No. 83-281
I N THE SUPREME COURT OF THE STATE O F MONTANA
1985
I N THE MATTER O F THE ADJUDICATION
OF THE E X I S T I N G RIGHTS TO THE USE
OF ALL THE WATER, BOTH SURFACE AND
UNDERGROUND, WITHIN THE POWDER R I V E R
DRAINAGE AREA, INCLUDING ALL TRIBU-
T A R I E S O F THE POWDER R I V E R I N CARTER,
CUSTER, FALLON, P R A I R I E , and POWDER
R I V E R COUNTIES, MONTANA,
DEPARTMENT O F STATE LANDS,
O b j e c t o r and A p p e l l a n t ,
-vs-
WALTER P E T T I B O N E , DAVID and MELINDA
B L I S S , ERNEST and PEGGY TOOKE,
.
GIACOMETTE RANCH, P J. RANCH, ELMER
OEDEKOVEN, E . MIORY HUBBARD, CINCH
BUCKLE RANCH, MALLET CATTLE COMPANY,
ROBERT F . HARDY TRUST, ALVIN and HELEN
I R I O N , HARDY LAND & LIVESTOCK COMPANY,
and BALES RAPJCH,
C l a i m a n t s and R e s p o n d e n t s .
APPEAL FROM: T h e Water C o u r t s of t h e S t a t e of Montana,
The Yellowstone Division-Powder River Basin,
T h e H o n o r a b l e W.W. L e s s l e y , C h i e f Judge.
COUlJSEL OF RECORD:
For A p p e l l a n t :
L y l e M a n l e y argued, D e p t . of S t a t e L a n d s , I i e l e n a ,
Montana; J o h n F . N o r t h , D e p t . of S t a t e L a n d s
F o r Respondents:
J o h n C a r r argued f o r B l i s s & B a l e s Ranch, Miles City,
Montana
F o r Amicus Curiae:
A l b e r t W. S t o n e , U of M L a w S c h o o l , M i s s o u l a , M o n t a n a
G o u g h , Shanahan, Johnson & W a t e r m a n ; R o n a l d F . W a t e r m a n
argued f o r M o n t a n a S t o c k g r o w e r s A s s o c . , H e l e n a ,
Montana
Submitted: February 21, 1985
Decided: June 1 8 , 1985
Filed: -1UM 1 : 1985
Clerk
M r . J u s t i c e L. C. Gulbrandson d e l i v e r e d t h e Opinion o f the
Court.
The State of Montana appeals from the Powder River
Final Decree holding title to certain water rights to be
vested i n respondents. We reverse.
The State of Montana, Department of State Lands,
objected to the portion of the Powder River Preliminary
Decree that awarded title of certain water rights to the
above-named respondents, all lessees o f S t a t e school trust
lands. A l l of the factual disputes, a s t o flow, s o u r c e and
place of d i v e r s i o n and p l a c e of use w e r e resolved p r i o r t o
t h e h e a r i n g on t h e S t a t e o b j e c t i o n h e l d November 24, 1982.
The h e a r i n g w a s c o n f i n e d s o l e l y t o t h e f o l l o w i n g q u e s t i o n o f
law:
Does t i t l e t o t h e w a t e r r i g h t v e s t i n t h e
l e s s e e o r t h e S t a t e o f Montana a s owner
o f t h e l a n d where t h e w a t e r i s d i v e r t e d ?
On A p r i l 4 , 1 9 8 3 , The W a t e r C o u r t s Judgment--The Powder
R i v e r F i n a l Decree, was i s s u e d . It h e l d t h a t t h e t i t l e t o
t h e w a t e r s d i v e r t e d on S t a t e s c h o o l t r u s t l a n d s v e s t s i n t h e
lessee, and n o t t h e S t a t e .
The S t a t e appealed t h i s portion of t h e F i n a l Decree.
The a p p e a l was f i r s t h e a r d b y t h i s C o u r t on J a n u a r y 1 3 , 1 9 8 4 .
Subsequently, by Order of March 26, 1984, w e d i r e c t e d the
parties to rebrief the case, and to address certain
questions. Because o f t h e broad significance of t h i s case,
we a l s o s o l i c i t e d amicus c u r i a e p a r t i c i p a t i o n . The p a r t i e s ,
and several amici, submitted supplemental briefs, and the
m a t t e r was a g a i n h e a r d on J a n u a r y 2 5 , 1 9 8 5 .
There a r e twenty-three water rights involved in this
a p p e a 1. They generally fa11 into one of the following
categories:
1) G r o u n d w a t e r W e l l s : Four r i g h t s are
from g r o u n d w a t e r w e l l s . Three o f the
w e l l s a r e on s c h o o l t r u s t l a n d s , a n d u s e d
wholly thereon. One s t r a d d l e s t h e b o r d e r
between a state-owned and p r i v a t e l y - o w n e d
s e c t i o n , a n d i s u s e d on b o t h .
2) Developed S p r i n g s : Three r i g h t s a r e
i n developed s p r i n g s f o r s t o c k watering.
The s p r i n g s , a n d t h e i r u s e s , a r e c o n f i n e d
t o the school t r u s t lands.
3) Diversions o f T r i b u t a r i e s : Fifteen
r i s h t s a r i s e f r o m d i v e r t i n s named o r
unnamed t r i b u t a r i e s o f l a r g e r - c r e e k s . In
most, t h e a p p r o p r i a t o r has c o n s t r u c t e d a
s m a l l dam on t h e t r i b u t a r y c r e a t i n g a
small reservoir f o r stock watering. In
some i n s t a n c e s , w a t e r c o n t i n u e s t o f l o w
from t h e r e s e r v o i r s t o t h e l a r g e r c r e e k .
One of t h e r i g h t s i n v o l v e s a d r a w o f
w a t e r f r o m t h e Powder R i v e r d e v o t e d t o
i r r i g a t i o n , not stockwatering.
Thirteen o f t h e s e d i v e r s i o n s occur wholly
on s c h o o l trust lands with the use
confined thereon. One r i g h t i s i n a
r e s e r v o i r on s t a t e l a n d t h a t s e r v e s b o t h
t h e s t a t e s e c t i o n and an a d j a c e n t p r i v a t e
section. The l a s t o f t h e s e r i g h t s i s a n
a p p r o p r i a t i o n used f o r i r r i g a t i o n . In
t h a t c a s e , t h e d i v e r s i o n i s on s t a t e
l a n d , a n d t h e u s e i s on b o t h s t a t e and
p r i v a t e land.
4 ) Direct U s e : One right is in an
undevelosed sprins and its drainaqe
a d j a c e n t - t o a -creek i n t h e Powder ~ i v e r
drainage. The s p r i n g , a n d i t s u s e , i s
confined t o t h e school t r u s t land. This
r i g h t h a s t h e o l d e s t p r i o r i t y d a t e o f any
a t i s s u e h e r e , O c t o b e r 1, 1 8 8 3 .
According t o t h e d e c r e e s a s s o c i a t e d w i t h t h e s e r i g h t s ,
each i s e x e r c i s e d year-round; a l t h o u g h i n t i m e s of d r o u g h t ,
t h i s may n o t b e p o s s i - b l e .
The l a n d s upon w h i c h t h e s e w a t e r r i g h t s l i e a r e t h o s e
that were granted to the State of Montana by the Federal
Government i n t h e Montana E n a b l i n g A c t . A c t of February 22,
1889, ch. 180, 25 S t a t . 676. Originally, these lands were
s e t a s i d e i n t h e Montana T e r r i t o r y O r g a n i c A c t , A c t of May
26, 1864, ch. 95, 13 S t a t . 8 5 , which provided t h a t s a i d l a n d s
w e r e "reserved f o r t h e purpose of being applied t o schools"
ch. 95, section 14, 13 S t a t . 9 1 i n t h e Montana Territory.
The E n a b l i n g Act granted these lands to the state on the
following t e r m s :
" S e c t i o n 1 0 . T h a t upon t h e a d m i s s i o n o f
each o f s a i d S t a t e s i n t o t h e Union
s e c t i o n s numbered s i x t e e n and t h i r t y - s i x
in every township of said proposed
S t a t e s , and where s u c h s e c t i o n s , o r any
parts thereof, have been sold or
o t h e r w i s e d i s p o s e d o f by o r u n d e r t h e
a u t h o r i t y o f any a c t o f C o n g r e s s , o t h e r
lands equivalent thereto, in legal
s u b d i v i s i o n s o f n o t less t h a n o n e - q u a r t e r
s e c t i o n , and a s c o n t i g u o u s a s may b e t o
t h e s e c t i o n i n l i e u o f which t h e same i s
taken, a r e hereby granted t o s a i d S t a t e s
f o r t h e s u p p o r t o f common s c h o o l s .
" S e c t i o n 11. T h a t all lands herein
granted f o r e d u c a t i o n a l purposes s h a l l be
d i s p o s e d o f o n l y a t p u b l i c s a l e , and a t a
p r i c e n o t less t h a n t e n d o l l a r s p e r a c r e ,
t h e p r o c e e d s t o c o n s t i t u t e a permanent
s c h o o l f u n d , t h e i n t e r e s t o f which o n l y
s h a l l b e expended i n t h e s u p p o r t o f s a i d
schools. But s a i d l a n d s may, u n d e r s u c h
regulations a s the legislatures shall
prescribe, be leased ... " c h . 1 8 0 , 25
s t a t . 679.
The 1889 Montana C o n s t i t u t i o n a c c e p t e d t h e s e l a n d s and
p r o v i d e d t h a t t h e y would be h e l d i n t r u s t c o n s o n a n t w i t h t h e
t e r m s o f t h e E n a b l i n g A c t , Montana C o n s t i t u t i o n o f 1 8 8 9 , a r t .
XVII, sec. 1. The 1972 Montana C o n s t i t u t i o n c o n t i n u e d t h e s e
t e r m s , Mont. C o n s t . a r t . X , sec. 11, c h . 1. See a l s o s e c t i o n
77-1-202, MCA (school lands held i n t r u s t f o r t h e support of
education) .
The d u t y o f administering t h e school trust lands is
p l a c e d upon t h e Board o f Land Commissioners ( B o a r d ) . Section
77-1-202(l), MCA p r o v i d e s that "The b o a r d shall administer
t h i s t r u s t t o secure the l a r g e s t measure o f l e g i t i m a t e and
reasonable advantage t o t h e S t a t e . " Pursuant t o 77-1-301(1),
MCA, t h e Department o f S t a t e Lands, (DSL) u n d e r t h e d i r e c t i o n
of t h e B o a r d , " . . . has charge o f t h e s e l e c t i n g , exchange,
classification, appraisal, leasing, management, sale, or
other disposition of s t a t e lands" The Department o f State
Lands has also promulgated regulations governing the
management, sale or lease of school trust lands. See
g e n e r a l l y T i t l e 2 6 , A.R.M.
Each of the respondents is a lessee of one o r more
sections of school trust lands. The DSL, by statute,
sections 77-6-115 and 77-6-301 and -302, MCA, and by
r e g u l a t i o n S26-3.123, A.R.M., a l l o w s lessees t o d i v e r t w a t e r s
on t h e l e a s e h o l d , d e v e l o p t h e m , a n d p u t t h e m t o u s e on o r o f f
that land. None o f t h e r i g h t s a t i s s u e i n t h i s case w e r e
perfected pursuant to the a b o v ~ mentioned statutes or
regulations. Rather, t h e l e s s e e s claim t h e s e r i g h t s a s "use
rights," which have l o n g been recognized i n t h i s S t a t e , see
M u r r a y v. T i n g l e y ( 1 8 9 7 ) , 20 Mont. 2 6 0 , 5 0 P. 723, and S t o n e ,
Montana W a t e r Law f o r t h e 1 9 8 0 1 s , p . 3, (1981 ed.)
These r i g h t s a r e a t i s s u e because of t h e g e n e r a l w a t e r
r i g h t s a d j u d i c a t i o n underway i n Montana. T h i s p r o c e s s began
with t h e p a s s a g e o f t h e Montana W a t e r U s e A c t o f 1973, ch.
452, L. 1973. The l e g i s l a t u r e e n a c t e d t h e Water U s e A c t i n
response to the chaos o f p r e v i o u s Montana water law. See
Stone, -
The Long Count on Dempsey: No
- Final Decision
i n Water R i g h t s A d j u d i c a t i o n , 3 1 Mont.L.Rev. 1 (1969); Stone,
A r e T h e r e Any A d j u d i c a t e d S t r e a m s - M o n t a n a ?
in 1 9 Mont.L.Rev.
19 ( 1 9 5 7 ) . I t set up a system o f g e n e r a l s t r e a m a d j u d i c a t i o n
administered by the Department of Natura 1 Resources and
Conservation (DNRC) and a l s o provided, from that time on,
t h a t t h e s t a t u t o r y m e t h o d w a s t h e e x c l u s i v e way t o a c q u i r e a
water right.
Prior to 1973, there were two possible ways of
perfecting a water right. F i r s t was t h e method p r o v i d e d f o r
by statute; p o s t i n g a t t h e p o i n t o f d i v e r s i o n and f i l i n g a
notice with the county clerk, Mont. Laws 1885, secs. 6
through 10; R.C.M. (1947), 89-810 t h r o u g h 814. Second was
simply by putting the water to use, Murray v. Tingley, supra.
The 1885 Act did not provide for any general adjudication of
streams. Nor did it provide any mechanism by which actual
uses, as opposed to claimed uses, could be ascertained. As
Professor Stone, in Montana Water - - - 1980's states,
Law for the
the problems the legislature addressed in 1973 were many:
"It [the old water rights system under
the 1885 Act] merely provided for
isolated lawsuits between particular
water users over their individual rights
in isolated parts of streams. The
statute resulted only in piecemeal
litigation, often repetitive and among
the same neighbors, over and over again
disputing one another's claims.
[Citations omitted.] It did not lead to
security in one's property rights nor to
finality in determining the fair and
legal distribution of water among
neighboring claimants.
"But not only were the individual water
users ill-served by this failure to
establish water rights; the public
interest also required an inventory of
the state's water needs so that future
negotiations or dealings with downstream
states could allocate the waters of our
interstate rivers." Stone, supra at p.
4.
The system of adjudication established by the 1973 Act
soon encountered difficulties. First, it required the DNRC
to physically inspect or discover all water rights. It soon
became evident that this process would take a very long time.
Six years after the 1973 Act was passed, the inspection and
adjudication of the Powder River Basin, one of the smallest
and relatively simplest in the State, was still in its
initial stages. Second, the 1973 Act did not provide for the
adjudication of federally reserved rights--presenting the
spectre of concurrent, wasteful and possibly inconsistent
litigation in the Federal Courts.
Responding to the shortcomings of the 1973 Act, the
1979 Montana Legislature enacted Senate Bill 76, ch. 697 L.
1979. It established a system of water courts and put upon
a p p r o p r i a t o r s and u s e r s t h e b u r d e n o f f i l i n g c l a i m s f o r t h e i r
rights. I t a l s o p r o v i d e d f o r r e s e r v e d w a t e r r i g h t s and s e t
up a Compact Commission t o n e g o t i a t e t h e f e d e r a l and I n d i a n
reserved rights. Ch. 697, s e c . 27, I.
, 1979.
The Water Court system is charged with the final
adjudication of water r i g h t s . Rased upon t h e c l a i m s f i l e d by
users and appropriators, the court issues temporary
preliminary decrees cataloging the various rights and
p r i o r i t i e s i n the respective basin. All named o r a f f e c t e d
p a r t i e s have, a t that time, an o p p o r t u n i t y t o o b j e c t t o t h e
temporary p r e l i m i n a r y decree. I f no o b j e c t i o n s a r e r a i s e d ,
t h e t e m p o r a r y d e c r e e i s made f i n a l . O b j e c t i o n s a r e h e a r d and
a d j u d g e d by t h e Water C o u r t , w i t h t h e r i g h t o f a p p e a l t o t h i s
Court.
T h i s i s t h e f i r s t a p p e a l we h a v e been c a l l e d on t o h e a r
from a f i n a l d e c r e e o f t h e Water C o u r t . I n reviewing t h i s ,
and subsequent final decrees, we will apply the same
s t a n d a r d s o f r e v i e w a s any o t h e r a p p e a l from a D i s t r i c t C o u r t
order.
The q u e s t i o n w e c o n s i d e r i s : Who i s t h e owner o f a
w a t e r r i g h t d i v e r t e d o r d e v e l o p e d on s c h o o l t r u s t l a n d ; the
State o r the lessee?
W hold t h a t t i t l e t o t h e s e water r i g h t s v e s t s i n t h e
e
State. The lessee, in making appropriations on and for
s c h o o l t r u s t s e c t i o n s , i s a c t i n g on b e h a l f o f t h e S t a t e . It
i s o n l y t h r o u g h s t a t e a c t i o n t h a t t h e lessee i s on t h e l a n d ,
and Montana law e x p r e s s l y p r o v i d e s t h a t t h e lessee s h a l l b e
r e i m b u r s e d f o r a l l c a p i t a l e x p e n d i t u r e s made i n p u t t i n g t h e
water t o b e n e f i c i a l use. The l e s s e e , u n d e r t h e t e r m s o f t h e
lease, i s simply e n t i t l e d t o t h e - o f water appurtenant t o
use
t h e school t r u s t land. The S t a t e i s t h e b e n e f i c i a l u s e r o f
t h e w a t e r , and i t s d u t y a s t r u s t e e o f t h e s c h o o l t r u s t l a n d s
p r o h i b i t s it f r o m a l i e n a t i n g a n y i n t e r e s t i n t h e l a n d , such
as the appurtenant water right, without receiving full
compensation t h e r e f o r .
The school trust lands are endowments by the United
S t a t e s t o t h e S t a t e o f Montana f o r t h e b e n e f i t of t h e common
schools. A major policy of the fledgling nation was to
f o s t e r p u b l i c e d u c a t i o n by g r a n t s o f l a n d t o newly a d m i t t e d
s t a t e s f o r t h a t purpose. Each o f t h e t h i r t y s t a t e s c a r v e d
o u t o f t h e p u b l i c domain r e c e i v e d s u c h g r a n t s , v a r y i n g i n t h e
quantity granted, and t e r m s o f t h e g r a n t , a s n a t i o n a l p o l i c y
and political winds dictated. See g e n e r a l l y Woodgerd and
McCarthy, S t a t e School T r u s t s - - - - Royalty Rates,
and O i l a n d Gas
3 Pub.Land L.Rev. 1 (1982).
Montana was a d m i t t e d t o t h e Union in 1889 a l o n g w i t h
Washington, North Dakota, and South Dakota. The Omnibus
Enabling A c t , supra, r e f l e c t s t h e g e n e r a l p o l i c y o f Congress
as s e t o u t above. Even before Montana joined the Union,
genera1 principles, evolving from the judicial review of
e a r l i e r enabling a c t s , governing t h e school land g r a n t t r u s t s
were well settled. I n two c a s e s , t h e T r u s t e e s o f Vincennes
U n i v e r s i t y v. S t a t e of Indiana ( 1 8 5 2 ) , 55 U.S. 268, 1 4 L.Ed.
2 6 7 , a n d S p r i n g f i e l d T o w n s h i p v. Q u i c k ( 1 8 5 9 ) , 63 U.S. 56, 1 6
L.Ed. 256, the United States Supreme Court set out three
important p r i n c i p l e s governing school t r u s t lands: 1) t h a t
the enabling acts created trusts similar to a private
c h a r i t a b l e t r u s t which t h e s t a t e c o u l d n o t a b r i d g e ; 2) t h a t
t h e enabling a c t s w e r e t o be s t r i c t l y construed according t o
f i d u c i a r y p r i n c i p l e s , and; 3) t h a t t h e e n a b l i n g a c t s preempt
s t a t e laws o r c o n s t i t u t i o n s . S e e a l s o Andrus v . Utah (1980),
446 U.S. 500, 520, 523, 100 S.Ct. 1803, 1814, 1815, 64
L.Ed.2d 458, 472, 4 7 4 , w h e r e t h e U n i t e d S t a t e s Supreme C o u r t
reaffirmed those principles, holding that Congress imposed
upon t h e s t a t e s a b i n d i n g a n d p e r p e t u a l o b l i g a t i o n t o u s e t h e
granted lands f o r public education.
The courts have been very protective of the trust
c o n c e p t , and emphatic a b o u t t h e need t o p r e s e r v e t h e v a l u e o f
t h e t r u s t corpus-the school lands. The s e m i n a l c a s e i n t h i s
regard i s Lassen v. Arizona ( 1 9 6 7 ) , 385 U.S. 458, 87 S . C t .
584, 1 7 IJ.Ed.2d 515. In Lassen, 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 t h e A r i z o n a Highway D e p a r t m e n t was r e q u i r e d
t o f u l l y c o m p e n s a t e t h e S t a t e Land D e p a r t m e n t (administrator
of t h e s c h o o l l a n d s ) f o r t h e v a l u e o f e a s e m e n t s t a k e n a c r o s s
school lands. The C o u r t h e l d t h a t t h e A r i z o n a E n a b l i n g A c t ,
ch. 310, 36 Stat. 557 (1910) "contain[ed] 'a specific
enumeration o f t h e purposes f o r which t h e l a n d s w e r e g r a n t e d
and the enumeration is necessarily exclusive of any other
purpose'" L a s s e n a t 4 6 7 , 87 S . C t . a t 5 8 9 , 1 7 L.Ed.2d a t 522
(quoting Ervien v. U n i t e d S t a t e s ( 1 9 2 8 ) , 2 5 1 U.S. 41, 47, 40
S.Ct. 7 5 , 7 6 , 64 L.Ed. 128, 130).
I n S t a t e o f U t a h v . Andrus (D. U t a h 1 9 7 9 ) , 486 F.Supp.
9 9 5 , t h e f e d e r a l d i s t r i c t c o u r t c o n c l u d e d t h a t t h e lessees o f
state school l a n d s had a n i m p l i e d r i g h t of access t o t h e i r
leasehold across adjacent federal lands. The c o u r t f e l t t h a t
if it h e l d o t h e r w i s e , "the very purpose of t h e school t r u s t
l a n d s would f a i l . Without a c c e s s t h e s t a t e could n o t develop
the trust lands in any fashion and they would become
e c o n o m i c a l l y w o r t h 1 ess. T h i s Congress d i d n o t i n t e n d . I' 486
F.Supp. a t 1002. The C o u r t i n U t a h v . A n d r u s made it c l e a r
t h a t a n y r e s t r i c t i o n on t h e u s e ( i . e . a c c e s s ) o f s c h o o l t r u s t
land t h a t e f f e c t i v e l y devalues it cannot b e s u s t a i n e d .
T h i s Court h a s l i k e w i s e been emphatic i n p r o t e c t i n g t h e
school t r u s t . I n Rider v. Cooney ( 1 9 3 3 ) , 94 Mont. 295, 23
P.2d 261, we first held that a lease is an "interest" i n
land. Then, a p p l y i n g t h e r u l e t h a t i n t e r e s t s i n s c h o o l t r u s t
l a n d s c a n n o t b e a l i e n a t e d f o r less t h a n f u l l v a l u e , w e h e l d
that the S t a t e musts also obtain full value for a lease
thereof. See a l s o S t a t e e x rel. Galen v. Dist. Ct. (1910),
42 Plont. 1 0 5 , 1 1 2 P. 706; Gladden Farms, Inc. v. State (Az.
1981), 633 P.2d 325; Arizona State Land Department v.
S u p e r i o r C o u r t (Az. 1 9 8 1 ) , 633 P.2d 330; C i t y o f S i e r r a V i s t a
v. B a b b i t t (Az. 1 9 8 1 ) , 6 3 3 P.2d 333; S t a t e v. University of
Alaska (Ak. 1 9 8 1 ) , 624 P.2d 807.
I n J e r k e v. S t a t e Dept. o f Lands ( 1 9 7 9 ) , 182 Mont. 294,
597 P.2d 49, w e addressed a s i t u a t i o n analogous t o t h e one a t
bar. The g e n e r a l q u e s t i o n p r e s e n t e d w a s how f a r t h e S t a t e
could surrender i t s managerial prerogatives over school lands
without violating the trust. Montana l a w empowers g r a z i n g
districts to manage and allocate lands within their
jurisdiction. This includes t h e power t o g r a n t p r e f e r e n c e
r i g h t s t o members i n t h e r e - l e a s i n g of school lands t h a t a r e
within the d i s t r i c t . The p l a i n t i f f i n J e r k e contended t h a t
t h e preference r i g h t unconstitutionally prevented the State
from r e c e i v i n g f u l l f a i r market v a l u e f o r t h e land. Since
the e x i s t i n g lessee who e x e r c i s e d t h e p r e f e r e n c e r i g h t w a s
not using the land (and thus not "follow[ing] good
a g r i c u l t u r a l p r a c t i c e s and mak[ing] improvements on t h e l a n d "
1 8 2 Mont. a t 297, 597 P.2d a t 51), we held the preference
right was unconstitutional as applied. T h i s was because:
"To a l l o w t h e p r e f e r e n c e r i g h t t o b e
exercised in this case would be to
install the Grazing D i s t r i c t a s t h e
t r u s t e e of t h e land. It, r a t h e r than t h e
Department o f S t a t e Lands, would d e c i d e
who w i l l o c c u p y t h e l a n d b u t it w o u l d n o t
b e bound by a c o n s t i t u t i o n a l o r f i d u c i a r y
duty." 1 8 2 Mont. a t 297, 597 P.2d a t 51.
S e e a l s o S t a t e e x r e l . Thompson v . Babcock ( 1 9 6 6 ) , 1 4 7 Mont.
46, 409 P.2d 808 (upholding t h e Commissioner's d i s c r e t i o n a r y
a u t h o r i t y t o a c c e p t l e a s e terms l e s s t h a n t h e h i g h e s t b i d i n
o r d e r t o e f f e c t u a t e s u s t a i n e d y i e l d c o n c e p t s and i n s u r e t h e
long-term s t r e n g t h o f t h e t r u s t c o r p u s ) ; I n R e Montana T r u s t
and Legacy Fund ( 1 9 6 4 ) , 143 Mont. 218, 388 P.2d 366. The
Oklahoma Supreme C o u r t i n Oklahoma E d u c a t i o n A s s o c i a t i o n v.
Nigh (Ok. 1 9 8 2 ) , 642 P.2d 230 h a s a l s o a d d r e s s e d t h e same
question a s t h i s Court did i n Jerke. The Oklahoma c o u r t went
f u r t h e r and found s e v e r a l s t a t e s t a t u t e s l i m i t i n g t h e amount
o f i n t e r e s t t h a t t h e s t a t e c o u l d receive on s c h o o l l a n d s , and
c r e a t i n g p r e f e r e n c e s i n t h e r e - l e a s i n g o f s c h o o l l a n d s , t o be
unconstitutional.
Most r e c e n t l y , t h e Washington Supreme C o u r t u p h e l d t h e
federal land grant trust i n h o l d i n g t h e Washington Forest
Products Industry Recovery Act of 1982, R.C.W.
79.01.1331-.1339, unconstitutional. The A c t was p a s s e d i n
response t o t h e d e c l i n e of t h e p r i c e s i n t h e f o r e s t products
industry a t the t i m e . I t a l l o w e d t h e Washington Department
o f S t a t e Lands t o r e l e a s e c o n t r a c t s p r e v i o u s l y e n t e r e d i n t o
with loggers and other forest products users because the
industry stood t o lose a g r e a t deal, due t o t h e d e c l i n e i n
prices, if the contracts were enforced. The Washington
Supreme C o u r t , i n Skamania County v . Washington (Wa. 1984) ,
685 P.2d 576, d e a l t w i t h t h e c o n t r a c t s on s c h o o l t r u s t l a n d .
Premising its argument by stating: "Every court that has
considered this issue has concluded that these are real
enforceable trusts that impose upon the state the same
f i d u c i a r y d u t i e s a p p l i c a b l e t o p r i v a t e t r u s t e e s , " 685 P.2d a t
580, the court found the act had violated the trust by
transferring t r u s t assets--the contract rights--for less t h a n
their f u l l v a l u e and h e l d it u n c o n s t i t u t i o n a l . 685 P.2d at
583. See also Torve and Handy, Skamania County -
v.
Washington: ---
A Case o f Divided L o y a l t i e s , Fall 1984, Western
N a t u r a l R e s o u r c e s L i t i g a t i o n D i g e s t Commentary 7 .
The above cases establish two main points that are
i m p o r t a n t when c o n s i d e r i n g e i t h e r minor p r e m i s e 1-eading t o
our decision. First, an i n t e r e s t i n school l a n d c a n n o t be
a l i e n a t e d u n l e s s t h e t r u s t r e c e i v e s adequate compensation f o r
that interest. Water t h a t i s a p p u r t e n a n t t o t h e s c h o o l l a n d s
i s an i n t e r e s t f o r which t h e t r u s t must r e c e i v e c o m p e n s a t i o n .
Second, any law or policy that infringes on the state's
managerial prerogatives over the school lands cannot be
t o l e r a t e d i f it reduces t h e value o f t h e land. In t h i s case,
t h e DSL c o n t e n d s t h a t t o a l l o w l e s s e e s t o d e v e l o p p r i v a t e ,
personal rights on school l a n d s would impermissibly reduce
the DSL's ability t o manage t h e s e lands f o r t h e i r highest
value.
S e c t i o n 70-15-105, MCA s t a t 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 i t i s by r i g h t
used w i t h t h e land f o r i t s b e n e f i t , a s i n
t h e c a s e o f a way o r w a t e r c o u r s e o r o f 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 land of another."
Further, P r o f e s s o r W e l l s A. Hutchins, i n h i s t r e a t i s e Water
L - - -e N i n e t e e n Western S t a t e s
R i h t s Laws i n t h Vol. I at 455
(U.S. Dept. of Agriculture, 1971) states: "Of general
application i n t h e West i s t h e r u l e t h a t an a p p r o p r i a t i v e
right becomes appurtenant to the land for the benefit of
which t h e w a t e r i s a p p l i e d . "
In Montana, the determination of whether water is
a p p u r t e n a n t t o t h e l a n d i s one o f f a c t . Yellowstone Valley
Co. v. A s s o c i a t e d Mortgage I n v e s t o r s , Inc. ( 1 9 3 0 ) , 8 8 Mont.
73, 290 P. 255; see a l s o H u t c h i n s , supra a t 459. Here, by
s t i p u l a t e d f a c t s , it appears t h a t a l l o f t h e water r i g h t s a t
issue are used either i n whole or in part on the school
lands. Additionally, all of the lands in question are
classified grazing lands under sections 77-1-401 to -404,
MCA, and the water appropriated on them is used for
stockwatering or other agricultural purposes. The water
r i g h t s i n question a r e appurtenant.
This conclusion is consistent with the general rule
t h a t when t i t l e t o i r r i g a t e d p r o p e r t y i s p a s s e d , t h e water
r i g h t s pass a s an appurtenance u n l e s s s p e c i f i c a l l y excepted.
Section 85-2-403, MCA; C a s t i l l o v. Kunnemann (Mont. 1982),
642 P.2d 1019, 39 St.Rep. 460; Adams v. C h i l c o t t ( 1 9 7 9 ) , 182
Mont. 511, 597 P.2d 1140; Schwend v. Jones ( 1 9 7 3 ) , 163 Mont.
41, 515 P.2d 89. Respondents point to no authority
e x p l a i n i n g why t h e r u l e i n r e g a r d t o l e a s e s o f l a n d s h o u l d b e
d i f f e r e n t than with t h e s a l e of land. W e b e l i e v e it s h o u l d
be the same--the parties to any such transaction may
s p e c i f i c a l l y e f f e c t a severance, b u t absent such, t h e water
r i g h t remains appurtenant, following t i t l e . I t d o e s n o t make
s e n s e f o r e a c h s u c c e e d i n g t e n a n t t o walk o f f w i t h one w a t e r
r i g h t a f t e r another.
Respondents cite several cases that appear to
articulate a contrary rule. The first, Smith v . Denniff
( 1 9 0 0 ) , 24 Mont. 20, 60 P. 398, is distinguishable i n the
f a c t t h a t it c o n c e r n e d w a t e r a p p r o p r i a t i o n s made by s q u a t t e r s
on t h e f e d e r a l l a n d s who d i v e r t e d w a t e r f o r u s e on t h e p u b l i c
doma i n . The school trust lands were withdrawn from the
p u b l i c domain by t h e Montana T e r r i t o r y O r g a n i c A c t , s u p r a , i n
1866, and none of the rights at issue in this case were
developed before then. As discussed above, school trust
lands are subject to a different set of rules than other
public lands. S e c o n d l y t h e y c i t e Hayes v. Buzzard ( 1 9 0 4 ) , 3 1
Mont. 74, 77 P. 423 f o r t h e r u l e t h a t t h e q u e s t i o n o f w h e t h e r
w a t e r i s a p p u r t e n a n t t o t h e u n d e r l y i n g l a n d t u r n s upon the
i n t e n t i o n of t h e appropriator. A g a i n , Hayes a r o s e on p u b l i c
domain land, not school t r u s t land. This Court recognized
that distinction:
"The l e g a l t i t l e t o t h e l a n d upon which a
w a t e r r i g h t a c q u i r e d by a - - r o-p r i a t i o n
pp
- -on t h e p u b l i c doiain
made - [emphasis
added] i s u s e d o r i n t e n d e d t o b e u s e d i n
no w i s e a f f e c t s t h e a p p r o p r i a t o r s t i t l e
t o t h e water r i g h t , f o r t h e - - bona f i d e
[ e m p h a s i s i n o r i g i n a l ] i n t e n t i o n which i s
r e q u i r e d o f an a p p r o p r i a t o r t o a p p l y t h e
water to some useful purpose may
comprehend a use upon lands and
possessions other than those of the
a p p r o p r i a t o r , o r a use f o r purposes o t h e r
than those f o r which t h e r i g h t was
o r i g i n a l l y appropriated." 3 1 Mont. a t 8 1
7 7 P.2d a t 425, q u o t i n g Smith v . D e n i f f ,
supra.
(See a l s o Ervien, 246 F. at 280: "Congress d i d n o t intend
that the [school t r u s t ] l a n d s g r a n t e d and c o n f i r m e d should
collectively constitute a genera1 resource or asset like
ordinary public lands held broadly in trust for the
people. .. ") Respondents' argument does not answer the
state's concern with meeting its trust responsibilities.
S i n c e a n a p p u r t e n a n t w a t e r r i g h t i s an i n t e r e s t i n t h e
land (see a l s o section 70-1-106, MCA; Yellowstone Co. v.
Asso. Mtg. Investors, s u p r a ) i t c a n n o t b e s u r r e n d e r e d by t h e
S t a t e without t h e t r u s t r e c e i v i n g f a i r market value. None o f
the lessees alleged payment of consideration to the State
a p a r t from t h a t r e q u i r e d by t h e l e a s e , and t h u s w e c o n c l u d e
t h a t t h e w a t e r r i g h t s a p p u r t e n a n t t o such l a n d s belong t o t h e
State.
The S t a t e a r g u e s t h a t v e s t i n g t i t l e i n lessees would
v i o l a t e t h e t r u s t f o r another reason. I f a lessee l o s t h i s
lease, but retained t h e water r i g h t , that lessee would in
e f f e c t be a b l e t o c o n t r o l t h e use o f t h e land. I n many c a s e s
in this semi-arid area, the control of water means the
control of the land itself. Conceivably, the DSL, in a
d e s i r e t o i n s u r e t h a t t h e l a n d had w a t e r , c o u l d f i n d i t s e l f
i n t h e awkward p o s i t j - o n o f n e g o t i a t i n g w i t h a f o r m e r l e s s e e ,
who m i g h t b e i n c l i n e d t o r e l e a s e h i s r i g h t o n l y t o f a m i l y o r
friends--thus assuring h i s re-entry. The f o r m e r l e s s e e c o u l d
" c h i l l " t h e b i d d i n g p r o c e s s by l e t t i n g it b e known t h a t h e
would o n l y r e l e a s e h i s r i g h t a t a n i n f l a t e d p r i c e . Finally,
t h e former l e s s e e could conceivably d i c t a t e p o s s i b l e u s e s o f
t h e land i n r e t u r n f o r t h e water. This s i t u a t i o n i s c l e a r l y
repugnant t o school t r u s t p r i n c i p l e s . This Court, i n Jerke
v. S t a t e Department o f L a n d s , supra, and o t h e r c o u r t s , see
Oklahoma E d u c a t i o n Assoc. v. Nigh, s u p r a and S t a t e o f Utah v.
Andrus, supra, have c o n s i s t e n t l y h e l d t h a t any i n f r i n g e m e n t
on the use or management prerogatives of the State that
e f f e c t i v e l y devalue school lands i s impermissible. W e agree,
and f i n d t h i s t o b e a n a l t e r n a t i v e ground f o r o u r d e c i s i o n .
Respondents point to section 77-6-115, MCA, which
states in pertinent part that:
" (1) The lessee o f s t a t e l a n d s may a t any
time prior to 1 year before the
e x p i r a t i o n o f h i s l e a s e make a p p l i c a t i o n
t o t h e board f o r permission t o secure a
water right to the land under his
lease. .. If t h e proposed p l a n meets
with the approval of the board,
p e r m i s s i o n s h a l l b e g r a n t e d t h e lessee t o
secure t h e desired water r i g h t f o r t h e
land and to place the same under
irrigation.
" ( 2 ) I f s u c h w a t e r r i g h t becomes a
permanent and v a l u a b l e improvement, t h e n
i n case of t h e s a l e o r l e a s e of t h e lands
t o o t h e r p a r t i e s , t h e f o r m e r lessee s h a l l
be e n t i t l e d t o r e c e i v e compensation i n
the amount of the reasonable value
thereof, as in the case of other
improvements, from t h e new l e s s e e o r t h e
purchaser.
" ( 3 ) These p r o v i s i o n s s h a l l n o t b e s o
c o n s t r u e d a s t o make t h e s t a t e l i a b l e t o
t h e l e s s e e f o r t h e payment o f t h e c o s t o r
v a l u e o f s u c h i r r i g a t i o n improvements."
They c o n t e n d t h a t t h i s s t a t u t e , i n e f f e c t , acknowledges t h e
property interest of the lessee in the water right, and
further, that in subsection (3) the State denounces any
i n t e r e s t i n t h e w a t e r by r e l e a s i n g i t s e l f from l i a b i l i t y f o r
t h e c o s t o f i r r i g a t i o n improvements. Respondents a l s o p o i n t
to 526.3.123, A.R.M., which p r o v i d e s that the State shall
r e i m b u r s e d e p a r t i n g l e s s e e s f o r t h e r e a s o n a b l e v a l u e of t h e
improvements made (as per section 77-6-115(2), MCA), and
that, "[alny water rights hereafter secured by the lessee
s h a l l b e s e c u r e d i n t h e name o f t h e s t a t e o f Montana." They
a r g u e t h a t s i n c e 526-3.123 A.R.M. was n o t a d o p t e d u n t i l 1 9 7 9 ,
it d o e s n o t a p p l y t o t h e w a t e r r i g h t s i n t h i s c a s e b e c a u s e
a l l of them p r e d a t e it. They a l s o a r g u e t h a t t h e p r o v i s i o n
lends i t s e l f t o supporting t h e position t h a t t h e S t a t e had
acquiesced i n r e c o g n i z i n g pre-1979 w a t e r r i g h t s i n lessees.
Both o f t h e s e arguments a r e unfounded. F i r s t , none o f the
alleged r i g h t s a t issue i n t h i s case w e r e perfected pursuant
to section 77-6-115, MCA or 526-3.123, A.R.M. Neither
provision can be used as direct a u t h o r i t y by respondents.
F o r t h a t r e a s o n w e a r e n o t c a l l e d upon t o c o n s t r u e s e c t i o n
77-6-115, MCA. We n o t e though t h a t it i s capable o f two
interpretations: first, as applying to water rights as
respondents argue; secondly, as applying only to
improvements, such as ditches, reservoirs, headgates, and
other capital projects, constructed "for" o r attached "to"
t h e l a n d and n o t s u b j e c t t o b e i n g r e t a i n e d by t h e l e s s e e upon
payment by a new lessee o r p u r c h a s e r , a s i s t h e case with
other improvements to the leasehold, as contended by the
State. The g e n e r a l r u l e i s t h a t whenever t h e r e a r e d i f f e r i n g
possible interpretations of statute, a constitutional
interpretation is favored over one that is not. United
States v. Clark (1980), 445 U.S. 23, 100 S.Ct. 895, 63
L.Ed.2d 171; Sutherland -
on Statutory Construction 545.11
(1984 e d . ) . In t h i s regard, we p o i n t t o t h e Skamania and
Nigh, decisions holding statutes unconstitutional because
t h e y v i o l a t e d t h e s c h o o l t r u s t p r i n c i p l e s e s t a b l i s h e d by t h a t
s t a t e ' s Enabling A c t .
In the alternative, respondents argue that section
77-6-115, MCA, and t h e p r i n c i p l e s o f t h e Water U s e A c t s e t
f o r t h i n s e c t i o n 85-2-101, MCA, and t h e p r i o r a p p r o p r i a t i o n
doctrine, give rise t o an implied severance of water from
land i n t h e school t r u s t land leases, and t h a t t h e S t a t e i s
now estopped to deny these rights because of the
l o n g - s t a n d i n g a n d d e t r i m e n t a l r e l i a n c e b y t h e lessees.
As we discussed above, the State holds these lands
s u b j e c t t o t h e school t r u s t . The e s s e n c e o f a f i n d i n g t h a t
property is held i n t r u s t , school, public, o r otherwise, is
that a n y o n e who acquires interests in s u c h p r o p e r t y do s o
" s u b j e c t t o t h e t r u s t " N a t . Audubon S o c i e t y v. S u p e r i o r C o u r t
(Cal. 1 9 8 3 ) , 658 P.2d 709, 723. See a l s o I l l i n o i s C e n t r a l
Railroad v. Illinois ( 1 8 9 2 ) , 146 U.S. 387, 13 S.Ct. 1 1 0 , 36
L.Ed. 1018 (a s t a t e may not abdicate its t r u s t i n public
p r o p e r t y ) ; a n d Thompson v. Babcock, s u p r a a t 5 4 , 409 P.2d a t
812, ("[wlhen s t a t e land i s l e a s e d , it does n o t r e l i n q u i s h
the entire interest therein"). The State has no power,
absent adequate consideration, to grant the lessees the
permission t o d e v e l o p non-appurtenant w a t e r r i g h t s , and e v e r y
s c h o o l t r u s t l e a s e c a r r i e s w i t h it t h i s l i m i t a t i o n .
Respondents' argument that they have detrimentally
r e l i e d upon " r e p r e s e n t a t i o n s " by t h e S t a t e made t h r o u g h i t s
laws and r e g u l a t i o n s , is not persuasive. There h a s been no
detriment. S e c t i o n 77-6-302, MCA p r o v i d e s t h a t lessors w i l l
receive reasonable compensation for any improvements they
h a v e made on t h e l e a s e h o l d i f t h e y r e l i n q u i s h t h e p r o p e r t y t o
a new lessee o r p u r c h a s e r . Further, t h e argument t h a t t h i s
rule sets up d i s i n c e n t i v e s t o t h e development of our water
resources, contrary to the genera1 policy set o u t i n the
W a t e r U s e A c t of p r o m o t i o n g t h e b e n e f i c i a l u s e o f w a t e r , is
also not persuasive. Section 77-6-302, MCA actually
i n s u l a t e s t h e developer-lessee from a n y m a r k e t r i s k t h a t h e
would h a v e t o b e a r i f making i m p r o v e m e n t s o n h i s own l a n d .
The Montana Constitution requires this result. Art.
IX, sec. 3 (1), p r o v i d e s t h a t " 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
o f a n y w a t e r s for a n y 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." This provision prevents t h e S t a t e
f r o m a f f e c t i n g r i g h t s v e s t e d a t t h e t i m e t h e C o n s t i t u t i o n was
adopted o t h e r than through t h e e x e r c i s e o f C o n s t i t u t i o n a l l y
p r o v i d e d p o w e r s s u c h a s e m i n e n t d o m a i n , Mont. C o n s t . A r t . 11,
sec. 29, o r t h e g e n e r a l p o l i c e power, and w i t h o u t a f f o r d i n g
d u e p r o c e s s o f l a w , Mont. Const. Art.m, sec. Here the
State, through t h e adjudication process, is claiming, and
t h i s Court i s recognizing r i g h t s "existing" a t the t i m e the
1972 C o n s t i t u t i o n was adopted-- Art. IX, sec. 3 ( l ) merely
reaffirms these rights.
As stated above, we h o l d that the lessee, under the
t e r m s of t h e school t r u s t 'lease, is entitled t o the use of
water appurtenant to the leased land. The State is the
beneficial user thereof, and its duty as trustee of the
school lands prohibits it from a l i e n a t i n g t h i s i n t e r e s t i n
the land absent full compensation therefor. Absent such
compensation, t h e t i t l e t o t h e water r i g h t s i n t h i s c a s e v e s t
in the State.
A p p e l l a n t s and a m i c i have urged t h i s C o u r t t o f i n d t h a t
school trust lands benefit from a federally reserved water
right a s o r i g i n a l l y recognized i n Winters v. United States
( 1 9 0 7 ) , 207 U.S. 564, 28 S . C t . 207, 52 L.Ed. 340, t o which
t h e S t a t e has succeeded. I n our opinion, it i s p e r h a p s b e s t
t o keep t h e reserved r i g h t s d o c t r i n e confined t o s i t u a t i o n s
w h e r e it a r o s e a n d i s m o s t a p p r o p r i a t e ; a s a n accommodation
between f e d e r a l and s t a t e i n t e r e s t s . S i n c e t h e r u l e we have
s t a t e d i s s u f f i c i e n t t o settle t h e case a t bar, p r i n c i p l e s of
judicial restraint counsel us to decline ruling further.
This r u l e applies t o a l l the waters a t issue. Subject
t o T i t l e 8 5 , C h a p t e r 2 , P a r t 5 , MCA, g r o u n d w a t e r a p p r o p r i a t e d
and u s e d on S t a t e l a n d s h o u l d b e t r e a t e d n o d i f f e r e n t l y t h a n
surface waters appropriated and u s e d on t h o s e lands. The
Montana C o n s t i t u t i o n , A r t . IX, sec. 3 , Mont. Const. and t h e
Water U s e A c t , s e c t i o n 85-2-102(14), MCA, make no d i s t i n c t i o n
b e t w e e n g r o u n d w a t e r and o t h e r w a t e r r i g h t s .
The O r d e r o f t h e Water C o u r t i s r e v e r s e d , and t h e c a s e
remanded f o r t h e p u r p o s e o f m o d i f y i n g t h e Powder R i v e r F i n a l
Decree i n c o m p l i a n c e w i t h t h i s O p i n i o n .
W e concur: ,
/
1
Justices
Mr. Justice Frank B. Morrison, Jr. specially concurring:
The majority opinion recalls to mind the old Montanan
who said, "A moose is a cow designed by a committee."
Indeed, this moose must have been designed by a committee.
The only bright light which shines through this
otherwise verbose and rambling epistle is the result. In
that I concur.
The majority opinion contains a good deal of judicial
chaff including a rather lengthy recital of irrelevant
historical data surrounding passage of the Montana Water Use
Act of 1973. This effort effectively obfuscates the issues
while impressing the casual reader that scholarship is the
cornerstone of the majority's pronouncement.
The issue in this case is quite simple and straight
forward. At the time the federal government granted school
lands to the state in trust for educational purposes, did the
federal government include within the grant the right to
develop water to achieve the educational purposes of the
trust? If, as an incident of ownership, the state acquired,
as appurtenant to the land, the right to develop water so
that the purpose of the trust could be realized, then the
state cannot alienate that property right in diminution of
the trust res.
The majority opinion initially indicates that the
educational purpose of the trust cannot be realized without
an appurtenant water right. With this I agree. However, in
an apparent attempt to avoid interrupting the priorities of
other appropriators, the majority seems to be saying that
this appurtenant right did not spring into existence until it
was developed by the lessee. This approach recognizes the
priority of appropriators. In order to accomplish this
objective the majority has created a fictional agency whereby
t h e lessee, who d e v e l o p s t h e w a t e r , d o e s s o on b e h a l f o f t h e
state. T h i s n o n s e n s e i s engaged t o a c h i e v e a r e s u l t .
The majority's effort to secure unto school lands a
s u f f i c i e n t amount o f w a t e r t o maximize t h e i r income p o t e n t i a l
for the trust, without disrupting p r i o r r i g h t s , could have
been a c h i e v e d on a more l e g a l l y sound f o u n d a t i o n by s i m p l y
holding that the federal government granted to the state
school lands w i t h t h e appurtenant r i g h t t o develop water i n
o r d e r t o maximize t h e i r income p r o d u c i n g a b i l i t y . The c o u r t
then could have held that, under the prior appropriation
doctrine, a p r i o r i t y d a t e d i d n o t commence u n t i l t h e r i g h t
was d e v e l o p e d . I n t h i s way, at least, t h e m a j o r i t y would
have recognized the property right in the state from t h e
beginning which would give a basis for holding that the
lessee d e v e l o p e d t h e r i g h t f o r t h e s t a t e .
In truth, these school l a n d s w e r e withdrawn from the
public domain prior to any appropriation. The federal
government granted to the state, in trust for educational
purposes, l a n d and t h e w a t e r n e c e s s a r y t o d e v e l o p t h e land
f o r i t s t r u s t purposes. Later, when t h e p u b l i c domain was
s e t t l e d a p p r o p r i a t i o n s w e r e made b u t t h e a p p r o p r i a t i o n s o n l y
operated on those lands remaining in the public domain.
S e t t l e r s who moved i n and a p p r o p r i a t e d c o u l d have o b t a i n e d no
w a t e r from s c h o o l l a n d s which r e s i d e d s a f e l y i n t h e t r u s t .
I find it unfortunate that reference i s made to the
"Winters Doctrine" o r t o f e d e r a l reserved r i g h t s . Apparently
there is some anticipation by the majority that this
precedent will effect the adjudication of Indian water
rights. P e r h a p s by a n a l o g y it w i l l . However, those cases
a r e not before us.
I concur i n t h e r e s u l t f o r t h e reason t h a t , a t the t i m e
o f t h e c r e a t i o n o f t h e s c h o o l t r u s t , t h e f e d e r a l government
conveyed to the state, not only the land, but the appurtenant
right to develop water necessary for fulfillment of the trust
purpose. I specifically disavow the remainder of the