Gutierres v. Albuquerque Land & Irrigation Company/Opinion of the Court
The pertinent portions of the territorial act of February 24, 1887, under which the plaintiff below was incorporated, are noted in the margin. 

It will be seen that the act authorized the formation of corporations for the purpose of constructing and maintaining reservoirs and canals, or ditches and pipe lines, and that two purposes were to be subserved by the formation of such companies (1) the supplying of water for irrigation, mining, manufacturing, domestic, and other public uses, including cities and towns; and (2) the colonization and the improvement of lands in connection therewith. The articles of association of the appellee set out the second of the aforesaid objects as being the purpose for which the company was formed. The organization of the company in conformity to the requirements of the statute is not questioned, and the existence of surplus water over and above the needs of prior appropriators of water at the point where it was proposed to divert the waters of the Rio Grande for the proposed canal is a fact found by the trial court and not disputed either in the supreme court of the territory or in the argument made at bar.

The contentions urged upon our notice substantially resolve themselves into two general propositions: First, that the territorial act was invalid, because it assumed to dispose of property of the United States without its consent; and, second, that said statute, in so far, at least, as it authorized the formation of corporations of the character of the complainant, was inconsistent with the legislation of Congress and therefore void. These propositions naturally admit of consideration together.

The argument in support of the first proposition proceeds upon the hypothesis that the waters affected by the statute are public waters, the property, not of the territory or of private individuals, but of the United States; that by the statute private individuals, or corporations, for their mere pecuniary profit, are permitted to acquire the unappropriated portion of such public waters, in violation of the right of the United States to control and dispose of its own property wheresoever situated. Assuming that the appellants are entitled to urge the objection referred to, we think, in view of the legislation of Congress on the subject of the appropriation of water on the public domain, particularly referred to in the opinion of this court in United States v. Rio Grande Dam & Irrig. Co. 174 U.S. 704-706, 43 L. ed. 1142, 1143, 19 Sup. Ct. Rep. 770, the objection is devoid of merit. As stated in the opinion just referred to, by the act of July 26, 1866 (14 Stat. at L. 253, chap. 262, § 9, Rev. Stat. § 2339, U.S.C.omp. Stat. 1901, p. 1437), Congress recognized, as respects the public domain, 'so far as the United States are concerned, the validity of the local customs, laws, and decisions of courts in respect to the appropriation of water.' By the act of March 3, 1877 (19 Stat. at L. 377, chap. 107, U.S.C.omp. Stat. 1901, p. 1549), the right to appropriate such an amount of water as might be necessarily used for the purpose of irrigation and reclamation of desert land, part of the public domain, was granted, and it was further provided that 'all surplus water over and above such actual appropriation and use, together with the water of all lakes, rivers, and other sources of water supply upon the public lands and not navigable, shall remain and be held free for the appropriation and use of the public for irrigation, mining, and manufacturing purposes, subject to existing rights.'

That the purpose of Congress was to recognize as well the legislation of a territory as of a state with respect to the regulation of the use of public waters, is evidenced by the act of March 3, 1891 (26 Stat. at L. 1095, chap. 561, U.S.C.omp. Stat. 1901, p. 1570). By the 18th section of the act of 1891 it was provided as follows (italics not in original):

'Sec. 18. That the right of way through the public lands and reservations of the United States is hereby granted to any canal or ditch company formed for the purpose of irrigation and duly organized under the laws of any state or territory, which shall have filed, or may hereafter file, with the Secretary of the Interior a copy of its articles of incorporation, and due proofs of its organization under the same, to the extent of the ground occupied by the water of the reservoir and of the canal and its laterals, and 50 feet on each side of the marginal limits thereof; also the right to take, from the public lands adjacent to the line of the canal or ditch, material, earth, and stone necessary for the construction of such canal or ditch: Provided, That no such right of way shall be so located as to interfere with the proper occupation by the government of any such reservation, and all maps of location shall be subject to the approval of the department of the government having jurisdiction of such reservation, and the privilege herein granted shall not be construed to interfere with the control of water for irrigation and other purposes under authority of the respective states or territories.' It may be observed that the purport of the previous acts is reflexively illustrated by the act of June 17, 1902 (32 Stat. at L. 388). That act appropriated the receipts from the sale and disposal of the public lands in certain states and territories to the construction of irrigation works for the reclamation of arid lands. The 8th section of the act is as follows:

'Sec. 8. That nothing in this act shall be construed as affecting or intended to affect or to in any way interfere with the laws of any state or territory relating to the control, appropriation, use, or distribution of water used in irrigation, or any vested right acquired thereunder, and the Secretary of the Interior, in carrying out the provisions of this act, shall proceed in conformity with such laws, and nothing herein shall in any way affect any right of any state or Federal government or of any landowner, appropriator, or user of water in, to, or from any interstate stream or the waters thereof: Provided, That the right to the use of water acquired under the provisions of this act shall be appurtenant to the land irrigated, and beneficial use shall be the basis, the measure, and the limit of the right.'

It would necessarily seem to follow from the legislation referred to that the statute which we have been considering is not inconsistent with the legislation of Congress on the subject of the disposal of waters flowing over the public domain of the United States. Of course, as held in the Rio Grande Case, p. 703, L. ed. 1141, Sup. Ct. Rep. 775, even a state, as respects streams within its borders, in the absence of specific authority from Congress, 'cannot, by its legislation, destroy the right of the United States, as the owner of lands bordering on a stream, to the continued flow of its waters; so far, at least, as may be necessary for the beneficial uses of the government property;' and the power of a state over navigable streams and their tributaries is further limited by the superior power of the general government to secure the uninterrupted navigability of all navigable streams within the limits of the United States. Necessarily, these limitations are equally applicable in restraint of the legislative branch of a territorial government, controlled, as is such body, by Congress. If we assume that a restriction on the power of a territory similar to that first stated prevails in favor of private owners of lands along a running stream, the act in question clearly is not violative of such rights, for the same does not attempt to authorize an infringement of them. The water which it is provided may be appropriated is 'surplus' water, of any stream, lake, or spring, and it is specifically provided in subdivision 4 of § 17 of the act 'That no water shall be diverted, if it will interfere with the reasonable requirements of any person or persons using or requiring the same when so diverted.' So, also, in § 25, it is declared 'that no incorporation of any company or companies shall interfere with the water rights of any individual or company acquired prior to the passage of this act.' The finding of the court below that 'surplus' water existed negates the idea that any legitimate appropriation of water which can be made by the appellee can in anywise violate the rights of others.

We perceive no merit in the contention that the proviso in the desert land act of March 3, 1877, declaring that surplus water on the public domain shall remain and be held free for the appropriation and use of the public for irrigation, mining, and manufacturing purposes, subject to existing rights, is an expression of the will of Congress that all public waters within its control or the control of a legislative body of its creation, must be directly appropriated by the owners of land upon which a beneficial use of water is to be made, and that in consequence a territorial legislature cannot lawfully empower a corporation, such as the appellee, to become an intermediary for furnishing water to irrigate the lands of third parties. As all owners of land within the service capacity of appellee's canal will possess the right to use the water which may be diverted into such canal, the use is clearly public (Fallbrook Irrig. Dist. v. Bradley, 164 U.S. 163, 41 L. ed. 390, 17 Sup. Ct. Rep. 56), and appellee is therefore a public agency, whose right to divert water and whose continued existence is dependent upon the application by it within a reasonable time of such diverted water to a beneficial use. Irrigation corporations generally are recognized in the legislation of Congress, and the rights conferred are not limited to such corporations as are mere combinations of owners of irrigable land.

It is conceded on behalf of appellant that, by the laws of Mexico in force when the territory of New Mexico was ceded to the United States, the use of the waters of both navigable and unnavigable streams was not limited to riparian lands, but extended as well to lands which did not lie upon the banks of the rivers, and that such use was subject to be regulated and controlled by the public authorities. It is, however, contended that the effect of the statute under consideration is to free the waters from public control and to transfer them to private control, a position which is manifestly unsound, in view of the public nature of such corporations and their liability to regulation by the legislative authority which has in effect created them. The concession above referred to and the implication arising from the statement in the answer and cross bill to the purport that the title of the defendants to their lands was derived, mediately or immediately, from those who held title thereto at the time of the acquisition of New Mexico by the United States, coupled with the finding by the trial court that, after making all due allowances for valid appropriations of water within the portion of the Rio Grande directly affected by the canal of the appellee, there yet existed a surplus of unappropriated water, warranted the trial court in treating as immaterial the claim asserted in the tenth paragraph of the answer of the defendants to the effect that, by the treaty of cession of New Mexico to the United States, the defendants and their associates acquired the right of user of all the waters of the Rio Grande adjacent to their lands. Neither do we think that the trial court was called upon, at the instance of the defendants, entire strangers in every aspect to other appropriators, to inquire into and pass upon the question whether appropriators of water below the mouth of the proposed canal of appellee would be injured by the construction of the canal. The rights of such persons will not, of course, be injuriously affected by the decree in this cause, and non constat but that they may yet intervene for their own protection, if they deem that the construction of the canal will be an invasion of their rights, or that they may be willing to forego objection to the construction of the canal.

On the whole, we are of opinion that the decree of the Supreme Court of the Territory of New Mexico was correct, and it is therefore affirmed.

Mr. Justice McKenna dissents. 

Notes

§ 468. Any five persons who may desire to form a company for the purpose of constructing and maintaining reservoirs and canals, or ditches and pipe lines, for the purpose of supplying water for the purpose of irrigation, mining, manufacturing, domestic, and other public uses, including cities and towns, and for the purpose of colonization and the improvement of lands in connection therewith, for either or both of said objects, either jointly or separately, shall make and sign articles of incorporation, which shall be acknowledged before the secretary of the territory, or some person authorized by law to take the acknowledgment of conveyances of real estate, and when so acknowledged such articles shall be filed with such secretary.

§ 469. Such articles shall set forth: First. The full names of the incorporators and the corporate name of such company.

Second. The purpose or purposes for which such company is formed, and, if the object be to construct reservoirs and canals, or ditches and pipe lines for any of the purposes herein specified, the beginning point and terminus of the main line of such canals and ditches and pipe lines, and the general course, direction, and length thereof shall be stated.

Third. The amount of the capital stock and the number of shares as deflnitely as practicable.

Fourth. The term of existence of the company, which shall not exceed fifty years.

Fifth. The number of directors, and the names of those who shall manage the business of the company for the first year.

Sixth. The name of the city or town and county in which the principal place of business of the company is to be located.

  *  *  *  *  *

§ 484. Corporations formed under this act for the purpose of furnishing and supplying water for any of the purposes mentioned in section four hundred and sixty-eight shall have, in addition to the powers hereinbefore mentioned, rights as follows:

First. To cause such examination and surveys for their proposed reservoirs, canals, pipe lines, and ditches to be made, as may be necessary to the selection of the most eligible locations and advantageous routes, and for such purpose, by their officers, agents, and servants, to enter upon the lands or water of any person or of this territory.

Second. To take and hold such voluntary grant of real estate and other property as shall be made to them in furtherance of the purposes of such corporation.

Third. To construct their canals, pipe lines, or ditches upon or along any stream of water.

Fourth. To take and divert from any tream, lake, or spring the surplus water, for the purpose of supplying the same to persons, to be used for the objects mentioned in section four hundred and sixty-eight of this act, but such corporations shall have no right to interfere with the rights of, or appropriate the property of, any persons except upon the payment of the assessed value thereof, to be ascertained as in this act provided. And provided, further, That no water shall be diverted if it will interfere with the reasonable requirements of any person or persons using or requiring the same, when so diverted.

Fifth. To furnish water for the purposes mentioned in section four hundred and sixty-eight, at such rates as the by-laws may prescribe; but equal rates shall be conceded to each class of consumers.

Sixth. To enter upon and condemn and appropriate any lands, timber, stone, gravel, or other material that may be necessary for the uses and purposes of said companies.

  *  *  *  *

§ 492. That no incorporation of any company or companies to supply water for the purposes of irrigation and other purposes shall have any right to divert the usual and natural flow of water of any stream which by law of 1854 has been declared a public acequia for any use whatever, between the fifteenth day of February and the fifteenth day of October of each year, unless it be with the unanimous consent of all and every person holding agricultural and cultivated lands under such stream or public

acequia, and to be irrigated by the water furnished by said stream or public acequia, and that no incorporation of any company or companies shall interfere with the water rights of any individual or company acquired prior to the passage of this act.