DISTRIBUTION.

accurate results are to be obtained they must be carefully followed. See Merriman's "Hydraulics," Trautwine's 'Engineer's Pocket Book."

CHAPTER 15.

FIXING WATER RATES.

§ 93. Necessity for the Law.

Throughout the arid and semi-arid West provision is made by statute for the appropriation of water for "sale" or "rent," as it is called in the various statutes and decisions, (76) although recent students of the irrigation systems are taking exception to the use of those terms. (77) Under these statutes an incorporated company, association of persons, or even an individual may divert and appropriate the water of a natural stream and convey it through the ditch, canal or other diverting or storage works, to the place of use, and there, in return for a reasonable compensation, deliver the water to the consumer for his beneficial use. The relation between carrier and consumer will be discussed under another title. (78) It is the purpose of these statutes to enable the appropriator or consumer to acquire a valid right to use the water, through the agency of the owner of the canal or ditch, and the statutes authorize such owner to make a reasonable annual carriage charge frequently but inaccurately termed "rental," (79) for delivering the water to the appropriator or consumer under the ditch. Without any restrictions this right to exact an annual tribute would give such owner a great

(76) So. Boulder & Rock Creek D. Co. v. Marfell, 15 Colo. 302, 25 P. 504 ('90); Gutheil P. I. Co. v. Montclair, 32 Colo. 420, 76 P. 1050 ('04); Lanning v. Osborne [Cal.], 76 Fed. 319 ('96); Souther v. San Diego Flume Co., 112 Fed. 228 ('01); 121 Fed. 347 ('03); Wilterding v. Green, 4 Ida. 773, 45 P. 134 ('96); Bardsley v. Boise City Irr. & L. Co., 8 Ida. 155, 67 P. 428 ('01); Boise City Irr. & L. Co. v. Clarke, 131 Fed. 415 ('04); Farmers' Irr. Dist. v. Frank, Neb., 100 N. W. 286 ('04). (77) Statutes of states and territories, post, Part X.

(78)

Post, $118.

§ 93, Necessity for the Law.

power over the consumer which could be exercised so unjustly as to oppress those who were dependent upon the canal or ditch for their only means of producing crops or otherwise making beneficial use of the water. All of these states and territories, therefore, have by law protected the consumer, and, as we shall see, (80) provided a method of fixing rates whenever the consumer feels that he is being unjustly treated.

$94. Constitution and Common Law.

The constitution of the state of Colorado (81) forbids the enforcement of unreasonable rates or conditions of time and payment by persons or corporations engaged in carrying water for hire. It also provides that the legislature shall, by law, authorize the board of county commissioners in their respective counties, when application is made to them by either party interested, to establish reasonable rates "for the use of water." (82) Individuals and corporations engaged in carrying water for an annual carriage fee are held to be common carriers or quasi-common carriers or public agents. (83) This constitutional provision is but a recognition of a common-law principle, that the individual or corporation who undertakes to perform a public or quasi-public duty for hire, must do so in a reasonable manner. (84)

(80) Post, §§94-97.
(81) Art. 16, §8.

(82) The term, "the use of water," is often incorrectly used to imply that the charge made by the carrier is for the use of the water itself, whereas it is in reality a charge for the carriage of the water, or in other words, the use of the ditch and right of way of the canal company by the consumer to carry his water. See Wheeler v. Northern Colo. Irr. Co., 10 Colo. 582, at p. 588 ('87), 17 P. 487.

(83) Wheeler v. Northern Colo. Irr. Co., 10 Colo. 582, 589, 17 P. 487 ('87); Merrill v. Southside Irr. Co., 112 Cal. 426, 44 P. 720 ('96); Wilterding v. Green, 5 Ida. 773, 45 P. 134 ('96); Western Irr. Co. v. Chapman, 8 Kan. App. 778, 59 P. 1098 ('99); Slosser v. Salt Riv. C. Co., 7 Ariz. 376, 65 P. 332 ('01); Gould v. Maricopa C. Co., Ariz., 76 P. 598 ('04).

(84) Wheeler v. Northern Colo. Irr. Co., 10 Colo. 582, at 590, 17 P. 487 ('87); Munn v. People, 94 U. S. 113 ('76); C. & N. W. R. R. Co. v. People, 56 Ill. 365; Vincent v. Chicago & Alton R. R. Co., 49 Ill. 33; Price v. Riverside L. L. Co., 56 Cal. 431 ('80).

DISTRIBUTION.

"The carrier is at least a quasi-public servant or agent. It is not the attitude of a private individual contracting for the sale or use of his private property. It exists largely for the benefit of others; being engaged in the business of transporting, for hire, water owned by the public, to the people owning the right to its use." (85)

Therefore, no constitutional provision is necessary to enable the courts to protect the consumer and to establish reasonable rules relating to the charge for carriage and the time and manner of its collection. (86) $95. Rate Fixing and "Anti-Royalty Act"-Public Service Corporations.

By the act of 1879, as amended, (87) it is provided that the county commissioners shall, at their January meeting, hear and consider all applications which may be made by any party or parties interested in procuring water for irrigation by "purchase" from any ditch or reservoir "furnishing or selling" water, etc., and that the board shall fix a time within the periods prescribed by the statute, when they will hear the testimony of the parties. The board is given as full power as the district court has to subpoena witnesses and to compel their attendance, and also to compel the production of books and papers required for evidence. In reaching its conclusions it must examine into the "value" of the construction of such ditch or reservoir, the cost of maintaining and operating same, and fix a price at which water shall be sold; which price shall not be changed oftener than once in two years. The act also provides that those who have used water from such ditch or canal and shall not have ceased doing so with the intent to obtain water from some other source of supply, shall have the right to continue "purchasing the water" to the same amount upon tender of the price fixed by the board, and if no such price has been fixed, then

(85) Wheeler v. Northern Colo. Irr. Co., 10 Colo. 582, 589, 17 P. 487 ('87).

(86) Id.

(87) Colo. 1 Mills' Ann. Stat., §§2295-2303.

§ 95, Rate Fixing and "Anti-Royalty Act"-Public Service

Corporations.

at the price at which others are procuring the water, or at which water was "sold" the last preceding year. By the Colorado act of 1887. (88) known as the "Anti-Royalty Act," it is made unlawful for any person owning or controlling any ditch. canal or reservoir to demand, accept or receive as royalty, bonus or premium, prerequisite or condition precedent to the right or privilege of applying or bargaining for or procuring such water. A penalty of fine and imprisonment is provided for the collecting of excessive rates and refusing to deliver water, and it is also provided that, for a refusal by a corporation to deliver water after proper demand and tender has been made, the attorney general, upon the request of the county commissioners of the proper county, or upon his otherwise receiving due notice thereof, shall institute and prosecute proceedings in quo warranto for the forfeiture of the corporate rights and privileges of such corporation. This enactment, as stated above, is locally known as the "Anti-Royalty Act." These statutes are not the outgrowth of the doctrine of appropriation, but follow the general principles relating to corporations performing a public duty or service or impressed with a public trust, such as supplying citizens with gas and water and transportation and communication facilities, including steam railways and telephone service. Statutes relating to rates charged for service by these various classes of corporations have been attacked as unconstitutional, and almost invariably sustained by the state and federal courts. (89)

(88) 1 Mills' Ann. Stat., §§2304-2309.

(89) Corporations furnishing gas-State v. Cincinnati Gas L. Co., 18 Ohio St. 262 ('68); Chicago Gas L. Co. v. People's Gas L. Co., 121 Ill. 530, 13 N. E. 169 (87); Gibbs v. Balt. Gas Co., 130 U. S. 396, 9 Sup. Ct. Rep. 553 ('89); People v. Chicago Gas Trust, 130 Ill. 268, 22 N. E. 798 ('89). Corporations furnishing or carrying water-County of San Francisco v. Spring Val. W. Co., 48 Cal. 493 ('74); Spring Val. Water Works v. City of San Francisco, 82 Cal. 286, 22 P. 910, 1046 ('90); San Diego W. Co. v. City of San Diego, 118 Cal. 556, 50 P. 633 ('97); City of Indianapolis v. Navin, 151 Ind. 139, 47 N. E. 525 ('97); City of Danville v. Water Co., 178 Ill. 299, 53 N. E. 118 ('99); Id., 180 Ill. 235, 54 N. E. 224 ('99); Freeport Water Co. v. City of Freeport, 187

DISTRIBUTION.

The United States supreme court, in the case of Spring Valley Water Works v. Schottler, (90) held that laws requiring gas companies, water companies, and other corporations of like charatcer to supply their customers at prices fixed by the municipal authorities of the locality, are within the scope of legislative power unless prohibited by constitutional limitation or valid obligation.

A case is now pending in the supreme court of Nebraska wherein the carrier claims that, because its articles of incorporation provide that it shall have the power "to sell water rights," it may cease "renting" the use of the water, and sell permanent rights. The minority stockholders contend that such a course would soon dispose of all of the property of the corporation and put it out of business. The trial court dissolved the temporary injunction issued at the request of the minority stockholders. It would seem as though such a corporation would have the right to dispose of permanent rights to run water through its canal, although a corporation does not possess all of the powers it claims or sets out in its charter. (91) The decisions interpreting the statutes relating to carriers of water for irrigation will be presented and discussed in the ensuing sections.

Ill. 179, 57 N. E. 862 ('00); Santa Ana Water Co. v. Town of San Buena Ventura, 65 Fed. 323 ('95); Spring Val. Water Works v. Schottler, 110 U. S. 347, 4 Sup. Ct. 48 ('83). Corporations furnishing steam facilities-Ill. Central R. Co. v. People, 95 Ill. 313 ('80); Ames v. Union Pac. R. R. Co., 64 Fed. 165, 167 ('94); Atty. Gen'l v. C. & N. W. R. R. Co., "Granger case," 35 Wis. 425 (74); Ore. R. R. v. Ore. R. R., 130 U. S. 1, 9 Sup. Ct. Rep. 409 ('89); Chicago, M. & St. P. R. R. v. Minn., 134 U. S. 418, 10 Sup. Ct. Rep. 462 ('90); Chicago R. R. Co. v. Wellman, 143 U. S. 339, 12 Sup. Ct. 400 ('92); Regan v. Trust Co., 154 U. S. 362, 399, 14 Sup. Ct. 1060 ('93); Johnson v. Atlantic Trans. Co., 156 U. S. 618, 15 Sup. Ct. 520 ('95); Lake Shore R. R. v. Smith, 173 U. S. 684, 19 Sup. Ct. 565 ('99); Chicago & Milwaukee R. Co. v. Tompkins, 176 U. S. 167, 20 Sup. Ct. Rep. 336 ('00). Corporations furnishing telephone service-State v. Citizens' Tel. Co., So. Car., 39 S. E. 257 ('01); City of St. Louis v. Bell Tel. Co., 96 Mo. 623, 10 S. W. 197 ('88).

(90) 110 U. S. 347 ('83).

(91)

Oregon R. R. Co. v. Oregon R. R. Co., 130 U. S. 1, 9 Sup. Ct. Rep. 409 ('89).