No. 84-118
I N THE SUPREME COURT O THE STATE O MONTANA
F F
1935
E . E. EGGEBRECHT, I N C . ,
a Montana c o r p . ,
P l a i n t i f f and R e s p o n d e n t ,
OTIS S. WATERS, e t a l . ,
D e f e n d a n t s and A p p e l l a n t s .
APPEAL FROM: D i s t r i c t Court of t h e Seventh J u d i c i a l D i s t r i c t ,
I n and f o r t h e County o f McCone,
The H o n o r a b l e LeRoy McKinnon, J u d g e p r e s i d i n g .
COUNSEL O RECORD:
F
For Appellants:
B a x t e r L a r s o n a r g u e d , Wolf P o i n t , Montana
F o r Respondent :
Garden, McCann & S c h u s t e r ; G e r a r d M. Schuster argued,
Wolf P o i n t , Montana
Submitted: March 1 3 , 1385
Decided: August 8 , 1985
Filed: lggj
Mr. Justice John Conway Harrison delivered the Opinion of the
Court.
This is an appeal from a ludgment of the District
Court, Seventh Judicial District, McCone County, quieting
title to a parcel of land owned by E. E. Eggebrecht, Inc.
("Eggebrecht"), plaintiff and respondent, and defeating a
right of way for a reservoir site on that land held by Otis
S. and Ardis Waters and Waters, Inc. ("Waters"), defendants
and appellants. The land in question is situated in NE%, Sk,
Section 12, T. 24 N., Rge. 49 E., M.P.M., McCone County,
Montana.
Eggebrecht bought this land in 1973 under a contract
for deed. Waters own an adjacent parcel of land. In 1976,
Waters rebuilt a dam on Wolf Creek, a small stream that
bisects the two properties. The dam is located about
two-thirds of a mile to the east of the boundary with
Eggebrecht's land. The water backed by this dam is known as
the Wolf Creek reservoir. On several occasions since 1978
the water in the reservoir has covered a portion of
Eggebrechtls farmland. Since the amount of water in the
reservoir depends on both the extent of spring runoff and the
amount of irrigation required on Waters' land, the number of
Eggebrecht's acres flooded, as well as the length of time the
water has stood on those acres, has varied from one year to
the next. From 1978, the first year that water was backed
onto Eggebrechtls land, to 1983, the year this lawsuit was
filed, the maximum amount of Eggebrecht 's farmland affected
in any one year was twenty-five acres. Moreover, in no year
was this land rendered completely unproductive. Eggebrecht
was able to seed the affected acreage after the water reced-
ed, gathering, to be sure, considerably lower yields. In
addition to causing decreased productivity on some of
Eggebrecht's farmland, the water has at various times caused
Eggebrecht great inconvenience in moving machinery to a
particular field; he has at those times been forced to make
either an eight mile detour or pass through a neighbor's
cultivated field.
The reservoir right of way that is the focus of this
lawsuit was acquired by Waters' predecessor in interest
pursuant to sections 18-21 of a March 3, 1891, Act of Con-
gress entitled, "An act to repeal timber culture laws and for
other purposes." 4 3 U.S.C., $5 946-949 (1982). Under this
Act, canal companies and irrigation districts, formed for the
purpose of irrigation and drainage, and having filed the
necessary materials for the approval of the Secretary of the
Interior, were granted a right of way on the public lands for
the ground occupied by any ditch, canal, or reservoir they
constructed. A map of the land so occupied was to be filed
in the local land office and thereafter all lands burdened by
such a right of way were to pass subject to the right of way.
In this case the validity of the right of way acquired by
Waters' predecessor in interest is not questioned by
Eggebrecht and is not at issue. A copy of a map of the
reservoir filed as an application under the Act, along with a
copy of a letter from the Interior Department indicating that
the reservoir had been constructed and the "easement" earned,
was accepted by the District Court as evidence that the right
of way had properly vested. We find no reason to hold
otherwise.
Upon initial review this case appeared straightforward.
Waters and Eggebrecht agreed that the right of way for the
reservoir site should properly he designated an easement by
grant from the United States to Waters>redecessor in
interest. They further agreed that the reservoir site had
been used as a reservoir from 1910 (the year the first dam
was built) to 1938 (the year the last dam washed out) , but
that from 1938 to 1976 there was no dam and thus, obviously,
no reservoir. At oral argument it was conceded that the
issue presented was whether an easement by grant can be
abandoned by non-user.
We have discovered, however, in the course of our
review of this case that there is a great deal of confusion
over the nature of the reservoir right of way that was grant-
ed to Waters' predecessor in interest under the March 3,
1891, Act in question. In Kern River Co. v. United States
(1921), 257 U.S. 147, 152, 42 S.Ct. 60, 62, 66 L.Ed. 175,
178, the Court stated, "The right of way intended by the Act
was neither a mere easement nor a fee simple absolute, but a
limited fee on an implied condition of reverter in the event
the grantee ceased to use or retain the land for the purpose
indicated in the act." Unfortunately, this obscured both the
nature of the present interest held by the grantee and the
future interest held by the grantor.
With respect to the future interest, the use of the
term "reverter" is clearly in error. Several cases have held
that divestiture under the Act does not occur automatically
upon failure to use or retain the land for the purpose stated
in the Act, but must be d.etermined by a legal proceeding.
Hurst et al. v. Idaho-Iowa Lateral and Reservoir Co. (Idaho
1926), 246 P. 23; Hurst et al. v. Idaho-Iowa Lateral and
Reservoir Co. (Idaho 1921), 202 P. 1068; Carns v. Idaho-Iowa
Lateral and Reservoir Co. (Idaho 1921), 202 P. 1071; United
States v. Whitney (1910), 176 F. 593. The Idaho Court in
Hurst (1921) compounded the terminological error in Kern
River by characterizing the future interest retained by the
United States as a possibility of reverter. However, a basic
element of a possibility of reverter is that possession
reverts automatically upon the occurrence of an event named
in the granting instrument (in this case the Act of Con-
gress) . American - - Property, Vol. I,
Law of § 4.12; Boyer,
Survey of - - -of
the Law Property, 3d.ed., p. 105. Since it has
been held, even in the Hurst case, that there is no automatic
reversion under the Act in question, it is clear that the
United States did not retain a possibility of reverter.
Rather, the United States granted to Waters' predecessor in
interest a right of way in the reservoir site subject to the
condition that it be used for the purpose indicated in the
Act. Should it not be used for that purpose, then the United
States can choose to exercise a right of re-entry or a power
of termination, thereby causing a forfeiture of the right of
way.
We now turn to the nature of the present interest in
the reservoir site held by Waters. When the United States
Supreme Court in Kern River, supra, designated the present
interest under the Act in question a "limited fee" it was
relying on an earlier decision in Rio Grande Western Ry. Co.
v. Stringham (1915), 239 U.S. 44, 36 S.Ct. 5, 60 L.Ed. 136.
In Stringham the Court characterized a railroad right of way
obtained under a 1875 Act of Congress as a "limited fee."
239 U.S. at 47, 36 S.Ct. at 6, 60 L.Ed. at 138. The ration-
ale for this characterization was later severely criticized
by the Court in Great Northern Ry. Co. v. United States
(1942), 315 U.S. 262, 62 S.Ct. 529, 86 L.Ed. 836. In that
case the Court found that the railroad rights of way obtained
under the 1875 Act should properly have been designated
easements. It follows therefore that the designation in Kern
River, that the reservoir right of way under the 1891 Act is
a limited fee, rests on a shakey legal foundation. An
analysis of the limited fee/easement distinction as it
pertains to a reservoir right of way under the 1891 Act is
contained in United States v. Big Horn Land and Cattle Co.
(8th Cir. 1927), 17 F.2d 357. In that case it was emphasized
that a fee interest may be had in an easement. "We think,
it, therefore, not important whether interest or estate
passed be considered an easement or a limited fee. In any
event it is a limited fee in the nature of an easement." Big
- - - Cattle - 17 F. 2d at 365.
Horn Land and Co., We agree. Kern
River introduced unnecessary terminological confusion.
Therefore, we hold that, despite Kern River, there is no
useful distinction to be made between a limited fee and an
easement when describing the nature of a reservoir right of
way granted under the 1891 Act.
Since the reservoir right of way in question can safely
he characterized as an easement, we turn to the question of
whether the lower court erred when it determined that said
right of way had been abandoned. The rule in Montana is that
in order to constitute an abandonment an intent to abandon is
necessary. Hilyard v. Engel (1949), 123 Mont. 20, 209 P.2d
895; Conway v. Fabian (1939), 108 Mont. 287, 89 P.2d 1022;
Rodda v. Best (1923), 68 Mont. 205, 217 P. 669; Moore v.
Sherman (1916), 52 Mont. 542, 159 P. 966. Certainly, Waters
never communicated by word an intent to abandon the reservoir
right of way. Further, and contrary to the claim of
Eggebrecht, mere non-use of an easement by grant, no matter
how long continued, does not constitute abandonment. City of
Billings v. O.B. Lee Co. (1975), 168 Mont. 264, 542 P.2d 9 7 .
The mere fact that from 1938 to 1976 no dam was in place with
which to back water onto the reservoir site does not consti-
tute abandonment of the reservoir right of way. Whether 38
years of non-use constitutes grounds for forfeiture under the
Act is a question that can be raised only by the United
States and not by the patentees and their successors.
Wiltbank v. Lyman Water Company (Ariz. 1970), 477 P.2d 771.
The judgment of the District Court is reversed.
We concur:
Justices
District Judge, sitting in place
of Mr. Justice L. C. Gulbrandson
Mr. J u s t i c e F r e d J . Weber d i s s e n t s a s f o l l o w s :
I r e s p e c t f u l l y d i s s e n t from t h e b a s i c c o n c l u s i o n o f t h e
majority opinion that the question of non-use of the
r e s e r v o i r s i t e c a n he r a i s e d o n l y by t h e U n i t e d S t a t e s and
not by the patentees and their successors in interest. I
c o n c l u d e t h a t t h e s u c c e s s o r i n i n t e r e s t t o t h e p a t e n t e e from
t h e United S t a t e s h a s t h e c a p a c i t y t o r a i s e t h e q u e s t i o n o f
non-use .
I n concluding t h a t it i s o n l y t h e U n i t e d S t a t e s w h i c h
can seek a forfeiture, the majority opinion relies upon
W i l t b a n k v. Lyman Water Company ( A r i z . C t . A p p . 1 9 7 0 ) , 477 P.2d
771. T h e r e a r e s i g n i f i c a n t d i f f e r e n c e s between t h e W i l t b a n k
f a c t s and t h o s e i n t h e p r e s e n t c a s e . I n Wiltbank, t h e United
S t a t e s government s i m u l t a n e o u s l y g r a n t e d r e s e r v o i r r i g h t s and
the right to enough water to fill the reservoir to its
maximum h e i g h t and t o k e e p i t f i l l e d i f p o s s i b l e . The i s s u e s
i n W i l t b a n k i n c l u d e d b o t h t h e r e s e r v o i r s i t e and t h e r i g h t t o
t h e water t o f i l l t h e reservoir. The A r i z o n a c o u r t c o n c l u d e d
t h a t i t would b e a b s u r d t o a l l o w a r e s e r v o i r r e v e r s i o n t o t h e
f e d e r a l government and n o t i n c l u d e t h e w a t e r r i g h t s t o f i l l
it. The c o u r t f u r t h e r concluded t h a t t h e r e s e r v o i r and t h e
n e c e s s a r y w a t e r r i g h t s b o t h made up t h e l i m i t e d f e e w h i c h was
retained by the United States and not granted to the
patentee. Based upon t h a t c o n c l u s i o n , t h e A r i z o n a c o u r t h e l d
that any forfeiture or abandonment is strictly an issue
b e t w e e n t h e l i m i t e d f e e h o l d e r and t h e U n i t e d S t a t e s a s t h e
grantor with reverter rights. I do n o t f i n d Wiltbank t o be
persuasive authority in the present c a s e which deals only
w i t h a r e s e r v o i r s i t e and no q u e s t i o n h a s been r a i s e d a s t o
t h e r i g h t t o t h e use of water i t s e l f .
I would a d o p t t h e r a t i o n a l e used by t h e I d a h o Supreme
C o u r t i n H u r s t v. Idaho-Iowa Lateral & R e s e r v o i r Co. (Idaho
1921), 202 P. 1.068. In Hurst the appellants claimed an
e a s e m e n t i n l a n d f o r a c a n a l and r e s e r v o i r g r a n t e d u n d e r t h e
same a c t o f C o n g r e s s o f March 3 , 1 8 9 1 , d e s c r i b e d i n o u r own
case. I n H u r s t t h e r e s p o n d e n t a s t h e o w n e r s o f t h e l a n d upon
w h i c h t h e r e s e r v o i r was l o c a t e d , s o u g h t a d e c l a r a t i o n b y t h e
I d a h o c o u r t t h a t t h e e a s e m e n t i n t h e l a n d s had b e e n f o r f e i t e d
and abandoned. I n g r a n t i n g a new t r i a l , t h e I d a h o Supreme
Court r e f e r r e d t o t h e contention t h a t o n l y t h e United S t a t e s
may a c t :
"The c o n t e n t i o n i s made t h a t o n l y t h e U n i t e d S t a t e s
c a n t a k e a d v a n t a g e o f f o r f e i t u r e , and t h a t i f
appellant failed t o use its reservoir site f o r t h e
purposes of the grant, private parties like
r e s p o n d e n t s c a n n o t q u i e t t i t l e i n t h ~b s e n c e o f
a
any a c t i o n by t h e United S t a t e s . . ..This i s t h e
o n l y q u e s t i o n w h i c h w e deem it n e c e s s a r y t o
c o n s i d e r on t h i s appeal." H u r s t , 2 0 2 P. a t 1 0 6 9 .
The Idaho Supreme C o u r t concluded that the disposition by
patent carried a l l of t h e i n t e r e s t o f t h e United States in
the land, including the right to declare a reversion,
stating:
" W e t h i n k it was t h e i n t e n t i o n o f C o n g r e s s i n
making p r o v i s i o n f o r t h e d i s p o s i t i o n o f p u b l i c
l a n d s , o v e r w h i c h r i g h t s o f way f o r r e s e r v o i r s and
c a n a l s have been g r a n t e d s u b j e c t t o such r i g h t s o f
way, t h a t s u c h d i s p o s i t i o n s h o u l d c a r r y w i t h it a l l
t h e i n t e r e s t o f t h e United S t a t e s i n t h e l a n d ,
including t h e reversion i n case of breach of
c o n d i t i o n s s u b s e q u e n t o r i n c a s e o f abandonment.
The n a t u r a l c o n s t r u c t i o n o f t h e l a n g u a g e o f t h e
s t a t u t e leads t o t h i s conclusion. No s u f f i c i e n t
r e a s o n i s s u g g e s t e d which r e q u i r e s a d i f f e r e n t
construction. It i s t h e p o l i c y o f t h e United
S t a t e s t o make f i n a l d i s p o s i t i o n o f i t s l a n d s a n d
s u b j e c t them t o t h e j u r i s d i c t i o n o f t h e s t a t e s i n
which they are situated, unless some public
i n t e r e s t r e q u i r e s a c o n t i n u a t i o n o f governmental
control." H u r s t . 202 P. a t 1 0 7 0 .
7: a p p r o v e the foregoing analysis. There i s nothing i n t h e
federal s t a t u t e s o r r e g u l a t i o n s which s u p p o r t s t h e m a j o r i t y
c o n c l u s i o n t h a t t h e r i g h t o f r e v e r s i o n was t o remain v e s t e d
i n t h e United S t a t e s . There i s no i n t e n t i o n t o r e s e r v e i n
t h e p a t e n t from t h e U n i t e d S t a t e s . T h e r e i s no p u b l i c p o l i c y
suggested in the present case which makes a reservation
appropriate.
I would therefore conclude that as a result of the
i s s u a n c e of t h e United States patent, t h e p a t e n t e e and h i s
s u c c e s s o r s i n i n t e r e s t h a v e s u c c e e d e d t o t h e r i g h t t o claim a
Mr. J u s t i c e Frank B. Morrison, J r . d i s s e n t s a s follows:
I r e s p e c t f u l l y d i s s e n t t o t h e majority opinion.
F i r s t , I b e l i e v e t h e Court has e r r e d i n i t s treatment of
the reversion issue. The m a j o r i t y s t a t e s :
" I n Kern River Co. v. U n i t e d S t a t e s ( 1 9 2 , 257
U.S. 1 4 7 , 1 5 2 , 42 S . C t . 6 0 , 62, 66 L.Ed. 1 7 5 , 1 7 8 ,
t h e C o u r t s t a t e d , 'The r i g h t o f way i n t e n d e d by t h e
A c t was n e i t h e r a mere e a s e m e n t n o r a f e e s i m p l e
a b s o l u t e , b u t a l i m i t e d f e e on a n i m p l i e d c o n d i t i o n
o f r e v e r t e r i.n t h e e v e n t t h e g r a n t e e c e a s e d t o u s e
o r r e t a i n t h e land f o r t h e purpose i n d i c a t e d i n t h e
a c t . "'
Thus, i n 1 9 2 1 , t h e U n i t e d S t a t e s Supreme C o u r t h e l d t h a t
the grant here in question was subject to a reversionary
i n t e r e s t and i n t h e e v e n t t h e g r a n t e e c e a s e d t o u s e t h e l a n d
for reservoir purposes, the reversion would occur. The
e f f e c t h e r e would b e t h a t p r e d e c e s s o r s i n i n t e r e s t t o W a t e r s ,
when they ceased to use the land for reservoir purposes,
triggered the reversion, automatically reinvesting t h e fee
i n Eggebrecht's predecessors. Of c o u r s e , t h i s would r e q u i r e
a f f i r m i n g t h e d i s t r i c t c o u r t judgment i n f a v o r o f E g g e b r e c h t .
To a v o i d t h i s r e s u l t t h e m a j o r i t y h a s t r e a t e d t h e r e v e r s i o n
a s a condition subsequent r e q u i r i n g r e e n t r y f o r purposes of
effectuating a forfeiture. Since Eggebrechts d i d n o t r e e n t e r
and effectuate a forfeiture, under t h e majority rationale,
they failed.
L e t u s examine t h e means u s e d t o r e a c h a r e v e r s a l . This
Court has disagreed with t h e d e c i s i o n o f t h e United States
Supreme C o u r t i n Kern R i v e r Co. v . U n i t e d S t a t e s , s u p r a . The
majority opinion s t a t e s :
"With r e s p e c t t o t h e f u t u r e i n t e r e s t , t h e u s e o f
t h e t e r m 'reverter' i s c l e a r l y i n e r r o r . Severa 1
c a s e s have h e l d t h a t d i v e s t i t u r e u n d e r t h e A c t d o e s
n o t o c c u r a u t o m a t i c a l l y upon f a i l u r e t o u s e o r
r e t a i n t h e land f o r t h e purpose s t a t e d i n t h e A c t ,
b u t must b e d e t e r m i n e d by a l e g a l p r o c e e d i n g .
H u r s t e t a l . v . Idaho-Iowa L a t e r a l and R e s e r v o i r
Co. ( I d a h o 1 9 2 6 ) , 246 P.23; Hurst e t a l . v.
Idaho-Iowa L a t e r a l a n d R e s e r v o i r Co. ( I d a h o 1921) ,
202 P. 1068; C a r n s v . Idaho-Iowa L a t e r a l and
R e s e r v o i r Co. ( I d a h o 1 9 2 1 ) , 202 P. 1-071; U n i t e d
S t a t e s v . Whitney ( 1 9 1 0 ) , 176 F. 593 . . ."
We must bear in mind that the United States Supreme
C o u r t was i n t e r p r e t i n g a f e d e r a l law i n t h e K e r n R i v e r c a s e
and i t s d e c i s i o n i s n o t s u b j e c t t o q u e s t i o n by t h e s e v e r a l
states. F u r t h e r m o r e , most o f t h e a u t h o r i t i e s c i t e d p r e d a t e
t h e Kern R i v e r d e c i s i o n .
In this case the United States had a reversionary
interest in the subject real property. When the United
States patented this real estate to Eggebrecht's
predecessors, t h e y received a l l elements of f e e simple t i t l e
i n c l u d i n g t h e r e v e r s i o n a r y i n t e r e s t i n t h e dominant e s t a t e .
T h e r e f o r e , when t h e r e s e r v o i r c e a s e d t o b e used f o r r e s e r v o i r
purposes, t i t l e r e v e r t e d t o t h e Eggebrechts.
Assuming arguendo that title remained in t h e Waters'
predecessors subject to a right of reentry for condition
broken, n e v e r t h e l e s s abandonment c o u l d h a v e o c c u r r e d . That
i s p r e c i s e l y what t h e t r i a l c o u r t found. Our o n l y f u n c t i o n
is to determine whether there is substantial credible
evidence i n t h e record t o support t h e finding of t h e t r i a l
court.
The m a j o r i t y o p i n i o n h o l d s t h a t : "Mere non-use of an
e a s e m e n t by grant, no m a t t e r how long continued, does n o t
c o n s t i t u t e abandonment." T h e r e i s o l d Montana law t o s u p p o r t
t h a t s t a t e m e n t b u t t h e t r e n d o f d e c i s i o n s h a s been t o t r e a t
non-use a s some e v i d e n c e o f abandonment. I n 79 F.anch, Inc.
v. Pitsch (1983), 666 P.2d 215, 40 St.Rep. 981, we held
e v i d e n c e o f e x t e n d e d non u s e c r e a t e d a r e b u t t a b l e p r e s u m p t i o n
o f abandonment:
"The D i s t r i c t C o u r t found t h a t t h e w a t e r
r i g h t s c l a i m e d by P i t s c h and 79 Ranch had
b e e n abandoned b e c a u s e t h e w a t e r had n o t
been u s e d f o r a t l e a s t f o r t y , and p e r h a p s
as many as sixty successive years.
P i t s c h and 79 Ranch a r g u e t h a t t h e mere
showing of nonuse even for a long period
of time, is not sufficient to support a
finding of abandonment. We disagree.
"Abandonment of a water right is a ques-
tion of fact. Section 89-802, Revised
Codes of Montana, 1947, (applicable hero,
repealed in 1973).
- Our scope of review
-
is therefore limited to determining
whether there is sufficient evidence to
support the District Court's findings.
Bagnell v. Lemery (1983), .
Mont
, 657 P.2d 608, 40 St.Rep. 58. Forty
years of nonuse is strong evidence - -
of an
- -
intentto abandona water right, - -and, in
effect, raises - rebuttable presumption
a
of abandonment.
- Because Pitsch and 79
Ranch have failed to rebut this presump-
tion, the District Court's finding must
be affirmed. " (Emphasis added)
Although we are not dealing with a water right but
rather with a limited fee, it would seem analogous. Although
I do not think we need to decide the question of abandonment,
there is sufficient evidence in the record to support the
finding of the trial court in this respect which provides
further basis for affirmance.
In summary, I would affirm the decision of the trial
judge .