DISTRIBUTION. California act of 1885 does not make the cost of the plant used in appropriating and furnishing water the test of the value for the purpose of fixing rates, but requires such rates to be based upon its actual value at the time of the hearing, and if it appears that the board made no allowance for the deterioration of the plant, that fact does not authorize a court to declare the rates fixed by the board unreasonable, although the deterioration of the plant should properly be taken into consideration. (114) If the rates fixed by the board for the sale, rental or distribution of water appropriated for such purposes, be unreasonable, the court will annul the rate, but will not establish a new one. The question must be remitted to the board, and the new rate ascertained and established as in a new proceeding. (115) Where the proper board, acting under the act of 1885, has not established the rates, the carrier may make valid contracts with its consumers for the furnishing of water, (116) and the carrier may raise such rates where no attempt has been made by the board to fix them. (117) Where a carrier has made valid contracts with the consumers, prior to the fixing of the rates by the board, the rights of the parties are governed by the contracts and are not affected by the subsequent action of the board. (118) By the California statute it is also provided as in Colorado, that the consumer, who has used water (114) Id. See, also, Lanning_v. Osborne, 76 Fed. 319 ('96). (115) Lanning v. Osborne, 76 Fed. 319 ('96). (116) San Diego Flume Co. v. Souther, 90 Fed. 164 ('98). (117) Osborne v. San Diego Land & Town Co. of Maine, 20 Sup. Ct. 860, 178 U. S. 22 ('00). (118) Souther v. San Diego F. Co., 112 Fed. 228 ('01), 121 Fed. 347 ('03). In this case the contract provided for a stipulated quantity of water, but contained a proviso that the company should not be liable for a failure to supply such quantity, if the failure was caused by drouth or other causes beyond its control. Held, that the contract should not be narrowly construed, and in case of drouth the company was entitled to distribute the water ratably among all its consumers. Where, however, the supposed contract is not a contract, but merely an option, it is not binding on either party in such a way as to prevent either party from taking advantage of the rates fixed by the board of county commissioners or from petitioning the board to fix the rates. See the Marfell case, ante, $96. § 97, Fixing Rates in Other Arid States-Reasonableness-AntiRoyalties. from a common carrier is entitled to continue such use. In a case where the carrier undertook to deprive such a consumer of his right and to supply late comers because, by reason of more favorable conditions, a larger area could be irrigated, it was held that the first consumer was entitled to his prior rights under the statute; that the fact of his signing a contract for five years at a higher rental than that fixed by the board and expressly waiving his rights under the statute did not deprive him of his right to continue using the water after the contract had expired, nor entitle the company to demand a renewal of the contract as a prerequisite to his securing the water. (119) Idaho has adopted practically the entire Colorado law relating to the delivery of water by carriers and the fixing of rates by the commissioners, (120) Prior to the adoption of this law the district court fixed reasonable rates. (121) A company, organized for conveying and selling or renting water under this law, has no authority to make a distinction between its consumers, and while supplying some with water under private agreement at low rates, attack the validity of the maximum rates fixed by the county commissioners under the statute on the ground that the rates so fixed will not yield a reasonable return on its investment, but will amount to a taking of property without compensation. (122) In determining the reasonableness of the rates charged by a carrier they must be considered as applicable to all its consumers. Such a rate is not unconstitutional as depriving the company of its property without compensation because it will not produce a revenue above expenses to pay a reasonable income on the money invested, where the plant was constructed on a larger scale and at a greater expense than was necessary to supply its present customers, and intended to sup ('99). (119) San Diego Land & Town Co. v. Sharp, 97 Fed. 394 (120) Act 1899, 2 Idaho Code, § 2599 et seq.; post, §§ 867, 935-939. (121) Wilterding v. Green, 4 Ida. 773, 45 P. 134 ('96). (122) Boise City Irr. & L. Co. v. Clark et al. Co. Com. [Ida.], 131 Fed. 415 ('04). DISTRIBUTION. ply a greater number than it has yet obtained. (123) As in Colorado,(124) royalties nor any other charge can not be made or collected as a condition precedent to the delivery of the water upon the payment of the annual carriage fee. (125) Under the recent codes, as well as under some of the older statutes of the other semi-arid states and territories, provisions similar to those of California, Colorado and Idaho furnish protection to the consumer from the extortionate demands of those engaged in carrying water "for sale" or "rental." (126) The supreme court of Arizona has rendered three very elaborate opinions discussing all of the questions treated in this chapter. (127) The latest of these cases distinctly announces the rule to be that there rests upon a public corporation, so long as it uses its franchise, a duty to render to the public, at a reasonable rate, the services for which it was created; that in the absence of statute the question whether rates which have been charged are unreasonable is a proper subject for judicial inquiry, (128) and upon the question as to the right of the court to fix the rate the court said: "Appellant contends that the fixing of a rate for the rendition of services by a public corporation is a legislative act, and not judicial. It is necessary. to apply a distinction which we may accurately make by adopting the language of the supreme court of the United States, in Interstate Commerce Com. v. Cincinnati, etc., R. R. Co., (129) 'It is one thing to inquire whether the rates which have been charged and collected are reasonable-that is a judicial act; but an (123) Boise City Irr. & L. Co. v. Clark et al. Co. Com. [Ida.], 131 Fed. 415 ('04). (124) Ante, $95. (125) San Diego Land & Town Co. v. City of National City [Cal.], 74 Fed. 79, 86 ('96); Lanning v. Osborne [Cal.], 76 Fed. 319, 325, 329 ('96). (126) Western Irr. Co. v. Chapman, 8 Kan. App. 778, 59 P. 1098 ('99). (127) Slosser v. Salt River C. Co., 7 Ariz. 376, 65 P. 332 ('01); Gould v. Maricopa C. Co., Ariz.- 76 P. 598 ('04); Salt River Val. C. Co. v. Nelssen, Ariz., 85 P. 117 ('06). (128) For cases supporting this doctrine, see 48 Cent. Dig. (129) 167 U. S. 479, 17 Sup. Ct. 896 ('96). 897, Fixing Rates in Other Arid States-Reasonableness-AntiRoyalties. entirely different thing to prescribe rates which shall be charged in the future-that is a legislative act.' The court did not seek to fix a rate for future service by appellant, but exercised jurisdiction to determine whether the rate was unreasonably high which had been collected by appellant from Nelssen for service of water pending a final hearing, which rate was paid by Nelssen under an order of the court, and, therefore, presumably without acquiescence in the amount." (130) CHAPTER 16. INCORPORATED IRRIGATION DISTRICTS— § 98. Origin of "Wright Act." The magnitude of many irrigation enterprises places them beyond the ability of individuals as well as of the average corporation. Experience has also taught that with each irrigator or carrying company working separately and for their respective interests, the best results are not obtained. These and other reasons led to the adoption in California in 1887 of what is known as the "Wright Act." (131) After a number of amendments the original act was repealed and in 1897 an entirely new act, was adopted. (132) The California act, but slightly modified in the main, has been adopted in the following states: Colorado, (133) Idaho, (134) Kansas, (135) Nebraska, (136) Nevada, (137) and Washington. (138) In 1888 Utah adopted the "Wright Act," but it was repealed by the Revised Statutes of 1898. It was (130) Salt River Valley C. Co. v. Nelssen, Ariz., 85 P. 117 ('06). In this case a temporary mandatory injunction was issued. See post, §155. (131) Laws 1887, p. 29. (132) Laws '97, p. 254; Gen. Laws '99, pp. 436-548. (133) Laws '05, p. 246; post, $516 (134) Laws '03, p. 150. (135) Gen. Stat. 05, §§3863-3886. (136) Comp. Stat. '05, §§6476-6542. (137) Comp. Laws '00, $$374-423. (138) Pierce's Code '05, §§5736-5814. DISTRIBUTION. provided, however, that the repeal should not affect existing districts. (139) The California act being the model for the acts in other states, this chapter will be based principally upon the California decisions. Indeed there are but few decisions upon this subject elsewhere, but such as there are will also appear in the following sections. A form of organization and aid akin to the "Wright Act" has been applied in South Dakota to the promotion of artesian well-boring for irrigation purposes. (140) § 99. Procedure for Organizing District. An irrigation district is started by the people. A majority of the owners, representing also a majority in value of the lands susceptible of irrigation from the same source and by the same diverting system, may petition the board of supervisors of the county in which the lands within the contemplated district or a greater portion of them are situated, to organize an irrigation district. (141) The petition must be accompanied by a bond to be approved by the board, conditioned for the payment of all costs, should the organization of the district not be effected. A day is to be fixed by the board for a hearing, and if the petition complies with all the requirements of the statute, an election is ordered to determine whether the district shall be organized and to elect its board of directors and other officers. This election is conducted as nearly as possible along the lines of a general election, and the qualifications of the electors vary in each state. (142) In California at least two (139) Rev. Stat. '98, §§1287, 1288; Laws 1905, p. 165, §71. (140) See ante, §38. (141) In Colorado the signers must be resident electors, who have in the preceding year paid a property tax in the proposed district. In Idaho and Washington the petition must be signed by "fifty, or a majority, of the holders of title or evidence of title," and must represent at least one-fourth of the total area of land in said district, which will be assessable for the purposes of the district. In Kansas the petition must be signed by three-fifths of the resident landowners. In Nebraska there must be a majority of the electors of the proposed district who are freeholders. In Nevada, a majority of the taxpayers owning lands within the proposed district, is required. (142) See state and territorial statutes, post, Part X. |