Consolidated Canal Company v. Mesa Canal Company

This case comes on appeal from a decision of the supreme court of the territory of Arizona (53 Pac. 575), affirming a decree of the district court of Maricopa county in favor of the defendant in a suit brought by the appellant to restrain the defendant from maintaining in its canal a dam in such a way as to impede the flow of water in appellant's canal, or to destroy a certain water power claimed by appellant.

The facts, as shown by the findings and statement prepared by the supreme court, are as follows: The appellee was the owner of the Mesa canal. On January 10, 1891, it made a contract with A. J. Chandler, who subsequently transferred his rights thereunder to the appellant. The material portions of the contract are as follows:

'This article of agreement, made and entered into this 10th day of January, A. D. 1891, by and between the Mesa Canal Company, a corporation duly organized and legally existing under and by virtue of the laws of the territory of Arizona, having its principal office and place of business at Mesa city in the county of Maricopa and territory of Arizona, party of the first part, and A. J. Chandler, of the city of Phoenix, in the county and territory aforesaid, party of the second part, witnesseth:

'That, whereas, the said party of the first part is an irrigating coproration, and as such is now the owner operating the Mesa canal in said county and territory.

'And, whereas, said party of the second part desires to increase the size and capacity of said canal between the point in Salt river where the water is now taken out, or by consent of the directors of the Mesa Canal Company may hereafter be taken out, and a point in said Mesa canal known as 'Ayers' head gate,' so as to increase the flow of water through said portions of said canal as aforesaid, and for the purpose of the party of the second part, his associates and assigns, obtaining water thereby through said canal, and in order to have the said canal increased in size, dimensions, and capacity, without cost or expense to said party of the first part, and without in any way interfering with the rights, titles, interests, or privileges of said party of the first part in and to said canal and the water flowing through said canal, except as hereinafter provided.


 * * *  *  * 'Now, therefore, the Mesa Canal Company, party of the first part, for and in consideration of the sum of one dollar to it in hand paid by the party of the second part, the receipt whereof is hereby acknowledged, and for the further consideration and purposes herein contained and expressed, does for itself and for its successors or assigns hereby grant unto the said A. J. Chandler, his associates, heirs, or assigns, forever, the following rights and privileges upon the terms and conditions herein expressed, viz.:

'That the said A. J. Chandler, his associates, heirs, or assigns, shall have the right and privilege of entering upon any and all of the following portions of said Mesa canal at any time prior to the first day of March, A. D. 1891, for the purpose of widening and enlarging and increasing the size and capacity of said Mesa canal between the point in Salt river where the water is now or may hereafter be taken out for said canal, and a point on said canal known as 'Ayers' head gate,' and enlarge and increase the size and dimensions of the main dam and head gates at the point of commencement of said canal in Salt river, and enlarge and increase the size and capacity of said Mesa canal so that the same when so enlarged and increased in size shall have a carrying capacity in addition to its present carrying capacity not exceeding forty thousand inches of water, miners' measurement, nor less than ten thousand inches of water, miners' measurement, and said enlargement shall be fully made and completed by the thirtieth day of December, A. D. 1891. The present carrying capacity of said Mesa canal for the purpose of this agreement shall be seven thousand inches, miners' measurement.

'All the cost and expense of enlarging and increasing the size of said dam, head gate, and canal as aforesaid shall be borne and paid by the party of the second part, his associates, heirs, or assigns, forever. And said enlargement shall be made without in any way interfering with any of the rights, titles, interests, or privileges of said party of the first part in and to the said canal and the water flowing through said canal, except as hereinafter provided.

'The party of the first part hereby reserves the right to further enlarge said portion of the Mesa canal whenever they deem it necessary to do so, provided such enlargement shall not interfere with or lessen the rights or privileges herein granted to the party of the second part, his associates, or assigns.

'Said party of the second part, his associates, or assigns, shall, in enlarging said main dam, head gates, and canal as aforesaid, in all respects enlarge said dam, head gates, and canal in a good, substantial, and workmanshiplike manner, according to the most approved methods of constructing and building irrigating canals.

'All suits, liabilities, costs, expenses, or judgments, and all damages or loss incurred or sustained by the party of the first part caused by said enlargement, shall be borne by the party of the second part, his associates or assigns forever, and all suits or proceedings against the party of the first part by reason of said enlargement to be defended at the expense of the party of the second part.

'It is expressly understood and agreed by the parties hereto, their successors, or assigns, that at all times when there is an abundance of water in Salt river liable to appropriation and flowage through said canal when so enlarged, then and at all such times the said party of the first part shall have the right to use from said canal in addition to the amount hereinbefore specified as the capacity of said canal two thousand inches of water, miners' measurement.

'The management and control of the canal between the point known as 'Ayers' head gate' to and including the dam in Salt river, when so enlarged as aforesaid, shall be in the party of the second part, his heirs, associates, or assigns. Provided, that the party of the second part, his heirs, associates, or assigns, shall, before he or they are entitled to receive or use any water through said canal, first deliver to the party of the first part, their heirs, or assigns, at the point in said Mesa canal known as 'Ayers' head gate,' and shall continue to deliver the seven thousand inches of water, miners' measurement, above expressed as the carrying capacity of said Mesa canal, or such portion thereof as may be apportioned to said Mesa canal by decree of any court. Provided, the stockholders who are now using or may hereafter use water above the 'Ayers' head gate' shall have their water delivered to them as at present above the 'Ayers' head gate' aforesaid, or said stockholders shall have their water delivered to them at the 'Ayers' head gate' with the other stockholders, as they may demand. Provided, further, that the water shall be delivered to the party of the first part after the completion of said canal as aforesaid for a period of five years, without cost to the party of the first part, their successors or assigns, and thereafter for a sum not exceeding three dollars per share per year forever, to be paid for in the same manner as they now pay for the same.



'Provided, further, that if the said party of the second part, his associates, heirs, or assigns, shall neglect to deliver water as agreed herein, or shall fail to carry out any of the terms of this agreement, and shall be notified by the directors of the Mesa Canal Company of such failure or neglect to carry out the terms of this agreement, and shall still neglect to carry out the terms of this agreement for a period of ten days thereafter, or in such case as a break in the canal, head gates, and dam, whereby the water is turned out for a period of five days, then and at all such times it is hereby agreed by the party of the second part, his heirs, associates, or assigns, that the directors of the Mesa Canal Company shall have the right and power to take full charge and control of said enlarged portion of said Mesa canal without process of law, and the same shall become the property of the Mesa Canal Company and shall so remain until the party of the second part, his associates, heirs, or assigns, shall fully comply with the term and requirements of this agreement, and then shall revert back to the party of the second part, his associates, heirs, or assigns, and shall be and remain in the party of the second part, his associates, heirs, or assigns, so long as the terms of this agreement shall be by them complied with.

'This agreement shall not give or convey to the party of the second part, his associates, heirs, or assigns, any title or ownership in or to the capital stock of said Mesa Canal Company, but shall only convey such privileges and rights as are herein mentioned.' The appellant, as the transferee from Chandler, enlarged and reconstructed the Mesa canal down to a place called the 'Division Gates,' which point had by mutual consent been substituted for Ayers' head gate as the point of division of the waters, and delivery by the appellant to the appellee of the water to which the latter was entitled. In thus enlarging and reconstructing the canal the appellant raised the grade thereof for the purpose of carrying the water at a higher elevation, thereby enabling the canal to cover more and other lands, and at the point where the division gates were located the elevation was about five feet above the grade of the canal before reconstruction, and by the construction of those gates at the point the appellant delivering the water to the appellee secured a fall of five feet in the water thus delivered.

Other findings were as follows:

'After appellant had delivered the water in the manner aforesaid for some years, the appellee built a dam in its canal a short distance below the division gates, that raised the water and caused it to flow through a lateral ditch, which enabled the appellee to irrigate some lands on which it had not been able to place water through its canal from its former elevation. The effect of this raise in the water was to reduce the fall at the division gates.

'After appellee had built its dam and backed up the water, as aforesaid, appellant had constructed a water wheel and a mill for grinding grain to be driven thereby, and had erected them at the division gates, so that the wheel was turned by the water as it fell from the division gate into the Mesa canal, a distance of about 5 feet. Afterwards appellant increased the height of the dam that it had formerly built to such an extent that it raised the surface of the water and backed the same up against the division gate in such manner as to destroy 3 1/2 feet of the 5 feet fall and totally destroyed the water power.

'The water raised by the dam and the water affording the water power thus destroyed is the 7,000 inches of water which appellant is obligated by the terms of the agreement aforementioned to first deliver to the appellee before said appellant is entitled to receive or use any water through said canal.

'A further result of the erection of the water in appellee's canal below the division gates was to very slightly, if at all, impede the flow of water in appellant's canal above the division gates and thereby detract very slightly from the carrying capacity of appellant's canal.

'The cost of the reconstruction of the canal from Ayers' head gate to the division gates exceeded $10,000, and the water power created at the fall was equal to about 40 horse power.'

Mr. John D. Pope for appellant.

Messrs. C. M. Frazier, R. C. Garland, and W. W. Wright, Jr., for appellee.

Mr. Justice Brewer delivered the opinion of the court: