e language. For example, s e c t i o n 85-2-404, MCA,
r e g a r d i n g abandonment of w a t e r r i g h t s s t a t e s :
" ( 1 ) I f a n a p p r o p r i a t o r c e a s e s t o u s e a11
o r a p a r t of h i s a p p r o p r i a t i o n r i g h t w i t h
t h e i n t e n t i o n of wholly o r p a r t i a l l y aban-
doning t h e r i g h t o r i f h e c e a s e s u s i n g h i s
appropriation r i g h t according t o i t s t e r m s
and c o n d i t i o n s w i t h t h e i n t e n t i o n of n o t
complying w i t h t h o s e t e r m s and c o n d i t i o n s ,
t h e a p p r o p r i a t i o n r i g h t s h a l l , t o t h a t ex-
t e n t , b e deemed c o n s i d e r e d abandoned and
s h a l l immediately e x p i r e .
" ( 2 ) I f an appropriator ceases t o use a l l
o r p a r t of h i s a p p r o p r i a t i o n r i g h t o r c e a s e s
using h i s appropriation r i g h t according t o
i t s terms and c o n d i t i o n s f o r a p e r i o d of 1 0
s u c c e s s i v e y e a r s and t h e r e was w a t e r a v a i l -
a b l e f o r h i s u s e , t h e r e s h a l l be a prima
f a c i e presumption t h a t t h e a p p r o p r i a t o r has
abandoned h i s r i g h t i n whole o r f o r t h e p a r t
n o t used.
" ( 3 ) T h i s s e c t i o n --t a p p l y t o e x i s t -
does n o
i n g r i g h t s u n t i l ---d e t e r m i n e d
t h e y have been
i n a c c o r d a n c e w i t h p a r t - of - c h a p t e r . "
2 - this
(emphasis a d d e d . )
I t i s c l e a r t h a t t h e l e g i s l a t u r e p r e c l u d e d a p p l i c a t i o n of
t h e S u r f a c e and Groundwater Act s t a t u t e s where i t deemed
such a c t i o n n e c e s s a r y . A c c o r d i n g l y , it was t h e l e g i s l a t u r e ' s
a p p a r e n t i n t e n t n o t t o p r e c l u d e a p p l i c a t i o n of s e c t i o n 85-2-
4 0 3 ( 3 ) , MCA, t o w a t e r r i g h t s e x i s t i n g p r i o r t o J u l y 1, 1973,
by v i r t u e of t h e f a c t t h a t language p r e c l u d i n g s u c h a p p l i c a t i o n
was n o t i n c l u d e d i n t h e s t a t u t e .
On r e h e a r i n g , Kunnemann c o n t e n d s t h a t a p p l i c a t i o n o f
s e c t i o n 85-2-403(3), MCA, of t h e S u r f a c e and Groundwater Act
t o w a t e r r i g h t s p e r f e c t e d b e f o r e t h e Act would v i o l a t e t h e
Montana C o n s t i t u t i o n . A r t i c l e I X , S e c t i o n 3, p r o v i d e s :
" (1) A l l e x i s t i n g r i g h t s t o t h e u s e of any
w a t e r s f o r any u s e f u l o r b e n e f i c i a l p u r p o s e
a r e h e r e b y r e c o g n i z e d and confirmed."
The s u b j e c t p r o v i s i o n of t h e Act d o e s n o t d e s t r o y t h e
r i g h t t o use water, thus v i o l a t i n g the c o n s t i t u t i o n a l provision.
R a t h e r , t h e Act e s t a b l i s h e s a p r o c e d u r e f o r review. The
Department of N a t u r a l R e s o u r c e s , under t h e A c t , c a n o n l y
deny t r a n s f e r i f o t h e r v e s t e d r i g h t s would be i n j u r e d . The
law h a s n o t been changed. The Department h a s simply been
g i v e n a r e v i e w t o d e t e r m i n e t h e same i s s u e t h a t c o u l d p r e v i o u s l y
have been d e t e r m i n e d o n l y by a D i s t r i c t C o u r t .
I n commenting upon t h e new p r o v i s i o n , Montana's n o t e d
w a t e r law a u t h o r i t y , A l b e r t S t o n e s a i d :
"The 1973 Water - A c t , R.C.M.,
Use - s e c t i o n 89-
892, c o n t i n u e s t h e p o l i c y of t h e r e p e a l e d
s e c t i o n 89-803, o n l y a d d i n g t h a t any change
must have t h e a p p r o v a l of t h e Department of
N a t u r a l Resources and C o n s e r v a t i o n . So t h e
c a s e law developed under t h e p r i o r code s e c -
t i o n s h o u l d remain a p p l i c a b l e t o t h e new sec-
tion." S e l e c t e d A s p e c t s of Montana Water Law,
p . 40.
W s e e nothing u n c o n s t i t u t i o n a l about applying t h e
e
mandated p r o c e d u r e t o r i g h t s p e r f e c t e d p r i o r t o t h e e f f e c t i v e
d a t e of t h e Act. T h e r e f o r e , we h o l d t h a t t h e owner of a
w a t e r r i g h t e x i s t i n g p r i o r t o J u l y 1, 1973, must s e e k t h e
a p p r o v a l of t h e Department of N a t u r a l Resources and C o n s e r v a t i o n
b e f o r e s e v e r i n g t h a t r i g h t from l a n d t o which i t i s a p p u r t e n a n t .
The r e s u l t o f o u r d e t e r m i n a t i o n i n v o l v i n g t h e f i r s t two
i s s u e s i s , t h a t ownership of t h e G r a n n i s w a t e r r i g h t and
d i t c h r i g h t was r e s e r v e d by r e s p o n d e n t Kunnemann. However,
t h e w a t e r r i g h t h a s remained a p p u r t e n a n t t o t h e l a n d conveyed
by Kunnemann t o F r a n k s and s o t h e r i g h t r e s e r v e d i s q u a l i f i e d .
Kunnemann must a p p l y t o t h e Department of N a t u r a l Resources
f o r p e r m i s s i o n t o s e v e r from t h e l a n d conveyed, t h e w a t e r
r i g h t which Kunnemann owns.
The same r a t i o n a l e a p p l i e s t o t h e McNiven w a t e r r i g h t .
The conveyance p a s s e d t i t l e , b u t t h e r i g h t t o u s e w i l l be
d e l a y e d u n t i l a p p r o p r i a t e a p p r o v a l i s g r a n t e d by t h e Department
of N a t u r a l Resources.
The r e s u l t o f t h i s o p i n i o n i s t o h o l d t h a t : (1) t h e
Montana S u r f a c e and Groundwater A c t , e x c e p t where i t i n d i c a t e s
a contrary i n t e n t , a p p l i e s t o water r i g h t s perfected p r i o r
t o t h e e f f e c t i v e d a t e of t h e A c t , and ( 2 ) f a i l u r e t o comply
w i t h t h e terms of t h e Act d o e s n o t r e n d e r a conveyance o r
r e s e r v a t i o n v o i d , b u t suspends a b i l i t y t o u s e t h e r i g h t
u n t i l t h e s t a t u t o r i l y mandated p e r m i s s i o n i s g r a n t e d by t h e
Department of N a t u r a l Resources.
Judgment i n f a v o r of Kunn d.
W e Concur:
J u s t i c e s John C . Sheehy and Fred J. Weber d i s s e n t i n g i n
part:
W a g r e e w i t h t h e r e s o l u t i o n of t h e f i r s t i s s u e by
e
t h e m a j o r i t y , t h a t Kunnemann i m p l i e d l y r e s e r v e d h i s
G r a n n i s w a t e r r i g h t and conveyed no r i g h t t o F r a n k s o r
h i s s u c c e s s o r s t o t a k e i r r i g a t i o n w a t e r o n t o t h e deeded
l a n d s through t h e G r a n n i s d i t c h a s i t r u n s t h r o u g h t h e non-
deeded p r o p e r t y r e t a i n e d by Kunnemann.
W e d i s a g r e e w i t h t h e c o n c l u s i o n of t h e m a j o r i t y t h a t
a p p r o v a l of t h e Department o f N a t u r a l Resources i s n e c e s s a r y
t o e f f e c t u a t e t h e t r a n s f e r by Kunnemann t o F r a n k s o r t h a t
any r i g h t t o Kunnemann t o u s e t h e r e m a i n i n g w a t e r i s " s e v e r e d "
and must have Department of N a t u r a l Resources a p p r o v a l .
A r e v i e w of b a s i c Montana w a t e r l a w i s u s e f u l t o demon-
s t r a t e our position.
W e b e g i n w i t h a reminder t h a t a w a t e r r i g h t and a
d i t c h r i g h t a r e separate e n t i t i e s , c a p a b l e of s e p a r a t e
ownership. Kunnemann c a n own a d i t c h r i g h t w i t h o u t a
mw-ky
water r i g h t , o r a water r i g h t without a d i t c h r i g h t . BWS~~F-
v. Missoula I r r . D i s t r i c t ( 1 9 3 1 ) , 90 Mont. 344, P.2d
; Connolly v . H a r r e l ( 1 9 3 6 ) , 102 Mont. 295, 57 P.2d 781;
McDonnell v. H u f f i n e ( 1 9 3 1 ) , 4 4 Mont. 4 1 1 , 1 2 0 P.2d 792. In
t h i s c a s e , Kunnemann s o l d t o F r a n k s t h a t p a r t o f t h e G r a n n i s
d i t c h t h a t was p a r t and p a r c e l of t h e d e c i d e d p r o p e r t y . He
r e s e r v e d t o h i m s e l f t h e Grannis w a t e r r i g h t which p r o v i d e d
w a t e r t o t h a t p o r t i o n of t h e G r a n n i s d i t c h . H e had a p e r f e c t
l e g a l r i g h t t o do s o , s i n c e Kunnemann c a n own a w a t e r r i g h t
without a d i t c h r i g h t .
B e f o r e t h e deed t o F r a n k s , Kunnemann, of c o u r s e , owned
a l l of t h e r e a l property involved here. H e owned a w a t e r
r i g h t t o 2 4 0 m i n e r ' s i n c h e s i n t h e G r a n n i s d i t c h and 450
m i n e r ' s i n c h e s i n t h e McNiven d i t c h . The d i t c h e s on h i s
l a n d s w e r e p a r t and p a r c e l of h i s ownership. The d i t c h e s
w e r e n o t " a p p u r t e n a n t " b e c a u s e t h e y were p a r t of t h e
r e a l e s t a t e t h a t Kunnemann owned. T h i s was e x p l a i n e d i n
Smith v. Denniff ( 1 9 0 0 ) , 2 4 Mont. 2 1 , 23, 2 4 , P.
a s follows:
"2. S e c t i o n 1078 of t h e C i v i l Code d e f i n e s
an 'appurtenance' a s follows: 'A thing is
deemed t o b e i n c i d e n t a l o r a p p u r t e n a n t t o l a n d
when i t i s by r i g h t used w i t h t h e l a n d f o r
i t s b e n e f i t , a s i n t h e c a s e of a way, o r w a t e r
c o u r s e , o r of a p a s s a g e f o r l i g h t , a i r o r h e a t
from o r a c r o s s t h e l a n d of a n o t h e r . ' A 'water
c o u r s e from o r a c r o s s t h e l a n d of a n o t h e r ' i s
a n easement, and by r e f e r e n c e t o s e c t i o n 1250
of t h e C i v i l Code i t i s p l a i n t h a t i n t h e
c o n t e m p l a t i o n of t h e Code a n a p p u r t e n a n c e t o
l a n d i s i n any and e v e r y c a s e an easement. For
example: A. owns a p a r c e l o f l a n d , t o i r r i g a t e
which he h a s l a w f u l l y a p p r o p r i a t e d and by
r i g h t is using, water. The d i t c h t h r o u g h which
t h e w a t e r i s conveyed i s a l s o owned by him, and
i s p a r t l y upon h i s l a n d and p a r t l y upon t h e l a n d
of B. The w a t e r r i g h t i s a n a p p u r t e n a n t t o A . ' s
l a n d , and t h a t p a r t o f t h e d i t c h which i s upon
B . ' s l a n d i s a n easement of A. t h e r e i n , and i s
a l s o a p p u r t e n a n t t o t h e l a n d of A . , b u t t h a t p a r t
of t h e d i t c h which i s upon A . ' s l a n d i s n o t
a p p u r t e n a n t t h e r e t o , b u t i s p a r t and p a r c e l o f
t h e land i t s e l f . "
Hence, i t i s c l e a r t h a t t h e p o r t i o n of t h e G r a n n i s
d i t c h t h a t l i e s upon t h e l a n d s s o l d t o F r a n k s i s n o t
" a p p u r t e n a n t " t o t h a t l a n d , b u t i s p a r t and p a r c e l of t h e
l a n d conveyed, F r a n k s r e c e i v e d no d i t c h r i g h t i n t h e G r a n n i s
d i t c h as a n " a p p u r t e n a n c e , " b e c a u s e F r a n k s g o t no r i g h t t o
convey i r r i g a t i o n w a t e r o v e r t h e r e m a i n i n g Kunnemann's l a n d
t h r o u g h t h e G r a n n i s d i t c h on t h a t l a n d . A d i t c h r i g h t on
t h e l a n d of a n o t h e r i s a n easement on t h e l a n d of t h e o t h e r ,
and an easement c a n n o t be c r e a t e d , g r a n t e d o r t r a n s f e r r e d
e x c e p t by o p e r a t i o n o f law, by a n i n s t r u m e n t i n w r i t i n g ,
by p r e s c r i p t i o n o r eminent domain.
The e f f e c t o f t h e deed from Kunnemann t o F r a n k s was
t o convey t o F r a n k s 230 m i n e r ' s i n c h e s o f w a t e r i n t h e
McNiven d i t c h , and t h e r i g h t t o t a k e w a t e r t o t h e deeded
l a n d s t h r o u g h t h e McNiven d i t c h o v e r t h e remaining Kunnemann
lands. By t h e deed, F r a n k s r e c e i v e d 230 m i n e r ' s i n c h e s
of McNiven w a t e r f o r m e r l y owned by Kunnemann, and a NcNiven
d i t c h r i g h t o v e r t h e r e m a i n i n g Kunnemann l a n d s a s a n
a p p u r t e n a n c e t o t h e l a n d s purchased by F r a n k s .
C a s t i l l o and C o t a n t are s u c c e s s o r s t o a p a r t of
t h e r i g h t s deeded by Kunnemann t o F r a n k s . They have no
o t h e r c l a i m upon Kunnemann, o r upon h i s remaining w a t e r o r
ditch rights. They c a n n o t g e t w a t e r t h r o u g h t h e G r a n n i s
d i t c h u n l e s s t h e y a c q u i r e (1) a w a t e r r i g h t which c a n be
d i v e r t e d a t t h e G r a n n i s d i v e r s i o n , and ( 2 ) a n easement o v e r
Kunnemann's r e m a i n i n g l a n d s t o c a r r y t h e w a t e r t h r o u g h t h e
G r a n n i s d i t c h o v e r Kunnemann's r e m a i n i n g l a n d s t o t h e l a n d s
owned by C o t a n t and C a s t i l l o .
A f u r t h e r r e s u l t of t h e deed t o F r a n k s by Kunnemann
i s t h a t F r a n k s g o t t h a t p o r t i o n of t h e G r a n n i s d i t c h which
was l o c a t e d upon t h e deeded l a n d s , b u t no w a t e r r i g h t b e c a u s e
t h e G r a n n i s w a t e r r i g h t was r e s e r v e d t o Kunnemann. When
C a s t i l l o and C o t a n t c l a i m e d w a t e r t h r o u g h t h e G r a n n i s d i t c h ,
t h e y w e r e c l a i m i n g w a t e r f o r which n e i t h e r t h e y n o r t h e i r
m u lac!
p r e d e c e s s o r F r a n k s had a w a t e r r i g h t . See ?4e4%kq-13. M i s s o u l a
I r r . D i s t r i c t , s u p r a , f o r a r e v e r s e of t h i s s i t u a t i o n .
C a s t i l l o and C o t a n t have no w a t e r r i g h t i n t h e G r a n n i s d i t c h
which i s a p p u r t e n a n t t o t h e l a n d s t h e y now own.
Kunnemann owned " e x i s t i n g r i g h t s , " t h a t i s w a t e r and
d i t c h r i g h t s which e x i s t e d p r i o r t o J u l y 1, 1973. W e disagree
t h a t t h e owner o f a n e x i s t i n g r i g h t may n o t t r a n s f e r a w a t e r
o r d i t c h r i g h t u n l e s s t h e Department of N a t u r a l Resources
approves. I n a r r i v i n g a t the opposite conclusion, t h e
m a j o r i t y r e l y upon a p o r t i o n of s e c t i o n 85-2-403, MCA, which
w e a g a i n q u o t e f o r t h e r e a d e r ' s convenience.
" (1) The right to use water under a permit
or certificate of water right shall pass
with a conveyance of the land or transfer
by operation of law, unless specifically
exempted therefrom. All transfers of interest
and appropriation rights shall be without loss
of priority.
"(2) The person receiving the appropriation
interest shall file with the Department notice
of the transfer on a form prescribed by the
Department.
"(3) Without obtaining prior approval from the
Department, an appropriator may not sever all
or any part of an appropriation right . . ."
We contend that the foregoing statute applies only
to water rights received under a permit or a certificate of
authority. It was not intended to apply to existing rights,
especially since existing rights were confirmed by 1972
Montana Constitution, Art. IX, § 3. The anomaly of the
majority relying on section 85-2-403, MCA is that the majority
hold in this case directly opposite to the provisions of
section 85-2-403(1). Under that subsection no implied
reservations are recognized. If that subsection applied
Kunnemann's rights to water from the Grannis ditch would have
passed by the deed to Franks because they were not "specifically
exempted therefrom. "
We are buttressed in our contention that section
85-2-403 does not apply to existing rights because in the
same part of the code, in section 85-2-401, MCA, it is provided
that priority of appropriations for existing rights are to
be determined by water courts.
Prior to July 1, 1973, an owner of a water right could
change the place of diversion, or place of use of his water
right, except only to the extent he may injure others by
such change. Section 89-803, R.C.M. 1947. These incidents
of ownership of water rights were confirmed by 1972 Montana
Constitution, Art. IX, § 3, or the constitutional
provision has no meaning. The majority takes away these
incidents unless the Department of Natural Resources gives
approval. Not only has the majority misconceived the intent
of the constitutional provision and the statutes adopted
thereafter, but they have placed in doubt the rights of
hundreds of water users in this state who have conveyed
or received conveyances of existing rights since July 1,
1973. Such a result is not necessary here, especially
since the process of adjudicating all water claims is now
in full swing before the water courts, when and where all
rights to the use and ownership of water will be determined.
Under our view of the law here, there is no conflict
with the state constitution, and we need not discuss such
an issue.
We would affirm the District Court - -
in toto,